Source: https://casetext.com/case/twin-ports-oil-co-v-pure-oil-co-3
Timestamp: 2019-05-20 04:53:04
Document Index: 468216966

Matched Legal Cases: ['§ 1', '§ 178', '§ 178', '§ 842', '§ 41', '§ 31', '§ 739']

Twin Ports Oil Co. v. Pure Oil Co, 26 F. Supp. 366 | Casetext
Twin Ports Oil Co. v. Pure Oil Co.
26 F. Supp. 366 (D. Minn. 1939)
Twin Ports Oil Co.v.Pure Oil Co.
United States District Court, D. Minnesota, Fourth DivisionJan 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.
Rayburn L. Foster, of Bartlesville, Okla., 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, Okla., 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, Okla., and Claude G. Krause, of Minneapolis, Minn., for defendant Continental Oil Co.
A.M. Ebright and F.H. Bacon, both of Bartlesville, Okla., Warren T. Spies, of Chicago, Ill., and Asa G. Briggs, of St. Paul, Minn., for defendant Cities Service Oil Co
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 AntiTrust Act.
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.
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.
Courts which have been called upon to determine what construction should be given to the term "final judgment" under circumstances comparable herein, are in accord with the views indicated. In Allen v. Reed et al., 60 App.D.C. 346, 54 F.2d 713, the court was considering a section of the code (D.C. Code 1929, T. 24, § 178), which provided in substance that any final judgment rendered in an action of ejectment should be conclusive as to the title therein established as between the parties to the action and all persons claiming under them since the commencement of the action. The court held, however, that a judgment rendered in an action of ejectment pending appeal was not a "final judgment" and therefore not conclusive on the question of title, stating (page 714): "There is nothing especially sacred about a judgment in ejectment, nor anything exceptional that does not apply to judgments in general. Section 1002 of the Code (D.C. Code 1929, T. 24, § 178) provides as follows: `Any final judgment rendered in an action of ejectment shall be conclusive as to the title thereby established as between the parties to the action and all persons claiming under them since the commencement of the action.' It will be observed that this relates to final judgments. A judgment appealed from is not a final judgment. It is merely an adjudication of the inferior court, the finality of which depends upon the action of the superior court. Until the decree upon which the judgment in the first ejectment suit was based was disposed of on appeal, it was not a final judgment, and was not therefore conclusive upon the parties on the question of title. Title remained suspended pending the appeal."
In Carroll Electric Co., Inc., v. Snelling, 1 Cir., 62 F.2d 413, the court cited the case of Allen v. Reed, supra, with approval and quoted from that decision a portion of the excerpt hereinbefore recited.
In Roberts v. Central Mutual Insurance Co., 1936, 285 Ill. App. 408, 2 N.E.2d 132, it appeared that one Roberts had recovered a judgment against a cab company for $2,500, and a suit was brought against the insurance company upon its bond to recover the amount of the judgment. In its answer to this suit, the insurance company set forth that the judgment against the cab company was pending on appeal. The lower court sustained a motion to strike out these allegations from defendant's answer on the grounds that they did not state a defense. The Appellate Court, however, reversed the lower court, stating (page 134):
See, also, Cochran v. Schell, 107 U.S. 625, 628, 2 S.Ct. 827, 830, 27 L.Ed. 543, where the Supreme Court in discussing the term "final judgment" as referred to in Section 989 of the Revised Statutes, 28 U.S.C.A. § 842, stated that "`the final judgment' * * * is the judgment as it stands after its affirmance by this court, and after the court below has rendered such judgment as the mandate of this court requires."
That Congress intended to use the term "final judgment" in the act as the pronouncement of a court of last resort — and, of course, if no appeal is taken, the judgment of the trial court — is further evidenced by the last paragraph of Section 5 of the Clayton Act above quoted. This paragraph suspends the statute of limitations during the pendency of the equity or criminal proceedings instituted by the Government. Madison case No. 1 is still pending, and the statute of limitations against plaintiff's claim is suspended. It is fair to assume that this paragraph was enacted because it was recognized that the final judgment referred to would be the final disposition of the case.
