AMERICAN PIPE & CONSTRUCTION CO. v. UTAH
Legal provision: Federal Rules of Civil Procedure, including Appellate Procedure (or relevant rules of a circuit court)
Argument of Jesse R. O?malley
Chief Justice Warren E. Burger: We'll hear arguments next in 72-1195 American Pipe and Construction against Utah.
Mr. O?Malley you may proceed whenever you're ready.
Mr. Jesse R. O?malley: Mr. Chief Justice, members of the Court, may it please the Court.
This case is before this Court on a writ of certiorari to the Ninth Circuit.
The narrow question involved is the validity of the order of the Trial Court, denying intervention by respondents in an antitrust treble-damage action based upon a prior government action after the running of the pertinent statute of limitations, Section 5 (b) of the Clayton Act.
Before beginning, I should note that I shall be referring to the key dates, which are pertinent to this statute of limitations question and these key dates are set forth in the record appendix, pages 1 to 4 in summary form.
And I should also indicate that the statutes, which we believe to be pertinent in controlling and the rules of Court, are set forth in the following six pages also of the record appendix.
As I indicated, this case is based upon a denial of a motion made by respondents in the Central District of California.
In December 1969, to intervene in an antitrust damage action, which have been filed by the State of Utah on May 13, 1969 and has a purported class action.
The Utah complaint alleges that the action was based on prior government, criminal and equitable actions.
And thus, by reasons of the prior government actions and pursuant to the tolling provisions of Sections 5 (b) of the Clayton Act, the State of Utah was able to bring this action, based upon alleged acts, which entered in 1962.
The government criminal action in which the Utah complaint was based was beyond March 10, 1964 and was terminated as to all defendants on June 19, 1964.
A separate government civil action filed after the criminal action ended, it was terminated as to all defendants, except American Pipe and Construction Company on December 8, 1967.
With the final judgment as to American Pipe and Construction Company, it wasn?t filed until May 24, 1968 and as by reason of this day of May 24, 1968 that the Trial Court has held at the date of one year later, May 24, 1969 was the date of the statute of limitations finally ran in this case.
The District Court on December 4, 1969 entered in order that Utah action did not constitute a class action and subsequently, entered an order made after that denial of the class action by respondents, the denying respondents? motion to intervene.
It is this order denying intervention at this juncture, which is a subject of these appellate proceedings.
The Court of Appeals reversed the order of the Trial Court denying leave to intervene and held that this suit was instituted on behalf of respondents.
By the filing of the Utah complaint on May 13, 1969, even though the prerequisites to our class action had not been met by the State of Utah and even though respondents took no action, no step, whatsoever to intervene, until December 19, 1969, a date more than five months after the limitations period prescribed by 5 (b) of the Clayton Act.
The narrow question involves therefore, is whether respondents, who had not filed suit within the period prescribed by Section 5 (b), were appropriate before the Trial Court by reason of the fact that the State of Utah erroneously designated its cause of action as a class action, and though this case may appear to have very superficial, factual, or complexity of terms on the very simple issue of Congressional intent in enacting Section 5 (b) of the Clayton Act.
Justice William H. Rehnquist: Mr. O'Malley, is there anything peculiar to the Section 5 (b) of the Clayton Act about the Ninth Circuit?s reasoning here?
Wouldn't it apply equally well to any other claim of statute of limitation.
Mr. Jesse R. O?malley: Yes, indeed and that is of course as we have planned out, Mr. Justice Rehnquist in connection with our petition for certiorari, this has the effect as we see it of affecting in every Federal statute of limitations.
By the mere fact that a class action is typed on our complaint, even though one does not in fact exist, it has the effect by virtue of the act of a private party of tolling the statute of limitations and I would say yes indeed that is indeed one of the major issues, not only in so far as 5 (b) of the Clayton Act is concerned, which is pertinent to this case, but I think the principle is applicable equally, Mr. Justice Rehnquist to every Federal statute of limitation.
I would submit that the intent, in connection with 5 (b) as to what the statute really means is clearly stated in the barring provision of the statute and it is also stated we submit with some precision and the legislative reports underlying the statute.
It should first be noted that the State of Utah is in Court only because of 5 (b), which provides for the suspension of the government -- of the statute of limitations during the pendency of the government antitrust action in which limits the period -- in which the litigant may commence an action based upon the government suit.
To the period of the pendency over the government civil or criminal action, and within one year thereafter, respondents did not move within that statutory period and were not before the Court, until after the one year suspension period, unless the filing of the invalid class action by Utah has a legal effect of bringing respondents before the Court.
