Williamson v. Columbia Gas & Electric Corporation

• Decision Date: 16 June 1950
• Docket Number: No. 6,7.,6
• Citation: 91 F. Supp. 874
• Court: U.S. District Court — District of Delaware
• Parties: WILLIAMSON v. COLUMBIA GAS & ELECTRIC CORPORATION, a Delaware Corporation (two cases).

91 F. Supp. 874

WILLIAMSON v. COLUMBIA GAS & ELECTRIC CORPORATION, a Delaware Corporation (two cases).

Nos. 6, 7.

United States District Court D. Delaware.

June 16, 1950.

Arthur G. Logan and Samuel R. Russell (of Logan, Marvel & Boggs), of Wilmington, Del., for plaintiff.

Clarence A. Southerland (of Southerland, Berl & Potter) of Wilmington, Del., and Edward S. Pinney, of New York City, for defendant.

RODNEY, District Judge.

These actions are before the court upon amended motions for summary judgment filed by the defendant. The actions have been pending a long time, having been instituted on February 14, 1938. Good reasons growing out of pending litigation in other courts seem to exist for the intervening delay for which this court is in no way responsible. Argument on the present motions was heard on May 19, 1950.

These are companion cases and it is agreed by both parties that for present purposes the determination of one will be controlling in the other. They are anti-trust actions seeking to recover treble damages under Section 4 of the Clayton Act¹ for alleged violations of Sections 1 and 2 of the Sherman Act.² The motions for summary judgment in each case are based on two grounds. One is that the dismissal of two other companion cases, 27 F.Supp. 198, involving the same parties by this court in April, 1939, is res judicata and bars the maintenance of the pending actions. The other ground is that the statute of limitations bars the maintenance of the pending actions.

An understanding of the issues raised by these motions requires a statement of the nature of the pending actions and of the dismissed actions and of the sequence of events which have occurred with reference to each.

The pending actions were brought on February 14, 1938, by Ben Williamson, Jr., as Trustee under Section 77B of the Bankruptcy Act, 11 U.S.C.A. § 207, of Inland Gas and of Kentucky Fuel, respectively, against Columbia, two of its subsidiary corporations and forty-four individuals. The declarations were filed on April 22 and April 28, 1938. Each declaration contained two counts and alleged that Columbia had conspired with the other defendants to restrain and monopolize trade and commerce in natural gas in an area embracing several midwestern states or portions of them. A motion to strike certain portions of the declarations was filed by the defendants on June 9, 1938. On October 5, 1938, the plaintiff, with leave of court, amended the declarations which, pursuant to the new Federal Rules of Civil Procedure, 28 U.S. C.A., became complaints. Under the complaints, as amended, Columbia was named the sole party defendant, but the causes of action remained the same. The defendant's motions to strike were renewed. On August 3, 1939, this court granted the motions in part and denied them in part. Consequently, plaintiff filed on October 25, 1939, the amended complaints which are now before the court. These amended complaints state substantially the same causes of action as the former complaints, and Columbia is in each case the sole defendant.

In the meantime two further suits had been filed by the plaintiff in this case, Ben Williamson, Jr., as Trustee for Inland and for Kentucky Fuel, against Columbia. They were filed respectively on September 16, 1938, and September 26, 1938, shortly after the coming into effect of the new Federal Rules of Civil Procedure. The complaints charged a violation of Section 7 of the Clayton Act,³ setting forth substantially the same facts as were set forth in the declarations or complaints in the first actions, and using to a considerable extent the very same language. They alleged that on November 6, 1930, Columbia indirectly acquired, in violation of Section 7 of the Clayton Act, a majority of the outstanding stock of Inland and of Kentucky Fuel, the effect of such acquisition being substantially to lessen competition and to restrain trade, and to create a monopoly in commerce pertaining to the production, transmission and distribution of natural gas.

