Braun v. Berenson
| Decision Date | 30 September 1970 |
| Docket Number | No. 28512.,28512. |
| Citation | 432 F.2d 538 |
| Parties | Meyer BRAUN, d/b/a Rex the Tailor, Plaintiff-Appellant, v. Theodore W. BERENSON, d/b/a Gulfgate Shopping Center, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Jim S. Phelps, Houston, Tex., for plaintiff-appellant.
Abraham G. Levin, New York City, John F. Heard, E. W. Barnett, John L. Jeffers, Jr., M. W. Parse, Jr., Stephen D. Susman, B. J. Bradshaw, Houston, Tex., for defendants-appellees; Baker, Botts, Shepherd & Coates, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., of counsel.
Before GODBOLD, SIMPSON and MORGAN, Circuit Judges.
This is a civil action brought pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15, to recover treble the damages allegedly sustained as a result of a conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The plaintiff Braun (hereafter, the plaintiff) appeals from a judgment of the District Court for the Southern District of Texas in effect dismissing the action as barred by the four-year statute of limitations applicable to civil antitrust suits, § 4B of the Clayton Act, as added by Act of July 7, 1955, c. 283, § 1, 69 Stat. 283, 15 U.S.C. § 15b; and from an order dismissing certain defendants. We reverse and remand for further proceedings.
Defendant Berenson (hereafter, Berenson) leased to defendant National Shirt Shops of Gulfgate, Inc., (hereafter, National Shirt) space on the main mall of the Gulfgate Shopping Center in Houston, Texas, in 1955. The lease agreement contained an "exclusive clause" which, with some exceptions, purported to give National the exclusive right to retail men's and boys' furnishings and sportswear in the shopping center.1
In 1956 Berenson leased to the plaintiff space on a side mall of the shopping center to operate a men's and boys' clothing store. Before making this lease, Berenson secured the permission of National Shirt. Correspondence between Berenson and National Shirt indicated National Shirt gave its permission "with the understanding that it will not in any way affect the terms of our lease with you Berenson".
The plaintiff alleges that at this time Berenson and National Shirt entered into what he terms a "secret agreement" whereby the plaintiff would be allowed to lease the side mall space, but would not be allowed to lease additional space or move to any other location in the shopping center for the life of National Shirt's lease, in violation of the federal antitrust laws. He further contends that this "secret agreement", when taken in conjunction with provisions in his own lease prohibiting him from putting another store within a three-mile radius of the shopping center, had the effect of restricting the location, size and growth of his business.
In 1957 the plaintiff attempted to lease a space (hereafter referred to as the "Thornton space") on the corner of the side mall on which he was located and the main mall of the shopping center that had recently become available. He was also approached by the shopping center manager at this time concerning other locations that had or might become available. These spaces were eventually leased to others, although the plaintiff's request was never expressly refused nor the reasons for the refusal explained. The testimony of Thomas Kaplan, Berenson's attorney during this period, indicates, however, that the reason for the refusal was National Shirt's "exclusive clause".
In December, 1960, the Thornton space again became available and the plaintiff requested Berenson to lease it to him. At this time Berenson informed the plaintiff that it was impossible for him to get extra space or move within the shopping center without first obtaining the permission of National Shirt. Plaintiff then went to New York to obtain National Shirt's permission and apparently reached tentative agreement as to the conditions under which National Shirt would acquiesce in the plaintiff's lease of the Thornton space. However, before the agreement was consummated, Edward L. Marks, an official of the National Shirt Shops chain, visited Houston and "shopped" plaintiff's store. On the basis of this investigation, National Shirt refused to allow the plaintiff to lease the Thornton space.
Again in 1964 plaintiff attempted to obtain a space adjoining his store, but his request was denied, and, again, apparently on the basis of National Shirt's "exclusive clause".
Plaintiff filed suit on October 31, 1964, and on November 11, 1967, the cause was tried on the merits before a jury. This first trial ended in a mistrial due to the inability of the jury to reach a verdict. In response to a motion for a directed verdict made by the defendants during the trial, the District Court entered a Memorandum Opinion ordering a separate jury trial on the statute of limitations issue pursuant to Rule 42(b), Federal Rules of Civil Procedure. The District Court stated the rule to be applied in civil antitrust cases as follows:
The district court went on to reason that "the overt act from which the plaintiff's cause of action accrued was the defendants' first refusal to plaintiff's request for additional space, such refusal being based on the alleged illegal agreement or conspiracy * * *" because "* * * the plaintiff suffered no new and independent damages by the continuing refusals of the defendants to consider his requests for additional space". The evidence presented at the second trial was limited to such as was relevant to answer the single interrogatory presented to the jury:
The jury answered the interrogatory in the affirmative and on the basis of this verdict the district court entered a judgment for defendants.
In the same memorandum opinion, the district court held that there was no fraudulent concealment of the alleged conspiratorial agreement, which would have tolled the running of the statute of limitations as long as the conspiracy remained undiscovered, because "it has not been alleged nor was there any evidence presented at the trial which would indicate any fraudulent concealment on the part of the defendants or any fiduciary duty existing between the plaintiff and the defendants".
In an earlier order, dated November 21, 1967, the district court dismissed individual defendant Edward Marks from the action.
The principal issue presented by this appeal is whether the plaintiff's claim for damages is barred by the statute of limitations. Section 15b, Title 15, United States Code provides that "any cause of action under sections 15 or 15a of this title shall be forever barred unless commenced within four years after the cause of action accrued. * *" (Emphasis added.) It is well established that an action for civil conspiracy under Section 15 accrues when an overt act violative of the antitrust laws is committed pursuant to the conspiracy which gives rise to new and independent damages to the person against whom the overt act is directed. Hanover Shoe, Inc. v. United Shoe Machinery Corp., M.D.Pa., 1965, 245 F.Supp. 258, aff'd, in part, rev'd in part, 3 Cir., 1967, 377 F.2d 766, aff'd in part, rev'd in part, 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968); Peto v. Madison Square Garden Corp., 2 Cir., 1967, 384 F.2d 682, cert. den. 390 U.S. 989, 88 S.Ct. 1185, 19 L.Ed.2d 1293; Sherman v. Goerlich's, Inc., E.D.Mich., 1963, 238 F. Supp. 728, 730, aff'd. 6 Cir., 1965, 341 F.2d 988, cert. den. 382 U.S. 830, 86 S.Ct. 69, 15 L.Ed.2d 74; Garelick v. Goerlich's, Inc., 6 Cir., 1963, 323 F.2d 854; Suckow Borax Mines Consol. v. Borax Consolidated, 9 Cir., 1950, 185 F.2d 196; Northern Kentucky Tel. Co. v. Southern Bell T. & T. Co., 6 Cir., 1934, 73 F.2d 333, 97 A.L.R. 133, cert. den. 294 U.S....
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