State v. New York Movers Tariff Bureau, Inc.
| Decision Date | 14 October 1965 |
| Citation | 48 Misc.2d 225,264 N.Y.S.2d 931 |
| Court | New York Supreme Court |
| Parties | The STATE of New York, Plaintiff, v. NEW YORK MOVERS TARIFF BUREAU, INC., et al., Defendants. The PEOPLE of the State of New York, Plaintiffs, v. OFFICE & LOFT MOVERS ASSOCIATION, Inc., et al., Defendants. |
Louis J. Lefkowitz, Atty. Gen., of New York (George C. Mantzoros, Samuel A. Hirshowitz, and Dennis P. Ryan, New York City, of counsel), for plaintiff.
Pratt & Pratt, Rockville Centre (E. Robert Pratt, Rockville Centre, of counsel), for defendants Lionel E. Weeks, Jr., Creighton McShane, Donald Hamilton, The Moving Employers Association of Long Island and The Long Island Moving and Storage Association, Inc.
Rosenbluth & Wolen, New York City (Herman Wolen and Hyman A. Hochman, New York City, of counsel), for defendant Weissberger Moving & Storage Co., Inc., and Weissberger Moving and Storage Co., Inc., appearing specially.
Lord, Day & Lord, New York City (John W. Castles, III, Herbert Brownell, Jack P. Jefferies, and Genevieve L. Fraiman, New York City, of counsel), for remaining defendants.
These two matters, involving, at this time, consideration of a number of motions each, are basically actions brought under the Donnelly Anti-trust Act (General Business Law, Art. 22).
The first (New York Movers Tariff Bureau) is a 1964 suit for civil penalties and for an injunction against 64 defendants. The second (Office & Loft Movers Association) is a criminal contempt proceeding based upon a 1940 consent decree issued by this Court, and has been instituted against twelve respondents.
Two motions, brought on by the plaintiff and the defendants, respectively, in the first action, sought stays on the one hand of certain proceedings instituted by the defendants before the State Public Service Commission, and on the other, of the continuance by the plaintiff of this action. Both applications were denied by me. Appeals were taken to the Appellate Division. That Court denied the defendants' motion to dismiss the plaintiff's appeal and denied the plaintiff's motion for an interim stay of the proceedings before the Public Service Commission. These appeals to the Appellate Division are presently pending. The hearings before the Commission have been completed and are presently undetermined. Another motion, by which the plaintiff sought a dismissal of the affirmative defenses contained in the answer of a number of the defendants, was denied by me upon the ground that the service of an amended answer rendered the motion moot. No appeal was taken from my decision on this motion.
There remain for disposition in the first-named action:
(a) A motion by the plaintiff under CPLR 3211(b) to dismiss the six affirmative defenses contained in the amended answer; and (b) A motion under CPLR 3024(a) by which five of the defendants seek a more definite statement of the complaint against them.
The motions to be disposed of in the second action are:
(c) The application by the plaintiffs to punish certain defendants for alleged violation of the decree;
(d) A cross-motion by certain defendants to vacate the order to show cause obtained to bring on the preceding motion, upon the grounds that there is no basis set forth in plaintiffs' application for the granting of the relief sought, that such relief is barred by estoppel, statute of limitations, the primary jurisdiction of the Public Service Commission and abatement, and a denial is interposed of the alleged charges of contempt;
(e) A cross-motion by one defendant, under CPLR 3211(a)(8), for dismissal of the plaintiffs' application to punish on the ground of absence of jurisdiction over the person of that defendant; and
(f) A motion by which the movant seeks a declaration that it is not a party to, and is not a proper party in respect of, the plaintiffs' motion to punish.
THE NEW YORK MOVERS TARIFF BUREAU ACTION (1964)
(A)
The Plaintiff's Motion To Dismiss The Six Affirmative Defenses.