In order to escape the barring provisions of the Clayton Act, the opinion of the Court of Appeals via legal section treats the respondents as if they had filed suits simultaneously with the State of Utah.
However, factually it is not with -- there's no dispute about this.
They had done nothing in any factual sense at that time.
They?d done nothing whatsoever and they haven't brought an action of their own volition and they hadn't move to intervene and either of these steps would merely have required the respondents to file a short and plain statement of the alleged violations and its purported impact upon the plaintiff.And we submit that in enacting 5 (b) of the Clayton Act, the Congress clearly intended to spell out the requirement that each plaintiff relying up on Section 5 (b) to toll a statute of limitations, must take the minimal step of stating its claim within the period prescribed by the statute.Now, where there is no class action, of course that would require the filing of the short and plain statement of the claim, pursuant to Rule 8 of the Federal Rules of Civil Procedure.
Justice Byron R. White: It's not if it is a good concept.
Mr. Jesse R. O?malley: But in the case of a -- Mr. Justice White, of a proper class action, we would submit that it is the legislative intent in enacting 5 (b) of the Clayton Act that each member of the class respond affirmatively to the order of the Court inviting the members of that class to state their claims and that they do so within the period of the statute of limitations.
The legislative history --
Justice Byron R. White: Well, that would be impossible for the members of the class as this case, Utah didn't file until 11 days before the year expired at the time the corporate get a ground ruling on the class, the one-year period wouldn't expire to all unnamed members.
Mr. Jesse R. O?malley: Well, of course, you have to, that is --
Justice Byron R. White: Unless you are going to say, as I was asking, whether pending the Court's ruling the limitation period is tolled.
Mr. Jesse R. O?malley: No, to say that pending the Court's action pursuant to Rule 23, the action is tolled, is to say that Rule 23 in some manner abridges or modifies Section 5 (b) of the Clayton Act.
Justice Byron R. White: So you did say then that in this case unnamed members of the class could not participate in the action at all.
Mr. Jesse R. O?malley: I am saying that they cannot do so, unless they affirmatively --
Justice Byron R. White: Within those unknown names?
Mr. Jesse R. O?malley: Yes, and I would point out however that was in the -- this action had -- this is not the bare bones, this is not one case, it's a series of cases and practically there were pursuant at least in seven prior class actions and invitations to join, but forgetting that factual background, the fact is that they did not move to intervene at any time within the statutory period and I would took some myth, that unless it is held that Rule 23, somehow abridges or somehow modifies, Section 5 (b) of Clayton Act, there is no power in the Court to permit intervention after the period of the running of the statute of limitations.
Justice William H. Rehnquist: Mr. O'Malley, isn't possible to defend Judge Pence's decision in the District Court consistently with the reasoning of the Ninth Circuit, saying in effect that the statute was tolled during the pendency of the action, but in the times following Judge Pence's ruling on the class action, the 11 days afterwards that the plaintiffs were then under an obligation to file actions of their own and it is decision, denying intervention might be justified on grounds applicable to intervention, without saying that they were cut-off, had they chosen to file their actions, rather than to intervene in Utah's action?
Mr. Jesse R. O?malley: I would think the answer to your question is in the affirmist, Mr. Justice Rehnquist.
I think very clearly, it would be possible to, within the discretionary realm of the -- that supported the Trial Court, under Rule of 24 (b) to justify the acts of the Trial Court tolling, in terms of the motion as being clearly within the discretion of the Trial Court.
The Trial Court by reason of its knowledge and experience in the West Coast Pipe case which have preceded and within the framework at the time that was available through the respondents during the period prior to the running of the statute and in the framework of the fact that the facts of this case showed that counsel for that is preparing on behalf of response in this case, at this time they couldn't study this action for six months and this prior to the filing of the suit, it was charge with the problems of knowledge of the problems of the statute of limitations growing out of the prior litigation.
I think in the light of that history, clearly the Court is justified in exercising its discretion and I think in incorporating its decision respecting the class action in this decision on the motions to intervene I think the theory was exercising the discretion.
Your Honor, it was referred --
Justice Byron R. White: Well, Judge Pence did the say that it is of second reason intervention just isn't permissible in this case.
Mr. Jesse R. O?malley: Yes.
Justice Byron R. White: Now, what happened to that ground of the Court of Appeals?
Mr. Jesse R. O?malley: Well, it was argued --
Justice Byron R. White: They just didn't raise it?
Mr. Jesse R. O?malley: In terms of the briefs before the Court of Appeals.
