United States District Court, Southern District of New York
December 20, 1990
COUNTY OF ORANGE, PLAINTIFF,
SULLIVAN HIGHWAY PRODUCTS, INC. AND NORTH DAKOTA CEMENT COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Martin, District Judge.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the defendants' motion for
partial summary judgment dismissing that part of plaintiff's
claim that seeks to establish defendants' liability and resulting
damages beyond 1983. For the reasons discussed below, defendants'
motion is granted.
Plaintiff commenced this action pursuant to the Sherman and
Clayton Acts to recover damages resulting from a conspiracy to
submit non-competitive, rigged bids and to allocate geographic
areas within New York State for the sale of asphalt to the
plaintiff. The action arises from a one-count indictment filed in
this Court on June 25, 1987 charging Sullivan Highway Products,
Inc. ("Sullivan") and its president Patrick Reardon as well as
three other companies and their principals with conspiracy to rig
bids from 1978 through 1983. On April 27, 1988, Sullivan, through
corporate resolution, and Reardon pled guilty to the indictment
pursuant to a cooperation agreement and testified as government
witnesses at the trial of the other co-conspirators, all of whom
were acquitted.*fn1 Sullivan was fined $50,000.00 and Reardon
was sentenced to one year probation and no fine. United States
v. Yonkers Contracting Co., 682 F. Supp. 757 (S.D.N.Y. 1988)
(Goettel, J.). Based upon the collateral estoppel effect of the
criminal convictions, plaintiff's motion for partial summary
judgment as to defendants' liability was granted in an opinion by
Judge Keenan, dated October 12, 1989.*fn2
Defendants' motion, which apparently stems from an Orange
County "Explanatory Memorandum" which indicated that the County
would be seeking damages from 1978 through 1987, is
straightforward. Simply, defendants claim that plaintiff has
failed to present any evidence that the conspiracy extended
beyond 1983. In fact, defendants present evidence, discussed in
detail below, which indicates that the conspiracy, or at least
defendants' participation therein, ended sometime in 1983
following a meeting between Reardon and a co-conspirator, Nick
Badami, at one time the president of Maybrook Materials, Inc.
Plaintiff, in opposition to defendants' motion, does not
present any evidence that indicates either that the conspiracy
lasted beyond 1983 or that refutes defendants' contention that
the conspiracy ended after Reardon's meeting with Badami.
Instead, plaintiff relies upon a line of cases that provides for
a presumption that a conspiracy continues to exist until a
defendant satisfies his or her burden of showing some affirmative
act indicating abandonment of participation in the conspiracy or
termination of the conspiracy. See, e.g., Hyde & Schneider v.
United States, 225 U.S. 347, 369, 32 S.Ct. 793, 803, 56 L.Ed.
1114 (1912); United States v. Battista, 646 F.2d 237, 246 (6th
Cir.), cert. denied, 454 U.S. 1046, 102 S.Ct. 586, 70 L.Ed.2d
488 (1981); United States v. Borelli, 336 F.2d 376, 388 (2d
Cir. 1964), cert. denied, 379 U.S. 960, 85 S.Ct. 647, 13
L.Ed.2d 555 (1965); United States v. Rollnick, 91 F.2d 911, 918
(2d Cir. 1937).
All of these above-cited cases and, in fact, all of the cases
cited by plaintiff are criminal actions. Plaintiff, however,
argues that this presumption of continuity should also apply in
the civil arena since Clayton Act treble damage actions, although
undeniably civil, nevertheless play a penal role in the statutory
scheme set up for enforcement of the anti-trust laws. See e.g.,
Illinois Brick Co. v. Illinois, 431 U.S. 720, 746, 97 S.Ct.
