Reading Industries, Inc. v. Kennecott Copper Corp.

61 F.R.D. 662, 18 Fed. R. Serv. 2d 619, 1974 U.S. Dist. LEXIS 12644
CourtDistrict Court, S.D. New York
DecidedJanuary 23, 1974
DocketNos. 71 Civ. 1736, 71 Civ. 1737
StatusPublished
Cited by17 cases

This text of 61 F.R.D. 662 (Reading Industries, Inc. v. Kennecott Copper 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
Reading Industries, Inc. v. Kennecott Copper Corp., 61 F.R.D. 662, 18 Fed. R. Serv. 2d 619, 1974 U.S. Dist. LEXIS 12644 (S.D.N.Y. 1974).

Opinion

LASKER, District Judge.

These companion actions are brought by several fabricators of copper products against five copper producers (the principal defendants) and some of their subsidiaries (fabricators producing certain products which compete with products manufactured by plaintiffs). The complaints in the two actions are similar, and for purposes of the present motions will be referred to collectively. The extensive complaint is divided into three counts. Count I charges that defendants, since at least 1964, have conspired to attempt to monopolize, and monopolized, the production and sale of copper and myriad (but unspecified) fabricated copper products, in violation of the Sherman Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2.- Count II alleges, with regard to each principal defendant, that its acquisitions of fabricating facilities violates § 7 of the Clayton Act, 15 U.S.C. § 18. Count III alleges that since at least 1964 defendants have unlawfully discriminated as to price in the sale of fabricated copper products in violation of the Robinson-Patman Act, 15 U.S.C. § 13.

Defendants, by parallel motions, move for a separate and later trial of Count II of the complaint pursuant to Rule 42(b), Federal Rules of Civil Procedure, and to defer discovery on it, reserving determination whether there should be separate trials of the Clayton Act claims against each of the five principal defendants.

I.

Plaintiffs advance the somewhat circular view that since the complaint treats the Count I and II claims as interrelated, that they must be so considered for purposes of Rule 42(b), and that in any event the elements of proof required by each count are so similar (for example, as to questions of the relevant market and line of commerce) that separate trials would be substantially duplicative.

They rely primarily on Utah Gas Pipe Lines Corp. v. El Paso Natural Gas Co., 233 F.Supp. 955, 962 (D.Utah 1964) for the proposition that Sherman Act and Clayton Act claims generally require similar proof and a unified trial. However that case is distinguishable: it involved many fewer parties, less complex claims, and the court found that as pleaded, the Clayton Act claim was insufficient so the Rule 42(b) motion was moot.

Plaintiffs also cite Reliable Volkswagen Sales and Service Company, Inc. v. Worldwide Automobile Corp., 34 F.R.D. 134, 138-139 (D.New Jersey, 1963) a [664]*664treble damage action charging a conspiracy to monopolize the retail sale of Volkswagen automobiles. In Volkswagen the court denied a Rule 42(b) motion for separate trial of the issue of the relevant market, holding that the monopoly claims were “inextricably woven” with the question of relevant market. That case also differs from the present case since only Sherman Act claims (none were brought under the Clayton Act) were brought against a single principal defendant (the other defendants were Volkswagen retail dealers) for restraint of trade in a relatively discrete product —Volkswagens and spare parts for them.

Plaintiffs cite no case, and we are aware of none, which in a single trial disposed of multi-defendant Sherman Act conspiracy claims, as well as Clayton Act claims that each defendant acting alone illegally acquired other, non-defendant companies.

II.

Rule 42(b) vests discretion in the court to order separate trials of claims “. . .in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy . . .”. In Xerox Corp. v. Nashua Corp., et al., 57 F.R.D. 25 (S.D.N.Y.1972) we noted that earlier decisions applying Rule 42(b) stressed the following factors: (1) are the issues sought to be separately tried significantly different from one another? (2) are the issues triable by jury or the court? (3) does the posture of discovery as to the respective issues suggest that they should or should not be tried together? (4) will the separate issues require the testimony of different witnesses and documentary proof? (5) will the party opposing the severance be prejudiced if it is granted? See Components, Inc. v. Western Electric Co., 318 F.Supp. 959, 966ff and cases cited therein (D.C.Me.1970), Metal Film Company v. Metlon Corp., 272 F.Supp. 64 (S.D.N.Y.1967), Transmirra Products Corp. v. Monsanto Chemical Co., 27 F.R.D. 482 (S.D.N.Y.1967).