We argued two points: (1) that it was incumbent upon the respondents to show an abuse of the discretion, which had been exercised by the Trial Court and that we argued that they had not shown such an abuse.
Justice Byron R. White: Even if they weren't barred by the statute of limitations, they have been allowed to intervene.
Mr. Jesse R. O?malley: That is correct.
Justice Byron R. White: --which Judge Pence did singed up.
Mr. Jesse R. O?malley: Yes and the -- surprisingly to say that except for the dissenting opinion by the Ninth Circuit, the dissenting opinion stated in so many words that was the judgment of the Court that the Trial Court has considered this and as a matter of discretion and exercising that discretion, that discretion should be upheld by the Court of Appeals.
Chief Justice Warren E. Burger: We'll resume there after lunch, very well Mr. O'Malley. [Lunch Recess]
Mr. O'Malley, you may continue.
Mr. Jesse R. O?malley: Yes, Your Honor.
The question was raised in the -- during before the recess as to whether members of the purported class, Court having an intervene in the eleven-day period, before the statute of limitations run assuming there was a valid class action.
Of course, that is not this case or the Trial Court, specifically held and it has not been the subject of any appeal that there is no class action in this case.
But, I should point out that -- well, that has been found that the members of the nonclass are no worst so often, and if the class action had not been alleged or if a litigant was a member of the -- was not a member of the class.
The mere allegation that there was or was not a class should not be held to give to parties who may or fall within the designation of the class on privilege status.
When Congress has specifically held that Section 5 (b) of the Clayton Act is a barring statute under the circumstances of this case that is true because the basic contention of the respondents and the contention which essentially was adapted by the Court of Appeals is that Section 5 (b) of the Clayton Act is somehow a abridge or modified by Rule 23 of the Federal Rules of Civil Procedure and we would submit that this is contrary to the enabling act, which expressly authorizes this Court to promulgate the Federal Rule of Civil Procedure, but which prohibits such rules from abridging, enlarging, or modifying any substance of right.
And of course, the basic premise of the Court of Appeals and of the respondents in this action is also, a contrary to the elementary and Hornbook principle at Court rules whatever they may be are subject to Congressional Statute.
The legislative history of Section 5 (b) clearly establishes that, that Statute has a dual purpose to give timely notice of the claims within the periods stated by the statute and the barring of causes of action not timely filed.
Each of these purposes is distorted by the decision of the Court of Appeals.
The mere filing of a class action, whether it is valid or invalid, doesn't give notice to defendants as to the claims of members of the class or nonclass, which will be asserted there until members of the class actually do assert such claims prior thereto neither members of the class nor their claims are identified.
In further end, if it is under Rule 23, members of the class have the option out of this litigation pursuant to Rule 23.
Now, and it is particularly true that their mere filing of the pleading bearing the label, the class action doesn't have any meaning, and then afford any meaningful notice, where as in this case, there have been seven prior class actions, in which the class has been exhaustively solicited.
Now, the history of this case in the West Coast Pipe litigation establishes in very practical terms at the purposes of the statute that the filing of the statute give notice to defendants just doesn?t exist in this case.
In his opinion, Judge Pence pointed out that in the West Coast Pipe cases, some 300 parties intervened and stated claims in those seven prior class actions.
In this case, after the action was filed by the State of Utah, no member of the class ever appeared to state their claims until five months after the limitations period and they didn't do so even then, until it was solicited by plaintiff's counsel and plaintiff's counsel obtain relief from respondents separate boards resent such claims.
And indeed, at that point, counsel for respondents stated to respondents, this in the record, that the statute probably ran on May 24, 1969, which was a date some five months prior at that time.
So, that interveners filed this motion was noticed that the statute had ran as to them and defendants never did have notice of the purported members of the claims by over the purported claims by members of the class, until five months after the period prescribed by the statute.
A case which we believe comes close to being on all force with this case is I. O'Connor against Anastasia, which we have cited in our brief for another point where Judge Medina, when he was sitting on the District Court, with respect to a Fair Labor Standards Acts, stated that in the case where a motion there and has been like -- as in this case was filed after the Statute had run.
He stated that defendants had no notice whatsoever that any claim was made on behalf of any of the claimants that is this case exactly, because although no class action was alleged here, in that case, none exist in this case.
And, Judge Medina went on to say it will not suffice.
He's talking about the issue of notice here, that someone else has a pending lawsuit against the defendant, sought to be charge, in which a similar, but different claim are alleged.
