576 F.2d 248 | 9th Cir. | 1978
Lead Opinion
This appeal arises from the dismissal of the second of two antitrust lawsuits filed by plaintiff Rutledge against various hydraulic hose manufacturers and assemblers. Rutledge’s first suit was filed in 1969 against five hose manufacturers and seven hose assemblers alleging a price fixing conspiracy in violation of Sections 1 and 2 of the Sherman Act and price discrimination in violation of the Clayton and Robinson-Pat-man Acts. (Rutledge v. Electric Hose and Rubber Co. (C.D.Cal.1971) 327 F.Supp. 1267 (hereinafter referred to as Rutledge I).) The trial judge in Rutledge I entered judgment dismissing the action at the close of Rutledge’s case and this court affirmed on January 30, 1975. (511 F.2d 668.)
On March 7,1975, Rutledge filed the complaint in this case (hereinafter referred to as Rutledge II). The Rutledge II complaint is almost a carbon copy of Rutledge I, except that (1) Boston Woven Hose and Rubber Company (“Woven Hose”), which had not been a party to the first suit, was named as a defendant in the second suit,
The district court correctly decided that plaintiff was not free to relitigate in Rutledge II any of the issues which were conclusively adjudicated against him in Rutledge I. Thus plaintiff cannot relitigate any of the claims of antitrust violations or claimed conspiracies that were averred in Rutledge I and repeated in Rutledge II. Plaintiff’s attempt to avoid the impact of issue preclusion (collateral estoppel) by claiming that it would be unfair to apply the doctrine to him is unsupported by the record. His argument is that he should not be foreclosed by the prior litigation because he had less than two years after the complaint was filed within which to complete his discovery and that his representation in propria persona in the prior case was no match for the array of law firms which represented the defendants in Rutledge I. These facts may explain why he lost Rutledge I, but they provide no legal basis for failing to apply issue preclusion to his second action.
Rutledge plausibly argues that issue preclusion does not apply in respect of his claim in Rutledge II that Woven Hose was guilty of price discrimination in its granting secret discounts to certain favored customers. We need not resolve that issue, however, because we are convinced that Rutledge’s claim for relief based upon these secret discounts is barred by the statute of limitations.
Rutledge acknowledges that the conduct of which he complains occurred more than four years before he filed the complaint in Rutledge II. He argues, however, that he avoided the bar of limitations by successfully pleading that Woven Hose fraudulently concealed the existence of this claim for relief. Rutledge had the burden of both pleading and ultimately proving fraudulent concealment. To carry that burden, he had to plead facts showing that Woven Hose actively misled him, that he had neither
The sole averments in the Rutledge II complaint directed to the fraudulent concealment argument are as follows: “Defendant has fraudulently concealed the existence of the aforesaid price discrimination through the adoption of elaborate schemes, resorting to secrecy to avoid detection, and by denying that such discrimination or price differential existed.” The only averment that is not conclusory is the allegation that defendant denied that such discrimination or price differential existed. Rutledge cannot rely upon conclusory statements to avoid the bar of limitations. He must plead with particularity the circumstances surrounding the concealment and state facts showing his due diligence in trying to uncover the facts. (E. g., Dayco Corp. v. Goodyear Tire & Rubber Co., supra; City of Detroit v. Grinnell Corp., supra; Laundry Equipment & Sales Corp. v. Borg-Warner Corp. (7th Cir. 1964) 334 F.2d 788.)
To avoid the bar of limitation by invoking the concept of fraudulent concealment, the plaintiff must allege facts showing affirmative conduct upon the part of the defendant which would, under the circumstances of the ease, lead a reasonable person to believe that he did not have a claim for relief. Silence or passive conduct of the defendant is not deemed fraudulent, unless the relationship of the parties imposes a duty upon the defendant to make disclosure. The affirmative act of denying wrongdoing may constitute fraudulent concealment where the circumstances make the plaintiff’s reliance upon the denial reasonable, but this is not such a case. As early as 1965, Rutledge had expressed his suspicion to attorneys for the Justice Department’s antitrust division that Woven Hose was giving a secret additional discount to one of Rutledge’s competitors, the Weatherhead Company, a suspicion based on Weatherhead’s low resale price.
AFFIRMED.
. The defendants in the first suit were named as co-conspirators of Woven Hose in the Rutledge II complaint.
. Rutledge claims that the Justice Department attorneys assured him that no secret discount had been offered. However, it has been observed in a similar context that such government assurances will not necessarily be held to “negative” a defendant’s well-founded suspicion of an antitrust violation, at least where the existence of a fraudulent concealment for purposes of tolling the statute of limitations is at issue. (See Starview Outdoor Theatre v. Paramount Film Distrib. Corp. (N.D.Ill.1966) 254 F.Supp. 855, 857-58.)
. This case is unlike Mt. Hood Stages, Inc. v. Greyhound Corp. (9th Cir. 1977) 555 F.2d 687. in Mt. Hood, the jury had found as a fact that Mt. Hood neither knew nor should have known of Greyhound’s antitrust violation, and Greyhound conceded that it had attempted to conceal its antitrust violation. In our case, it is unnecessary to decide whether Rutledge knew enough facts to put him on constructive notice that he had a claim for relief against Woven Hose. The existence of his suspicion and his opportunities for discovery were relevant only as those facts bear upon the reasonableness of his reliance upon Woven Hose’s alleged denial of wrongdoing.
Dissenting Opinion
dissenting:
I dissent from the holding that Rutledge’s claim was time-barred and would remand for further proceedings. In my view Rutledge had the right to accept with