Consideration of similar factors in the present lawsuit indicates that a separate trial of Count II is much the wiser course. Counts I and III relate to the copper production and fabrication markets from about 1964 to 1970 and claim that defendants increased the price of copper, restricted production, and subjected independent fabricators to a “price squeeze,” putting them at a comparative disadvantage vis-a-vis the integrated copper company defendants. Count II, the Clayton Act claim, incorporates the allegations of Count I (by Paragraph 30), and alleges that defendants obtained their fabricating subsidiaries, divisions or affiliates “by a series of mergers and acquisitions beginning as early as the 1920’s” (Complaint, Count II, Paragraph 32) and that the acquisitions and mergers have been instrumental in enabling defendants to engage in the acts alleged to violate the Sherman Act (Complaint, Paragraph 34). The relief sought includes the award of treble damages, injunctive relief and (as to Count II) multiple divestitures that would, in effect, restructure the copper industry.

Returning to the factors outlined in Xerox, supra, it seems clear, first, that the Count II issues are significantly different from those of Counts I and III. Count I alleges a number of overt acts undertaken by defendants acting in concert in the period 1964-70. Count III (the Robinson-Patman claim), though not a conspiracy claim, directly relates to the same alleged pattern of anti-competitive market activity, and apparently reaches back only to 1966, by operation of the statute of limitations.

Count II, however, makes the significantly different claims that each of the principal defendants obtained its fabricating subsidiaries or affiliates by a series of mergers beginning as early as the 1920’s, whose effect was substantial[665]*665ly to lessen competition in the production and sale of copper and various fabricated copper products. While we agree with plaintiffs that adjudication of all three counts requires determination of the relevant markets — a complex enterprise even as to a single claim — it is obvious that the relevant markets for the Clayton Act claims which relate to periods reaching back into the 1920’s, may be very different from the relevant market for purposes of Counts I and III relating to the period 1964-70.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dallas v. Goldberg
143 F. Supp. 2d 312 (S.D. New York, 2001)
Monaghan v. SZS 33 Associates, L.P.
827 F. Supp. 233 (S.D. New York, 1993)
Ismail v. Cohen
706 F. Supp. 243 (S.D. New York, 1989)
Sound Video Unlimited, Inc. v. Video Shack Inc.
700 F. Supp. 127 (S.D. New York, 1988)
Ropfogel v. Wise
112 F.R.D. 414 (S.D. New York, 1986)
United States Football League v. National Football League
634 F. Supp. 1155 (S.D. New York, 1986)
Barr v. Dramatists Guild, Inc.
573 F. Supp. 555 (S.D. New York, 1983)
Union Bank of Bavaria v. Belk
510 F. Supp. 1117 (W.D. North Carolina, 1981)
Hospital Building Co. v. Trustees of Rex Hospital
86 F.R.D. 694 (E.D. North Carolina, 1980)
Organic Chemicals, Inc. v. Carroll Products, Inc.
86 F.R.D. 468 (W.D. Michigan, 1980)
Jones v. Orenstein
73 F.R.D. 604 (S.D. New York, 1977)
Washington Whey Co. v. Fairmont Foods Co.
72 F.R.D. 180 (D. Nebraska, 1976)
Triangle Industries, Inc. v. Kennecott Copper Corp.
402 F. Supp. 210 (S.D. New York, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
61 F.R.D. 662, 18 Fed. R. Serv. 2d 619, 1974 U.S. Dist. LEXIS 12644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reading-industries-inc-v-kennecott-copper-corp-nysd-1974.