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KWF INDUS. v. AT&T

June 28, 1984

KWF Industries, Inc., Plaintiff
v.
American Telephone and Telegraph Co., et al., Defendant


Johnson, D.J.


The opinion of the court was delivered by: JOHNSON

JOHNSON, D.J.:

 Plaintiff KWF Industries, Inc. commenced this action against defendants by filing a complaint on February 15, 1983. Defendant, after answering the complaint, moved to dismiss the first count on the grounds that it is barred by the applicable statute of limitations. KWF opposes the motion. After consideration of the pleadings, memoranda of law, and the argument of counsel, the Court concludes that the motion of defendants must be denied.

 Background

 In count one of the complaint, plaintiff alleges that defendants and others, prior to 1968 and continuing up to February 1983, have been engaged in an unlawful combination and conspiracy to unreasonably restrain trade and commerce in, inter alia, the distribution of automatic answering devices in violation of sections 1 and 3 of the Sherman Act, 15 U.S.C. §§ 1 and 3 (1982 ed.). Plaintiff further alleges that defendants have engaged in an unlawful combination and conspiracy to both monopolize and attempt to monopolize interstate trade and commerce in the distribution of automatic answering devices and have monopolized the aforesaid trade and commerce in violation of section 2 of the Sherman Act, 15 U.S.C. § 2. *fn1"

 Statute of Limitations

 The statute of limitations applicable to this case provides in pertinent part:

 
Whenever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, but not including an action under section 15a of this title, the running of the statute of limitations in respect of every private or State right of action arising under said laws and based in whole or in part on any matter complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter: Provided, however, that whenever the running of the statute of limitations in respect of a cause of action arising under section 15 or 15c of this title is suspended hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued.

 Plaintiff alleges in its complaint that the statute of limitations governing its Sherman Act claims was tolled during the pendency of United States v. American Tel. & Tel. Co., et al., C.A. No. 74-1698 (D.D.C. Nov. 20, 1974), a civil antitrust action filed by the United States against American Telephone and Telegraph Company, Western Electric Company, Inc., and Bell Telephone Laboratories, Inc. *fn2" Its claims in this action, plaintiff asserts, are based upon matters raised in the 1974 suit filed by the United States and thus its right of action was suspended pursuant to 15 U.S.C. § 16(i). Defendants do not deny that the statute of limitations was suspended during the pendency of the 1974 case but rather dispute the date of the termination of that case. Plaintiff contends that the 1974 case terminated on August 24, 1982, when a consent decree was entered dismissing the case. Thus, it argues that its action, filed on February 15, 1983, was timely filed and well within the one-year period. On the other hand, defendants maintain that the 1974 case was terminated on January 8, 1982, when the parties to that action filed a stipulation of voluntary dismissal pursuant to Rule 41(a)(1)(ii), Federal Rules of Civil Procedure (FRCP), and plaintiff's action was filed thirteen months after the termination of the 1974 case. Thus, the pivotal issue to be decided is when did the 1974 case terminate. A brief account of the relevant procedural background of that case is necessary to understand how this dispute arose.

 The 1974 Antitrust Case

 Discussion

 It must first be pointed out that a motion to dismiss under Rule 12 of the FRCP is merely a decision on pleadings, and for that reason, it is granted sparingly and with caution. This is especially true in antitrust cases. See Hospital Bldg. Co. v. Trustee of Rex Hospital, 511 F.2d 678, 680 (4th Cir. 1975), rev'd on other grounds, 425 U.S. 738, 48 L. Ed. 2d 338, 96 S. Ct. 1848 (1976). Moreover, in ruling on defendants' motion to dismiss on statute of limitations grounds, the allegations of the complaint are assumed to be true. See Barnosky Oils, Inc. v. Union Oil Co. of California, 665 F.2d 74, 77 (6th Cir. 1981). See M&T Chemicals, Inc. v. International Business Machines Corp., 403 F. Supp. 1145, 1146 (S.D.N.Y. 1975), aff'd, 542 F.2d 1165 (2d Cir. 1976), cert. denied 429 U.S. 1030, 50 L. Ed. 2d 637, 97 S. Ct. 656 (1976).

 The gravamen of defendants' argument is that the stipulation of voluntary dismissal presented to the clerk's office by the parties to the 1974 case was "filed" in accordance with Rule 5(e) thereby dismissing the suit on January 8, 1982, notwithstanding Judge Greene's directive that the stipulation be lodged rather than filed. Indeed, defendants maintain that Judge Greene's directive did not and could not prevent the dismissal of the 1974 case under Rule 41, which clearly provides that a stipulation of dismissal automatically takes effect upon filing "without order of the court" unless a specific federal statute requires otherwise. Defendants further assert that the Antitrust Procedures and Penalties Act of 1974, 15 U.S.C. § 16(b)-(h) (Tunney Act), which Judge Greene cited as a ...


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