New York City Transit Authority v. United States Steel Corp.

40 F.R.D. 333, 10 Fed. R. Serv. 2d 739, 1966 U.S. Dist. LEXIS 10166, 1966 Trade Cas. (CCH) 71,768
CourtDistrict Court, S.D. New York
DecidedMay 11, 1966
DocketNo. 66 Civ. 61
StatusPublished

This text of 40 F.R.D. 333 (New York City Transit Authority v. United States Steel 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
New York City Transit Authority v. United States Steel Corp., 40 F.R.D. 333, 10 Fed. R. Serv. 2d 739, 1966 U.S. Dist. LEXIS 10166, 1966 Trade Cas. (CCH) 71,768 (S.D.N.Y. 1966).

Opinion

MEMORANDUM

FRANKEL, District Judge.

On January 10, 1966, the New York City Transit Authority brought this treble-damage' action under Section 4 of the Clayton Act, 15 U.S.C. § 15. The complaint is stated to be filed “on behalf of the New York City Transit Authority, and all other public bodies and agencies, municipalities, governmental subdivisions, private persons, firms and corporations similarly situated * * * ” (par. 1.). Similarly, after stating that plaintiff is a public benefit corporation “engaged in the operation of a rapid transit railroad within the City of New York” (par. 2), the complaint asserts (par. S) that:

“The plaintiff is representative of a class consisting of all public bodies- and agencies, municipalities, governmental subdivisions, private persons, firms and corporations purchasing wrought steel wheels,, sometimes referred to as 'rolled steel wheels, for [335]*335use on passenger and'ffeight car's, subways and elevated rapid transit lines and electric railways, and brings this action as a class suit pursuant to Rule 23(a) (3) of the Federal Rules of Civil Procedure. The members of the class are so numerous as to make it impracticable to bring them all before the Court, and the plaintiff herein will fairly insure the adequate representation of the entire class. The rights of all members of the class to recover against the defendants for violations of the Sherman Act, as hereinafter alleged, are affected by common questions of law and fact and are sought to be vindicated by common relief.”

Briefly summarized, the complaint’s substantive charges are that defendants have been engaged in manufacturing and selling wrought steel wheels for rapid transit and other railroad ears; that such wheels are sold and shipped in interstate commerce to public and private railroad operators as well as manufacturers of passenger and freight cars; that from “at least as early as 1948 and continuing to at least 1962,” the defendants combined and conspired, contrary to Section 1 of the Sherman Act, as amended, 15 U.S.C. § 1, by agreeing to fix prices through a variety of specified devices and arrangements; that the conspirators made identical bids on wrought steel wheel contracts of both public and private users; that the defendants were indicted for the conspiracy on April 2, 1963, and convicted on various dates in 1963 and 1965; that plaintiff bought over $10,000,000 worth of wrought steel wheels from defendants during the period of the conspiracy; and that “plaintiff and all members of the class which it represents” were damaged by the excessive prices charged pursuant to the unlawful combination.

Less than two months after the Transit Authority sued, the City of New York moved under Rule 24, Fed.R.Civ.P., for leave to intervene as a plaintiff. The proposed complaint o'f the'City substan-' tially duplicates the Transit Authority’s in describing the alleged conspiracy, its techniques, the indictment and convictions, and the nature of the City’s injury. It alleges purchases by the City from defendants of more than $8,230,000 in wrought steel wheels during the period of the claimed conspiracy.

Within a week after the City’s motion, - Hudson Rapid Tubes Corporation moved to intervene as a plaintiff. Alleging that it succeeded in December, 1961, after a reorganization, to the rights of Hudson & Manhattan Railroad Company in an interstate-interurban rapid transit electric railway running between New York and New Jersey, this movant’s proposed complaint also duplicates in substantial measure that of the Transit Authority. It alleges (par. 20) that Hudson Rapid Tubes, its predecessors and their suppliers, during the period of the alleged conspiracy, “purchased from various of the defendants wrought steel wheels in a total amount exceeding $365,000.”

