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SOUTHERN PAC. COMMUNS. CO. v. AT&T

July 7, 1983

SOUTHERN PACIFIC COMMUNICATIONS CO., Plaintiffs
v.
AMERICAN TELEPHONE And TELEGRAPH CO., Defendant



The opinion of the court was delivered by: RICHEY

 The Court has before it a motion by plaintiff, Southern Pacific Communications Company ("SPCC") under Fed. R. Civ. P. 60(b)(6) to vacate judgment in the above-captioned case, 556 F. Supp. 825, an opposition by defendant, American Telephone and Telegraph ("AT&T") and the entire record herein. Plaintiff asserts two grounds for its motion. First, plaintiff claims that this Court is collaterally estopped from reaching the conclusions it reached in its 603-page opinion in this case by several rulings of the Honorable Harold H. Greene in United States v. American Telephone & Telegraph, 524 F. Supp. 1336 (1981) (denying motion to dismiss), 555 CCH Trade Reg. Rep. 1 (Aug. 11, 1982) (approving consent decree with modifications), No. 74-1698 (Aug. 24, 1982) (rendering Modified Final Judgment). Second, plaintiff argues that this Court is collaterally estopped from reaching the conclusions it reached to the extent that they conflict with the conclusions reached in the case of MCI Communication Corp. v. American Telephone & Telegraph, No. 74-C-633 (N.D. Ill. 1980), aff'd in part and rev'd in part, 708 F.2d 1081 (7th Cir. 1983). In support of these contentions, plaintiff has invoked principles of common law and § 5(a) of the Clayton Act. Because the Court is convinced that plaintiff has not properly invoked the doctrine of collateral estoppel or § 5(a), plaintiff's motion will be denied. *fn1"

 I.

 UNITED STATES v. AMERICAN TELEPHONE & TELEGRAPH HAS NO COLLATERAL ESTOPPEL EFFECT

 The case of United States v. American Telephone & Telegraph, which plaintiff seeks to rely upon, resulted in the entry of a consent decree settling the government's claim against AT&T. Plaintiff relies on two different parts of that action which was before the Honorable Harold H. Greene: (a) Judge Greene's opinion denying defendant's motion for dismissal under Fed. R. Civ. P. 41(b); and (b) Judge Greene's opinion approving and modifying the final consent decree ("Modification of Final Judgement" or "MFJ") and the MFJ itself. However, neither of these has any collateral estoppel effect.

 It is clear that Judge Greene's ruling on defendant's motion to dismiss in United States v. American Telephone & Telegraph cannot be considered the final resolution of the issues involved in that suit. "[A] denial of defendant's [41(b)] motion amounts to nothing more than a refusal to enter judgment at that time." Armour Research Foundation v. Chicago Rock Island & Pacific Railroad Co., 311 F.2d 493, 494 (7th Cir.) cert. denied, 372 U.S. 966, 10 L. Ed. 2d 129, 83 S. Ct. 1091 (1963). As Judge Greene specifically stated in his opinion denying defendant's motion, that denial was merely a "tentative and inconclusive ruling on the quantum of plaintiff's proof." United States v. American Telephone & Telegraph, 524 F. Supp. 1336, 1343 (1981) (quoting Armour Research Foundation, supra at 494.) At the time of Judge Greene's ruling on defendant's motion, defendant had not had an opportunity to introduce any evidence in its defense. Accordingly, this ruling cannot serve as a final judgment on which a claim of collateral estoppel may be based. See Restatement 2d of Judgments § 27 comment k (1982) (a final judgment is a requisite of a collateral estoppel claim).

 The MFJ in United States v. American Telephone & Telegraph, also cannot be given any collateral estoppel effect. While courts are split on whether preclusive effect can be given to consent decrees in general, 1B J. Moore Federal Practice para. 0.444[3], at 4009 (1982), it is clear that this particular decree can have no such effect. The MFJ specifically provides that it is not to be given collateral estoppel effect. Section III states: "Neither this Modification of Final Judgment nor any of its terms or provisions shall constitute any evidence against, an admission by, or an estoppel against any party or BOC [Bell Operating Company]." 1982-2 Trade Cas. para. 64,900 at 72,558. If courts refuse to give effect to such language in consent decrees, parties will be far less likely to settle, knowing that such settlements will forever estop them from protesting their innocence.

 Not only does the common law rule of collateral estoppel fail to apply to the Court's 41(b) ruling or to the MFJ, but the specific provisions of § 5(a) of the Clayton Act do not require giving the decree or opinion preclusive effect either. Section 5(a) provides that:

 
"A final judgment or decree . . . rendered in any civil or criminal proceeding brought by [the government] to the effect that a defendant has violated [the antitrust] laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel between the parties . . . ."

 Even if the MFJ could be taken as a finding of antitrust violations, there is a second and more significant problem with plaintiff's reliance on § 5(a). Section 5(a) does not purport to create preclusive effect under any circumstances. Rather the section states that a judgment finding violations constitutes prima facie evidence against the defendant. Thus, at best, this finding could have been introduced by plaintiff to buttress its prima facie case. The fact that plaintiff has now found an additional piece of evidence that could have been presented as part of its prima facie case hardly convinces the Court that it should vacate the judgment it entered based upon careful consideration of all the evidence presented in this case. It should be clear from this Court's voluminous opinion soundly rejecting SPCC's allegations on every claim that introducing the MFJ as part of plaintiff's prima facie case would have had no effect on the outcome of this litigation.

 II.

 THE COURT WILL NOT GIVE MCI COMMUNICATIONS CORP. v. AMERICAN TELEPHONE & TELEGRAPH COLLATERAL ESTOPPEL EFFECT

 SPCC argues that this Court's conclusions in this case were precluded by the findings of the jury in MCI Communications Corp. v. American Telephone & Telegraph. However, the Court finds it to be completely inappropriate to raise this issue in a Rule 60(b) motion. *fn2" If plaintiff intended to rely upon collateral estoppel in presentation of its case, it should have briefed and argued that issue long ago -- perhaps in its pleadings or on motion *fn3" ...


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