City of Burlington, Vermont v. Westinghouse Electric Corp.
Decision Date | 05 March 1963 |
Docket Number | 432-62 to 438-62,420-62 to 427-62,and 2829-62.,405-62 to 410-62,Civ. A. No. 348-62 to 350-62,359-62 to 365-62 |
Parties | CITY OF BURLINGTON, VERMONT, Plaintiff, v. WESTINGHOUSE ELECTRIC CORPORATION et al., Defendants. |
Court | U.S. District Court — District of Columbia |
Charles S. Rhyne, Lenox G. Cooper, Rhyne & Rhyne, Washington, D. C., for City of Albemarle, N. C.
Elmer F. Bennett, Ely, Duncan & Bennett, Washington, D. C., for City of Burlington, Vt., City of Hagerstown, Md., the State of Maryland and its State Roads Commission, and City of Vineland, N. J.
Robert E. Sher, James H. Heller, Sher, Oppenheimer & Harris, Washington, D. C., for the Puerto Rico Water Resources Authority.
Chester H. Gray, Corp. Counsel, D. C., John A. Earnest, James M. Cashman, Asst. Corp. Counsel, Washington, D. C., for District of Columbia.
Miles W. Kirkpatrick, Don B. Blenko, Philadelphia, Pa., Arthur B. Edgeworth, Morgan, Lewis & Bockius, Washington, D. C., for Allen-Bradley Co., Cutler-Hammer Inc., and Square D. Co.
Robert C. Barnard, John K. Mallory, Jr., Cleary, Gottlieb & Steen, Washington, D. C., for Allis-Chalmers Mfg. Co., Joslyn Mfg. & Supply Co., McGraw-Edison Co., Moloney Electric Co., Sangamo Electric Co., and Wagner Electric Corp.
Robert D. Larsen, Charles F. Young, Royall, Koegel, Harris & Caskey, Washington, D. C., for Arrow-Hart & Hegeman Electric Co. and Ward Leonard Electric Co.
Lloyd N. Cutler, Ezekiel G. Stoddard, Samuel A. Stern, Wilmer, Cutler & Pickering, Washington, D. C., for Carrier Corp.
Ephraim Jacobs, Hollabaugh & Jacobs, Washington, D. C., for Federal Pacific Electric Co.
Earl W. Kintner, Ralph S. Cunningham, Jr., Sidney Harris, John F. Bodle, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., for Duncan Electric Co., Inc.
Francis M. Shea, Richard T. Conway, William H. Dempsey, Jr., Shea & Gardner, Washington, D. C., for General Elec. Co., Clark M. Clifford, Clifford & Miller, Washington, D. C., of counsel.
Richard A. Whiting, Robert M. Goolrick, Steptoe & Johnson, Washington, D. C., for I-T-E Circuit Breaker Co.
Mac Asbill, Willis B. Snell, Charles L. Saunders, Jr., Sutherland, Asbill & Brennan, Washington, D. C., for Southern States, Inc. (formerly known as and named in the complaints as Southern States Equipment Corp.)
John S. Walker, Jones, Day, Cockley & Reavis, Washington, D. C., for the Clark Controller Co.
Leonard J. Emmerglick, Ellis Lyons, Perlman, Lyons & Emmerglick, Washington, D. C., for Westinghouse Elec. Corp.
John D. Lane, J. Carter McKaig, Hedrick & Lane, Washington, D. C., for Worthington Corp.
In 32 of the 461 treble damage antitrust suits instituted under Section 42 of the Clayton Act and now pending in this Court, defendants have joined in support of a motion under Rule 12(f) of the Federal Rules of Civil Procedure to strike all claims for injuries accruing prior to the four-year period of limitation as provided in Section 4B3 and 5(b)4 of the Clayton Act, and all allegations of fraudulent concealment. In the alternative defendants move, pursuant to Rules 12 and 56 of the Federal Rules of Civil Procedure, for an order or judgment dismissing such claims or, pursuant to Rule 16, for the entry of a pretrial order disposing of the issue.
