First Iowa Hydro Elec. Coop. v. Iowa-Illinois Gas & E. Co.

• Decision Date: 24 May 1957
• Docket Number: No. 15548.,15548.
• Parties: FIRST IOWA HYDRO ELECTRIC CO-OPERATIVE, F. A. E. Gillmor, Harry J. Strong, and Harry Imel, Appellants, v. IOWA-ILLINOIS GAS and ELECTRIC COMPANY, Iowa Power and Light Company, Iowa Southern Utilities Company, Interstate Power Company, Union Electric Power Company, Kansas City Power and Light Company, Iowa Electric Light and Power Company, Northwest Light and Power Company, Wisconsin Power and Light Company, Iowa Public Service Company and Iowa Utilities Association, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

245 F.2d 613 (1957)

FIRST IOWA HYDRO ELECTRIC CO-OPERATIVE, F. A. E. Gillmor, Harry J. Strong, and Harry Imel, Appellants, v. IOWA-ILLINOIS GAS and ELECTRIC COMPANY, Iowa Power and Light Company, Iowa Southern Utilities Company, Interstate Power Company, Union Electric Power Company, Kansas City Power and Light Company, Iowa Electric Light and Power Company, Northwest Light and Power Company, Wisconsin Power and Light Company, Iowa Public Service Company and Iowa Utilities Association, Appellees.

No. 15548.

United States Court of Appeals Eighth Circuit.

May 24, 1957.

J. Roger Wollenberg, Washington, D. C. (Haley, Doty & Wollenberg, Washington, D. C., on the brief), for appellants.

Larned A. Waterman, Davenport, Iowa (Charles D. Waterman, W. B. Waterman, James J. Lamb, Charles D. Waterman, Jr., Donald H. Sitz, Davenport, Iowa, Howard A. Steele, W. Z. Proctor, Harris N. Coggeshall, Llewellen E. Slade, Des Moines, Iowa, Robert Valentine, Robert W. Greenleaf, Centerville, Iowa, R. W. Colflesh, Maxwell A. O'Brien, Des Moines, Iowa, Clement F. Springer, Robert W. Bergstrom, Chicago, Ill., E. Marshall Thomas, Francis J. O'Connor, Dubuque, Iowa, Robert H. Walker, W. Logan Huiskamp, Joseph A. Concannon, Keokuk, Iowa, V. Craven Shuttleworth, Tyrrell M. Ingersoll, Harry E. Wilmarth, Cedar Rapids, Iowa, Byron L. Sifford, Sioux City, Iowa, Byron Spencer, Joseph J. Kelly, Jr., Kansas City, Mo., Earl Smith, Mason City, Iowa, Frederic M. Miller, Joseph Brody, Val Schoenthal, and Sherwin J. Markman, Des Moines, Iowa, on the brief), for appellees.

Before WOODROUGH, VOGEL, and VAN OOSTERHOUT, Circuit Judges.

WOODROUGH, Circuit Judge.

This action was brought on February 18, 1954, to recover treble damages and injunctive relief under the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note and Clayton Act, 15 U.S.C.A. § 12 et seq., against the ten defendant utility corporations and the unincorporated association which are here as appellees.

After the action had been pending nearly two years and on January 25, 1956, the District Court sustained motions made by the defendants to dismiss it for failure of plaintiffs to prosecute and for disobedience to Court orders in violation of the Federal Rules of Civil Procedure, 28 U.S.C.A. The Court dismissed the action at plaintiffs' costs¹ with directions that the dismissal should operate as an adjudication upon the merits. The grounds for dismissal were (1) that plaintiff Harry J. Strong as a party plaintiff and as an officer and manager of the corporate party plaintiff First Iowa Hydro Electric Cooperative and plaintiff F. A. E. Gillmor, president and director of said cooperative, each did willfully and without justification or excuse after having been ordered by the Court to testify by deposition, willfully and without justification or excuse refuse to do so; (2) and that the plaintiffs willfully and without justification or excuse failed and refused to comply with an order of the Court to make a deposit of $2500, to defray fees and disbursements of the Special Master.

This appeal is taken to reverse the judgment.

The defendants, except the unincorporated association and perhaps one or two others are, and long have been, engaged in distributing and selling electric power in an area that includes parts of Iowa and adjacent States. On September 8th, 1948, the Federal Power Commission granted a license to the plaintiff First Iowa Hydro Electric Cooperative to construct and operate a hydro-electric-project, No. 1853, in the Cedar River which flows through Iowa and to generate and sell its electric power in the same area where appellees operate. In State of Iowa v. Federal Power Commission, 8 Cir., 178 F.2d 421, this Court dismissed a petition to vacate the Commission's order granting the license to First Iowa Hydro Electric Cooperative. Our opinion contains a brief outline of the project and our conclusions concerning the powers of the Commission in the matter as declared by the Supreme Court in First Iowa Hydro Electric Cooperative v. Federal Power Commission, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143.

