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UNITED STATES v. GMC

March 25, 1960

UNITED STATES of America, Plaintiff,
v.
GENERAL MOTORS CORPORATION, Defendant



The opinion of the court was delivered by: HERLANDS

Motion by defendant for transfer to the Northern District of Ohio, Eastern Division, and for a stay. Motion by plaintiff for production of documents.

In this action under Section 7 of the Clayton Act, 15 U.S.C.A. § 18, the Government charges that General Motors violated that antimerger section by its 1953 acquisition of the stock and subsequently transferred assets of Euclid Road Machinery Company.

 Euclid then was one of the leading producers of off-highway earth-moving equipment. Although General Motors did not manufacture off-highway earthmoving equipment prior to 1953, it did manufacture major components of such equipment (e.g., diesel engines and transmissions); and General Motors supplied them to some of the manufacturers. In 1953, Euclid purchased more than half of its requirements for diesel engines and transmissions from suppliers other than General Motors.

 The complaint charges that 'since 1953 Euclid Division (of General Motors, which continued the business of the merged company) has materially reduced its purchase of diesel engines and transmissions from suppliers other than General Motors.' The complaint further alleges that the Euclid Division has enlarged the line, and that some of its new products are made exclusively with General Motors' diesel engines, Transmissions, and other components. According to the complaint, General Motors, prior to and during 1953, considered entering the earth-moving equipment field independently, by use of its own facilities.

 The Government's theory is that the acquisition violated Section 7 by reason of the fact (1) that it eliminated potential competition between General Motors and Euclid in the off-highway earth-moving equipment line; and (2) that its reasonably probable effect may be substantially to lessen competition (a) in that line, because General Motors enjoys a competitive advantage over other producers by reason of its integration and financial power, and because other mergers in the field may be fostered; (b) in the manufacture and sale of components; and (c) in the business of financing dealers' purchases and sales. The latter is said to be a line of commerce in which Yellow Manufacturing Acceptance Corporation (a wholly-owned subsidiary of General Motors) is engaged. The government asks for complete divestiture.

 The defendant moves, under 28 U.S.C.A. § 1404(a), to have the action transferred from this district to the Northern District of Ohio, Eastern Division, sitting in Cleveland. All of the plants, managerial offices and personnel of defendant's Euclid Division are located in Cleveland. Defendant's executive offices are in Detroit and New York.

 Section 1404(a) provides:

 'For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.'

 The motion is addressed to the sound discretion of the court. The controlling criteria have been expounded in Gulf Oil Corp. v. Gilbert, 1947, 330 U.S. 501, 508, 509, 67 S. Ct. 839, 91 L. Ed. 1055. Although a lesser showing of inconvenience is now required for transfer under section 1404(a) than was formerly required for dismissal under the doctrine of forum non conveniens (with which Gulf Oil was concerned, Norwood v. Kirkpatrick, 1955, 349 U.S.29, 32, 75 S. Ct. 544, 99 L. Ed. 789), the plaintiff's choice of forum will not be disturbed unless the balance of convenience and justice weighs heavily in favor of the defendant. Lykes Bros. S.S. Co. v. Sugarman, 2 Cir., 1959, 272 F.2d 679, 681.

 Under section 1404(a), the court may transfer an action to a more suitable forum when the plaintiff's choice of forum, although permitted by a venue statute, probably will work a substantial hardship upon the defendant and the witnesses, which hardship cannot be justified by a showing of countervailing convenience or necessity on the plaintiff's part. The plaintiff may not, by choice of an inconvenient forum, inflict upon the defendant expense and trouble not necessary to plaintiff's own right to pursue his remedy. Gulf Oil, supra, 330 U.S. at page 508, 67 S. Ct. at page 839; Koster v. (American) Lumbermens Mutual Casualty Co., 1947, 330 U.S. 518, 531-532, 67 S. Ct. 828, 91 L. Ed. 1067.

 A motion under section 1404(a) is usually brought soon after a complaint is filed. At that time, the parties generally do not have definitive knowledge of the principal issues, the lines of proof, the names of all witnesses, and the probable duration of the trial. Good-faith estimates and informed judgment must, to some extent, be utilized. The relative advantages and obstacles to a fair, speedy and economical trial (Gulf Oil Co., supra, 330 U.S. at page 508, 67 S. Ct. at page 839) must be evaluated in order to discern whether the movant has carried its burden of demonstrating that the balance of convenience and justice weighs heavily in its favor.

 The principal desiderata are: relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling witnesses; cost of obtaining attendance of witnesses; possibility of a view, if appropriate; and all other practical problems that would make the trial of a case easy, expeditious and inexpensive. In appraising the factors of public interest, it is also appropriate to give some consideration to the relative state of trial calendar congestion in the districts involved.

 Defendant's convenience must be viewed in light of not only the degree to which its business will be disrupted by trial in one forum rather than another, but also its cost of transporting to a city other than their origin (and maintaining therein) people, files and objects. According to its affidavits, defendant will rely almost entirely on the testimony of a number of important Euclid executives, and on data, documents, records, drawings and demonstrative evidence located at the Euclid Division plants and offices in and around Cleveland.

 If the trial is held in Cleveland, the Euclid executives can perform their regular duties except when actually testifying or preparing testimony. They need not neglect their regular duties for an entire day, or lose time waiting to testify, awaiting recall to the stand, or awaiting the settlement of procedural matters among the attorneys and the court. Even on days on which such a witness testifies, he can devote noncourt and evening hours to his regular work and to conferring with associates, ...


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