It appears that a plea of nolo contendere was entered by the defendants before any testimony was taken, and if the judgment entered thereon is a consent judgment within the purview of the first proviso of the act, it follows that all reference to Madison case No. 2 in the amended complaint should be stricken. Congress apparently intended to encourage consent judgments and decrees. It sought to induce a prompt surrender to the Government's demands by excluding consent judgments and decrees from the prima facie rule. That the exception would apply to consent decrees in equity cases entered before any testimony had been taken is free from doubt. The query is, however, does this exception also apply to judgments entered on pleas of guilty and pleas of nolo contendere in criminal cases?
It will be noted that this proviso specifically refers to consent judgments in criminal cases. It was apparently promulgated in order to enable defendants in certain cases then pending before the courts to agree to consent decrees in equity cases, or to enter promptly pleas of guilty or nolo contendere in criminal cases, so that the prima facie feature of the judgments and decrees might not be available to third parties. There can be no serious controversy over the construction of this proviso. However anomalous the term "consent judgment" in a criminal proceeding may be, it must be conceded that Congress unmistakably intended to include judgments entered on pleas of guilty and pleas of nolo contendere in pending criminal cases as consent judgments if entered forthwith after the adoption of the act. If it intended to exclude consent judgments in pending criminal cases, no cogent reason is advanced why consent judgments rendered in criminal cases thereafter filed should not be in the same category. Reason and common sense suggest that, if Congress intended to avoid long civil proceedings by encouraging consent decrees, the same consideration would apply to criminal proceedings. Congress was not obliged to make the way easier for private litigants. The prima facie feature of judgments and decrees entered in proceedings instituted by the Government was an innovation of the Clayton Act, and in considering the past experience with reference to the advantage of consent decrees and pleas of guilty, it was apparently assumed that the provisos would redound to the public good.
"Mr. Donovan: It was agreed between the Government and ourselves, Your Honor, that the costs would be assessed in the sum of $25,000. That is correct, isn't it?
"Judgment — June 2, 1938.
If there be any doubt, however, as to the intent of Congress from the language of the act and from the proceedings that took place when the plea of nolo contendere was entered, a consideration of the history of the legislation fairly removes any uncertainty that may exist. The purposes and objects of the act may be gathered from the committee hearings, committee reports, and debates in Congress when the act was being considered. That the court may look to the legislative history in construing a statute when there may be doubt on the subject is amply sustained by the authorities. United States v. Mullendore et al., 8 Cir., 35 F.2d 78; Federal Trade Commission v. Raladam Company, 283 U.S. 643, 51 S.Ct. 587, 75 L.Ed. 1324, 79 A.L.R. 1191; Humphrey's Executor v. United States, 295 U.S. 602, 55 S.Ct. 869, 79 L.Ed. 1611; United States v. Madigan, 300 U.S. 500, 57 S.Ct. 566, 81 L.Ed. 767.
In Federal Trade Commission v. Raladam Company, supra, it became necessary for the Supreme Court to construe the Federal Trade Commission Act, 15 U.S.C.A. § 41 et seq., and determine whether or not the Commission had power to issue a cease and desist order when competition was not involved. The court stated (page 650 of 283 U.S., page 591 of 51 S.Ct.): "It is true, at least generally, that statements made in debate cannot be used as aids to the construction of a statute. But the fact that throughout the consideration of this legislation there was common agreement in the debate as to the great purpose of the act may properly be considered in determining what that purpose was and what were the evils sought to be remedied."
