Party Discovery: RORY LEWIS VS. ASBESTOS DEFENDANTS (B/P) AS REFLECTED ON EXHIBITS et al

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DEBORAH LINDBLOM, 8B#136356

LAW OFFICES OF DEBORAH LINDBLOM ELECTRONICALLY
1345 Vicente Street FILED
San Franciseo, California 94116 Superior Court of California,
Telephone: (415) 759-6084 Fax: (415) 759-6085 County of San Francisco
Attorneys for defendant

YALE INDUSTRIAL PRODUCTS, INC. JUL 05 2007

GORDON PARK-LI, Clerk
BY: WILLIAM TRUPEK
Deputy Clerk

oO Co ms NW

SUPERIOR COURT OF THE STATE OF CALIFORNIA
CITY AND COUNTY OF SAN FRANCISCO

RORY LEWIS, No. CGC-05-438 257
Plaintiff, REQUEST FOR JUDICIAL NOTICE OF
IN RE SUGAR INDUSTRY ANTITRUST
V5. LITIGATION V. AMSTAR

CORPORATION (1978) 579 F.2D 13
ASBESTOS DEFENDANTS (B*P), et al.,

Defendants. TRIAL DATE: July 9, 2007
/ {Brayton Group 404]

Defendant YALE INDUSTRIAL PRODUCTS, INC. (hereinafter, unless otherwise
specified, referred to as "defendant") herein requests the Court take judicial notice of In Re
Sugar Industry Antitrust Litigation v. Amstar Corporation (1978) 579 F.2d 13, a true and
correct copy of which is attached herewith.

Pursuant to California Evidence Code Section 451, the court shall take judicial notice
of all decisional, constitutional, and public statutory law of this state and of the United States
and the provisions of any charter described in sections 3, 4, or 5 of Article XI of the
California Constitution, and the true signification of all English words and phrases and of all
legal expressions, and facts and propositions of generalized knowledge that are so universally

-Page 1-
Yale Request for Judicial notice of In Re Sugar Industry Antitrust Litigation 579 F.2dRow oN

known that they cannot reasonably be the subject of dispute. Judicial notice is mandatory
regarding those matters encompassed by California Evidence Code section 451.

Pursuant to California Evidence Code section 452, the court may take Judicial Notice
of (a) the decisional law of any state of the United States, (d) Records of (1) any court of
this state or (2) any court of record of the United States or any state in the United States, (h)
Facts and proposition that are not reasonably subject to dispute and are capable of immediate
and accurate determination by resort to sources of reasonably indisputable accuracy.

DATE: July 5, 2007 LAW OFFICES OF DEBORAH LINDBLOM.

bs _La—
DEBO! LINDBLOM, attorney for Defendant

YALE INDUSTRIAL PRODUCTS, INC.

-Page 2-
Yale Request for Judicial notice of In Re Sugar Industry Antitrust Litigation $79 F.2dPROOF OF SERVICE BY LEXIS E-FILING
I declare that I am a citizen of the United States, that I have attained the age of
majority, and that I am not a party to this action. On the date specified below, I caused the
within document(s) entitled:

REQUEST FOR JUDICIAL NOTICE OF In Re Sugar Industry Antitrust
Litigation v. Amstar Corporation (1978) 579 F.2d 13

to be served on the party(ies) or their (its) attorney(s) of record in this action listed below in
the manner indicated.
X By Lexis e-filing, according to the General Orders

1am familiar with this firm’s practice of collection and processing of correspondence
to be deposited for delivery via the Lexis/Nexus E-Filing
AND addressed as follows:

TO ALL E-FILING IN RE COMPLEX PARTIES KEPT BY LEXIS/NEXUS
ACCORDING TO THE GENERAL ORDERS

I declare under penalty of perjury under the laws of the State of California that the

foregoing is true and correct and that this declaration is executed on July 5, 2007, at San

Francisco, California. WH

“Page 3-
Yale Request for Judicial notice of In Re Sugar Industry Antitrust Litigation 579 F.2dBS

“t of Appeals held thal the ,
es while on the generous
uly erroneous in view of

reuit Judge, filed a die

‘urgeons ¢=18.110
1,000 to 21-year-old male,
putation of right leg due
\etice, was on the generous
of whole record was not

New York City (James
ert S. Glotzer, New York
© plaintiff-appellee-cross-

atine, Asst. U.S. Atty.,
£ New York, Brooklyn, N.
ger, U. S. Atty., Alvin A.
1. Stone and Edward 8.
J. &. Attys, Brooklyn, N.
for defendant appellant

ARD, MULLIGAN and
» Judges.

rom a judgment of $600,-
bert ‘A. Lennon for se-
red as a result of medical
St, Albans Naval Hospi-
¢ United States has con-
We are, therefore, con
‘he amount of the award
quacy of the findings of
ting without 2 jury, on
arties are appealing ‘the
> eontending that the
and fails adequately to
¥ loss of future earnings,
ent asserting that the

an of the Marines, was
18 motor vehiele accident,
of 21, His leg badly
was treated at St. Al-
developed osteomyelitis.
found that insufficient
an of Lennon’s woimnd;
Libioties were adminis-
ennon himself was per-

IN RE SUGAR INDUSTRY ANTITRUST LIT. 13

Cite as 529 F.24 13 (1878)

mitted to care for his wound at far too
early a stage in his recovery. Though—as
Judge Costantino found—proper treatment
began in December of 1972, the osteomyeli-
tis proved to be unatrestable, and Lennon's
right leg was amputated in October of 1974.

Bvidence was introduced al rial tending
‘to show that Lennon had hed ‘ambitions of
entering a union apprenticeship program

journeyman eles-
ty had been
foreclosed by his injuries. Besides this,
‘there was no specific proof that Lennon
‘would have been able to enter such a pro-
gram even without his accident, nor did be
introduce specifi evidence to demonstrate
other lost opportunities. Judge Costantino
found that Lennon “has proved that the
range of jobs available to bim is reduced
[but] he has not proved that his residual
earning capacity has been diminished.”

