Appendix — United States v. American Bldg. Maint. Industries
Supreme Court brief1975
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Text
DATE
6/11/73
7/2/73
7/25/73
7/27/73
7/30/73
8/28/73
10/15/73
10/18/73
4
PROCEEDINGS
w/respect to settlement of the action, that the
artios shall report on the progress of settle-
ment negotiations at the Status conference
at 10 am on 6/11/73, in ple of the previously
sched PTC.
For status hrg & on mot of ens! ord cont to
7/23/73, 10 AM.
Mild not on Ct’s own mot ord P/T conf cont to
7/30/73, 10 am.
Fid U.S.A. proposed agenda for the status
conf on 7/30/73.
Fld deft’s response to plft’s proposed agenda
for the status conf on 7/30/73.
Fur status hrg. Cons! for deft hv to 8/17/73 to
file mot for summ judgmt & cnsl for pltf to
file response by 9/4/73. Fur stay of Discov
until hrg on mot for summ judgmt. Cnsl for
pitf to prep ord. .
Fld Deft Stip & ORD (JWC) with regard to
deft’s motn for S/J of dism.
Fid Deft Note of Motn retble 9/4/73, /10:00
AM & motn of deft American Building Main-
tenance Ind. for S/J of dism & suggestion
the crt lacks subj matter jurisdiction.
Fld Deft Memo of pts/auth in support of deft’s
motn for S/J of dism & suggestions that crt
lacks subj matter jurisdiction.
Fld Deft. Affid of Jess E. Benton, Jr.
Fld Deft Affid of Jess E. Benton, ITT
Fld Deft Affid of Eugene Coil.
Fld Deft Affid of Claudia Morgan.
LODGED deft Findings of fact & conclusions
of law.
LODGED deft proposed S/J of dism in favor
of deft American Building Maintenance In-
dustries against pltf USA.
Fld USA memo in oppos to defts S/J motn.
Fld USA Affid in support of governments
memo in oppos to defts S/J motn.
Fld Deft Applic of American Building Main-
tenance Industries for an ex party ord ext
ti & cont hrng, Affid of Anthonie M. Voogd &
memo pursuant to local rule 3(j).
DATE
10/18/73
11/19/73
11/20/73
11/27/73
12/3/73
12/7/73
12/10/73
12/12/73
12/21/73
1/3/74
1/7/74
2/7/74
5
PROCEEDINGS
Fld pltf Memo on defts req for a continuance.
MIN ORD: Over objects of ensl for (ext ord
hrg on defts mot for summ judgmt cont to
11/26/73, 10 am. Fur deft hv to 11/19/73 to
reply to Govt’s memo pts & authrs in oppos
to deft’s mot.
Fid deft Affid of Bud McKinney.
Fld deft Affid of H. Robert Vance.
Fld deft Affid of Sydney J. Rosenberg.
Fld deft Affid of James J. Breen.
Fld deft Affid of Ted Childress.
Fld deft reply memo of deft American Build-
ing Maintenance in support of its motn for
S/J of dism & suggestion that ert lacks subj
matter
Fld pitf memo in support of applic for ord cont
hrng on defts S/J motn to 12/10/73.
Fld pltf ORD (JWC) cont hrng on defts S/J
motn retble 12/10/73; pltf may have to
12/3/73 to file statement of genuine issues;
deft may have to 12/7/73 to fil response.
Fid pitf Statement of genuine issues.
Fld defts reply to pltfs statemnt of genuine
issues.
MIN ORD: Hrg deft ;s mot for summ judgmt
and Crt takes under Submn.
Fld fndgs of fact & concl of law; Fld summary
jdgmt of dism] in fv of deft American Build-
ing Maintenance Industries & agnst pltf
United States of America & ord thereon
dismg the action & that pltf take nothing on
his complt & that sd deft recov its costs.
(Ent 12/12/73) JS-6 mld epys & r ‘fd prtys
Fld deft Note of filing depos of Jess E. %enton,
ITI. on 12/21/73.
Fld DEPOSITION of Jess E. Benton, III tk
on 9/1/72 w/Exhibits.
Fld deft Notice of filing od depos of John
Lewis Barta on 1/2/74
Fld DEPOSITION of John Lewis Barta tk on
9/15/73.
Fid pitf’s N/A of summy jdgmnt of disml. w
proof of ser.
a a),
Unrrep States District Courr
Centra, District or CaLirorNia
Untrep States or AMERICA,
PLAINTIFF, Civil No. ;
. 71-55 JWC t
° > Filed: 1/8/71 1
American Bumping MaIntENANCE '
InDUSTRIEs, Complaint ‘
DEFENDANT.
The United States of America, plaintiff, by its attorneys,
acting under the direction of the Attorney General of the
United States, brings this civil action to obtain equitable
relief against the above named defendant, and complains
and alleges as follows: .
I
Jurisdiction and Venue
1. This complaint is filed and this action is instituted
against the defendant under Section 15 of the Act of Con-
gress of October 15, 1914, as amended (15 U.S.C. § 25),
commonly known as the Clayton Act, in order to prevent
and restrain the continuing violation by the defendant, as
hereinafter alleged, of Section 7 of the Clayton Act (15
U.S.C. § 18).
2. American Building Maintenance Industries transacts
business and is found within the Central District of Cali-
fornia.
at. 40. oe tee Oe CUP CUCU. 4 te COO
II
3. As used herein:
(a) ‘‘Southern California’’ refers to the area encom-
| passed by Los Angeles, Orange, San Bernardino,
3 Riverside, Santa Barbara and Ventura Counties
in the State of California; and
(b) ‘‘Los Angeles area”’ refers to that part of South-
ern California bounded generally on the north by
Oxnard, on the south by San Clemente, on the
east by Fullerton, Pomona, Covina and Azusa,
and on the west by the Pacific Ocean.
a a a a ee a a a a a ae
ht Pu ttm en
6
7
Iil
4. American Building Maintenance Industries (herein
referred to as ‘‘ABMI’’) is hereby made the defendant
herein. ABMI is a corporation organized and existing under
the laws of the State of California and has its principal
place of business at San Francisco, California. Each
reference hereir to ABMI shall include its subsidiary and
affiliated corporations.
LIV
Nature of Trade and Commerce
5. ABMI is one of the largest sellers of janitorial services
in the United States with total revenues in 1969 of
$64,720,490, of which janitorial services accounted for
$52,431,934. American Building Maintenance Companies
(ABMI’s janitorial services division) has 56 branches
serving more than 500 communities throughout the United
States and Canada. In Southern California, ABMI’s jani-
torial services facilities are located in Los Angeles, Long
Beach and Santa Ana. ABMI is the largest seller of jani-
torial services in Southern California with sales in 1969 of
$10,922,395, or approximately 10 percent of the sales of
janitorial services in the Southern California market.
6. At tke time of the acquisition and merger hereinafter
described, J. E. Benton Management Corporation and
Benton Maintenance Company (herein referred to collec-
tively as “Benton’’) were each corporations organized and
existing under the laws of the State of California. At said
time, Benton was engaged in the janitorial services, real
estate and building management businesses and operated
in Southern California in the Los Angeles area. In 1969,
Benton’s sales of janitorial services totalled $7,243,000,
making itthe fourth largest seller of such services in South-
ern California with almost 7 percent of the sales in said
market.
7. Janiforial services contracting companies, including
ABMI, ofer to sell and sell their services primarily to land-
lords, maaaging agents and tenants of commercial, indus-
trial and institutional buildings. These services may in-
elude, but are not limited to: general cleaning; sweeping
and dustiag; stripping, waxing and polishing floors; carpet
vacuuming and shampooing; trash removal ; venetian blind
8
cleaning and repairing; washing of floors and walls; fur-
niture cleaning, polishing and refinishing; elevator oper-
ating ; and porter work.
8. In connection with its janitorial services contracting
business, ABMI maintains offices and serves customers in
various states of the United States. Both ABMI and
Benton have purchased and received substantial quantities
of janitorial supplies that have been shipped and trans-
ported across state lines and in interstate commerce. Jani.
torial services customers of ABMI and Benton have
regularly engaged in commerce among the several states
of the United States.
V
Offense Alleged
9. On or about June 30, 1970, ABMI acquired J. E.
Benton Management Corp. and Benton Maintenance Com.
pany was merged into American Building Maintenance
Company of California, a wholly-owned ABMI subsidiary.
10. The effect of the aforesaid acquisition and merger
may be to substantially lessen competition or tend to create
a monopoly in the sale of janitorial services in Southern
California and in the Los Angeles area, in violation of
amended Section 7 of the Clayton Act, in the following
ways, among others:
a. Actual and potential competition between ABMI and
Benton has been eliminated ;
b. Benton has been eliminated as a substantial factor in
competition ;
c. ABMI has increased in relative size to such a point
that its advantage over its competitors threatens to be
decisive ; and .
d. Concentration in the sale of janitorial services has
been increased to the detriment of actual and potential
competition.
Prayer
Waenerorg, the plaintiff prays:
1. That the acquisition and merger described in para-
graph 9 of this complaint be adjudged a violation of
amended Section 7 of the Clayton Act;
2. That ABMI be required to divest itself of the jani-
9
torial services contracting business of J. E. Benton Manage-
ment Corp. and of Benton Maintenance Company which was
merged into its wholly-owned subsidiary, American Build-
ing Maintenance Company of California ;
3. That the plaintiff have such other and further relief
as the nature of the case may require and which the Court
may deem just and proper; and
4, That the plaintiff recover the costs of this suit.
Dated: January 7, 1971.
Joun N. MitrcHELL
Attorney General
Ricnarp W. McLaren
Assistant Attorney General
Bappia J. RasHip
/s/ James J. Coyle
James J. CoyLe
Attorneys, Department of Justice
/s/ Michael J. Dennis
MicHare.t J. Dennis
Attorney, Department of Justice
REPEAT RAV HEBERT PERS
Unrrep Stares District Courr™
Cenrrat, District or CaLrroRNIA
(Caption Omitted in Printing)
ANSWER TO COMPLAINT
Filed: April 7, 1971
Defendant, American Building Maintenance Industries,
answers the complaint as follows:
First Defense
1. The complaint fails to state a claim upon which relief
can be granted.
Second Defense
2. Defendant admits:
That plaintiff purports to bring its action within the
statutes referred to in the complaint;
That defendant is a corporation organized and existing
under the laws of the State of California and has its prin-
cipal place of business at San Francisco, California; and
transacts business and is found within the Central Dis-
trict of California;
That defendant is one of many sellers of janitorial
services in the United States;
That for the fiscal year ending October 31, 1969 defend-
ant’s total revenues were $64,072,480, of which main-
tenance services accounted for $52,431,984 ;
That in its janitorial service division defendant has 56
branches serving more than 500 communities throughout
the United States and Canada;
That on or about June 30, 1970, ABMI acquired the
stock of J. E. Benton Management Corporation, and
Benton Maintenance Company was merged into American
Building Maintenance Company of California, a wholly
owned subsidiary of defendant;
That each of said latter corporations were organized
and existing under the laws of the State of California and
operated in Southern California ;
That at the time of said acquisition J. E. Benton
10
11
Management Corporation was engaged in the building
management and real estate business in the Los Angeles
area and incident thereto provided certain janitorial
services ;
That at the time of said merger Benton Maintenance
Company was engaged in the janitorial services business
in the Los Angeles area.
That the revenues for the fiscal year ending February
28, 1970 of J. E. Benton Management Corporation from
the rendering of janitorial, management, real estate and
other services totaled $3,025,542 ;
That the revenues in 1969 of Benton Maintenance Cor-
poration from the rendering of janitorial and other
services totaled $5,007,378 ;
That ABMI offers to sell and sells janitorial services to
landlords, managing agents and tenants of. commercial,
industrial and institutional buildings and to others ;
That janitorial services may include general cleaning;
sweeping and dusting; stripping, waxing, and polishing
floors ; carpet vacuuming and shampooing; trash removal :
venetian blind cleaning and repairing; washing of floors
and walls; furniture cleaning and polishing; elevator
operating ; and porter work; and
That defendant, Benton Maintenance Company, and
J. E. Benton Management Corporation each have pur-
chased and received janitorial supplies that have been
shipped and transported across state lines.
3. Defendant is without knowledge or information suffi-
cient to form a belief as to the truth of:
Allegations purporting to describe the activities,
revenues or business of others.
4. Defendant denies each and every other allegation con-
tained in the complaint.
Fourth Defense
5. To the extent material to plaintiff’s complaint, defend-
ant is not and has not been the producer, manufacturer,
distributor or seller of any commodity. Plaintiff merely
furnishes the labor of unskilled workers for the rendering
of janitorial work. Such unskilled workers are freely avail-
able in large numbers to anyone desiring to furnish or
desiring to have janitorial work done. Neither defendant
nor anyone else is now able or has at any time been able to
12
restrict or restrain in any manner the availability of any
workers for janitor work. Such workers have at all times
been available without restriction or restraint. Such work.
ers are available to all within the Los Angeles area, the
Southern California area, or to anyone without those areas
who may desire to or care to enter into the janitorial
services businesses either from without or within the State
of California. It is not now possible nor has it been possible
for defendant alone or defendant with Benton Maintenance
Company or J. E. Benton Management Corporation to
restrain, restrict or hamper the use of janitor workers or
the entry into janitorial work.
Wuenerorg, defendant prays:
1, That plaintiff take nothing by virtue of its complaint;
and
2. For such further and other relief as may be proper
in the promises.
DATED: April ...., 1971.
Lawuer, Feux & Hat
Maxcus Harrson
AntHonre M. Vooap ~*
eee eee eee eee essere seesreeeeeees
Attorneys for Defendant
American Building Maintenance
Industries
(Certificate of Service Omitted in Printing)
Unrrep Srates District Court
CentraL District or CaLIFORNIA
(Caption Omitted in Printing)
ANSWERS AND OBJECTIONS TO FIRST SET OF
INTERROGATORIES PROPOUNDED TO PLAINTIFF
BY DEFENDANT AMERICAN BULDING
-MAINTENANCE INDUSTRIES
Interrogatory No. 1
Describe the boundaries of the ‘‘Los Angeles area’’ as
defined in paragraph 3(b) of the complaint with sufficient
particularity to enable ABMI to delineate those boundaries
on a map of Southern California. .
Answer to Interrogatory No.1
As stated in paragraph 6 of the complaint, the ‘‘Los
Angeles area’’ is the area of operation of J. E. Benton
Management Corp. and Benton Maintenance Company
(hereinafter referred to collectively as ‘‘Benton’’). On
Angust 4, 1970, Mr. Allen M. Singer, Vice-President and
Secretary, American Building Maintenance Industries,
stated that Benton operated in Southern California as far
north as Oxnard, south as far as San Clemente, east to
Azusa, Covina, Fullerton and, at one time, as far as
Pomona; said discussion was confirmed in Mr. Dennis’
letter to Mr. Singer dated August 12, 1970; and in Mr.
Singer’s letter to Mr. Dennis dated September 9, 1970, he
stated that ‘‘[a]t the time of the acquisition, Benton was
doing work as far east as Azusa, as far south as San
Clemente, and as far north as Ventura.”’
_ Interrogatory No. 2
_ State separately with respect to each of the subsidiary
and affiliated corporations of ABMI referred to in para-
graph 4 of the complaint:
a. Its name and address;
b. Whether it is a ‘‘seller of janitorial services’’ as
that term is used in paragraph 5 of the complaint;
c. Whether it is a ‘‘janitorial service contracting com-
13
14
pany’’ as that term is used in paragraph 7 of the com-
plaint ;
d. Whether its revenues in 1969 were included in the
figure of $64,720,480 referred to in paragraph 5 of the
complaint, and, if so, the amount of its revenues so
included ; :
e. Whether its revenues in 1969 were included in the
figure $52,431,984 referred to in paragraph 5 of the com-
plaint, and, if so, the amount of its revenues so included;
and '
f. Identify all documents which were the source of, |
or from which you derived, the information provided in.
your answers to the foregoing subparagraphs a. through
e.
Answer To Interrogatory No. 2
The information requested in the foregoing Interrogatory
No, 2 (a. through f.) may be found in Exhibit ‘‘A’’ sub-
mitted by Mr. Allen M. Singer in response to the following
question contained in a letter from Michael J. Dennis to
American Building Maintenance Industries (referred to as
ABMTI), dated July 13, 1970:
‘*(1) Please state the correct corporate name, mailing
address, state and date of incorporation, description of
the business and the geographic area of operation of
ABMI and each of its subsidiaries or affiliates.’’
Plaintiff relied on statements made by Mr. Singer and has
no other information regarding the identity or revenues of
any of the affiliated or subsidiary corporations of defendant
ABMI.
