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UNITED STATES v. AMERICAN RADIATOR & STD. SANITARY

August 9, 1967

United States
v.
American Radiator & Standard Sanitary Corp., et al. United States v. Plumbing Fixture Mfrs. Assn., et al.


Rosenberg, District Judge.


The opinion of the court was delivered by: ROSENBERG

This follows the decree for a preliminary injunction entered on July 28, 1967. This matter is here on four motions. The first motion was filed by the defendants in the two above entitled criminal actions to restrain and enjoin certain plaintiffs and party intervenors in civil actions, filed in the United States District Court for the Eastern District of Pennsylvania, from compelling the criminal defendants to file answers to the civil complaints and respond to discovery, particularly to interrogatories as filed in the civil actions.

 The second motion was filed by counsel for some of the plaintiffs and party intervenors in the Philadelphia actions to dismiss the first motion as here filed by the defendants. The third motion, also a motion for injunction, was filed after the argument was had on the first two motions, by counsel for all the individual defendants in one of the criminal cases, to enjoin the corporate and co-defendants in the criminal cases and their agents from filing answers to complaints in Philadelphia and from otherwise divulging any matters in such civil proceedings, which matters may be relevant in the two pending criminal cases. A petition for leave to intervene was then filed by the plaintiff Philadelphia Housing Authority and a motion to dismiss the individual defendants' motion for injunction was also filed. The defendants objected to this petition at this point because the plaintiffs had already been served on the first motion for injunction.

 I shall here identify the first motion as the (criminal) defendants' motion, as it comes from all the defendants in the two pending criminal actions in the Western District Court; the second motion as the (civil) plaintiffs' motion, as it comes from the party plaintiffs and intervenors in the Eastern District Court of Pennsylvania; the third motion as the individual (criminal) defendants' motion; and the fourth pleading as the plaintiffs' petition and motion.

 The facts in this case are simple. After an extensive grand jury investigation into activities of plumbing manufacturers throughout the United States, a grand jury at Pittsburgh, Pennsylvania, on October 6, 1966, presented two indictments, charging antitrust violations, against the defendants named in the two criminal actions. These are numbered 66-295 and 66-296. On the same date the United States also filed a civil action at No. 66-1184 in the District Court for the Western District of Pennsylvania, charging antitrust violations and seeking injunctive relief.

 The first indictment at Criminal No. 66-295 charges eight corporate defendants, a trade association and eight individual defendants, with engaging in a conspiracy, in violation of Section 1 of the Act of Congress of July 2, 1890, commonly known as the Sherman Act. The indictment charges, in substance, that the defendants conspired to fix the prices of enameled cast iron and vitreous china plumbing fixtures beginning sometime in September 1962 and continuing at least until sometime in 1966.

 The second indictment at Criminal No. 66-296 charges ten corporate defendants and their trade association with engaging in a conspiracy in violation of Section 1 of the Sherman Act, in that such defendants conspired to fix the prices of staple vitreous and china plumbing fixtures beginning in November 1960 and continuing to June 1962.

 On November 15, 1966, at the arraignment, all the defendants pleaded not guilty. Appearances of counsel had previously been entered for all the defendants. On November 3, 1966, an order was entered on agreement of all counsel to hold Civil Action No. 66-1184 in abeyance and to continue the same until further order of court.

 In the meantime, on December 21, 1966, in the District Court for the Eastern District of Pennsylvania, certain plaintiffs filed two civil actions at Nos. 41773 and 41774, based upon the indictments as found at Criminal Nos. 66-295 and 66-296 in this District, claiming treble damages against all corporate defendants.

 In the first numbered case the action was brought by the Philadelphia Housing Authority as a class action in behalf of "all state and municipal governments, governmental agencies, authorities and subdivisions which build or renovate homes and apartment dwellings . . ." In this proceeding the States of Alaska and Michigan and various municipal and political governments and subdivisions or their authorities proceeded to become party intervenors.

 The second numbered action was filed by Lindy Bros., Inc. of Philadelphia as a class action on behalf of "approximately 16,000 builders of home and apartment dwellings throughout the United States . . ."

 The record before me indicates that forty-nine parties have sought to become intervenors. Both civil actions in the Eastern District Court were assigned as protracted cases to Judge John W. Lord, Jr. A series of motions and a number of hearings were had before Judge Lord as they related to continuances or postponements by the defendants for the filing of answers to the complaints in these civil actions and to postponing or continuing of the time for the filing of answers to the plaintiffs' interrogatories or other discovery processes.

