Opinion
Civ. A. No. 4672.
November 7, 1975.
James M. Tunnell, Jr., of Morris, Nichols, Arsht Tunnell, Wilmington, Del., Edward F. McKie, Jr., Dale H. Hoscheit, and James A. Sheridan, of Schuyler, Birch, Swindler, McKie Beckett, Washington, D.C., for plaintiffs.
Thomas S. Lodge, of Connolly, Bove Lodge, Wilmington, Del., Dugald S. McDougall, of McDougall, Hersh Scott, Chicago, Ill., for defendant.
OPINION
I. PARTIES AND JURISDICTION
This is a declaratory judgment action which poses questions regarding the validity, infringement and enforceability of a patent on certain improvements in color television picture tubes. Plaintiffs, Tokyo Shibaura Electric Co., Ltd., Toshiba America, Inc., and Toshiba Hawaii, Inc., (hereinafter collectively referred to as "Toshiba") are respectively, a Japanese corporation and its wholly-owned New York and Hawaiian subsidiaries which sell color television picture tubes in the United States. Defendant, Zenith Radio Corporation ("Zenith") is a Delaware corporation whose principal place of business is neither New York nor Hawaii; venue is properly laid in this district under 28 U.S.C. § 1391(c). Toshiba seeks a judgment declaring the invalidity, non-infringement and unenforceability of Zenith's United States Letters Patent No. 3,146,368 (the "'368 patent"), issued August 25, 1964 to J.P. Fiore and S.H. Kaplan. Zenith, as their assignee, has counterclaimed for infringement of the '368 patent by Toshiba. These issues have been tried, and I find that there exists a substantial and actual controversy between the parties on the issues presented in this action, justifying a declaratory determination of their respective rights.
The issue of damages on the counterclaim has been severed for separate trial (if necessary).
II. BACKGROUND FACTS
The story of color television picture tube design begins almost half a century ago (see DX 21, p. 1177), but it is sufficient for present purposes to refer only to the period commencing in 1953, when the Federal Communications Commission determined that television pictures transmitted in color had to be "compatible" with — that is, able to be received on — conventional black and white television receivers. Several different kinds of television picture tubes were proposed for use in the new "compatible" system and competed for favor in industry laboratories for some years. Although only one type ultimately entered commercial production, three types play a role in the present action and a description of the structure and operation of each is necessary.
For a general discussion of the developments leading up to this action, see Columbia Broadcasting System v. Sylvania Electric Products, Inc., 294 F. Supp. 468 (D.Mass. 1968), aff'd in part and remanded in part, 415 F.2d 719 (1st Cir. 1969), cert. denied, 396 U.S. 1061, 90 S.Ct. 755, 24 L.Ed.2d 755 (1970).
A. Common Features Of Relevant Tubes
In all three types of tubes, the color picture seen by the viewer is created in the same basic manner. On the inside surface of the viewing screen of the picture tube are deposited a very large number of "phosphors" — chemical materials which have the property of emitting visible light when bombarded by electrons (Tr. 47). Different phosphors will emit light of different colors, and by placing phosphors which emit the three "primary" colors of red, blue and green in close conjunction with each other on the viewing screen, any visible color can be reproduced by bombarding a suitable combination of these phosphors (Tr. 61; DX 21, p. 1178). For convenience, these phosphors will hereinafter be called red, blue and green, even though they are in reality whitish except when being bombarded (Tr. 62, 448). The emitted colors can be made brighter or dimmer by varying the intensity of the bombardment (Tr. 46, 50).
In the record the viewing screen is frequently referred to as the "faceplate".
This bombardment is accomplished by means of one or more "beams" of electrons generated by one or more "electron guns" which are mounted in the neck of the tube and which project the beams onto the viewing screen (Tr. 46-47). These beams bombard only a small portion of the screen at any one instant, but the different phosphors are so small and so close together, and the beam "scans" the viewing screen at so rapid a pace, that the human eye can perceive only a single color picture (Tr. 46-51).
