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PENNSYLVANIA v. LAKE ASPHALT & PETROLEUM CO.

June 5, 1985

COMMONWEALTH OF PENNSYLVANIA IN ITS OWN BEHALF, Plaintiff
v.
THE LAKE ASPHALT AND PETROLEUM COMPANY OF PENNSYLVANIA and ROBERT W. EHRHART, Defendants



The opinion of the court was delivered by: CALDWELL

 I. Introduction

 Defendants, Lake Asphalt and Petroleum Company (Lake) and Robert W. Ehrhart, President of Lake, filed a motion to dismiss plaintiff's complaint. Subsequently, plaintiff, the Commonwealth of Pennsylvania, filed an amended complaint, mooting some of the issues raised by defendants. Defendants dealt with this amended complaint in their reply brief to plaintiff's brief in opposition to the motion to dismiss. Defendants' motion is accordingly ripe for disposition.

 II. Background

 Plaintiff's complaint has two federal causes of action: (1) an antitrust claim for violation of the Sherman Act, 15 U.S.C. § 1; and (2) a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), pursuant to 18 U.S.C. §§ 1962(a) and (b). Pendent state claims are also made for fraud and breach of contract.

 All the claims arise from a series of transactions entered into by Pennsylvania and Lake between 1979 and 1981 for the purchase of bituminous emulsion, used in the repair and resurface of roadways. The Commonwealth alleges, inter alia, that the defendants and other co-conspirators agreed to allocate among Lake and other suppliers the sale of bituminous emulsion to the state. The co-conspirators, among other things, submitted collusive, non-competitive bids in support of their scheme.

 In connection with the fraud and contract claims, plaintiff claims that defendants illegally charged it higher prices for emulsion purchased from certain suppliers. The RICO claim is predicated upon the use of the mails in obtaining the higher prices.

 III. Discussion.

 We must bear in mind the following standard of review in disposing of the motion.

 
On a motion to dismiss, we must accept as true all well pleaded allegations of the complaint and resolve all reasonable inferences drawn from the allegations in the light most favorable to the plaintiff as the non-moving party. See Rogin v. Bensalem Township, 616 F.2d 680, 685 (3d Cir. 1980). We can dismiss plaintiff's claims only if it appears beyond a reasonable doubt that plaintiff cannot prove facts in support of its claim sufficient to entitle it to relief. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 444 (3d Cir. 1977).

 Pennsylvania v. Emulsion Marketing, Inc., No. 84-1551, slip op. at 3 (M.D. Pa. May 6, 1985) (Caldwell, J.) (brackets added).

 A. Statute of Limitations Defense.

 Defendants first contend that any antitrust claim accruing before March 27, 1981 is barred by the four year statute of limitations in the Clayton Act. 15 U.S.C. § 15b. Plaintiff asserts that the statute was tolled by defendants' fraudulent concealment of their illegal activities. To establish fraudulent concealment that would toll the statute, plaintiff must show that the defendants concealed the conduct complained of, and that plaintiff failed, despite the exercise of due diligence on its part, to discover the facts forming the basis of its claim. See In re Beef Industry Antitrust Litigation, 600 F.2d 1148 (5th Cir. 1979). Paragraph 18 of the amended complaint sets forth the alleged acts of concealment: (1) certification to the Commonwealth by the co-conspirators that bids had been made in an independent and non-collusive manner by the execution of the standard bid package; (2) submission of complementary bids; (3) meetings and phone calls prior to bid lettings to allocate the supply of bituminous emulsion to the Commonwealth; and (4) phone calls subsequent to the bid lettings to further the allocation process.

 Defendants argue that none of this conduct constitutes fraudulent concealment. Citing Overfield v. Pennroad Corp., 146 F.2d 889, 896 (3d Cir. 1944), they contend that "concealment which tolls the statute must be an affirmative, independent act of concealment; mere silence or nondisclosure, even by corporate officials is not enough." Here, defendants argue the alleged concealment consists only of acts in furtherance of the conspiracy itself. Further, the certification of non-collusion is a mere denial of wrongdoing, insufficient to toll the statute. Plaintiff takes the opposite position. It claims, citing Ingram Corp. v. J. Ray McDermott and Co., Inc., 495 F. Supp. 1321 (E.D. La. 1980), rev'd on other grounds, 698 F.2d 1295 (5th Cir. 1983), that it "is unnecessary to show affirmative acts ...


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