Interrogatory No. 3
State separately with respect to each seller of janitorial
services with which ABMI is compared in the first sentence
of Paragraph 5 of the Complaint: |
a. Its name and address;
b. Its principal place of business;
c. The location of each of its facilities used in the sale
of janitorial services ;
d. Each of the janitorial services provided by it;
e. The section or sections of the country where it sold
janitorial services in 1969;
15
f.. Its revenues in 1969;
g. Its revenues in 1969 from the sale of janitorial
services; |
h. Its revenues in 1969 from the sale of janitorial
| services in the Los Angeles area;
i. Its revenues in 1969 from the sale of janitorial
services to landlords, managing agents and tenants of
commercial, industrial and institutional buildings located
in the Los Angeles area;
j. Its revenues in 1969 from the sale of janitorial
services in southern California;
k. Its revenues in 1969 from the’ sale of janitorial
services to landlords, managing agents and tenants of
commercial, industrial and institutional buildings located
in Southern California;
1, Whether it.is a ‘‘seller of janitorial services’’ as that
term. is used in paragraph 5 of the complaint;
n:, Me Whether it is‘a ‘‘janitorial service contracting com-
pany’’ as, that term is used in paragraph 7 of the com-
plaint ; |
n. Whether in 1969 it was an actual competitor of
ABMTI in the sale of nanan services in Southern Cali-
fornia ;
o. Whether in 1969 it was an actual competitor of
, ABMI in the gale of’ janitorial services in the Los
Angeles area;
p. Whether in 1969 it was a potential competitor of
- ABMT in the Southern California area;
q. Whether in 1969.it was a potential competitor of
ABMTI in the Los Angeles area;
r. Identify all documents which were the source of, or
from which you derived, the information given in your
answers to the foregoing subparagraphs a. through q.
of this interrogatory. '
Answer To Interrogatory No. 3
(1) a. Allied Maintenance Corp. (Co. has 59 wholly-
owned and four 50 per cent-owned subsidiaries in
the United States and Canada.) .
b. 2 Pennsylvania Plaza, New York, New York 10001.
c. Unknown.
d. Maintenance and cleaning of department stores, |
airline, bus and railroad terminals, sports sta-
16
diums and other structures. Janitorial services
, for business enterprises and Government
agencies,
e. Unknown.
‘f. 1969 operating revenues, $50,766,800.
g- through k. Unknown.
l. andm. Yes. 4
‘nm. ando. Yes.
p. andq. Yes.
(2)
r. The source of the information given in the answer
to the foregoing subparagraphs a. through q. may
be found in Documents (1), (2) and (3), as
described in Exhibit ‘‘B’’ attached hereto.
a. ‘Kinney National Service, Inc. (many subsidiaries,
including eight specifically listed under ‘“‘ Building
| Services’? in Document 1 described in Exhibit
‘*B’’ attached hereto. —
‘b. 10 Rockefeller Plaza, New York, New York 10020,
¢. Building Service Group is engaged in cleaning
and maintenance services in New York City area
upstate New York, California, Connecticut,
Georgia, Illinois, Massachuse ts, Missouri, New
Jersey, Ohio, Pennsylvania, Virginia, and the
District of Columbia. |
d. Cleaning and maintenance of buildings.
e. Los Angeles, area, California, Connecticut,
Georgia, Illinois, Massachusetts, Missouri, New
Jersey, Ohio, Pennsylvania, Virginia, the District
of Columbia, New York City area, and upstate
New York.
f. Kinney National Service, Inc.-Building Services
Group operating revenues fiscal year ended
9-30-69, $124,884,000.
g, Unknown. .
h. National Cleaning Company, Division of Kinney
_ National Service of California, Inc., 1969 revenues
for janitorial service in Los Angeles area was
$8,000,000 to $9,000,000 (est. $8,500,000).
i. through k. Unknown.
l. throughg. Yes.
r. The source of the information given in the answer
to the foregoing subparagraph may be found in
Documents (1), (2), (3) and (4), as described in
Exhibit ‘‘B”’ attached hereto.
17
(3) a. Prudential Building Maintenance Corp. (29
wholly-owned subsidiaries).
_b.. 1430 Broadway, New York, New York 10018.
-¢. New York City, Chicago, Los Angeles.
d:-Gleaning and maintenance and other services for
office buildings, hotels, factories, stores and other
commercial and institutional space.
New York City area, Chicago area, Los Angeles
area.
Service Revenues, 1969, $44,895,780.
through k. Unknown.
through q. Yes.
The source of the information given in the answer
to the foregoing subparagraphs may be found in
Documents (1), (2), (3) and (4), as described in
Exhibit ‘‘B’’ attached hereto.
mmo
Interrogatory No. 4
State with respect to the term ‘‘ janitorial services’’ used
in paragraphs 5, 6, 7, 8, and 10 of the complaint:
a. Whether parking service is a janitorial service ;
b. Whether building security service is a janitorial
service ;
c. Whether grounds maintenance service such as
gardening is a janitorial service ;
: d. Whether elevator repair service is a janitorial serv-
1ce; ,
e. Whether lighting fixture cleaning service is a jani-
torial service ;
f. Whether pest control service is a janitorial service ;
g. Whether the provision of dust control mats and
equipment is a janitorial service;
h. Whether the provision of linens is a janitorial serv-
ice ;
i. Whether air conditioning maintenance service is a
janitorial service ;
j. Whether window cleaning service is a janitorial
service ;
k. Whether drapery cleaning service is a janitorial
service ;
1, Whether lighting bulb or tube replacement service is
a janitorial service;
m. Whether industrial landscaping service is a jani-
18
torial service ;
n. ether doorman service is a janitorial service;
o. Whether building directory service is a janitorial
service ;
p. Whether metal polishing service is a janitorial serv-
ice;
q. Whether residential cleaning service is a janitorial
service ;
r. Whether building management service is a janitorial
service ;
s. Whether garage service is a janitorial service;
t. Whether the term janitorial services includes any
service other than those named in the foregoing sub-
paragraphs a. through s. and those named in paragraph 7
of the complaint, and if so, the name and nature of each
such other service. -
Answer To Interrogatory No. 4
Yes.
through 1. Unknown.
. through p. Unknown.
No. .
No.
Plaintiff is unable to answer without a definition of
‘“ garage service.’’
Plaintiff knows only that restroom cleaning is an-
other janitorial service included in the term ‘‘jani-
torial services.’’ Plaintiff does not have sufficient
knowledge to say whether or not the term ‘‘jani-
torial services’’ includes any other services.
PROF Rome Be p
Z
°
¢*
Interrogatory No.5
State with respect to the janitorial services referred to in
paragraph 7 of the complaint:
a. Whether there are services which are interchange-
able with the services referred to in paragraph 7;
19
b. Describe the services which are so interchangeable;
c. If you have excluded any services as interchangeable
‘which were excluded on the basis of price, quality or use,
describe the reasons for such exclusion in terms of price,
quality and use;
d. Identify all documents which were the source of, or
from which you derived, the information given in your
answers to the foregoing subparagraphs a. through c. of
this interrogatory.
Answer To Interrogatory No.5
a. Plaintiff has no knowledge of the existence of any
services which are interchangeable with janitorial serv-
ices.
Interrogatory No. 6
Identify all documents upon which you base the allegation .
in paragraph 5 of the complaint that the total revenues of
ABMT in 1969 were $64,720,480.
Answer To Interrogatory No. 6
The source of the information requested by the foregoing
Interrogatory No. 6 is:
American Building Maintenance Industries’ Annual Re-
port of 1969 (5 year Financial Review data shown o
inside front cover). ‘
Interrogatory No.7
Identify all documents upon which you base the allegation
in paragraph 5 of the complaint that the revenues of ABMI
in 1969 for janitorial services were $52,431,984.
Answer To Interrogatory No.7
The source of the information requested by the foregoing
Interrogatory No.7 is:
ABMI’s Annual Report of 1969 (Consolidated Statement
of Income, year ended October 31, 1969 and 1968, Page
12).
20
Interrogatory No. 8 ,
Identify all documents upon which you base the allegation
in paragraph 8 of the complaint that ABMI has janitorial
services facilities in Long Beach and Santa Ana.
Answer To Interrogatory No.8
Exhibit ‘‘A’’, a copy of which is attached hereto, provides
the information requested in Interrogatory No. 8.
Interrogatory No.9
State separately as to each seller of janitorial services
in Southern California with which ABMI is compared in the
last sentence of paragraph 5 of the complaint (other than
sellers of janitorial services named in your answer to the
foregcing Interrogatory No. 3) each of the matters referred
to in subparagraphs a. through r. of the foregoing Inter-
rogatory No. 3. ;
Answer To Interrogatory No.9
~~
_
~"
~
. Pierose Building Maintenance Co.
1401 W. 8th Street, Los Angeles, California.
1401 W. 8th Street, Los Angeles, California.
Unknown.
Los Angeles area, Southern California. -
Unknown.
through k. $8,900,000.
through q. Yes.
The source of the information given in the answer
to the foregoing subparagraphs a. through q. may
be found in Documents (1), (5) and (6), as
described in Exhibit ‘‘B’’ attached hereto.
White Glove Building Maintenance, Inc.
5285 W. Washington Boulevard, Los Angeles,
California 90016.
5285 W. Washington Boulevard, Los Angeles,
California 90016.
. Unknown. .
Los Angeles area, Southern California.
Unknown. .
. $5,564,925.
$5,564,925.
nm ho So
(2)
oP
c.
d
e.
f.
&
h.
21
through k. Unknown.
through q. Yes.
. The source of the information given in the fore-
going subparagraphs a. through q. may be found
in Document (7), as described in Exhibit ‘‘B’’
attached hereto.
Interrogatory No. 10
Identify all documents upon which you base the allegation
in paragraph 5 of the complaint that the sales of janitorial
services in the Southern California market by ABMI in
1969 were $10,922,395.
Answer To Interrogatory No. 10
The source of the information requested in Interrogatory
No. 10 are letters dated September 9, 1970 and October 21,
1970, from Allen M. Singer, Vice-President and Secretary,
American Building Maintenance Industries, to Michael J.
Dennis, copies of which are attached and marked Exhibits
““C”’ and ‘‘D’’, respectively.
Interrogatory No. 11
‘State with respect to the sale of janitorial services in the
Southern California market referred to in paragraph 5 of
the complaint:
a. The total amount of such sales in 1969;
b. Identify all documents which were the source of, or
from which you derived, the information given in your
answer to the foregoing subparagraph a; and
c. State the name and address of each person who was
the source of the information given in your answer to the
foregoing subparagraph a.
Answer ToInterrogatory No. 11
a. The total amount of sales of janitorial services in
the Southern California area for the year 1969 was
approximately $100,000,000.
b. The source of the information given in the fore-
going sudparagraph a. is: The United States Bureau of
the Census, Census of Business, 1967, Selected Services:
California, BC67-SA6. A copy of this volume is in the
office of the Antitrust Division, 1315 United States Court
22
House, 312 North Spring Street, Los Angeles, California
90012. Copies may also be obtained from the U. §.
Government Printing Office, Washington, D. C.
ce. Additional information was supplied by the follow-
ing persons:
(1) Mr. A. H. Wittenberg, Jr.,
3500 West First Street
Los Angeles, California
(2) Hr. Harold Connor
3500 West First Street
Los Angeles, California
(3) Mr. Allen M. Singer
333 Fell Street
San Francisco, California
Interrogatory No. 12
State with respect to J. E. Benton Management Cor-
poration prior to the alleged merger and acquisition:
a. Whether it was a “‘seller of janitorial se:-vices’’ as
that term is used in paragraph 5 of the complaint;
b. Whether it was a ‘‘janitorial service contracting
company’’ as that term is used in paragraph 7 of the
complaint ; t
c. The nature of the real estate business conducted !
by it; f
d. The nature of the building management business
conducted by it;
e. Whether or not you made any determination that it
Wasa particularly disturbing, disruptive or otherwise
unusually competitive factor in the market for janitorial
services ; }
f. If your answer to the foregoing subparagraph e. is
in the affirmative, state what the determination was and
the facts used in arriving at that determination ; :
g. Whether or not you made any determination that it
had an unusual competitive potential in the market for
janitorial services ;
h. If your answer to the foregoing subparagraph g. is ]
in the affirmative, state what the determination was and
the facts used in arriving at that determination ;
i, Whether you determined that absent the merger re- 8
ferred to in paragraph 9 of the complaint, it was likely to t
23
have had a substantial competitive influence in the market
for janitorial services ;
j. If your answer to the foregoing subparagraph i. is in
the affirmative, state the determination so made and the
factors included in arriving at that determination;
k. Identify all documents which were the source of, or
from which you derived, the information given in your
answers to the foregoing subparagraphs a. through j. of
this interrogatory.
Answer To InterrogatoryNo.12 .
a.ana b. Yes,
e.and d. Plaintiff has no knowledge as to the nature of
the real estate business or the building management busi-
ness of J. E. Benton Management Corp. prior to the
merger.
e., g. and i. Plaintiff made no such determinations prior
to the merger. Moreover, it is irrelevant whether or not
plaintiff made such determinations.
f., h. and j. Not applicable.
Interrogatory No. 13
State with respect to Benton Maintenance Company prior
to the alleged merger and acquisition each of the matters
referred to in subparagraphs a., b. and e. through k. of the
foregoing Interrogatory No. 12.
Answer To Interrogatory No. 13
only that at the time of |the acquisition Benton Maintenance
Company was engaged in the janitor service business in the
Los Angeles area.
In response to subparagraph e., plaintiff made no such
determinations prior to the alleged merger and acquisition.
The source of the information given in response to sub-
paragraphs a. and b. is Exhibit ‘‘E’’, a copy of which is
attached.
In response to ne offi acu a. and b., plaintiff knows
Interrogatory No. 14
State separately with respect to each seller of janitorial
services with -which the sales of Benton were compared in
the last sentence of paragraph 6 of the complaint (other
24
than sellers of janitorial services named in your answers
to the foregoing Interrogatories Nos. 3 and 9) each of the
matters referred to in subparagraphs a. through r. of the
foregoing Interrogatory No. 3.
Answer ToInterrogatory No. 14
All sellers of janitorial services compared with Benton
are as stated in the answers to the foregoing Interrogatories
Nos. 3 and 9.
Interrogatory No. 15 ©
Is there any difference between a ‘‘janitorial services
contracting company”’ as that term is used in paragraph 7
of the complaint and a ‘‘seller of janitorial services’’ as
used in paragraph 5 of the complaint?
Answer Tolnterrogatory No. 15
No. The term ‘‘seller of janitorial services”? as used in
__- paragraph 5 of the complaint refers to the sale of janitorial
“services on a contract basis by ABMI, one of the largest
\_ janitorial services contracting companies.
Interrogatory No. 16
If the answer to the foregoing Interrogatory No. 15 is in
the affirmative state:
a. Whether the difference is based on the type of the
business entity providing janitorial services (whether it
be a corporation, a sole proprietorship, a partnership or
other form of business entity), and, if so, state the types
of the entities which are sellers of janitorial services and
the types of entities which are janitorial services contract-
ing companies;
b. Whether the difference is based on size, and, if se,
state the annual revenues and assets of sellers of jani-
torial services and the annual revenues and assets of
janitorial services contracting companies;
c. Whether the difference is based on the nature of the
agreement whereby janitorial services are provided
_ (whether it be the monthly amount to be paid pursuant to
the agreement, the term of the agreement or any other
provision of the agreement), and, if so, state the pro-
25
visions of the agreements used by sellers of janitorial
service and the provisions of the a,reements used by
janitorial services contracting companies;
d. Whether the difference is based upon annual reve-
nues from janitorial services, and if so, state the annual
revenues from janitorial services of sellers of janitorial
services and the annual revenues from janitorial services
of janitorial service contracting companies;
e. Whether the difference is based on the kind of jani-
torial services provided, and, if so, state the kinds of
janitorial services providéd by sellers of janitorial serv-
ices and the kinds of janitorial services provided by
janitorial services contracting companies;
f. Whether the difference is based on the fact that
janitorial service contracting companies provide a certain
mix or range of janitorial services, and, if so, state each
of the janitorial services included in that mix or range;
g. Whether the difference is based on nature of cus-
tomers, and, if so, state the nature of customers of sellers
of janitorial services and the nature of customers of
janitorial services contracting companies ;
h. Whether the difference is based on any other criteria,
and, if so, state the nature of each such criterion and how
and in what manner sellers of janitorial services and
janitorial services contracting companies ;
such criterion ; and
i. Whether janitorial services contracting companies
include companies which provide janitorial services only
as an incident to or together with the sale of other
services. .
Answer To Interrogatory No. 16
Not applicable.
Interrogatory No. 17
State separately with respect to each janitorial services
contracting company as that term is used in paragraph 7 of
the complaint doing business in Southern California (other
than seller of janitorial services named in your answers to
the Interrogatories Nos. 3, 9 and 14) each of the matters re-
ferred to in subparagraphs a. through r. of the foregoing
Interrogatory No. 3.
26
Answer To Interrogatory No. 17
Not applicable. .
Interrogatory No. 18
State and define with respect to the allegations of para-
graph 10 of the complaint: ;
a. Each ‘‘line of commerce’’ in which you assert that
the acquisition and merger may have the effect of sub-
stantially lessening competition ;
b. Each ‘‘line of commerce”’ in which you assert that the
acquisition and merger may have the effect of tending to
create a monopoly ;
c. As to each ‘‘line of commerce’’ referred to in your
answer to the foregoing subparagraph a. of this inter-
rogatory, the ‘‘section of the country”’ in which you assert
the aforesaid acquisition and merger may have the effect
of substantially lessening competition;
d. As to each ‘‘line of commerce’’ referred to in your
answer to the foregoing subparagraph b. of this inter-
rogatory, the section of the country in which you assert
the aforesaid acquisition and merger may have the effect
of tending to create a monopoly.
