Court Opinion

ID: 9445869
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:39:38.266881+00
Date Added: 2024-06-11T17:30:25.837904
License: Public Domain

HINCKS, Circuit Judge.
These are appeals by the plaintiffs from judgments of Judge Galston, dismissing the complaints in two actions to recover treble damages under the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note. The only question presented is whether the actions were barred by the Statute of Limitations. In that connection, the crucial question is this: Was it proper for the judge instead of a jury to decide whether the defendant could have been sued in the Southern District of California between. July 20, 1935 and July 20, 1938? This is critical because upon it depends the question whether the actions were barred by the Statute of Limitations when they were commenced in the Eastern District of New York on September 5, 1951; and why this is true appears from the following facts.
The Sherman Act, even after its amendment by the Clayton Act in 1914, deals with the Statute of Limitations only in § 5 of the second Act, 15 U.S.C.A. § 16, which provides that the period during which a suit in equity, brought by the United States, shall be pending shall toll the running of the statute as to “every private right of action * * based * * * on any matter complained of in said suit.” Concededly such a suit was pending from July 20, 1938, until September 5, 1951, when these actions were begun. Except for this the law of New York controlled, and § 48(2) of the Civil Practice Act of that state fixes six years as the period of limitation for an action “to recover upon a.liability *835created by statute.” Were tbis the only relevant section, the action of Gumbiner Co., in which the alleged damages were all suffered before Dec. 8, 1931, would have been barred in spite of § 5 of the Clayton Act, but the action of the Bertha Building Corporation in which the damages did not end before July 4, 1935, would not have been. However, § 13 of the New York Civil Practice Act provides that when a claim “arises outside of this state, an action cannot be brought in a court of this state to enforce” it “after the expiration of the time limited” by the law of the state where the claim arose, and since the claims at bar arose in California, the law of that state controls: i. e., § 351 of the California Code of Civil Procedure. This provides that, if the obligor of a liability is “out of the State” when it “accrues * * * the time of his absence is not part of the time limited for the commencement of the action.” It is the defendant’s position that it was not “out of the State” during the three years (the period of limitation in California), before July 20, 1938, because during all that time the plaintiffs could have sued it in the Southern District of California. If this was an issue properly tried to a judge, instead of to a jury, we all agree that Judge Galston’s findings were not “clearly erroneous,” so that at long last the outcome turns upon the answer to the crucial question posed in the opening paragraph of this opinion.
If the issue were one of whether the venue in each, or either, of the instant suits was proper we should agree that no jury question was presented; for it is clear that a judge may take that issue from a jury when it arises at a trial and decide it himself just as he might have done had it been raised before trial. But though decision as to whether these suits are barred by the statute depends upon whether National could have been sued by these plaintiffs in California before the California statute of limitations had run, and so comes down to a question of venue in respect to each of such supposititious suits, the critical issue in the instant actions remains whether the statute bars the suits. That issue is not to be treated as merely one of venue. A determination of this defense has a reach and a finality not inhering in any decision as to venue. For if the defense of the statutory bar is sustained, the resulting judgment of dismissal operates as a final adjudication of the merits of the controversy: a decision as to venue, however, of course leaves the plaintiff free thereafter to seek an adjudication on the merits of his claim. Fed.Rules Civ.Proc. rule 41(b), 28 U.S.C.A.
Inherent in that issue is the resolution of disputed questions of fact involving decision as to the credibility of witnesses and the need to weigh the evidence of National to the effect that it was doing business in the Southern District of California, now that it is to its advantage to take such a position, against its repeated allegations to the contrary in prior suits brought against it when it was to its advantage to take a stand diametrically opposed to what it is now attempting to prove. And it should not be forgotten that decision must be made in the light of fact findings as to many matters peculiarly within the knowledge of those in charge of the affairs of National during the critical period; and am to many occurrences which may seem to have chameleonic attributes when interpreted, or explained.
The burden is, of course, on National to establish its affirmative defense of the limitation statute. Pieczonka v. Pullman Co., 2 Cir., 102 F.2d 432. And when the plaintiff has made out a prima facie case of absence from the jurisdiction the burden is on the defendant to show that such absence has not tolled the running of the statute. Banister v. Solomon, 2 Cir., 126 F.2d 740.
Antitrust suits like these are triable as of right by jury if a party demands one. Ring v. Spina, 2 Cir., 166 F.2d 546. And if National’s affirmative defense based on the statute of limitations tendered genuine issues of fact, they were also as of right triable by *836jury. Jelliffe v. Thaw, 2 Cir., 67 F.2d 880; Chambliss v. Simmons, 5 Cir., 165 F. 419. Applicable, to be sure, is the rule that when the evidence is so one-sided that reasonable men would not differ as to the facts proved, the judge may take the issue from the jury, but we do not regard the evidence in this record in that category even without the admissions of National. However that may be, its admissions that it did no business in California and had no agents there during the relevant period should, we think, make it perfectly clear that there were genuine issues of fact which could not properly be taken from the jury: that it was erroneous to refer such issues to Judge Galston for trial without a jury.
We would hold further that the dismissal below cannot be sustained as one properly ordered on the pleadings. This was an alternative ground on which the order appealed from was based.
Apparently Judge Galston thought that proof that National prior to 1938 was a member of a conspiracy which was injuring the plaintiffs within California (proof essential to a recovery) would necessarily mean that National was “transacting business” in California within the meaning of § 12 of the Clayton Act and hence was entitled to prevail in its defense of the statute of limitations. In other words, he apparently thought that a fact essential to the proof of the claim also proved a defense to the claim. That analysis has indeed a superficial plausibility.
Admittedly, it is hard to see how a finding that National was not transacting business in California (without such a finding the plaintiffs cannot escape the defense of the statute) can square with a finding that National was part of a conspiracy which caused injury to the plaintiffs in California (without which no recovery can be had on the complaint). However, the apparent conflict between those findings can perhaps be solved by ascertaining which of the numerous alleged co-conspirators are proven to be such, if any, and the relationship which exists between each of them and the plaintiffs. Not until this is done, do the cases interpreting § 12 of the Clayton Act [15 U.S.C.A. § 22] become relevant. The most recent Supreme Court discussion of this problem occurs in dictum in Bankers Life & Casualty Co. v. Holland, 346 U.S. 379, 74 S.Ct. 145, 98 L.Ed. 106, where Justice Frankfurter dissenting on another point observes that co-conspirators “as such” are not “agents” for purposes of venue.
We cannot bring ourselves to accept the suggestion in Giusti v. Pyrotechnic Industries, 9 Cir., 156 F.2d 351, that because of the presence within the jurisdiction of one co-conspirator all foreign corporations which are alleged to be co-conspirators are amenable to process. We think such doctrine inherently unsound and in conflict with the later pronouncement in Bankers Life, supra. The best discussion of the problem is in Independent Productions Corporation v. Loew’s Inc., D.C.S.D.N.Y.1957, 148 F.Supp. 460. We agree fully with the rationale and holding of Judge McGohey’s opinion in that case. Thus it is conceivable that the proofs may be such that a finding that National had no agents in California and acting independently had transacted no business there, and thus has not sustained its statutory defense, is not necessarily in conflict with a finding that it conspired with others to cause injury to the plaintiffs in California. The validity of a plaintiff’s verdict, if one shall be returned, cannot be assessed until all the evidence is in.
Reversed and remanded for a jury trial of the issue raised by the defendant’s plea.