City of Burbank v. General Electric Company

• Decision Date: 20 March 1964
• Docket Number: No. 18474-18478.,18474-18478.
• Citation: 329 F.2d 825
• Parties: The CITY OF BURBANK, a municipal Corporation of the State of California, Appellant, v. GENERAL ELECTRIC COMPANY, a corporation, et al., Appellee. DEPARTMENT OF WATER AND POWER OF the CITY OF LOS ANGELES, a municipal Corporation of and in the State of California, Appellant, v. ALLIS-CHALMERS MANUFACTURING COMPANY et al., Appellee. IMPERIAL IRRIGATION DISTRICT, Appellant, v. FEDERAL PACIFIC ELECTRIC COMPANY et al., Appellee. PACIFIC GAS & ELECTRIC COMPANY, a corporation, Appellant, v. GENERAL ELECTRIC COMPANY, a corporation, et al., Appellee. PACIFIC GAS & ELECTRIC COMPANY, a corporation, Appellant, v. FEDERAL PACIFIC ELECTRIC COMPANY, a corporation, et al., Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

329 F.2d 825 (1964)

The CITY OF BURBANK, a municipal Corporation of the State of California, Appellant, v. GENERAL ELECTRIC COMPANY, a corporation, et al., Appellee.

DEPARTMENT OF WATER AND POWER OF the CITY OF LOS ANGELES, a municipal Corporation of and in the State of California, Appellant, v. ALLIS-CHALMERS MANUFACTURING COMPANY et al., Appellee.

IMPERIAL IRRIGATION DISTRICT, Appellant, v. FEDERAL PACIFIC ELECTRIC COMPANY et al., Appellee.

PACIFIC GAS & ELECTRIC COMPANY, a corporation, Appellant, v. GENERAL ELECTRIC COMPANY, a corporation, et al., Appellee.

PACIFIC GAS & ELECTRIC COMPANY, a corporation, Appellant, v. FEDERAL PACIFIC ELECTRIC COMPANY, a corporation, et al., Appellee.

Nos. 18474-18478.

United States Court of Appeals Ninth Circuit.

March 20, 1964.

COPYRIGHT MATERIAL OMITTED

Samuel Gorlick, City Atty., City of Burbank, Burbank, Cal., William C. Dixon and Alfred C. Ackerson, Los Angeles, Cal., for appellant City of Burbank.

Roger Arnebergh, City Atty., Gilmore Tillman, Chief Asst. City Atty. for Water & Power, Robert E. Moore, Jr., Deputy City Atty., Gerald Luhman, Deputy City Atty., Los Angeles, Cal., and Ely, Duncan & Bennett, and Northcutt Ely, Washington, D. C., for the appellant Dept. of Water and Power of City of Los Angeles.

Horton, Knox, Carter & Rutherford, James H. Carter, El Centro, Cal., Ely, Duncan & Bennett, Washington, D. C., for appellant Imperial Irr. Dist.

Lawler, Felix & Hall, Marcus Mattson, R. F. Outcault, Jr., Los Angeles, Cal. and Richard H. Peterson, Frederick T. Searls, Philip A. Crane, Jr., San Francisco, Cal., for appellant Pacific Gas & Electric Co.

Adams, Duque & Hazeltine, Lawrence T. Lydick, Los Angeles, Cal., for appellee I-T-E Circuit Breaker Co.

Gibson, Dunn & Crutcher, and Richard H. Wolford, Los Angeles, Cal., for appellees A. B. Chance Co., Clark Comptroller Co., Joslyn Mfg. & Supply Co., Lapp Insulator Co., McGraw-Edison Co., Ohio Brass Co., Porcelain Insulator Corp., Southern States Equip., Square D Co., and C. H. Wheeler Mfg. Co.

Lillick, Geary, McHose, Roethke & Myers, and William A. C. Roethke, Los Angeles, Cal., for appellee Kuhlman Elec. Co.

Loeb & Loeb and John L. Cole, Los Angeles, Cal., for appellees Cornell-Dubilier Elec. Corp. & Federal Pacific Co.

MacDonald & Halsted and Robert H. Edwards, Los Angeles, Cal., for appellee Hubbard & Co.

McCutchen, Black, Harnagel & Shea, Harold A. Black, and G. Richard Doty, Los Angeles, Cal., for appellee Gen. Elec. Co.

Musick, Peeler & Garrett, Bruce A. Bevan, Jr., and Ralph E. Erickson, Los Angeles, Cal., for appellees Cutler-Hammer Inc., and Allen Bradley Co.

Newlin, Tackabury & Johnston, and Frank R. Johnston, Los Angeles, Cal., for appellee H. K. Porter Co.

Parker, Milliken, Kohlmeier, Clark & O'Hara, Mark Townsend, and R. F. Wade, Los Angeles, California, for appellee Wagner Elec. Corp.

Paul, Hastings, Janofsky & Walker, Lee G. Paul, Los Angeles, Cal., for appellees Ingersoll-Rand Co., Worthington Corp.

Sheppard, Mullin, Richter & Hampton, and Gordon F. Hampton, Los Angeles, Cal., for appellees Moloney Elec. Co., and Schwager-Wood Co.

Stephens, Jones, LaFever & Smith, Don P. Clark, and Maurice Jones, Jr., Los Angeles, Cal., for appellee Sangamo Elec. Co.

Swerdlow, Glikbarg & Berkowitz, Harry B. Swerdlow, and Allan Albala, Beverly Hills, Cal., for appellee Westinghouse Elec. Co.