The defendants have not filed an answer to the Transit Authority’s complaint. Instead, they have (1) opposed the motions to intervene and (2) moved under Rule 12(f), Fed.R.Civ.P., “for an order dismissing this action as a class action under Rule 23(a) * * * on the grounds that the class as alleged is not a class within the meaning of Rule 23(a), that plaintiff is not such a person as will fairly insure adequate representation of the alleged class, and that the alleged common questions of law and fact are not sufficient to justify a class action * *

We were reminded the other day, just after these motions were argued, that the proper course with matters of this kind is to rule first on the motions for inter-' vention, then on the essentially “esthetic” motion to strike the class suit allegations. Lipsett v. United States, 359 F.2d 956 (2d Cir. 1966). Those instructions remain controlling until or unless the radically altered new Rule 23 becomes; [336]*336effective on July 1, 1966. Following them, we conclude that defendants’ contentions must be rejected.

1. The motions to intervene seem overwhelmingly right under Rule 24(b) (2). The proposed complaints are to a large extent copies of the unanswered original filed by the Transit Authority. The gist of all three is a detailed and enduring conspiracy concerned with a single type of product. The claims will have far more than one “question of law or fact in common.” It is highly probable that joinder will effect important economies in pretrial as well as trial proceedings.

Against the obvious points favoring joinder, defendants say three things: (1) that the movants for intervention have claims based upon entire cars bought from manufacturers who bought the wheels from defendants while the Transit Authority sues for wheels alone bought directly from defendants; (2) that the Transit Authority purchased on sealed bids whereas the proposed intervenors did not; and (3) that “there is a substantial question as to whether Hudson, its predecessor or its successor is the proper party to allege any claim against defendants.” Memorandum opposing intervention, p. 2.

As to the first point, both movants allege that they bought wheels alone as well as wheels on cars. To this extent at least, their claims are exactly like the Transit Authority’s. If this were not so, however, it would make no difference for present purposes. Defendants do not claim on the motions before us that purchasers of cars may not sue, cf. State of Missouri v. Stupp Bros. Bridge & Iron Co., 248 F.Supp. 169, 172-175 (W.D.Mo.1965); they say only that the “differences between the claims of purchasers of wheels from defendants and the claims of purchasers of cars from car manufacturers who were supplied with wheels by defendants are so great that, if purchasers of cars are permitted to intervene, the litigation would become broader and far more complex than it already is.” Memorandum opposing intervention, p. 3. To some extent defendants are undoubtedly correct. How much broader the litigation will become, and whether it will really be “far more complex” are matters on which we are entitled to be uncertain, perhaps even skeptical, at this early stage. What remains decisive now, at any rate, is that the central feature—the “integral core” —of the intervenors’ claims is the same single conspiracy. Weeks v. Bareco Oil Co.,

Related

Kainz v. Anheuser-Busch, Inc.
194 F.2d 737 (Seventh Circuit, 1952)
All American Airways, Inc. v. Elderd, Mayor
209 F.2d 247 (Second Circuit, 1954)
Julius Nagler v. Admiral Corporation
248 F.2d 319 (Second Circuit, 1957)
William Harris v. Palm Springs Alpine Estates, Inc.
329 F.2d 909 (Ninth Circuit, 1964)
Lipsett v. United States
359 F.2d 956 (Second Circuit, 1966)
State of Missouri v. Stupp Bros. Bridge & Iron Co.
248 F. Supp. 169 (W.D. Missouri, 1965)
Weeks v. Bareco Oil Co.
125 F.2d 84 (Seventh Circuit, 1941)
P. W. Husserl, Inc. v. Newman
25 F.R.D. 264 (S.D. New York, 1960)
City of Chicago v. Allen Bradley Co.
32 F.R.D. 448 (N.D. Illinois, 1963)

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40 F.R.D. 333, 10 Fed. R. Serv. 2d 739, 1966 U.S. Dist. LEXIS 10166, 1966 Trade Cas. (CCH) 71,768, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-city-transit-authority-v-united-states-steel-corp-nysd-1966.