 A number of postponements were granted and Judge Lord, at my request, allowed still further time after the motion for injunction was filed here so that I could hear the parties and inquire into the voluminous pleadings and affidavits and briefs that had been presented to me during the time when I was away from my duties.

 Prior to these postponements, Judge Lord had, after filing a comprehensive Memorandum and Order, stated that the plaintiffs in the civil actions had certain rights which should not be prejudiced by any delaying actions of the defendants, and that the requirement for the defendants to answer the complaints and interrogatories did in nowise prejudice the defendants because protective rights would be available to them during the actual discovery processes. On June 7, 1967, he denied the defendants' motions for a stay of all proceedings. Since Judge Lord's continuance protected the defendants until July 31, 1967, an argument on the first two motions was ordered by me to be held July 24th.

 On June 30, 1967, all the defendants in both criminal actions filed a motion for injunction at Pittsburgh seeking to enjoin and restrain the plaintiffs and party intervenors in the civil actions at Philadelphia from compelling them as defendants in the civil actions to file answers either to the complaints or interrogatories, based upon practically the same reasons as were urged before Judge Lord. Immediately thereafter, counsel for the plaintiffs and party intervenors filed a motion to dismiss the defendants' motion, for the reasons (1) that service upon the lawyers of record was not service upon the parties; (2) that in any event it was not service upon all the defendants and intervenors; (3) that the Western District Court, being a court of concurrent jurisdiction could not oust the District Court for the Eastern District of Pennsylvania from its jurisdiction previously acquired; and (4) that the determination by Judge Lord being one based upon his discretionary power was in all events valid and the law of the case.

 At the July 24th hearing, *fn1" all arguments on the first two motions were heard. Counsel for the plaintiffs in the second motion were first heard on the question of jurisdiction, as they had indicated their desire to be heard, without submitting to the jurisdiction of this court.

 The defendants argued that Federal Rules of Criminal Procedure Nos. 4(c)(2), *fn2" 17(e)(1), *fn3" 49(b), *fn4" and 57(b), *fn5" vest every federal district court in criminal actions with power to protect and extend its jurisdiction throughout the United States, and that another source of power is the historic All Writs Act, 28 U.S.C. § 1651. *fn6" Their basic argument for relief was that they would be unduly burdened in being compelled to present a defense to the civil actions in Philadelphia, particularly as it related to the multitudinous and burdensome discovery there, while at the same time they were required to prepare their defenses to the criminal actions at Pittsburgh; and that they would be deprived of due process of law by a fair trial in these criminal proceedings, and be unduly prejudiced if they were compelled to present evidence against themselves or against the other co-defendants, if so compelled to do in the Philadelphia civil proceedings.

 During the argument counsel for the individual defendants (Criminal No. 66-295) suggested his likely intention of further protecting these individual defendants by a motion to enjoin the co-defendants from proceeding with discovery or pleading in civil actions at Philadelphia or elsewhere. This was filed on July 25th, and a hearing was set for July 28th. Argument was had, and the contentions of the movant individual defendants were essentially the same as those presented for the earlier motion for injunction. The individual defendants argued that any information which might be divulged by the officers of the co-defendant corporations would also prove prejudicial to their rights as defendants in the criminal case.

 The plaintiffs' counsel, who appeared on July 24th, Mr. David Berger and Mr. Aaron Fine, also appeared at the July 28th hearing and argued against the motions. At the same time, Mr. Fine presented a petition for intervention and a motion for the dismissal of the individual defendants' motion for injunctive relief on the ground that the motion presented no controversy within the requirement of Article III, Section 2 of the Constitution of the United States because no adversary issue was presented between the individual defendants as movants and the co-defendants whom they sought to enjoin and that, therefore, the motion was collusive.

 The first questions here then are (1) Do district courts have, under such circumstances as are here presented, jurisdiction to grant remedial aid to criminal defendants? If the answer to the above is "yes", then (2) What method is available for making service upon the necessary parties required to be enjoined?

 Both parties in their briefs and at the argument on July 24th referred to United States v. Simon, 262 F. Supp. 64 (S.D.N.Y., 1966), 373 F.2d 649, C.A. 2, 1967, cert. granted, sub. nom. Simon v. Wharton, 386 U.S. 1030, 18 L. Ed. 2d 591, 87 S. Ct. 1485 (1967). Each side has presented it as supporting the contentions of that side. The defendants point to it as authority for present jurisdiction here and as precedent for the granting of injunctive relief to threatened defendants charged with crime. The plaintiffs point to the reversal by the Court of Appeals for the Second Circuit of the District ...


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