2061, 2075, 52 L.Ed.2d 707 (1977) (purpose of § 4 of Clayton Act
was to create a "group of `private attorney generals' to enforce
the antitrust laws"), reh. denied, 434 U.S. 881, 98 S.Ct. 243,
54 L.Ed.2d 164 (1977); Waldron v. Cities Service Co.,
361 F.2d 671, 673 (2d Cir. 1966) ("We are not unmindful that private
anti-trust suits to some extent cast the plaintiff in the role of
a `private attorney general' . . ."), aff'd, 391 U.S. 253, 88
S.Ct. 1575, 20 L.Ed.2d 569 (1968), reh. denied, 393 U.S. 901,
89 S.Ct. 63, 21 L.Ed.2d 188 (1968); United States v. Standard
Ultramarine and Color Co., 137 F. Supp. 167, 171 (S.D.N.Y. 1955)
(private damage action characterized as an "auxiliary policing
method" designed "to help achieve the broad objectives of the
[Sherman] Act"). From these cases, plaintiff argues that since it
is acting as a "private attorney general" exercising "an
auxiliary policing method," the presumption should also apply to
this action. Failure to do so, plaintiff claims, "would do
violence to the penal function of the anti-trust treble damage
Defendants, on the other hand, argue that the applicability of
the presumption in the civil setting would undercut the "entire
body of antitrust jurisprudence." Thus, defendants contend that,
unlike the Sherman Act, the Clayton Act's treble damage provision
is "in essence a remedial provision" which "measures the awards
by a multiple of the injury actually proved." Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 485-86, 97 S.Ct. 690,
696, 50 L.Ed.2d 701 (1977) (emphasis added). In addition,
defendants note that the burden of proof on plaintiffs in civil
anti-trust actions is and always has been strict. See, e.g.,
Matsushita Electric Industrial Co. v. Zenith Radio Corp.,
475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (plaintiff
"must present evidence `that tends to exclude the possibility'
that the alleged conspirators acted independently"). Thus,
defendants argue that application of the presumption would
undermine this strict burden of proof.
In short, utilizing competing policy arguments, plaintiff
focuses on the Clayton Act's penal functions while the defendants
stress the Act's remedial nature. However, it is clear that the
treble-damage provision of § 4 of the Clayton Act serves and was
designed to serve both remedial and penal functions. As the
Supreme Court observed in Brunswick:
When Congress enacted the Clayton Act in 1914, it
`extend[ed] the remedy under section 7 of the Sherman
Act' to persons injured by virtue of any anti-trust
violation. H.R.Rep. No. 627, 63rd Cong., 2d Sess., 14
(1914). The initial House debates concerning
provisions related to private damages actions reveal
that these actions were conceived primarily as
`open[ing] the door of justice to every man, whenever
he may be injured by those who violate the antitrust
laws, and giv[ing] the injured party ample damages
for the wrong suffered.' 51 Cong.Rec. 9073 (1914)
(remarks of Rep. Webb); see, e.g., id., at 9079
(Rep. Volstead), 9270 (Rep. Carlin), 9414-9417,
9466-9467, 9487-9495. The House debates following the
conference committee report, however, indicate that
the sponsors of the bill also saw treble-damages
suits as an important means of enforcing the law.
Id., at 16274-16275 (Rep. Webb), 16317-16319 (Rep.
429 U.S. at 486, n. 10, 97 S.Ct. at 696, n. 10. See also
Illinois Brick Co., 431 U.S. at 746, 97 S.Ct. at 2075 ("§ 4 has
another purpose in addition to deterring violators and depriving
them of the `fruits of their illegality,' it is also designed to
compensate victims of antitrust violations for their injuries.");
Monarch Life Insurance Co. v. Loyal Protective Life Insurance
Co., 326 F.2d 841, 846, n. 2 (2d Cir. 1963) ("The [Clayton Act]
treble-damage action was intended not merely to redress injury to
individual through the prohibited practices, but to aid in
achieving the broad social object of the statute"), cert.
denied, 376 U.S. 952, 84 S.Ct. 968, 11 L.Ed.2d 971 (1964).
Having reviewed the competing principles, it appears that if a
presumption applies in a criminal case against a defendant facing
possible incarceration, there would be little reason not to apply
the presumption in an analogous civil case — one brought under a
statute with both civil and penal functions — where the burden of
proof is less and the defendant is facing only a monetary loss.
Rather than adopt a general rule, however, it seems more
appropriate to make the judgment whether to apply a particular
presumption on a case by case basis. Here, the presumption that a
conspiracy, when shown to exist, is presumed to continue until
the evidence establishes that it terminated involves no more than
drawing a logical inference from an established fact. Once it is
shown that a conspiracy of indefinite duration existed, it is
logical to infer (or presume) that the conspiracy continued
beyond the last conspiratorial act established by the evidence.