In supplemental findings, dated Novem-
ber 8, 197, Judge Costantino took note of
Lennon's athletic habits prior to his acci-
dent, and of the drastie’changes eaused in
hhis hobbies and in his social life by “the
amputation; of the groat pain accompany-
ing the amputation, including phantom
pain"; of the eonstant tearing of Lennon's
stump due to eellulitis, which prevents Lene
non from wearing a prosthesis for extended
periods of time; of the possibility of cor-
recting the cellulitis by a stump reVision,
and of the 50% chance that such a revision
‘would fail and perhaps lead Us a loss of the
knee; and of future medical expenses of
$25,000.

Ordinarily in cases of this sort, we would
remand to the trial judge for more detailed
findings, alloesting damages among loss of
earnings, past and fulure, estimated cost
and. type of future medical expenses, and
past and future pain and suffering, as well
asa statement of how the judge arrived at
his figures for each class of damages. See
Rapisardi v. United Fruit Co, 441 F-24 1308
(2d Gir. 1971); Fuchstadt v. United States,
484 F.2d 867 (2d Cir. 1970); Moore-MeCor-
mack Lines, Ine. v. Richardson, 205 F.2d
583, 590-91 (2d Cir. 1961),.cert. deniod, 968
U.S, 989, 82 S.Ct: 606, 7 L.E4.2d 526 and 370
USS. 997, 82 S.Ct, 1577, 8 L.Bd.2d 806 (1962).
However, having looked over the entire rec-

‘ord, we believe that to do so in this ease
would serve no practical purpose.

‘The award of $600,000 is on the generous
side, but viewed on the record as a whole it
is not clearly erroneous. There was not
‘enough specific evidence presented to per-
mit the court to award any additional
amount for loss of future earnings, Act
cordingly, we affirm.

LUMBARD, Cireuit Judge (dissenting):

I dissent, and vote to reduce the judg-
‘ment from $600,000 to $300,000. In light of
the fact that evidence as to loss of future
earnings was nonexistent or highly specula-
tive, and that the trial judge evidently gave
plaintiff the benefit of every possible doubt
with respect to the future course of his
injuries, I believe that,the award was exces-
sive, at least to the extent of $300,000.

.

In re SUGAR INDUSTRY ANTITRUST
LITIGATION.

STOTTER & CO. INC, Appellant,

AMSTAR CORPORATION, Borden, Ine,
and ,its Subsidiaries, Colonial Sugar
Company, North American Sugar Indus-
tries, Industrial Sugars, Inc,, Sugar Re-
finery of Palm Beack, Ine. (formerly
Florida Sugar Refinery, Inc.), CPU In-
ternational, Inc., Michigan Sugar Com-
pany, National Hame Products Corpora-
tion, The National Sugar Refining Com-
pany, Savannah Foods and Industries,
Inc, and SuCrest Corporation, Appel-
Tees.

Nos. 77-1555 and 77-2606,
United States Court of Appeals,
‘Third Cireuit.

Argued Jan, 12, 1978.
Decided March 6, 1978.
Rehearing Denied July 5, 1978.
As Amended Aug. 14, 1978.

Wholesaler of candy, beverage syrup,
and other produets brought suit againstsugar refiners, seeking treble damages un-
der the Clayton Act because of overcharges
plaintiff paid in purchasing food products
containing sugar refined or sold by defend-
ants, The United States Distriet Court for
the Eastern Distriet of Pennsylvania, Bd-
ward N. Cahn, J., granted summary judg-
ment in favor of defendants, and plaintiff
appealed. ‘The Court of Appeals, Weis, Cir-
cuit Fudge, held that although the Supreme
Court’s Illinois Brick decision bans Clayton
Act suits by persons who are not direct
purchasers from the defendant antitrust vi-
‘olator, the decision does not bar a suit by a
plaintiff who purchases directly from the
alleged offender but buys a product, candy,
which incorporates the price-fixed product,
sugar, as one of its ingredients; stated oth-
erwise, the proseription against reeovery
for indirect purchases dées not extend to
the product as weil as the buyer.

Vacated and remanded,

1. Monopolies <=28(1.6)

Although the Supreme Court's Minois
Brick decision bans Clayton Act suits by
persons who are not direct purchasers from
the defendant antitrust violator, the deci-
sion does not bar a suit by a plaintiff who
purchases directly from the alleged offend-
er but buys a product, candy, which incor-
porates the price-fixed product, sugar, as
one of its ingredients; stated otherwise, the
proscription against recovery for indirect
purchases does not extend to the product as
well as the buyer. Sherman Anti-Trust
Act, § 1, 15 US.CA. § 1; Clayton Act, § 4,
15 USCA. § 15.

2, Monopolies ¢=28(1.7)

The price fixer of a basic commodity
cannot escape the reach of a treble damages
penalty simply by incorporating the tainted
element into another product.” Clayton Act,
§4,15 USCA. § 15.

3. Corporations e=13

A division of a corporation is not a
separate entity but is the corporation itself.

579 FEDERAL REPORTER, 24 SERIES

4. Corporations #=1.6(4)

Where sales of candy, in which price-
fixed sugar was used, were made by a divi-
sion of one corporation and a subsidiary of
another, the division and subsidiary were to
be respectively treated as an alter ego of
the parent in Clayton Aet suit; thus, claims
were properly asserted against the parent
corporations, Clayton Act, § 4, 15 USCA.
$36.

Opinion Sur Petition For Panel Rehearing
5. Federal Courts ¢=708

Since affidavit of defendant was not
part of the record in the district court, it
would not be considered by the Court of
Appeals.
6. Federal Courts 2744

Issues not raised in the distriet court
nor briefed on appeal would not be eon
sidered by the Court of Appeals on petition
for rehearing; they were properly matters
for consideration of the district court in the
first instance, should they become material
to the litigation,

Harvey S. Kronfeld, Paul C. Madden,
Eudson, Wilf & Kronfeld, Philadelphia, P:
for appellant.

