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FUCHS SUGARS & SYRUPS, INC. v. AMSTAR CORP.

October 8, 1975

Fuchs Sugars & Syrups, Inc., and Francis J. Prael, doing business as Lewis & Co., Plaintiffs
v.
Amstar Corp., Defendant


Ward, D.J.


The opinion of the court was delivered by: WARD

WARD, D. J.:

Defendant Amstar Corporation ("Amstar") moves pursuant to Rules 12(b)(6) and 12(f), Fed. R. Civ. P., for an order dismissing Count II of the amended complaint in this action and striking certain portions of that pleading. For the reasons hereinafter stated, the motion is denied.

 Plaintiffs are two among several "general sugar brokers" whose services in distributing sugar products were terminated on March 30, 1974 by Amstar, a leading manufacturer of refined cane sugar. The complaint charges violations of §§ 1 and 2 of the Sherman Anti-trust Act, 15 U.S.C. §§ 1 and 2, and § 7 of the Clayton Act, 15 U.S.C. § 18, in addition to raising certain state law claims.

 Rule 12(f), Fed. R. Civ. P., under which defendant moves, provides:

 
Motion to Strike. Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within 20 days after the service of the pleading upon him or upon the court's own initiative at any time, the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.

 Amstar argues that references in the amended complaint to the 1934 decree of this Court in United States v. The Sugar Institute are immaterial and must be stricken.

 Modern federal practice permits wide latitude in pleading. Nagler v. Admiral Corp., 248 F.2d 319, 322-25 (2d Cir. 1957). Motions to strike are not favored and are granted only if the challenged matter clearly has no bearing upon the issues of the action. 2 A. J. Moore, Federal Practice para. 12.21[2], at 2429 (2d ed. 1975).

 Plaintiffs maintain that they do not seek to enforce the 1934 decree but instead refer to it as indicative of Amstar's monopolistic intentions. Facts bearing upon defendant's "course of conduct" may carry weight. In any event, "allegations in a complaint which supply background or historical material or which are of an evidentiary quality will not be stricken unless unduly prejudicial to defendant." South Side Drive-In Co. v. Warner Bros. Pictures Dist. Corp., 30 F.R.D. 32, 34 (E.D. Pa. 1962).

 
Even if we were satisfied that the matter in the complaint[s] relating to the Government action was immaterial, it is settled law in this District that "immaterial allegations, and likewise verbose, conclusory, or evidentiary allegations, need not be stricken unless their presence in the complaint prejudices the defendant." In the last analysis, the complaint[s] [is] confined to matters of public record.

 Federated Department Stores, Inc. v. Grinnell Corp., 287 F. Supp. 744, 747 (S.D.N.Y. 1968).

 As part of the historical context of defendant's dealings, the mention of the decree is no more prejudicial than much of the rest of the amended complaint. At this still early stage of the litigation, far from the jury, the pleadings are best left undisturbed. Determinations as to the admissibility of evidence will be made at trial. See Federated Department Stores, Inc. v. Grinnell Corp., supra, at 748-49.

 The second portion of Amstar's motion is directed to plaintiffs' claim under § 7 of the Clayton Act. Defendant asserts that divestiture is not available as a remedy for private parties.

 Plaintiffs' entitlement to the relief of divestiture presents a difficult and unsettled question. There is authority on both sides;* the most recent and authoritative pronouncements have issued from the Ninth Circuit in International Telephone and Telegraph Corp. v. General Telephone & Electronics Corp., 518 F.2d 913 (9th Cir. 1975) ("ITT") and the Third Circuit, NBO Industries Treadway Companies, Inc. v. Brunswick Corp. 523 F.2d 262 (3d Cir. 1975) ("NBO").

 The Ninth Circuit has held that private parties may not obtain divestiture under § 7 while the Third Circuit, in dicta, indicates that this remedy is available. Recent law review commentary, Note, "The Use of Divestiture in Private Antitrust Suits" 43 Geo. Wash. L. Rev. 261 (1974), as well as the Anti-trust Division, United States Department of Justice, Brief for the United States as Amicus Curiae, submitted in ...


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