The language of House Report Number 422, Eighty-fourth Congress First Session of 1955, we believe confirms a principle that timely affirmative notice by each plaintiff is required to give defendant's notice of each claim.
And, this appears from a language of that report, which states that in cases where the plaintiff's action has been suspended by the pendency of government antitrust proceedings, he would be required to bring his action, either within the suspension period, i.e. one year after the government suit had terminated or within the four year statutes.
This clearly stated requirement mandates, we believe affirmative action by each claimant within the statutory period.
And any other construction would make the barring provision of the statute without meaning to permit this intervention, as in this case, after the barring period has run, after the statute has run, is tantamount in the equivalent and is identical to granting an additional tolling period.
Enacting 5 (b), Congress clearly stated its intent to eliminate the very kind of additional tolling exceptions and extensions, which is a basis for the Court of Appeals verdict in this case.
The report referred to a private treble damage action, which has been based on the suit against the motion picture industry, which was pending during the 40s by the government.
And stated that the extent to which this litigation in this case was extended by virtue of various tolling provisions of Federal Law is disposed by the following table indicating the inadvisability of prolonging the limitation period in such instances.
While a committee considers as highly desirable to toll the statutes of limitations during a government antitrust action into grant plaintiffs a reasonable time or after in which to bring suit, it does not believe that the unduly prolongation of proceedings of this type is conducive to effective and efficient enforcement of the antitrust law.
And, thus if it would clearly appear that the Congressional policy is stated in such report is to eliminate that very kind of additional tolling periods, authorized by the opinion of the Ninth Circuit.
We submit that the decision of the Ninth Circuit can't be squared with the intent to eliminate tolling extensions and exceptions.
And it can't be squared with a requirement than in a case where, which is this case, where the statute of limitations has been suspended by the pendency of a government antitrust proceedings, such plaintiff would be required to bring his action within one year after the government suit has terminated.
Contrary, to the plain meaning of the statute, the effect of the decision of the Court of Appeals if a class action is filed, members of the purported class would be run an additional tolling period, beyond the statutory period, until the Court determines, whether the action maybe maintained as a class action, in this case it was five months.
In Eisen against Carlisle, which is now pending on this Court, pursuant to a writ of certiorari, the additional tolling period would have been approximately five years and during this period, under the decision of the Court of Appeals, plaintiff's counsel is authorized by such a thing to solicit class members until a negative class has been reached.
At that point, he has able to bring motions on behalf of those he solicited and that's what occurred in this case.
And this is contrary we submit to the principle that the power to create tolling extensions and exceptions is limited by the general rule that when a Federal statute of limitations exist, such as 5 (b) it access a total bar, extinguishing the right to sue.
That concept was stated by this Court in Holmberg against Armbrecht, 327 US, at page 395 in this language.
If Congress explicitly puts limits upon the time for enforcing a right, which it is created that is amended on that matter.
The Ninth Circuit stated the proposition in somewhat similar language with respect to the statute of limitations, with respect to the Federal Tort Claims Act that a Federal District Court has no jurisdiction to entertain a suit after the statute of limitations is run.
Despite their contention, we believe that respondent's position, if we understand the thrust of it is that the barring provisions of -- and it is the premise of the opinion of Court of Appeals that the barring provision of 5 (b) are somehow limited by Rule 23, Federal Rules of Civil Procedure.
We submit that consistent with the intent of Congress, the filing of a class action can have no bearing as to whether claimants had satisfied the statute of limitations.
If Rule 23 affects the limitations, as stated in 5 (b) in any respects, it constitutes an abridgement of such Statute by Rule of Court.If the applicability of Section 5 (b) is dependent upon whether the class action is alleged or found, it is a capricious standard, which is inconsistent with the clearly stated Congressional intent.And, as I have stated earlier, Section -- the barring provisions of Section 5 (b) of the Clayton Act.
Justice William J. Brennan: Mr. O'Malley, we had some discussions, I notice your time is running out.
Mr. Jesse R. O?malley: Yes.
Justice William J. Brennan: Whether the Court of Appeals have also reversed on the other ground namely that as a matter of exercise of discretion, a permissive intervention.
Judge Pence had denied intervention.
In the Court of Appeal's second opinion, not the first one.
I noticed this paragraph, however denial of appellant's motion for permissive intervention, under Rule 24 (b) was in our judgment erroneous.
Is that a disposition of the other ground?
Mr. Jesse R. O?malley: Well, I did not really feel so, if the Court please.