Robert M. Landis, Stephen A. Stack, J
Dechert, Price & Rhoads, Philadelphia,
William B. Willis, James H. Carter, William
M. Dallas, Jr., Sullivan & Cromwell, New
York City, Frederick M. Porter, Chris G.
Gunderson, Jr, Amstar Corporation, New
York City, for Amstar Corp.

‘Theodore W. Flowers, Edward C. Mengel,
Jr, White & Williams, Philadelphia, Pa.,
Walter W. Kocher, Edward A. Matto, e/o
Borden, Ine., Columbus, Ohio, for Borden,
Ine, Colonial Sugar Co., North American
Sugar Ind, Industrial Sugars, Inc, Sugar
Refinery of Palm Beach, Ine, (formerly
Florida Sugar Refinery, Ine.).

John G. Harkins, Jr, Lloyd R, Ziff, Rich-
and M. Bernstein, Pepper, Hamilton &
Scheetz, Philadelphia, Pa., John E. Simpson,

iller, Beckmann & Simpson, Savannah,
Ga, for Savannah Foods & Industries, Inc.

IN RES

Benjamin M. Quigg, Je., Mo
Bockius, Philadelphia, Pa, G
yack, John N, MeBaine, Lord
New York City, for CPC Inte

‘Timothy D. Wittlinger, Ht
ams, Goodrich & Tait, Detr
Michigan Sugar Co.

Henry W. Cornell, II, Br
Buffalo, N-Y,, for National }
Corp.

Robert L. Bilis, Jeffrey °
stein, Shames, Hyde, Wirth,
hill, New York City, for RS*
(formerly The National Suge
Ine).

Laurence Greenwald, Ja
Stroock & Stroock & Lav
City, S. Gordon Elkins, Ja
Stradley, Ronon, Stevens &
aelphia, Pa., for SuCrest Go

Before ADAMS and
Judges, and COOLAHAN,

OPINION OF THE

WEIS, Cireuit Judge.

In this antitrust action
defendant refiners of suga
in a conspiracy to fix th
product, At least two of
use the sugar to manafact
‘they sell to the plaintiff +
question raised in this eppe.
plaintiff has run into an {U1

‘Honorable James A. Coolal
District Court for the Distr
{gitting by designation

1. The Sugar Litigation gre
‘Act indictments and civil:
the United States against su
‘and sugar eane refiners, o!
‘of refined sugar in states wi
‘pi River. The government
the fling of numerous pri
both the western and easte

In September, 1975, atte!
tial dichotomy in the sugs
the east and west coasts

fants, market areas, and ©

Judicial Panel on Multidist)

“simlined that the cases iavol

17 east of the Mississippi Rive
‘os dated before Judge Cabn inNES

5 > 1.6(4)

s of candy, in which pricg-
: used, were made by a divi-
voration and a subsidiary of
ision and subsidiary were to
treated as an alter ego of
ayton Act suit; thus, claims
asserted against the parent
‘Jayton Act, § 4, 15 USCA.

tition For Panel Rehearing
rte 708,

avit of defendant was not
ord in the district court, it
smsidered by the Court of

rts e744
raised in the district court
appeal would nol be con-
vourt of Appeals on petition
they were properly matters
1 of the district court in the
hould they become material

ronfeld, Paul C. Madden,
Kronfeld, Philadelphia, Pa.,

ndis, Stephen A. Stack, Jr.,
& Rhoads, Philadelphia, Pa.,
s, James H. Carter, William
Sullivan & Cromwell, New
deriek M. Porter, Chris G.
Amstar Corporation, New
Amstar Corp.

Flowers, Edward C. Mengel,
Nilliams, Philadelphia, Pa.,
her, Edward A. Matto, o/o
slumbus, Ohio, for Borden,
ugar Co., North American
ustrial Sugars, Inc, Sugar
alm Beach, Inc. (formerly
‘efinery, Ine.).

ing, Jr., Lloyd R. Ziff, Rich-
ein, Pepper, Hamilton &
Ipbia, Pa, John E. Simpson,
an & Simpson, Savannah,
ah Poods & Industries, Ine.

: Benjamin M. Quigg, Jr., Morgan, Lewis &
Bockius, Philadelphia, Pa., Gordon B. Spi
Yaek, John N. MeBaine, Lord, Day & Lord,
New York City, for CPC International, Inc.

‘Timothy D. Wittlinger, Hill, Lewis, Ad-
‘ams; Goodrich & Tait, Detroit, Mich., for
Michigan Sugar Co.

Henry W. Cornell, III, Berg & Cornell,
Buffalo, N. Y., for National Home Produets
Corp.

Robert L. Ellis, Jeffrey I. Klein, Gold-
stein, Shames, Hyde, Wirlh, Bezahler & Ca-
hill, New York City, for RSN Projects, Ine
(formerly The National Sugar Refining Co.,
Ine).

Laurence Greenwald, Jay P. Mayesh,
Stroock & Stroock & Lavan, New York
City, 8. Gordon Elkins, James A. Young,
Stradley, Ronon, Stevens & Young, Phila-
delphia, Pa., for SuCrest Corp.

Before ADAMS- and WEIS, Cireuit
Judges, and COOLAHAN, District Judge*

OPINION OF THE COURT
WEIS, Cireuit Judge. .

In this antitrust action it is alleged that
defendant refiners of sugar have engaged
in a conspiracy to fix the price of that
product, At least two of the defendants
use the sugar to manufacture candy whieh
they sell to the plaintiff wholesaler. The
‘question raised in this appeal is whether the
plaintiff has ran into an [Jllinois] brick wall

“Honorable James A. Coolahan, United States
District Court for the District of New Jersey,
sitting by designation.

