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LURIA STEEL & TRADING CORP. v. OGDEN CORP.

January 17, 1972

Luria Steel & Trading Corp. et al.
v.
Ogden Corp. et al.


Broderick, D.J.


The opinion of the court was delivered by: BRODERICK

BRODERICK, D.J.

 This matter is before the Court on defendants' motion for partial summary judgment based upon the statute of limitations. Plaintiffs have brought this antitrust suit under Section 4 of the Clayton Act, seeking treble damages by reason of alleged violations of Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act, in that plaintiffs, scrap metal dealers, have been injured by the business activities of defendants.

 The basic federal statute of limitations applicable specifically to treble damage actions under the antitrust laws is Section 4B of the Clayton Act, which provides that, "claims shall be forever barred unless commenced within four years after the cause of action accrued." 15 U.S.C. § 15b. The parties to this motion have agreed with plaintiffs that this action shall be considered as having been commenced on October 10, 1969. Accordingly, by the present motion defendants seek to bar all claims against them for the period prior to October 10, 1965 -- (the four-year statutory period).

 The principal questions presented by the motion are: (1) whether the running of the statute of limitations should be treated as having been suspended by reason of a Federal Trade Commission proceeding initiated in 1954, which proceeding continued to October 10, 1968, against certain of the named defendants, and (2) if so, against which of the named defendants.

 Plaintiffs, in opposing the instant motion, rely on § 5(b) of the Clayton Act (15 U.S.C. § 16(b)), which provides for the tolling of the four-year statute of limitations during the pendency of "any civil or criminal proceeding . . . instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws . . . and for one year thereafter." They argue that the instant suit was commenced within one year of the termination of the government action brought by the Federal Trade Commission under § 5 of the Federal Trade Commission Act and § 7 of the Clayton Act, and, therefore, they have a right to recover for violations of the antitrust law dating back to six years prior to the institution of this suit. *fn1"

 Defendants, on the other hand, argue that the tolling of the statute occurs only during the pendency of the Clayton Act action which was finalized on May 27, 1968, because defendants chose only to appeal the FTC Section 5 decisions to the United States Supreme Court. Since this occurred more than one year prior to the institution of the instant suit, the defendants contend that all claims except for the four years prior to the institution of this suit are barred. They further argue that in 1954 when the federal action commenced there was no federal statute of limitations or applicable tolling provision and, therefore, plaintiffs cannot rely on the FTC proceeding to toll the statute of limitations.

 In this Circuit a distinction has been drawn between a government action under the FTC Act to enforce the provisions of that Act and actions under the FTC Act to restrain Clayton Act violations. New Jersey Wood Finishing Co. v. Minnesota Mining and Manufacturing Co., 332 F.2d 346 (3rd Cir. 1964), aff'd, 381 U.S. 311, 14 L. Ed. 2d 405, 85 S. Ct. 1473 (1965). This distinction would appear to indicate that the Third Circuit is of the opinion that FTC actions to enforce FTC violations do not toll the statute of limitations, but that FTC actions to enforce the Clayton Act do. While plaintiffs have cited several cases which hold that governmental action to enforce violations of FTC Act tolls the statute, none of these were decided by the Third Circuit. See, Rader v. Balfour, 440 F.2d 469 (7th Cir.) cert. denied, sub nom. Alpha Chi Omega v. Rader 404 U.S. 983, 92 S. Ct. 44, 30 L. Ed. 2d 367 (1971); Lippa's, Inc. v. Lenox, Inc., 305 F. Supp. 182 (D.Vt. 1969); In Re Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, 333 F. Supp. 317 (S.D.N.Y. 1971). While we are impressed with the reasoning expressed in the above three cases, we are constrained to follow the apparent distinction recognized in the New Jersey Wood case. However, this distinction is of little significance in the case at bar because, for the reasons hereinafter stated, we reach the same conclusion under both lines of authority.

 Since it is clear that the Clayton Act proceedings before the FTC tolled the statute, we must determine whether the Clayton Act aspect of the FTC proceeding in the instant case should be deemed to have been finalized as of the time defendants chose not to appeal the Clayton Act adjudications -- i.e., May 28, 1968 (90 days after the date the Third Circuit denied rehearing) or October 14, 1968 (the date the United States Supreme Court denied certiorari Luria Bros. & Co. v. F.T.C., 393 U.S. 829, 89 S. Ct. 94, 21 L. Ed. 2d 100)).

 In deciding this issue of first impression, we rely on the language of the Third Circuit in New Jersey Wood, supra, where that Court stated:

 
it seems to us that FTC orders and FTC proceedings presently enjoy the efficacy of court proceedings for purposes of Section 5, and that in this appeal the FTC proceeding . . . to restrain a violation of Clayton Section 7, tolled the statute of limitations . . .

 We construe this statement to mean that once an FTC proceeding to enforce Clayton Act Section 7 has been instituted, the statute of limitations is tolled until the proceeding is finalized and not merely until the Clayton Act aspects are finalized. Consequently, we hold that the statute of limitations did not cease being tolled until the Supreme Court denied certiorari. This conclusion is reinforced by the admonition of the United States Supreme Court that § 5 (b) of the Clayton Act should be liberally construed. Minnesota Mining and Manufacturing Co. v. New Jersey Wood Finishing Co., 381 U.S. 311, 14 L. Ed. 2d 405, 85 S. Ct. 1473 (1965); Leh v. General Petroleum Corp., 382 U.S. 54, 15 L. Ed. 2d 134, 86 S. Ct. 203 (1965). Any other conclusion would require private plaintiffs to read all motions and papers filed in a government action. It would seem that private plaintiffs should be able to rely on the docket entries in the government's case. In the instant case the pertinent docket entries read as follows:

 
Notice of filing (on 5/24/68) of petition for writ of certiorari, by Luria Brothers & Co., Inc. received from Clerk of Supreme Court, filed. (S.C. No. 1463, October 1967) ...

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