Westinghouse Electric Corp. v. Rio Algom Ltd.

473 F. Supp. 382, 26 Fed. R. Serv. 2d 847, 1979 U.S. Dist. LEXIS 15307
CourtDistrict Court, N.D. Illinois
DecidedJanuary 3, 1979
DocketMDL 342; No. 76 C 3830
StatusPublished
Cited by2 cases

This text of 473 F. Supp. 382 (Westinghouse Electric Corp. v. Rio Algom Ltd.) 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
Westinghouse Electric Corp. v. Rio Algom Ltd., 473 F. Supp. 382, 26 Fed. R. Serv. 2d 847, 1979 U.S. Dist. LEXIS 15307 (N.D. Ill. 1979).

Opinion

MEMORANDUM DECISION

MARSHALL, District Judge.

On October 15, 1976, Westinghouse Electric Corporation filed this antitrust action [385]*385against twelve foreign and seventeen domestic corporations engaged in various aspects of the uranium industry. All defendants were duly served with a summons and a copy of the complaint. Nine foreign defendants 1 based in Canada, England, Australia and South Africa failed to appear and answer or otherwise plead to the complaint. On February 2, 1977, a default was entered against each of them under Rule 55(a), F.R. Civ.P. On August 19, 1977 Westinghouse made two requests designed to implement that default. First, it requested entry of a final default judgment as to liability against the nine defendants, pursuant to Rules 54(b) and 55(b). Second, it requested the entry of detailed findings of fact and conclusions of law in support of that judgment, pursuant to Rule 52(a). In support of each request it submitted detailed proposed findings and conclusions. The appearing defendants opposed both requests, characterizing them as unauthorized, improper, unnecessary and prejudicial. The issues have been extensively briefed. We grant Westinghouse’s first request but deny the second.

I. The Motion for Entry of Final Default Judgments

The leading case on the propriety of a default judgment against fewer than all of the defendants in an action is Frow v. De La Vega, 15 Wall. 552, 82 U.S. 552, 21 L.Ed. 60 (1872). De La Vega sued Frow and thirteen other defendants in federal court claiming that Frow and seven of his codefendants jointly had conspired to defraud him out of a tract of land by using forged and spurious documents. All the defendants answered the complaint, except Frow. The trial court entered a “decree pro confesso ” against him. More than a year later, on plaintiff’s motion and over Frow’s objection and motion for leave to file an answer, the court entered a “final decree absolute” against Frow, declaring that title to the land belonged to plaintiff and awarding a permanent injunction against Frow. Following this decree, the court proceeded to try the merits of the action as to the remaining defendants, held in favor of those defendants, and dismissed the complaint as to them.

On Frow’s appeal from the final decree entered against him, the Supreme Court reversed. The Court was troubled by the “absurd” inconsistency between the two decrees, which alternatively sustained and rejected plaintiff’s claim of a joint fraud. To avoid this incongruous result, the Court ruled that:

The true mode of proceeding where a bill makes a joint charge against several defendants, and one of them makes default, is simply to enter a default and a formal decree pro confesso against him, and proceed with the cause upon the answers of the other defendants. The defaulting defendant has merely lost his standing in court. He will not be entitled to service of notices in the cause, nor to appear in any way. He can adduce no evidence, he cannot be heard at the final hearing. But if the suit should be decided against the complainant on the merits, the bill will be dismissed as to all the defendants alike — the defaulter as well as the others. If it be decided in the complainant’s favor, he will then be entitled to a final decree against all. But a final decree on the merits against the defaulting defendant alone, pending the continuance of the cause, would be incongruous and illegal.

82 U.S. at 554. If, then, the alleged liability is “joint,” a “final decree” should not be entered against a defaulting defendant until all of the defendants have defaulted, or until the case is tried as to the remaining appearing defendants. In the present case, the appearing defendants contend that the Frow rule prohibits the entry of a default judgment against any of the defaulting defendants until a trial is held on the merits.

Application of the Frow rule to the present case presents two interpretive prob[386]*386lems. The first is created by the Court’s use of now-obsolete terminology. The Court approved the entry of “a default and a formal decree pro confesso," but not a “final decree,” against the defaulting defendant. If, as Westinghouse argues, a “formal decree pro confesso ” is the equivalent of the modern Rule 55(b) default judgment as to liability, then its motion is well taken. If, however, a “formal decree pro confesso” is the equivalent of the modern Rule 55(a) entry of default, and the Court intended by its prohibition of a “final decree” to prohibit the equivalent of a modern default judgment, then Frow seems to require that the motion be denied. The second interpretative problem is to define the language which states that the rule is to apply “where the bill makes a joint charge against several defendants.” We must determine what the Court meant by using the term “joint” liability, and whether the Westinghouse complaint raises comparable allegations.

We direct our attention first to an examination of the antiquated equity language concerning default decrees. The Frow procedure endorsed the entry of a “formal decree pro confesso ” but proscribed a “final decree on the merits.” The distinction between these two decrees was elucidated in Thomson v. Wooster, 114 U.S. 104, 109-14, 5 S.Ct. 788, 29 L.Ed. 105 (1885). Although in Thomson Justice Bradley (who also authored Frow) employed a somewhat different terminology, and described the difference between “an order taking a bill pro confesso ” and a “decree pro confesso,” the corresponding effect of the two steps were the same.

We may properly say, therefore, that to take a bill pro confesso is to order it to stand as if its statements were confessed to be true; and that a decree pro confesso is a decree based on such statements, assumed to be true . . . and such a decree is as binding and conclusive as any decree rendered in the most solemn manner. “It cannot be impeached collaterally, but only upon a bill of review, or [a bill] to set it aside for fraud.”

114 U.S. at 111-12, 5 S.Ct. at 792. He later compared these definitions to corresponding sections of the then-extant Federal Equity Rules. Thus, the 18th Rule governed the taking of a bill pro confesso and provided that if the defendant failed to make a timely response to the complaint, the plaintiff “may at his election, enter an order (as of course) in the order book, that the bill be taken pro confesso, and thereupon the cause shall be proceeded in ex parte" and the matter of the bill may be decreed by the court after the expiration of thirty days, if appropriate. Then the 19th Rule “declare[d] that the decree rendered upon a bill taken pro confesso shall be deemed absolute . . .” Id.

These two rules in turn corresponded to Rules 16 and 17 of the Equity Rules of 1912, the direct precursors of today’s Rule 55. 10 Wright & Miller, Federal Practice & Procedure: Civil, § 2681 at p. 247 (1973); 6 J. Moore, Federal Practice, ¶ 55.02[2] (2d ed. 1976). Rule 16 tracked the 18th Rule as described by Justice Bradley and referred to that procedure as a “decree pro confesso.”

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Related

In Re Uranium Antitrust Litigation
473 F. Supp. 382 (N.D. Illinois, 1979)

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473 F. Supp. 382, 26 Fed. R. Serv. 2d 847, 1979 U.S. Dist. LEXIS 15307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/westinghouse-electric-corp-v-rio-algom-ltd-ilnd-1979.