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New Jersey v. Morton Salt Co.

decided: December 8, 1967.

NEW JERSEY, STATE OF; COUNTY OF BERGEN; NEW JERSEY HIGHWAY AUTHORITY AND NEW JERSEY TURNPIKE AUTHORITY
v.
MORTON SALT CO.



Hastie, Freedman and Seitz, Circuit Judges.

Author: Seitz

Opinion of the Court

SEITZ, C. J.:

On June 28, 1965, the State of New Jersey instituted in the district court a private antitrust class action against seven corporations seeking treble damages and other appropriate relief because of their alleged violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2). Several parties were permitted to intervene as plaintiffs. The district court thereafter granted the partial summary judgment motions of certain defendants based on the applicable statute of limitations.*fn1 Plaintiffs were granted leave to appeal those judgments and this is the decision thereon.

On July 11, 1961, the United States of America instituted a civil antitrust action in the Federal District Court of Minnesota (hereafter "Minnesota case"). Only one of the appellees here, International Salt Company ("International"), was a named defendant therein. The defendants in the Minnesota action were charged with a continuing combination and conspiracy to restrain trade in interstate commerce in rock salt in violation of Section 1 of the Sherman Act and to fix prices and to submit collusive bids to governmental agencies and corporations in connection with the sale of rock salt. A consent decree was entered against International on November 4, 1963. On November 24, 1964, judgments on the merits were entered in that action against other defendants, including defendants in this case who are not appellees. Those judgments were affirmed by the Supreme Court of the United States on October 25, 1965. Morton Salt Company v. United States, 382 U.S. 44, 15 L. Ed. 2d 36, 86 S. Ct. 181 (1965).

In 1966, the present appellees, International, Winans Carter Corp., Winans Reliance Corp., C.G. Winans Co., Chas. Schaefer Sons, Inc., National Oil & Supply Co., and Cayuga Rock Salt Company, successfully moved for partial summary judgment in this action in the district court on the basis of the statute of limitations (15 U.S.C. § 15b), which provides that any action to enforce a claim of the present type is barred unless commenced within four years after the cause of action accrued.

With respect to the appellees other than International the district court concluded that the tolling statute, 15 U.S.C. § 16(b), had no application to them because they were not named as defendants or conspirators in the Government's Minnesota action. The appellants challenge the correctness of that interpretation. In reaching its conclusion that the statute applied only to named parties to the Government proceedings, the district court relied upon a decision of the New Jersey district court to that effect incorporated in an order in the case of New Jersey Wood Finishing Co. v. Minnesota Mining & Manufacturing. The order was apparently not appealed. In the present case the district court felt that it should adhere to the prior ruling in its district. However, it also relied upon cases elsewhere to the same effect.

We turn to the tolling statute. Section 16(b) provides:

"(b) Whenever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, but not including an action under section 15a of this title, the running of the statute of limitations in respect of every private right of action arising under said laws and based in whole or in part on any matter complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter: Provided, however, That whenever the running of the statute of limitations in respect of a cause of action arising under section 15 of this title is suspended hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued."

It is clear from the undisputed facts that if the quoted tolling provision was applicable to all the appellees, the summary judgments were erroneously entered here. We say this because § 16(b) tolls the statute during the pendency of Government proceedings and for one year thereafter. This action was, of course, commenced even before the termination of the Minnesota case. We address ourselves then to the question as to whether the statute of limitations was tolled as to such appellees.

We note immediately that Section 16(b) does not contain any language limiting its application on the basis of the identity of the defendants in the Government's antitrust action. Rather it is directed, to the extent indicated, to the preservation of "every private right of action," against the operation of the statute of limitations. And so Section 16(b) does not explicitly limit its operative effect to named parties or conspirators. That the absence of circumscribing language may have resulted from a deliberate Congressional intent is indicated by contrasting Section 16(b) with Section 16(a).*fn2 Section 16(a), dealing with the use of judgments or decrees obtained by the Government, explicitly limits their use to the defendants against whom they are obtained. We recognize that due process requires that Section 16(a) operate only against parties. But we think the language also suggests that had Congress intended to similarly limit the operation of Section 16(b), it had before it language appropriate to that end.

In pursuit of the proper interpretation of the tolling statute, we turn next to an examination of the Congressional purpose behind the enactment of the statute authorizing private antitrust actions. See Burnett v. N.Y. Central Railroad Co., 380 U.S. 424, 85 S. Ct. 1050, 13 L. Ed. 2d 941 (1965). In this way we gain a "feel" for the appropriate approach to the problem of construing the tolling statute. Of course, limitation statutes reflect the view that society as well as potential defendants have an interest in repose from litigation. But that factor may be outweighed when the implementation of some important Congressional purpose is involved. We think such a purpose is particularly apparent here. As the United States Supreme Court said in Minnesota Mining & Mrg. Co. v. New Jersey Wood Finishing Co., 381 U.S. 311, 14 L. Ed. 2d 405, 85 S. Ct. 1473 (1965), when considering this very section, Congress has expressed its belief that private antitrust litigation is one of the surest weapons for effective enforcement of the antitrust laws. See also Leh v. General Petroleum Corp., 382 U.S. 54, 15 L. Ed. 2d 134, 86 S. Ct. 203 (1965); and see Bruce's Juices v. American Can Co., 330 U.S. 743, 91 L. Ed. 1219, 67 S. Ct. 1015 (1947).

The Congressional history, as reflected in the Minnesota Mining case, gives further support to the view that the tolling provision was enacted for the benefit of private parties who were injured. This factor plus Congressional policy suggest most strongly that the tolling provision, if of doubtful meaning, should be interpreted in a way which will permit a determination on their merits of private claims in this area.

Certainly a purpose behind the tolling provision was to afford the private litigant, as against defendants in a Government action, the benefit, under restricted conditions, of a judgment or decree obtained by the Government. But Leh and Minnesota Mining make it clear that at least an equally important purpose behind the enactment of Section 16(b) was to permit private claimants to obtain the benefit of the evidence and legal rulings involved in the Government's action. If the tolling provision is not for the benefit of private individuals who have been damaged by the activities of entities which are not named in the Government action, that Congressional purpose will be in part frustrated. It could well mean that causes of action against purely private defendants would be barred even before the Government's action had ...


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