United States v. Automobile Manufacturers Ass'n, 69-75.

• Decision Date: 16 March 1970
• Docket Number: No. 69-75.,69-75.
• Citation: 307 F. Supp. 617
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES of America, Plaintiff, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, Inc.; General Motors Corporation; Ford Motor Company; Chrysler Corporation; and American Motors Corporation, Defendants.

307 F. Supp. 617

UNITED STATES of America, Plaintiff, v. AUTOMOBILE MANUFACTURERS ASSOCIATION, Inc.; General Motors Corporation; Ford Motor Company; Chrysler Corporation; and American Motors Corporation, Defendants.

No. 69-75.

United States District Court C. D. California.

November 7, 1969.

Judgment Affirmed March 16, 1970.

Bernard M. Hollander, Raymond W. Philipps, Allen E. McAllester, Dept. of Justice, Antitrust Division, Los Angeles, Cal., for plaintiff.

Gibson, Dunn & Crutcher, Julian O. Von Kalinowski, Paul G. Bower, Los Angeles, Cal., Wilmer, Cutler & Pickering, Lloyd N. Cutler, Washington, D. C., for Automobile Manufacturers Ass'n, Inc.

Lawler, Felix & Hall, Marcus W. Mattson, Los Angeles, Cal., for General Motors Corp.

Overton, Lyman & Prince, Carl J. Schuck, Los Angeles, Cal., for Ford Motor Co.

McCutchen, Black, Verleger & Shea, Philip K. Verleger, Los Angeles, Cal., for Chrysler Corp.

O'Melveny & Myers, Allyn O. Kreps, Los Angeles, Cal., for American Motors Corp.

Judgment Affirmed March 16, 1970. See 90 S.Ct. 1105.

MEMORANDUM OPINION

CURTIS, District Judge.

This is an action brought by the United States of America charging that the defendants, Automobile Manufacturers Association, Inc.,; General Motors Corporation; Ford Motor Company; Chrysler Corporation; and American Motors Corporation have conspired with other motor vehicle manufacturers, in violation of § 1 of the Sherman Act (15 U.S.C. § 1), to eliminate competition in the research, development, manufacture and installation of motor vehicle air pollution control equipment, and in the purchase from others of patents and patent rights, covering such equipment. By way of relief, the plaintiff is seeking an order enjoining these defendants from continuing the alleged unlawful conduct.

After eight months of negotiation, the parties have agreed to settle this case upon terms and conditions embodied in the proposed consent decree now before this court for approval.

On September 11, 1969, the proposed decree was made public and all interested parties, including the State of California, County of Los Angeles, City of Los Angeles, and the Air Pollution Control District of the County of Los Angeles, were invited to express their views as to whether or not the consent decree should be approved. The United States reserved the right to withdraw from the stipulated judgment, however, at any time within thirty days after its submission in the event any objections brought to its attention might seem meritorious.

On October 28, 1969, after the thirty day period had expired, this court held an open hearing at which time all persons wishing to appear as amici curiae were permitted to voice their objections. Appearances have been made on behalf of many states, counties, cities, air pollution control districts, congressional groups, associations and interested individuals.

Petitions to intervene, as parties plaintiff, were filed by the County of Los Angeles; County of Santa Barbara; the Bay Area Air Pollution Control District; Air Pollution Control District of the County of Los Angeles; the State of New York; the State of Connecticut; the State of Maryland; the State of New Jersey; City of New York; American Civil Liberties Union; two aldermen from the City of Chicago; M. B. Grossman and S. J. Tamkin, plaintiffs in a class action now pending in this court; and William J. A. Sturtz. With the exception of petitioner Sturtz, all prospective intervenors sought intervention in order to assert treble damage claims.¹

