Citizens Utilities Co. v. American Tel. and Tel. Co., 77-1941

• Decision Date: 30 April 1979
• Docket Number: No. 77-1941,77-1941
• Citation: Citizens Utilities Co. v. American Tel. and Tel. Co., 595 F.2d 1171 (9th Cir. 1979)
• Parties: 1979-1 Trade Cases 62,650 CITIZENS UTILITIES COMPANY et al., Plaintiffs-Appellants, v. The AMERICAN TELEPHONE AND TELEGRAPH COMPANY et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1171

595 F.2d 1171

1979-1 Trade Cases 62,650

CITIZENS UTILITIES COMPANY et al., Plaintiffs-Appellants, v.The AMERICAN TELEPHONE AND TELEGRAPH COMPANY et al Defendants-Appellees.

No. 77-1941.

United States Court of Appeals Ninth Circuit.

April 30, 1979.

Weyman I. Lundquist, Esq., San Francisco, Cal., for plaintiffs-appellants.

Robert M. Westberg, San Francisco, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before CARTER, Senior Circuit Judge, BRIGHT^* and CHOY, Circuit judges.

BRIGHT, Circuit Judge.

Appellants, Citizens Utilities Company and its California subsidiary (collectively, Citizens), filed this antitrust action against the appellees, American Telephone & Telegraph Company(AT&T), the Pacific Telephone & Telegraph Company(Pacific) and Bell Telephone Company of Nevada (collectively, Bell), in October 1960.Sixteen years later, this lawsuit had not yet been tried.On January 3, 1977, the district court¹ dismissed Citizens' action on two alternative grounds: (1) want of prosecution by Citizens, under Fed.R.Civ.P. 41(b); and (2) lack of jurisdiction, because the Federal Communications Commission(FCC) possesses either primary or exclusive jurisdiction over the subject matter of the action.Citizens appeals.We affirm the judgment of dismissal.

I.Factual Background.

This action has its genesis in the period 1950-1957, when several disputes arose between Citizens and Bell concerning the division of revenues from "interchanged calls" between their systems, that is, telephone calls passing over interconnecting lines of Citizens and one of the Bell companies.² Citizens, contending that its return on the use of its facilities for interchanged calls was unreasonably low, sought, among other things, change to a new method of dividing revenues, based upon a study of Citizens' expenses and investment relating to calls interchanged with Bell.In 1957, appellee Pacific rejected a cost study plan proposed by Citizens.Citizens agreed to a plan proposed by Pacific, but it inserted a clause in the agreement reserving its claims that prior divisions of revenue were unfair.

In October 1960, Citizens brought this action under sections 1and2 of the Sherman Act,15 U.S.C. §§ 1,2,15,26 (1976), alleging that the appellees combined and conspired to fix prices and to discriminate against Citizens by presenting a united front at negotiations with Citizens regarding the division of revenues from interchanged calls.Citizens has supplemented its complaint from time to time to allege continuing conspiracy and damages.

A detailed summary of the sixteen-year record of proceedings in this case from its filing until its dismissal in December 1976 would serve no useful purpose here.A few matters, however, deserve mention.

The parties conducted extensive discovery between 1961 and 1971.However, the record fails to show any substantial activity by either party during several periods, for example, from June 1961 to February 1963, and most of 1965 and 1969.³

Over this eleven-year period from 1961-1971, Citizens' efforts to speed up the discovery process consisted of four motions for a preliminary pretrial conference aimed at establishing a schedule for completion of discovery, filed in May 1966, November 1968, August 1970, and July 1971.⁴Bell resisted Citizens' 1966 motion, contending that it was far from completion of discovery, and that motion was denied.The 1968 motion was also denied, for reasons which do not appear in the record.Citizens withdrew its 1970 motion after the parties stipulated to arrange a later pretrial conference and to "work out a timetable for the completion of discovery * * * ."Bell effectively joined in Citizens' 1971motion for a pretrial conference, though it also stated its intention to move for summary judgment on the ground that the federal courts lacked jurisdiction of the action.

On August 27, 1971, in accordance with the parties' stipulation, United States Senior District JudgeGeorge B. Harris entered a pretrial order establishing a briefing and hearing schedule for Bell's motion for summary judgment.Proceedings concerning two successive motions by Bell for summary judgment occupied the parties until April 1973.Judge Harris denied both of those motions.

The parties eventually stipulated to set the action for trial on March 18, 1974.However, in early March, Judge Harris advised the parties that because of a calendar problem he could not preside over the trial on March 18.Judge Harris suggested that the parties consent to a trial before a magistrate or that a new judge be assigned.Bell insisted upon trial before a judge, and the district court ordered the trial "off calendar."

