resulted in a consent judgment entered before any testimony was
taken is not determinative. While the two procedures may be
equivalent for purposes of satisfying the requirements of a
criminal conviction, they obviously are different so far as
Section 5(a) is concerned.
Since it has been definitively established that guilty findings
or judgments entered upon plain pleas of nolo contendere are
consent judgments under Section 5(a), Commonwealth Edison Co. v.
Allis-Chalmers Mfg. Co., 323 F.2d 412 (7 Cir. 1963), cert. den.
376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659 (1964); City of
Burbank v. General Electric Co., 329 F.2d 825 (9 Cir. 1964), it
follows from the foregoing that similar judgments entered upon
pleas of nolo contendere coupled with express consent to the
entry of such findings or judgments are likewise. Accordingly,
the defendants' motion to strike paragraph 14 of the complaint,
and those portions of paragraphs 16 and 17 relating to the
criminal case, will be granted.
PLEADING THE PENDING CIVIL CASE
Plaintiffs suggest that the references in their complaint to
the civil case presently pending before Judge Marovitz of this
court, 63 C 1100, provide background information relevant to the
case at bar. As was said in International Shoe Machine Corp. v.
United Shoe Machine Corp., 315 F.2d 449, 457 (1 Cir. 1963), the
"cases recognize the principle that until there has been a
terminus to the litigation, the judgment or decree is not final
and may not be utilized as prima facie evidence."
The civil case before Judge Marovitz has not yet reached the
trial stage. It is well established that for a judgment to be
"final", as contemplated by section 5(a) of the Clayton Act, the
time to appeal must have run or the judgment affirmed by a court
of last resort. Twin Ports Oil Co. v. Pure Oil Co., 26 F. Supp. 366,
369 (D.Minn. 1939), aff'd 119 F.2d 747 (8 Cir. 1941), cert.
den. 314 U.S. 644, 62 S.Ct. 84, 86 L.Ed. 516 (1941). Further, if
the impact of a judgment not yet "final" in the sense
contemplated by the statute is "delusively imprecise",
International Shoe Machinery Corp. v. United Shoe Machinery
Corp., supra, surely the bare allegations relating to the
pendency of a suit have no place in the complaint and serve no
useful purpose. See also Sager Glove Corp. v. Bausch & Lomb
Optical Co., 149 F.2d 1, 3 (7 Cir. 1945). Paragraph 15 and all
references in paragraph 17 to the pending civil case, are
therefore ordered stricken from the complaint.
THE ALLEGATIONS OF FRAUDULENT CONCEALMENT
The defendants would also have the court strike the allegations
and claims set out in paragraphs 16 and 17 which relate to events
prior to June 20, 1959. In these paragraphs the plaintiffs assert
that "the conspiracy set forth [in the complaint] had been
fraudulently concealed by defendants by various means and methods
used to avoid the detection thereof", that, as a result of such
fraudulent concealment, until June 20, 1963, the date of filing
the criminal indictments in 63 CR 352 previously referred to,
plaintiffs had no knowledge thereof, and that the statute of
limitations was therefore tolled.
Defendants urge that these allegations are conclusionary,
thereby failing to meet the requirement of particularity of
pleading set out in Rule 9(b), F.R.Civ.P., and that the
allegations as to the existence of the conspiracy are not
allegations of fraudulent concealment sufficient to toll the
statute of limitations.
The pleadings allege secret meetings in hotels and even a
private residence at which the defendants allocated jobs and
fixed prices. They further charge that the decisions reached at
such meetings were communicated by telephone to other defendants
not present. By this means it is alleged that the decision as to
which defendant was to receive a particular job was effected
since other defendants either did not bid or submitted
bids calculated to insure they would not obtain the job.
Specifically, the complaint asserts that while bids on
plaintiffs' jobs were offered by several of the defendants, such
bidding was calculated to result in the particular contract in
question being awarded to the defendant previously selected at a
meeting of the alleged conspirators. Generally, the complaint
alleges that the procedures used were such as to make it
impossible for the plaintiffs to have knowledge of defendants'
That fraudulent concealment tolls the running of the four year
statute of limitations under the Clayton Act is well established.
Atlantic City Electric Co. v. General Electric Co., 312 F.2d 236
(2 Cir. 1962), cert. den. 373 U.S. 909, 83 S.Ct. 1298, 10 L.Ed.2d
411 (1963); Allis-Chalmers Mfg. Co. v. Commonwealth Edison Co.,
315 F.2d 558 (7 Cir. 1963); Kansas City v. Federal Pacific
Electric Co., 310 F.2d 271 (8 Cir. 1962), cert. den.
373 U.S. 914, 83 S.Ct. 1297, 10 L.Ed.2d 415 (1963); Public Service Co. v.
General Electric Co., 315 F.2d 306 (10 Cir. 1963), cert. den.
374 U.S. 809, 83 S.Ct. 1695, 10 L.Ed.2d 1033 (1963). There remains
only the question of whether the complaint is defective in its
allegations with respect thereto.
Rule 9(b) of the Federal Rules of Civil Procedure requires that
in averments of fraud, the circumstances constituting fraud shall
be stated with particularity. In the Court's opinion, the
allegations previously referred to meet that requirement. To
quote the decision upon which the defendants place their greatest
reliance, Kansas City v. Federal Pacific Electric Co., supra,
"When the antitrust laws are violated, the wrongdoers who are
successful in cloaking their unlawful activities with secrecy
through cunning, deceptive and clandestine practices should not,
when their machinations are discovered, be permitted to use the
shield of the statute of limitations to bar redress by those whom
they have victimized."
The instant complaint alleges the two elements set forth in the
Kansas City case, supra, 310 F.2d at 278, as required in a claim
of fraudulent concealment, "the use of fraudulent means by the
party who raises the ban of the statute and successful
concealment from the injured party." The pleadings being
sufficient to raise this issue, that portion of the defendants'
motion which seeks to strike the allegation of fraudulent
concealment and claims prior to June 20, 1959 is denied.
1. Defendants' motion to strike paragraphs 14, 15 and portions
of paragraphs 16 and 17 of the complaint is granted.
2. Defendants' motion to strike all allegations of fraudulent
concealment and all claims for acts of the defendants prior to
June 20, 1959 is denied.
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