Walker, Wright, Tyler & Ward, Irving M. Walker and Don F. Tyler, Los Angeles, Cal., for appellee Allis-Chalmers Mfg.

Before BARNES, JERTBERG and KOELSCH, Circuit Judges.

BARNES, Circuit Judge.

Before us are five appeals by four appellants in companion cases arising from private treble damage actions filed as an outgrowth of the government's antitrust prosecutions in the electrical equipment industry. These appeals are from the Southern District of California, Central Division. The electrical equipment convictions were obtained, of course, in 1961 in the District Court for the Eastern District of Pennsylvania.

The companion appeals are from an order, applicable to the several cases, sustaining a motion made by certain defendants¹ under Federal Rules of Civil Procedure 12(f) to strike all reference in some 124 companion cases to certain previous criminal proceedings had between certain defendants in each action and the United States of America, including a recital of the defendants' pleas entered in said criminal proceedings.²

The motion was granted in a memorandum of decision and a subsequent order.

The district court had jurisdiction of the cause pursuant to 15 U.S.C. §§ 1 and 15. Since the district court in its order characterized the question before it in terms required by 28 U.S.C. § 1292(b),³ and since another panel of this court granted leave to appeal, this court has jurisdiction pursuant to 28 U.S.C. § 1292(b).

The district court ordered to be stricken all "references to the government criminal and civil proceedings, including dates of initiation and termination thereof;" pleas of guilty and nolo contendere entered therein; sentences imposed; and grand jury indictments returned.

In support of this decision the district court relied primarily on its conclusion that § 5 (a) of the Clayton Act (15 U.S.C. § 16(a))⁴ did not authorize the use in private treble damage suits of pleas of guilty and nolo contendere as prima facie evidence of violation of the antitrust laws. The district court also held in its memorandum that the stricken allegations were only evidentiary and thus had no place in the complaint, especially when they were "certainly not necessary to a short and plain statement of the claim showing that the pleader is entitled to relief, which is all that Rule 8(a) (2) * * * requires." (No. 18477, R.125.)

This court could approach these appeals with the preliminary question in mind: Did the district court abuse its discretion in striking the allegations? If it had, and we reversed on that ground, we could avoid the more fundamental question — whether § 5(a) excludes as consent decrees the use of pleas of guilty and nolo contendere in private treble damage suits. Yet, if we were to avoid an inquiry into the applicability of § 5 (a), we cannot see another "controlling question of law" upon which to justify these interlocutory appeals under 28 U. S.C. § 1292(b). Finding no other "controlling question of law" upon which to justify these appeals, we would be required to dismiss these appeals as previously improvidently granted by this court.

We are not disposed to so dismiss. Rather, we believe that we have the responsibility to reach the question of the applicability of § 5 (a). The question presented to this court in the application for leave to appeal was clearly the proper interpretation of the proviso in § 5 (a). This was what was discussed by the trial court in its memorandum, and, in our opinion and in the opinion of all the parties, is the issue which was certified to this court as controlling.⁵ It is the only issue relied upon by the appellants in three of the five appeals. Even the party in the other two appeals which argues that the allegations stricken were material, nonprejudicial, and of evidentiary value, touches these issues only obliquely⁶ in its application to take these appeals (though not on the appeal itself). Finally, were we not to reach the issue concerning § 5(a), the parties, attorneys, witnesses, and the district court might consume months in proceedings which could be wasted effort if it should later be determined that the district court was in error in its conclusion that plaintiffs in private treble damage suits cannot use pleas of guilty and nolo contendere as prima facie evidence of violation of the antitrust laws.

These same reasons, as well as others, convince us that we should not reach the pleading issues raised in Nos. 18477 and 18478.⁷ Interlocutory appeals under 28 U.S.C. § 1292(b) are allowed for the purpose of determining

"* * * controlling questions of law as to which there is substantial ground for difference of opinion * * * where an immediate appeal from the order may materially advance the ultimate termination of the litigation. * * *"

We do not believe that the pleading issues raised in Nos. 18477 and 18478 were so certified by the district court as controlling questions of law, nor do we believe that an immediate appeal from the order on these pleading issues may materially advance the ultimate termination of the litigation. We also agree with opinions expressing the view that this statutory provision allowing interlocutory appeals in certain enumerated instances should be used sparingly.⁸ We thus will not rule on the ordinary pleading issues raised in Nos. 18477 and 18478 but only consider the controlling question concerning § 5(a).

Does § 5(a) of the Clayton Act (15 U. S.C. § 16(a)) authorize the use by a private plaintiff in treble damage litigation of defendants' previous pleas of

(a) nolo contendere, or of

(b) guilty

as prima facie evidence of violation of the antitrust laws?

As we have seen, § 5 (a) of the Clayton Act, as amended, provides (15 U.S.C. § 16(a)):

"A final judgment or decree * * * in any civil or criminal proceeding * * * shall be prima facie evidence against such defendant in any action or proceeding brought by any other party * * * as to all matters * * * which * * * would be an estoppel as between the parties * * *. Provided, That this section shall not apply to consent judgments or decrees entered before any testimony has been taken * * *."⁹

The court below held that the proviso operates to exempt from the force of the body of section 5(a) judgments or decrees based both on pleas of nolo contendere and guilty; that criminal convictions, whether following a plea of guilty or nolo contendere, are "consent judgments or decrees," as that phrase is employed in section 5(a) of the Clayton Act.

In considering the language to be interpreted, we find a slight change was made in it between the 1914 enactment, and the 1955 re...