The event did not seem to me that mere language seem to reach the question as to whether the Trial Court, Mr. Justice Brennan, had exercised an abuse of discretion.
Justice William J. Brennan: Well, the reason I wondered is that comes about halfway through the opinion.
I admit it is not very clear and then, the penultimate paragraph, deals with the 5 (b) question, we conclude that it was order for the Court below that appellants' petitions or intervention were barred by 5 (b).
I wonder if the former paragraph is one with this disposition --
Mr. Jesse R. O?malley: In all account, I was somewhat uncertain myself, but I thought that the best view of the Court's opinion of the principal opinion by the Ninth Circuit was that it was really wasn't reaching the issue, as to whether there had been a use of discretion.
We argued that to the Ninth Circuit in our briefs and in our argument.
Justice William J. Brennan: (Voice Overlap) the Ninth Circuit had to reach that to reverse it, did it not?
Mr. Jesse R. O?malley: I would think it's mandatory under Rule of 24, except for the somewhat ambiguous language that you have cited, Mr. Justice Brennan, I don't know of any place it?s discussed except in the dissenting opinion.
Justice William J. Brennan: So, let me think that this way, do you think that both issues are before us for decision?
Mr. Jesse R. O?malley: Yes, I do Your Honor.
And, it is my judgment that even if the Court should disagree with our position, which we think it is basic, with respect to the power of the -- with respect to 5 (b), there is still is a fetter on the part of the Appellate Court, the Ninth Circuit to show any or/and on the part of respondents to show any abuse of discretion by Judge Pence, which is a matter both under the rules, if is within his problems and I suppose there is no living person who knows more about the background of this litigation than Judge Pence who had charge of the 350 cases, which were pending between 1964 and which are pending even now, in so far as this case is concerned.
Thank you Your Honor.
Argument of Gerard R. Miller
Mr. Gerard R. Miller: Mr. Chief Justice --
Chief Justice Warren E. Burger: Mr. Miller.
Mr. Gerard R. Miller: -- and may it please the Court.
I think the facts of this case are particularly important.
The State of Utah filed its class action, eleven days prior to the running of the suspension period provided by Section 5 (b).
The State was fully aware of the fact that that suspension period was about to run and it undertook to protect this lesser governmental bodies.
Those are the -- at least some of them are the respondents before this Court, not the State.
No question, but what the States, the antitrust case was filed timely and that?s pending before Judge Pence, right now.
The State's action was transferred by the panel down to California in the first major thing that happened was that the motion to determine the class was brought on before Judge Pence.
Judge Pence indicated clearly in my mind that he preferred to handle these matters through joined intervention, and he made reference to his vast experience in handling the West Coast Pipe cases and indicated that this was more efficient, a more desirable way to proceed.
Now, the class action that was alleged by the State, have to yield the affidavits filed in support thereof, indicated that there might be up with some 800 members in that class and Judge Pence pointed out that in his experience, they probably wonder why would it be that many members.
And, he pointed to the fact that the California, Hawaii, Washington, Oregon, Arizona had been involved in the West Coast Pipe cases.
Their populations were much greater than the States of Utah, Wyoming, and Idaho, and he indicated, he expect that they would have one-sevenths of the number that they actually had turn out.
Chief Justice Warren E. Burger: And what did Judge Pence decide on the issue of class action?
Mr. Gerard R. Miller: He decided that we could not maintain the class action.
He, as the Ninth Circuit indicated, I think they're actually right, he invited intervention and joinder.
Chief Justice Warren E. Burger: And, what did the Ninth Circuit do about that?
Mr. Gerard R. Miller: Well, the Ninth Circuit didn't do anything about the class action, because Judge Pence wouldn?t certify for appeal and his counsel already pointed out that he is going to appeal.
It couldn?t reasonably fit into the death knell theory of cases.
These parties were not before the Court of that time.
We thought that the only reasonable thing to do for these-- for Salt Lake City, Salt Lake County, River Basin and all the rest of these governmental bodies was to move to intervene in this action.
Justice William J. Brennan: Did Judge Pence certify an appeal, Mr. Miller?
Mr. Gerard R. Miller: On the class action?
Justice William J. Brennan: Yes.
Mr. Gerard R. Miller: Yes, he did.
And he denied it.
He indicated that reasonable lines couldn?t disagree.
Chief Justice Warren E. Burger: What were your options or the options of the other potential members of the class at that time?
Mr. Gerard R. Miller: Upon denial the class action?
Chief Justice Warren E. Burger: And denial of the certification for appeal?
