Goodfriend v. Kansas City Star Company, 11303.

• Decision Date: 17 January 1958
• Docket Number: No. 11303.,11303.
• Citation: 158 F. Supp. 531
• Parties: M. Robert GOODFRIEND and J. S. Levinson, Plaintiffs, v. The KANSAS CITY STAR COMPANY, a corporation, and Emil A. Sees, Defendants.
• Court: U.S. District Court — Western District of Missouri

158 F. Supp. 531

M. Robert GOODFRIEND and J. S. Levinson, Plaintiffs, v. The KANSAS CITY STAR COMPANY, a corporation, and Emil A. Sees, Defendants.

No. 11303.

United States District Court W. D. Missouri, W. D.

January 17, 1958.

Beagle & Benjamin, Kansas City, Mo., for plaintiffs.

Watson, Ess, Marshall & Enggas, Kansas City, Mo., for defendants.

DUNCAN, Chief Judge.

On September 24, 1957, plaintiffs instituted this suit under the provisions of § 15 Title 15 U.S.C.A. to recover damages for monopolizing and attempting to monopolize the dissemination of news and advertising in the Kansas City area. Defendants have filed motion to dismiss on the sole ground that the action is barred by the statute of limitations, § 15b Title 15 U.S.C.A.

The factual situation here presents a new question under the Federal Statute of Limitations. Plaintiffs allege that prior to January 7, 1948, they were engaged in the publication of a small magazine devoted to the interests of high school and college youth, and that because of the illegal acts of the defendants, as alleged in their complaint, they were, on January 7, 1948, compelled to sell their publication at a substantial loss.

Whatever cause of action the plaintiffs may have had against the defendants accrued not later than January 7, 1948.¹

In the absence of a Federal statute, Missouri's five-year statute of limitations, V.A.M.S. § 516.120, applied.

On January 6, 1953, the United States filed two suits against the defendants, one criminal and one civil, charging them with the same violations of the antitrust laws as plaintiffs have charged in their complaint. Except for the intervening influence of these suits, plaintiffs' cause of action would have been barred by the state statute of limitations on January 7, 1953. But the filing of such suits tolled the running of the statute. § 16, Title 15 U.S.C.A. provided:

"* * * each and every private right of action arising under said laws and based in whole or in part on any matter complained of in said suit or proceeding shall be suspended during the pendency thereof."

On July 7, 1955, while plaintiffs' cause of action was reposing in suspension as a result of the tolling effect of the Government suits, Congress amended the Clayton Act, and the Federal law for the first time, provided a period of limitation. In fact, two periods of limitation, one limiting the tolling period after the final judgment in a Government case to one year, and the other a universal statute of limitations of four years. The amendment, although approved on July 7, 1955, did not become effective until six months thereafter. 69 Stat. 282.

The Clayton Act, as amended Title 15 U.S.C.A., provides:

"§ 15b. Limitation of actions

"Any action to enforce any cause of action under sections 15 or 15a of this title shall be forever barred unless commenced within four years after the cause of action accrued. No cause of action barred under existing law on the effective date of this section and sections 15a and 16 of this title shall be revived by said sections."

"§ 16. Judgment in favor of Government as evidence; suspension of limitations

"(a) A final judgment or decree heretofore or hereafter rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said laws or by the United States under section 15a of this title, as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto: Provided, That this section shall not apply to consent judgments or decrees entered before any testimony has been taken or to judgments or decrees entered in actions under section 15a of this title.

"(b) Whenever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, but not including an action under section 15a of this title, the running of the statute of limitations in respect of every private right of action arising under said laws and based in whole or in part on any matter complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter: Provided, however, That whenever the running of the statute of limitations in respect of a cause of action arising under section 15 of this title is suspended hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued."

It is the defendants' contention that because plaintiffs' cause of action accrued more than four years before suit was filed, and also since plaintiffs' complaint had not been filed during the period July 7, 1955, to January 7, 1956, it was barred by the four year provision of § 15b, supra; that the intent of the Act was to bar all actions regardless of the law of the forum, or the tolling provisions of the section, after four years from the date the action accrued; and that the limitation applies retroactively to all actions regardless of when they accrued, and irrespective of the effect of the tolling provisions of § 16 either before or subsequent to its amendment upon the local statutes of limitations.

The defendants have cited numerous cases in support of their contentions, yet none are applicable for the determination of the question here presented. Moreover, the factual situation of the cited cases decided since the newly enacted Statutes of Limitations are wholly dissimilar to the present case.

In Cardinal Films Inc., v. Republic Pictures Corp., D.C.S.D.N.Y.1957, 148 F. Supp. 156, 159, the court, after deciding for the defendant on the merits, stated that the statute of limitations affecting plaintiff's cause of action had not been tolled since his complaint was not "based in whole or in part on any matter complained of" in a prior Government suit. Hence, so much of the plaintiff's claim accruing more than four years before the filing of the complaint, was barred.

In Solinski v. General Electric Co., D. C.N.J.1957, 149 F.Supp. 784, the plaintiff's cause of action accrued in October, 1940; the Government instituted its action against the defendant on January 27, 1941, tolling the statute of limitations until its termination on December 6, 1953; plaintiff instituted his action on October 25, 1956. The plaintiff's action was barred by limitations since he filed his complaint more than four years after his cause of action accrued, and more than one year after the termination of the Government suit.

Before the amendment of § 15, and the inclusion of the limitation provision, there was great confusion in the application of the various state statutes of limitations. There likewise was a wide variation in the periods of limitation, ranging from 1 to 20 years. This condition created a state of uncertainty as to the time when defendants might be subject to suits for violation of the antitrust laws. To remedy this situation, the Congress fixed a universal statutory period of four years, which, apparently, was a general average of the states' statutes of limitations. See Vol. 2 U.S.Code Cong. & Adm. News 1955, p. 2328 et seq.

Despite the effort of Congress to eliminate the confusion occasioned by the various and varying periods of limitation within which private antitrust actions could be brought, there is difference of opinion among lawyers as to the meaning of the congressional act. A reading of the congressional history also reveals some conflicting statements as to its meaning.

The Act § 16(b) provides that whenever the running of the statute of limitations in respect of a cause of action arising under § 15 of this title is suspended hereunder, "any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued."

If the Act had said "if brought within the period of suspension, or one year thereafter, and within four years of the time of accrual", its application would be simple, and plaintiffs' cause of action would be barred, but the Act uses the disjunctive "or" which indicates an alternative - - - one or the other.

Defendants urgently insist that after the Federal Act was passed on July 7, 1955, the plaintiffs were required to bring their action within the grace period before the Act took effect on January 7, 1956. To sustain their contention, they cite § 4 of the Act 69 Stat. 282, 15 U.S.C.A. § 15b note which provided that the Act should not become effective until six months after its enactment; and the report of the Committee of the Senate explaining the purposes of the Act. 2 U.S.Code Cong. & Adm. News 1955, supra.

The report stated:

"Section 4 of the bill provides that the effective date of the proposed legislation

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