City of New York v. International Pipe & Ceramics Corp.

• Decision Date: 10 April 1969
• Docket Number: Motion No. 5 and 6,Docket 32555.
• Parties: The CITY OF NEW YORK, a Municipal Corporation of the State of New York, on behalf of itself and all others similarly situated, Plaintiff, v. INTERNATIONAL PIPE AND CERAMICS CORPORATION, Lock Joint Pipe Company, Kerr Concrete Pipe Company, Martin Marietta Corporation, DePasquale Brothers, Inc., 8 Morris Avenue Glen Cove Corp., and Colonial Sand & Stone Co., Inc., Defendants.
• Court: U.S. Court of Appeals — Second Circuit

410 F.2d 295 (1969)

The CITY OF NEW YORK, a Municipal Corporation of the State of New York, on behalf of itself and all others similarly situated, Plaintiff, v. INTERNATIONAL PIPE AND CERAMICS CORPORATION, Lock Joint Pipe Company, Kerr Concrete Pipe Company, Martin Marietta Corporation, DePasquale Brothers, Inc., 8 Morris Avenue Glen Cove Corp., and Colonial Sand & Stone Co., Inc., Defendants.

Motion Nos. 5 and 6, Docket 32555.

United States Court of Appeals Second Circuit.

Argued June 17, 1968.

Decided April 10, 1969.

William H. Mathers, New York City (Chadbourne, Parke, Whiteside & Wolff, New York City, for defendant Martin Marietta Corp.), for the motion.

Clark C. Vogel, Rumson, N. J., and Arnold & Porter, Washington, D. C., of counsel.

Sullivan & Cromwell, New York City (for defendants International Pipe & Ceramics Corp. and Lock Joint Pipe Co.), for the motion.

Jerome Doyle, New York City (Cahill, Gordon, Sonnett, Reindel & Ohl, New York City, for defendant Kerr Concrete Pipe Co.), for the motion.

Thomas J. Higgins, Roslyn Heights, N. Y. (for defendants DePasquale Brothers, Inc. and 8 Morris Avenue Glen Cove Corp.), for the motion.

Goodstein, Zamore, Mehlman & Krones, New York City (for defendant Colonial Sand and Stone Co., Inc.), for the motion.

J. Lee Rankin, Corp. Counsel, New York City, in opposition.

Louis J. Lefkowitz, Atty. Gen., State of New York (for intervenor plaintiff New York State Thruway Authority), in opposition.

Sidney Goldstein, New York City (for intervenor plaintiff The Port of New York Authority), in opposition.

David Brrger, Philadelphia, Pa., Maloney, Ross, Phelps & Wolf, New York City (for various intervenor plaintiffs), in opposition.

Dickstein, Shapiro, Dennis & Galligan, New York City (for intervenor plaintiff State of Wisconsin), in opposition.

David Bromberg, New York City (for intervenor plaintiff State of Kansas), in opposition.

Before MOORE and HAYS, Circuit Judges, TIMBERS,^* District Judge.

MOORE, Circuit Judge:

The plaintiff "The City of New York, a Municipal Corporation of the State of New York, on behalf of itself and all others similarly situated" brings this action as the representative of a class (Rule 23, F.R.Civ.Pr.) consisting of "all state and municipal governments, government agencies, authorities and subdivisions in the United States * * *"^** The defendants are manufacturers and sellers of "low-pressure" and "non-pressure" concrete pipe, allegedly sold to governmental agencies pursuant to a conspiracy in violation of the antitrust laws of the United States. This action is the outgrowth of two indictments in the District of New Jersey in 1966 in which certain of the defendants in this action and others not here named were charged with criminal conspiracy.

The indictments were filed on January 11, 1966, the defendants therein pleaded nolo contendere and sentences were imposed on April 29, 1966. The action by the City of New York was filed on April 28, 1967. These dates are of importance only with reference to the possible application of the statute of limitations if the requirement for the commencement of this action within a year from the termination of the criminal actions controls (Clayton Act, §§ 4B, 5(b), 15 U.S.C. §§ 15b, 16(b), 69 Stat. 283). In all, twenty-seven governmental agencies have intervened as plaintiffs.

In January 1968 defendant Kerr Concrete Pipe Company made a motion, in which the other defendants joined, to obtain a determination that the action should not be treated as a class action as defined in Rule 23. The motion came on before Judge Ryan. The Judge did not dispose of the motion in summary fashion but made a thorough investigation into the facts bearing upon a determination of the class action issue. Towards this end he directed extensive factual discovery by means of interrogatories and answers thereto. The answers included amongst other things information as to the names of the manufacturers, place of manufacture, the names and location of customer purchasers, the periods of purchase and sale, and the cost.