1. The Sugar Litigation grew out of Sherman
‘Act indictments and civil actions brought by
‘the United States against sugar beet processors
and sugar cane refiners, charging. pricecixing.
Of refined sugar in states west of the Mississip-
pi River. The government's actions triggered
he filing of numerous private suits covering
Doth the western and eastern markets.

1n September, 1975, after finding  substan-
tal dichotomy in the sugar industry between
the east and west coasts in terms of defend
Ants, market areas, and economic issues, the
Judicial Panel en Multdistrict Litigation deter-
‘ined that the cases invotving parties located
feast of the Mississippi River should be consoll-
‘ated before Judge Cahn in the Fastern District

a IN RE SUGAR INDUSTRY ANTITRUST LIT.
(ite as 579.24 12 (1978)

bb

his efforts to secure treble damages aris-
ig out of his candy purchases. We con-
clude that plaintiff's action is not barred,
and accordingly vacate a summary judg-
ment entered in favor of the defendants.
The Sugar Industry Antitrust Litigation
is complex and extensive, literally extend-
ing from coast to coast. ‘It rests basically
on allegations that major sugar refiners
and others in the United States conspired to
fix the prices of refined sugar in violation
of § 1 of the Sherman Act, 15 USC. § 1!
In its complaint plaintiff Stotter & Co.,
Ine. asserted that it is entitled to recover
‘treble damages under § 4 of the Clayton
Act, 15 USCC. § 15, because of overcharges
it paid in porchasing food products eontain-
ing sugar refined or sold by defendants.
Stotter is a Philadelphia area wholesaler of
ceandy, beverage syrup, and other products.
‘The 12 defendants refine and sell sugar in
the eastern half of the United States, and
several of them also manufacture food
products containing sugar they refine,
Stotter did not purchase sugar from any of
the defendants but did buy candy from
defendant Borden and from a subsidiary of
defendant SuCrest. Stotter purchased oth-
er products such as soft drink beverage
syrup ffom nondefendant manufacturers,
who secured sugar from defendants.
Stotter’s complaint was similar to many
others in the Sugar Litigation alleging a
combination and conspiracy to fix and raise
prices? However, unlike the others which

of Pennsylvania, In re Sugar Industry Anti-

trust Litigation, 399 F.Supp. 1397 (Jud Pan,

‘Mult-Lit.1975). “his appeal involves only the
eastern proceeding.

2. The Stotter complaint alleged that defendants.

hhad engaged in 2 combination and conspiracy:

“a. To fix and raise the basis prices of re-
fined sugar,

b. To fix prepaid freight applications:

©. To eliminate, reduce and prevent the
granting of allowances to customers for
refined sugar,

4. To fix, raise, malatain and stabilize the
effective selling price of refined suger,
aad

e. To eliminate or minimize offist pricing,
in the sale of refined sugar.”

Stotter filed on behalf of itself and a class of
“all private persons and business entities in the16 579 FEDERAL REPORTER, 24 SERIES

asserted injury because of excessive prices
paid for refined sugar, Stotter claimed
‘damages because it had been charged sub-
stantially more for various food produets
which contained sugar. The district court
centered summary judgment against Stotter,
holding that since it purchased only sugar-
containing products, it was too “remote in
the chain of distribution of refined sugar to
make a claim for alleged overcharging

Although judgment was entered on all
claims, the court did discuss the difference
between the situation in which Stotter pur-
chased such products as candy direetly from
the defendants and that in which it hought
sugar-containing products from nondefen-
dants who did not refine sugar. As to the
latter category, which might. be termed in-
direct purchases, the court observed that
plaintiff would be obliged to embark upon
discovery with respect to each sugar-con-
taining product sold by 70 separate suppli-
ers—some who did not even manufacture
the product.

Tn discussing purchases made directly
from the defendants, the court ssid:

“The problem with the plaintiff's claim

related to direct purchases of candy from

defendants is it simply has not pleaded or
proved (to the extent necessary to survive

a Rule 56 motion) that a conspiracy to fix

sugar prices by the major refiners ex-

‘tends to their own sugar-eontaiuing prod-

nets.”

On appeal, Stotter has limited the issue to
the summary judgment only insofar as it
affects the direct purchases of candy from
defendants, Indeed, in the face of Tinois

Market who, during the petiod in suit, pur-
chased sugar or any food product containing
sugar in any form for wholesale di
tribution or resale.” The district court declined
to certify Stotter as a class representative, In
re Sugar Industry Antitrust Litigation, 73
F.RD. $22, 340 (ED.Pa,1976), That ruling has
not been appealed.

3. Specifically, the complaint alleged:
"22. During the period in suit to the present,
plaintiff and members of the Class represents
hhave purchased various food products contain-
‘ng sugar refined or sold by one or more of the
defendants.

Brick Co. v, Illinois, 481 US. 720, 97 S.Ct.
2061, 52 L.Ed.2d 707 (1977), plaintiff has no
hope of suecéss on the purchases from non-
defendants.

Preliminarily, we observe that the plain-
tiff did plead, although not artfully or
clearly, that it had purchased food products
containing sugar refined or sold by the de
fendants! ‘The complaint itself could readi-
ly be amended to state unambiguously that
purchases were made directly from some of
the defendants, In their briefs in the dis-
trict court on the motion for summary
judgment, both parties commented on the
plaintiff's direct purchases of candy from
Borden. Accordingly, we heliove that the
district judge's comments as to pleading
and proof were intended to reflect his view
thatvthe issue was lack of standing as a
matter of law, rather than simply a plead-
ing or evidentiary deficiency. Had it been
the latter, opportunity for discovery would
have been granted.

[1] We come then to the question in this
cage. ‘The Supreme Court's decision in Ii
a0is Brick Co. v. Hinois, suipre, bans Clay-
ton Act suits by persons who are not direct
purchasers from the defendsnt antitrust vi-
lator. Does the decision als bar a suit by
plaintiff who purchases direetly from the
alleged offender but buys a product which
ineorporates the price-fixed product as one
of its ingredients? Stated another way,
does the proscription against recovery for
indirect purchases extend to the product as
well as the buyer?

