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Williamson v. Columbia Gas & Electric Corp.

December 28, 1950


Author: Goodrich

Before GOODRICH, KALODNER and HASTIE, Circuit Judges.

GOODRICH, Circuit Judge: This case involves the application of the rules of res judicata to a civil suit brought by the plaintiff, through its trustee in bankruptcy, for injuries alleged to have been sustained because of the defendant's violation of the antitrust laws.

This action, which we shall call action No. 1, was begun on February 14, 1938. It charged that the defendant, conspiring with certain other persons, had, in violation of the provisions of the anti-trust laws,*fn1 inflicted great injury upon the plaintiff. But as the complaint was amended it sought recovery against Columbia Gas and Electric Corporation alone, although other parties were named as having conspired with Columbia in the various transactions of which complaint is made.

Subsequently, on September 16, 1938, the plaintiff brought in the same court (the United States District Court for the District of Delaware) another action against the defendant charging injury in violation of the anti-trust laws.*fn2 This we shall call action No. 2. In this action the charge did not read in terms of conspiracy but alleged Columbia alone as the wrongdoer.

Thus we have two actions pending by the same plaintiff against the same defendant in the same court, each involving a suit for recovery of injuries alleged to have been sustained by action on the part of the defendant in violation of the anti-trust laws of the United States. Later to be examined is the identity, or substantial identity, of these suits.

The No. 2 action came to a conclusion first. On April 29, 1939, the court ordered "That the complaint in the * * * cause be and it hereby is dismissed. * * *"*fn3

The whole question with which we have to do in this case involves the effect of this judgment for the defendant upon the plaintiff's No. 1 action. In the District Court, the defendant moved to dismiss action No. 1 because of its victory in action No. 2. The motion was granted and the plaintiff appeals. Our discussion of the main question will be divided into consideration of the several issues presented.

Assume for the moment that the subjectmatter of action No. 1 is identical with subject-matter No. 2 so as to amount to the same "cause of action." Then we have two questions which may be disposed of first to clear the way for the most difficult thing about the case which is the assumption of identity just stated. The two questions are: (1) Does it matter for purposes of application of res judicata that the No. 2 action, later begun, was finished first? The answer to this question is no. The point is so well settled on authority that it is not a serious matter of contention in this case.*fn4 (2) The second question is, what of the fact that the recital contained in the order of dismissal, already quoted in the margin, mentioned a stipulation between the parties and the further fact that that stipulation had to do with the time in which the alleged cause of action accrued?

Here is what had occurred. Prior to the dismissal of action No. 2 the parties had entered into a stipulation. That stipulation provided that "The alleged right of action sued upon in this cause accrued not later than January 1, 1931." It was further agreed that if the court should consider the action barred by any applicable statute of limitations the pending motion to dismiss was to be granted. The plaintiff's theory at that time was that his action was not barred by the Delaware statute of limitations, and he evidently felt sufficiently confident of his position to enter into the stipulation which posed the legal issue of its correctness.

Subsequent event proved plaintiff's theory to be incorrect. Both the District Court and this Court held that the Delaware statute was applicable and the plaintiff's suit was begun too late.*fn5

Does the fact that the judgment was entered for the defendant in action No. 2 on the basis that the action was barred by lapse of time preclude the application of res judicata to action No. 1, still assuming that the causes of action are identical? The answer to this question is likewise no. The adjudication in favor of the defendant operates as a bar to another suit on the same cause of action in the same jurisdiction.*fn6 The fact that the case was tried upon stipulation of fact does not make it any the less a final adjudication of the plaintiff's claim.

With these minor points out of the way we now get to the main question in the case which was hypothetically assumed in the discussion just preceding. That question is whether action 1 and action 2 are substantially identical. If they are the rule of law is clear enough. "Where a valid and final personal judgment is rendered on the merits in favor of the defendant, the plaintiff cannot thereafter maintain an action on the original cause of action."*fn7 The general principle is well known and undisputed. The difficulty comes in its application to varying sets of facts.

The best way to find out what is involved in the two actions is to look at the claims made by the plaintiff. Neither case went to trial on the facts so all we have is what the plaintiff charges, plus the supplementary affidavits, motions, and the like, which led up to the action of the Trial Judge dismissing plaintiff's action No. 1. The plaintiff alleges its organization and entry into the gas business. It says that the defendant, seeking to crush out a competitor, acquired the controlling shareholder interest in the plaintiff company and proceeded to manipulate its affairs to the disadvantage of the plaintiff and the advantage of the defendant. It says that after the plaintiff went into receivership the defendant named and controlled the receiver and the final result was that the plaintiff was forced into bankruptcy. This is a general statement; no attempt has been made to particularize individual charges.

The complaint in action No. 1 alleged that all this had been done as part of a continuing conspiracy in violation of Sections 1 and 2 of the Sherman Act, but, as amended, named only Columbia as defendant. The complaint in action No. 2, filed 7 months later, alleged that all that had transpired was in violation of Section 4 of the Clayton Act. The information set forth in the two complaints is substantially identical, plaintiff merely using words of conspiracy in the first action and replacing them with allegations that defendant did the same things on its own or through its agents in the second action. The wrongful acts alleged on the part of the defendant and the damages alleged to have been sustained by the plaintiff are practically identical in both ...

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