95-2655 La.App. 4 Cir. 11/27/96, State ex rel. Ieyoub v. Bordens, Inc.
| Decision Date | 27 November 1996 |
| Citation | 684 So.2d 1024 |
| Parties | 95-2655 La.App. 4 Cir |
| Court | Court of Appeal of Louisiana — District of US |
Richard P. Ieyoub, Attorney General, Jane Bishop Johnson, Assistant Attorney General, Baton Rouge, for Plaintiff/Appellee.
Alston & Bird, Michael A. Doyle, Atlanta, GA, and Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., Edward H. Bergin, Pauline F. Hardin, Nan Roberts Eitel, New Orleans, for Defendant/Appellant.
Before BARRY, KLEES and ARMSTRONG, JJ. [95-2655 La.App. 4 Cir. 1] BARRY, Judge.
On October 10, 1994 the State ex rel. the Attorney General filed a petition for treble damages (pursuant to Louisiana Anti-Monopoly Statute, La. R.S. 51:132, 51:137 and 51:138) against Borden's Inc. (Borden) in state court. 1 The Attorney General sued on behalf of a number of Louisiana school systems alleging the schools did not receive competitive bids or pay competitive prices for milk; and on behalf of school children who paid inflated prices due to bid-rigging. 2 Attached to the petition was: an October 12, 1993 federal criminal antitrust complaint; Borden's guilty plea agreement; a federal judgment which fined Borden $750,000 for its participation in a conspiracy to rig bids (Sherman Antitrust Law) which was signed April 14, 1994 and entered April 18, 1994. 3 Borden removed [95-2655 La.App. 4 Cir. 2] the case to federal court, but it was remanded to state court with a declaration that the Louisiana Attorney General had authority to sue in a parens patriae capacity, and Louisiana had a quasi-sovereign interest in the economic well-being of its citizens and was a real party in interest. In state court Borden filed an exception of prescription which was overruled.
La. Const. art. IV, § 8 and La. R.S. 13:5036 provide the Attorney General's authority to institute proceedings to protect the state's interests. La. R.S. 51:138 provides authority to file suit to enforce the Antitrust Law. Here the State filed the action on behalf of the school systems and the citizens of the state as parens patriae, literally "parent of the country," the concept of "standing" which is utilized to protect quasi-sovereign interests such as the general economy of the state. State attorney generals have parens patriae authority to bring antitrust actions on behalf of state citizens. See generally Alfred L. Snapp and Son, Inc. v. Puerto Rico ex rel., Barez, 458 U.S. 592, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982); State v. Time, Inc., 249 So.2d 328 (La.App. 1st Cir.1971), writ denied 259 La. 761, 252 So.2d 456 (La.1971); Black's Law Dictionary, 1003 (5th Ed.1979); National Association of Attorneys General, L. Ross, ed., State Attorneys General: Powers and Responsibilities, 91-92. 4 A final judgment in a criminal prosecution by the United States "shall be prima facie evidence" against the defendant in any civil proceeding as to all matters which would be res judicata between the parties to the suit or prosecution. "[R]unning of prescription of a private right of action arising under these laws and based in whole or in part on any matter complained of in the [95-2655 La.App. 4 Cir. 3] proceeding shall be suspended during the pendency of the [federal criminal] proceeding." La. R.S. 51:132.
There is no statute of limitation in La. R.S. 51:121 et seq., the Louisiana Anti-Monopoly Law, more particularly R.S. 51:137 which provides for recovery of treble damages. There is one Louisiana case which discusses a prescriptive period. In Loew's, Incorporated v. Don George, Inc., 237 La. 132, 110 So.2d 553 (La.1959), the Supreme Court held that an antitrust action sounds in tort and the one year prescriptive period of La. C.C. art. 3492 applies in a private action. See also Delaughter v. Borden Company, 364 F.2d 624 (5th Cir.1966); Diliberto v. Continental Oil Company, 215 F.Supp. 863 (E.D.La.1963) 5; ABA Antitrust Section, State Antitrust Practice and Statutes: Chapter 20 for the State of Louisiana, 20-21 (1990).
The one year prescriptive period begins to run from the date actual or appreciable damage is sustained. La. C.C. art. 3492. The damage need not be calculable or fully incurred but cannot be speculative. Harvey v. Dixie Graphics, Inc., 593 So.2d 351 (La.1992). The commencement of prescription is delayed when a complex business tort, similar to a continuing tort, is involved. Prescription does not begin to run until the continuing tort ceases. National Council on Compensation Insurance v. Quixx Temporary Services, Inc., 95-0725 (La.App. 4 Cir. 11/1/95), 665 So.2d 120. There must be continuing acts coupled with continued damages. Id.; South Central Bell Telephone Company v. Texaco, Inc., 418 So.2d 531 (La.1982).