Answer To Interrogatory No. 18
Subparagraphs a. and b. The line of commerce in which
said effects may occur or have occurred is the sale of ‘‘Jani-
torial Services.’’ As stated in paragraph 7 of the complaint,
janitorial services may include, but is not limited to, general
cleaning; sweeping and dusting; stripping, waxing, and
polishing floors; carpet vacuuming and shampooing; trash
removal; venetian blind cleaning; washing of floors and
walls ; furniture cleaning and polishing; elevator operating;
and porter work.
Paragraph 7 of the complaint further states that such
janitorial services are customarily sold by janitorial serv- —
ices contracting companies to landlords, Managing agents
and tenants of commercial, industrial and institutional
buildings.
ce. and d. The sections of the country where the aforesaid
acquisition and merger may have said effects are Southern
California and the Los Angeles area. ‘‘Southern Cali-
So ss: a
| - oe —
27
fornia’”’ is defined as the nine counties of Los Angeles,
Orange, San Bernardino, Riverside, Santa Barbara, and
Ventura. ‘‘Los Angeles area’’ is defined as that part of
Southern California bounded generally on the north by
Oxnard, on the east by Fullerton, Pomona, Covina and
Azusa, and on the west by the Pacific Ocean.
Interrogatory No. 19
State with respect to paragraph 10 of the complaint how
and in what manner the effect of the acquisition and merger
may be to substantially lessen competition in the sale of
janitorial services in Southern California.
Answer To Interrogatory No. 19
The effect of the acquisition and merger may be to sub-
stantially lessen competition, or tend to create a monopoly,
in the sale of janitorial services in Southern California and
in the Los Angeles area, in violation of amended Section 7
of the Clayton Act, in the following ways, among others::
(a) Actual and potential competition between ABMI
and Benton has been eliminated ;
(b) Benton has been eliminated as a substantial factor
in competition ;
(c) ABMI has increased in relative size to such a point
that its advantage over its competitors threatens to be
decisive ; and
(d) Concentration in the sale of janitorial services has
been increased to the detriment of actual and potential
competition. Plaintiff does not have sufficient knowledge
at this time to state additional ways in which the acquisi-
tion and merger may have said effects.
~
Interrogatory No. 20
State with respect to paragraph 10 of the complaint how
and in what manner the effect of the acquisition and merger
may be to substantially lessen competition in the sale of
janitorial services in the Los Angeles area.
Answer To Interrogatory No. 20
Same as response to the foregoing Interrogatory No. 19.
28
Interrogatory No. 21
State with respect to paragraph 10 of the complaint how
and in what manner the effect of the acquisition and merger
may be to tend to create a monopoly in the sale of janitorial
services in Southern California.
Answer To Indarcepilony No. 21
Same as response to the foregoing Interrogatory No. 19.
Interrogatory No. 22
State with respect to paragraph 10 of the complaint how
and in what manner the effect of the acquisition and merger
may be to tend to create a monopoly in the sale of janitorial
services in the Los Angeles area.
Answer To Interrogatory No. 22
Same as response to the foregoing Interrogatory No. 19.
Interrogatory No. 23
Describe with particularity and in detail the ‘‘actual .
competition between ABMI and Benton’’ referred to in
paragraph 10a of the complaint which has been eliminated
by the merger and acquisition.
Answer To Interrogatory No. 23
Actual competition between ABMI and Benton for jani-
torial services business in Southern California and in the
Los Angeles area has been eliminated by reason of the
elimination of a substantial competitor in the above-men-
tioned market. ;
Interrogatory N 9. 24
Describe with particularity and in detail the ‘‘ potential
competition between ABMI and Benton’’ referred to in
paragraph 10a of the complaint which has been eliminated
by the merger and acquisition.
Answer To Interrogatory No. 24
Potential competition between ABMI and Benton for
janitorial services business in Southern California and i in
the Los Angeles area has been eliminated. i
29
_ Interrogatory No. 25
‘Describe with particularity and in detail the nature of the
competition from which Benton was eliminated as a sub-
stantial factor as alleged in paragraph 10b of the complaint.
_ Answer To Siteetopatorg No. 25
Benton was eliminated as a substantial factor i in cule:
tion for janitorial services business in the Southern Cali-
fornia and in the Los Angeles area.
Interrogatory No. 26
Describe with particularity and in detail the nature of
ABMI’s ‘‘advantage over its competitors’’ referred to in
paragraph 10c of the complaint.
Answer To Interrogatory No. 26
ABMI has an advantage over its competitors for jani-
torial business in Southern California’ and in the Los
Angeles area because it has increased in relative size as a
result of the sequin and merger.
bitenalares No. 27
State with respect to the allegation in paragraph 10c of
the complaint that ABMI’s “advantage over its competitors
' threatens to be decisive’’ what is meant by a decisive ad-
vantage.
Answer To Interrogatory No. 27
A ‘‘decisive advantage”’ is an advantage that may substan-
tially lessen competition or tend to create a monopoly.
. Interrogatory No: 28
‘State separately as to each of the competitors of ABMI
in Southern California referred to in paragraph 10c of the
complaint (other than sellers of janitorial services named
in your answers to the foregoing Interrogatories Nos. 3, 9,
14, and 17) each of the matters referred to in subparagraphs
a, through r. of the foregoing Interrogatory No. 3.
Answer To Interrogatory No. 28
In drafting the allegations in paragraph 10¢ of the com-
plaint, plaintiff had no specific knowledge of and, there-
fore, made no reference to, any sellers of janitorial services
which it can name other than those named in answer to
Interrogatories Nos. 3, 9, 14, and: 17. Plaintiff does not
doubt, however, that there are competitors over whom
' ABMI’s' advantage threatens to be decisive, concerning
which plaintiff has no knowledge at this time.
Interrogatory No. 29
State separately as to each of the competitors of ABMI in
the Los Angeles area referred to in paragraph 10c of the ©
complaint (other than sellers of janitorial services named -
in your answers to the foregoing Interrogatories Nos. 3, 9,
14, 17, and 28) ‘each of the matters referred to in subpara-
' graphs a. through r. of the foregoing Interrogatory No. 3.
Answer To Interrogatory No. 29. }
Same as response to the foregoing Interrogatory No. 28.
Interrogatory No. 30
' State the name and address of each seller of janitorial
services or janitorial services contracting company which
commenced doing business in Southern California between
January 1, 1965 and December 31, 1970. °
Answer To Interrogatory No. 30
The Antitrust Division of the United States Department
of Justice has no ‘knowledge of which sellers of janitorial
services or janitorial services contracting companies, if any,
commenced or ceased doing business in Southern Cali-
fornia between January 1, 1965 and December 21, 1970, nor
does it know whether or not any other division, department,
branch or agency. of the United States of America has such
knowledge. ,
Interrogatory No. 31
State separately as to each seller of janitorial services or
janitorial services contracting company which céased doing
31
business in Southern California between January 1, 1965
and December 31, 1970, each of the matters referred to in
subparagraphs a. through d. and r. of the foregoing Inter-
rogatory No. 3.
Answer To Interrogatory No. 31
Not applicable.
Interrogatory No. 32
State separately with respect to each seller of janitorial
services or janitorial services contracting company (other
than Benton Maintenance Company or J. E. Benton Man-
agement Corporation) which sold janitorial services in
__.Southern California and which was acquired by or merged
into a seller of janitorial services or janitorial services
contracting company during the period January 1, 1965 to
December 31, 1970:
a. Its name;
b. The name of the janitorial services contracting com-
pany or seller of janitorial services which acquired it or
with which it merged ;
c. The date of the acquisition or merger;
d. Identify all documents which were the source of, or
from which you derived, the information given in your
answer to the foregoing subparagraphs a. through c. of
this interrogatory.
Answer To Interrogatory No. 32
(1) a. California Building Maintenance Co.
b. Benton Maintenance Co.
c. December 31, 1968.
d. Document 1, Exhibit ‘‘B’’ attached hereto.
a. National Cleaning Contractors, Inc.
b. Kinney Service Corp.
c. August 1966.
d. Page 2511 of document (1), Exhibit ‘‘B’’ attached
hereto.
(3) a. State Maintenance Company.
Kinney Service Corp.
October 1965.
Page 1757 of document (2), Exhibit ‘‘B’’ at-
tached hereto.
aes
32
Western Building Maintenance Company.
Kinney National Service, Inc.
December 1966.
Page 1757 of document (2), Exhibit ‘‘B’’ at.
tached hereto.
Coast Maintenance Co.
Kinney National Service, Ine.
April 1967.
Page 1757 of document (2), Exhibit ‘‘B’’ at-
tached hereto.
Santa Ana Building Maintenance.
American Building Maintenance.
February 1965.
See Exhibit ‘‘F’’’ attached hereto.
Long Beach Building Maintenance Company.
American Building Maintenance.
February 1965.
See Exhibit ‘‘F'’’ attached hereto.
Monarch Building Maintenance Co., Inc.
Prudential Building Maintenance Corp.
May 1968.
Moody’ s Industrial Manual, 1969, Moody’s In-
vestor’s Service, Inc., 99 Church Street, New
York 10007. This is a standard reference book,
available in the Los Angeles Public Library.
(4)
Be op
(5)
Ro op
(6)
(7)
(8)
BSP aerPas op
Interrogatory No. 33
State separately with respect to each market affected by
the merger referred to in paragraph 9 of the complaint:
a. Its nature;
b. Its geographic boundaries ;
ce. The factors used by you in determining that geo-
graphic market ;
d. Whether there are any barriers to entry into such
market;
e. Whether said merger created any barriers to such
entry;
f. Describe separately each of the barriers referred to
in your answers to the foregoing subparagraphs d. and e.;
g. Whether there have been any technological changes
during the five year period preceding the filing of the
complaint which affect the structure of such market;
i 33
h. If your answer to the foregoing subparagraph g. is
in the affirmative, describe such technological changes ;
i. Whether you have investigated, examined or deter-
mined the extent to which the demand for janitorial serv-
ices in such market may be satisfied by hiring the labor
for janitorial work without dealing with any seller of
janitorial services or janitorial services contracting com-
pany ;
j. If your answer to the foregoing subparagraph i. is in
the affirmative, the results of each such investigation,
examination and determination, and the factors and facts
involved ;
k. Whether you have investigated, examined or deter-
mined the factors which affect a customer making a choice
between hiring his own labor force for janitorial work
and dealing with a seller of janitorial services or a jani-
torial services contracting company in such market;
1. If your answer to the foregoing subparagraph k. is
in the affirmative, the results of each such investigation,
examination and determination, and the factors and facts
involved ; Secs
m. Whether you have investigated, examined or deter-
mined the extent to which customers in such market are
sensitive to price changes in the janitorial services con-
tracting business ;
n. If your answer to the foregoing subparagraph m. is
in the affirmative, the results of each such investigation,
examination and determination, and the factors and facts
involved ;
0. Whether you have investigated, examined or deter-
mined the economic or financial strength of defendant’s
competitors in such market ;
p. If your answer to the foregoing subparagraph o. is
in the affirmative, the results of each such investigation,
examination and determination, and the factors and facts
involved ;
q- Whether you have made any economic surveys of
such market ;
r. If your answer to the foregoing subparagraph q. is
in the affirmative, describe such survey ;
s. Whether you have determined that there have been
creases in concentration in that market ;
t. If your answer to the foregoing subparagraph s. is
34
in the affirmative, what acts or occurrences or events have
contributed to or have caused such increases in concen-
tration;
u. Whether the market has a product dimension;
v. If your answer to the foregoing subparagraph u. is
in the affirmative, the nature of the product dimension,
and the factors used in determining the product dimen-
sion; and
w. Identify all documents which were the source of, or
from which you derived, the information given in your
answers to the foregoing subparagraph a. through v.
Answer To Interrogatory No. 33
Response to subparagraphs a. through c.:
The merger of Benton Maintenance Company into the
ABMI wholly owned subsidiary affected the janitorial serv-
ices market within Southern California and within the Los
Angeles area. Plaintiff does not have sufficient knowledge
at this time to identify any other markets affected by said
merger.
Southern California is composed of the six counties of
Los Angeles, Orange, San Bernardino, Riverside, Santa
Barbara, and Ventura. The Los Angeles area is bounded
generally on the north by Oxnard, on the south by San
Clemente, on the east by Fullerton, Pomona, Covina, and
Azusa, and on the west by the Pacific Ocean.
Southern California, as defined, was represented to plain-
tiff (see Exhibit ‘‘C’’) as being the area in which ABMI
conducted a portion of its janitorial services business. The
Los Angeles area, as defined, was represented to plaintiff
(see Exhibit ‘‘D’’) as being the area in which Benton
Maintenance Company conducted ‘its janitorial services
business.
Responses to subparagraphs d. e. and g.:
Plaintiff does not have sufficient information to answer.
Subparagraphs f. and h.: Not applicable.
Subparagraphs i. and k.: No.
Subparagraphs j. and 1.: Not applicable.
Subparagraph m.: Yes. ,
Subparagraph n.: Plaintiff was not able to make a firm
determination as a result of its investigation and examina-
tion on the question of whether price alone was the deter- :
35
mining fac‘or in the janitorial Wervices contracting business
in Souther: California and in the Los Angeles area.
Suhparagraph o.: No.
Subparagraph p.: Not applicable.
Subparagraphs q. and r.: The Antitrust Division of the
United States Department of Justice has not made any
economic-surveys of the janitorial services market in
Southern California, as defined, or in the Los Angeles area,
as defined, if by ‘‘eeonomic survey’’ is meant a polling of
all competitors within said_markets to determine their
volume of sales, etc. Otherwise, the Antitrust Division
knows only that the United States Department of Com-
merce, Bureau of the Census, periodically makes certain
surveys of businesses within certain States, counties and
metropolitan areas, among which are surveys of businesses
in Standard Industrial Classification No. 7349.
Subparagraphs s. and t.: Yes, plaintiff is aware of the
mergers and acquisitions recited in answer to the foregoing
Interrogatory No. 32, which have contributed to or caused
increases in concentration in the Southern California and
in the Los Angeles area janitorial services markets.
Subparagraphs u. and v.: Yes, janitorial services in
Southern California and inthe Los Angeles area include
general cleaning; sweeping and dusting; stripping, waxing
and polishing floors; carpet vacuuming and shampooing;
trash removal; venetian blind cleaning; washing of floors
and walls; furniture cleaning and polishing; elevator oper-
ating ; and porter work. :
Subparagraph w.: See Exhibits ‘‘C”’ and “‘D”” attached
hereto.
Interrogatory No. 34
In determining to challenge the merger referred to in
paragraph 9 of the complaint:
a. Did you apply any standards other than the sizes of
_ the merging firm’s market shares;
b. If so, state the standards applied and the facts indi-
cating the application of such standards; and
c. Identify all documents used in making that deter-
mination and all documents referring to that determina-
tion, and all documents referring to the standards and
factors used in that determination.
ie
36
Answer To Interrogatory No. 34
Plaintiff objects to the foregoing interrogatory. The
standards used by plaintiff in its decision to challenge a
particular merger is not relevant to any issues in this case.
It also calls for information which does not relate to matters
which can be inquired into under Rule 26(b) of the Federal
Rules of Cwil Procedure.
Interrogatory No. 35
' State:
a. The date on which you first learned of the merger
and acquisition referred to in paragraph 9 of the com-
plaint ;
b. How or in what manner or from what source you first
learned of the merger and acquisition referred to in para-
graph 9 of the complaint;
ce. The date on which you determined for the first time
to challenge the legality of the merger and acquisition
referred to in paragraph 9 of the complaint;
d. Whether or not you at any time prior to the service
of the complaint notified defendants that you had deter-
mined to challenge the legality of the said merger and
acquisition ; and
e. If your answer to the foregoing subparagraph d. is
in the affirmative, identify all documents constituting or
referring to any such notification to defendant.
Answer To Interrogatory No. 35
Plaintiff objects to the foregoing interrogatory. The date
and manner in which plaintiff learned of this merger; the
date plaintiff decided to file suit; and the time and manner
in which plaintiff notified defendant of its intention to file
such suit are irrelevant to any issues in this case.
Interrogatory No. 36
State with reference to paragraph 2 of the prayer of the
complaint :
a. Whether or not you are able to list the assets, dives-
titure of which by defendant will satisfy said paragraph 2
of the prayer of the complaint ; and
37
b. If your answer to the foregoing subparagraph a. is
in the affirmative, list said assets.
Answer To Interrogatory No. 36
a. Plaintiff at this time is unable to list the assets, divesti-
ture of which by defendant will satisfy paragraph 2 of the
prayer of the complaint.
b. Not applicable.
Interrogatory No. 37
State with regard to janitorial services used by plaintiff,
or any of its divisions, departments, branches or agencies:
a. The total number of employees of plaintiff perform-
ing janitorial services in the Los Angeles area;
b. The total number of employees of plaintiff perform-
ing janitorial services in the Southern California area;
‘ec. Whether any division, department, branch or agency
of plaintiff provides janitorial services to any other
division, department, branch or agency in Southern Cali-
fornia pursuant to any governmental rule or regulation;
d. If your answer to the foregoing subparagraph ec. is
in the affirmative, state the name of each such division,
department, branch or agency and identify all documents
constituting such rule or regulation ;
e. State the name and address of the person employed
by plaintiff personally responsible for the administration
of janitorial services for plaintiff in Southern California ;
f. State whether plaintiff has employed any seller of
janitorial services or janitorial services contracting com-
pany to provide janitorial services for plaintiff in the
Los Angeles area during the period commencing January
1, 1968 and ending June 1, 1970;
g. If the answer to the foregoing subparagraph f. is in
the affirmative, state the name and address of each seller
of janitorial services or janitorial services contracting
company providing such services and identify all docu-
ments constituting contracts for such services;
h. The total square feet of building area for which
janitorial services are provided for plaintiff in Southern
California; and
i. The total square feet of building area for which
janitorial services are provided for plaintiff in the Los
Angeles area.
