Brigham City Corporation v. General Electric Company

• Decision Date: 28 September 1962
• Docket Number: No. C 16-62 — C 28-62.,C 16-62 — C 28-62.
• Citation: 210 F. Supp. 574
• Parties: BRIGHAM CITY CORPORATION et al., Plaintiffs, v. GENERAL ELECTRIC COMPANY et al., Defendants. PROVO CITY CORPORATION, Plaintiff, v. GENERAL ELECTRIC COMPANY et al., Defendants.
• Court: U.S. District Court — District of Utah

210 F. Supp. 574

BRIGHAM CITY CORPORATION et al., Plaintiffs, v. GENERAL ELECTRIC COMPANY et al., Defendants.

PROVO CITY CORPORATION, Plaintiff, v. GENERAL ELECTRIC COMPANY et al., Defendants.

No. C 16-62 — C 28-62.

United States District Court D. Utah, Central Division.

September 28, 1962.

Joseph L. Alioto, San Francisco, Cal., Brigham E. Roberts, Salt Lake City, Utah, Thomas S. Taylor, Dallas H. Young, Jr., Provo, Utah, for plaintiffs.

Calvin A. Behle, James Lee, George W. Latimer, Salt Lake City, Utah, Moses Lasky, Richard Haas, San Francisco, Cal., for defendant Westinghouse Elec. Corp.

Dennis McCarthy, Salt Lake City, Utah, for defendants Allis-Chalmers and McGraw Edison Co.

Peter W. Billings, Salt Lake City, Utah, Morris M. Doyle, San Francisco, Cal., for defendant General Elec. Co. J. Thomas Greene, Salt Lake City, Utah, and R. Walston Chubb, St. Louis, Mo., for defendant Wagner Elec.

CHRISTENSEN, District Judge.

These consolidated cases are a few of a large number of similar civil antitrust suits which have been filed in various districts throughout the country as a result of criminal indictments returned in the United States District Court for the Eastern District of Pennsylvania and the consequent conviction by plea of various manufacturers of electrical equipment and some of their officers and agents.

The plaintiffs instituted the actions in this court in February, 1962, seeking treble damages under Section 4 of the Clayton Act (15 U.S.C.A. § 15) for alleged violations of Section 1 of the Sherman Act (15 U.S.C.A. § 1). Plaintiffs allege treble damage claims for alleged conspiracies "beginning at least as early as 1951 and continuing until sometime in 1960."

The complaint in C 16-62, after alleging the conspiracy and its effects states:

"15. Plaintiffs had no knowledge of the said combination and conspiracy, or of any facts which might have led to the discovery thereof, and they first became aware of the unlawful conspiracy by the return of indictments against defendants in 1960 by a United States Grand Jury. It could not have uncovered the conspiracy at an earlier date by the exercise of due diligence, inasmuch as the unlawful conspiracy had been fraudulently concealed by defendants through their adoption of elaborate schemes for submitting sham and collusive bids which misrepresented the independence and competitiveness thereof, and their resort to secrecy to avoid detection."

There are averments in the other complaints to similar effect.

The defendants in all actions have filed or joined in appropriate motions to strike or for partial summary judgment in assertion of their position that the four year period of limitations provided in Section 4B of the Clayton Act (15 U.S.C.A. § 15b)¹ bars portions of the respective claims for damages after taking into consideration the suspending effect of the Philadelphia proceedings pursuant to Section 5(b) of the Clayton Act (15 U.S.C.A. § 16(b)).² Whether it does depends upon whether there may be read into the basic four year period an additional exception not expressed in the statute but to be invoked by plaintiffs' allegations of "fraudulent concealment" or "secrecy". For the purposes of this opinion, Rule 9(b), Federal Rules of Civil Procedure, 28 U.S.C.A.,³ may be disregarded and we shall assume that there are facts specified in the complaints to substantiate the conclusions to their full breadth.

