United States v. Firestone Tire and Rubber Co.

• Decision Date: 07 January 1974
• Docket Number: No. C73-836.,C73-836.
• Citation: 374 F. Supp. 431
• Parties: UNITED STATES of America, Plaintiff, v. The FIRESTONE TIRE AND RUBBER COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

374 F. Supp. 431

UNITED STATES of America, Plaintiff, v. The FIRESTONE TIRE AND RUBBER COMPANY, Defendant.

No. C73-836.

United States District Court, N. D. Ohio, E. D.

January 10, 1974.

As Amended January 10, 17, 1974.

Frank Moore, Robert A. McNew, Anti-Trust Div., Cleveland, Ohio, Joseph T. Maioriello, Dept. of Justice, Washington, D. C., for plaintiff.

Dennis M. Kelly, Cleveland, Ohio, Hammond E. Chaffetz, George D. Newton, Jr., Chicago, Ill., Harold L. Henderson, Bath, Ohio, Firestone Tire & Rubber Co., Joseph E. Downs, Akron, Ohio, for defendant.

MEMORANDUM OPINION

BATTISTI, Chief Judge.

In this civil antitrust suit, the Government charges that from about 1959 to date defendant Firestone Tire and Rubber Company, an Ohio corporation, has engaged in numerous activities designed to secure a monopoly in the manufacture and sale of replacement tires, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, and has made certain corporate acquisitions between 1959 and 1967 violative of Section 7 of the Clayton Act, 15 U.S.C. § 18.

Defendant, in its answer, has interposed as a "First Affirmative Defense": "Plaintiff is not entitled to equitable relief because of its unconscionable delay." Additionally, in Paragraph 19 of its answer, defendant, while admitting having made many of the acquisitions enumerated in the Government's complaint, adds that three of such acquisitions were made "with the knowledge and acquiescence of the plaintiff."

The Government has moved pursuant to Rule 12(f) F.R.Civ.P. to strike defendant's "First Affirmative Defense" as being legally insufficient, and to strike the phrase "with knowledge and acquiescence of the plaintiff," contained in Paragraph 19 of defendant's answer, on the ground that this allegation is immaterial and impertinent.

The defense of "unconscionable delay" or laches is no bar to a suit brought by the Government to vindicate a public right, particularly one so important as the effective enforcement of the Nation's antitrust laws. United States v. New Orleans Chapter, Associated General Contractors, 382 U.S. 17, 86 S.Ct. 33, 15 L.Ed.2d 5 (1968) reversing per curiam 238 F.Supp. 273 (E.D.La.1964); Times-Picayune v. United States, 345 U.S. 594, 623-624, 73 S.Ct. 872, 97 L.Ed. 1277 (1953); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 225-228, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); United States v. Pennsalt Chemicals Corp., 262 F.Supp. 101 (E.D.Pa.1967); United States v. Shubert, 14 F.R.D. 471, 474 (S.D.N.Y.1953).

Defendant has cited to the Court a number of cases which it contends stand for the proposition that Government suits in equity may be barred, in certain circumstances, by the doctrine of laches, or the doctrine of equitable estoppel. See e. g. Michigan v. Jackson, 69 F. 116 (6th Cir. 1895); Iowa v. Carr, 191 F. 257 (8th Cir. 1911); The Falcon 19 F.2d 1000 (D.Md.1927). Insofar as these cases support defendant's contention, they are entirely inapplicable here. Generally, they involved actions wherein the Government or one of the states was more basically proceeding in what has been obliquely termed its "proprietary," rather than "sovereign" capacity, seeking to prevail as against the compelling equities of bona fide private purchasers and the like. When confronted with such circumstances, courts, in the interests of justice, are manifestly more willing to subject Government fully to equitable defenses such as estoppel, particularly inasmuch as the public interest would not be unduly harmed. See e. g. United States v. Georgia Pacific Co., 421 F.2d 92 (9th Cir. 1970). This being so, it remains clear, however, that principles of equity may not be applied to the United States in such a manner as to frustrate the purpose of its laws or to thwart its public policy. Pan American Petroleum & Transport Co. v. United States, 273 U.S. 456, 505-506, 47 S.Ct. 416, 71 L.Ed. 734 (1927).

The Government's motion to strike defendant's "First Affirmative Defense" is, accordingly, granted. The defense is wholly insufficient as a matter of law.

In evaluating defendant's "knowledge and acquiescence" allegation, contained in Paragraph 19 of its answer, for purposes of the Government's motion to strike, it must first be said that this allegation raises many of the same points that have already been dealt with in regard to defendant's "First Affirmative Defense" of "unconscionable delay" or laches. Significantly, defendant does not either allege or contend that it ever gained any immunity or received any lawfully authorized exemption from the antitrust laws with regard to the acquisitions here in question. Absent this, the alleged "knowledge or acquiescence" on the part of the Government or its agencies at any particular time with regard to these acquisitions would not bar a subsequent suit to enforce the antitrust laws when it is determined, after further consideration, that such is necessary in the public interest. United States v. E. I. duPont deNemours & Co., 353 U.S. 586, 597-598, 77 S.Ct. 872, 1 L.Ed.2d 1057 (1957); United States v. Socony-Vacuum Oil Co., supra.¹

Defendant, however, has injected an additional argument. It submits that since it is being charged with attempting to monopolize the manufacture and sale of replacement tires in violation of Section 2 of the Sherman Act, and since the Government has alleged that the acquisitions under consideration comprise an important component of this "attempt," its allegations as to the "knowledge and acquiescence" of the Government would at least bear some...