Twin Ports Oil Co. v. Pure Oil Co., 4000.

• Decision Date: 25 January 1939
• Docket Number: No. 4000.,4000.
• Citation: 26 F. Supp. 366
• Parties: TWIN PORTS OIL CO. v. PURE OIL CO. et al.
• Court: U.S. District Court — District of Minnesota

26 F. Supp. 366

TWIN PORTS OIL CO. v. PURE OIL CO. et al.

No. 4000.

District Court, D. Minnesota, Fourth Division.

January 25, 1939.

Davis, Michel, Yaeger & McGinley, of Minneapolis, Minn., for plaintiff.

David T. Searls, of Houston, Tex., and Kelly Bell, of Chicago, Ill., Vinson, Elkins, Weems & Francis, of Houston, Tex., and R. G. Emmett, of Minneapolis, Minn., for defendant Pure Oil Co.

Weymouth Kirkland, of Chicago, Ill., and Stinchfield, Mackall, Crounse, McNally & Moore, of Minneapolis, Minn., for defendant Standard Oil Co. of Indiana.

Fowler, Youngquist, Furber, Taney & Johnson, of Minneapolis, Minn., and H. H. Thomas of Madison, Wis., for defendant Sinclair Refining Co.

Samuel A. Mitchell, Claude P. Berry, and Richard D. Shewmaker, all of St. Louis, Mo., and Kay Todd, of St. Paul, Minn., for Shell Petroleum Corporation.

Rayburn L. Foster, of Bartlesville, Okl., Walter L. Barnes, of Des Moines, Iowa, and Jay W. Smith, of Minneapolis, Minn., for defendant Phillips Petroleum Co.

Louis Mead Treadwell, of New York City, and Oppenheimer, Dickson, Hodgson, Brown & Donnelly, of St. Paul, Minn., for defendant Socony-Vacuum Oil Company, Inc.

W. P. Z. German and Alvin F. Molony, both of Tulsa, Okl., Cliff V. Peery, of Kansas City, Mo., and Bowen, Best, Flanagan & Rogers, of Minneapolis, Minn., for defendant Skelly Oil Co.

Jas. J. Cosgrove, W. H. Zwick, and A. L. Hull, all of Ponca City, Okl., and Claude G. Krause, of Minneapolis, Minn., for defendant Continental Oil Co.

A. M. Ebright and F. H. Bacon, both of Bartlesville, Okl., Warren T. Spies, of Chicago, Ill., and Asa G. Briggs, of St. Paul, Minn., for defendant Cities Service Oil Co.

NORDBYE, District Judge.

Plaintiff, a jobber in gasoline and allied products, alleges a conspiracy among and by the above-named defendant oil companies to raise prices and to make uniform certain so-called jobbers' contracts, so as to prevent plaintiff in the event its dealings were not satisfactory with one of the major oil companies, from entering into a contract with any other one of the so-called majors. In proving the conspiracy alleged, plaintiff seeks to rely on the method of proof provided by the Clayton Amendment to the Sherman Anti-Trust Act.

The complaint alleges the rendering of two judgments of conviction in criminal cases entered against the moving defendants in the so-called Madison, Wisconsin, cases, which were prosecuted by the United States Government. Plaintiff pleads these judgments by reference, together with the indictments upon which the judgments were based, and gives notice that the judgments and indictments will be relied upon as evidence at the trial of this case.

There were two so-called Madison cases. Madison case No. 1 was based upon an indictment returned in the District Court of the United States for the Western Division of Wisconsin, which was entitled United States of America v. Standard Oil Company, Indiana, et al., 23 F.Supp. 937. In this case, judgment was rendered against all of the defendants. except Standard Oil Company (Indiana). The latter defendant was granted a new trial. The remaining defendants were found guilty, and were fined by the court in various amounts. Thereafter, the defendants against whom judgments were entered, duly filed their notices of appeal and their supersedeas bonds. This case is now pending on appeal in the Circuit Court of Appeals, Seventh Circuit.

Madison case No. 2 is based on an indictment returned in the same district entitled United States of America v. Socony-Vacuum Oil Company, Inc., et al., 23 F. Supp. 531. Before any evidence was introduced, all the defendants who are defendants in this case withdrew their pleas of not guilty, which had been entered in the case, and with the consent of the court and upon recommendation of the Government, entered pleas of nolo contendere. Fines and court costs were thereupon imposed against each of the defendants, all of which have been paid.