Meanwhile, on February 20, 1974, Citizens' president, Richard Rosenthal, wrote to Citizens' lead attorney, Joseph F. Alioto, suspending his authority to act on behalf of Citizens.Citizens states in its brief that its dispute with Alioto resulted from his time-consuming political activities, "depriving Citizens of the (legal) services for which it had contracted."⁵.Alioto filed a motion to withdraw as Citizens' counsel on April 5, 1974.

The record shows no further activity in the case until more than two years later, on June 4, 1976, when Citizens' present counsel filed their appearance.Citizens states that it spent that two-year interval searching for new counsel.During that period, no particular district judge had responsibility for the case.However, within two weeks of a request by Citizens' new counsel for a status conference, the case was assigned to United States District JudgeWarren J. Ferguson.

At a status conference on September 20, 1976, Bell moved to dismiss the action under Fed.R.Civ.P. 41(b) for Citizens' failure to prosecute.⁶Following a hearing on December 17, 1976, Judge Ferguson granted Bell's motion to dismiss, stating that from his reading of the record "16 years is too long" for this case, and such excessive delay "is simply a matter of pure procrastination on behalf of the plaintiff * * * ."Judge Ferguson also held in the alternative that jurisdiction in the case lay in the regulatory agencies and not in the court.In his unpublished order denying Citizens' motion for reconsideration, filed on April 1, 1977, Judge Ferguson further stated:

16 years have passed since this action was instituted; the events at issue stretch back 25 to 30 years.Numerous witnesses have died; memories have faded.Actual prejudice, not merely presumed prejudice, has resulted.Here we do not have a single 16 year spell of inaction, but rather spaces throughout the course of litigation where procrastination, for whatever reason, slowed proceedings.Plaintiffs have an obligation to press forward with litigation, even if defendants in part slow their progress.They failed to do that here.

Final judgment of dismissal was entered on January 14, 1977.Citizens brought this timely appeal from the judgment and the district court's refusal to reconsider, contending that the district court abused its discretion under Rule 41(b) and erred in concluding that it lacked jurisdiction.

II.The Dismissal for Failure to Prosecute.

A dismissal under Rule 41(b) for failure to prosecute will be reversed only for abuse of discretion.E. g., Anderson v. Air West, Inc.,542 F.2d 522, 524(9th Cir.1976);Alexander v. Pacific Maritime Association, 434 F.2d 281, 283(9th Cir.1970).

A district court's decision on a motion to dismiss for want of prosecution requires weighing conflicting policies: on the one hand, the court's need to manage its docket, the public interest in expeditious resolution of litigation, and the risk of prejudice to defendants from delay; on the other hand, the policy favoring disposition of cases on their merits.SeePearson v. Dennison, 353 F.2d 24, 28-29(9th Cir.1965).Although prejudice to defendants may be presumed from "unreasonable" delay, E. g., Alexander, supra, 434 F.2d at 283, whether Actual prejudice exists may be an important factor in deciding whether a given delay is "unreasonable."Pearson v. Dennison, supra, 353 F.2d at 29.

In this case, the district court found that actual prejudice resulted to Bell from delays caused, at least in part, by Citizens' inaction.⁷The court focused not only upon the period from March 1974 to June 1976, when Citizens allegedly was searching for new counsel, but also upon earlier periods of inactivity.The court recognized that foot-dragging by Bell may have contributed to the numerous delays, but it plainly indicated that Citizens failed to meet its "obligation to press forward with (the) litigation."

We have carefully reviewed the record.The district court's findings of prejudice to Bell and to Citizens' lack of diligence are supported by the record.Although the issue is a close one and might have been decided differently, we cannot say that the decision to order a dismissal of this action falls outside the discretion conferred upon a federal district judge under Fed.R.Civ.P. 41(b).

Accordingly, we affirm the judgment of dismissal.⁸

JAMES M. CARTER, Senior Circuit Judge, dissenting:

I respectfully dissent.I think the majority is wrong in affirming the trial court's dismissal of this action for failure to prosecute.

The majority adequately discusses the early years of the case.The defendants, like all defendants in antitrust cases, were not anxious to go to trial.

We pass up those early years when both sides were probably equally at fault as to delay, and come to the period beginning in 1971.There is no dispute that defendants deliberately delayed the action at various times.Defendants brought various motions for summary judgments, two during the 1971-73 period.Defendants then sought the remedy of an extraordinary writ to this circuit to review the trial court's denial of the motion for summary judgment.The request for the writ was denied and...