38
Answer To Interrogatory No. 37
It would be unduly burdensome for plaintiff to secure the
information requested by the foregoing Interrogatory No.
37. However, Exhibits ‘‘G’’ and ‘“‘H”’ attached and filed
concurrently herewith represent a good faith effort on the
part of plaintiff to comply with defendant’s request.
Interrogatory No. 38
State separately with respect to each person interviewed
by any representative of plaintiff with respect to the sale of
janitorial services in Southern California:
a. His name;
b. His address;
_ ¢. The person, corporation with which he is associated
or by whom he is employed ;
d. The name of each person representing plaintiff who
conducted each such interview, together with the divi-
sions, departments, branches or agencies of plaintiff with
whom that person was associated or employed;
e. The date or dates the interview was conducted ;
f, Identify all documents evidencing what was stated at
such interview.
Answer To Interrogatory No. 38
Plaintiff objects to this interrogatory. It calls for infor-
mation which is irrelevant, unduly and unreasonably bur-
densome for plaintiff to produce. The names, addresses,
company affiliations, etc. of all persons interviewed by rep-
resentatives of the United States is not relevant to the
subject matter of this litigation, nor is such information
likely to lead to the discovery of relevant material.
Plaintiff also objects to this interrogatory in that it does
not relate to matters which can be inquired into under Rule
26 of the Federal Rules of Civil Procedure.
Dated: July 12, 1971
/8/ Michael J. Dennis
MicHak. J. Dennis
Attorney, Department of Justice
(Jurat Omitted in Printing)
Untitep States District Court
CentraL District oF CALIFORNIA
(Caption Omitted in Printing)
NOTICE OF MOTION AND MOTION OF DEFENDANT
AMFRICAN BUILDING MAINTENANCE INDUS-
TRIES FOR'SUMMARY JUDGMENT OF DIS-
MISSAL AND SUGGESTION THE COURT
LACKS SUBJECT MATTER JURISDICTION
[Rules 12(h) (3) and 56, F.R.C.P.]
TO PLAINTIFF UNITED STATES OF AMERICA AND
TO THE DEPARTMENT. OF JUSTICE, ANTITRUST
DIVISION, AND MICHAEL J. DENNIS, ITS ATTOR-
NEYS:
Puease Take Notice that on Tuesday, September 4, 1973,
at 10:00 o’clock a.m., or as soon thereafter as counsel can
be heard, in the Courtroom of the Honorable Jesse W. Cur-
tis, Judge of the above entitled Court, defendant American
Building Maintenance Industries will move the Court, pur-
suant to Rule 56 of the Federal Rules of Civil Procedure,
for summary judgment dismissing the above action for lack
of subject matter jurisdiction.
Further, defendant suggests, pursuant to Rule 12(h) (3)
of the Federal Rules of Civil Procedure, that the Court lacks
jurisdiction of the subject matter of the action.
This motion and suggestion are made upon the grounds
that there is no genuine issue as to any material fact re-
lating to jurisdiction and defendant is entitled to a judg-
ment of dismissal as a matter of law.
This motion is based upon the Affidavits of Jess E.
Benton, Jr., Jess E. Benton, III, Eugene Coil, and Claudia
Morgan filed herewith, upon the memorandum of points and
authorities filed herewith, and upon all the files and records
of this action.
DATED: August 17, 1973
Lawter, Fevrx & Hai
Marcus Martson
AntTHoNIE M. Voocp
By /s/ Anthonie M. Voogd
AntHonie M. Voocp
Attorneys for Defendant
American Building
Maintenance Industries
DEFENDANT’S SUPPORTING AFFIDAVITS, FILED
AUGUST 28, 1973:
Unitep States Distaict Court
CentraL Distreict or Cauirornia
(Caption Omitted in Printing)
AFFIDAVIT OF CLAUDIA MORGAN
Cuaupia Moraan, being first duly sworn, deposes and
says: . ;
1. I reside at 13614 Abana Drive, Cerritos, California
90701.
2. During the period of time between March 30, 1971 and
June 9, 1971, I was employed by Kelly Girl and was as-
signed as a temporary employee to American Building
Maintenance Company of California. During this period of
~ time I reviewed certain records of J. E. Benton Management
Corporation and Benton Maintenance Company located at
the offices of American Building Maintenance Company of
California, at 921 East 61st Street, Los Angeles, California
90035. The review of the records was conducted by me under
the immediate supervision of Jess E. Benton, III, Director
of Administration, Los Angeles Regional Office, American
Building Maintenance Company of California.
3. The records reviewed by me included account ledger
cards and other documents indicating all purchases made
by J. E. Benton Management Corporation and Benton
Maintenance Company from suppliers during the calendar
year 1969 and the first six months of 1970. The review was
mede in order to respond to Interrogatory No. 16 of Plain-
tiff’s First Set of Interrogatories to Defendant, which I
have been informed were filed in this action on March 30,
1971. Interrogatory No. 16 inquired:
‘‘With regard to the suppliers of Benton during the
period January 1, 1968 to June 30, 1970, state as to each
supplier:
(a) the name and address;
(b) the dollar amount and description of products
supplied to Benton which were shipped from outside the
State of California.’’
40 rs
41
4, Attached hereto as Exhibits ‘‘A’’ through ‘‘D’’ are
copies of the schedules prepared by me, which I understand
were filed in response to Interrogatory No. 16. These
schedules show suppliers and out-of-state purchases of the
Benton companies as follows:
1. Exhibit ‘‘A’’: Benton Maintenance Company, Jan-
uary 1, 1969 through December 31, 1969.
2. Exhibit ‘‘B’’: Benton Maintenance Company, Jan-
uary 1, 1969 through June 30, 1970.
3. Exhibit ‘‘C’’: J. E. Benton Management Corpora-
tion, March 1, 1969 through February 28, 1970.
4. Exhibit ‘‘D’’: J. E. Benton Management Corpora-
tion, March 1, 1970 through June 30, 1970.
5. As more particularly appears from the schedules, the
Benton Maintenance Company made no out-of-state pur-
chases between January 1, 1969 and June 30, 1970. J. E.
Benton Management Corporation made no out-of-state pur-
chases between March 1, 1970 and June 30, 1970 and made
the following out-of-state purchases between March 1, 1969
and February 28, 1970: -
Mathew Bender Co. $13.39 Real Estate Publications
P. O. Box 658
Albany, New York
12201 \
Monarch Metal Products $25.01 Reel Rack
New Windsor
New York 12550
Prentice Hall, Inc. $79.98 Income Tax Publication \
Englewood Cliffs, 7
New Jersey
Ready Made Sign Co. $11.97 Sign Purchase
1207 44th Avenue
Long Island, New
York 11001
DATED: August 14, 1973.
/s/ Claudia Morgan
Ciaupia Morcan
(Jurat Omitted in Printing)
Untrep Srates District Court
CentraL District or CaLiroRNia
(Caption Omitted in Printing)
AFFIDAVIT OF EUGENE COIL
Kvcene Con, being first duly sworn, deposes and says:
1, From January 1, 1967 to June 30, 1970, I was employed
by Benton Maintenance Company as an assistant to G. V.
Carr. During that period of time, Mr. Carr was the Treas.
urer of Benton Maintenance Company and the Treasurer
of J. E. Benton Management Corporation. I was, and am,
intimately acquainted with the accounting procedures of the |
Benton companies during that period of time.
2. J. E. Benton Management Corporation and Benton
Maintenance Company maintained offices at 3727 West
Olympic Boulevard, Los Angeles, California. The Pacific
Telephone and Telegraph Company provided the Benton
companies with telepkone services through a single switch-
board at these offices over telephone number 737-3220. These
telephone services were billed to and paid by J. E. Benton
Management Corporation. Benton Maintenance Company
reimbursed J. E. Benton Management Corporation for its
usage of the telephone services. :
3. In the course of my duties I reviewed the bills sub-
mitted to J. E. Benton Management Corporation by The
Pacific Telephone and Telegraph Company and approved
them for payment. Additionally, I computed the amount
Benton Maintenance Company would reimburse J. E. Ben-
ton Management Corporation for use of telephone services.
Prior to June, 1969, Benton Maintenance Company reim-
bursed J. F. Benton Management Corporation fifty percent
of all telephone services charges other than long distance
charges; after June, 1969 and through June, 1970, this
percentage was increased to sixty percent. The charges for
all long distance calls made by Benton Maintenance Com-
pany were paid by that company to J. E. Benton Manage-
ment Corporation.
4. Attached hereto as Exhibits ‘‘A’’ through ‘‘R”’ are
true and correct copies~of telephone bills rendered J. E.
Benton Management Corporation by The Pacific Telephone
42
43
and Telegraph Company from J anuary of 1969 through
June of 1970, together with copies of checks submitted to
The Pacific Telephone and Telegraph Company in payment
of the bills and my worksheets relating to payment of. the
bills. The bills indicate the charges for out;of-state tele-
phone calls and telegrams shown in the third column:
: Total Amount List of Out of State Telephone
Date of Bil of Bill Calls and Telegrams
January 25, 1969 $ 798.16 all of None
; (Exhibit A) = which was paid.
February 25, 1969 $ 792.41 of which January 30, 1969 to Mingo Junetion,
(Exhibit B) . $787.01 was Ohio, $1.70 (Misdialed number or
paid billing error) ;
February 15, 1969 to Kansas City,
Missouri, $2:95 (Billing error) _
February 18, 1969 to Kansas City,
ge : Missouri, $0.75 (Billing error)
March 25, 1969 $1,511.64 of which March 5, 1969 td Kansas City, Mis-
(Exhibit C) $1,484.85 was souri, $0.75 (Billing error)
paid March 5, 1969 to Kansas City, Kan-
sas, $1.80 (Billing error).
March 5, 1969 to Kansas City, Kan-
sas, $1.80 (Billing error)
March 5, 1969 to Kansas City, Kan-
sas, $3.15 (Billingerror)
March 5, 1969 to Kansas City, Kan-
sas, $14.60 (Billing error)
March 9, 1969 to Kansas City, Mis-
souri, $2.55 (Billing error)
April 25, 1969 $1,323.36 of which March 26, 1969 to Kansas City, Kan-
(Exhibit D) $1,319.21 was sas, $2.60 (Billing error)
, paid. April 7, 1969 to Albuquerque, New
Mexico, $1.50 (Personal—G.V. Carr)
April 8, 1969 to Las Vegas, Nevada,
$1.30
April 21, 1969 to Duluth, Minnesota,
$4.05 (Personal—Ivar Gustafson )
' April 21, 1969 to St. Paul, Minne-
f sota, $1.55 (Billing error) '
£pril 8, 1969 to New York, New,
York, $2.69 (Telegram)
$1,134.13 of which May 12, 1969 to Las Vegas, Nevada,
$1,128.11 was $1.30 (Personal—Jess E. Benton,
paid. III) ©
~ May 21, 1969 to Altnl, Pennsyl-
‘ f vania, $1.70 (Billing error)
Date of Bill
June 25, 1969
(Exhibit F)
TOTALS
44
Total Amount
of Bi
$1,196.71 of which
$1,190.69 was
' paid.
$1,168.94 of which
$1,167.07 was
paid.
!
$1,146.11 all of
which wus paid.
$ 663.97 all of
which was paid.
y 999.53 all of
which was paid.
$ 947.00 all of
which was paid.
$ 901.98 all of
which was paid.
$ 92490 all of
which was paid.
$ 991.27 all of
which was paid.
$ 946.93 all of
which was paid.
$1,000.86 all of
which was paid.
$ 888.59 all of
‘which was paid.
$ 974.21 all of
which was paid.
f
$18,310.70 of which
$18,260.45 was
paid.
List of Out of State Telephone
Calle and Telegrams
May 22, 1969 to Medford, Oregon,
$7.05 (Billing error)
June 3, 1969 to New York, New
York, $1.80 (Telegram)
June 6, 1969 to Philadelphia, Penn-
sylvania, $1.70 (Billing error)
July 10, 1969 to Topeka,
' $8.00 (Personal—K. Nolan)
July 11, 1969 to Buffalo, New York,
$1.70 (Billing error)
July 23, 1969 to West Germany,
$7.42 (Telegram, Personal—Jess E.
Benton, III)
_ September 16, 1969 to Roseville,
Michigan, $2.60
None
None
December 8, 1969 to New York, New
York, $2.44 (Telegram)
None f
February 24, 1970 to Las Vegas,
Nevada, $1.20 (Personal—Eugene
Coil)
Mareh 19, 1970 to Las Vegas,
Nevada, $1.30
April 7, 1970 to New York, New
York, $1.35
April 17, 1970 to New York, New
York, $1.80
April 17, ‘1970 to Oradell, New
‘Jersey, $4.05
None
‘June 1, 1970 to New York, New
York, $1.80
June 11, 1970 to Mingo Junction,
Ohio, $1.35 (Misdialed call)
f
5. With ten exceptions, the out-of-state telephone calls -
45
and telegrams indicated on the bills were totally unrelated
to the business activities of the Benton companies, being:
a. Calls involving erroneous billings: On numerous
occasions, unknown persons would make long distance
calls, usually from public telepbones, and charge the calls
to telephone number 737-3230, the number for the Benton
compan'es. Charges for these calls were deducted from
the telephone bills and not paid. These calls are indicated
on the above list by the words ‘‘billing error.’’
b. Personal Calls: On occasion, employees at the Ben-
ton companies would use the telephone service to place
personal calls and reimburse J. E. Benton Management
Corporation through me for the costs of the call. The calls
are indicated on the above list by the word “‘ personal’’
and the name of the person who placed the call.
ce. Telegram to West Germany: I have read the Affi-
davit of Jess E. Benton, ITI, and am thereby advised that
the July 23, 1973 telegram to West Germany was personal.
d. Msdialed Calls: The January 30, 1969 and June 11,
1970 calls to telephone number (614) 535-1230 in Mingo
Junction, Ohio were misdialed attempts to call (714)
535-1230 in Anaheim, California, a frequently called tele-
phone number. ‘These calls are indicated on the above list
by the words ‘‘ misdialed call.’’
The remaining out-of-state calls and telegrams are listed
below :
a. April 8, 1969 call to Las Vegas, Nevada, $1.30;
b. April 8, 1969 telegram to New York, New York,
$2.69:
e. June 3, 1969 telegram to New York, New York, $1.80;
d. September 16, 1969 call to Roseville, Michigan, $2.60;
ina December 8, 1969 telegram to New York, New York,
44;
f. March 19, 1970 call to Las Vegas, Nevada, $1.30;
g. April 7, 1970 to New York, New York $1.35;
h. April 17, 1970 call to New York, New York, $1.80;
i. April 17, 1970 call to Oradell, New Jersey, $4.05;
j. June 1, 1970 call to New York, New York, $1.80;
__ Certain of these ten calls, particularly the calls to Las
Vegas, may have been personal calls, calls involving errone-
_ ous billings or misdialed calls. The total amount billed for
_ these ten calls was $21.13.
46
6. The Pacific Telephone and Telegraph Company pro-
vided Benton Maintenance Company with night line tele-
phone services over telephone number 737-3611 at 3727
West Olympic Boulevard, Los Angeles, California. It also
provided Benton Maintenance Company with telephone
services over telephone number 790-2685 at the offices of its
client, Jet Propulsion Laboratories, 4800 Oak Grove Drive,
Pasadena, California 91103. Bills for these services were
paid by Benton Maintenance Company.
7. In the ordinary course of business and as Assistant
Comptroller of Benton Maintenance Company, I reviewed _
the bills rendered to that company by The Pacific Tele-
phone and Telegraph Company before approving them for
payment.
8. Attached hereto as Exhibits ‘‘S”’ through ‘‘Y”’’ are
true and correct copies of retained telephone bills for tele-
phone services rendered Benton Maintenance Company by
The Pacific Telephone and Telegraph Company. These bills
indicate no out-of-state telephone calls were made over
telephone numbers 737-3611 and 790-2685.
DATED: August 14, 1973.
/s/ Eugene Coil
Eugene Com,
(Jurat Omitted in Printing)
ms
mSycrto me sak
= @.@ & 6 FS wet oe
Unrrep States District Court
CentraL District oF CALIFORNIA
(Caption Omitted in Printing)
AFFIDAVIT OF JESS E. BENTON, II
Jess E. Benton, III, being first duly sworn, deposes and
says:
1. In July of 1969 I was Assistant Secretary-Treasurer
of J. B. Benton Management Corporation and the Assistant
Secretary-Treasurer of Benton Maintenance Company.
2. In July of 1969 I was also a member of the Board of
Directors of the Los Angeles Junior Chamber of Commerce
which at that time was sponsoring the City of Los Angeles
as a ‘Theme City’’ in the German American Volkfest to
be held in Berlin, West Germany, from July 25, 1969
through August 10, 1969. I was the member of the Board of
Directors responsible for matters relating to the Volkfest.
