[¶ 70,633] United States v. Federal Pacific Electric Company; General Electric Com­ pany; (I-T-E Circuit Breaker Company; Joslyn Mfg. and Supply Co.); H. K. Porter Company, Inc.; (Schwager-Wood Corporation; Southern States Equipment Corporation; and Westinghouse Electric Corporation). In the United States District Court for the Eastern District of Pennsylvania. Civil No. 28088. Filed January 9, 1963. Case No. 1518 in the Antitrust Division of the Department of Justice.

Sherman Act Collusive Bidding-Restrictive Practices-Power Switching Equipment-Consent Judgment-Manufacturers of power switching equipment were each prohibited by a consent judgment from submitting collusive bids, exchanging price information, fixing prices, dis­ criminating in prices or terms of sale, refusng to sell products, tying-in sales of products, and allocating markets. Also, each manufacturer was required to submit non-collusion affidavits with bids to governmental agencies and to review and determine its prices individually. See Department of Justice Enforcement, Vol. 2, ¶ 8834.10. For the plaintiff: Lee Loevinger, Assistant Attorney General, W. D. Kilgore, Jr., Baddia J. Rashid, Donald G. Balthis, John E. Sarbaugh, and John J. Hughes, Attorneys, Department of Justice. For the defendants: Cravath, Swaine & Moore, by George B. Turner, for W estinghouse Electric Corporation; Dechert, Price & Rhoads, by Raymond W. Midgett, Jr., for I-T-E Circuit Breaker Co.; Scarborough & Harris, by Arthur R. Harris, for Joslyn Manufactur- ing and Supply Company; Reinhardt, Coblens & Stoll, by Norman A. Stoll, for Schwager- Wood Corporation, and Sutherland, Asbill & Brennan, by Mac Asbill, for Southern. States Equipment Corporation {presently known as "Southern States, Inc.''). U.S. Electric.Co.

Final Judgment volts, including but not limited to discon­ GANEY, Circuit Judge [In full text]: Plain­ necting, grounding and interrupter switches, tiff, United States of America, having filed the mechanisms used for operating such its complaint herein on May 19, 1960, and switches, and the steel and aluminum struc­ the plaintiff and the undersigned defendants tures and bus supports used in outdoor [I-T-E Circuit Breaker Co., Joslyn Mfg. and substations. With respect to any consent­ Supply Co., Schwager-Wood Corp., Southern ing defendant who is also a defendant con­ States Equipment Corp., and Westinghouse senting to the Final Judgment in Civil No. Electric Corp.), by their respective attorneys, 27716 or 27717 entered by this Court on having severally· consented to the entry of 1962, the term "power this Final Judgment without trial or ad­ switching equipment" shall not include any judication of any issue of fact or law herein, power switchgear assembly or power without this Final Judgment constituting switching equipment, or any component evidence or. an admission by any party thereof, subject to the applicable provisions signatory hereto with respect to any such of either of such Final Judgments; issue, and this Court having determined (B) Person" means any individual, part- pursuant to Rule 54(b) of the Federal Rules nership, firm, corporation, association, trus­ of Civil Procedure that there is no just tee or any other business or legal entity ; and reason for delay in entering a Final Judg­ ( C) "Manufacturer" means a person who ment as to all of. plaintiff's claims asserted manufactures or assembles, or proposes in in said complaint ·against the defendants good faith to manufacture or assemble, signatory hereto, within the United States in its own plant Now, therefore, before the taking of any regularly maintained for that purpose. testimony, without trial or adjudication of any issue of fact or law herein and upon III consent ·of the parties signatory hereto as aforesaid, the Court hereby determines that [Applicability] the proceeding herein is terminated as to The provisions of this Final Judgment the defendants signatory hereto and directs applicable to any consenting defendant shall entry of Final Judgment as to all of plain­ apply also to each of its subsidiaries, suc­ tiff's claims herein against those defend­ cessors and assignees, and to their respec­ ants (provided that the making and entry tive officers, directors, agents, servants and of this Final Judgment shall be without employees, and to all other persons in ac­ prejudice to plaintiff filing and prosecuting tive concert or participation with such de­ claims for damages, if any, resulting from fendant who shall have received actual notice activities alleged in the complaint herein) of this Final Judgment by personal service and as to those defendants it is hereby or otherwise. Each such defendant is ordered Ordered, adjudged and decreed as follows: and directed to take such steps as are rea­ sonably appropriate to procure compliance I by its subsidiaries, officers, directors, agents, [Sherman Act] servants and employees with the terms of The Court has jurisdiction of the subject this Final· Judgment. For the purpose of matter of this action and of the defend­ this Final Judgment each consenting de­ ants signatory hereto. The complaint states fendant and its subsidiaries, officers, direc­ claims upon which relief may be granted tors, agents, servants and employees, or against those defendants under Section 1 any of them, shall be deemed to be one of the Act of Congress of July 2, 1890, person. This Final Judgment shall not entitled "An act to protect trade and com­ apply to or require sales of power switching merce against unlawful restraints and equipment for use outside the United States monopolies," commonly known as the Sher­ except for sales of such equipment by any man Act, as amended. consenting defendant to or for the use of the plaintiff or any instrumentality or agency II thereof. [Definitions] IV As used in this Final Judgment: [Practices Prohibited] (A) "Power switching equipment" means Each of the consenting defendants is en­ all air-break switches rated in excess of 600 joined and restrained from directly or in- U.S. v. Federal Pacific Electric Co.