Hlinois Brick held that the “passing on” &
defense which was prohibited by Hanover

INJURY TO PLAINTIFF AND CLASS
23. As a result of the foregoing, plaintiff and
‘other members of its Class have been injured in
their businesses and other property by having,
been charged substantially higher prices for
various food products than they would have
‘paid and by having a smaller volume of bust
‘ess than they would have had in the absence
‘of such violations.”

4. “Passing on” describes the action of an over-
‘charged buyer who passes the extra expense
‘on to, those who buy from him. “Defensive
‘passing on” refers to efforts by antitrust de-
feadants to showr that a particular plaintiff was
‘not injured because he had foisted the inflated

IN RE St

oe, Ine. v. United Shoe Mac
oe U.S. 481, 88 S.Ct. 2224, 20
(1968), should also be applied
tive fashion to a plaintiff's ¢
pass-on rale should apply eq
tiffs and defendants, 481 US.

‘Ct. 2061. ‘The Court groune
sion on several bases, includin

2 ity of exposing the defendar

ability and the evidentiary
that would arise in apportion
charge among those in the ¢
suffered injury. The Court
‘concern that if the direct p
rot make a full recovery of t
‘the wrongdoer would be able
of the fruits of its illegality.
reasoning, the Court held the
which purchased a complet
not permitted to sue the ot
Tonerele leek which had be
into the structure. In wae
‘mination, the Supreme Cour
‘onerete block had passed tt
arate levels in the chain of
fore aching the plant
“[Tyhe evidentiary compl
certainties involved in th

‘of pass-on against x dire
srulipied im the offensiv

by a plaintiff several stey

the defendant in the chat
‘The demonstration of
overchange was passed
2 purchaser must be repest
“cat which the price-fixec
hands before they reach

+ 431 US. at 732-83, 9

“Permitting the use of
under § 4 essentially

treble-damages actions
forts to apportion the re
potential plaintiff's tha
sorbed part of the over

price onto his own cust
‘passing on” is used to ch
strategy proving that an +
posed upon them by buy
fendant in the chain of di
nos Brick v.llinois, 431IES Li

i
nois, 481 U.S. 720, 97 S.Ct.
| 707 (1977), plaintiff has no E
‘on the purchases from non-

we observe that the plai
although not artfully or 4
tad purchased food products
r refined or sold by the de- i
complaint itself could readi- i
estate unambiguously that
made directly from some of
In their briefs in the dis-
the motion for summary 4

Parties commented on the aie
1 purchases of candy from Et
dingly, we believe that the Jame

comments as 10 pleading eS
intended to reflect his view ~

was lack of standing as a Mise
rather than simply a plead- E
uy deficiency. Had it been
riunity for discovery would |
ted.

2 then to the question in thi
veme Court's decision in Illi-
v. IHinois, supra, bans Clay- gS
7 persons who are not direct he
v the defendant antitrust vic *
ve decision also bar a suit by |
purchases directly from the
but buys a produet which
e price-fixed product as one
nts? Stated another way,
‘iption against recovery for
ses extend to the produet as.
ver? 4
held that the “passing on” °f
was prohibited by Hanover

PLAINTIFF AND CLASS.
Iv of the foregoing, plaintiff and
ofits Class have been injured in
8 and other property by having S
substantially higher prices for
vroducts than they would have

wing a smaller volume of busi-
‘would have had in the absence
describes the action of an over:
‘whe passes the extra expense i
ho bey from him. “Defensive
fers to efforts by antitrust de-

dw that a particular plaintiff was
‘ause be had foisted the inflated

IN RE SUGAR INDUSTRY ANTITRUST LIT. 7
(Cite as 870 F.2d 13 (1978)

Shoe, Ine. v. United Shoe Machinery Corp,
‘392 U.S, 481, 88 S.Ct. 2224, 20 LEd2d 1231
(1968), should also be applied in a correla-
tive fashion to a plaintiff's case—that the
pass-on rule should apply equally to plain
tiffs and defendants, 481 U.S, at 780-31, 97
S.Ct. 2061. ‘The Court grounded its conelu-
sion on several bases, including the possibil-
ity of exposing the defendant to multiple
Jiability and the evidentiary complexities
that would arise in apportioning the over-
‘charge among those in,the chain who had
suffered injury. The Court also expressed
‘concern that if the direct: purchaser could
not make & full recovery of the overcharge,
the wrongdoer would be able to keep some
‘of the fruits of its Megality. Rased on this
reasoning, the Court held that the plaintiff,
‘which purchased a completed building, was
not permitted to suc the manufacturer of
conerete block which had been incorporated
into the structure. In reaching this deter-
mination, the Supreme Court noted that the
conerete block had passed through two sep-
arate levels in the chain of distribution be-
fore reaching the plaintiff:
“(I Jhe evidentiary complexities and un-
certainties involved in the defénsive use
of pass-on against a direet purchaser are
‘multiplied in the offensive use of pass-on
by a plaintiff several steps removed from
the defendant in the chain of distribution.
‘The demonstration of how much of the
overcharge was passed on by the first
purchaser must be repeated at each point
at which the price-fixed goods changed
hhands before they reached the plaintiff.”
431 US. at 782-83, 9T SCL at 2068.