In United States v. Mullendore et al., supra, it had been urged that a proviso of the statute relating to Indian lands had the effect of removing exemptions from taxation upon such lands. In construing and interpreting the proviso, the court considered the legislative history and the proceedings in Congress in order to ascertain the "true legislative intent." It quoted certain discussions that took place on the floor of the House, and in discussing the right of the court to look to extraneous matters, stated (page 82 of 35 F.2d): "However, if there be doubt on the subject it is removed, we think, by discussions of the Act when it was under consideration in the House, and to which we may look to ascertain its meaning. Work v. Braffet, 276 U.S. 560, 48 S.Ct. 363, 365, 72 L.Ed. 700; United States v. Missouri Pac. R. Co., 278 U.S. 269, 49 S.Ct. 133, 136, 73 L.Ed. 322. In the Work Case it was said: `That such was the purpose (of a section of an Act) is established by the Congressional debates;' and in the Missouri Pacific Case the court said: `Where doubts exist and construction is permissible, reports of the Committees of Congress and statements by those in charge of the measure, and other like extraneous matter, may be taken into consideration to aid in the ascertainment of the true legislative intent.'"
It appears that several so-called antitrust bills had been introduced in the House. On May 6, 1914, the House Judiciary Committee in a majority report returned for consideration H.R. 15657. Section 6 in the bill (later amended to be Section 5) provided that the judgment or decree would be conclusive in favor of or against the defendant to the full extent that said judgment or decree would constitute an estoppel between the defendant and the United States in any other proceeding. The proviso did not mention criminal proceedings, however, but was limited to a suit or proceeding in equity. A minority house report criticized the proposal to make judgments or decrees conclusive in private suits. It was pointed out that consent decrees saved the Government time and expense, and that if the proposed bill became a law, no defendant would ever consent to a decree if the result thereof would be to bind him conclusively in any third party suit that might be commenced on the same state of facts. The bill was passed in the form recommended by the majority report, with the amendment, however, that the judgment or decree would be conclusive against the defendants, but not in favor of them. In other words, if the decree or judgment was in favor of the defendant, it would not avail the defendant in any third party suit, but if it were against the defendant, it was conclusive.
Senator Reed in discussing these provisos on the floor of the Senate stated, after quoting both provisos in full (p. 15823): "It is my opinion, from that language, that the deduction must be drawn that the exception applies to criminal as well as civil consents. The only way you can consent in a criminal case is by an absolute plea of guilty or the plea of nolo contendere."
"Mr. Norris: But if the Senator will notice from the first part of the section, it reads —
"Mr. Borah: Yes; `in any criminal prosecution'.
There is an additional reason why the judgment in Madison case No. 2 is not available to this plaintiff. The act provides that the judgment or decree shall be prima facie evidence against said defendant "as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto." It therefore becomes necessary to determine to what extent this judgment, entered on a plea of nolo contendere, creates an estoppel between the Government and the defendants herein This requires a consideration of the effect and the nature of a plea of nolo contendere.
That a plea of nolo contendere is an admission of guilt only for the purpose of the case is well-established by the authorities. Further, it is quite uniformly recognized by well-considered decisions that such a plea does not create an estoppel, and the defendant is not estopped to deny the facts upon which the prosecution was based in a subsequent civil proceeding. It cannot be used as an admission in a civil case for the same act. Hudson v. United States, 272 U.S. 451, 47 S.Ct. 127, 71 L.Ed. 347; Tucker v. United States, 7 Cir., 196 F. 260, 41 L.R.A., N.S., 70; White v. Creamer, 175 Mass. 567, 56 N.E. 832; State v. La Rose, 71 N.H. 435, 52 A. 943; State v. Burnett, 174 N.C. 796, 93 S.E. 473, L.R.A. 1918A, 955; Berlin v. United States, 3 Cir., 14 F.2d 497; Teslovich v. Fireman's Fund Ins. Co., 110 Pa. Super. 245, 168 A. 354; Johnson v. Johnson, 78 N.J. Eq. 507, 80 A. 119; United States v. Lair, 8 Cir., 195 F. 47; People ex rel. Attorney General v. Edison, 100 Colo. 574, 69 P.2d 246.
