Simco Sales Service of Pennsylvania v. Air Reduction Co., Civ. A. No. 31018.

• Decision Date: 04 January 1963
• Docket Number: Civ. A. No. 31018.
• Citation: 213 F. Supp. 505
• Parties: SIMCO SALES SERVICE OF PENNSYLVANIA, INC. v. AIR REDUCTION COMPANY, Inc. and Chemetron Corporation.
• Court: U.S. District Court — Eastern District of Pennsylvania

213 F. Supp. 505

SIMCO SALES SERVICE OF PENNSYLVANIA, INC. v. AIR REDUCTION COMPANY, Inc. and Chemetron Corporation.

Civ. A. No. 31018.

United States District Court E. D. Pennsylvania.

January 4, 1963.

Samuel E. Dennis, Dennis, Lichtenstein, Cohen & Dennis, Philadelphia, Pa., for plaintiff.

William S. Rawls, Ballard, Spahr, Andrews & Ingersoll, Philadelphia, Pa., Shearman & Sterling, New York City, of counsel, for defendant Air Reduction.

Philip H. Strubing, Pepper, Hamilton & Scheetz, Philadelphia, Pa., Kirkland, Ellis, Hodson, Chaffetz, & Masters, Chicago, Ill., of counsel, for defendant Chemetron Corp.

LUONGO, District Judge.

Before me is the motion of defendants under Rule 12(f) to strike portions of the complaint filed in this civil antitrust action brought under sections 1 and 2 of the Sherman Act 15 U.S.C.A. §§ 1, 2, and section 4 of the Clayton Act 15 U.S.C.A. § 15.

In substance, plaintiff has alleged that: on March 7, 1952, in the matter of United States v. The Liquid Carbonic Corp., D.C.E.D.N.Y.1952, Civil Action No. 9179, a consent decree was entered enjoining all the defendants in that proceeding (including Air Reduction Company, Inc., a defendant in the instant action) from engaging in certain activities; in criminal contempt proceedings instituted thereafter for violation of that decree (United States v. General Dynamics Corp., D.C.E.D.N.Y.1961, No. 60 Cr. #422) Air Reduction Company, Inc. pleaded guilty; in said criminal contempt proceedings, Chemetron Corporation, also a defendant in the instant action, was charged with violation of the 1952 decree although it was not originally a party to the proceedings in which the consent decree was entered, and it pleaded nolo contendere¹ to the criminal contempt charge.

Defendants seek to strike from the complaint all references to the consent decree of March 7, 1952, and the pleas entered by them to the charges of criminal contempt resulting therefrom. Defendants contend that those allegations are "* * * immaterial, impertinent and scandalous, and the only purpose for including them in the complaint is to create prejudice against the defendants." Plaintiff opposes the motion on the ground that the matter is properly pleaded and admissible in evidence under both § 5 of the Clayton Act 15 U.S.C.A. § 16 and common law rules of evidence.

The motion to strike the challenged references will be granted in so far as it relates to Chemetron Corporation's plea, but will be denied as to Air Reduction Company, Inc.'s plea.

It has been well and long established that a plea of nolo contendere and a judgment of conviction entered thereon may not be used in subsequent civil proceedings against the party making such a plea. Hudson v. United States, 272 U.S. 451, 47 S.Ct. 127, 71 L.Ed. 347 (1926); Smith v. United States, 287 F. 2d 299 (5th Cir., 1961); Berlin v. United States, 14 F.2d 497 (3rd Cir., 1926). This principle has been adopted and applied in antitrust cases. Atlantic City Electric Company v. General Electric Company, 207 F.Supp. 620 (D.C.S.D. N.Y.1962) and cases cited therein at page 628. The reference to Chemetron's nolo contendere plea will, therefore, be stricken.

In the case of Air Reduction Company, however, its guilty plea to the contempt charges compels a different result on this motion to strike. Section 5 of the Clayton Act 15 U.S.C.A. § 16 provides:

"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 * * * 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 * * *."

Air Reduction argues that a contempt proceeding is not a proceeding "under the antitrust laws", that it is something separate and apart and wholly unrelated to the antitrust laws. Whether this is so depends, I think, upon the circumstances under which a particular contempt proceeding has been brought. If brought to vindicate the dignity and power of the Court, defendant's point may be well taken, but where contempt proceedings are instituted to compel compliance, or to punish failure to comply, with the terms of a Court decree entered to enforce the provisions of certain laws (here the antitrust laws),...