The electrons striking the glass viewing screen have a tendency to remain there. Their accumulation can cause the screen to repel the similarly charged electrons aimed at it on the beam's next scan (Tr. 52), and for this reason a thin layer of aluminum is ordinarily placed on top of the phosphors on the inside surface of the viewing screen (see Fig. 3, infra). This layer not only conducts the electrons away from the screen after they have bombarded the phosphors but also increases the efficiency of the phosphors by reflecting out to the viewer the light initially emitted by the phosphors towards the inside of the tube (Tr. 52-53, 457). is the foundation for the claim, rather than to bar the enforcement thereof. Midstate Horticultural Co. v. Pennsylvania R.R., 320 U.S. 356, l.c. 359, 64 S.Ct. 128, l.c. 129, 88 L.Ed. 96, l.c. 100.
The rule is recognized in Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743, relied upon by the plaintiff, in the following language:
"If Congress explicitly puts a limit upon the time for enforcing a right which it created, there is an end of the matter. The Congressional statute of limitation is definitive." ( 327 U.S. l.c. 395, 66 S.Ct. l.c. 584, 90 L.Ed. l.c. 746).
Undoubtedly there are general federal doctrines providing relief for the victims of fraud which are read into every federal statute of limitations where Congress is silent on the matter. Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770. Holmberg v. Armbrecht, supra; Exploration Co. v. United States, 247 U.S. 435, 38 S.Ct. 571, 62 L.Ed. 1200; Bailey v. Glover, 88 U.S. (21 Wall.) 342, 22 L.Ed. 636; Annotations, 3 L.Ed. 1886, 130 A.L.R. 8, supp. 24 A.L.R.2d 1413. As stated earlier, generally these doctrines are not applicable where there is a newly created statutory cause of action and a special statute explicitly limiting the time for action thereon. But there are cases where the general federal doctrines are applied to special statutes of limitation applicable to legislatively created or expanded causes of action which did not exist before. Glus v. Brooklyn Eastern District Terminal, supra, a unanimous opinion in a Federal Employers' Liability Act case; Annotation, 3 L.Ed.2d l.c. 1888.
All this brings us back to the critical inquiry under Glus and Holmberg, whether in respect of the particular cause of action, Congress has explicitly or clearly indicated its intention to exclude application of general doctrines suspending tolling of, or estopping the application of, statutes of limitations.
Whether the statute clearly shows an intention to exclude the application of general doctrines is a matter of opinion which can be settled finally only by the court of last resort.
IV.
Some consideration must be given to the subject matter of the new cause of action. It is conceivable that general equitable principles of estoppel may be applicable to limitations in Federal Employers' Liability Act cases involving tort actions by employees, as held in Glus, and the same principles be inapplicable in actions based on conspiracy which is ordinarily secretive in nature. The fact that Congress, in enacting section 4B, was legislating against conspiracies, ordinarily concealed, is entitled to some consideration in determining the Congressional intent.
V.
The foreseeable effects of the application of equitable principles of suspension and estoppel upon the ability of the courts to process anticipated litigation should be given some consideration. In this connection there is the practical consideration that these antitrust cases and other cases ordinarily on the dockets may overtax the capacities of the courts if the period of limitation can be extended backward in time as contended by the plaintiff. Congress should be assumed to have had in mind the capacity of the courts to process the authorized litigation. If plaintiff's contention is sustained there is no definite limit in time beyond which treble damage actions are barred.
For these five reasons, among others, the conclusion is reached that the motions to dismiss and for summary judgment should be sustained.
Before closing, consideration should be given to the Moviecolor case relied upon by the plaintiff.