It has not been urged seriously, or if so, not convincingly, that these petitioners may intervene here as a matter of right, for it is well settled that treble damage claimants do not have an "interest" cognizable under Rule 24(a) F.R.Civ.P. in Government anti-trust actions seeking injunctive relief. United States v. Blue Chip Stamp Company, 272 F.Supp. 432 (C.D.Cal.1967), aff'd sub nom. Thrifty Shoppers Scrip Company v. United States, 389 U.S. 580, 88 S.Ct. 693, 19 L.Ed.2d 781 (1968); Commonwealth Edison Company v. Allis Chalmers Manufacturing Company, 207 F. Supp. 252 (N.D.Ill.1962) aff'd 315 F.2d 564 (7th Cir. 1963); United States v. Harper & Row Publishers, Inc., unreported opinion (N.D.Ill., E.D., Nov. 27, 1967), aff'd sub nom., City of New York v. United States, 390 U.S. 715, 88 S.Ct. 1410, 20 L.Ed.2d 251 (1968);² United States v. Western Electric Co., 1968 CCH Trade Cases ¶ 72,415 (D.N.J., 1968), aff'd sub nom. Clark Walter and Sons, Inc. v. United States, 392 U.S. 659, 88 S.Ct. 2286, 20 L.Ed.2d 1348 (1968); United States v. Minnesota Mining & Manufacturing Company, unreported opinion (N.D.Ill.E.D. Sept. 2, 1969); United States v. Aluminum Company of America, 41 F.R.D. 342 (D.C.), aff'd per curiam sub nom. Lupton Mfg. Co. v. United States, 388 U.S. 457, 87 S.Ct. 2112, 18 L.Ed.2d 1318 (1967).³

It also seems clear that the intervenors are not entitled to permissive intervention. Rule 24(b) F.R.Civ.P. requires the court, in considering whether to allow permissive intervention, to consider whether the intervention will "unduly delay or prejudice the adjudication of the rights of the original parties."⁴

The main goal of the intervenors here is to block the proposed decree in the hopes of compelling the parties to litigate this case to judgment. A favorable judgment could then be used as a basis for their own treble damage actions. In the alternative, they are seeking the inclusion of an admission of liability, commonly called an "asphalt clause",⁵ which would produce the same result. However, the defendants have made it clear that they would not consent to such a clause and if it were to be insisted upon, no settlement of the case would be possible.

To allow permissive intervention in this case would certainly delay and prejudice the adjudication of the original parties. Courts, generally, have consistently denied intervention under Rule 24 F.R.Civ.P. in Government anti-trust cases where the purpose is to defeat the entry of a consent decree. United States v. Blue Chip Stamp Company, supra.

All petitions for intervention should, therefore, be denied.

Prior to the institution of this action, the Government impanelled a grand jury to investigate charges that these defendants were engaging in anti-trust activities. After eighteen months, the grand jury was dismissed, without an indictment having been returned. However, during its investigation, a tremendous amount of evidentiary material was gathered together and reviewed and the testimony of many witnesses was obtained. It has been contended by many appearing here as amici curiae that the proposed decree should contain some provision releasing this material, as well as the transcript of the grand jury proceedings, from the cloak of secrecy traditionally surrounding such proceedings, in order that it might become available to treble damage claimants. At the hearing, a proposed order was presented to the court, to which all parties have agreed and which this court has signed, requiring that all evidence obtained by the grand jury, as well as its own transcript, be impounded in the hands of the Justice Department, where it may be obtained by treble damage claimants, or others, by subpoena or other appropriate means, where good cause therefor can be shown. This appears to satisfy those making this contention.

Let us now turn to a consideration of the proposed consent decree.

Section 5(a) of the Clayton Act, after providing that a final judgment or decree in an anti-trust action brought by the Government may be used with prima facie effect in treble damage actions, expressly excepts from these provisions consent decrees entered in such actions. In so doing, it implicitly recognizes consent decrees as a means of terminating civil anti-trust actions brought by the Government, and their use has become a most effective technique in anti-trust enforcement. It is reported that between 70 and 75 per...