“Permitting the use of pason theories
under § 4 essentially would transform
treble-damages actions into massive ef-
forts to apportion the recovery among all
potential plaintiffs thet eould have ab-
sorbed part of the overcharge—from di-
price onto his own customers. “Offensive
assing on” is used to characterize plains
strategy proving that an overcharge was im
posed upon them by buyers closer to the de-
fendant in the chain of distribution. See Hi-
ois Brick v. Hlols, 431 U.S. 720, 723. 97 S.Ct

rect purchasers to middlemen to ultimate
consumers.” Id. at 787, 97 S.Ct. at 2070.
Defendants here argue that the primary
reason for the result in Illinois Brick was
the Court's desire to avoid further complex-
ity being introduced into antitrust litiga-
tion, Although that case concededly in-
volved a somewhat different situation, de-
fendants contend the rationale nevertheless
should control. Plaintiff responds that if it
‘eannot sue Borden for the overcharge incor-
porated in candy brought about by the
price-fixing of sugar, then no one can, Any
other entity in the produet chain of distri-
bution would necessarily be an indirect pur-
chaser and ineligible under Ilinois Brick.
‘Thus, Borden would escape liability for fix-
ing the price of all the sugar it incorporated
into candy
Ilinois Brick dwelle’ on the complicated
caleulations which would be common in an-
titrust cases if the passing-on prohibition
were not invoked’ The Court explained:
“The principal basis for the decision in
Hanover Shoe was the Court’s perception
of the uncertainties and difficulties in
analyzing price and output decisions ‘in
the real economic world rather than an
‘economist’s hypothetical model,’ 392 U.S.
at 493, 88 S.Ct. 2224 and of the costs to
the jldicial system and the efficient en-
forcement of the antitrust laws of at-
tempting to reconstruct those decisions in
the courtroom.” 431 U.S. at 731-82, 97
S.Ct, at 2068,
As the defendants-here point out, the prod-
uuet which plaintiff purchased competes not
with sugar, but with other candy, and more
than one ingredient determines the price.
To this extent, there will be some additional
complications underlying the damage
claims. However, this must not be allowed
to obscure the fact that the plaintiff did
purchase direetly from the alleged violator.
‘True, the price-fixed commodity had been
2061, 52 LE42d 707 (1977; Sullivan, Hand-
book of the Law of Antitrust § 252 (1977).

5, The Court's concern over adding to the diff-
‘culties io already complex antitrust tigation is
evident throughout the opinion. See 431 U.S.
at 730 33, 737, 740 I, 97 S.Ct. 2061.18 519 FEDERAL REPORTER, 2d SERIES

combined with other ingredients to form a
different product. But just as the sugar
sweetened the candy, the price-fixing en-
hanced the profits of the candy manufac-
turers. The situation is the same as if the
general contractor which sold the building
to the plaintiff in Ilinois Brick were the
manufacturer of the concrete block which
went into the structure, In that situation,
the concern which the Supreme Court ex-
pressed about the proration of overcharge
among a number of entities in the chain
would not have been present.

Nor is that. problem of allocation among
various distributors present in the case sub
Judice. Plaintiff is a direct purchaser and,
‘therefore, entitled to recover the full extent
of the overcharge. As one of its basic
premises, Mlinois Brick held that “the over-
charged direet purchaser, and not others in
the chain of manufacture or distribution is
the party ‘injured in his business or proper-
ty’ within the meaning of the section”, 431
U.S. at 129, 97 S.Ct. at 20685 The difficul-
ty in computation here is not in parceling
out damages among entities in the chain,
bbut in isolating the excessive cost of one
ingredient which goes into the product, pur-
chased by the plaintiff. Conceivably, in
some eases that may be a problem not easi-
ly solved, but here we think it not serious
enough to invoke the obstacle of Hlinois
Brick. It is most Tikely ascertainable by
‘examination of the defendant's records and
depositions of its employees. Orly one par-
ty in the distributive ehain will be involved,
rather than many.

[2] We are also influenced by the real-
lation that to deny recovery in this in-
stance would leave a gaping hole in the
administration of the antitrust laws. It
would allow the price-fixer of a basic com-
modity to escape the reach of a treble-dam-

6. Granting Stotter standing is consistent with
‘our decision in Bravman ¥. Bassett Furniture
Industries, 952 F.2d 90 (3d Cit. 1977) and Cro-
‘mar Co. v. Nuclear Materials & Equipment
Comp, 843 F.2d 501 (3d Cir. 1976). Analyzing
the relationship of the parties, the alleged ef-
{ect of the violation upon the plaintiff and the
nature of the industry leads to the conclusion
‘that plaintiff is entitled to protection under the
anticrust laws,

age penalty simply by incorporating the
tainted element into another product.
Thus, a refiner who illegally set the price of
sugar could shield itself by putting all of
the sugar into a new product, a syrup,
simply by adding water and perhaps a little
flavoring. We do not think the antitrust
laws should be so easily evaded. See The
Supreme Court, 1976 Term, 91 Harv.L.Rev.
‘2, 21, B80 (1977).

Ilinois Brick did not purport to provide
any such escape. The opinion was at pains
to point out that all of the overcharges
‘could be collected by direct purchasers, the
parties the Court believed most likely to
take action against priee-fixers, To adopt
‘the defendants’ position in the case at bar,
however, would permit them to by-pass the
threat of a trebledamage remedy? and
‘would be contrary to the spirit of the anti-
‘trust laws, as expressed by the Court im
Perma Life Mufflers, Inc. v. International
Parts Corp., 392 U.S. 184, 189, 88 S.Ct. 1981,
1984, 20 L.Ed.2d 982 (1968): “the purposes
of the antitrust laws are best served by
insuring that the private action will be an
ever-present threat to deter any one con-
templating business behavior in violation of
the antitrust laws.” See also Pfizer, Inc. ¥.
Government of India, 434 U.S. 308, 98 S.Ct
584, 5d L.Ba.2e 563 (1978).

[3,41 We see no need to differentiate
between the sales by a division of Borden
sad those by a subsidiary of SuCrest. A
division of a corporation is not a separate
entity but is the corporation itself. Al.
though the subsidiary does have a separate
legal existence, it is owned by the parent
company, and would not ordinarily sue it
After considering all of the facts in this
esse, we conclude that, at least for this
purpose and in this context, the subsidiary

7. Obviously, we express no view on whether
there was price-fixing involved in the case. Be-
ccause of the nature of the fegal problem in-
volved and the posture in which the ease reach-
88 us, we have assumed lability on the part of
the defendants only arguendo—not in actuali-
vy.