3. On July 23, 1969 I arranged for the sending of a tele-
gram from the Los Angeles Junior Chamber of Commerce
to the German American Volkfest in Berlin, West Germany.
The arrangements for the sending of the telegram were
made by me by telephone from the offices of the Benton
companies located at 3727 West Olympic Boulevard, Los
Angeles, California. I understand the costs of the telegraph
appeared on the August 25, 1973 telephone bill submitted to
J. E. Benton Management Corporation by The Pacific
Telephone and Telegraph Company.
4. The telegram concerned the German American Volk-
fest only and was totally unrelated to the business activities
of the Benton companies.
DATED: August 14, 1973.
/s/ Jess E. Benton, IIT
Jess E. Benton, II
(Jurat and Certificate of Service Omitted in Printing)
47
Unrrep Srares Disraict Court -
Centra District or CaLirorniu
(Caption Omitted in Printing)
AFFIDAVIT OF JESS E. BENTON, JR.
Jess E, Benton, Jr., being first duly sworn, deposes and
Says:
Introduction
1. I am retired from active business and reside at 2728
Monte Mar Terrace, Los Angeles, California 90064. From
1936 to June 30, 1970, the date of the merger hereinafter
referred to, I was employed by J. E. Benton Management
Corporation, and from before 1950 to June 30, 1970 I was
the President of that corporation. I was employed by Ben-
ton Maintenance Company as its President from 1958 to
1967 and as its Chairman of the Board and Chief Executive
Officer from 1967 to June 30, 1970. I was, and am, intimately
acquainted with the business and activities of the Benton
corporations through June 30, 1970.
History of J. E. Benton Management Corporation
2. J. E. Benton Management Corporation was established
during the national economic depression by my father,
Jess E. Benton, and his partner, A. F. Ohl. The corporation
was established by use of the corporate shell of Pacific
Realty Securities Company, an inactive corporation or-
ganized under the laws of the State of California.
3. J. E. Benton Management Corporation was established
for the express purpose of managing buildings and hotels
which were assets of bankrupt corporations which had been
reorganized under Section 77B of the Bankruptcy Act.
Trustees in corporate reorganization proceedings did not
wish to, sell the buildings because of the depressed state of
the real estate market. J. E. Benton Management Corpora-
tion provided trustees with building management services
until such time as the real estate market improved and the
building could be sold for a reasonable price.
4. Between 1936 and 1949 J. E. Benton Management
Corporation provided management service for numerous
48
B
of
0!
49
e
buildings under the control of corporate reorganization
trustees. These management services included all services
necessary for the operation of a building, such as rental of
space, collection of rent, accounting, repair, alterations,
engineering, and janitorial services. Subsequent to 1936
the company commenced selling management services to
owners of buildings and apartments and also commenced
engaging inthe real estate business.
5. Between 1936 and June 30, 1970, J. E. Benton Manage-
ment Corporation engaged in the real estate business and
the business of providing building management, janitorial
and related services, These were the only businesses the
corporation engaged in during this period of time.
History of Benton Maintenance Company
6. Benton Maintenance Company was established by me
in 1958 under the name of Affiliated Maintenance Company.
The corporation was established by use of the corporate
shell of S. W. Straus & Co., an inactive corporation orga-
nized under the laws of the ‘State of California. The name
Affiliated Maintenance Company was changed to Benton
Maintenance Company in 1968.
7. Benton Maintenance Company was organized for the
purpose of engaging in the business of selling janitorial
services alone and apart from the sale of management serv-
ices. It was not practicable for J. E. Benton Management
Corporation to engage in this business. Janitorial services
_ are frequently sold to building managers. A building man-
ager might be unwilling to purchase janitorial services from
J, E. Benton Management Corporation, believing that his
position as building manager might be threatened.
8. Between 1958 and June 30, 1970, Benton Maintenance
Company’ engaged i in the business of selling janitorial and
related services. This was the only business the corporation
engaged in during this period of time.
Ownership of the Benton Companies
9. Prior to June 30, 1970 I owned all of the stock of J. E.
Benton Management Corporation and eighty-five percent
of the stock of Benton Maintenance Company. Ten percent
of the Benton Maintenance Company stock was owned by
my brother, Robert Benton. Ivar Gustafson, an officer of
50
the corporation, owned the remaining five percent of the
stock.
10. Because of their differing corporate organization and
ownership, the businesses of the Benton corporations were
kept strictly separate with the following exceptions. Robert
Benton, Jess E. Benton, III, G. V. Carr, and I were em-
ployed by both corporations. The purchase of janitorial
supplies was sometimes jointly negotiated by both corpora-
tions but invoiced and paid separately. There was some
borrowing of equipment between the corporations. Both
corporations maintained their only offices at 3727 West
Olympic Boulevard, Los Angeles, California. The two
corporations used the same telephone switchboard at their
offices, but divided the costs of telephone services. J. E.
Benton Management Corporation paid the salary of the
switchboard operator. Benton Maintenance Company paid
the salaries of other office personnel who provided some
service to J. E. Benton Management Corporation.
The Merger
11. On June 30, 1970, Benton Maintenance Company was
merged into American Building Maintenance Company of
California. Robert Benton, Ivar S. Gustafson and J re-
ceived 75,000 shares of the common stock of American
Building Maintenance Industries for our Benton Mainte-
nance Company stock. On the same date American Building
Maintenance Industries purchased all of the stock of J. E.
Benton Management Corporation from me for $750,000.
12. I sold my interests in the Benton corporations to
American Building Maintenance Industries because of my
age and my desire to retire. ©
13. The businesses of the Benton corporations were con-
ducted entirely within Los Angeles, Orange and Ventura
Counties in California.
14. The Benton corporations had no manufacturing
plants, no sales or distribution outlets, no product which
was sold or shipped, no patents or scientific know-how, and
no location or business situs advantage.
15. The business of the Benton corporations in providing .
janitorial services, and the janitorial service business gener-
ally, is an intensely local activity. No commodity is sold.
The only sale made (if it be a sale) is the sale of unskilled
. labor of janitors necessary to clean buildings. There is no
tangible property involved in the business except insignifi-
cant, incidental facilities.
51
16. All but an extremely small number of the suppliers
of the Benton corporations were located within California.
17. The Benton corporations purchased supplies as
needed. They did not enter into any requirements or con-
tinuing supply contracts with its suppliers. There are no
significant economies to be realized through bulk or quan-
tity purchases of supplies necessary to the provision of
janitorial services. Supplies represent a minor part of the
total costs of providing janitorial service. The basic service
provided was the labor necessary to perform the cleaning
work. Costs of supplies represent approximately three
percent of total amounts paid by customers for janitorial
services.
18. The major suppliers of the Benton corporations were:
a. Ball Industries, E] Segundo, California, which de-
livered industrial and janitorial equipment and supplies
from its warehouse to the Benton corporations’ ware-
house at 3727 West Olympic Boulevard or to customer
locations specified by the Benton corporations;
b. National Sanitary Supply Co., Los Angeles, Calli-
fornia, which delivered paper goods and other janitorial
supplies from its warehouse to the Benton corporations’
warehouse or to customer locations specified by the Ben-
ton corporations;
ce. U.S. Guards, Monterey Park, California, which pro-
vided the Benton corporations with building guard serv-
ices on a subcontract basis ; and
d. Courtesy Chevrolet Leasing, Los Angeles, Cali-
fornia, which leased vehicles to the Benton corporations.
19. To the best of my recollection between 1965 and June
30, 1970 no officer or employee of J. E. Benton Management
Corporation crossed a state line while engaged in business
activities for that corporation; and between 1968 and June
30, 1970, no officer or employee of Benton Maintenance
Company crossed a state line while engaged in business
- activities for that corporation.
20. The Benton corporations did not advertise nationally.
They purchased advertising in the yellow pages of local
telephone directories and distributed brochures describing
their businesses to prospective customers.
| Dated:, August 16, 1973.
ae {
/8/ Jess E. Benton, Jr.
Jess E. Benton, Jr.
. (Jurat and Certificate of Service Omitted in Printing)
APPENDIX A
Customers of Benton which were engaged in interstate or
foreign commerce and which paid Benton more than $10,000
for services in 1969 included :
Ameritan Brass Mfg. Co.
Bank of America National Trust and Savings Association
Charles Luckman Associates (subsidiary of Ogden Corp.)
Collier Carbon and Chemical Corporation (subsidiary of
Union Oil Company of California)
General Telephone Company of California
Great Western Savings & Loan Association
Hunt Foods
Hycon Manufacturing Company (subsidiary of McDon-
nell Donglas Corporation)
Insuranee Company of North America
International Business Machines Corp.
Lincoln Savings & Loan Association
Lockheed Corporation
March & McLennan, Incorporated (subsidiary of Marlen-
nan Corp:)
Minnesota Mining & Manufacturing Company
Mobil Oil Corp.
National Aeronautics and Space Administration (NASA
Jet Propulsion Laboratory)
North American Aviation (now Rockwell International
Corp.)
Pacific Telephone & Telegraph
Shell Oil Company
Teledyne, Inc. ~
Texaco, Inc.
Tishman Realty & Construction Co., Inc.
TRW, Inc.
Union Oil Company of California
Union Pacific Corporation
United Artists Corp. (subsidiary of Transamerica Corp.)
United California Bank _—s«t.
_ Van Camp Sea Food Co. (Div. of Ralston Purina)
Walston & Co. =
Western Electric Company
Sources : Exhibits C, F & H filed by ABMI
June 9, 1971, pursuant to Protective Order
entered June 2, 1971. |
52
Unrtep Sratres District Court
CentraL District or CALIFORNIA
(Caption Omitted in Printing)
AFFIDAVITS IN SUPPORT OF GOVERNMENT’S
MEMORANDUM IN OPPOSITION TO DEFENDANT’S
SUMMARY JUDGMENT MOTION
INDEX
I CUSTOMERS
TE BO ha sah ahh bos Ke civencsvetees
Jet Propulsion Laboratory
Rockwell International ................
Plant Services Department
Rockwell International .................
Tishman Realty & Construction Co. .:.-..
General Telephone Company of Cali-
eee eee ee eeee
TOI i oo oa vicin te a oak ada wee ape ei
Pacific Telephone and Telegraph Com-
ONG chess cis vee eube SNS ens aes)
Mobil Oil Corporation .....20.s0..0ce0
Union Oi] Company ..............- as
A, Bek acces ae ou ke wha chewed nd
Carnation. COmpeny. «.... 6... cbee sessce
pe rer rr Terre
UPPLIERS
BAU 2 Seo OWP
A. Westinghouse Electric Spee. Ele-
wator DIGIMON bas one chad oye isiveeed’
B. Metropolitan Water District ............
C. Department of Water and Power Aqueduct
DI hi 6 5 6 56h vo ne ie verde én p08
D. Department of Water and Power ........
Power Operating and
Maintenance Division
E. Courtesy Chevrolet Co. ............++.-
F. Southern California Gas Company ......
G.:. Balk Tmtraee ais ove 6 caccccvcsceccss
H. National Sanitary Supply Co. ..........
I. Crown Zellerbach
54
J. National Cash Register Company ... : es
K. Preferred Distributing Company
HI COMPETITORS
CS 6 2s a:o:8
ee ee eee
ee ee
I. CUSTOMERS
Arripavirt or Cuartes V. ENGLE
Cuartes V. Enciz, being first duly sworn, deposes and
says:
1. I am presently employed as Director of Facilities
for TRW, Inc., Systems Group (hereinafter TRW, Sys-
tems) and maintain offices at One Space Park, Redondo
Beach, California. I have served in various supervisory
capacities within the facilities department of TRW since
March, 1961. I have responsibility for the general operation
and maintenance of the TRW, Systems facilities in Redondo
Beach. As part of my duties, I have been responsible for
the initiation of requests for the purchase of contracted
janitorial services. I have personal knowledge of the busi-
ness activities of TRW and particularly of the activities
carried on by TRW, Systems during the aforesaid period.
I understand the important relationship between janitorial
maintenance services and the overall operations of TRW.
2. TRW is a multi-national corporation engaged in sys-
tems engineering services and information services, and
in the development and manufacture of jet engine com-
ponents, space vehicle components, communication satellites
and other spacecraft, electronic components and systems,
industrial tools, bearings and fasteners. In 1969 and 1970,
the company was initiating its efforts in areas such as
microelectronics, holography and laser technology, the life
sciences, avionics, computer software services, automated
control systems and the application of systems engineering
methods to civil and industrial markets. During this period
TRW conducted one of the largest computer software
operations in the world, processing as many as 600 complex
55
problems daily. In addition, TRW has developed records
management systems for cities and counties; a land use in-
formation system for California; and an information
recording system for a consortium of major oil companies.
3..In the Los Angeles area alone, TRW, Systems utilizes
approximately 2.8 million sq. ft. of useful space. Many of
the aerospace activities of TRW are centered in these facili-
ties. Included among the many products and systems devel-
oped and assembled in these facilities during 1969 and 1970
were the Lunar Module back-up guidance system, attitude
control engines and the Lunar Module Descent Engine for
the Apollo series spacecraft which effected man’s first land-
ing on the moon; and various products for the Pioneer-
Venus program. The huge manufacturing and assembly
areas of TRW, Systems were also utilized in the manu-
facture and assembly of other spacecraft and spacecraft
components. For example, during the aforesaid period
Intelsat III, then the world’s largest commercial com-
munications satellite, was assembled and tested by TRW
in its facilities in Redondo Beach including the laboratory
known as the Environmental Simulation Chamber. In fact,
by 1972 TRW had placed more than 100 spacecraft in the
solar system. These products and the raw materials and
components from which they were manufactured moved
regularly in interstate commerce.
4. TRW, Systems has always contracted for the major
portion of the janitorial maintenance of its facilities. With
over two million square feet of manufacturing space in the
Los Angeles area, TRW, Systems is one of the larger single
space janitorial maintenance customers in the United States.
Prior to its acquisition by ABMI, Benton performed the
janitorial maintenance in the offices, laboratories and manu-
facturing areas which make up this facility. The mainten-
ance requirements of this facility and the nature of the
design, development and fabrication work performed
therein require janitorial maintenance to be scheduled in
careful coordination with production and other activities.
These technically complex schedules are produced by com-
puter and are dependent upon and work in support of pro-
duction schedules. Similarly, we produce computerized
schedules for purchasing, engineering, and management ac-
tivities. We have found proper janitorial maintenance to be
such a vital part of these operations that it must be sched-
‘>
—_—
56
uled and integrated into the overall operations of TRW.
The janitorial contractor must have sufficient expertise to
operate within the schedules. Indeed, only janitorial con-
tractors with considerable work schedule experience are
able to operate effectively within this system. TRW’s pur-
chasing, facilities and production personne] work in ‘close
cooperation with the management of the janitorial con-
tractor. This close relationship is representative of the
importance of the work of the janitorial maintenance con-
tractor to TRW’s manufacturing and distribution system,
5. Several of the areas maintained by Benton required
exceptionally high maintenance quality. These areas in-
cluded clean rooms; engineering and research laboratories;
rooms containing electronic data processing equipment; and
areas utilized in the fabrication and assembly of spacecraft
and associated components. TRW, Systems operates
several clean rooms in which spacecraft and aerospace com-
ponents are assembled and tested. In order to eliminate
dust contaminants from these clean rooms a laminar air
circulation pattern is maintained and employees must take
air showers and wear specialized clothing. The maintenance
of these rooms is virtually a continuous operation and as a
result Benton personnel worked side by side and in close
cooperation with TRW scientists and technicians working
therein. The fastidious cleaning of these rooms is, and was,
& precondition of the testing and assembly operations
carried on in these rooms. In TRW’s research laboratories,
maintained by Benton, a broad range of scientific experi-
mentation and testing was performed. This work involved
electronic, physical, chemical and laser research. The clean-
ing of these laboratories required meticulous attention to
detail and particularly careful scheduling and coordination
so that highly sensitive experiments could be carried on in
the proper environment and to insure that they would not
be disturbed in the cleaning operation. This coordination
was affected through constant communication and cooper-
ation between TRW and Benton personnel.
6. The maintenance of manufacturing and assembly areas
within TRWs facilities requires a high degree of mutual
assistance and coefficiency. In these areas, the maintenance
and produc‘ion schedules are highly interdependent. More-
over, the maintenance employee must handle and clean
manufacturing eqtipment and provide a safe and clean
environment for TRW employees. As a result, the main-
57
tenance operations play a vital part in the assembly and
fabrication of products by TRW which subsequently move
in interstate commerce.
7. Under the maintenance contract with TRW, Benton .
also removed various waste materials from TRW’s labora-
tories, offices and manufacturing areas. These materials
included packaging materials, cartons, waste paper and
residue from manufacturing operations. Substantial quan-
tities of these materials move directly to TRW from outside
the State of California.
8, TRW’s considerable ‘computer facilities constitute an-
other maintenance problem area. TRW relies heavily upon
the effective operations of these computers and the main- |
tenance of a dust free environment for these machines is
-eritical to their effective operation. Dust accumulations are
as disruptive as is improper programming by TRW per-
sonnel and are commonly more difficult to correct. Indeed, a
minute piece of dust in a core unit of one of these machines
ean put it out of service. Benton’s employees had sufficient
experience and proficiency to deal with this problem.
