United States District Court, Southern District of New York
February 1, 1991
WILLIAM J. HIGGINS, PLAINTIFF,
NEW YORK STOCK EXCHANGE, DEFENDANT.
The opinion of the court was delivered by: Sweet, District Judge.
Defendant New York Stock Exchange ("NYSE") moves to dismiss
the complaint on the grounds that the action is time-barred by
the statute of limitations. For the following reasons, the
motion is granted.
NYSE is a New York corporation which operates as a securities
exchange, providing a market for the trading of securities.
Plaintiff William J. Higgins ("Higgins") is a member of NYSE
who operates as an independent broker, executing orders on the
floor of NYSE as an agent for others.
In 1981, Higgins sought permission from NYSE to install an
unrestricted business telephone line in his booth on the NYSE
floor. At the time, NYSE allowed only restricted lines on the
NYSE floor, ostensibly for the purpose of preventing large
institutional investors from being able to tie up any direct
phone lines to the floor and thereby gain an edge over smaller
investors. Higgins alleges that such a phone line would have
allowed him to communicate directly with non-NYSE-members,
thereby allowing him to compete with other members for their
customers. In keeping with its then policy, NYSE denied Higgins
In 1984, Higgins again sought permission to have an outside
line connected to his booth. This time, Higgins also requested
permission to have the new line connected to a cordless
telephone, which he could carry with him while he was away from
his booth on the trading floor. Again NYSE rejected Higgins'
request. Higgins appealed this decision to NYSE's board of
directors, which affirmed the rejection on March 7, 1985.
Higgins next sought review before the Securities and Exchange
Commission ("SEC"), which vacated NYSE's decision in May, 1987,
on a finding that NYSE had no specific rules which prevented it
Higgins' request. NYSE responded by proposing a rule to
prohibit portable telephones on the trading floor; the rule was
approved by the SEC in 1988, and the decision was affirmed on
appeal in Higgins v. SEC, 866 F.2d 47 (2d Cir. 1989).
On June 15, 1990, Higgins filed this action alleging that
NYSE's denials of his requests for a telephone in his booth
constituted a conspiracy to violate the Sherman Act, 15 U.S.C. § 1.
The alleged conspiracy involves the efforts of NYSE and
various NYSE members to prevent Higgins from competing with
other NYSE members by preventing him from communicating with
non-member customers from his booth. Higgins also contends that
an object of the conspiracy was the fraudulent concealment of
the fact that NYSE had no intention of giving fair
consideration to any of Higgins requests for a telephone line
in his booth. Higgins seeks treble damages under § 4 of the
Clayton Act, 15 U.S.C. § 15.
1. The statute of limitations was not tolled by the SEC
NYSE moves to dismiss on the grounds that Higgins action is
barred by the four-year statute of limitations applicable to an
action under the Clayton Act, contained in § 4B, 15 U.S.C. § 15b.
NYSE contends that, because Higgins' complaint deals with
events which occurred prior to June 15, 1986 — four years
before the filing of the complaint — his action is
time-barred. Higgins counters that his instigation of the
administrative proceedings with the SEC tolled the statute
until those proceedings were completed in 1987.
Higgins relies on Ricci v. Chicago Mercantile Exchange,
409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525 (1973) and Mt. Hood
Stages, Inc. v. Greyhound Corp., 616 F.2d 394 (9th Cir.), cert.
denied, 449 U.S. 831, 101 S.Ct. 99, 66 L.Ed.2d 36 (1980) to
support his contention that the statute of limitations was
tolled during the pendency of the SEC proceedings. In Ricci,
the Supreme Court held that antitrust proceedings against the
defendant Chicago Mercantile Exchange should be stayed pending
administrative proceedings before the Commodity Exchange
Commission ("CEC"), because certain issues were within the
CEC's jurisdiction and its resolution of those issues was
essential to the antitrust claim. 409 U.S. at 304-05, 93 S.Ct.
at 581-82. In Mt. Hood, the Ninth Circuit held that where an
administrative proceeding was a prerequisite to the plaintiff's
antitrust suit the statute of limitations would be tolled
during the proceeding. Higgins argues that Ricci implies that
his SEC proceeding was in fact a prerequisite to his antitrust
claim, and that Mt. Hood therefore provides that the
limitations period was tolled during the SEC proceeding.
