City of New York v. General Motors Corp.

60 F.R.D. 393, 17 Fed. R. Serv. 2d 869
CourtDistrict Court, S.D. New York
DecidedAugust 9, 1973
DocketNo. 72 Civ. 4213
StatusPublished
Cited by19 cases

This text of 60 F.R.D. 393 (City of New York v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of New York v. General Motors Corp., 60 F.R.D. 393, 17 Fed. R. Serv. 2d 869 (S.D.N.Y. 1973).

Opinion

ROBERT L. CARTER, District Judge.

OPINION

The City of New York has moved, pursuant to Rule 23 of the Federal Rules of Civil Procedure and Rule 11A of the Local Rules of this court, for leave to proceed on behalf of all non-federal governmental units and instrumentalities in the United States which have purchased or have contributed to the purchase of city buses or bus parts, as defined in paragraph 6 of the complaint, during the period covered by this action. General Motors has moved to have George Reycraft, Esq. disqualified from representing the City on the ground that such representation is in violation of the Code of Professional Responsibility.

I.

The Motion for Class Action Determination1

Counsel for the City of New York have represented, on the basis of their discovery to date, that the class plaintiff seeks to represent includes between 200 and 300 non-federal governmental units and instrumentalities and that its membership is readily and precisely determinable. A preliminary list of 177 class members has been provided to the court and is attached hereto as an Appendix. The City has agreed to bear the cost of direct notice to each member of the class.

It is apparent that there are common questions of law and fact and that the [395]*395size of the class warrants a finding that joinder is impractical.2 Moreover, the court has no reason to doubt that the City of New York can and will provide fair and adequate representation to the other members of the class. Fed.R.Civ.P., Rule 23(a)(1), (2) and (4).

The defendant contends that differences among the class members regarding the manner of purchase and payment; the effect of the alleged monopolization upon physical, economic, environmental and sociological conditions; design specifications and the amounts paid make class action treatment inappropriate in this case. These factors at first blush, seem supportive of the defendant’s contention, but on full consideration it becomes clear that each of these local differentiations relates solely or primarily to the question of damages and will be of little or no relevance in determining plaintiff’s underlying claims.

The complaint alleges an unlawful, nationwide monopoly which operates to the detriment of every public body providing or financing bus systems in the United States. Should plaintiff succeed in proving that common claim, the complications which might arise by virtue of differences in the nature and extent of damages can be minimized by the establishment of separate proceedings to determine damages or by the determination of formulae for the assessment of damages sustained by various members of the class. Should plaintiff fail to prove its underlying claims, defendant would be spared relitigation of those issues by similarly situated potential plaintiffs. It is my judgment, therefore, that the claims of the City of New York are typical of those of the class and that class action treatment is permissible. Fed.R.Civ.P. 23(a) (3). Philadelphia Electric Company et al v. Anaconda American Brass Company, 43 F. R.D. 452 (E.D.Pa.1968); State of Iowa v. Union Asphalt & Roadoils, Inc., 281 F.Supp. 391 (S.D.Iowa 1968).

Defendant has argued that class action litigation is less appropriáte in cases which allege monopolization than in cases which allege a conspiracy to fix prices. Although a monopoly has been charged, there is nothing in the complaint which would suggest that we are dealing with anything less than a national market. Indeed, the City of New York has represented that “General Motors [was] at the time of filing [of] this complaint the only company which manufacture [d] new buses in the United States and [was] the principal, if not sole, supplier to the few other companies which assemble new buses in the United States from parts manufactured by others” (Complaint, ffll). Under these circumstances, it does not appear that an action on behalf of a national class is in any way inappropriate or that the claim of the plaintiff regarding the alleged monopolization is atypical. The possibility of establishing such subclasses as the facts may wárrant is not, however, precluded. Fed.R.Civ.P., Rule 23(c)(4).

Rule 23(b)(3) provides that where the requirements of subdivision (a) have been met, class action status may be conferred if

the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superi- or to other available methods for the fair and efficient adjudication of the controversy.

It is my view that the common underlying issue of liability pursuant to an unlawful, nationwide monopoly predominates over any questions as to the varying nature or amount of damages.

[396]*396The next consideration is assessment of the superiority of the class action as a means of resolving this controversy. Defendant has urged that this determination cannot properly be made until such time as suits are filed by other class members, arguing that class action status should not be conferred unless and until a number of members of the class manifest a definite and serious interest in litigating their claims. It is, however, inconceivable that other governmental units will not pursue such claims in the event that the class action motion is denied and the suit brought by the City of New York is, or appears likely to be, successful.

In this regard, the lesson of State of Illinois v. Harper & Row Publishers, Inc., 301 F.Supp. 484 (N.D.Ill.1969), is instructive. That case involved antitrust actions by various state and local government units to recover damages for the artificial inflation of the price of children’s library books. In 1969 the court ordered that the litigation proceed as a national class action after noting that:

In 1966’ there was a single suit purporting to be a class action. The entire litigation might have been concluded without further complexity. But defendants successfully opposed the class suit, with the result that lawsuits have blossomed throughout the country. Rather than the original handful of attorneys, lawyers are now so plentiful that the entire courtroom is filled at each pretrial conference. Section 1407 consolidation became mandatory. When returned for trial, the subsequently filed cases will consume substantial amounts of the transferor courts’ time. The prosepect of further intervention and joinder, combined with the inevitable proliferation of lawsuits, is inimicable to economical adjudication. 301 F.Supp. at p. 490.

Defendant’s remaining contention that Rule 23 treatment is only appropriate where the proposed class members are incapable of pursuing the litigation independently is without merit. The 1966 Advisory Committee’s Note to amend Rule 23 sets forth the following guiding considerations for review of a class action application made pursuant to subsection (b) (3):

The interests of individuals in conducting separate lawsuits may be so strong as to call for denial of a class action.

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Bluebook (online)
60 F.R.D. 393, 17 Fed. R. Serv. 2d 869, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-new-york-v-general-motors-corp-nysd-1973.