THE MOVIECOLOR CASE
In a thoughtful opinion, Judge Feinberg of the District Court for the Southern District of New York has reached a conclusion contrary to that expressed in this memorandum. Atlantic City Electric Co. v. General Electric Co., D.C., 207 F. Supp. 613. This conclusion was based upon an analysis of the opinion of the Court of Appeals for the Second Circuit in Moviecolor, Ltd. v. Eastman Kodak Co., 288 F.2d 80. Moviecolor is binding on the District Courts of the Second Circuit and strongly persuasive in its holding. There is a considerable difference of opinion concerning the interpretation to be given to Moviecolor. There is a serious question whether, viewed in the light most favorable to plaintiff, Moviecolor's holding is dictum. The Southern District of New York in Atlantic Electric took the position that even if Moviecolor was dictum on this issue, it was controlling. This Court is not compelled to take the same position in the absence of any expression by the Court of Appeals for the Eighth Circuit. Therefore, the refinements of Moviecolor will not be discussed. Judge Feinberg seems to have made a scholarly appraisal of that case in Atlantic Electric, but Moviecolor, although entitled to great respect, is not final in any view because the court rendering the opinion is not the court of last resort.
In addition to those already mentioned, there are other cases supporting plaintiff's view, including the clear holding in Dovberg v. Dow Chemical Co. (E.D.Pa.) 195 F. Supp. 337. They have been given serious consideration in reaching the conclusion expressed herein.
For the assistance of those reviewing this ruling there are attached hereto summaries of the principal points and authorities relied upon by the plaintiff and the defendants in this matter, marked Exhibits C and D respectively.
EXHIBIT A
BRIEF SUMMARY OF LEGISLATIVE HISTORY OF SECTION 4B OF CLAYTON ACT
The following list shows the bills considered by various congresses prior to the adoption of H.R. 4954 by the First Session of the 84th Congress:
81st Congress, 1st Session S. 1910, H.R. 4985
(1) a six-year statute of limitations for private treble damage suits;
(2) in the case of conspiracy, six years after the date of discovery of the facts upon which the plaintiff relies.81st Congress, 2d Session H.R. 7905
(1) United States may recover actual damages;
(2) six-year statute for both Government and private damage suits;
(3) six years after discovery for both United States and private plaintiffs;
(4) suspension of statute during pendency of Government criminal or civil suit applicable to damage suits of United States as well as private plaintiffs;
(5) judgment in Government criminal or civil case conclusive evidence against a defendant in suits for damages both by the United States and private plaintiffs.
H.R. 8763
(1) United States may recover actual damages;
(2) any action for damages by United States or private plaintiffs shall be forever barred unless commenced within six years after the cause of action accrued;
(3) suspension of statute during pendency of Government criminal, civil or damage suit, applicable to private suits;
(4) judgment in Government criminal or civil case (but not in Government damage suit) prima facie evidence in damage suits both by United States and private plaintiff.82nd Congress, 1st Session H.R. 3408 and 1323
identical with H.R. 8763 (1950)
H.R. 1986
six years after discovery of facts by private plaintiff.
H.R. 109
treble damages in Government suits.
83rd Congress, 1st Session H.R. 467
(1) five-year statute of limitations applicable to Government and private damage suits;
(2) when suspended by Government criminal or civil suit, private suit had to be commenced either during period of suspension, or within five years after cause of action accrued;
(3) causes of action barred by state statutes on the effective date of the act would not be revived;
(4) eliminated provision suspending statute during pendency of Government damage suit.
EXHIBIT B CELLER-PATMAN COLLOQUY
"Mr. Patman: Mr. Chairman, after the word `accrued' in line 7, page 2, I have an amendment prepared to include the phrase `and became known', so as to make it clear that the cause of action or that limitation would not commence to run against a cause of action until it is discovered, until it became known, and, therefore, I would like to ask the chairman of the committee this question: Is it your understanding, Mr. Chairman, that the cause of action will not commence to run, the limitation will not commence to run on the cause of action until after it is discovered, 4, 6 or 10 years hence?
"Mr. Celler: The statute of limitations will start running from the time the action accrues, not from the time of discovery. If you make it time of discovery, then you practically have no statute of limitations at all. An action could have accrued and the person aggrieved might not have heard of it for 20 years. Under the suggested amendment he would have a right to bring an action after 20 years, after the evidence will have been lost, and the defendant would be put in a rather deplorable situation in that regard. We provide that the 4-year statute shall start to run from the time the wrong was done, not from the time of discovery.