Mr. Gerard R. Miller: Well, that wasn't denied, until later on, that was argued at the same time as the motions to intervene, Your Honor.
When Judge Pence read his opinion, indicating we could not maintain the class action, the first thing it occurred to counsel was that we better move to intervene and we better do it within 11 days, because that's the number of days that we're left, when the class action was filed.
And the Attorney General thereupon sent a telegram to all of these cities, counties, water districts, sewer districts advised them that this case has been filed in their behalf, advised them that the Court had now decided that it could not be maintained as a class action and that their rights would be in jeopardy.
Where upon some 60 somewhat bodies did contact the Attorney General's Office and we filed the motions to intervene within eight days.
Now, there were five governmental bodies that did not move to intervene until the 29, some 25 days after the Court's ruling and after the 11 days remaining.
So, we get both situations going here.
I don't think the Ninth Circuit focused upon these five Johnny-come-latelys'.
Justice William H. Rehnquist: Did you give any thought on behalf of the client you have represent to filing separate original actions within the 11 days, rather than just moving to intervene in the State of Utah?s action?
Mr. Gerard R. Miller: Yes, Your Honor we did and we decided that there's this great deal of talking, there is talk running through these successive opinions, concerning the relationship back.
And, we thought that our best bet to safeguard their rights was a motion intervene in this specific case that after all was filed on May 13, 1969, rather than risk having some Court rule that well, there?s nothing to relate back to, I mean admittedly it?s a fiction.
We thought this was the best way to proceed.
The motions to intervene were filed to get it to propose complaint was by the way tracks the original complaint of this case, when counsel talks about surprise and you didn't know that parties before and I think are these strong end arguments, because he knew fully well when the class action was filed that there were other members to this case and he knew at that time that he should have known or should have been in the position to expect all of the other, certainly all of the other lesser governmental bodies of Utah to have claims before the Court.
We filed the applications intervene and that came on for hearing before Judge Pence and Judge Pence then, rules, "Well, I can't let you intervene, because the statute is run."
Well, of course he knew the statute had run when we argued the class action matter.
That's one of the important things I felt that was argued to the Court, but look if the Court rules against us on the class action, we are going to have serious problems on the statute of limitations.
Well, now, he says, the Statute has run, Section 5 (b) is substantive and we can't let Procedural Rule 23 affect it in any way.
Justice Byron R. White: Did Judge Pence indicate that even if the class action whether accepted even if the case could go forward as a class action that nevertheless in order to prevent the running of the statute of limitations, unnamed members would have to come in and identify themselves?
Mr. Gerard R. Miller: Yes sir, he did that in his opinion on the motions to intervene in dictum, because that wasn?t really the case that he indicated in his mind --
Justice Byron R. White: So it would be for the statute of limitations purposes, it really was something irrelevant?
Mr. Gerard R. Miller: Right, whether --
Justice Byron R. White: Whether the statute of limitations was run as to whether it would go forward to class action.
Mr. Gerard R. Miller: Yes, sir.
Justice Byron R. White: People individually that have to come in within the year?
Mr. Gerard R. Miller: That's the way I read Judge Pence's opinion.
In a class action or a nonclass and the one that?s maintained or one that's ordered not to be maintained, still the members of that class must come in and file something specify what?
To complain a motion to intervene before the statute runs and their rights to be barred.
He said, "This has more force than this case, well I've ruled that it cannot be maintained."
Chief Justice Warren E. Burger: What's the effect on the potential members of the class of this dictum of Judge Pence on that subject?
Mr. Gerard R. Miller: Well, I think if his dictum is correct then --
Chief Justice Warren E. Burger: Well not if it's correct, that it is dictum, what impact does that have if any?
Does it justify them in doing nothing?
That's one of the things I?m driving at.
Mr. Gerard R. Miller: I'm not so sure I understand your question sir.
Chief Justice Warren E. Burger: Well, did they do anything do after that?
Mr. Gerard R. Miller: After filing the motion?
After the applications to intervene?
Chief Justice Warren E. Burger: Yes.
Mr. Gerard R. Miller: Well we appealed the denial of those application to the Ninth Circuit.
Now, we are here on --
Chief Justice Warren E. Burger: But not the class action aspect?
Mr. Gerard R. Miller: No, not that the class action aspect has not been appealed.
The State asked that it might be certified for appeal and the Judge denied that.
These applicants after all were before the Court only in the sense of applying for intervention and that was after the class action ruling.