_ 9. In purchasing contracted janitorial services, TRW pur-
thases a distinct gro"p of services, the most important com-
ponent of which is’ the management skill of the janitorial
contractor. In addition, the janitorial contractor effects
a substantial cost savings for TRW in performing this work
as its wage rate end fringe benefit package is significantly
lower, than that of TRW.
10. A common decision in industrial management involves
the decision between purchasing a product or service and
fabricating or supplying it from within the company. This
decision is commonly known as the Make-Buy decision. TRW
maintains large machine shops in which various spacecraft
components can be fabricated. Before ‘doing so, however, |
TRW’s cost for producing a component is tested against
the price at which the product can be bought in the open
market. Though several other factors are involved in the
Make-Buy decision, price is often the most significant.
' Similarly, essential services are subject to such Make-Buy
decisions. Even though TRW has a complement of construc-
‘tion and repair employees, we have found it cost effective in
some cases to subcontract for this service. For janitorial
maintenance, the significant cost savings and the expertise
offered by the janitorial contractor have caused TRW to
subcontract for this service. In terms of importance to
58
TRW’s overall operations, there is no distinction between
products and services that are purchased and products and
services which are fabricated or supplied directly by TRYW.
We expect and require the subcontractor to adhere to the
same quality specifications and the same scheduling and
security regulations as TRW’s own personnel. When the
Buy decision is made and the product or service is supplied
by others, it is quickly integrated into TRW’s system of
manufacture.
11. For several years prior to 1968, Benton performed
the entire janitorial maintenance contract at TRW, Systems
facilities in the Los Angeles area. We found them to be an
exceptionally capable and efficient firm and had serious
reservations when in 1969 ABMI underbid Benton and was
awarded the contract. Our reservations were confirmed in
our dissatisfaction. with the work performed by ABMI. It
appears that ABMI significantly underestimated the ma-
terial requirements in the contract and were, therefore, con-
stantly in search of a way to cu‘ costs. This resulted in a
general deterioration in the quality of the work performed.
12. Benton was a particularly strong competitor not only
in providing high quality maintenance services but in the
competitive bidding in response to TRW’s invitations for
‘ bids. Their on-the-job supervision and management exper-
tise was of an exceptionally high quality. As such, we were
disappointed and concerned when we were informed that
ABMI had acquired Benton. ABMI sought to quiet our
concerns by assuring us that the Benton supervisory per-
sonnel and management would be retained. On the basis of
our previous expe.ience with ABMI, ABMI would not
ordinarily have been awarded the contract to which they
_ ‘succeeded by acquiring Benton. We at TRW rely upon com-
petition to assure alternate sources of supply at com-
_ petitive prices. The acquisition of Benton by ABMI
‘ eliminated a strong and viable competitor in supplying
contracted janitorial services to TRW and has represented
a, step away from a freely competitive market for con-
tracted janitorial services.
pce ‘/8/ Charles V. Engle
Cuartes V. Enciz
(Jurat Omitted in Printing)
r
/
ee =
Arrmavit or Raymonp HernanvDez
Raymonp Hernanvez, being first duly sworn, deposes and
says:
1. Continuously since approximately December, 1969,
Ihave held my present position of Contract Negotiator for
the Jet Propulsion Laboratory, 4800 Oak Grove Drive,
Pasadena, California. The Jet Propulsion Laboratory is a
division of the California Institute of Technology operating
under two prime contracts with the United States Govern-
ment, National Aeronautics and Spdce Administration
(NASA). All of the facilities and equipment of the Labora-
tory are owned by NASA. The California Institute of
Technology provides all necessary personnel for the de-
sign, development, assembly and/or manufacture of various
pieces of space equipment on behalf of NASA. My duties
as Contract Negotiator include responsibility for procur-
ing janitorial maintenance services. I have personal knowl-
edge of the activities of the Jet Propulsion Laboratory and
the importance which janitorial maintenance contracting
services play in these activities.
2. The activities of the Jet Prepulsion Laboratory are
interstate and international in character. The Laboratory
is engaged in the research, development and manufacture of
spacecraft, communications systems and support operations
for the conduct of the unmanned exploration of space. In
performing this function for NASA, the Jet Propulsion
Laboratory performs a research and development function
and subcontracts for the production of approximately 90
percent of the physical components of the spacecraft.
Parties to these subcontracts are institutions and corpo-
rations found in many states of the United States. For
example, in fiscal 1970 contracts with out-of-state institutions
and corporations amounted to $58 million. All of the space-
eraft components, some of which are produced at the Jet
Propulsion Laboratory, are assembled at the Jet Propul-
sion Laboratory in Pasadena into the finished spacecraft.
It is then transported to Cape Kennedy, Florida before its
interplanetary journey. The Jet Propulsion Laboratory is
clearly engaged in interstate commerce.
3. From January 1, 1970 through December 11, 1970, the
Jet Propulsion Laboratory had in effect Contract No. 952696
with the Benton Maintenance Company which originally
59
60
provided for an authorized expenditure of $1.3 million and
was ammended to authorize an expenditure of $2.15 under
which Benton provided janitorial maintenance services to
the Laboratory including assembly and manufacturing
areas within the facility. (A copy of this contract secured
from the files of the Jet Propulsion Laboratory is attached
as part of this affidavit.) In addition to the services specified
in Contract No. 952696, the Jet Propulsion Laboratory
often called upon Benton to supply janitorial maintenance
contracting services for special cleaning situations and in
emergencies, known in the trade as ‘‘tag jobs.’’ ;
4. Benton Maintenance Company also provided all ma-
terial and equipment necessary-to its performance under the
contract. These supplies were purchased on behalf of the
Laboratory and became the property of the United States
upon receipt at the Laboratory.
5. The Jet Propulsion Laboratory depended upon the
expertise of Benton in designing efficient and effective work
routines which would improve upon those specified in the
contract. In this regard Benton developed a system of
allocating maintenance functions which considerably
lowered the cost of this service while maintaining the
necessary high quality. The development of this system
was important to the continuing contractual relationship
between NASA and the California Institute of Technology.
The expertise in designing work routines is a valued
expertise of the janitorial maintenance contractor. —
6. The Jet Propulsion Laboratory under separate con-
tracts periodically called upon Benton’s specialized knowl-
edge, capabilities and equipment to perform janitorial main-
tenance services in support of ‘‘clean rooms,’’ specialized
laboratories and the spacecraft assembly facility. These
rooms and facilities maintain an extra level of cleanliness
essential to the development and manufacture of highly
technical scientific equipment. The development or assembly
of scientific equipment in these rooms could have been
seriously impaired by improper maintenance. This special-
ized cleaning is critical to the operation of these facilities.
In addition Benton Maintenance performed janitorial main-
tenance services in support of other assembly and manuv-
facturing areas within the NASA facility.
7. Pursuant to Contract No. 952696 Benton removed
various waste materials from laboratory, office and assembly
areas within the Laboratory. These materials included
we wa Se ' _— wae — a= ae S.C SS
ee ee i |
1
61
small packaging materials, cartons as well as waste paper.
Substantial quantities of these materials are believed to
move directly to the Jet Propulsion Laboratory from out-
side the State of California.
8. The Jet Propulsion Laboratory is an enterprise
in interstate commercial activities. We awarded
the contract to Benton to obtain its specialized knowledge,
capabilities and expertise on the basis of meeting the
conditions of our Invitation For Bids and Benton’s low
price. The services provided by Benton were an essential
part of the integrated operations of the Laboratory. As
such, Benton played an essential part in support of the Jet
Propulsion Laboratory’s role in the United States’ ex-
ploration of space.
/s/ Raymond Hernandez
Raymonp HERNANDEZ
(Jurat Omitted in Printing)
Arripavit or CHares W. Mox.ey
Caries W. Moxtey, being first duly sworn, deposes and
says:
1. Since September of 1965, I have served in various
supervisory capacities within the Plant Services Depart-
ment of North American Rockwell Corporation, 12214
Lakewood Boulevard, Downey, California. In February of
1973, the name North American Rockwell Corporation was
changed to Rockwell International. For convenience North
American Rockwell Corporation and Rockwell International
subsequently will be referred to as Rockwell. As part of my
duties, I have been responsible for the operations of the
Plant Services Department of the Space Division of Rock-
well and for the initiation of requests for the purchase of
contracted janitorial services. I have knowledge of the
business of Rockwell and particularly of the activities of the
Space Division during the aforesaid period. I thoroughly
understand the important relationship between janitorial
maintenance services and the overall operations of Rock-
well. 4
2. Rockwell is a national and multi-national corporation
engaged in the design, engineering, development, production
and interstate distribution of various products including
automotive parts, single- and multi-engine aircraft, space-
craft, launch vehicles, ground support equipment, com-
puters, radars and other electronic systems for aircraft and
space vehicles, rocket engines, nuclear reactors and power
systems, textile machinery and various components for in-
dustrial equipment. During the period January, 1969
through June 30, 1970, Rockwell maintained general offices
in E] Segundo, California. The computer facilities for the
_ corporate operations of Rockwell in the western United
States are maintained within the buildings occupied by
the Space Division in Downey, California. These computer
facilities provide electronic data processing for the design,
development, production and interstate distribution of the
products listed above. ett
3. During the period May, 1969 through June 30, 1970,
the Space Division of Rockwell was engaged in interstate
and international activities relating to the development
and production of the Apollo command and service modules,
the S-II stage of the Saturn Launch System and various
62
63
other components of space vehicles. In producing these
products the Space Division occupied offices, laboratories
and manufacturing facilities in Downey, California and Seal
Beach, California. These buildings contain more than
8,200,000 sq. ft. and include multi-level buildings for the
assembly of rocket systems, research and engineering
laboratories, computer facilities, corporate management
offices and other manufacturing and assembly areas for
highly technical aerospace equipment. The Plant Services
Department is responsible for the overall maintenance, con-
struction and repair of buildings occupied by the Space
Division. These functions include the repair of manu-
facturing equipment, the construction and repair of build-
ings and fixtures, as well as custodial maintenance.
4. The interstate activities of the Space Division are
earried on by an integrated system of management, design,
engineering, production, distribution and other functions,
each of which plays an indisnensahle role in the ultimate
development of products by Rockwell. Some of these func-
tions are service functions which support and/or direct
manufacturing operations. The management of the Space
Division, including the management of purchasing, quality
control, personnel, production and distribution, performs a
vital service without which no products could be manu-
factured. This is also true of design and engineering
services, data processing services and plant services. With-
out these services integrated into a cohesive manufacturing
system, the Space Division could not operate efficiently
hor compete in the market for its prodvcts. The Plant
Services Department falls under the direct supervision of
the production management of the Space Division and works
together with the other functional divisions of the Space,
Division toward the ultimate production of aerospace
vehicles and equipment.
4. The Plant Services Department maintains the elec-
trical and water systems, the heat and air conditioning
equipment, the steam generation facilities, the gas and
oxygen systems and other such systems within the offices,
laboratories and manufacturing areas within the Space
Division facilities. The Department also maintains the
vehicular equipment operated by the Space Division as well
as the manufacturing equipment.
5. In the performance of custodial maintenance, the Plant
Services Department also performs services which are
64
directly involved in the assembly and testing of manv-
factured parts and systems, For example; the Space Divi-
sion operates eight ‘‘clean rooms”? in which highly sensitive
aerospace equipment is assembled and tested. At least one
of these rooms presently requires a cleanliness level of
less than 160,000 dust particles per cubic foot of air. The
maintenance of these rooms is a highly refined activity
involving specializing training, techniques and equipment.
Maintenance employees cleaning these rooms must wear
head coverings, smocks and shoe coverings and are given an
air shower before entering the clean room. The employees
must utilize specialized vacuum cleaners, chamois mops and
chemically treated dusting gloves in cleaning these rooms.
The manufacturing and testing operations within clean
rooms are such that if the particulate level within the room
is exceeded the room must be shut down for cleaning.
6. Another area within the Space Division facilities which
requires an extremely high level of cleanliness is the West-
ern Corporation Computer Center. The breakdown of the
data processing equipment in this facility severely burdens
and interrupts the operations of Rockwell] International.
In fact, it is personnel in the corporate offices in Pittsburgh,
Pennsylvania who first notice and complain when this com-
puter malfunctions, Other data processing equipment is
operated by the Space Division in the Flight Simulation
Laboratory. This Laboratory features three analogue con- .
puters which electronically simulate inflight conditions.
is room and other data processing centers within the
Space Division are an integral part of the design and pro-
duction of space equipment and proper maintenance of
these rooms is critical to the efficient operations of the
computers.
7. The removal of trash and waste products from offices,
laboratories and manufacturing areas is also an important
part of the effective use of these areas.
8. The management of the Plant Services Department of
the Space Division considers subcontracting for custodial
and other maintenance services. to be distinctly ad-
vantageous. We would subcontragt most or all of these
activities were it not for the existence of a-binding labor
agreement with the International ‘Union, United Auto-
mobile, Aerospace and Agricultural Implement Workers
of America (UAW). Article XXV° of this agreement, a
copy of which is attached as a part of this affidavit, pro-
65
hibits Rockwell from subcontracting for janitorial mainten-
ance work for longer than two months in duration. Only
when the work to be performed is beyond the experience or
equipment capabilities of Rockwell or when there are in-
sufficient Rockwell personnel to perform the work may it be
subeontracted. The principal reasons for this preference for
subcontracted janitorial services are as follows: Self-
maintenance places an excessive drain on management
resources, in contrast to the ability of a subcontractor to
provide virtually all of the management and supervision
function. Rockwell does not have access to a labor pool as
large or as motivated as the janitorial contractor and Rock-
well’s custodial work force has an unusually high turnover.
One reason for this is that during periods of layoffs any
senior employee may ‘‘bump”’ a junior custodial employee.
In addition, in hiring new custodial employees it often
requires six to ten weeks for Rockwell to process an appli-
cant before he is able to begin his employment. The most
compelling reason for this preference, however, is the
significant cost advantage incident to subcontracting for
custodial services. Under the UAW contract, Rockwell has
a significantly higher wage rate for custodial employees and
earries a fringe benefit cost of approximately 50 per cent
of the average hourly rate. As a result of the factors listed
above, the Space Division would subcontract for most or all
of its janitorial services if it were permitted to do so.
9. Despite the limitations on subcontracting, during the
period January, 1969 through June 30, 1970, Benton per-
formed a significant amount of contracted janitorial services
for the Space Division. These services included ‘‘high dust-
ing’’ and the cleaning of work benches in the world largest
clean room located in Rockwell’s Building 290. Benton
performed high dusting in manufacturing areas within
Rockwell’s Seal Beach, California facility in which S-II
rockets, a part of the Saturn Launch System, were assem-
bled. Benton also performed high dusting and other main-
tenance functions in other clean rooms and manufacturing
areas. High dusting is one service for which Rockwell is
able to contract on an annual basis as it has never been
performed by UAW members. High dusting requires large
inputs of staging equipment and personnel which Rockwell
‘does not have available. Moreover, a distinct expertise is
required to perform this operation which Rockwell person-
- nel do not possess. High dusting in the clean room of
66
Building 290 is vital to the assembly and testing operations
performed therein. i services performed by Benton in
maintaining these clean rooms and manufacturing facilities
are indistinguishable from the operations: of the Plant
Services Department in terms of their importance to the
design, development and manufacturing functions which
take place in these facilities. \
10. Most of the plants operated by Space Division and
a significant amount of the manufacturing equipment are
owned by the National Aeronautics Space Administration
(NASA). Rockwell operates these plants under contract to
NASA. NASA audits the operations of the Plant Services
Department and the quality of the maintenance of these
plants and equipment. As a result, the proper maintenance
of these facilities is important to the continuing contractual
relationship between NASA and Rockwell International.
/s/ Charles W. Moxley
Cartes W. Moxey
(Jurat Omitted in Printing)
metre ante emma
MASTER AGREEMENT
between
NORTH AMERICAN ROCKWELL CORPORATION
AEROSPACE AND ELECTRONICS GROUPS
and the
INTERNATIONAL UNION,
UNITED AUTOMOBILE,
_ AEROSPACE & AGRICULTURAL
IMPLEMENT WORKERS OF AMERICA
(UAW)
Effective December 5, 1971
ARTICLE XXV SUBCONTRACTING
resented by the Union for the term of this Agreement in
accordance with the provisions of such revised program.
ARTICLE XXV.
SUBCONTRACTING
The Company agrees that it will not subcontract mainte-
nance work operations to he performed on Company premises
when such subcontract covers continuing work ‘operations to. ~
be performed for longer than two (2) months and when the
work operations involved have normally been performed by
employees in the bargaining unit, unless a sufficient number
of employces are not available to perform such work opera-
tions within the time required.
ARTICLE XXVI
SELECTED SKILLS PROGRAM
1. A Selected Skills Program, together with a Sclected
Joint Apprentice Committee Agreement providing, as set forth
herein, an apprenticeship training program and amendments
to Article XVI, Wages and Article XVII, Hours and Special
Pay Provisions in their application to such Program and
Agreement, have been agreed to by the parties.
2. The following classifications are among those Selected
Skills classifications being considered for apprenticeship. For
purposes vf Selected Skills treatment, only certain lower level
classifications (if any) related to each of the Selected Skills
classifications will be identified for the crediting of time to-
ward becoming a journeyman as noted below.