However, in Ricci the plaintiff had filed a timely antitrust
action and the defendant had moved to dismiss. This motion was
denied, but the case was stayed pending the outcome of the CEC
proceedings. Because the defendant had timely notice of the
plaintiff's claims, there was little prejudice from delaying
the suit while the CEC ruled on the dispute. In the present
case, on the other hand, NYSE had no knowledge or reason to
know that Higgins intended to bring an antitrust suit until
well after the limitations period had expired. Higgins cannot
avail himself of the fact that NYSE might have obtained a stay
during the SEC proceeding, particularly where there is no
evidence that NYSE would in fact have done so.
Higgins' reliance on Mt. Hood overlooks subsequent Ninth
Circuit authority which has limited that case to the particular
situation in which a plaintiff's antitrust claim cannot go
forward until the administrative proceeding has been completed.
For example, in Community Electric Service of Los Angeles, Inc.
v. National Electrical Contractors Association, Inc.,
869 F.2d 1235 (9th Cir. 1989), the court refused to toll the antitrust
limitations period during the pendency of the plaintiff's NLRB
proceedings, because those proceedings were required neither by
federal policy considerations nor by the doctrine of primary
jurisdiction. In distinguishing Mt. Hood, the Community
Electric court commented "Here, the NLRB proceedings did not
toll the limitations period since prior resort to
the Board was not a prerequisite to review in federal court."
869 F.2d at 1241. See also Brunswick Corp. v. Riegel Textile
Corp., 752 F.2d 261, 270 (7th Cir. 1984) (patent- interference
proceeding did not toll statute as Patent Office lacked primary
jurisdiction over question of patent validity), cert. denied,
472 U.S. 1018, 105 S.Ct. 3480, 87 L.Ed.2d 615 (1985).
Similarly, Higgins has not referred to any requirement that
he seek SEC review prior to bringing his claim against NYSE.
Nor has he identified any federal policy which would be served
by tolling the statute of limitations. His complaint alleges
that as early as 1978 the SEC had at least suggested that NYSE
could not limit the telephone access of its members without an
explicit rule authorizing it to do so. However, such a
suggestion did not in any way inhibit Higgins from filing his
claim within the statutory time period.
In addition, although Higgins contends that filing his
antitrust claims prior to the resolution of the SEC proceedings
would have been "sheer formality," because the suit would have
been stayed pending the outcome of those proceedings under
Ricci, this argument presupposes that NYSE would have sought
such a stay. Higgins also overlooks the fact that this
"formality" would at least have served to give NYSE timely
notice of his claims, even if the suit was subsequently stayed.
"To allow the statute of limitations to be tolled on the basis
of a defense that might be raised if the suit were filed on
time is unconventional. . . ." Brunswick Corp., 752 F.2d at
2. Higgins' damages were not so speculative that he could not
have sued in a timely manner.
Alternatively, Higgins argues that under Zenith Radio Corp.
v. Hazeltine Research, Inc., 401 U.S. 321
, 91 S.Ct. 795, 28
L.Ed.2d 77 (1971), his cause of action did not accrue until he
was able to install a telephone (as a result of the SEC's 1987
directive) because prior to that time he could not measure the
damages which he had suffered by the alleged unlawful refusal
to approve his earlier applications. The general rule, as
articulated in Zenith is that
if a plaintiff feels the adverse impact of an
antitrust conspiracy on a particular date, a cause
of action immediately accrues to him to recover
all damages incurred by that date and all provable
damages that will flow in the future from the acts
of the conspirators on that date. To recover those
damages, he must sue within the requisite number
of years from the accrual of the action.
401 U.S. at 339, 91 S.Ct. at 806. The exception created in
Zenith applies only in the very limited circumstances in which
the damages are so speculative that a court would be unwilling
to entertain an estimate of their magnitude. See Brunswick
Corp., 752 F.2d at 270-71; Camotex, S.R.L. v. Hunt, 741 F. Supp. 1086
(S.D.N.Y. 1990). Mere uncertainty as to the precise amount
of damages is insufficient to toll the statute. Camotex, 741
F. Supp. at 1090.
In the present case, there is little doubt that NYSE's
refusal to permit Higgins to install a telephone had an adverse
impact on his business, in that it reduced his ability to
contact customers. The fact that the damages might have been
difficult to calculate would not have prevented Higgins from
bringing his claim in a timely fashion, and cannot preserve his
untimely claim here. "Exclusion from a market is a conventional
form of antitrust injury that gives rise to a claim for damages
as soon as the exclusion occurs . . ., even though, in the
nature of things, the victim's losses lie mostly in the
future." Brunswick Corp., 752 F.2d at 271.
For the foregoing reasons, Higgins' antitrust claim against
NYSE is barred by the statute of limitations, and the complaint
is therefore dismissed.
It is so ordered
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