"Mr. Patman: Even in the case of fraud or conspiracy?
"Mr. Celler: No. In the case of fraud or conspiracy the statute of limitations only runs from the time of discovery.
"Mr. Patman: That is the point I wanted to make sure of. You are not attempting to change that particular part of it?
"Mr. Celler: Not at all.
"Mr. Patman: Mr. Chairman, the proposal for inserting the words `and become known' after the word `accrued' in line 7, page 2, is to emphasize and make clear in the law that the period of limitations shall not commence to run until at least covert wrongs have been discovered. We should make certain that in enacting a uniform Federal statute of limitations we will not be acting to limit the damage period to 4 years, even though a monopolistic conspiracy may have lasted for 10 years before the victim even knew of its existence. Perhaps the amendment I propose will not insure fully against such unjust result, but it will serve to improve the provision which has been presented in H.R. 4954 in making certain that the action is not barred until a period of 4 years after the victim learned of the existence of his cause of action." 101 Cong. Rec. 5132-33 (1955).
EXHIBIT C PLAINTIFF'S POINTS AND AUTHORITIES I
The applicability of the Federal Doctrine of Fraudulent Concealment to Section 4B of the Clayton Act is not a case of first impression. Two previous cases have involved the same question and have applied the doctrine to toll Section 4B of the Clayton Act. Moviecolor, Ltd. v. Eastman Kodak Co., 288 F.2d 80 (2nd Cir. 1961), cert. denied, 368 U.S. 821, 82 S.Ct. 39, 7 L.Ed.2d 26 (1961). Dovberg v. Dow Chemical Co., 195 F. Supp. 337 (E.D.Pa. 1961).Both cases state that the doctrine of Federal Fraudulent Concealment tolls the running of the statute of limitations contained in the Clayton Act.
II
The Federal Doctrine of Fraudulent Concealment is read into every statute of limitations governing federally created rights unless a clear unequivocal intent to the contrary is expressed by the Congress. Sherwood v. Sutton, Fed.Cas. No. 12,782, 5 Mason 143 (D.N.H. 1828); Bailey v. Glover, 88 U.S. (21 Wall.) 342, 22 L.Ed. 636 (1875); Traer v. Clews, 115 U.S. 528, 6 S.Ct. 155, 29 L.Ed. 467 (1885); Kirby v. Lake Shore M.S.R.R., 120 U.S. 130, 7 S.Ct. 430, 30 L.Ed. 569 (1887); Exploration Co. v. United States, 247 U.S. 435, 38 S.Ct. 571, 62 L.Ed. 1200 (1918); Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946).
It should be noted that the Supreme Court in the Holmberg case states that the equitable doctrine of Fraudulent Concealment is read into every federal statute of limitation.
III
The clear expression of the congressional intent requires the application of the Federal Doctrine of Fraudulent Concealment to Section 4B of the Clayton Act.
The Supreme Court of the United States has never refused to apply doctrine of Fraudulent Concealment to any statute of limitation nor has it ever announced that a substantive statute of limitation is immune to equitable considerations. Grossman v. Young, 72 F. Supp. 375 (S.D.N.Y. 1947); Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959).
The Glus case would seem to dispel any remaining doubt that equitable considerations can toll a statute of limitation incorporated into a statutory cause of action.
The colloquy between Congressman Patman and Congressman Celler on the floor of the House clearly reveals that Congress intended the doctrine of Fraudulent Concealment would toll the statute of limitation of the Clayton Act (Cong. Rec., Vol. 101, Part 4, pp. 5132-3, 84 Cong.Fed.Sess. (1955) U.S. Code Congressional Administrative News, p. 308.
"Mr. Patman: Even in the case of fraud or conspiracy?
