Leh v. General Petroleum Corporation

PETITIONER: Leh
RESPONDENT: General Petroleum Corporation
LOCATION: General Petroleum Corporation

DOCKET NO.: 4
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 382 US 54 (1965)
ARGUED: Oct 11, 1965
DECIDED: Nov 08, 1965

Facts of the case

The Clayton Antitrust Act ("Clayton Act") was enacted by Congress in 1914 to prevent anticompetitive practices in business. Section 5(b) of the Clayton Act halted the running of the statute of limitations on pending claims arising from the act. It also specified a four-year statute of limitations for these causes of action.

On September 28, 1956, Marc D Leh brought an action against General Petroleum Corportation and five other petroleum manufacturers alleging injury to his business caused by a conspiracy or combination to exclude Leh from engaging in wholesale distribution of gasoline in Southern California. He alleged that this conspiracy began in 1948; all parties agreed that Leh's right to initiate a cause of action began in February of 1954. Leh anticipated a statute of limitations problem under California law, as California's Code of Civil Procedure specified a one-year statute of limitations for penal causes of action, in contrast to the Clayton Act's four-year limit. Hence, Leh cited to United States v. Standard Oil, in which the United States alleged a conspiracy to control prices among a nearly identical set of defendants and successfully applied the Clayton Act's longer limit.

District court Judge William Mathes ruled in favor of General Petroleum, holding that the tripling of damages was a penalty, and was thus barred by the statute of limitations under California law. The court also held that the Clayton Act did not apply to the claim --distinguishing on the facts from Standard Oil -- primarily because Leh did not allege that the defendants combined to control prices, did not name the same set of defendants, and did not allege a similar period of conspiracy. Judge Stanley Barnes of the U.S. Court of Appeals, Ninth Circuit, affirmed. Judge Barnes affirmed the lower court's interpretation of California law, and that the application of the Clayton Act used in Standard Oil did not apply here because the facts were not similar enough to justify collateral estoppel.

Question

Is Leh's claim similar enough to that made by the government in Standard Oil to justify his use of collateral estoppel? Was Leh's claim valid because the Clayton Act suspended the running of the statute of limitations?

Media for Leh v. General Petroleum Corporation

Audio Transcription for Oral Argument - October 11, 1965 in Leh v. General Petroleum Corporation

Earl Warren:

Number 4, Marc D.Leh, etcetera, Petitioners, versus General Petroleum Corporation, et al.

Mr. Harris.

Richard G. Harris:

May it please the Court.

In this matter, we have had, within the past several months, the decision of this Court in Minnesota Mining & Manufacturing Company versus New Jersey Wood Finishing which was cited in the brief.

In that case, the test laid down by this Court for determining the question of tolling was stated to be “was the conduct challenged by the plaintiff complained of in the government action?”

As stated at page 323 of the Minnesota Mining case.

I submit to the Court that the conduct challenged by the plaintiff was complained of in the government action and referred to the overt acts challenged by the plaintiff and contrast them with the overt acts or conduct complained of by the Government in the following particulars.

In the plaintiffs' complaint, we alleged overt acts consisting of, among others, controlling the sale and distribution of refined gasoline in the Southern California area, denying independent jobbers access to a source of supply of refined gasoline, preventing independent jobbers from obtaining refined gasoline from other sources.

The government complaint, on the other hand, at paragraphs 70 (b) (6), (7), (8), (10), (11), (12), and (15), charges the defendants there named with foreclosing independent wholesale and retail markets otherwise available to independent refiners by requiring independent jobbers, wholesalers, and retailers to handle exclusively the refined petroleum products of the defendant majors.

Again, the plaintiffs' complaint states as an overt act that the defendants prevented the customers of independent jobbers to retailers from obtaining gasoline with which to compete with retail service stations and outlets operated or controlled by the defendants there named.

The government complaint, on the other hand, charges the defendants there named with maintaining agreed upon wholesale and retail prices by refusing to sell gasoline to any wholesale or retail distributors who refuse to follow the prices fixed and by adopting the uniformed policy of refusing to sell gasoline to any wholesale distributor, jobber, or retail dealer who would not agree to sell the products of a single dependent major on an exclusive dealing basis.

Again, the plaintiffs' complaint charges the defendants with maintaining fixed artificial and uncompetitive prices for the wholesale and retail sale of refined gasoline in the Southern California area.

The government complaint charges the defendants there named in almost identical language with fixing and maintaining uniform and noncompetitive resale prices to the charged consumers by retailers handling gasoline.

The plaintiffs charge as an overt act that the defendants destroyed any substantial competition afforded them in the wholesale and retail selling and marketing of refined gasoline in the Southern California area.

The government complaint charges the defendants with sharing wholesale and retail markets in the sale of gasoline by standardizing the various grades, qualities, and structure of gasoline and by selling gasoline and other refined products at identical prices.

The plaintiffs' complaint in the private case charges the defendants as an overt act with controlling the sources of refined gasoline in the Southern California area, and preventing and precluding independent jobbers from obtaining source and supply.

The government complaint, on the other hand, charges the defendants with fixing and maintaining uniform and noncompetitive prices for the sale of gasoline by causing the posting of an agreed price for each type and grade of gasoline at wholesale distribution points and by causing each other to post and charge identical prices at such points.

Now, from a comparison of those overt acts alleged by the plaintiff in the private case with the comparison of the charges by the Government in the government case, it is submitted that the test of this Court in Minnesota Mining, to with, was the conduct challenged by the plaintiff complained of in the government action, is more than satisfied.

However, the respondents in this case address themselves to three distinctions which they urge differentiate that conduct which has just been compared.

Distinction number one is that the complaint in the government case charges a conspiracy commencing in or about the year 1936, whereas, the complaint in the private case charges a conspiracy commencing in or about the year 1948.

Now, again, in addressing myself to this distinction, I do so by asking, “Is the Government complaining of conduct in 1936 or is the Government complaining of conduct at all times and including 1948 and right up until, and including 1950, the time of filing of the government antitrust action?”

In my references, I will refer to the appendix filed by respondents of the government complaint since it's -- since it's in a brief form rather than the typewritten record on which this case is being presented.

In answer to that question of 1936 versus 1948 and what the government was complaining about when it filed its complaint in 1950, I refer first to the appendix at page 40, which takes up at that point at paragraph number 21 of the government complaint.

At that point, the Government, in its complaint, points out that the Conservation Committee of California Oil Producers had its inception in 1930 but that the present committee was organized in 1936 and goes on to state, in effect, its formation constituted merely a reorganization of predecessor organizations.

So that, the 1936 date used in the government complaint, I submit, is clarified as the date upon which the Conservation Committee of Oil Producers was reorganized.

At page 49 and 50 of the appendix, commencing at numbered paragraphs 46 of the government complaint, it is to be emphasized, that in describing the commerce and trade affected, the government is not talking about something that happened in 1936 as a static and frozen thing.

The Government says, as of January 1, 1949, there were approximately 64 crude oil refineries.

Their complying crude oil import -- input was so many barrels per day.

Again, further on that, as of January 1, 1949, there were so many barrels refined from the refineries that were opened and 17 refineries were, at that point, idle.

At pages 52 and -- at page 50, rather, numbered paragraph 50, during 1948 the total gasoline produced by refiners in the Pacific States area was approximately 120 million barrels, at which defendant majors produced and sold approximately 108 million barrels for approximately 90%.