142
Arripavit or Joun Bian
Joun Bram, being first duly swort, deposes and says:
1. Continuously since March 1964, I have held my present
position of Procurement Supervisor of Central Purchasing
for North American Rockwell Corporation and Rockwell
International, 2201 Seal Beach Boulevard, Seal Beach,
California. In February of 1973 the name North American
Rockwell Corporation was changed to Rockwell Inter.
national. As part of my duties, I have been responsible for
the procurement of janitorial maintenance services, I have
general knowledge of the business of Rockwell International
and particularly of the activities of the Space Division
during the aforesaid period. I recognize the relationship
between janitorial services and the overall operations of
Rockwell International.
2. During the period May 1969 through June 30, 1970,
the activities of the Space Division of North American
Rockwell Corporation were interstate and international in
character. During the period, the Space Division was
engaged in the design, engineering, development, production
and interstate distribution of various products for manned
and unmanned spacecraft including the Apollo command
and service modules, the S-IT stage of the Saturn Launch
System and various other components of spacecraft, lannch
vehicles and rocket engines in the Apollo/Saturn and other
programs. In support of these operations, in fiscal year
1970 the Space Division committed procurements of
$75,743,222 for raw materials, supplies, equipment and com.
ponent parts, substantial quantities of which were pur-
chased outside the State of California.
3. Several of the buildings in which the Benton Com-
panies performed janitorial services for North American
Rockwell are buildings owned by National Aeronautics and
Space Administration (NASA). Most of the manufacturing
equipment located in these plants and the products manv-
factured therein are the property of NASA and the United
States Government. ;
4. Rockwell International maintains a Plant Services
Department which is responsible for maintenance oper-
ations in the buildings operated by the Space Division. The
janitorial services supplied by the Benton Companies prior
to June 30, 1970 were services in direct support of Plant
68
nO NR Ao ge SS, EE Se es ee a ak ee
ee ee ee
a a a ae
69 / p
Services Department personnel and were often services
that were beyond the current equipment and personnel capa-
bilities of the Plant Services Department. For example, in
1970 Benton Maintenance Company provided ‘‘high dust-
ing’’ services in areas in which S-II rockets were manu-
factured and assembled before transfer to Cape Kennedy,
Florida. These services included the general cleaning and
dusting of. ceilings, sky lights, ceiling equipment, and fix-
tures. ‘‘high-dusting’’ requires a considerable amount of
‘ seaffolding on ‘‘staging’’ equipment and large numbers of
employees. We chose to utilize Benton’s specialized equip-
ment and experience to accomplish this task on the basis of
Benton’s low bid in response to Rockwell’s Invitations To
Bid. ' , :
5. I am generally aware that a high degree of cleanliness
is required in the manufacture of space vehicles and aero-
space systems. For example, the Space Division operates
the world’s largest ‘‘clean room”’ located in Building No.
290 in the NASA complex of buildings in Downey, Cali-
fornia. In this room, the command and service modules for
the Apollo spacecraft are assembled and tested. This room
and other ‘‘clean rooms’’ operated by Rockwell contain
test stands, work stands and assembly operations which
require a very high maintenance quality level. Prior to
June 30, 1970, Benton periodically was awarded contracts
for the cleaning of such work stands, ‘high dusting’’ and
other maintenance operations within the ‘‘clean room’’ of
Buileine No. 290 and the other ‘‘clean rooms’’ operated by
Rockwell. Benton also performed maintenance operations
in areas in which S-II rockets were assembled and in areas
which included research and engineering testing labora-
tories. I periodically receive calls from Plant Services
personnel stating that it will be necessary to cease oper-
ations in these ‘‘clean rooms’’ and in other manufacturing
areas if the areas are not properly cleaned. Based upon
assertions by responsible Plant Services personnel, it is my
understanding that maintenance operations within such
areas act in direct support of the production of goods which
are engineered and manufactured to extremely close toler-
ances. oD
6. The services provided by the Benton employees were
indistinguishable from the services performed by personnel
working in Rockwell’s plant services department in terms of
70
‘their importance to the operations ‘of Rockwell Inter.
national. . ;
7. I have found Benton to be a strong competitor in
competitive bidding in response to Rockwell’s invitations
for bids, and in the provision of high quality services,
Benton had a particularly high quality of field supervision
which is @ valued feature of a janitorial maintenance con-
tractor’s services, To the best of my knowledge ABMI has
subsequently used this field supervision in ‘performing
maintenance services under contracts awarded subsequent
‘ to its acquisition of Benton. To my knowledge ABMI was
awarded no such contracts prior to June 30, 1970,
/8/ John Blain
Joun Bua
(Jurat Omitted in Printing)
Arripavit or Auan D. Levy
Aan D. Levy, being first duly sworn, deposes and says:
1. Since January 1972, I have held the position of Vice
President for Tishman Realty & Construction Co., Inc. ;
New York, New York and, as such, I have the responsibility
for the management of Tishman buildings on the west
coast. Previous to that I was Director of Property Manage-
ment for the same west coast area starting in J uly 1969.
Immediately prior to that, I.was Regional Manager of the
company’s east coast and midwest area properties. In all
these positions I have had responsibility for procuring
essential janitorial maintenance services for Tishman and I
have had to be cognizant of the Tishman policies and re-
quirements for janitorial maintenance contracting services
and the needs of its tenants for such services. ;
2. For approximately three years prior to June 30, 1970,
Benton Maintenance Company provided services to the
Tishman Plaza buildings at 3440, 3450, 3460 and 3470 Wil-
shire Blvd., Los Angeles, California, pursuant to a “‘Jani-
torial Maintenance Agreement.’’ This complex of buildings
contains over 750,000 sq. ft. and more than 200 offices
occupied by various individuals and corporations. Under
the contract Benton was responsible for the general main-
tenance of both the lease areas and the common areas of the
buildings. These services included general cleaning and the
removal of trash from the offices of the tenants of the build-
ings, maintenance of common passageways and rest rooms
and for a portion of the time in which Benton serviced the
Tishman buildings it provided 24-hour security service for
the buildings. In addition, Benton supplied operating engi-
neers who maintained and regulated the air conditioning,
heating and electrical systems in the buildings. Under the
‘contract, Benton also supplied all of the materials and equip-
ment used in performing the cleaning functions listed above
ineluding tools, cleaning chemicals, waxes, floor machines,
rest room materials and uniforms for security and jani-
torial personnel.
3. The services provided by Benton constituted an essen-
tial and vital part of the operation of the buildings and the
activities carried on within them. Without heat and air
conditioning, lighting and electricity, few if any activities
could have been carried on within the premises nor would
71
72
there have been tenants to occupy the buildings if the air
conditioning, heating and electricat systems were not prop-
erly maintained and operated. The general cleaning, main-
tenance and the removal of trash from the offices of tenants
of the buildings are services which tenants require to be
_performed at very high levels of thoroughness and efficiency,
The provision of watchmen to provide after-hours security
and monitor traffic in the building during working hours is
also a service that is vital to the activities of the tenants
and without which Tishman would have considerable
difficulty attracting good tenants for its buildings. The
proper maintenance of common areas within the buildings
is essential not only to provide free and open access to the
business operations of the tenants but is a highly important
financial consideration for Tishman. The skilled main-
tenance of these common areas and the insurance and in-
demnification required by the contract insulates Tishman
from a substantial risk of liability. A principal reason that
Tishman contracts for the janitorial maintenance of its
buildings is that the contractor supplies a unified service
which performs not only the cleaning and operation of
building equipment and systems but also provides the man-
agement and supervision of these services. In so doing,
Benton worked in close cooperation with both Tishman and
the tenants of the Tishman buildings. In fact, we place
such significant importance on the responsibility for the
proper maintenance and-eperations of the buildings that the
activities of a contractor such as Benton can be said to be
a vital part of the operations of the buildings.
4. Tishman is engaged in the business of constructing
commercial buildings, leasing and managing them through-
out the United States. Tishman presently operates approx-
imately 33 buildings in the following states: California,
Illinois, New York, Ohio and Pennsylvania. In fiscal 1969,
Tishman reported total property income of approximately
$37.5 million. The company maintained its headquarters
offices in New York City and from this location supervises
and monitors the operations of Tishman’s operations
throughout the United States. Corporate officers in New
York periodically execute janitorial contracts and receive
financial reports on the operations of Tishman buildings
on a regular basis. These communications include reports
submitted by Benton concerning wages and benefits paid to
the Benton work force in the Tishman Plaza buildings. The
tirwvw @2Oe OO BB RSG .* OB
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73
Tishman management in New York is consulted before a
major janitorial maintenance contract, such as the contract
with Benton, is entered into.
5. It has always been the company policy and practice
since I have been with the company to contract for janitorial
services in most of our buildings. In so doing, we avail
ourselves of these specialized services rather than try to
simulate the offerings of a contractor with an in-house
janitorial operation. Cleaning contractors specialized
service and expertise are directly and vitally related to
the efficiency of Tishman’s overall operations. This is
because, unlike us, contractors have a knowledge of the
labor market in the area in question, they have an under-
standing of maintenance skills, they have the ability to
screen workers for security risks, they know how to design
efficient work routines, they know what maintenance ma-
terials and equipment are correct to use and how to use
them, they have the capability to handle emergency main-
tenance situations requiring extra manpower and they can
purchase supplies in bulk discount quantities and store
adequate quantities. Benton was such a competitor in the
os Angeles area, and excellently performed the desired
services.
6. There are two basic functional ingredients to the
operation of a modern office buildings: management and
maintenance. These two functions are so interdependent
that a great deal of functional cooperation is required.
Benton was a major contractor of Tishman and in the Los
Angeles area the services performed by Benton constituted
a significant portion of the activities required to operate
the Tishman buildings. Because of firms like Benton, Tish-
man was able to carry out its policy of contracting to obtain
the benefits of the janitorial maintenance specialist’s knowl-
edge and capabilities. By utilizing janitorial contractors
such as Benton, Tishman operates its nationwide building
leasing operation on a cost effective basis.
7. The tenants of the Tishman Plaza buildings included
among others the following interstate business: Pacific
Telephone and Telegraph Company; Avis, Inc.; Texaco
Ine.; Carte Blanche Corporation and J. J. Newberry Co.
The services supplied by a contractor such as Benton were
integral parts of the business activities of these tenants
in that those working in their offices could not have con-
veniently performed their business functions without the
74
building providing a clean, air conditioned, heated, venti-
lated, lighted, secure and generally habitable working
environment.
8. Benton was a very high quality janitorial maintenance
contractor and an active competitor in the Los Angeles
area. The management of the Benton organization was
unusually dedicated to its service business and we found
them very responsive when we had a problem. They took an
active personal interest in our buildings and frere unusually
attentive to our needs for janitorial maintenance service,
Benton’s absorption into ABMI reduced by one the com.
petitors which Tishman can look to for the satisfaction of
our janitorial maintenance needs. To service a group of
buildings as large as the Tishman Plaza, a janitorial main-
tenance contractor must be of a substantial size in order to
be able to finance the initial costs of equipment and the pay-
ing of wages and other obligations while awaiting payment
of the contract fee from us. Only a limited number of con-
tractors in the Los Angeles area meet this standard and the
elimination of Benton has reduced by one the number of
qualified competitors competent to service the Tishman
Plaza buildings.
/s/ Alan D. Levy
Auan D. Levy
(Jurat Omitted in Printing)
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Arrnpavit or Donatp E. Det Dosso
Donato E. Dez Dosso, having first been duly sworn,
deposes and says.
1, Continuously since March 1970, I have been Buildings
Supervisor for General Telephone Company of California,
2020 Santa Momica Boulevard, Santa Monica, California,
with responsibility for the geographic area from Marina
Del Rey on the south to Santa Maria on the north and from
the San Fernamdo Valley in the west to Lancaster in the
east. I have bee, employed by General Telephone Company
of California or jts predecessors since J anuary 1, 1946, and
have had duties as a Lineman, Central Office Installer,
Engineer, Plant: Construction Foreman, Supply and Build-
ing Maintenance Foreman, as well as my present position.
My experience jn these positions included various oper-
ations dealing with switching and crossconnecting equip-
ment. In my present position and in other positions I have
held with Genera} Telephone since 1962, I have been respon-
sible for the PrOcuring of contracted janitorial maintenance
‘services. As part of my present duties, I need to be and am
aware of the D&cessary role which janitorial maintenance
services play 1 the operation of General Telephone’s busi-
ness of Providing communications services. This role is
required in roOms~which house our switching and cross-
connecting equipment because a high degree of cleanliness
18 necessary in Stych rooms.
2. I have progyred and supervised the janitorial main-
tenance contracting services of both Benton Maintenance
Company and J. jy, Benton Management Corp. I did not
distinguish between such services supplied by the one as
opposed to the other, because they were both the same
company as far as [ was concerned. They both had the
same office and the same telephone number and I dealt with
the same person for both companies, namely Ivar S.
Gustafson. Ther-efore, I will hereafter refer to these com-
panies as ‘‘Bento,, »»
3. Prior to June 30, 1970, Benton supplied janitorial
maintenance serv;ices to about 20% of the General Telephone
buildings im My ‘area. We were very pleased with the high
quality of cleaning work performed by Benton as evidenced
by the fact that Benton cleaned the General Telephone head-
quarters building, continuously since it opened in about 1956.
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76
The quality of janitorial maintenance was of importance to
General Telephone because Benton maintained central
all parts of the United States and the world via other
telephone companies’ equipment, and Benton, in providing
an essential service to General Telephone’s operations,
played a part in the total operations of our company.
/8/ Donald E. Del Dosso
Donan E. Dex Dosso
(Jurat Omitted in Printing)
Arrimavit or Georce G. Guzst
Gzorce G. Guest, being first duly sworn, deposes and
says:
1. Iam Staff Supervisor—Buildings for The Pacific Tele-
phone and Telegraph Company, 740 South Olive Street, Los
Angeles, Caiifornia, with responsibility for janitorial main-
tenance for The Pacific Telephone facilities in the area from
Santa Maria to Long Beach. I was promoted to this position
in March 1972. Prior to that I was Plant Staff Assistant
starting in October of 1970 and served as Building Main-
tenance Foreman starting in August 1967, both for the
central Los Angeles County area. My duties in these
positions have included the procuring of contracted jani-
torial maintenance services. I am generally familiar with
the communications operations of Pacific Telephone and
with the Company’s requirements for janitorial mainte-
nance services. .
2. From September 1969 through June 30, 1970, Benton
Maintenance Company pursuant to contract supplied jani-
torial maintenance services in my area, which is known as
the ‘‘Wilshire District’’. These services included general
cleaning and dusting, maintenance of restrooms, removal of
dirt and trash and the supplying of the materials and equip-
ment used in performing these a In the Wilshire
District, Benton serviced ten Pacific elephone Company
central office facilities, four office buildings, a plant work
center and eight other facilities. The central offices house
the telephone switching and cross-connection equipment
which handle calls to and from other parts of California, the
United States and the world.
Pacific keeps the central office switching equipment clean
to help insure trouble-free operation. Benton’s work in-
cluded cleaning the rooms in which the switching equipment
was located but did not include cleaning the switching |
equipment itself. Cleaning of the equipment was done by
Pacific Telephone Company employees. .
We provided Benton with appropriate general directions
as to what had to be done but also relied upon their abilfty
a8 an experienced janitorial maintenance contractor to keep
the premises clean.
Among the matters we considered of importance in select-
ing Benton (and other such contractors) were (a) being an
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78
established bisiness, (b) being apparently in stable financial
condition, (e) having a good reputation and (d) having
experience inthe trade.
/8/ George G. Guest
Georce G. Guest
(Jurat Omitted in Printing)
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_. 1. Continuously since June, 1968, I have held the position
Arripavit or Joux Srover
_ Jonny Srover, being first duly sworn, deposes and says:
of Building Manager for Mobil Oil Corporation, 612 South
Flower Street, Los Angeles, California. My duties have
included the procuring of contracted janitorial maintenance
services for the Mobil Oil building at the above address.
Lhave personal knowledge of the activities of the Mobil Oil
Corporation, the activities of most of the tenants of the
Mobil Oil building, and the part which contracted janitorial
maintenance services play in these activities.
2.\Mobil Oil Corporation is an international corporation.
Forexample, Mobil operates crude oil exploration and
production facilities in many states and facilities for-refin-
ing crude oil into various petroleum products. It distributes
and markets these petroleum products on a worldwide basis.
The Mobil Oil building in Los Angeles houses the corpora-
tion’s Marketing Department which has responsibility for
Mobil’s\marketing in the seven western states, a Manufac-
turing Accounting Section which supports the operation
of refineries in the States of California and Washington, a
Western Area Production Department whose activities in
1969 and 1970 included substantial exploration in Alaska,
and Mobil’s Los-Angeles Accounting and Computer Center.
The Marketing Department located in the Mobil building
regularly cgnducts business with over 3,500 service stations
variously located in the seven western states. Its employees
travel extensively throughout Mobil’s Western Region.
Mobil’s Credit Card Center for the seven western states
also utilizes computer equipment located in the Mobil
building. In 1969 and 1970, the electronic data processing
equipment operated by these functional groups initiated the
billing for, monitored receipt of, and disbursed millions of
dollars annually.
