Commonwealth Edison Co. v. Allis-Chalmers Manufacturing Co.

245 F. Supp. 889, 9 Fed. R. Serv. 2d 16, 1965 U.S. Dist. LEXIS 9905, 1965 Trade Cas. (CCH) 71,549
CourtDistrict Court, N.D. Illinois
DecidedJuly 19, 1965
Docket61 C 1278 and 61 C 1689, 61 C 2180, 62 C 23, 65 C 170, 65 C 449-65 C 451, 65 C 544, 65 C 864, 65 C 865, 65 C 900, 65 C 920, 65 C 1000-1015 and 65 C 1129
StatusPublished
Cited by13 cases

This text of 245 F. Supp. 889 (Commonwealth Edison Co. v. Allis-Chalmers Manufacturing Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commonwealth Edison Co. v. Allis-Chalmers Manufacturing Co., 245 F. Supp. 889, 9 Fed. R. Serv. 2d 16, 1965 U.S. Dist. LEXIS 9905, 1965 Trade Cas. (CCH) 71,549 (N.D. Ill. 1965).

Opinion

ROBSON, District Judge.

The above captioned actions are part of the more than nineteen hundred related treble damage antitrust actions involving the electrical equipment industry which were filed throughout the country during the early 1960’s. 1 Plaintiffs in the instant cases are seeking damages for alleged overcharges on their purchases of power switchgear assemblies.

Seventeen of the twenty-one power switchgear assembly actions originally brought in this District have been dismissed. Twenty-seven additional power switchgear assembly cases have been transferred here from six other districts, one of which has been dismissed, leaving thirty suits pending. All of these actions have been consolidated for pre-trial purposes, and this Court has set one or more of them for trial on October 4, 1965.

Plaintiffs have moved pursuant to Rules 11 and 12(f), F.R.Civ.P., to strike defendant I-T-E Circuit Breaker Company’s defense of economic coercion. 2 Extensive pre-trial discovery has been completed and the cases are now entering the final pre-trial stages. Efficient handling of this complex litigation requires that the real issues in dispute be sharply delineated, and the immaterial issues eliminated. Though motions to strike are not favored by the federal courts, 3 they provide a useful and appropriate tool where the parties disagree only on the legal implications to be drawn from uncontroverted facts, or where questions of law are involved. To this end the *892 Court on March 2, 1965 entered Local Pre-Trial Order No. 4 which required I-T-E to file “a detailed written statement stating in separately numbered paragraphs all facts and contentions which relate to or bear on your defenses of ‘coercion, duress and compulsion * * * ’ and your inability to refrain from participating in the alleged conspiracy in this product line, or any attempts made by you to withdraw from the conspiracy in this product line.” 4

The Court has concluded that plaintiffs’ motions so strike should be granted for three reasons. First, economic coercion is not a legal defense to treble damage actions. Second, I-T-E has failed to assert facts sufficient to meet the legal criteria of economic coercion as developed through judicial decision. Third, this sanction should be imposed on I-T-E for failure to comply with Local Pre-Trial Order No. 4 and subsequent directions of the Court.

I. Legal Sufficiency of the Economic Coercion Defense in Treble Damage Actions„

I-T-E’s coercion defense attacks the heart of plaintiffs’ causes of action. For plaintiffs to recover from I-T-E in these cases they must first prove that I-T-E has violated the antitrust laws. The theory of the coercion defense is that a party who is forced to participate in an illegal conspiracy has not violated the antitrust laws. I-T-E alleges that its participation in the conspiracy resulted from economic coercion by the larger electrical equipment manufacturers, “(General Electric, Westinghouse and, from time to time, Allis-Chalmers)”, 5 and accordingly, that it has not committed the tort necessary to create liability to plaintiffs.

This result would overlook the significance of the following discussion in United States v. Paramount Pictures, Inc., et al., 334 U.S. 131, 161, 68 S.Ct. 915, 931, 92 L.Ed. 1260 (1948) (an equitable proceeding):

“There is some suggestion on this as well as on other phases of the cases that large exhibitors with whom defendants dealt fathered the illegal practices and forced them onto the defendants. But as the District Court observed, that circumstance if true does not help the defendants. For acquiescence in an illegal scheme is as much a violation of the Sherman Act as the creation and promotion of one.” (Emphasis supplied.)

Although it may be arguable that the economic coercion defense is less applicable in an equitable suit for remedial relief than in a punitive criminal or treble damage action, this Court has concluded that Paramount is binding precedent and, accordingly, that plaintiffs’ motions to strike should be granted. 6 I-T-E attempts to distinguish the word “acquiescence”, used in Paramount, from the “coercion, duress, and compulsion” inflicted upon it. The defense asserted in Paramount was that “illegal practices” were “forced” upon certain of the defendants. Similarly, here it is asserted that I-T-E has been coerced into various actions. The attempt to distinguish between “forced acquiescence” and “coercion” is pure semantics.

The defense of economic coercion has not barred recovery by treble damage *893 plaintiffs in any case reported to date. The Ninth Circuit commented on the defense in two treble damage actions. The first of these, Flintkote Co. v. Lysfjord et al., 246 F.2d 368, 375 (C.A.9 1957), was a suit by an acoustical tile contractor against a tile supplier (Flintkote), a contractor’s trade association and certain of its members. The complaint charged a conspiracy to monopolize the acoustical tile industry and a threat by the Association and its members to boycott Flint-kote’s products unless it discontinued supplying plaintiff. Holding that there was sufficient evidence to support the jury’s findings of Flintkote’s participation in the conspiracy, the Ninth Circuit relied on Paramount and stated:

“ * * * There was no direct evidence that Flintkote, as a seller of tile and not an installer, participated directly in that original conspiracy between the dealers, but there was evidence from which an inference might have been drawn by the trier of fact warranting the belief that the defendant Flintkote, through acting as supplier to the conspirators on some of the jobs, could have acquired knowledge of the conspiracy; and there was evidence which warranted the conclusion that Flint-kote, with such inferred knowledge, participated in the conspiracy, and aided it, by its refusal to sell to plaintiffs. If that refusal was not the result of the exercise of ordinary business judgment, but the result of threats made and pressure applied by members of the known conspiracy to and against Flintkote, the act of refusing to sell would constitute knowing participation. Because one is coerced by economic threats to participate in or aid and abet an illegal scheme does not excuse the actor.”

The Ninth Circuit made no reference to Paramount in Fox West Coast Theatres Corp. et al. v. Paradise Theatre Building Corporation, 264 F.2d 602, 605 (C.A.9 1958) (treble damage suit against six motion picture producers-distributors-exhibitors) which expressed the opposite view:

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245 F. Supp. 889, 9 Fed. R. Serv. 2d 16, 1965 U.S. Dist. LEXIS 9905, 1965 Trade Cas. (CCH) 71,549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commonwealth-edison-co-v-allis-chalmers-manufacturing-co-ilnd-1965.