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June 14, 1978


The opinion of the court was delivered by: DITTER

In this civil anti-trust suit, the Justice Department sought to prevent the acquisition of Chef Pierre, Inc. by Consolidated Foods Corporation. The complaint charged a violation of the Clayton Act, section 7, *fn1" and that jurisdiction in this court is conferred by section 15. *fn2"

On May 10, 1978, after an eight day trial, I issued an order denying all injunctive relief. The order was accompanied by my findings of fact and conclusions of law, and it was followed by a lengthy opinion which explains the merits of this case. *fn3" Upon entry of my order, the Government made a motion for a new trial, which I denied from the bench. I will now set forth my reasons for that denial.

 This litigation has had a brief but important history. On November 30, 1977, Consolidated Foods, a Maryland corporation with its principal place of business in Chicago, Illinois, and Chef Pierre, a Delaware corporation from Traverse City, Michigan, announced their plans to merge. This agreement was approved by the companies' boards of directors on January 30, 1978. Ratification by the Chef Pierre shareholders was required by April 30, 1978, since the agreement would expire on that date if the merger had not been consummated. Accordingly, a shareholders' meeting was scheduled to be held in Traverse City on April 17, 1978.

 The Department of Justice learned of the merger plan at the time of its announcement. Through its Philadelphia Anti-Trust Division, the department began an investigation by sending letters to the companies, as well as to many of their competitors, in order to ascertain what anticompetitive effect, if any, the proposed merger might have. The first of these letters was sent on December 7, 1977. Having gathered information by this method and through telephone calls, the Philadelphia office, on March 17, 1978, made its recommendation to the Department of Justice in Washington. Twenty-five days passed before a decision was made authorizing the bringing of suit. The next day, Thursday, April 13, 1978, the complaint that launched this litigation was filed. It charged that Consolidated's acquisition of Chef Pierre would substantially lessen competition and thereby violate section 7 of the Clayton Act. The Government sought a temporary restraining order and a preliminary injunction which would prohibit the defendants from taking any further steps toward consummating the merger. The complaint also requested that the defendants be permanently enjoined from carrying out the provisions of the merger agreement.

 At a conference in my chambers the following day, Friday, April 14, 1978, counsel for the defendants informed the court that due to the suit, the shareholders' meeting scheduled for April 17 had been postponed until April 28, 1978. In an effort to conclude this matter before that time, the defendants asked that the court invoke the provisions of Rule 65(a)(2) of the Federal Rules of Civil Procedure whereby a hearing on a preliminary injunction is consolidated with a plenary trial on the merits resulting in a final judgment. *fn4" Noting that the Government had allowed four and one-half months to pass before bringing this action, mindful of the pre-complaint discovery powers available to the Government, and conscious of the obvious hardship that delay would visit on the defendants, I granted their request and told the attorneys that trial would begin as soon as the case then before me was concluded. I also suggested that every effort be made to stipulate to as many facts as possible. Counsel assured me they would do so.

 The matter then on trial was completed the following Tuesday, April 18, and I met with counsel again to consider a motion filed by the Government to limit the hearing to matters pertaining to a preliminary injunction. I was told that a broad range of stipulations had been agreed upon, the issues had been narrowed tremendously, and that the Government's need to call 18 witnesses had been eliminated. Nevertheless, the Government said it needed more time because it had not as yet talked to all of its potential witnesses, one of whom was on vacation in Florida and another in Jamaica. The Government stated that this was a major anti-trust case involving a significant segment of the economy. It emphasized the interest of the public in these proceedings and submitted that the public had an important stake in the matter. *fn5"

 Still feeling that fairness to the defendants required a prompt decision on the merits, I directed that the case proceed on a consolidated basis starting the next day. I also said to the Government,

. . . if you find out you will have a problem despite your best efforts to bring these people in or get them in since they are in Florida or Jamaica or wherever they may be, we will then consider an appropriate request at that time.

 Later I added,

We will get started tomorrow on the basis of its being a consolidated hearing. If during the course of that hearing you bring to my attention the need for additional time and I am convinced that you need it, I will no doubt grant it to you . . . So we will get started tomorrow morning and if and when you find you can't stipulate as to matters and you find that people, wherever they may be, then come and tell me about it, say we have this fellow in Jamaica and we can't get anyone to Jamaica to bring him back, whatever.

 In the same vein I said,

I am not precluding the government from asking for additional time. If and when you get to the point where you find that you can't stipulate any further and if and when at that point you just can't get your witnesses in, I (will) want to know who the witnesses are and what you are expecting them to testify to and what efforts you have made to get them in. And I (will) want to know the facts necessary to make a decision.

 At no time did the Government ask for more time to produce a specific witness or exhibit. There was no suggestion that the defendants were unreasonably refusing to stipulate. Recesses, lunch breaks, and court hours were set to help ease whatever witness problem was brought to my attention. It is important to note that at no time prior to the trial, during the trial, or after the trial has the Government suggested any delay was attributable to the fact that either of the defendants had not supplied documents or information or entered into stipulations when requested to do so. *fn6" There was no suggestion that any company in the industry had withheld information or had failed to provide it promptly. In fact, the sole reason advanced for delay until the eve of Chef's shareholders' meeting was the meticulous care exercised by the Government in reviewing the information it received and in determining whether it should proceed with suit.

 The Government's motion for a new trial is based on the proposition that it was fundamentally unfair to proceed so quickly to an immediate trial on the merits. Specifically, ...

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