"Mr. Celler: No, in the case of fraud or conspiracy the statute of limitation only runs from the time of discovery."
Congressman Celler as chairman of the House Judiciary Committee and Floor Manager of the bill clearly recognized the distinction between a discovery bill which was rejected and the then existing doctrine of Fraudulent Concealment.
IV
The discovery doctrine and the Federal Doctrine of Fraudulent Concealment are absolutely different and have no relation to each other. Tinkoff v. United States, 211 F.2d 890 (7th Cir. 1954); Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated, Ltd., 185 F.2d 196 (9th Cir. 1950); Moviecolor, Ltd. v. Eastman Kodak Co., 288 F.2d 80 (2nd Cir. 1961), cert. denied, 368 U.S. 821, 82 S.Ct. 39, 7 L.Ed.2d 26 (1961); Dovberg v. Dow Chemical Co., 195 F. Supp. 337 (E.D.Pa. 1961).V
The applicability of the Federal Doctrine of Fraudulent Concealment will not abrogate the congressional intent for uniformity because this doctrine is read into every federal statute of limitation. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946).
The language adopted by Congress under which the limitation period begins after a cause of action "accrues" itself indicates that the Fraudulent Concealment Doctrine is applicable, because it has been held that causes of action do not accrue when there is concealment until after the concealment is broken. Exploration Co. v. United States, 247 U.S. 435, 38 S.Ct. 571, 62 L.Ed. 1200 (1918); Kirby v. Lake Shore M.S.R.R., 120 U.S. 130, 7 S.Ct. 430, 30 L.Ed. 569 (1887); Kicklighter v. New York Life Ins. Co., 145 F.2d 548 (5th Cir. 1944).
EXHIBIT D DEFENDANTS' POINTS AND AUTHORITIES I
This is a case of first impression. Cases such as American Tobacco Company, Crummer, Philco, Norman and Moviecolor dealt with state statutes of limitations which were applicable prior to the enactment of Section 4B of the Clayton Act. Since the state statutes were statutes of general application not enacted by the sovereign that created the right which plaintiff asserts, they must be regarded as procedural and subject to the federal rule that procedural statutes are tolled by fraudulent concealment. The discussion of the application of the doctrine of fraudulent concealment to Section 4B of the Clayton Act, which is found in Moviecolor, is, by the court's own admission, merely dicta and is not persuasive. American Tobacco Company v. People's Tobacco Company, 204 F. 58 (5th Cir. 1913); Crummer Company v. Du Pont, 117 F. Supp. 870 (N.D.Fla. 1954); 223 F.2d 38 (5th Cir. 1955); 255 F.2d 425 (5th Cir. 1958); Philco Corp. v. Radio Corporation of America, 186 F. Supp. 155 (E.D.Pa. 1960); Norman Tobacco Candy Co. v. Gillette Safety Razor Corp., 197 F. Supp. 333 (N.D.Ala. 1960). Moviecolor, Limited v. Eastman Kodak Co., 288 F.2d 80 (2nd Cir. 1961).
Had there in fact been a question of limitations in Dovberg v. Dow Chemical Company, 195 F. Supp. 337 (E.D.Pa. 1961), Section 4B of the Clayton Act would have been involved. However, there was no reason to consider the statute of limitations in that case and the court's discussion of the problem must be regarded as dicta.