The motions seek to strike all of the allegations in the amended complaint relating to the Madison cases and the indictments in said cases, copies of which have been attached to the amended complaint, on the grounds that (1) the judgment rendered in Madison case No. 1 is not a final judgment by reason of the pendency of the appeal, and therefore none of the proceedings would be admissible in evidence at the trial of this case; and (2) that the proceedings in Madison case No. 2 are not admissible in evidence because a judgment based on a plea of nolo contendere entered under the circumstances therein is a consent judgment within the meaning of the first provision of the Clayton Act, and further, that the judgment is not admissible in evidence because it created no estoppel between the parties thereto and therefore it does not adjudicate, nor is it admission of, any fact questions herein.

Section 5 of the Clayton Act, 38 Stat. 731, 15 U.S.C.A. § 16, reads as follows:

"That a final judgment or decree hereafter rendered in any criminal prosecution or in any suit or proceeding in equity 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 suit 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, This section shall not apply to consent judgments or decrees entered before any testimony has been taken: Provided further, This section shall not apply to consent judgments or decrees rendered in criminal proceedings or suits in equity, now pending, in which the taking of testimony has been commenced but has not been concluded, provided such judgments or decrees are rendered before any further testimony is taken.

"Whenever any suit or proceeding in equity or criminal prosecution is instituted by the United States to prevent, restrain or punish violations of any of the anti-trust laws, the running of the statute of limitations in respect of 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."

It may be noted that the second proviso of the act above quoted is omitted in 15 U.S.C.A. § 16, because, by the terms thereof, it was temporary legislation.

Madison Case No. 1

Is the judgment rendered in this case a final judgment as that term is used in the Clayton Act? If it is, defendants' motions should be denied; if it is not, obviously the judgment, as well as the indictment, is immaterial, irrelevant and prejudicial, and should be stricken out.

In determining the meaning of the term "final judgment" as used in the act, we must look to the act itself and ascertain the intent of Congress with reference thereto. A consideration of the abstract term, divorced from the act, will simply lead to uncertainty and confusion, and the definition given to the term in any particular case or decision will not be of any assistance unless the particular facts and circumstances of the case have been carefully considered. In determining whether a judgment in a criminal case is final for the purpose of appeal, it is generally understood that "final judgment" means the sentence. "In criminal cases, as well as civil, the judgment is final for the purpose of appeal `when it terminates the litigation * * * on the merits' and `leaves nothing to be done but to enforce by execution what has been determined.'" Berman v. United States, 302 U.S. 211, 213, 58 S.Ct. 164, 166, 82 L.Ed. 204. Therefore, if one were considering the term "final judgment" for the purpose of appeal, concededly the judgment entered in Madison case No. 1 is final. Furthermore, if the judgment was not appealable, it is evident that the sentence rendered in said case would be a final judgment, but it seems reasonably clear that Congress in using the term "final judgment" in the Clayton Act had in mind the final disposition of the case, i. e., a final judgment by reason of failure to appeal within the statutory period, or a final judgment by reason of an affirmance of the appeal by the court of last resort.

It is generally recognized that, in the passage of the Clayton Act, 38 Stat. 730, Congress intended to give to a private person, who had been injured by a violation of the Sherman Anti-Trust Act, 15 U.S.C. A. §§ 1-7, 15 note, the benefit of the final disposition of any criminal or equitable proceeding growing out of the conspiracy, instituted by the Government against the same defendants. A defendant who stood trial and was found guilty, and against whom a final judgment was entered, became therefore subject to the use of said judgment as prima facie evidence in third party suits. Long and burdensome litigation was thereby saved to the injured third party, and the prima facie evidence of a final judgment would inure to his benefit. But Congress took pains to state that it was a final judgment that should be prima facie evidence, not merely the judgment entered. If the appeal now pending in Madison case No. 1 is successful, the judgment upon which plaintiff relies may be vacated and set aside. If the present judgment were received in evidence at the trial herein, and a reversal of the judgment is thereafter handed down, the entire proceeding in this Court would be for naught. A futile ceremony may thereby be carried on in the trial proceedings herein, and a verdict based on alleged evidence which later is found to be no evidence at all. Civil proceedings based upon such a judgment might proceed to execution and sale, and irrevocable damage result before a court of last resort vacates the judgment. Surely, Congress did not intend such an absurd result.

Plaintiff urges that the Supreme Court in Berman v. United States, supra, has already determined what constitutes...