The opinion of the court was delivered by: METZNER
Plaintiffs are minority stockholders of General Motors Corporation who have based this derivative action against du Pont and General Motors primarily on matters involved in the government anti-trust suit against these corporations and U.S. Rubber Co. United States v. E. I. du Pont de Nemours & Co., 353 U.S. 586, 77 S. Ct. 872, 1 L. Ed. 2d 1057 (1957). The final judgment in that case, entered on March 1, 1962, dismissed without prejudice the claims alleging violations of the Sherman Act, and adjudicated that du Pont's acquisition of General Motors stock violated section 7 of the Clayton Act. In their complaint, plaintiffs have quoted at length from the above decision of the Supreme Court in the government suit, relying on section 5(a) of the Clayton Act, 15 U.S.C. § 16(a).
It is the usual practice in a private Sherman Act, litigation to defer a determination as to the effect to be given under section 5(a) to a prior government judgment until the deposition-discovery proceedings have been completed, and court and counsel are ready to frame the issues for trial. See, e.g., Alamo Theatre Co. v. Loew's, Inc., 143 F.Supp. 419 (N.D.Ill.1956). However, a different approach is necessary in this case in order to define the scope of deposition-discovery procedures. The complaint alleges and seeks recovery for both Sherman Act and Clayton Act violations. Since the government judgment was predicated solely on a violation of section 7 of the Clayton Act, serious questions arise as to the solace available to plaintiffs from that judgment. Section 7 condemns acts that have a reasonable tendency to result in violations of the Sherman Act. The latter act speaks of actual restraints and monopolies. As the Supreme Court pointed out,
'The Clayton Act was intended to supplement the Sherman Act. * * * Its aim was primarily to arrest apprehended consequences of intercorporate relationships before those relationships could work their evil, which may be at or any time after the acquisition, depending upon the circumstances of the particular case.' 353 U.S. at 597, 77 S. Ct. at 879, 1 L. Ed. 2d 1057. (Emphasis supplied).
Therefore a ruling on the availability to these plaintiffs of the judgment in the government suit is important to advise plaintiffs of the extent to which they must rely on independent evidence to prove their case.
Furthermore, and independent of the applicability of section 5(a), there is the question whether recovery of money damages may be had for a violation of section 7 of the Clayton Act.
Section 5(a) of the Clayton Act, 15 U.S.C. § 16(a), provides:
'A final judgment or decree * * * hereafter rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said laws * * * as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto'.
The Supreme Court has held that section 5(a) adopts the general principles of Collateral estoppel. Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 71 S. Ct. 408, 95 L. Ed. 534 (1951).
'Such estoppel extends only to questions 'distinctly put in issue and directly determined' in the criminal prosecution. * * * In the case of a criminal conviction based on a jury verdict of guilty, issues which were essential to the verdict must be regarded as having been determined by the judgment.' 340 U.S. at 569, 71 S. Ct. at 414, 95 L. Ed. 534.
Subsequent cases have held that this rule is applicable when the government suit was a civil suit. Eagle Lion Studios, Inc. v. Loew's, Inc., 248 F.2d 438 (2d Cir. 1957), aff'd by an equally divided Court, 358 U.S. 100, 79 S. Ct. 218, 3 L. Ed. 2d 147 (1958); Webster Rosewood Corp. v. Schine Chain Theatres, Inc., 263 F.2d 533 (2d Cir.), cert. denied, 360 U.S. 912, 79 S. Ct. 1296, 3 L. Ed. 2d 1261 (1959); Richfield Oil Corp. v. Karseal Corp., 271 F.2d 709 (9th Cir. 1959), cert. denied, 361 U.S. 961, 80 S. Ct. 590, 4 L. Ed. 2d 543 (1960).
Judge Learned Hand in the case of The Evergreens v. Nunan, 141 F.2d 927, 152 A.L.R. 1187 (2d Cir.), cert. denied, 323 U.S. 720, 65 S. Ct. 49, 89 L. Ed. 579 (1944), drew a distinction between ultimate facts and mediate data. Ultimate facts are those essential to the decision and 'upon whose combined occurrence the law raises the duty, or the right, in question'. Mediate data are facts 'from whose existence may be rationally inferred the existence of one of the facts upon whose combined occurrence the law raises the duty, or the right.' 141 F.2d at 928.
In Yates v. United States, 354 U.S. 298, 338, 77 S. Ct. 1064, 1087, 1 L. Ed. 2d 1356 (1957), the Court held that:
'. . . a prior judgment need be given no conclusive effect at all unless it establishes one of the ultimate facts in issue in the subsequent proceeding. So far as merely evidentiary or 'mediate' facts are concerned, the doctrine of collateral estoppel is inoperative. The Evergreens v. ...