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October 18, 1962


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

Separate motions*fn1 have been filed to strike allegations in the respective complaints pertaining to references to the Government's prior criminal and civil proceedings.*fn2

The motion in 61 C 1277 and related cases, pursuant to Rule 12(f), is for an order striking all allegations concerning or summarizing prior criminal indictments of, and judgments against, the defendants and alleged coconspirators in the United States District Court for the Eastern District of Pennsylvania, because those allegations are highly prejudicial to the defendants and are incompetent and immaterial, and may not be pleaded because "prior criminal judgments do not constitute prima facie evidence in these causes under Section 5(a) of the Clayton Act (15 U.S.C.A. § 16(a)) for the reason that the same were consent judgments entered before testimony taken and therefore fall within the proviso to Section 5(a) of the Clayton Act." Further, the allegations contain references to pleas and judgments in prior criminal proceedings relating to alleged coconspirators who are not parties to these causes, and finally, because the allegations improperly contain purported summarizations and conclusions by plaintiffs as to the charges contained in the indictments and the issues involved in the prior criminal proceedings.

The separate motion of Sangamo Electric Company, in No. 62 C 348, is in the alternative to the above motion, and is directed against the last sentence of paragraph 18 of the complaint on the grounds that it refers to grand jury proceedings and the return of indictments in 1960, and no indictment was ever returned against Sangamo involving instrument transformers, and the allegation is immaterial, irrelevant and unfairly prejudicial to Sangamo. It further moves to strike allegations in paragraph 19 pertaining to the prior criminal and civil proceedings as immaterial, scandalous and incompetent in this civil action against Sangamo because it was not a defendant in those actions.

The disposition of these motions depends primarily upon the interpretation to be given to the phrase "consent judgments or decrees entered before any testimony has been taken" — whether it was meant to cover judgments on pleas of guilty as well as nolo contendere pleas. The section, 15 U.S.C. § 16(a) in its entirety provides:

    "A final judgment or decree heretofore or hereafter
  rendered in any civil or criminal proceeding
  brought by or on behalf of the United States under
  the antitrust laws to the effect that a defendant has
  violated said laws shall be prima facie evidence
  against such defendant in any action or proceeding
  brought by any other party against such defendant
  under said laws or by the United States under section
  15a of this title, as to all matters respecting which
  said judgment or decree would be an estoppel as
  between the parties thereto: Provided, That this
  section shall not apply to consent judgments or
  decrees entered before any testimony has been taken
  or to judgments or decrees entered in actions under
  section 15a of this title." (Italics supplied.)*fn3

Plaintiffs maintain:

(1) The proviso of the Act is inapplicable to any judgment in any criminal case, either after plea of nolo contendere, and especially after a plea of guilty. They contend the several decisions which support even the striking of references to nolo contendere pleas and judgments are wrong in that the proviso makes no reference to consent judgments in criminal cases, as does the body of the section.*fn4

(2) The legislative history is too ambiguous and conflicting to support defendants' construction of the proviso.

(3) The judgments were entered after testimony was received so that the proviso is by its very terms inapplicable.*fn5

(4) The admissibility of pleas of guilt as admissions under the general rules of evidence provides an essential and proper background to the conspiracy allegations of the complaints.*fn6

(5) The word "consent" is inappropriate to describe judgments in criminal cases. (United States v. Norris, 281 U.S. 619, 50 S.Ct. 424, 74 L.Ed. 1076 (1930); United States v. Standard Ultramarine & Color Co., 137 F. Supp. 167, 173 (D.C.N.Y., 1955); Ansaldo San Giorgio I, 73 F.2d 40, 41 (2nd Cir., 1934), aff'd 294 U.S. 494, 55 S.Ct. 483, 79 L.Ed. 1016 (1935)).

Plaintiffs point out that the only decision which had squarely faced the problem of the inclusion within the proviso of pleas of guilty and judgments based thereon, held that the guilty plea could not be deemed a "consent" judgment. (Sacramento Municipal Utility District v. Westinghouse Electric Corp., Civil No. 8380, N.D.Cal. May 2, 1962, unreported.)*fn7 It was there stated that:

    "Specific note should be made of the reference in
  paragraph 22 to defendant's plea of guilty to the
  criminal indictment. Title 15 U.S.C. § 16, by its
  terms, does not apply to `consent decrees,' but a
  plea of guilty cannot be construed as being a consent
  decree, any more than a crime can be consented to. A
  conviction of violation of the Sherman Act
  establishes `prima facie all matters of fact and law
  necessarily decided by the conviction and the verdict
  on which it was based' (Emich Motors Corp. v. General
  Motors Corp., 340 U.S. 558, 569, 71 S.Ct. 408, 95
  L.Ed. 534), and no logical distinction appears herein
  between a plea of guilty and a conviction after