On November 16, 1938, Columbia filed motions to dismiss the actions which had been filed in September, 1938, on the ground that the cause of action against the defendant did not accrue within a period of three years prior to the commencement of the actions. Attached to the moving papers was a stipulation signed by counsel for both parties to the effect that the right of action sued upon in those actions accrued not later than January 1, 1931; and that if the court, upon hearing the motion, should be of the opinion that the action was barred by any applicable statute of limitations, the motion should be granted. After hearing arguments upon the motions, the District Court dismissed the actions, holding the Delaware three-year statute of limitations to be applicable.⁴ This judgment was affirmed by the Third Circuit Court of Appeals,⁵ and the Supreme Court denied certiorari.⁶

Defendant's first contention is that the court's orders dismissing the plaintiff's actions of September, 1938, were final and binding adjudications of those actions; that the same causes of action are asserted in the present actions as in the dismissed actions, and that the present actions are consequently barred as res judicata.

For the purposes of the present discussion it is believed that it is sufficient to state, as a generally correct proposition, that the factual bases of the dismissed actions and of the pending actions are substantially similar. In the dismissed actions the wrongful act was the acquisition of control of the two corporations, Inland and Kentucky Fuel, by the purchase of their securities, the effect of such acquisition being to lessen competition and restrain trade. In the pending actions a conspiracy to restrain trade and to monopolize is charged, the conspiracy being a continuing one. The acquisition of control of Inland and Kentucky Fuel is alleged to be a part of the conspiracy. Many other acts are also alleged to have been subsequently committed by the defendant pursuant to the conspiracy. These subsequent acts were also, for the most part, set forth in the recital of facts in the dismissed complaints. The items of damage claimed in dismissed actions were virtually the same as in the pending actions.

It is elementary that where a valid and final adjudication is rendered in favor of the defendant in one action, the plaintiff cannot thereafter maintain an action upon the same cause of action.⁷ If a suit involves the same parties and the same cause of action as in a suit which has been finally adjudicated, the parties will be bound not only by what was actually litigated and determined, but also by those germane matters which might, with propriety, have been litigated and determined.⁸

The defendant's contention is that the first and second actions in the present instance involved the same cause of action. Plaintiff's position is that there are different causes of action, or alternatively that there was a splitting of plaintiff's cause of action, to which the defendant has impliedly consented.

The first question to determine, therefore, is whether the suits are based on the same cause of action. It has frequently been pointed out that the term "cause of action" may have different meanings for different purposes.⁹ In its application to the doctrine of "res judicata" its precise meaning is not altogether clear. In some cases it has been said that the test to be applied to determine identity of causes of action is whether the facts essential to the maintenance of the actions are the same, or whether the same evidence would sustain both.¹⁰ On the other hand, in Baltimore S. S. Co. v. Phillips, 274 U.S. 316, 47 S. Ct. 600, 602, 71 L.Ed. 1069, the Supreme Court said: "A cause of action does not consist of facts, but of the unlawful violation of a right which the facts show. The number and variety of the facts alleged do not establish more than one cause of action so long as their result, whether they be considered severally or in combination, is the violation of but one right by a single legal wrong."

In the present cases, the facts alleged are substantially the same as those that were alleged in the dismissed actions. The damages sought are substantially the same. In addition the right violated and the legal wrong are the same. The right may be described as the right of the two corporations, Inland and Kentucky Fuel, to conduct their businesses free from tortious restraints; the wrong alleged was the invasion of that right by acts which placed an unlawful restraint upon it. I am of the opinion, therefore, that under the generally accepted tests there is identity of causes of action between the pending suits and the dismissed suits.

The fact that the grounds of recovery in the actions are different does not by any means preclude the application of the principle of "res judicata." The rule stated in the A.L.I. Restatement of the Law of Judgments, Sec. 63, is that: "Where a judgment on the merits is rendered in favor of the defendant, the plaintiff is precluded from subsequently maintaining an action on the same cause of action although he presents a ground for the relief asked other than those presented in the original action, except where the defendant's fraud or misrepresentation prevented the plaintiff from presenting such other ground in the original action."

In United States v. California & Oregon Land Co., 192 U.S. 355, 358, 24 S.Ct. 266, 267, 48 L.Ed. 476, the Supreme Court stated that a plaintiff may not split up his claim "and, a fortiori, he cannot divide the grounds of recovery." In the dismissed actions, the plaintiff sought to recover upon the theory that the facts alleged showed a violation by defendant of a certain section of the Clayton Act, 15 U.S.C.A. § 12 et seq., and damages flowing from that violation. In the pending actions, substantially the same facts are said to have constituted violations of the Sherman Act, 15 U.S.C.A. §§ 1-7...