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NOERR MOTOR FREIGHT v. EASTERN R. R. PRESIDENTS CO

July 21, 1953

NOERR MOTOR FREIGHT, Inc. et al.
v.
EASTERN R.R. PRESIDENTS CONFERENCE et al.



The opinion of the court was delivered by: CLARY

This action, a proceeding under the Sherman and Clayton Anti-Trust Acts, 15 U.S.C.A. § 1 et seq., was filed by the Pennsylvania Motor Truck Association, hereinafter called 'PMTA', and 37 individual operators of trucks in and through the Commonwealth of Pennsylvania, nearly all of whom are members of PMTA. The action is brought on behalf of themselves and all others similarly situated against Eastern Railroad Presidents Conference, hereinafter called the 'Conference', all of the railroads represented in the Conference, several present and past presidents of the said railroads individually, and Carl Byoir & Associates, Inc., hereinafter called 'Byoir', a publicity agent employed by the Conference. The suit asks for an injunction and treble damages. The railroads involved, approximately 35 in number, operate in the northeastern section of the United States, north of the Potomac and east of the Ohio rivers. The complaint alleges that in or about May of 1949 the defendant railroads embarked upon an illegal conspiracy to monopolize the business of transportation of freight and passengers in the northeastern section of the United States, the object of the conspiracy and concert of action of the defendants being to secure such a monopoly by destroying interstate competitive highway transportation including the businesses of the plaintiffs. Over 20 preliminary motions have been filed which may be grouped as follows:

(a) Motions to dismiss for failure to state a cause of action,

 (b) Motion of the Conference, an unincorporated association, to dismiss for improper venue, insufficiency of service of process, and lack of jurisdiction over the person,

 (c) Motions of various railroad corporation defendants to dismiss for improper venue, for lack of jurisdiction, or, in the alternative, to quash return of service of summons,

 (d) Objections to interrogatories,

 (e) Motions for more specific answers to interrogatories,

 (f) Motions to compel answers on discovery depositions.

 Since the three latter categories involve discovery matters, they will be treated separately in an order to be filed later. This opinion will discuss the first three sets of motions.

 (A) Motions to Dismiss for Failure to State a Cause of Action

 Motions by the Erie Railroad Company, Reading Company, New York, Chicago & St. Louis Railroad Company, R. W. Brown, Delaware, Lackawanna & Western Railroad Company, Joseph A. Fisher, Eastern Railroad Presidents Conference, The Virginia Railway Company, Wheeling & Lake Erie Railway, Chesapeake & Ohio Railway Company, and the Lehigh & -hudson River Railroad, have challenged the sufficiency of the complaint, contending that it is defective in that it fails to state sufficient facts upon which relief can be granted. Since these motions go to the fundamentals of the case, they will be first considered. In the determination of the motions, only the allegations of the complaint itself will be considered without regard to depositions subsequently taken.

 The complaint, briefly summarized, first identifies the parties and their respective relations to the transportation of passengers and freight in the northeastern section of the United States. Byoir is identified as a publicity agent with its principal office at 10 East 40th Street, New York City. Jurisdiction is averred under the Sherman and Clayton Acts, supra. The complaint then charges that in May of 1949 the defendants embarked upon an illegal conspiracy in violation of the anti-trust laws of the United States, the purpose of the conspiracy being to eliminate the plaintiffs and those similarly situated, as competitors in the field of the hauling of freight, and to carve out exclusive monopolistic spheres of operation in the freight transportation business of the United States, so that railroads would have a monopoly on freight hauling in interstate commerce. To that end, the complaint charges, the Conference appointed a committee on competitive transportation for the carrying out of the conspiracy and retained defendant Byoir as its public relations agent for the express purpose of effectuating the object of the conspiracy. Byoir in conjunction with the Conference and the railroads, acting through their presidents and/or trustees, embarked upon a campaign designed specially to impede the operation of the trucker plaintiffs in every possible way, and in pursuance thereof, among other things, vilified and defamed the plaintiffs by circulation to the public generally, to public officials, and to suppliers and customers of the plaintiffs, of false and malicious reports of and concerning the plaintiffs in their business of hauling freight; formed so-called 'independent' citizens groups organized to circulate false and malicious propaganda attacking the plaintiffs, in fact composed and prepared by Byoir on behalf of the railroads, but made to appear to emanate from such independent sources; sought to secure the passage of legislation favorable to the railroads and injurious to the truckers through the instrumentalities of the so-called 'independent organizations'; attempted to and actually prevented the passage of legislation in Pennsylvania favorable to the truckers by bribery of public officials and officials of independent organizations, all to the end that the defendants might bring about the destruction of the business of the plaintiffs and the elimination of them as competitors. The complaint further avers that this conspiracy has continued from 1949 to the present day, has resulted in disparaging the plaintiffs' business in the public mind, has created great public hostility to the plaintiffs, has interfered with the legitimate conduct of their business and the furtherance of their business, has resulted in increased cost to shippers and consumers, particularly in areas not served by the railroads, has increased the expense of operation by the plaintiffs, and finally has caused loss of accounts and profits and prospective profits to the plaintiffs.

 The motions to dismiss are based upon the ground that the complaint fails to allege facts constituting a cause of action under the Sherman or Clayton Acts in that (1) it fails to aver any specific damage to any individual plaintiff or to the public and (2) the defendants' activities complained of involve primarily attempts to influence legislation, which activities do not fall within the scope of the anti-trust laws and are within the protection of the First Amendment to the Constitution of the United States.

 In considering these motions, the Court must accept as true the allegations of the complaint and if the allegations of ultimate facts would justify a recovery then the motions should be overruled. The courts have consistently recognized the difficulty in anti-trust actions in setting forth in precise detail acts which constitute alleged violations of the anti-trust laws. In light of the liberality of pleadings permitted by the Federal Rules of Civil Procedure, 28 U.S.C., a pleader is not required to set out in detail the acts complained of nor the circumstances from which he draws the conclusions that violations of the Acts of Congress have actually occurred and the pleader has been damaged. Louisiana Farmers' Protective Union, Inc. v. Great Atlantic & Pacific Tea Co., 8 Cir., 131 F.2d 419. In determining the sufficiency of a complaint in a case of this nature, a plaintiff must be given liberal latitude in the pleadings, since it is inherent in such action that all of the details and specific facts relied upon cannot properly be set forth as part of the pleadings. Brownlee v. Malco Theatres, D.C., 99 F.Supp. 312.

 Considering first the contention of the defendants that their activities in attempting to influence legislation do not fall within the scope of the anti-trust laws, their argument in that regard may be briefly stated as follows. It is legal to attempt to influence legislation and, being legal, their activities to accomplish that end cannot be the basis of a charge of violation of the anti-trust laws. In making this contention the defendants miss the fundamental issue of an anti-trust case, whether there is concert of action for a purpose prohibited by the Acts, i.e., for the purpose of effecting a restraint of trade. The confusion of means and objective were commented upon by Chief Judge Forman in the case of Slick Airways v. American Airlines, D.C., 107 F.Supp. 199, at page 207:

 'The defendants misconceive the nature of the complaint by confusing the means allegedly used with the result to be achieved. * * * It is in this that they fall into error for these alleged acts rather constituted the means and methods by which the defendants conspired to ...


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