I could find new authority for an unnamed absent member of a class that have been ordered not to be maintained to pursue appeal, except in the situation we had a death knell theory and then, the represented party versus one that?s appealing such as in the Eisen case, saying that there would be no case, if its not a class action there would be no case at all.
Now, I think --
Justice William J. Brennan: Mr. Miller?
Mr. Gerard R. Miller: Yes sir?
Justice William J. Brennan: Before you move on, does the record show whether or not, as a matter of fact any of these 60 justices, governmental agencies that try to intervene had relied on the pendency of the class action suit?
Mr. Gerard R. Miller: Yes, well I feel that it does.
There some 6 or 7 affidavits indicating that they were aware of the class action suit that they discussed it with me or with one of my partners, or with someone from the Attorney General's Office.
And that they were in fact relying on it, they were waiting for it, waiting information from the Court, waiting for notice to be sent.
One is from Salt Lake City, one is from Salt Lake County, the City of Oregon, Weaver County.
Judge Pence found specifically that they had no right to rely, and so "they did not rely" that was one of his findings.
Now, as to the question on abuse to discretion, which just been mentioned, Judge Pence did exercise his discretion as to these specific applicants, he did it in so far as the claims included in the four years preceding the filing of the applications were concerned.
In other words he said, "These claims are not barred and so these parties aren't before me and I cannot deny their motions to intervene."
He did that back in March, when he is ruling on the motions for intervention, but states his opinion on March 30, 1970.
And so, we had no final order for the applicants, it was necessary then to have a meeting with all the applicants to determine whether or not they want to sacrifice their claims in their preceding four years, in order that we can secure a final order and appeal to the Ninth Circuit.
And they decided that there would be the better course to pursue.
So then, we amended the proposed complainant intervention to eliminate those years that were not barred by the statute of limitations, whereupon some three months later on July 8, Judge Pence then entered his order, indicated once a final order that the claims were barred by the statute of limitations in denying interventions.
So, I don't feel, I don?t and I certainly feel that this case involved abuse of discretion in any way and if in fact it did, I think the Ninth Circuit properly ruled by implication that once the invited intervention is an alternative to the class action procedure, even though it might include some 300 members, as he said, 350 members.
I can do it better by intervention then it would certainly be an abuse of discretion to deny those applications for intervention.
Justice William J. Brennan: Do you think that's the input of that one sentence relative to you Mr. Miller?
Mr. Gerard R. Miller: No, Your Honor, I don't believe that's the input. (Voice Overlap)
I think, it's from implication in the whole opinion, certainly it has already to.
The only other comment I had on abuse of discretion, I think it is a threshold question for the Appellate Court to determine whether they are going to hear the case on the merits as Professor Moore points out.
It is almost an appellate fiction, if they say, "Well, we don't want to hear the case," and they say, "Well, he exercises discretion."
If they really want to reach the merits of the case, then they reach the merits.
Professor Moore points out one way or another, they usually have to do this anyway.
Well, the Ninth Circuit did this and they decided the case.
Justice Byron R. White: You're not -- I suppose in this case you're not urging that the class you wanted define, included people, whose claims are already barred?
Mr. Gerard R. Miller: No, no, their claims were not barred.
Mr. Gerard R. Miller: You wanted as a -- to include in the class only those unnamed people who at that time, at the moment of filing the suit had a lawsuit have been filed by those people individually, would have been timely?
Mr. Gerard R. Miller: Right that's exactly the case before the Court.
Now Rule 23 uses two words.
It uses the word "commence," it uses the word "maintain," and it clearly indicates that there are two events that will take place.
One, an action will be commenced.
It"s commenced by a representative party, on behalf of a group of people, the class.
But at later time and Rule 23 specifies, as soon as practicable, the Court then, will determine whether or not that action shall be maintained as a class action.
Two different events entirely.
There"s nothing in the Rule 23 about reliance, quite to the contrary, with the Amendment, now that the unnamed parties you're going to be bound by that judgment, one way or another, always necessary that they receive notice.
Best possible notice calculate to reach them, and if they do not opt that, they're going to be bound by the judgment.
They don't have to show they relied.
Likewise, in Section 5 (b), provides the suspension treaty that we're dealing with, there's nothing there that concerns relying on anything.
It merely provides that the statute will run, unless an action is commenced, the same word.
Unless it?s commenced within one year after the government proceedings have ceased.
As far as legislative history is concerned, I think there?s certainly no legislative history on this point, because the Rule was amended until 1966 and it wasn't, it isn't reasonable to suggest that Congress had, was in his contemplation what would happen in connection with the procedural rule determined by this Court as to how you commence an action.