3. The mechanical operation of electronic data process-
ing equipment is dependent upon the janitorial maintenance
and the environmental support facilities of the rooms in
which the equipment is located. In 1969 and 1970, Benton
employees serviced the filters of the air conditioning equip-
ment for these rooms, improper servicing of which could
have caused the ‘computer equipment to malfunction,
thereby seriously interrupting the operations of Mobil’s
Western Region.
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4. Several other corporations maintain offices in fhe Mo-
bil Oil building. Included among these tenants in 1970 were
the Kaiser Steel Corporation, Hendy International, Pacific
Far East Line, Inc., Ducommun Metals Corporation, Re-
public Steel and the Du Pont Corporation, all of whom it
is believed at various times engaged'in interstate commerce,
A more complete list of the tenants of the Mobil Oil building
in 1970 is attached as a part of this affidavit.
5. Since its construction in 1949, until June 30, 1970, the
Mobil building was operated and the janitorial maintenance
function exclusively was performed by J. E. Benton Man-
_ agement Corporation. Prior to August, 1963 the services
supplied by Benton consisted of building operations and
janitorial maintenance. In providing building operating
services, Benton performed functions including purchasing
and making payment for building supplies, and procuring
the repair and maintenance of the heating and air condi-
tioning equipment, electrical and plumbing system. Benton
generally conducted the business of operating the building.
Between August, 1963 and June 30, 1969, Benton performed
only janitorial services in the building. This work was per-
formed under the name J. E. Benton Management Corpora-
tion despite the fact that no management services were
performed. During this period, Mobil also contracted with
Benton Maintenance Company for window washing services.
For both services I dealt with the same Benton personnel
and regarded these two companies as one.
6. The general cleaning and maintenance of the building
is a direct and vital part of Mobil’s operations and the
activities of its tenants. Proper maintenance of offices and
-common areas within the building is insisted upon by the
tenants and by Mobil personnel. Attractive and well main-
tained offices and clean and unobstructed public areas are
of vital importance to the businesses of our tenants. A
poorly maintained building or office is not conducive to an
image of business efficiency and contributes to the loss of
‘customers and tenants.
7. In 1969 and 1970, Benton also supplied the services of
operating engineers who monitored and performed pre-
‘ventative maintenance and repair on the building’s heating
and air conditioning equipment and other fixtures and
systems. The work of these engineers was a critical part of
the activities carried on in the building. Without heat, light
a. ee ee i, ee er |
mee
81
and plumbing, few, if any, operations could have been car-
ried on in the building.
8. In 1972, Mobil sent requests for bids for the janitorial
work previously performed by Benton to five companies
who we considered to be qualified bidders. These companies
met our requirements for financial stability, had strong
reputations for maintaining large buildings and met Mobil’s
strict indemnity bonding requirements. These five compa-
nies were Bekins, Kinney National, Prudential, Los Angeles
Building Maintenance and American Building Maintenance
Industries. Prior to the acquisition of Benton by ABMI,
Benton would also have received a request for bids and
their bid would have been carefully considered because of
the excellent service that Benton had previously provided.
We have found Benton to be an extremely strong competi-
tor in the provision of quality janitorial maintenance serv-
ices. Mobil relies upon competition to assure that alternate
sources of quality janitorial maintenance will be available
and the acquisition of Benton by ABMI eliminated Benton
as an alternate source in this industry.
/s/ John Stover
Joun STOVER
(Jurat Omitted im Printing)
Arripavit or L. B. Hicsre
L. B. Hicszs, being first duly sworn, deposes and says:
1. In October 1969, I was appointed Assistant Building
Manager for Union Oil Company at its international head.
quarters building, 461 S. Boylston, Los Angeles, California.
I was promoted to my present position of Building Man-
ager of said building in October 1970. I am generally fa-
miliar with the business of Union Oil Company and of the
business activities carried on in its international head-
quarters buildings. As part of my duties, it has been
necessary for me to thoroughly understand the important
relationship between janitorial maintenance services sup-
plied to said building and the efficient operation of Union
Oil Company. As Building Manager, I have been responsible
for the procurement of such services.
_ _.2, From October 1969 through June 30, 1970, the Union
Oil Company, through its officials and employees at the
international headquarters building, carried on and super-
vised substantial business which was interstate and inter-
national in character. In 1969, Union Oil Company reported
net sales for said business of $1.58 billion. During this
time, our company relied on J. E. Benton Management
Corp. maintenance services which played an essential role
in facilitating the business activities at its headquarters
building. i
3. J. E. Benton Management Corp. was supplying jani-
torial.maintenance amd related services at our headquarters
building when I. became Assistant Building Manager in
October 1969.and continued to supply said services to Union
Oil Company through June 30, 1970. The services which
J. E. Benton Management Corp. supplied included mainte-.
nance of floors, restrooms, removal and disposal of trash,
window washing and lighting fixture maintenance. They
were also responsible for the maintenance and operation of
the air conditioning, heating and electrical systems of the
building. As part of its service, the Benton organization
selected and obtained cleaning materials and equipment, as
well as certain supplies to be used in the building.
4. Janitorial maintenance contractors like J. E. Benton
Management Corp. have teams of experienced personnel
with expertise and capacity for the supervision, follow-up
and back-up of this maintenance work which Union Oil
82
Company does not have. During the period October 1969
through June 30, 1970, Union Oil ompany depended upon
this special expertise and,c ili J. E. Benton Man-
agement Corp. ind considered that \firm to be an integral
part of the business carrfed on at our international head-
quarters. Without such services, our\company would be
severely hampered in its capacity to carry out its extensive
national and international business.
_ (Jurat Omitted in Printing)
i
Arripavit or Epwarp H. Parorzxa
Epwarp H. Patorzxa, being first duly sworn, deposes and
says:
1. From September 1958 to September 1970, I held the
position of Supervisor of Office Services for Texaco Inc. at
‘the West Coast operations building, 3350 Wilshire Boule.
vard, Los Angeles, California. My duties included the pro-
curing of contracted janitorial maintenance services for
this building and as part of this job it was necessary for ine
to be aware of the requirements of the various Texaco de-
partments for such services.
2. Prior to June 30, 1970, J. E. Benton Management
Corp. provided contracted janitorial maintenance services
to the aforesaid Texaco building, including general cleaning
and dusting, removal of dirt and trash, window washing,
restroom maintenance and supplying all the necessary
maintenance materials, equipment and supplies (including
cleaning fluids, brooms, scrubbing equipment and restroom
paper supplies). This service also included the stationing
of a Benton employee in the lobby of the building to admit
persons who were proper to be in the building at night and
to screen out all others. I dealt with Robert E. Benton,
James J. Breen and William McWethy of the Benton or-
ganization, among others. I was advised by Mr. Breen that
from time to time Mr. Breen secured workmen from the
Benton janitorial maintenance job at the nearby Tishman
buildings and allocated them to the Texaco building when
absentees needed replacement. Other services provided by
J. E. Benton Management Corp. included the operation and
maintenance of the air conditioning and heating systems in
the building and the supervision and performance of elec-
trical and mechanical maintenance. In addition, J. E; Ben-
ton Management Corp. secured and paid for the electricity,
water and natural gas used in the building.
3. Prior to June 30, 1970, Texaco’ contracted with the
J. E. Benton Managemen Corp. to obtain their expertise
which Texaco did not possess. This expertise included their
expert knowledge of what cleaning and maintenance mate-
rials to use and how to apply them. In my opinion the
services performed by Benton pursuant to the contract with
Texaco were highly satisfactory and, for that reason, Tex-
aco did not ever solicit competitive bids for the supplying
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85
of janitorial maintenance services to the aforesaid building
after Benton began supplying said service, although other
contractors did seek our business. Benton’s services in-
cluded the areas of the aforesaid building containing com-
puters and data processing equipment which handled billing
to and from Texaco customers throughout the western
United States.as well as the financial accounting for Tex-
aco’s operatiors-in-said area. Dirt and dust between the
electrical contacts of the computers or on the retina of the
scanning devises in the building could have hampered their
operation. Texaco relied upon Benton’s expertise to supply
this and the other janitorial maintenance services to the
aforesaid building.
/s/ Edward H. Patotzka
Epwarp H. Patrorzka
(Jurat Omitted in Printing)
Arripavit or Maynarp HEIDER
Maynarp Hemmer, being first duly sworn, deposes and
says:
1. Continuously from 1948 to July 1972, I was General
Office Manager for the Carnation Company at its world
headquarters building, 5045 Wilshire Boulevard, Los
Angeles, California. I was responsible, among other things,
for seeing that janitorial »naintenance services were sup-
plied for said building.
2. Prior to June 30, 1970, the Carnation Company world
headquarters building housed the company’s Evaporated
Milk Division, Instant Milk Division, Pet Foods Division,
Bottled Milk and Ice Cream Division, Contadina Division
(engaged in vegetable and fruit canning) and Can Manu-
facturing Division. The Albers Milling Company (an ani-
mal foods producer) and McGraw Color Graph Co., were
Carnation subsidiaries that were located in the building
also. In addition, Carnation International, which operated
plants in Scotland, France, Holland, West Germany, Spain,
South Africa, Peru, Mexico and Australia, and Carnation
Co. Ltd., which operated about five milk and potato process-
ing plants in Canada, were headquartered in the Carnation
building. The various divisions of Carnation operated from
this world headquarters numerous plants located in the
tates of New York, Missouri, California, Tennessee, Ken-
ucky, Illinois, North Carolina, West Virginia, Washington,
Colorado, Texas, Pennsylvania, Virginia, Michigan, Wis-
consin, Iowa, Illinois, Idaho, Arizona, Oregon, Oklahoma,
Hawaii and Utah. Carnation reported sales from its total
operations of $964 million for the year 1969.
3. J. E. Benton Management Corp. provided comprehen-
sive building management services at the Carnation world
headquarters from the opening of the building in 1948
through June 30, 1970. The duties which Benton had in-
cluded general cleaning. of the 100,000 square feet of floor
space in the nine-story building, maintaining the restrooms,
providing a night watchman to patrol every part of the
building once an hour, cleaning and relamping lights, win-
dow washing, removal of trash, maintaining the ai: condi-
tioning, heating plant and plumbing and providing the ma-
terials and supplies used in performing these services.
Carnation could have tried to use its own employees to clean
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87
the building, but we decided in 1948 that we wanted a jani-
torial maintenance contractor to perform this work because
we did not have any experience at it. Unlike contractors,
we did not know the size and kin? of work force necessary
to do particular jobs. Neither did Carnation have a jani-
torial maintenance labor pool from which to draw employees
as a contractor did. Also, as a result of his broad experience
in servicing many customers in different types of locations,
janitorial maintenance contractors know how to design
efficient and effective work routines, they. know what mate-
rials and what equipment can do the best job and they have
a professional knowledge of how to supervise and motivate
a janitorial work crew. In providing Carnation with jani-
torial maintenance services, the Benton management, super-
visory staff and work crew was performing the same task
that would have been performed had Carnation had its own
employees doing this work, but Carnation was obtaining the
benefit of Benton’s experience, capabilities and specialized
skills.
4. Carnation’s world headquarters building houses the
top management of this national and international company.
The management and corporate leadership centered in this
facility is the primary motivating force for the activities
of the company. This management is the final authority for
the production and distribution of the company’s interstate
goods. Without light, heat and power for this building the
management activities could not take place. The manage-
ment and maintenance of a safe and habitable working area
is desirable for a world headquarters building.
5. Prior to June 30, 1970, the various divisions and sub-
sidiaries (referred to in paragraph 2) which conduct their
operations from the Carnation world headquarters building
utilized the computer complex’located in the building. This
- computer complex was used to store, retrieve and analyze
“information about Carnation’s interstate production and
marketing and was vital to our company’s operations. We
always had a critical problem of how to maintain the clean-
liness of the area in which these computers were located.
It was very important to keep the area free of dust and
dirt which could impair the operations of this sensitive
electronic equipment. However, the janitorial maintenance
of this area was complicated by the fact that the computers
‘operated 24 hours a day and janitorial work crews might
get in the way of those operating this equipment or acci-
Sy
88
dentally*push a button or hit the controls on the computers,
This necessitated a close working relationship between the
supervisor of the Carnation Data Processing Department
and the Benton night foreman. They worked together to
make sure that the computer area was frequently mopped
to remove the fine paper dust created by computer print-out
paper going through the machines at high speed. Also, the
high powered electric current in this area used to operate
the computers presented a high danger of fire and the
supervisor of Data Processing and the night foreman
worked together.to ensure that there was as little trash
and used print-6ut paper in the room as possible. Thus,
Benton’s cleaning activities were important in the proper
operations of Carnation’s data processing equipment. If
the janitorial maintenance services which Bentcu provided
in this computer area had not been performed, Carnation’s
data processing would have likely been disrupted by the
dust or even by fire.
6. We were very pleased with the high quality and de-
pendability of the janitorial] maintenance contracting serv-
ices which Benton provided to the Carnation world
headquarters. Benton’s reliability and stability was demon-
strated in part by the fact that it was a three-generation
family business. Other janitorial maintenance contractors
called on me periodically to obtain our business, but I
discouraged them because we were completely satisfied with
Benton and saw no reason for changing. American Building
Maintenance, Kinney National, Pierose and White Glove
were the four big contractors that actively onan Carna-
tion’s business.
/s/ Maynard Heider
Maynarp HEIDEr
({Jurat Omitted in Printing)
Arriwavit or Epmunp Sakowi1cz
Epmunp Saxowicz, being first duly sworn, deposes and
says:
1. Continuously since May 1969, I have held my present
position of Office Services Manager for Teledyne, Inc., 1901
Avenue of the Stars, Suite 1800, Los Angeles, California.
As part of my duties, I have been responsible for the pro-
curement of janitorial maintenance services. I am generally
knowledgeable of the business of Teledyne, Inc. and of the
activities carried on in its Century City Office during the
aforesaid period. I recognize the relationship between
janitorial services and the ovefall operations of Teledyne,
Inc.
2. From May 1969 through June 30, 1970, the business
of Teledyne, Inc. carried on at and supervised from its
Century City headquarters was interstate and international
in character. During said period, Teledyne, Inc. reported
revenues for the fiscal year ended October 31, 1969 of $1.29
billion. During the period, Teledyne, Inc. was engaged in
several states and in foreign countries in the production
of electronic and aviation control systems; production and’
fabrication of specialized metals; production of machines
used in metal working applications, manufacturing un-
manned aircraft, gas turbine engines and a variety of avia-
tion products and components and industrial products; and
in insurance and financial businesses.
3. Janitorial maintenance contracting services play an
essential part in the interstate and international business
activities conducted by Teledyne, Inc. at its Century City
headquarters.
4. Benton Maintenance Company was supplying con-
tracted janitorial maintenance services for the headquarters
of Teledyne, Inc. in Century City when I came to work there °
in May i969. Benton Maintenance Company continued to
supply said services to Teledyne, Inc. through June 30,
1970. During this period, Benton Maintenance Company
also selected and ordered on behalf of Teledyne, Inc. main-
tenance equipment and restroom paper supplies from Na-
tional Sanitary Supply Co. and floor waxes from Ball In-
dustries. |
5. The janitorial maintenance contracting services pro-
vided by Benton Maintenance Company for the headquar-
89
90
' ters office of Teledyne, Inc. consisted of a comprehensive
variety of services, including maintenance of floors, care of
restrooms, and removal of disposal of trash. Teledyne, Inc.
recognizes that any janitorial maintenance contracting firm
supplying this comprehensive type of service to our com-
pany must have an extensive degree of expertise in terms
of floor maintenance, selection of proper cleaning materials
(waxes, detergents, etc.) and equipment, cleaning proce-
dures, trash removal and overall janitorial operations.
Without a specialized firm supplying such services, our
office operations would be seriously curtailed. Benton
Maintenance Company, in supplying these services, is a
part of our interstate and international business carried on
at our Century City Headquarters office, just as is any
component or unit in the Teledyne, Inc. operations.
/s/ Edmund Sakowicz
Epmunp Saxkowicz
(Jurat Omitted in Printing)
Il. SUPPLIERS
Arripavit oF Davin T. Hannan
Davi T. Hannan, being first duly sworn, deposes and
says:
1. Iam presently employed by the Westinghouse Electric
Corporation, Elevator Division, as District Marketing Man-
ager and maintain offices at 600 St. Paul Avenue, Los
Angeles, California. As part of my duties, I have had
supervisory responsibility for the sale of elevator equip-
ment and maintenance to J. FE. Benton Management Com-
pany. I have reviewed the records of Westinghouse and
have personal knowledge of the accuracy of the facts set
out below.
2. For several years prior to June 30, 1970, Benton was
billed and remitted payment for the maintenance and repair
of the Westinghouse elevator equipment located in the
Texaco Building, 3350 Wilshire Boulevard, Los Angeles,
California. During calendar year 1969, Benton paid West-
inghouse $13,752.65 for parts, materials and repair of this
elevator equipment. Parts and materials purchased by
Benton were supplied directly by Westinghouse and came
primarily from Westinghouse plants in Jersey City and
Dover, New Jersey. Substantially all billing documents
from Westinghouse to J. E. Benton Management Corpora-
tion were shipped by the Westinghouse Electric Corpo-
ration, Customer Accounting, Elevator Construction Divi-
sion, 150 Pacific Avenue, Jersey City, New Jersey. All
remittances by Benton were made to the Westinghouse
El
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