State of Utah v. AMERICAN PIPE & CONSTRUCTION COMPANY, 26542

• Decision Date: 07 May 1973
• Docket Number: No. 26542,26543.,26542
• Citation: 473 F.2d 580
• Parties: STATE OF UTAH, Plaintiff, v. AMERICAN PIPE & CONSTRUCTION COMPANY et al., Defendants-Appellees, Weber Basin Water Conservancy District et al., Applicants for Intervention-Appellants. STATE OF UTAH, Plaintiff, v. AMERICAN PIPE & CONSTRUCTION COMPANY et al., Defendants-Appellees. Salt Lake County Cottonwood Sanitary District et al., Applicants for Intervention-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

473 F.2d 580 (1973)

STATE OF UTAH, Plaintiff, v. AMERICAN PIPE & CONSTRUCTION COMPANY et al., Defendants-Appellees, Weber Basin Water Conservancy District et al., Applicants for Intervention-Appellants.

STATE OF UTAH, Plaintiff, v. AMERICAN PIPE & CONSTRUCTION COMPANY et al., Defendants-Appellees.

Salt Lake County Cottonwood Sanitary District et al., Applicants for Intervention-Appellants.

Nos. 26542, 26543.

United States Court of Appeals, Ninth Circuit.

January 31, 1973.

Certiorari Granted May 7, 1973.

Gerald R. Miller (argued), Denis R. Morrill, of Mulliner, Prince & Magnum, Kent Shearer, of Neslen & Mock, Prince, Yeates, Ward, Miller & Geldzahler, Vernon B. Romney, Atty. Gen., State of Utah, Salt Lake City, Utah, for appellants.

Jesse R. O'Malley (argued), Lawrence E. Stickney, of Music, Peller & Garrett, Los Angeles, Cal., Gordon Johnson, of Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., Oliver F. Green of Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., James O. Sullivan, Wayne M. Pitluck, of Sullivan, Marinas, Augustine & Delafield, San Diego, Cal., John J. Hanson, Robert E. Cooper, of Gibson, Dunn & Crutcher, Los Angeles, Cal., Haldor T. Benson, of Vancott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, Richard W. Campbell, of Olmstead, Stine & Campbell, Ogden, Utah, George Read Carlock, of Ryley, Carlock & Ralston, Phoenix, Ariz., Dominic B. King, Pittsburgh, Pa., for defendants-appellees.

Before: MERRILL and KILKENNY, Circuit Judges, and TAYLOR, District Judge.^*

Certiorari Granted May 7, 1973. See 93 S.Ct. 2146.

MERRILL, Circuit Judge:

Weber Basin Water Conservancy District and other applicants for intervention have taken this appeal from a final order¹ of the District Court denying their applications to intervene in the action below brought by the State of Utah.

That action was brought May 13, 1969,² as a class action against appellees, alleging a Sherman Act conspiracy in the sale of concrete and steel pipe and seeking treble damages with respect to purchases of those products. The State of Utah purported to represent a class described as "those public bodies and agencies of state and local government in the State of Utah who are end users of pipe acquired from defendants * * *." The action relied upon the same conspiracies involved in protracted litigation popularly known as the West Coast Pipe Cases, growing out of five criminal and five civil actions initiated by the Government in 1964 and ultimately terminated May 24, 1968.

On December 4, 1969, on motion of appellees, the court entered an order that the action shall "not be maintained as a class action"; that the class action "in all respects stands terminated as of May 13, 1969, the date of the filing of the complaint herein." The order was based on findings made under Rule 23, Federal Rules of Civil Procedure,³ that members of the class described in the complaint are "not so numerous that joinder of all such entities is impracticable"; and that experience in the West Coast Pipe Cases had demonstrated that a class action was "inferior to other available methods for the fair and efficient adjudication of the instant controversy."⁴

Eight days later, on December 12, 1969, appellants filed motions to intervene as plaintiffs, as of right, under Rule 24(a) (2), or by permission, under Rule 24(b) (2). On March 30, 1970, the court handed down a decision denying intervention,⁵ which was followed by formal findings of fact, conclusions of law, and order, from which order this appeal is taken.

We agree with the District Court that appellants had no right to intervention under Rule 24(a) since, as a practical matter, they would not be affected by any potential recovery by Utah. Fed.R.Civ.P. 24(a) (2).

