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KEYSTONE RESOURCES v. AT&T

October 9, 1986

KEYSTONE RESOURCES, INC., Plaintiff,
v.
AMERICAN TELEPHONE & TELEGRAPH COMPANY, Western Electric Company, and Nassau Recycle Corporation, Defendants



The opinion of the court was delivered by: DIAMOND

 DIAMOND, J.

 Plaintiff Keystone Resources has sued defendants American Telephone & Telegraph ("AT&T"), Western Electric, and Nassau Recycle Corporation ("Nassau") under the antitrust laws, 15 U.S.C. §§ 1, 2, 15. Before us is defendants' motion for summary judgment. We hold that the statute of limitations, 15 U.S.C. §§ 15b, 16(i), bars Keystone's claim, and we grant summary judgment for the defendants. *fn1"

 I. Background

 In the early 1970s, Keystone recycled communications copper wire for Nassau, a subsidiary of Western Electric, at Keystone's plants in Mars, Pennsylvania; Greensboro, Georgia; and Newark, New Jersey. Keystone's plants were designed to recycle exclusively this scrap from Nassau. Nassau obtained the scrap from defendant AT&T and its Bell Operating Companies ("BOCs"). Since AT&T had a monopoly on the production of telecommunications equipment, it produced eighty percent of the telecommunications scrap in the United States.

 In 1976, Nassau opened its own scrap reprocessing facility in Gaston, South Carolina, to perform in-house the services previously done for Nassau by Keystone and other scrap reprocessing companies. According to Keystone, Nassau and its co-defendants conspired to accomplish this vertical integration with the intent to suppress competition. As a result, Nassau terminated its operations at Keystone's three plants by the end of 1979. Unable to obtain telecommunications scrap in profitable amounts, Keystone converted its Mars and Greensboro facilities to aluminum and zinc smelting and closed its Newark plant, all before May 1, 1980. The BOCs continued to offer scrap for competitive bidding, but Keystone did not bid. Nassau obtained a majority of the BOCs' recycling contracts.

 On May 1, 1984, more than four years after Keystone stopped recycling Nassau scrap, Keystone commenced this action.

 In this motion for summary judgment, defendants contend that Keystone did not commence this action within the four-year statute of limitations. 15 U.S.C. § 15b. Defendants assert that Keystone's cause of action accrued sometime in 1976, when Nassau opened its Gaston plant, and that Keystone's injury was final by the end of 1979, when Nassau ceased operations at Keystone's Newark plant. According to defendants, even if they committed further acts of monopolization after 1980, Keystone did not suffer new injuries that might give rise to new causes of action because Keystone did not and could not bid on any new scrap contracts after 1979.

 Defendants also contend that the one-year suspension period, 15 U.S.C. § 16(i), *fn2" brought into play by the United States' action against AT&T does not save Keystone's action. According to defendants, at the latest, the government action against AT&T ceased to pend on August 24, 1982, when Judge Greene approved the parties' consent decree and ordered the case closed. See United States v. American Telephone & Telegraph Co., 552 F. Supp. 131 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001, 75 L. Ed. 2d 472, 103 S. Ct. 1240 (1983). *fn3"

 In response, Keystone claims that additional overt acts of monopolization occurred after May, 1980, giving rise to causes of action within the four year limitation period. Keystone alleges that it wanted to bid on the BOCs contracts, but monopolization during this period, not defendant's pre-1980 acts, prevented Keystone from bidding on them. Further, Keystone submits that the government action continued to pend until Judge Greene approved the AT&T plan of reorganization on August 5, 1983. *fn4" See United States v. Western Electric Co., Inc., 569 F. Supp. 1057 (D.D.C. 1983), aff'd sub nom. California v. United States, 464 U.S. 1013, 78 L. Ed. 2d 719, 104 S. Ct. 542 (1983). Thus, Keystone timely commenced its action on May 1, 1984.

 II. The Pendency Toll

 The Third Circuit has not resolved the issue of when an action resulting in a consent decree ceases to pend for purposes of 15 U.S.C. § 16(i). In Shimazaki Communications, Inc. v. AT&T, 647 F. Supp. 10 (S.D.N.Y. 1986), Judge Duffy held that the United States v. AT&T litigation terminated on August 24, 1982, with the entry of the consent decree, and not with the subsequent approval of the final plan of reorganization. We are persuaded that Judge Duffy's decision is consistent with the legislative intent behind the tolling provision and the opinions of other courts interpreting it.

 Explanation of our decision requires a brief description of the United States government litigation against AT&T. These facts are not in dispute.

 In 1974, the federal government commenced an antitrust action against AT&T in the District Court for the District of Columbia before Judge Greene. That case proceeded to trial in 1981. After presentation of the government's case and most of the defendant's case, the parties filed a stipulation of dismissal on January 8, 1982. On the same day, the parties submitted a modification of final judgment in a 1949 antitrust action that had been terminated by entry and approval of a consent decree in the District ...


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