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August 22, 1969

United States, Plaintiff
FMC Corp., Defendant

Higginbotham, J.

The opinion of the court was delivered by: HIGGINBOTHAM




 In this civil action the plaintiff, the United States of America, seeks to restrain and enjoin alleged violations of Section 1 of the Sherman Antitrust Act by the defendant, FMC Corporation (hereinafter FMC). Briefly summarized the complaint charges that, beginning in at least 1955, FMC and several other members of the so-called "chlor-alkali" industry engaged in a combination and conspiracy, which had as its object the elimination of price competition in the sale of chlorine, caustic soda and soda ash. The conspiracy is alleged to have taken the form of meetings, informal discussions, telephone calls and written correspondence. The complaint further alleges that the effect of the combination and conspiracy has been to unreasonably restrain interstate commerce by restricting and controlling competition among the co-conspirators; and the plaintiff therefore prays the Court to issue an injunction prohibiting further activities in pursuance of the conspiracy.

 The principal manifestations of the conspiracy were alleged to be:

 (1) Discussions and communications among the alleged conspirators leading to agreements to raise the prices of chlorine, caustic soda and soda ash in 1955 and 1956; of dry caustic soda in 1958; and of chlorine in 1960.

 (2) Collusive efforts in 1958 and 1960 to maintain at an artificially high level the previously (1956) fixed list price of liquid caustic soda, by means of tacit agreements to restrict discounts to selected industries and users.

 (3) Collusive attempts to maintain and perfect the freight equalization system used by the industry from a period of at least 1954 through 1958;

  (a) by conspiring not to recognize Linden, New Jersey, as an equalization point for chlorine and caustic soda;

 (b) by exchanging truck and barge rates which were not public information;

 (c) by agreeing on minimum quantities which would entitle customers to lower barge rates; and

 (d) endeavoring to eliminate any disparities in practice which might detract from the quotation of identical freight rates.

 The complaint as originally filed on December 24, 1964, named as defendants FMC and eight other chlor-alkali producers. But, prior to trial the eight defendants other than FMC entered into consent decrees with the plaintiff, thereby settling the proceedings against them, without however admitting the substantive allegations of the complaint. FMC, as it had the right, elected to go to trial, denying in all material respects the allegations of the complaint.

 The case was tried by the Court without a jury in a trial which lasted nineteen days. Diligent effort by counsel for both sides resulted in several stipulations which greatly facilitated the presentation of documentary evidence, thereby expediting trial of the issues.

 At trial an issue arose concerning the admissibility as substantive evidence in this case of testimony given by one of the plaintiff's key witnesses before a federal grand jury which investigated the chlor-alkali industry in 1961 and 1962, but failed to bring indictments. The court denied the plaintiff's motion to introduce the testimony as substantive evidence of the matters asserted therein under the past recollection recorded exception to the hearsay rule; but so that, if the case is appealed, the reviewing court may have the benefit of knowing what the court's findings would have been had the testimony been admitted into evidence, the court, pursuant to Rule 43(c), F.R.Civ.P., *fn1" and by agreement of counsel, made additional alternative findings based upon the excluded testimony.

 The court, after giving careful consideration to the pleadings and evidence, including exhibits and stipulations, the memoranda and briefs submitted by the parties, and the oral arguments of counsel, concludes that, with respect to certain elements charged in the complaint, the Government has sustained its burden of proving that there existed a combination and conspiracy which had as its purpose and effect the elimination of price competition in the sale of chlor-alkali products; but as to other elements of the complaint the Government failed to sustain its burden. In support of that holding, the Court now makes the following Findings of Fact and Conclusions of Law, separately stated.



 A. General Findings.

 (1) Defendant FMC Corporation is organized and exists under the laws of the State of Delaware and has its principal place of business and main office in San Jose, California.

 (2) Jurisdiction of the subject matter duly appears and proper venue of the defendants is not contested.

 (3) Except as otherwise stated or required by context, the facts herein found occurred or existed within the period from January 1, 1955 to December 24, 1964 (hereinafter referred to as the "period covered by the Complaint"), and occurred or existed within, and are limited to, the area of the Continental United States generally east of the Rocky Mountains.

 (4) The three "chlor-alkali" commodities - chlorine, caustic soda and soda ash - to which the allegations of the complaint refer, are sold and shipped in interstate commerce by the defendant FMC Corporation and by the other producers thereof with whom FMC competes in such commerce. (5) Although dismissed as parties to this action the eight other former co-defendants listed below were alleged by the government to be co-conspirators with FMC, and, for purposes of brevity, will be referred to hereinafter by the following abbreviated terms: Allied Chemicals Corporation Allied Diamond Alkali Company Diamond Dow Chemical Company Dow Hooker Chemical Corporation Hooker Olin Mathieson Chemical Company Olin Pennsalt Chemicals Corporation Pennsalt Pittsburgh Plate Glass Company Columbia Southern n2 Wyandotte Chemicals Corporation Wyandotte


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