United States District Court, Northern District of Illinois, E. D
February 9, 1966
STARVIEW OUTDOOR THEATRE, INC., AND DIAMOND REALTY, INC., PLAINTIFFS,
PARAMOUNT FILM DISTRIBUTING CORP., TWENTIETH CENTURY FOX FILM CORPORATION, WARNER BROS. PICTURES DISTRIBUTING CORP., UNIVERSAL FILM EXCHANGES, INC., COLUMBIA PICTURES CORPORATION, UNITED ARTISTS CORPORATION, BUENA VISTA DISTRIBUTION CO., INC., AMERICAN BROADCASTING-PARAMOUNT THEATRES, INC., BALABAN & KATZ CORPORATION, AND PUBLIX GREAT STATES THEATRES, INC., DEFENDANTS.
The opinion of the court was delivered by: Parsons, District Judge.
MEMORANDUM OPINION AND ORDER
I have before me a motion adopted by all defendants for the
entry of a pretrial order pursuant to Rule 16 of the Federal
Rules of Civil Procedure limiting the issue of damages at
trial to those alleged to have occurred after July 29, 1959.
In the alternative, these same defendants renew their motion
under Rule 56(d) of the Federal Rules of Civil Procedure for
partial summary judgment against the plaintiffs as to all
injuries which allegedly occurred prior to July 29, 1959.
On June 3, 1964, I denied defendants' previous motion for
partial summary judgment, and stated:
"It appearing from record that plaintiffs had
notice of alleged violations of antitrust laws by
defendants for purpose of preventing tolling of
applicable statute of limitations, but it not
appearing exactly when this notice attached, a
genuine issue of a material fact remains.
"Wherefore, defendant's motion for summary
judgment on ground that suit is barred by
applicable statute of limitations must be, and
the same hereby is, denied."
Since there are matters before me which were not made
available for consideration by me at the time of my denial of
defendants' original motion, I should consider at this time
their motion as renewed.
The complaint herein, filed July 29, 1963, seeks damages
against defendants under Title 15, U.S.C. § 15, for antitrust
violations allegedly occurring before July 29, 1959. Title 15,
U.S.C. § 15b provides in pertinent part that:
"Any action to enforce any cause of action
under sections 15 or 15a of this title shall be
forever barred unless commenced within four years
after the cause of action accrued. * * *"
There has been considerable confusion concerning the
formulation of the legal standard for determining whether the
statute of limitations bars part of this claim. Substantial
argument was devoted to an interpretation of my previous
ruling. It was cited for the proposition that "notice" and not
"knowledge" is what is required in order to prevent tolling of
the applicable statute of limitations. I cannot ascribe to
that position. I would be hard pressed to give precise
meanings to the words "notice" and "knowledge". Further, I do
not find that case law reflects a firm distinction. See: Pan
American Petroleum v. Orr, 319 F.2d 612
(5th Cir. 1963);
Philco Corp. v. Radio Corporation of America, 186 F. Supp. 155
One principle is clear: Plaintiffs are required to exercise
reasonable diligence in seeking to discover the existence of
alleged violations after being put on inquiry. What
constitutes "being put on inquiry"? I suppose, a certain
degree of notice, a certain amount of knowledge and some
reasonable suspicion. The verbal formula must be considered in
the context of a motion for summary judgment.
The defendants now contend that there is additional evidence
showing sufficient notice to plaintiffs of the existence of a
claim so as to charge them with due diligence in bringing suit
within the time prescribed by the statute of limitations.
Evidence in support of this contention consists of: (1) a
lawsuit brought by Starview in 1949 against some of the same
defendants who are now before me with allegations similar to
those in the present controversy; (2) depositions of
plaintiffs' officers and shareholders; and (3) correspondence
between plaintiffs' attorney and the Antitrust Division of the
Department of Justice.
The following facts are not in dispute:
On May 17, 1957, counsel for plaintiffs wrote a letter to
Victor R. Hansen, Assistant Attorney General, Antitrust
Division, Department of Justice, which states in pertinent
part as follows:
"* * *
"It appears to us that Balaban & Katz
Corporation is clearly engaged in a plan to
monopolize the supply of motion pictures
available for showing in Elgin by buying more
pictures than are required by the reasonable
needs of the Crocker."
The letter from the Assistant Attorney General in response
to the letter from plaintiffs' counsel concluded that the
award of bids for certain pictures to the Crocker Theatre was
based upon a reasonable evaluation. It does not follow,
however, that the response contained in the letter from the
Assistant Attorney General negatived plaintiffs' knowledge of
alleged antitrust violations reflected in the letter by
The pleadings filed by the same plaintiff, Starview, in
1949, and subsequently amended on February 7, 1951, have been
quoted in part within the answering brief of certain
defendants in support of the motion pursuant to Rule 56(d). A
comparison of the complaint filed in the prior litigation with
the complaint in the controversy before me reveals a marked
similarity of allegations with the exception of Paragraphs
22(c) and 22(b).
I conclude from the resemblance of pleadings that plaintiffs
were chargeable with knowledge in the early 1950s which caused
them to institute proceedings in an action substantially
similar to the one presently before me. I find that the
depositions of George H. Reckas, Harry J. Reckas, and Betty
Reckas, the principal
officers of plaintiff corporation, buttress my conclusion.
I do not find that there is an area of reasonable doubt
about the sufficiency of knowledge chargeable to plaintiffs.
The question is not merely when did notice of alleged wrong
doing attach. The motion for partial summary judgment raises
a question of what degree of notice is necessary in order to
bring into play a standard of due diligence.
Plaintiffs may not postpone suit until they have all of the
information necessary to prove an antitrust violation. Public
Service Co. of New Mexico v. General Electric Co.,
315 F.2d 306, 309, 312 (10 Cir. 1963), cert. den. 374 U.S. 809, 83
S.Ct. 1695, 10 L.Ed.2d 1033; Commonwealth Edison Co. v.
Allis-Chalmers Mfg. Co., 210 F. Supp. 557 (N.D.Ill. 1962),
aff'd 315 F.2d 558, 561 (7 Cir. 1963); Atlantic City Electric
Co. v. General Electric Co., 207 F. Supp. 620 (S.D.N.Y. 1962),
aff'd 312 F.2d 236 (2 Cir. 1962), cert. den. 373 U.S. 909, 83
S.Ct. 1298, 10 L.Ed.2d 411; Westinghouse Electric Corporation
v. Pacific Gas and Electric Company, 326 F.2d 575, 576 (9 Cir.
1964); General Electric Company v. City of San Antonio,
334 F.2d 480, 482 (5 Cir. 1964); Kansas City, Missouri v. Federal
Pacific Electric Co., 310 F.2d 271 (8 Cir. 1962).
After reviewing the similar pleadings in a suit filed in
1949 by the same plaintiff, as well as the correspondence and
depositions noted above, I am convinced that defendants'
motion pursuant to Rule 56(d) of the Federal Rules of Civil
Procedure is well founded.
I find that plaintiffs had sufficient notice of alleged
antitrust violations as of May 17, 1957. It was therefore
incumbent upon them to exercise due diligence in bringing suit
within the time prescribed by the statute of limitations.
Since I find that plaintiffs were put on inquiry more than
four years prior to the filing of this suit, I hereby grant
defendants' motion for summary judgment and limit the issue of
damages at trial to those alleged to have been incurred after
July 29, 1959. It therefore becomes unnecessary for me to
consider defendants' alternative motion for a pretrial order
pursuant to Rule 16 of the Federal Rules of Civil Procedure.
It is so ordered.
© 1992-2003 VersusLaw Inc.