IN RE SU

treated as the alter
soa Nh Perma Life Muffl
e ‘To adopt any other view
Peasion by the simple expedient
(a subsidiary between the viol:
E first. noncontrolled purchaser
ppreme Court anticipated this
Tllinois Brick's now one
fe mnting on exceptions to +
- ope passing on: “Anotbet
ee phich market forces have bet
Bnd a pass-on defense might
where the direct Puree
by its customer.’
woreat U S. at 736, 97 S.Ct.
roring that ‘exception to offe
on reflects the situation he
» Greet seller is owned by the
ffxer. We conclude, therefor
‘have been properly asserted ¢
and SuCrest
"Oia the récord before us, ¥
> te determine that other de
Ey have sold produets directly t
‘That inquiry should be made
> ggurt. Moreover, We decide
that the plaintiff is entitlee
dlaims and now must prove
there was # conspiracy b
‘harmed. plaintiff. Accordit
ment of the district court
{and the matter remanded i
ceedings consistent with thi

». OPINION SUR PETY
PANEL REHEA

WEIS, Cirenit Judge.

‘Alter petitions for rehe
rt in bane and, elternst

Was had before the panel.
= Positions “taken by the p
‘that farther comment fro
‘ite.

“Cases, 487 F.2d 191, 199-
& ‘Handér & Blechman, An

gy bumer Interest: The FallaERIES

simply by incorporating the
rent into another product,
ar who illegally set the price of
shield itself by putting all of
ato a new product, & syrup,
ing water and perhaps a litlle
Ve do not think the antitrust
be so easily evaded. See The
ut, 1976 Term, 91 Harv.LRev.
1977).
ick did not purport to provide
ape. The opinion was at pains
that all of the overcharges
ected by direct purchasers, the
Court believed most likely to
against. price-fixers. To adopt
its" position in the case at bar,
tld permit them to by-pass the
treble-damage remedy? and
atrary to the spirit of the anti-
as expressed by the Court in
Mufflers, Inc. v. International
392 U.S. 134, 139, 88 S.Ct. 1981,
14.24 982 (1968); “the purposes
crust laws are best served by
{ the private aetion will be an
threat to deter any one con-
susiness behavior in violation of
tlaws.” See also Pfizer, Ine. v.
of India, 484 US. 308, 98 S.Ct.
24 563 (1978).

> see no need to differentiate
sales by a division of Borden
vy @ subsidiary of SuCrest, A
a corporation is not a separate
is the corporation itself. Al
subsidiary docs have a separate
nee, it ig owned by the parent
ad would not ordinarily sue it,
dering all of the facts in this
metade that, at Teast for this
1 in this context, the subsidiary

2, we express no view on whether
dtice-fixing involved in the case. Be-
he nature of the legal problem in-
the posture in which the case reach-
save assumed liability on the part of
ants only arguendo—not in actuai-

<5 ceedings consistent with this opinion.

treated as the alter ego of the
Perma Life Mufflers, Ine., su-

preme wwation in
Hinois Briek's now famous footnote 16,
Soinmenting on exceptions to nonuse of de-
fensive passing on: “Another situation in

Be Ghich market forces have been superseded
‘a pass-on defense might be permitted is

= Ser the direct purchaser is owned or con-
polled by its customer.” Mlinois Brick, su-
‘pra, 481 US. at 786, 97 S.Ct. at 2070. Mir-
oring that exception to offensive passing
‘on reflects the situation here where the
direct seller is owned by the alleged price-

ee fixer. We conclude, therefore, that claims

jhave been properly asserted against Borden

tees and SoCrest.

On the record before us, we are hesitent
to-determine that other defendants may

= hive aold products direetly to the plaintiff.
= hat inquiry should be made by the district
Moreover, we decide no more than

is entitled to present its

dlaims and now must prove not only that
“there-was a conspiracy but also thet it
harmed plaintiff. Accordingly, the judg-
“ment of the district court will be vacated
and the matter remanded for further pro-

OPINION SUR PETITION FOR
PANEL REHEARING

PAWEIS, Cixeuit Judge.

- {After petitions for rehearing before the

oar in bane and, alternatively, before the
Panel were submitted, further argument
‘was had before the panel, Because of the

= Positions taken by the patties, we think

“= that further comment irom us is appropri-
a

8, Cases in which a plaintiff was separated from
“dt Bricefixer by only the violator's subsidiary
have been raze, and are distinguishable from
the majority of cases where intervening levels
{n the distribution chain are not controlled by
Sefendants. See In re Western Liquid Asphalt
‘Cases, 487 F.2d 191, 199-200 (8th Cir. 1973);
Handler & Biechman, Antitrust and the Con-
“sumer Interest: The Fallacy of Parens Pairiae

IN RE SUGAR INDUSTRY A.«f1TRUST LIT. 19
(Che me 879 F24 13 (1978)

The appeal was originally submitted lo us,
on @ narrow question—did Stotter's status
as a direct purchaser of candy entitle it to
pursue antitrust claims based on price-fix-
ing of sugar which was incorporated in the
candy? We conéluded that suit could be
‘maintained where a refiner, or its subsidi-
ary used its sugar in manufacturing: eandy
which it sold to the plaintiff.

[5] In its petition for reheating, Borden
asserts as a factual matter that sugar re-
fined by Borden was not used in manufae-
turing the candy it sold to Stotter. The
petition is supported by an affidavit prepar-
ed after this court’s opinion had been filed.
‘SuCrest, however, did not ask for rehearing
and did not join in Borden’s petition. Since
the affidavit of Borden wes not part of the
record in the district court, we do not con-
sider it here. See System Operations, Inc.
¥. Scientific Games Development Corp, 555
F.2d 1181, 1144 n.17 (8¢ Cir. 1977); Jaconski
vy, Avisun, 359 F.2d 981, 986 n.11 (8d Cir.
1966). Moreover, Borden's petition raises a
‘ground it did not urge in its brief or et oral
argument.