(6) Plaintiffs further maintain that the references in the complaints to the Philadelphia criminal proceedings are proper. They contend that the weight of authority holds that a judgment or decree admissible as prima facie evidence, under Section 5(a) may be pleaded in the complaint.*fn8

(7) Motions to strike are not favored and will not be granted absent a showing of prejudice.*fn9

Plaintiffs point out that Congress saw fit, in the wording of the temporary proviso (no longer in effect) to use the word "criminal," as well as civil, proceedings and its omission from the proviso now in effect is extremely indicative of a positive intent to remove criminal consent judgments from the ambit of the proviso.*fn10 They further contend that since the main body of the section makes the judgment prima facie evidence as to matters to which there might be estoppel,*fn11 or to judgments or decrees entered under section 15a actions, it is indicative of a category of litigation other than those in which judgments on guilty pleas fall. They base this on the ground that pleas of guilty are admissible under the ordinary rules of evidence as admissions, and Section 15(a) concerns civil proceedings.

Plaintiffs trace the various versions of the Act with the differing phraseology, citing the fact that the conferees offered no written explanation for adding the two provisos which neither House had approved, and stating the "unreliability of such [Congressional] debates as a source from which to discover the meaning of the language employed in an act of Congress." (Lapina v. Williams, 232 U.S. 78, 90, 34 S.Ct. 196, 199, 58 L.Ed. 515 (1914)). Further, much of the colloquy cited as favorable to defendants' construction was that of antagonists of the legislation and therefore entitled to little weight or authority. (Mastro Plastics Corp. v. N.L.R.B., 350 U.S. 270, 76 S.Ct. 349, 100 L.Ed. 309 (1956); Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035 (1951)). Plaintiffs lucidly describe the Congressional colloquy as "particularly unreliable since precision of expression was not characteristic of these debates. * * * [M]ost of the statements in the debates are, at best, ambiguous."

In support of their contention that irrespective of the controversy revolving around the interpretation of the proviso, it is inapplicable in that testimony was in fact received in the prior government proceedings. They predicate this position on the equivalence of the words "testimony" and "evidence".*fn12 In fact, some of the Congressmen used the word "evidence" in speaking of the Conference Report. Plaintiffs go on to refute the affidavit of Howard J. Aibel, an attorney in the General Electric Company, which states that "pleas were entered and judgment entered thereon by the Court before any testimony had been taken" as hearsay, and misleading, in that it fails to disclose the pleas which were entered long before the "settlement negotiations." The Transcript of Proceedings in the criminal cases indicates, plaintiffs say, that evidence was presented to the Court both to induce the acceptance of nolo contendere pleas, and to attempt to prove mitigating circumstances in connection with sentencing. Further, they state that affidavits, verified statements, and various factual memoranda were submitted to the Philadelphia court. Also, during the course of the Philadelphia proceedings, counsel for various defendants made representations in open court as to various factual aspects of the cases, and "solemn admissions of counsel are considered evidence in the trial of a case."*fn13 They point out, and stress, that the proviso uses the word "any" in describing the amount of evidence taken as making the proviso inapplicable.

Defendants maintain:

(1) The statute precludes from the prima facie effect of judgments in prior governmental civil or criminal proceedings,*fn14 judgments based on "consent" which defendants, with a great deal of plausibility, assert include not only judgments on pleas of nolo contendere*fn15 but also judgments based on pleas of guilty, in that the purpose of the statute was to prompt defendants to capitulate and save the Government the cost of prosecuting to completion these protracted cases. Both judgments are based on the only consent needed — that of the defendant. There need not be mutuality of consent; the consent of the Government is not necessary — unilateral consent is enough.*fn16

(2) The statute gives only judgments prima facie evidentiary effect, and does not extend to pleading such judgments, let alone other matters involved in such prior suits.

(3) The pleadings here refer to judgments and allegations covering coconspirators not defendants here.

(4) The proviso should be interpreted to cover criminal as well as civil proceedings although criminal proceedings are not specifically referred to therein because the same phrase "judgments or decrees" is used in the main part of the section as well as in the proviso and should be given the same meaning.*fn17

(5) The Congressional history of the Act clearly demonstrates Congress intended to cover judgments based on guilty pleas in ...

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