This logic would apply whether the case at issue was civil or
Thus, the more appropriate question is not whether the
presumption that a conspiracy continues should be applied in a
civil case, but rather what weight must be given to that
presumption and what evidence must be presented to overcome it.
The parties, not surprisingly, dispute the weight the
presumption holds and the evidence necessary to rebut it. They do
agree, however, that Federal Rule of Evidence 301 governs the
debate. This Rule provides that:
a presumption imposes on the party against whom it is
directed the burden of going forward with evidence to
rebut or meet the presumption, but does not shift to
such party the burden of proof upon the party in the
sense of the risk of nonpersuasion, which remains
throughout the trial upon the party on whom it was
The Rule does not discuss the issue of what is required to
rebut a presumption.*fn3 However, a review of applicable case
law and the views of the legal commentators indicates that a
presumption is considered "rebutted if a reasonable jury could
find, on the basis of the evidence in the case, the contrary of
the presumed proposition of fact more probable than not." 1
Weinstein's Evidence, § 301, p. 301-32 (1990).*fn4
In the present case, the defendants have presented sufficient
evidence to not only rebut the presumption but also to satisfy to
the Court that their motion for summary judgment should be
Specifically, Mr. Reardon testified at the criminal trial that
the conspiracy ended in late spring or early summer of 1983:
I told Nick [Badami, then president of Maybrook
Materials, Inc.] that they were wrong, they weren't
necessary. We ought to cut it out.
He said, I agree a hundred percent. And we never had
any more meetings.
Reardon further testified that prices were arrived at
In addition, defendants cite to the testimony of John Maggard,
another cooperating witness and the former president of Maybrook
Materials, Inc. who was succeeded by Badami. Maggard testified at
the criminal trial that the meetings lasted until 1982 or 1983.
Apart from testimony of cooperating witnesses, defendants point
to the fact that the indictment did not charge defendants with
participating in a conspiracy "up until the date of the
indictment" but only that the co-conspirators met from 1978 to
1983 to discuss the prices they would submit for the bids.
Moreover, the bill of particulars furnished by the government
identified the illegal bids as having been submitted from 1978 to
1983 and the government's supplemental bill stated that Reardon
was associated with Sullivan "for the entire period covered in
the indictment, i.e., at least as early as 1978 and continued
Finally, plaintiffs, in their complaint in this action, sought
damages caused by the defendants' and their co-conspirators'
participation in a conspiracy "[f]rom at least as early 1978 and
continuing into 1983 . . ."*fn6
Plaintiff presents no evidence in response to the defendants'
proof. Instead, the plaintiff argues that even if the presumption
has been rebutted and, thus, drops out, the defendants' proof
that the conspiracy ended in 1983 rests upon the testimony of
witnesses whose credibility must be evaluated. This, plaintiff
contends, creates a genuine issue of fact sufficient to preclude
summary judgment. In response to a similar contention, the Court
in Sterling Nat. Bank & Trust Co. v. Federated Dept. Stores,
612 F. Supp. 144, 146 (S.D.N.Y. 1985) stated that:
If the credibility of the movant's witness is
challenged by the opposing party and specific bases
for possible impeachment are shown, summary judgment
should be denied. There must, however, be more than
mere allegations in a memorandum of law to place
credibility in issue and preclude summary judgment;
specific facts must be produced.
See also United States v. Pilot Petroleum Associates, Inc.,
712 F. Supp. 1077, 1082 (E.D.N.Y. 1989).*fn7
The Court finds this
holding fitting in the present case and, thus, rejects
plaintiff's attempt to create an issue of fact based solely upon
an allegation challenging the movant's credibility.
For the foregoing reasons, defendants' motion for summary
judgment dismissing that part of plaintiff's claim that seeks to
establish defendants' liability and resulting damages for a
period beyond 1983 is granted.
The parties are directed to submit a Joint Pre-Trial Order
within thirty days of their receipt of this Memorandum Opinion