II
Congress has the power to enact a definitive statute of limitations which is not subject to tolling for any reason whatsoever. Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 90 L.Ed. 743 (1946); Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 64, 73 S.Ct. 580, 97 L.Ed. 821 (1953); Adams v. Albany, 80 F. Supp. 876, 881 (S.D.Cal. 1948). Congress in enacting Section 4B of the Clayton Act plainly and unequivocally barred all claims under Section 4 of the Clayton Act filed more than four years after such claims accrued. Inasmuch as the language of Section 4B is plain and unequivocal, there is no need to resort to other aids of statutory construction. Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 64, 73 S.Ct. 580, 97 L.Ed. 821 (1953); Soriano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957); United States v. Borin, 209 F.2d 145, 147 (5th Cir. 1954), cert. den. 348 U.S. 821, 75 S.Ct. 33, 99 L.Ed. 647 (1956); Adams v. Albany, 80 F. Supp. 876, 881 (S.D.Cal. 1948). Conclusive proof that there was to be no implied exception to the bar created by Section 4B is found in the fact that at the same time Congress expressly enacted in Section 5(b) the one exception to the absolute bar contained in Section 4B. Where Congress has used general mandatory language and has imposed one or more explicit exceptions, the Court has no power to read in an additional exception. Soriano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957); Kendall v. United States, 107 U.S. 123, 125, 2 S.Ct. 277, 27 L.Ed. 437 (1883).
III
Section 4B, being a substantive part of the statute creating a cause of action, extinguishes the cause of action and cannot be tolled except by express legislative authority. The courts have consistently held that where the time for commencing an action is prescribed in the statute which creates the liability and gives the right of action, the time is not extended by reason of fraud or concealment which might work an extension of ordinary statutes of limitations. Pollen v. Ford Instrument Co., 108 F.2d 762 (2nd Cir. 1940); The Harrisburg, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358 (1886); A.J. Phillips Co. v. Grand Trunk Western Railway Co., 236 U.S. 662, 35 S.Ct. 444, 59 L.Ed. 774 (1915); Scott v. Railroad Retirement Board, 227 F.2d 684 (7th Cir. 1955); United States ex rel. Texas Portland Cement Co. v. McCord, 233 U.S. 157, 34 S.Ct. 550, 58 L.Ed. 893 (1914); Leimer v. Woods, 196 F.2d 828 (8th Cir. 1952); United States v. Borin, 209 F.2d 145 (5th Cir. 1954), cert. den. 348 U.S. 821, 75 S.Ct. 33, 99 L.Ed. 647 (1956); Adams v. Albany, 80 F. Supp. 876 (S.D.Cal. 1948).
See also, Frazee v. Partney, 314 S.W.2d 915 (S.Ct.Mo. 1958). As long as the statute of limitations is specifically directed at the right created by statute, it is immaterial that the limitations provision may be contained in a different statute or may have been passed subsequent to the enactment of the statute creating the right. Davis v. Mills, 194 U.S. 451, 24 S.Ct. 692, 48 L.Ed. 1067 (1904); Midstate Horticultural Co. v. Pennsylvania R. Co., 320 U.S. 356, 64 S.Ct. 128, 88 L.Ed. 96 (1943).
IV
The legislative history of Section 4B is consistent with the plain meaning of the statutory language. During the six years prior to the enactment of Section 4B in 1955, Congress had before it numerous bills to establish a uniform federal statute of limitations for treble damage antitrust actions. Congress was repeatedly urged to insert a fraudulent concealment exception and held extensive hearings on the advisability of such an exception, but consistently refused to adopt any such proposals. See schedule appearing at pages 16-18 of brief filed by co-defendants. The eleventh-hour colloquy between Congressman Patman and Congressman Celler on the floor of the House (Cong. Rec. Vol. 101, part 5, pp. 5132-33, 84th Cong., 1st Sess. (1955)) cannot be given any weight in view of the consistent refusal of both the House and Senate to include a fraudulent concealment exception. Pennsylvania R.R. Co. v. International Coal Mining Co., 230 U.S. 184, 194, 33 S.Ct. 893, 57 L.Ed. 1446 (1913); Federal Trade Commission v. Anheuser-Busch, Inc., 363 U.S. 536, 80 S.Ct. 1267, 4 L.Ed.2d 1385 (1960); Brown Shoe Co. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510.
V
If the doctrine of fraudulent concealment is read into Section 4B, the Congressional effort to establish a uniform federal statute of limitations to replace the multiple statutory limitations periods resulting from applying state laws will be completely nullified and every conspiracy case will have its own individual statute of limitations. Certainly this is contrary to Congressional intent.