Although the probable cost of the project was estimated at many millions of dollars, the cooperative to which the license was granted consisted of the five persons who are joined with it as plaintiffs in this action. Each of the five has paid into the cooperative $2.00 for his share in it and the complaint alleged that "said individual plaintiffs constitute all of the members of the First Iowa Hydro Electric Cooperative and each own an equal one-fifth therein."

The complaint filed in this action charged that the defendants, beginning in 1938 when the cooperative was organized under the laws of Iowa (Chapter 390, § 8485-b 1 et seq. of the 1935 Code of Iowa, I.C.A. § 498.1 et seq.) and continuing thereafter, acted in conspiracy to violate and attempted to violate and violated the provisions against restraint of trade and monopoly contained in the Sherman Act and in the Clayton Act, first, to prevent the issuance of the license for the project to plaintiffs and then to prevent financing the project and construction of it by plaintiffs and thereby did prevent the plaintiffs "from obtaining the necessary funds to construct said project." The period of time covered by the complaint was from 1938 to 1956. Plaintiffs alleged they had been damaged by the defendants' conduct in the sum of $40,000,000 and prayed for recovery in the sum of $120,000,000. They also prayed that defendants be enjoined from continuing their wrongful acts and in strict accordance with Rule 38(b) of the Federal Rules of Civil Procedure, they demanded a trial by jury "of all the issues tendered by the above and foregoing complaint, except the issue whether or not the plaintiffs are entitled to the equitable injunctive relief prayed."

The allegations of wrong done by defendants against plaintiffs are set forth in the complaint, mostly in paragraph ten,² in general and sweeping terms and without identification of times, places, persons or utterances.

Likewise the allegations as to diligent efforts made by plaintiffs to obtain money to construct and carry out the project, No. 1853, and as to institutions which "would willingly have furnished the funds to pay the cost of said proposed project" are merely general.³

Shortly after the complaint was filed and before any of the defendants answered it, certain defendants began discovery proceedings by means of written interrogatories and notices of depositions of the plaintiffs, but the interrogatories propounded and the answers and the notices gave rise to objections and motions and on March 30th, 1954, thirty days after the complaint had been filed, Judge Riley, on whose docket the case pended, conducted proceedings relative to preparing the case for trial at which all parties were represented by attorneys of record. Judge Riley observed that the charges in the complaint were very general; that under the old rules there would have been a plethora of motions for more specific statements and to strike and everything else; that little time should be wasted on those methods because of discovery proceedings designed to obviate them. Judge Riley stressed the seriousness of the charges in the complaint and their generality and declared that the defendants had the right to find out through depositions of the plaintiffs what the plaintiffs claimed the facts were on which they based their accusations and claims. The Judge accordingly made suggestions that all counsel sit down and try to figure out and agree among other things upon how the taking of the depositions of the individual plaintiffs should be handled in an orderly way and made suggestions how it could be done without undue duplication but in fairness to each of the eleven defendants.

He did not however require the defendants to file answers to the complaint before carrying on their discovery proceedings.

Apparently he thought that the defendants could obtain the information, to which they were entitled, from the individual plaintiffs by the production of documents and by depositions of plaintiffs. He directed the defendants to proceed to obtain the production of the documents by the plaintiffs and the taking of depositions of the individual plaintiffs in accordance with Rule 30.

It resulted that on July 9, 1954, the Court was called on to consider motions on behalf of both plaintiffs and defendants with respect to interrogatories which had been propounded and the responses prior to any pleading filed by defendants or the cause being at issue. After consideration of that situation, the Judge concluded that it was necessary to have the issues joined before proceeding further with the discovery proceedings and directed that defendants plead to the complaint within twenty days. At the same hearing he also entered an order to compel plaintiff Harry J. Strong to make and file a written oath to the effect, i. a., inter alia that he is secretary treasurer of the plaintiff cooperative, that the answers to interrogatories to which his signature was attached were made by him in that capacity as such officer for and on behalf of plaintiff cooperative and that his answers were true, etc., and that "failing this, plaintiff will be subject to sanctions under Rule 37."

A separate answer for each defendant was accordingly filed in due time, the answers being similar in respect to general and particular denials of all charges and each set up a number of specific defenses. But the generality of the pleadings left the defendants under the same necessity as before to find out through depositions of the plaintiffs what the plaintiffs claimed the facts were on which they based their charges and the court declared that its rulings on certain motions that had been filed were without prejudice to defendants' right to obtain by deposition the information they had sought by interrogatories.

Following the proceedings before Judge Riley on July 9, 1954,...