Several United States district courts already have decided the precise question in similar cases and in almost the exact context in which it is presented here.⁴ These well reasoned and documented decisions have rendered further treatment of the subject on the trial level largely unnecessary. A careful reading of them, and some additional study that has been given to the problem since it initially was presented, have not persuaded me that the tentative views⁵ then indicated were in substance erroneous, however inartfully stated. Despite the plausibility of arguments supporting plaintiffs' position in view of a natural aversion to "concealment", fraudulent or otherwise, there are certain fundamental difficulties standing in the way of those arguments which my mind has not been able to circumvent or surmount. With the thought that these difficulties in prior decisions may not have been given due recognition or weight on the one hand, or sufficient emphasis on the other, I take the liberty of enumerating them without repeating the more comprehensive discussion set out in Judge Becker's opinion with which I generally agree.⁶

1. Congress has the power, if it chooses, to enact a statute of limitations which is not subject to tolling or suspension for any reason. And it is for the Congress to weigh the morality or public policy which justifies such an enactment and not for the Courts, so long as Congress acts within its powers and the parties to a suit who seek to avail themselves of the benefit of such a provision have not barred themselves from relying upon the statute, irrespective of its true meaning, by conduct which invokes the established equitable doctrine of estoppel. Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959); Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 73 S.Ct. 580, 97 L.Ed. 821 (1953); Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946); The Harrisburg, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358 (1886).

2. The general language in Holmberg, supra, that, "This equitable doctrine now claimed to be some "fraudulent concealment" doctrine is read into every Federal Statute of Limitations," without which the contention of the plaintiffs would hardly be plausible, was mere dicta, was manifestly inaccurate as a generalization, was diametrically opposed to the principle recognized in the same case that Congress may provide if it chooses a limitation not subject to tolling, and did not even refer, expressly or by implication, to such a doctrine of "fraudulent concealment" as must now be relied upon by plaintiffs. It is the inexorable "every" which plaintiffs must strain to its fullest scope and the definitive "this" which they must extirpate from its textual antecedent to make much favorable to their position out of Mr. Justice Frankfurter's language. Moreover, if we look to the true doctrine of the cases, the line of authority in general, and this case in particular, it will be seen that they have reference to a situation essentially different⁷ than that of the cases at bar in this court.

3. If it were to be assumed that some pervasive doctrine of "fraudulent concealment" must be, or could be, read into every statute of limitations, we need not stop to consider the difficulties and uncertainties that generally would be encountered but should be confronted at once in these cases based on Section 1 of the Sherman Antitrust Act by obstacles which appear insurmountable. Having no guidelines, such as those existing in causes of actions founded upon fraud or the accepted equitable principles of estoppel, we would have to fashion new criteria with reference to conspiracy cases. Assuming a conspiracy is established, would mere failure of the participants to disclose the conspiracy as a whole, or limited facts with reference to it, suspend the running of the statute? In some such cases, the conspiratorial compacts will be self-secreting; and these may be the ones in practice that prove the most effective, predatory, far reaching and damaging. If the conspirators by the transparent or questionable nature of the combination have to resort to fabrication of records, false communications, or similar tactics, the conspiracy could be of a type susceptible of discovery otherwise for such badges of wrong sometimes are the revelation of the basic wrong itself. Will we then let these suits for relief from the more subtle and effective conspiracies be barred at the end of four years and keep claims as to others alive for ten, twenty, or thirty years or until the victims are demonstrably aware of the conspiracy? To what degree must concealment appear, and in what form, to amount to "fraudulent concealment". How will we instruct the jury; what standards for our own decisions? It is no answer to say that the courts have refused to set rigid boundaries for the doctrine of fraud, for we are not dealing with fraud as a doctrine but as a mere appellation attached to a root conspiracy and related concealment.

The short of the matter is that the statute of limitations under the doctrine of "fraudulent concealment" would be suspended in every conspiracy case without any limitation except for the provable discovery of the alleged victim. In my experience, indications of wrongful concealment or, if you please, "fraudulent concealment", often may be more readily established than the conspiracy itself; and it is not unusual for plaintiffs to rely upon inferences drawn from indications of concealment or misrepresentation, coupled with parallel action, when the conspiracy itself was not otherwise provable. There are few if any cases where a plaintiff could not plausibly ascribe his failure of discovery to concealment and could not with plausibility characterize such concealment as "fraudulent" within the meaning plaintiffs seek to have approved.

4. It is a fact beyond question that Congress rejected purposely a provision which would have suspended the running of the statute of limitations specifically with respect to conspiracies until the conspiracy was, or in the exercise of reasonable diligence or care could have been, discovered. This considered rejection cannot have been wiped out by statements on the floor of the house which if given plaintiffs' interpretation, would negate the very action which the committees of Congress and Congress clearly took.⁸ If Congress rejected a so-called "discovery-due diligence" exception, which is conceded by all, it necessarily rejected a "fraudulent concealment" e...