In the first action above-captioned, instituted by the State of New York, the 64 defendants are alleged to control and perform about 90% of all of the work in the moving and storage industry in the Commercial Zone of the City of New York and are charged with a conspiracy of price-fixing and monopolistic practices in violation of Article 22 of the General Business Law. The six affirmative defenses interposed by the answering defendants (who are other than The Long Island Moving and Storage Association, Inc., Lionel E. Weeks, Jr., individually and as President of The Moving Employers Association of Long Island, Creighton McShane and Donald Hamilton) 1, and attacked by the State, are as follows:
(1) That the action is barred by a three-year Statute of Limitations;
(2) That the action is barred by a six-year Statute of Limitations (3) That if the defendants performed any of the acts complained of, such performance was duly authorized by the authority of the Public Service Law of the State of New York as the same has been amended from time to time;
(4) That the allegations of the complaint are based upon activities that are subject to regulation by and are within the jurisdiction of the Public Service Commission, which is authorized to regulate same under the Public Service Law of the State of New York;
(5) That the defendant Movers Tariff Bureau has brought a proceeding before the Public Service Commission for the approval of the agreements and practices which are the subject matter of the complaint, which approval, if granted, would exempt defendants from the proscriptions of the Donnelly Antitrust Act, and if said agreements and practices are approved, such approval will bar this action; and
(6) That the plaintiff is estopped from bringing this action.
I shall consider first the defense last pleaded--that of alleged estoppel on the part of the plaintiff.
The gist of this defense is that the operations of the defendant Tariff Bureau and of the Office of Impartial Chairman (established under the collective labor agreement in the industry) have been openly conducted, since 1936 and 1955, respectively, with the full knowledge of the Attorney General; that the Attorney General was advised in advance of the proposed activities of the Office of Impartial Chairman, which the Attorney General has not previously challenged in any way; that, when section 63-i, subd. 3(c) of the Public Service Law was amended in 1955 (L.1955, ch. 834) so as to include the New York City Commercial Zone under the Article (3-B) relating to motor carriers of property, the Attorney General publicly asserted that this would make the Donnelly Act in-applicable to that zone and would relieve certain movers therein from existing court decrees; and that the defendants have at all times relied upon these statements of the Attorney General and his failure to challenge the operations of the New York Movers Tariff Bureau and the Office of Impartial Chairman.
As against this aspect of the motion, and in support of their affirmative defense, the defendants have cited, and urged upon me, the case of United States v. New Orleans Chapter, Associated General Contractors of America, Inc., 238 F.Supp. 273 (E.D.La.). This is the only precedent which has come to my attention as being arguably contrary to the contention that the defense of estoppel must be dismissed; and it is my view that the case is distinguishable from that at bar. 2
Basically, I point out that, in holding that the Government was estopped, the Court made it quite clear that its view depended upon the nature of the case before it--a criminal prosecution as such, which the present action before me plainly is not. The Court said, at pages 279-280:
'The general rule is that the doctrine of estoppel is not applicable against the government in criminal matters. The rule admits, however, of an important exception.
'The government is estopped in the enforcement of criminal laws only by some sound public policy, such as when its officers have induced or lured the defendant into the commission of a criminal act.' [citations omitted]
'The facts here show that the government had in fact examined the activities of the Association, including the use of 'Bidding Rule C', which is now the basis for the alleged criminal violations of the antitrust laws. The antitrust laws are unchanged; the relevant part of the Sherman Act has not since been amended. And there was never any effort by the Association to conceal from anyone its 'modus operandi' with reference to bidding procedures. The provision for 'single bidding' has been in the Association's rules of procedure for better than a decade and was fully known to the government.
'Here the government's acquiescence toward 'Bidding Rule C' following its earlier examination of the Association induced defendants to continue using that same bidding procedure in the interim. Any allegation that the activity formerly approved is now considered criminal cannot be countenanced. The Court cannot refrain from the observation that this attitude by governmental departments and their officials could impair confidence on the part of our citizens and taxpayers in their public institutions.
Such an attitude could undermine proper respect for the government when encouragement of that respect, in accordance with the proper principles of law, is one of the prime duties of the federal court. [citation omitted]'
And, on the Motion for Reconsideration, the Court said that its 'invocation of public policy was thus considered proper in order to prohibit any allegation that the activity formerly investigated and unobjected to is now to be considered as criminal for purposes of retroactive prosecution' (238 F.Supp. 273, 282).
Moreover, while the ancient maxim--that 'The King can do no wrong'--is no longer strictly true or legally efficacious, it is my view of the existing law...
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