Rather than reviewing in detail the allegations of the complaints filed in these cases, it is sufficient to say that they arise out of the electrical equipment indictments returned in 1960 in the United States District Court for the Eastern District of Pennsylvania.5 In general, plaintiffs, who are public corporations, city and state governments, complain of continuing agreements among the defendants to fix prices, submit collusive bids and price quotations and allocate sales among themselves on various items such as distribution transformers, circuit breakers, meters, etc.
In support of claims which in one case go as far back as 1948, and, in order to avoid the restrictive effects of the four-year limitation period of Section 4B of the Clayton Act, plaintiffs allege that defendants fraudulently concealed their violations; i. e., they employed deceptive schemes designed to conceal their damaging practices. In order to point with greater specificity to the charges made by plaintiffs, a paragraph of the complaint filed by the City of Piqua, Ohio, in Civil Action No. 2829-62, which is similar to allegations made by other plaintiffs, is here reproduced:
The sufficiency of the above and other allegations is not contested at this time by defendants' motion, but instead, defendants attack plaintiffs reliance on the so-called doctrine of fraudulent concealment to toll the four-year limitation period of Section 4B. The attack has many avenues of approach, but basically it centers around their contention that no doctrine of fraudulent concealment exists, as such, in the federal judicial system.6
Prior to a consideration of the several points raised in the argument made by defendants, it is felt that a brief summary of the overriding consideration aimed at in the resolution of this difficult problem would serve a useful purpose. Therefore, with the following introduction, the Court will attempt to answer the arguments of defendants and state its reasons for adopting the conclusion that the four-year period of limitation of Section 4B is tolled by the fraudulent concealment of antitrust violations.
The Supreme Court, in Glus v. Brooklyn E. Dist. Terminal, 359 U.S. 231, 232, 79 S.Ct. 760, 761, 762, 3 L.Ed.2d 770 (1959), has quoted the well-known maxim that "no man may take advantage of his own wrong." In the present situation it appears difficult to reach the conclusion that Congress was unmindful of this maxim when it considered and deliberated the amendment to the Clayton Act, proposed in 1955, establishing a uniform period of limitation in antitrust litigation. Since it is obvious that Congress in enacting antitrust legislation during the past seventy-odd years had as one of its main purposes a desire to make it economically unattractive to create monopolies, it would appear to be unreasonable to argue that in passing a statute of limitation in this area, Congress would permit violators to gain substantial immunity by merely devising elaborate schemes which avoid detection.
In considering this same problem, the United States Court of Appeals for the Eighth Circuit in its recent decision in Kansas City v. Federal Pac. Elec. Co., 310 F.2d 271, 284 (1962), has said:
In support of their motion and in contrast to the view expressed above, defendants argue that no federal doctrine of fraudulent concealment existed prior to the enactment of Section 4B in 1955, or exists at this time, and thus could not have been in the mind of Congress during its deliberations. However, the decisions in Bailey v. Glover, 88 U.S. (21 Wall.) 342, 22 L.Ed. 636 (1874) and Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946), would appear to refute this position.
In Bailey v. Glover, supra, an assignee of a bankrupt brought suit to set aside certain fraudulent real estate conveyances from the bankrupt to defendants. Faced with a two-year statute of limitation, plaintiff argued that the clandestine nature of the fraud tolled the statute. Agreeing with this position, the Supreme Court considered it equally applicable in law and in equity. In concluding that the tolling of the statute in the situation presented to it was a "sound and philosophical view of the principles of the Statute of Limitation" the Court stated:
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Westinghouse Electric Corp. v. City of Burlington, Vermont
...suits, 15 U.S.C. § 15b, is tolled by fraudulent concealment on the part of the defendants. E. g., City of Burlington, Vermont v. Westinghouse Electric Corp., 215 F.Supp. 497 (D.D.C.1963), aff'd, 117 U.S.App.D.C. 148, 326 F.2d 691 (1964). One well established defense to a claim of fraudulent......
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City of Burlington, Vermont v. Westinghouse Electric Corp.
...damage antitrust suits is tolled by fraudulent concealment on the part of the defendants. See City of Burlington, Vermont v. Westinghouse Electric Corp., 215 F.Supp. 497 (D.D.C. 1963), aff'd, 117 U.S.App.D.C. 148, 326 F.2d 691 (1964). Since one recognized defense to an allegation of fraudul......
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