INTERNATIONAL RAILWAYS OF CENTRAL AMER. v. United Fruit Co.
Decision Date | 11 May 1966 |
Docket Number | No. 65 Civ. 479.,65 Civ. 479. |
Citation | 254 F. Supp. 233 |
Parties | INTERNATIONAL RAILWAYS OF CENTRAL AMERICA, Plaintiff, v. UNITED FRUIT COMPANY, Defendant. |
Court | U.S. District Court — Southern District of New York |
Leventritt, Bush, Lewittes & Bender, New York City, for plaintiff (Aaron Lewittes, M. Victor Leventritt, and Sidney Bender, New York City, of counsel).
Davis, Polk, Wardwell, Sunderland & Kiendl, New York City, for defendant (Ralph M. Carson, Porter R. Chandler, Robert F. Dobbin and James W. B. Benkard, New York City, of counsel).
There are before us two motions for partial summary judgment.
Defendant moves for partial summary judgment on the grounds that plaintiff is barred from prosecuting the antitrust counts of the complaint because it is attempting to split a cause of action (a form of res judicata), and because the statute of limitations has run on this action.
Plaintiff bases his motion for partial summary judgment on the doctrine of collateral estoppel. Plaintiff contends that the parties have previously litigated the facts in the New York State Courts, and that the findings of the New York State Courts bind the same parties in a subsequent litigation and establish defendant's violations of the antitrust laws.
To understand the questions of law raised by these motions, it is necessary to be familiar with the past relations between the parties to this suit. Plaintiff, INTERNATIONAL RAILWAYS OF CENTRAL AMERICA, is a New Jersey corporation, hereafter referred to as IRCA; defendant, UNITED FRUIT COMPANY, is also a New Jersey corporation, hereafter referred to as UNITED. IRCA operates the principal railroad system in Guatemala; UNITED operates banana growing plantations in Guatemala and other countries and imports them into the United States and other countries. UNITED transports its bananas over IRCA's railroad lines to the Atlantic seaboard and thence by ship to the United States and Europe. For many years defendant has directly or indirectly owned a controlling stock interest in plaintiff. In 1949 a derivative stockholders' suit was filed in the New York State Courts by minority shareholders of IRCA against UNITED. That suit, Ripley, et al. v. International Railways of Central America and United Fruit Company, 8 A.D.2d 310, 188 N.Y.S.2d 62, 8 N.Y.2d 430, 209 N.Y.S.2d 289, 171 N.E. 2d 443, was based on the theory that UNITED, as the controlling stockholder of IRCA, had abused its fiduciary duty to IRCA by paying insufficient freight rates for the transportation of its bananas and imported materials. In 1956, after a New York Supreme Court decision for the plaintiff, IRCA joined with the stockholders as plaintiff in urging for higher damages on appeal. In 1961 after twelve years of litigation, judgment was entered, awarding an amount exceeding nine million dollars to plaintiff IRCA. That case basically involved all the contractual and other relations between IRCA and UNITED and was limited by the New York statute of limitations to the years 1943 through 1961. In deciding the Ripley case the Court considered not only the language of the agreements between IRCA and UNITED but also the entire relationship between the two companies and their role in the development of the Guatemalan economy. This thorough inquiry of all the business relations between the two parties was necessary in order to accurately assess the damages which UNITED had inflicted on IRCA. The Court in Ripley also made a comparison of the rail transportation rates paid to IRCA by independent shippers with those paid by UNITED. For example, the Referee found that "Obviously the static rate of $60.00 or even as increased after 12 years to $75., then to $85., or even to $90. for U. F. Co., as against the rates prevailing, even of $130. plus $36. wharfage for general or so-called independent shippers, was inscionable (sic), unprincipled and contrary to the public interest" (p. 175 of Referee report and decision).
In the present action before us, the amended complaint alleges six claims for relief. Both parties move for summary judgment on the first, second, fourth and sixth claims. Defendant also moves for summary judgment on so much of the third and fifth claims as relate to matters occurring before February 16, 1961 with the exception of so much of the fifth claim as is based solely on an alleged breach of contract.
Plaintiff's claims are basically as follows:
THIRD (in relevant part): That Compania Agricola de Guatemala (a wholly owned subsidiary of UNITED) beginning in or about 1949 combined and conspired with UNITED in unreasonable restraint of trade for the purpose of monopolizing the foreign commerce of the United States, and in furtherance of this policy entered into agreements with IRCA (p. 25, Am.Compl.) The New York court found this rate scale inadequate and required UNITED as fiduciary of IRCA to pay increased rates. IRCA asks for further damages because UNITED was acting in violation of the antitrust laws.
The Ripley case was extensively litigated. The appellate record was one of the longest ever submitted to the New York Court of Appeals. The printed report and decision of the Referee was 310 pages and according to the affidavit of one of the Ripley plaintiffs' attorneys, the trial consumed 176 trial days, pretrial depositions totalled 3,211 pages, discovery and inspection by the Ripley plaintiffs covered more than 500,000 pages of documents, the stenographic transcript covered 25,830 pages, and the parties introduced into evidence 5,900 exhibits totalling 250,000 pages in length. Briefs filed with the Referee comprised 1,588 printed pages. The Ripley plaintiffs proposed 1,190 findings of fact, and the defendant UNITED...
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International Railways of Cent. America v. United Brands Co.
...of action between Ripley and the instant suit, and by the statute of limitations. A granting of the motion on the first ground (254 F.Supp. 233 (S.D.N.Y.1966)) was reversed, 373 F.2d 408 (2d Cir. 1967). However, this court agreed with the district court that the statute of limitations barre......
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International Railways of Cent. Am. v. United Fruit Co., 178
...on the basis of the record and judgment in the Ripley action. Judge Ryan granted both branches of UF's motion and denied plaintiff's, 254 F.Supp. 233 (1966). A judgment was entered which made the recitals appropriate under Rule 54 with respect to the grant of defendant's motion and containe......
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...dominion over either plaintiff's mind or in any other manner deprived them of their freedom of will. See Int'l Railways of Cent. Am. v. United Fruit Co., 254 F.Supp. 233 (S.D.N.Y.1966), aff'd in part and rev'd in part, 373 F.2d 408 (2d Cir.), cert. denied, 387 U.S. 921, 87 S.Ct. 2031, 18 L.......
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Pauk v. Board of Trustees of City University of New York
...capable of granting him complete relief has no further right to a second bite at the same apple...," International Railways of Central America v. United Fruit Company, 254 F.Supp. 233, 238, affirmed in part and reversed in part, 373 F.2d 408, and see section 62 Restatement of Judgments comm......