Prescriptive statutes are strictly construed against prescription and in favor of the claim. Bustamento v. Tucker, 607 So.2d 532 (La.1992). If there are two [95-2655 La.App. 4 Cir. 4] possible constructions of a prescriptive statute, the one that maintains the action should be adopted. Louisiana Health Services and Indemnity Company v. Tarver, 93-2449 (La.4/11/94), 635 So.2d 1090.
The burden of proving that a suit has prescribed rests with the party pleading prescription. Boyd v. B.B.C. Brown Boveri, Inc., 26,889 (La.App. 2 Cir. 5/10/95), 656 So.2d 683, writ not considered 95-2387 (La.12/8/95), 664 So.2d 417. When a petition reveals on its face that prescription has run, the plaintiff has the burden of showing that the claim has not prescribed. Wimberly v. Gatch, 93-2361 (La.4/11/94), 635 So.2d 206; Lima v. Schmidt, 595 So.2d 624 (La.1992).
La. R.S. 51:122 et seq. is a counterpart to § 1 of the Sherman Antitrust Act. The U.S. Supreme Court's interpretation of the Sherman Act is a persuasive influence on the interpretation of our state statutes. Louisiana Power and Light Company v. United Gas Pipe Line Company, 493 So.2d 1149 (La.1986), rehearing granted on other grounds. Generally, an antitrust cause of action accrues when a defendant commits an act which injures a plaintiff's business. However, in the context of a continuing conspiracy to violate antitrust laws, each time a plaintiff is injured by the act of a defendant, a cause of action accrues to recover damages caused by that act and the statute of limitations runs from the commission of the last act. Al George, Inc. v. Envirotech Corporation, 939 F.2d 1271 (5th Cir.1991), quoting Zenith Radio Corporation v. Hazeltine Research, Inc., 401 U.S. 321, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971). See also Imperial Point Colonnades Condominium, Inc. v. Mangurian, 549 F.2d 1029 (5th Cir.1977), cert. denied 434 U.S. 859, 98 S.Ct. 185, 54 L.Ed.2d 132 (1977); Bell v. Dow Chemical Company, 847 F.2d 1179 (5th Cir.1988); Poster Exchange, Inc. v. National Screen Service Corporation, 517 F.2d 117 (5th Cir.1975). Federal cases interpreting the statute of limitations involved [95-2655 La.App. 4 Cir. 5] in antitrust actions (four years under 15 U.S.C. § 15b) hold that in a conspiracy action the period begins with an overt act pursuant to the conspiracy; cases look to the last bid in which wrongdoing is alleged in bid rigging cases. See State of Texas v. Allan Construction Company, 851 F.2d 1526 (5th Cir.1988).
In an antitrust action the plaintiff must know or should have known that he is sustaining an actionable injury before the prescriptive period begins to run. When an act does not effect a traumatic injury but produces ill effects by passage of time, and it is impossible to designate the exact moment when the act produced the requisite damage to start prescription, recovery should be allowed for all damages sustained within one year prior to the filing of the suit. Delaughter, 364 F.2d at 624. 6
However, there are two grounds for allowing an antitrust suit to be filed more than four years after the events that create the cause of action: the continuing conspiracy or continuing violation exception that allows a cause of action to accrue whenever the defendant commits an overt act to further the antitrust conspiracy; and the revival of the cause of action outside the limitations period because the plaintiff's damages were speculative or unprovable when the act originally occurred. Kaiser Aluminum & Chemical Sales, Inc. v. Avondale Shipyards, Inc., [95-2655 La.App. 4 Cir. 6] F.2d 1045 (5th Cir.1982). See also Zenith Radio Corporation, 401 U.S. at 321, 91 S.Ct. at 795.
In order to avoid the federal statute of limitations a plaintiff may also invoke the fraudulent concealment doctrine, which is similar to Louisiana's doctrine of contra non valentem. Fraudulent concealment involves proof that the defendant concealed the injurious conduct and that the plaintiffs did not discover the conduct despite due diligence. Some federal circuits have held that antitrust violations arising from bid-rigging conspiracy are self-concealing and affirmative acts of concealment need not be shown. New York v. Hendrickson Brothers, Inc., 840 F.2d 1065 (2d Cir.1988), cert. denied 488 U.S. 848, 109 S.Ct. 128, 102 L.Ed.2d 101 (1988); State of Colorado ex rel. Colorado Attorney General v. Western Paving Construction Co., 833 F.2d 867 (10th Cir.1987), panel opinion vacated en banc 841 F.2d 1025 (1988). See also Hobson v. Wilson, 737 F.2d 1 (D.C.Cir.1984), cert. denied 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985). The Fifth Circuit rejects that argument, but holds that actions to show fraudulent concealment need not be separate from the acts underlying the bid-rigging. State of Texas, 851 F.2d at 1531.
Borden argues that prescription runs where the State asserts claims in its parens patriae capacity and here the one year prescriptive period has run. The Attorney General counters that prescription does not run against the State based on La. Const. art. XII, § 13, which declares that "prescription shall not run...
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