However, denial of appellants' motion for permissive intervention under Rule 24(b) was, in our judgment, erroneous.

The court felt that the limitations of § 5(b) of the Clayton Act, 15 U.S.C. § 16(b), barred appellants from assertion of their claims. That section suspends the running of the statute of limitations against private Clayton Act suits during the pendency of suits initiated by the Government (based on the same violations) and for one year thereafter.⁶ The section then emphasized the converse:

"Provided, however, That whenever the running of the statute of limitations in respect of a cause of action arising under section 15 of this title is suspended hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued."

In this case § 5(b) served to suspend limitations for one year from May 24, 1968 (termination of the Government suits), and ran (or would have run) against these appellants May 24, 1969. The section requires that an action be "commenced * * * within the period of suspension * * *." Rule 3, Fed.R.Civ.P., provides that "A civil action is commenced by filing a complaint with the court." This suit, as we have noted, was commenced by Utah eleven days before the running of the statute. If the action had proceeded as a class action, we have no doubt that appellants' claims would satisfy § 5(b).⁷

The District Court read § 5(b) as not only granting a tolling period but as warning that further delay was not to be tolerated. The court stated in its decision:

"This court can but conclude that within the statutorily created antitrust universe § 5(b) cannot be retolled by any Federal Rule of Civil Procedure to permit relation back of their several causes of action by intervenors attempting to intervene in either class or non-class actions filed for violation of the antitrust laws, after the tolling period of § 5(b) has ended." 50 F.R.D. at 108.

We cannot agree. Appellants sought only to present to the court in the very form the court had indicated it preferred the very claims already tendered to the court on their behalf by Utah.

Maintenance of the class action was denied not for failure of the complaint to state a claim on behalf of the members of the class (the court recognized the probability of common issues of law and fact respecting the underlying conspiracy) not for lack of standing of the representative,⁸ or for reasons of bad faith or frivolity. It was denied because, considering the size of the class and the nature of claims of its members, it was felt that those claims could more efficiently be entertained through joinder of the claimants rather than by class treatment.

Under these circumstances, we hold that as to members of the class Utah purported to represent, and whose claims it tendered to the court, suit was actually commenced by Utah's filing. The claims of appellants were then before the court and the only question was as to the manner in which they should be entertained on the merits.⁹ The requirements of § 5(b) were then met.

Suit having been commenced by a filing of the complaint, members of the class were safely in court and their claims protected against the bar of § 5 (b) until, by order of the court, they were ejected from the suit. The statute thus was tolled by commencement of suit and did not again commence to run until entry of the order denying class action.

This being so, it did not lie within the discretionary province of the District Court to deprive them of the eleven days balance of time remaining to them under § 5(b). If the order, through legal fiction, is to project itself backward in time it must fictionally carry backward with it the class members to whom it was directed, and the rights they presently possessed. It cannot leave them temporally stranded in the present.

We conclude that it was error for the court to hold that appellants' petitions for intervention were barred by § 5(b).

The order of the District Court is affirmed as to intervention under Rule 24(a). As to intervention under Rule 24(b), the matter is remanded with instructions that the order be vacated and for further proceedings upon the motions. Costs are awarded to appellants.

KILKENNY, Circuit Judge (dissenting):

I believe the trial judge exercised a legal discretion and that the appellants, on the record before us, have not shown an abuse of his appraisal of the issues presented on the applications for intervention. I would affirm on the basis of the trial judge's decision. State of Utah v. American Pipe & Construction Co., 50 F.R.D. 99 (C.D.Cal.1970).

* Honorable Fred M. Taylor, Senior United States District Judge for the District of Idaho, sitting by designation.

1 Initially, the decision of the court below, reported in 50 F.R.D 99 (1970), did not present an appealable final order. Applicants had alleged a cause of action including the four years prior to December 12, 1969, the date when the motions to intervene were filed, and as to those allegations, the statute of limitations had not run. 50 F.R.D. at 110. Applicants subsequently amended their complaint to eliminate allegations of conspiracy less than four years before the filing of the motion to intervene, thereby permitting a final order denying intervention to be filed.

2 Action was brought in the District Court of the District of Utah. On July 28, 1969, the Judicial Panel on Multidistrict Litigation transferred the case from the District of Utah to the Central District of California for assignment to Judge Martin Pence, Chief Judge of the District of Hawaii, who had been actively...