‘The district court decided the issue before
it as one of law: as to the sugarcontaining
products it purchased, Stotter was “too re-
‘mote in the chain of distribution of refined
sugar to make claim » At the
original oral argument, eounsel for the de-
fendants accurately stated that the ques-
tion was one of law and spoke of transfer of
sugar from one operating unit of a compa
ny to another unit of the same company.
The issue beford us, therefore, was whether
Stotter was permitted to maintain a claim
‘a8 a direct purchaser from Borden ef candy
manufactured with sugar Borden had re-
fined. ‘The factual question of whether the
candy contained Borden sugar was not ar

and a Suggested New Approach, 88 Yale Li

626, 645 1.97 (1976); Note, Sealing the Hinols

Brick Wall: The Future of Indirect Purchasers

Jn Antitrust Litigation, 63 Cornell LRev. 308,

327 (1878). Ci. Perkins v. Standard Oi] Co.

395 U.S. 642, 647-48, 89 S.Ct. 1871, 23 LEd.24

1595 (eales ‘through controlled subsidiaries

‘deemed 2 mere formal exchange in a Robinson-
Patman situation).20

‘gued or briefed but was rather assumed as
‘a predicate for the legal problem under
consideration. Bordon, or any other de-
fendant, of course, is not precluded from
now contending on remand to the district
court that none of its refined sugar was in
the products it sold to Stotter, that it did
not engage in a price-fixing conspiracy or
that plaintiff did not sustain damages, The
distriel court did not make findings on
‘these Factual matters but accepted them
arguendo in concluding that Stotter was too
far down the chain of distribution to main-
tain an action.

[6] In the course ‘of our opinion, we
referred at times to the plaintiff's adversar-
ies as “defendants,” and Stotter now con-
tends that we have determined that 2 claim
may properly be asserted against all of the
alleged co-conspirators. Stotter reasons
that alt co-conspirators are jointly and sev-
erally liable and, therefore, damages sus-
tained by a dircet purchaser from one may
be recovered from all or any one of the
conspirators. Another variation of this is-
sue was advanced by Stotter during the
post-opinion argument; whether Stotter
was entitled to recover from Borden or
‘SuCrest for purchases of candy made with
sugar received from another alleged co-con-
spirator, ©. g, an unaffiliated company,
such as Amstar Corporation. Although
these are important points, they were not,
raised in the district court nor briefed on
appeal. We therefore follow our general
procedure and do not reach those legal
problems at this juncture. See Singleton v.
Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 49
LEd.2d 826 (1976). ‘They are properly mat-
ters for the consideration of the district
‘court in the first instance, if they become
material to the litigation.

‘The petition for rehearing will be denied
and the case is remanded to the district
couirt for further proceedings.

579 FEDERAL REPORTER, 24 SERIES

COLUMBIA METAL CULVERT
COMPANY, INC,, Appellant,
KAISER ALUMINUM & CHEMICAL
CORPORATION, Kaiser Aluminum &
‘Chemical Sales, Inc., Robert A. Kennedy
and Kennedy Culvert & Supply Compa-

ny and Robert Kennedy.

‘No. 77-1846,

United States Court of Appeals,
‘Third Cirevit.

Argued Feb. 22, 1978.
Decided May 24, 1978.

In suit for antitrust violations in the
market for: aluminum culvert pipe, the
United States District Court for the East-
ern District of Pennsylvania, Edward N.
Cahn, J., entered a directed verdict for de-
fendants at the close of plaintiff's case, and
plaintiff Sppealed. The Court of Appeals,
Adams, Cireuit Judge, held that: (1) there
‘was sufficient evidence to allow a jury rea-
sonably to conclude that a relovant market
for Sherman Act purposes was composed of
aluminum culvert; (2) there was sufficient
evidence to go to the jury on the charge
that defendant parent corporation, which
manufactures aluminum sheet and coil
from which aluminum culvert pipe is con-
structed, and defendant subsidiary corpora-
tion, which sells the sheet and coil to pipe
fabricators such as plaintiff and, in addi-
tion, fabricates and sells aluminum culvert
pipe itself in competition with other fabri-
ators, violated the Sherman Act by monop-
olizing or altempting to monopolize the alu-
minum culvert market; (8) there was suffi-
ent evidenee to go to the jury on the
charge that the parent and subsidiary de-
fendants conspired in restraint of trade, in
violation of the Sherman Act's first section,
10 drive plaintiff out of business, but there
‘was insufficient evidence to allow that jury
reasonably to find a “unity of purpose, de-
sign or understanding” between those cor-
porate defendants and the other two de-

COLUMBI

fondants, and (4) there was
dence to allow the jury reas
© the “line of commerce” re
exclusive dealing arranger

<5" In evaluating a defen

© directed verdiet, the que:
sufficient evidence has t
‘when viewed in light m
plaintiff and allowing all
‘ences in its behalf, to allo
‘iat relief is warranted,

2. Federal Civil Procedur:
‘Where the issues are
tion by the jury, the judge
jury of its role at trial
action is necessary to gua
dict founded solely on “m

3. Monopolies ¢=28(8)
In suit for antitrust
market for aluminum eult
trict court erred in dete
jury could reasonably fi
‘market in the ease to be
speetrum of products mor
“aluminum culvert and
which determination red
position of defendants frot
aluminum market to less
‘aluminum and steel mark
‘was sufficient evidence to
sonably to conclude that +

RE for Sherman Act purposes

‘caluminum culver. She

The “monopoly” eo:
i Sherman Act’s second s
€ power to control prict
“petition.” Sherman Anti-
USCA. § 2.