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RADIO CORPORATION OF AMERICA v. RAULAND CORP.

July 17, 1956

RADIO CORPORATION OF AMERICA, PLAINTIFF-COUNTER-DEFENDANT
v.
RAULAND CORPORATION AND ZENITH RADIO CORPORATION, DEFENDANTS-COUNTER-CLAIMANTS. ZENITH RADIO CORPORATION AND RAULAND CORPORATION, CROSS-CLAIMANTS, V. RADIO CORPORATION OF AMERICA, GENERAL ELECTRIC COMPANY, AND WESTERN ELECTRIC COMPANY, INC., CROSS-DEFENDANTS.



The opinion of the court was delivered by: Igoe, District Judge.

The court has before it for decision three motions: (a) a motion by Radio Corporation of America (plaintiff and counter-defendant) to strike and dismiss the amended and supplemental counterclaim filed on May 23, 1956; (b) nearly identical motions filed by General Electric and Western Electric Co., Inc. (cross-defendants) asking that Zenith Radio Corporation and The Rauland Corporation, who are defendants and counter-claimants, be required to take an election either to dismiss GE and Western out of the case on the counterclaims, or to cut the damage period to a date no earlier than two years prior to the filing of the amended counterclaim of February 11, 1954. GE and Western also move that the allegations of pendency of government antitrust suits against them as tolling the statute of limitations be stricken from the amended and supplemental counterclaim.

The RCA Motion To Strike and Dismiss

There is little if anything in the latest motion of RCA which has not already been argued by counsel and decided by the court on two previous occasions. The same, or very similar points, were made in opposition to the motion for leave to amend which was decided February 11, 1954 and in the later motion to dismiss which was decided by the court's opinion of March 29, 1955. For purposes of this case, that decision disposed of such questions as whether one injured in his business by reason of exclusion from foreign trade by a conspiracy may recover for loss of profits; that royalty payments exacted under threat of suit by an illegal combination of "block-booked" patents are properly an element of damage; and that recovery may be had for attorney's fees and costs of defending against infringement claims asserted as part of a conspiracy to restrain trade. In that opinion this court also held that the previous counterclaim satisfied the requirements of the Federal Rules of Civil Procedure, 28 U.S.C.A., in that it contained a sufficient statement of the facts relied upon and the claims for relief sought. What was said upon these points, as well as upon the applicability of section 17 of the Illinois Limitations Act, Ill.Rev.Stat. 1955, c. 83, § 18, is applicable with equal force to the current objections to the amended and supplemental counterclaim.

RCA argues that insofar as the latest counterclaims relate to Australia, Holland and England, the applicable limitation would outlaw any claim prior to January 27, 1954. This is a valid point only if the amendment does not relate back to the previous claims. The previous counterclaim sought money damages for loss of export trade to Canada, and alleged in rather general terms that the parties had divided the world into exclusive territories and that Zenith and Rauland had been excluded from various competitive markets (Amendment to the Counterclaim, Par. 9). Under the circumstances, the addition of money damage claims for loss of profits in foreign trade with Australia, England and Holland through operation of the same world-wide conspiracy first alleged, would appear to relate back to the earlier and more general pleading. As a matter of fact, it appears that the latest amendment was made for the purpose of answering the repeated demands of counsel for RCA that they be informed precisely as to the particular countries from which counter-claimants allege exclusion.

There is no merit in the argument of laches and that the court should strike this amendment because it was not timely filed. Leave to amend is within the sound discretion of the court, and it should be freely permitted, particularly when the need for amendment is brought on by positions asserted by the other side. That the damages sought are greatly increased has no bearing on the right to amend; in any case damages must be proved at the trial and if counterclaimants can only prove the smaller amount, then the larger claim in the pleading can have no effect on the judgment.

    The GE and Western Motions to Dismiss or Limit the Period
                           of Damages

GE and Western have filed motions asking an order requiring counterclaimants to elect either to dismiss them out of the case or to limit the damage period applicable to all of the parties to February 11, 1952, which is two years prior to the filing of the treble-damage amendment to the counterclaim. The argument is that since this is an action sounding in tort, and against joint tort feasors, there can be only one judgment, which cannot apportion damages among the parties, and which must be for a common damage period — the shortest period applicable to any of the parties. In support of this position, they rely upon Essaness Theatres Corp. v. Balaban & Katz et al., D.C.N.D.Ill. 1955, C.C.H.Trade Reg.Repts. Par. 68, 152.

That decision has been examined with a great deal of care, and this court wishes to express complete agreement with the fundamental principles discussed therein. Insofar as a case involves a tort, a single judgment is required, and there can be no enforced contributions or apportionments among joint tort feasors.

This is not to say, however, that there can be but a single judgment covering several different causes of action combined in one proceeding. Under Rule 18 of the Federal Rules of Civil Procedure litigants are encouraged to bring into one proceeding all the causes of action that may lie between the parties, and quite obviously the rules contemplate that several judgments may be necessary or appropriate to dispose of a litigation involving multiple claims. It therefore would seem that in a case of several causes of action the court may enter several judgments, as the interests of the parties may appear.

It is my opinion that the position of GE and Western must turn on whether this case involves a single tort which must be disposed of by a single judgment, or whether there are a number of different causes of action making it appropriate for the entry of more than one judgment.

Under the pleadings, Zenith and Rauland each seek separate damages for loss of profits in export trade to various named countries and attorneys' fees and costs of defending against infringement claims, which damage is alleged to have occurred between January 14, 1947 and January 1, 1956. Recovery is sought against RCA, GE and Western jointly and severally on these items and over this period. In another and separately pleaded count, Zenith alone seeks a judgment against RCA and GE for royalties paid between June 22, 1940 and January 1, 1947, said to have been extorted pursuant to the conspiracy. In other words, the pleadings ask for three separate judgments:

1. in favor of Rauland, against GE, RCA and Western for the period 1947-1956;

2. in favor of Zenith, against GE, RCA and Western for the period 1947-1956;

3. in favor of Zenith, against GE and RCA, for the period of 1940-1947.

There can be no really serious argument over the point that a cause of action for damages under the antitrust laws does not arise with the formation of an illegal conspiracy, but rather when the interests of the plaintiff are invaded by such a conspiracy so as to cause him loss and damage. Suckow Borax Mines Consol. v. Borax Consolidated, 9 Cir., 1950, 185 F.2d 196; Foster & Kleiser Co. v. Special Site Sign Co., 9 Cir., 1936, 85 F.2d 742; Momand v. Universal Film Exchange, D.C.S.D.N.Y. 1947, 43 F. Supp. 996, 1013. That being so, each continued invasion of interest causing loss and damage is in effect a new cause of action, and the statute of limitations begins to run when it occurs, as the above cases hold.

Applying these principles to the pleadings here, Zenith and Rauland, the counterclaimants, allege a continuing conspiracy to shut them out of export trade from the United States to Canada, England, Australia and Holland over a period of years commencing in 1947, and upon proof to this effect each would be entitled to judgment against the cross-defendants for three times the damages occurring in this period. Zenith also alleges damages from 1940 to 1947 in the form of royalty payments illegally extorted, and asks that this ...


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