The Proceedings Before Judge Ryan

On December 12, 1967, a hearing was held before Judge Ryan relating largely to the granting of interventions and to the effect of existing interrogatories and answers thereto.

On January 10, 1968, a lengthy hearing was conducted (Tr. pp. 1-97). Further interventions were allowed and various counsel for plaintiff and intervenor-plaintiffs presented their views as to the propriety and practicality of treating the case as a class action. During argument, the Court expressed the opinion that "the Court will be in a much better position to determine whether this is or is not to be declared a class action at this time if we have these interrogatories served and answered before the determination is made to have some basis for it" (Tr. p. 31).

On April 2, 1968, there was an adjourned hearing (Tr. pp. 1-127), on the class action motion and the Court proceeded to hear final argument "since the answers to these interrogatories have been served by the defendants and by a substantial number of the plaintiffs * * *" (Tr. p. 4). The interrogatories and answers were exceedingly voluminous and were filed by the City of New York, International Pipe and Ceramics Corp., Kerr Concrete Pipe Co., the Port of New York Authority, the State of New York and the New York State Thruway Authority, the City of Philadelphia, Allegheny County Sanitary Authority, the City of Detroit, the City of Tampa, the City of Pittsburgh, the State of Alaska and the State of Ohio. Illustrative of the vast quantity of information furnished to the Court are the answers of the State of Ohio for the years 1955-58 which covered 634 pages and the submission by the New York State Thruway Authority of 102 exhibits.

During argument, the Court covered the many factual elements which he felt should control his judgment as to whether this action should be regarded as, and continue as, a class suit.

After having the nature and scope of the prospective trial thus unrolled before him, having had an opportunity to examine the interrogatories and answers thereto over a period of many weeks and after having heard extensive oral argument on the class action issue, Judge Ryan came to the conclusion that "treatment of this suit as a class action would not be `superior to other available methods for the fair and efficient adjudication of the controversy.'"

Of particular significance is Judge Ryan's role as a Rule 2 judge, namely, as the judge assigned to hear and determine all procedural matters in advance of the trial, to align the relevant issues and to hear and determine the issues on the trial itself. The responsibility therefore of the fairest and most efficient way to handle the trial should be left in the hands of the judge charged therewith. This point is illustrated by Judge Ryan's comment during argument for the issuance of a certificate that he had "simply held that this suit under the facts here, the undisputed facts, does not require and does not dictate that it be given class treatment" and that "it is not just, fair and equitable and that it would not promote the orderly conduct of this litigation" (Tr. 4/23/68, pp. 18, 15).

The key words of Rule 23 are "fair and efficient adjudication." This issue should not be decided in an abstract or academic manner but rather in a practical and realistic way by a trial judge who has knowledge of the actual problems presented in the courtroom by these multi-plaintiff, multi-defendant cases. In theory and in an initial off-hand reaction, it is tempting to say: why not let everyone who asserts a somewhat related grievance come into a common arena to resolve their controversy? However, on a moment's reflection, it should be apparent that the capacities of judges and jurors to absorb the factual situations thus presented are finite and that court-houses are not coliseums. Illustrative of the desirability of focusing attention upon narrow issues is the increasing tendency in the criminal law to avoid as much as possible the multi-defendant trial on the theory that it is most difficult to assure "equal protection" and "due process" if court or jury has to resolve a plethora of issues between a host of parties.

Contrasted against this obvious difficulty are the equally obvious benefits intended to be bestowed by the Rule 23 class action which would obviate the necessity for many — possibly hundreds of — separate actions where the issues are similar.

In resolving these countervailing situations, the judgment of the trial judge should be given the greatest respect and the broadest discretion, particularly if, as here, he has canvassed the factual aspects of the litigation.

Judge Ryan came to the conclusion that the "whole case remains as an independent suit by all parties who are joined as parties plaintiff * * * the action continues, but it continues not as a class action * * * and that it continues as to all named plaintiffs which would include those who have been granted permission to intervene." Thus neither the City of New York nor any of the other twenty-seven intervenor-plaintiffs have been foreclosed or thwarted in any way from having their rights adjudicated through trial to final judgment. No judgment, final or otherwise, has been levied against them by Judge Ryan. He has merely decreed that upon the facts presented, the district court trial would better result in a fair and efficient adjudication were it to proceed not as a class action. Judge's Ryan's order did not contain the necessary statement required by 28 U.S.C. § 1292(b). A motion to add such a statement was denied.

The sole question now before this court is whether Judge Ryan's order is a "final decision" as defined in 28 U.S.C. § 1291 and, hence, appealable at this stage of the litigation. Since the order and the opinion on which it is based are premised on the assumption that the action will proceed to some...