A very clear and helpful statement regarding the effect of a plea of nolo contendere as an estoppel in another proceeding is set forth in State v. La Rose, supra, wherein the court said (page 946 of 52 A.): "If LaRose were sued for damages under the statute (Pub.St. c. 112 §§ 31, 32), it is clear, according to the authorities, that evidence of his plea of nolo to a complaint for selling the liquor which caused the damage would be no more competent than his conviction upon a plea of not guilty to the same complaint. If the plea is not competent between different parties because it is only a limited admission of the charge, the admission is not made unlimited by a change of parties. The admission must be one thing or the other when made. Its character at the time determines its meaning, not the use attempted to be afterwards made of it. It cannot mean one thing in a subsequent civil suit for damages, and another thing in a subsequent proceeding by the state. The competency of an admission does not depend upon its being made to a party to the suit. If it were an unlimited admission, it would be evidence against the defendant in all subsequent controversies. It is settled by the authorities that it is not. Therefore, there being no ground for an estoppel, the plea can have no greater effect in a proceeding to which the state is a party than in a civil suit, and it is therefore inadmissible against the defendant. * * *"
In Teslovich v. Fireman's Fund Ins. Co., supra, in an action on an insurance policy, the defendant offered to prove that the plaintiff was indicted for arson, pleaded nolo contendere, and was sentenced. The instant action was a civil suit upon the policy for the losses sustained by the fire involved in the criminal proceeding. The ruling of the trial court in sustaining plaintiff's objection to the record in the arson case was affirmed by the Appellate Court on appeal, the court stating (page 356 of 168 A.): "`Although the great majority of the citations which we have made are of dicta of text writers and judges, and we have not found many instances of actual decisions upon the question in civil actions, it appears that the consensus of professional and judicial opinion so strongly supports the view expressed by Rice, P.J., in the case first above cited [Com. v. Ferguson, 44 Pa. Super. 626], to the effect that the plea of nolo contendere amounts only to an implied confession, and is the equivalent of a plea of guilty, "in its effect upon the case" and "cannot be used against the defendant in any civil suit for the same act," that in our opinion we should follow that statement, notwithstanding its character as an obiter dictum.'"
"The effect of the plea under discussion is well stated in 12 Cyc. at page 354 as follows: `A plea of nolo contendere, which is still allowed in some jurisdictions, is an implied confession of the crime charged, and, as regards the case in which it is entered, is equivalent to a plea of guilty, except that it gives to the accused the advantage of not being estopped to deny his guilt in a civil action based upon the same facts as he would be upon a plea of guilty." Johnson v. Johnson, 78 N.J. Eq. 507, 80 A. 119, 121.
"The only advantage in a plea of nolo contendere gained by the defendant is that it gives him the advantage of not being estopped to deny his guilt in civil action based upon the same facts. Upon a plea of guilty, entered of record, the defendant would be estopped to deny his guilt, if sued in a civil proceeding." State v. Burnett, 174 N.C. 796, 93 S.E. 473, 474, L.R.A. 1918A, 955.
"The plea of nolo contendere entered in the forum of the indictment, while effective for sentence there, was not otherwise or elsewhere conclusive. `When accepted by the court, it becomes an implied confession of guilt, and, for the purposes of the case only, equivalent to a plea of guilty. * * * The difference between it and a plea of guilty appears simply to be that, while the latter is a confession binding defendant in other proceedings, the former has no effect beyond the particular case.' 16 C.J. 404, § 739." (Citing cases). People v. Edison, 100 Colo. 574, 69 P.2d 246, 248.
"But, even if we regard the implied confession as a petition which in Hawkins' time had to be accepted as tendered, in modern practice it has been transformed into the formal plea of nolo contendere. Like the implied confession, this plea does not create an estoppel; but, like the plea of guilty, it is an admission of guilt for the purposes of the case." Hudson v. United States, 272 U.S. 451, 455, 47 S.Ct. 127, 129, 71 L.Ed. 347.
There are certain other portions of the motions made by certain defendants which seek to strike out certain parts of the amended complaint for the reasons that they are indefinite and uncertain, and other alternative relief is asked for. The motions relating to such matters were not argued or briefed, and presumably were subordinated to the more important parts of the motions which relate to the Madison cases. It may be that the moving parties, in view of the ruling herein, will not care to press the remainder of their motions at this time, but so that the rights of the parties may be reserved, it is ordered that the portions of the motions not ruled upon herein be denied without prejudice.