The opinion of the court was delivered by: SUGARMAN
The defendant National Lead Company moves 'for an order construing the Final Decree herein, dated October 11, 1945, as not prohibiting' an agreement proposed to be made between National Lead Company and Fabriken Bayer Aktiengesellschaft, hereafter called 'Bayer'.
The decree made by Judge Rifkind
and affirmed by the Supreme Court
was the culmination of the trial of an action brought by the United States against movant, National Lead Company, Titan Company, Inc. and E. I. duPont de Nemours and Company, Inc., to enjoin the defendants from continuing violations of Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1, 2, and for ancillary remedies.
The defendants were found by the trial court 'to have been engaged in a combination in restraint of trade and commerce in titanium pigments among the several states of the United States and of foreign nations * * *'. The court also found 'that the defendants have been and now are parties to contracts, agreements, and understandings in restraint of such trade and commerce in violation of Section 1 of the Sherman Act, 26 Stat. 209, 15 U.S.C.A. § 1 * * *'.
Jurisdiction of the court is claimed by movant to rest upon the final paragraph of the decree which provides:
'13. Jurisdiction of this cause, and of the parties hereto, is retained by the Court for the purpose of enabling any of the parties to this decree, or any other person or corporation that may hereafter become bound, in whole or in part, thereby to apply to the Court at any time for such further orders, modifications, vacations or directions as may be necessary or appropriate (1) for the construction or carrying out of this decree, and (2) for the enforcement of compliance therewith and the punishment of violations thereof.'
In support of its motion, National Lead shows that it produces and sells titanium pigments in the United States and abroad. By paragraph 6 of the 1945 decree, movant and the co-defendants were enjoined '(a) from entering into, adhering to, maintaining or furthering, directly or indirectly, or claiming any rights under any contract, agreement, understanding, plan or program among themselves, the co-conspirators, or with any other person, partnership or corporation, which has as its purpose or effect the continuing or renewing of any of the agreements listed in paragraph 5 hereof'. The court by paragraph 5 of the decree adjudged certain agreements to be unlawful and restrained the defendants from further performance thereof and of any agreements amendatory thereof or supplemental thereto. Other provisions made to effectuate the decree are not here directly relevant except so much of paragraph 8 which required movant within one year to present a plan whereby it would acquire all of the stock of Titangesellschaft m.b.H. (TG) or divest itself of any interest therein. National Lead in compliance with this proviso has acquired the entire ownership of TG.
TG is a German corporation and a producer of titanium pigments. It was established by National Lead and I.G. Farbenindustrie A.G. (I.G.)
pursuant to agreements which bound the parties to the scheme or plan found to be unlawful and in violation of Section 1 of the Sherman Act.
Movant claims that TG's potential for expansion to meet the current worldwide demand for its product has been fully exploited and new facilities for production of titanium pigments in Germany are required to satisfy the pressing demands of the market.
For economic and financial reasons movant proposes to enter into an agreement with Bayer for the creation of such expanded facilities.
In barest outline, the proposal looks toward the exploitation of Bayer's existing site, its raw material, water supply, shipping facilities, trained personnel and other assets coupled with National Lead's patents, technical information and capital. National Lead and Bayer propose the formation of an as yet unnamed 'New Company' under their joint control and ownership at Krefeld-Uerdingen in the Federal Republic of Germany.
The draft of the proposed agreement refers to the terms of the final decree in this action and in effect National Lead and Bayer agree to abide by the terms thereof.
In opposition to the motion, the plaintiff United States urges that, against the background of the main action, the antiturst violations therein found and the final decree, the proposed agreement would be violative of the spirit if not the letter of Judge Rifkind's decree and is prohibited thereby. This contention is stressed regardless of the lawfulness of the proposal under the antitrust laws generally.
The United States points to the fact that Bayer is the successor to I.G. at least in respect of the subject matter of the proposed agreement between National Lead and Bayer, viz., production and distribution of titanium pigments.
In 1925, Bayer, formerly an independent company, merged into the I.G. entity. After the defeat of Nazi Germany the Allied High Commission for Germany ordered the dispersion of the ownership and control of I.G. and the extinguishment of its juristic personality. The assets of I.G. were distributed among twelve companies to promote competition in the German chemical and related ...