And then, clearly Congress left that up to this Court, and the Advisory Council to determine the rules of procedure under the Statutory Grant, promulgate proper rules, as to how you commence an action, Rule 23 said, you commence an action by filing a complaint.
There's nothing at all that shocks me or the thought that on the State of Utah determine that they wanted to undertake to protect their rights of its cities and towns.
And label the complaint, a class action that defined that complaint to include those lesser public bodies, the purchased pipes from these defendants.
But that then commenced an action and satisfied Section 5 (b).
Now, the Ninth Circuit, I think properly decided this question and I think they gave us, in my mind that the least they could?ve.
They indicated that the statute then may -- once the Court determine the class negatively, determine it cannot be maintained, then the statute began to run again, 11 days began to run.
And since, at least the majority of these parties filed within eight days, they were safely inside the statute.
I would suggest to the Court that a better rule would be the one, I think was expressed by Justice Douglas in his concurring opinion in Brunette versus New York Central Railroad, that didn't involve class action, but it involve a similar situation.
In that case, in FELA case, the plaintiff filed an action in the Ohio Court and the statute then run, and then the plaintiff discovered that the Ohio Court was the wrong Court and did not have venue.
There was no saving statute in Ohio and there was no law in Ohio by which that case could be transferred to a proper court, court with proper venue.
So, that case was dismissed and eight days later, interestingly enough, that plaintiff filed an action in the Federal Court.
And this Court held that, that satisfied the statute and the majority in that opinion indicated that the statute did not begin to run again until the appeal time that run in Ohio, unless that was a final order.
And in the concurring opinion, I feel a better rule stated in that was that once the action been filed, the statute of limitations were satisfied and then, the manner in which the plaintiff pursued that was subject to latches.
Justice Byron R. White: In other words, in Utah, does the Attorney General represent your separate independent local entities?
Mr. Gerard R. Miller: No, he does not do so specifically.
He is the Chief Legal Officer of the State.
He renders opinions to those entities that they should seek opinions from.
Justice Byron R. White: Well, if separate suits have been instituted here, would he have represented them?
Mr. Gerard R. Miller: Well, as it turns out he did, for at least with the 60 with the Court.
Justice Byron R. White: (Voice Overlap) intervene that he represented?
Mr. Gerard R. Miller: That he has no statutory authority to automatically represent Salt Lake City or the river basin in Water Conservancy District.
But when the Attorney General was faced through this dilemma, the counsel refers to this solicitation Attorney General felt that it was his duty.
He'd be remiss in his duty if he did not notify these people, they could bring their actions.
I suggest that any rule, other than the one that Ninth Circuit came up with and that is a decision contrary to the Ninth Circuit, will do violence to statute of limitations, do violence to the true Congressional attempt, which was uniformity of application.
I think if you indulge yourself in theories, such as the class members mostly rely, then those that can provide reliance to satisfaction one Judge or save those cannot barred by the statute of limitations.
Those who were ignored, if the classes order maintained, possibly they're protected.
If the classes order not maintained, they're not protected, so you have an unequal application of the statute and in this day and age, especially in antitrust litigation, where you have transfer work courts and transfer re-courts.
And, where the Trial Court can amend and modify the class action order anytime, prior to judgment on the merits, and then even after that you have the Appellate Court as in Hershey saying, "No, no there's really should have been a class."
If you make the statute dependent upon whether or not a Court ultimately orders that the class be maintained, this is going to be very much like springing and shifting uses.
You are going to have the statute popping it up and shifting around at various times for various persons, depending on their situation, depending on what the Court, finally decided which a situation for their class action.
We feel that the Ninth Circuit decided this in the only appropriate way that the Ninth Circuit did justice and that their decision is proper.
Justice William H. Rehnquist: Mr. Miller, is it well settled that an order denying a motion intervene is appealable from the District Court to the Court of Appeals?
Mr. Gerard R. Miller: A permissive intervention, Your Honor?
Justice William H. Rehnquist: Yes.
Mr. Gerard R. Miller: No, I think the law there is that the words that are used by the Appellate Court is that if an abuse and discretion was shown, then it is appealable, we?ll hear it on the merits.
Justice William H. Rehnquist: Well, is that under 1291, is it consider final decision of the District Court, under 28 U.S.C. 1291?
Mr. Gerard R. Miller: Yes, yes. Oh! I think that's settled.
Are there any other questions?
Chief Justice Warren E. Burger: Thank you, Mr. Miller.
Thank you, Mr. O'Malley.
The case is submitted.