Northern Kentucky Tel. Co. v. Southern Bell T. & T. Co.

• Decision Date: 07 November 1934
• Docket Number: No. 6488.,6488.
• Citation: 97 ALR 133,73 F.2d 333
• Parties: NORTHERN KENTUCKY TELEPHONE CO. v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

97 ALR 133, 73 F.2d 333 (1934)

NORTHERN KENTUCKY TELEPHONE CO. v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO. et al.

No. 6488.

Circuit Court of Appeals, Sixth Circuit.

November 7, 1934.

M. J. Hennessey, of Augusta, Ky., for appellant.

J. C. Doolan, of Louisville, Ky. (Frost & Jacobs, of Cincinnati, Ohio, U. J. Howard, of Covington, Ky., E. D. Smith, of Atlanta, Ga., and Trabue, Doolan, Helm & Helm, of Louisville, Ky., on the brief), for appellees.

Before HICKS, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

The action was brought under section 7 of the Sherman Anti-Trust Law (15 USCA § 15 note) to recover treble damages for a conspiracy in restraint of interstate commerce, declared illegal by section 1 (15 USCA § 1). The plaintiff having demurred to the several answers of the defendant, which pleaded the Kentucky statute of limitations, the demurrers having been overruled as to the answers but sustained as to the petition under Kentucky practice, and the plaintiff having declined to plead further, the District Court entered an order dismissing the petition, and the plaintiff appeals.

The first questions to be answered are: (1) What statute of limitations was applicable? and (2) When did it begin to run? If these questions are answered as they were below, they control the case, and nothing else need be decided. To understand the issues, however, some explanation of the controversy must be given.

The plaintiff's petition was filed May 2, 1931, and amended October 14, 1932. It alleges the formation of a conspiracy among the several defendants and others in August, 1926, for the purpose of preventing the plaintiff from securing a franchise in Bracken county, Ky., and preventing it from securing connections either with defendants' lines or those of other companies in privity with them for the purpose of exchanging interstate telephone messages. In furtherance of the conspiracy, a number of overt acts are alleged to have been committed by the defendants and others, including the employment in 1926 by the Citizens' Company and another, of attorneys to oppose the plaintiff's application for a franchise in the fiscal court of Bracken county; the refusal in February, 1927, by the Southern Bell and the Cincinnati Bell Companies, to agree to an interchange of interstate messages through the physical connection of their lines with the lines of the Higginsport Telephone Company; the refusal in 1927 by the same defendants to an interchange of messages through a physical connection with the lines of the Felicity Home Telephone Company; the refusal in December, 1926, by the Southern Bell to agree to an interchange of messages over the lines of the Robertson County Telephone Company, which had been acquired by the plaintiff; threats in 1927 by Southern Bell to discontinue contracts for long-distance service with other independent companies in the event that they should establish physical connection with the plaintiff, or enter into agreements with it for the interchange of messages, and the refusal in 1927 by the Citizens' Company to make physical connection with the plaintiff's lines, or to enter into an agreement with it for the interchange of long-distance messages. It will be noted that the alleged conspiracy was formed, all of the overt acts relied upon to establish it were committed, and damage therefrom resulted, more than one year prior to the bringing of the action. The importance of these circumstances will presently appear.

Section 1 of the Sherman Anti-Trust Act (15 USCA § 1) provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." Section 7 of the act (Section 15 note, title 15, USCA) provides: "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides. * * *" It is under this section that the action was brought.

The defendants rely upon section 2516, Kentucky Statutes, which interposes a bar of one year to certain specified actions, including an action for conspiracy. There being no period of limitation provided in the Sherman Anti-Trust Act, or other applicable federal statutes, it is agreed that Kentucky law governs. Chattanooga Foundry & Pipe Works v. Atlanta, 203 U. S. 390, 27 S. Ct. 65, 51 L. Ed. 241. The plaintiff, however, urges that section 2516 is not applicable because its action is not for conspiracy, but one to recover damages resulting from acts done pursuant to conspiracy, and because section 2515, Kentucky Statutes, which provides a five-year period of limitation for "an action upon a liability created by statute, when no other time is fixed by the statute creating the liability," governs because its action is upon such a liability.

The distinction urged between an action for a conspiracy and one for damages growing out of a conspiracy would seem to be a mere play upon words. Plaintiff's amended...