Dixie Carriers, Inc. v. Channel Fueling Service, Civ. A. No. B-86-1191-CA
| Decision Date | 08 July 1987 |
| Docket Number | B-86-1223-CA,B-86-1755-CA and B-87-00084-CA.,B-86-1360-CA,Civ. A. No. B-86-1191-CA,B-86-1390-CA |
| Citation | 669 F. Supp. 150 |
| Parties | DIXIE CARRIERS, INC., et al., v. CHANNEL FUELING SERVICE, INC., William F. Fredeman, Sr., William F. Fredeman, Jr., Henry F. Fredeman, James Crawford, et al. |
| Court | U.S. District Court — Eastern District of Texas |
Michael K. Clann, Clann, Bell & Murphy, Herbert T. Schwartz, Wood Lucksinger & Epstein, Houston, Tex., F.L. Benckenstein, Ned Johnson, Benckenstein, Oxford, Radford & Johnson, Louis H. Beard, Wells, Peyton, Beard, Hunt & Crawford, Beaumont, Tex., for plaintiffs.
Ronald S. Liebman, Patton, Boggs & Blow, Washington, D.C., Gilbert I. Low, Orgain, Bell & Tucker, Beaumont, Tex., David H. Berg, Houston, Tex., for defendants.
Dixie Carriers, Inc., Dow Chemical Company, and nine other plaintiffs have brought suit in this consolidated action against Channel Fueling Service, Inc., Port Arthur Towing Company, William F. Fredeman, Jr., Henry F. Fredeman, James Crawford, and others, for damages growing out of an alleged continuing plan and scheme to defraud the plaintiffs of millions of dollars of diesel oil, and other petroleum products for a period in excess of ten (10) years.
Channel Fueling Service, Inc. and Port Arthur Towing Company developed a very successful business of refueling towboats and tugs in midstream, using the Intercoastal waterways in Texas and Louisiana while the vessels were underway, so that they would not be required to take on fuel at a stationary position while in transit.
All of the corporations were controlled by the defendants, the Fredemans, Crawford, and their predecessors. Among the counts alleged by the plaintiffs are counts in violation of the civil RICO statute, 18 U.S.C. § 1961 et seq., the antitrust statute, 15 U.S.C. §§ 1 AND 15 (§ 4 of the Clayton Act), the Texas Deceptive Trade Practices and Consumer Protection Act (TEX.BUS. & COMM.CODE, §§ 17.41 et seq., and common law fraud. The plaintiffs also sought a temporary restraining order and a temporary injunction to prevent the defendants from removing or disposing of certain assets in any manner, except insofar as to continue the operation of the business.
All of the defendants in this cause were the defendants in a criminal action which was the subject of a four-months trial in the Eastern District of Texas before another judge. The jury found a number of the defendants guilty of some charges, could not agree upon a verdict as to the Fredemans, and could not agree upon a verdict as to the corporate defendants. The criminal indictment against the defendants upon which the jury could not return a verdict is still pending before the same judge who tried the criminal case.
The plaintiffs contend that unless the defendants are enjoined pending the outcome of this suit, the Fredemans and other defendants will remove from the jurisdiction of the court substantial assets which would in effect render a judgment against the defendants useless, and in effect, an empty sack.
This court granted the temporary restraining order without notice, and set for hearing the temporary injunction, and heard the testimony of four witnesses produced by the plaintiffs, all of whom testified that, pursuant to the orders of the Fredemans, and the corporations which they controlled, and their various employees and agents, the witness-employees were directed to cooperate in a plan to under-deliver and overcharge for such diesel oil which was delivered to the plaintiffs in the midstream operations. The stated goal was to underdeliver at least 15 percent of the deisel charged and collected for. At least one witness, Palmer, stated that he had no doubt that unless enjoined, the Fredemans and Crawfords would remove and dispose of all of the assets of the corporate defendants and the personal assets of the individual defendants, leaving little or nothing available to satisfy a judgment for the plaintiffs, in the event one was obtained against the defendants after a trial on the merits. The defendants produced no testimony.
Prior to the hearing, and without waiving the same, the defendants William Fredeman, Jr., and James Crawford, filed a motion to recuse this judge pursuant to Title 28, § 455(b)(2). As an attachment to...
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