directing entering into, adhering to or claiming to any power switching equipment except or maintaining any right under any con­ with or after the release of such prices to tract, agreement, arrangement, understanding, the trade generally, or except in connection plan or program with any other manufac­ with bona fide purchase or sale negotiations; turer or seller of power switching equip­ ment in the United States to: (B) Continuing to be a member of or participating in the activities of any asso­ (A) Eliminate or suppress unreasonable ciation or other organization with knowledge competition in the manufacture, distribution that any of the activities of such association or sale· of power switching equipment; or other organization are being carried on (B) Allocate or divide territories, mar­ in a manner which, if the assooiation or kets, fields or customers for the manufac­ other organization were a consenting de­ ture or sale of power switching equipment; fendant herein, would violate the provisions provided, however, that this subsection (B) of this Final Judgment; shall not prohibit a consenting defendant (C)(l) Refusing to sell or quote on, sub­ from accepting or granting, without more, ject to defendant's regularly established otherwise lawful patent, trade secret or terms and conditions of sale, any power technical information licenses; switching equipment to any manufacturer (C) Fix or maintain prices, pricing meth­ of electrical equipment (produced for gen­ ods, or any terms or conditions for the sale eral resale to others) in which such power of any power switching equipment to any switching equipment is incorporated or to third person; which such power switching equipment is (D) Exchange information concerning physically connected, for incorporation in, prices, pricing methods or other terms and connection to, and resale with or for the conditions of sale (other than information repair of such equipment, so long as such released to the trade generally) at or upon power switching equipment is being sold which any power switching equipment is or offered for sale by such defendant to to be sold to any third person; any other manufacturer of the same type (E) Submit noncompetitive, collusive or of equipment for the same purpose; rigged bids or quotations for supplying any (2) Discriminating in any such sales by power switching equipment to any third selling any such equipment in quantities, or person; at prices, terms and conditions of sale for (F) Bid or quote, refrain from bidding the same quantities, not at the same time or quoting or communicate an intention to available to other such manufacturers; pro­ bid or quote or to refrain from bidding or vided, however, that in any suit or proceeding quoting, on any power switching equipment hereafter instituted by the plaintiff against any to be sold to any third person; such defendant charging a violation of this (G) Hinder, restrict, limit or prevent any subsection (2), such defendant may rebut person from purchasing any power switch­ a prima facie case made by the plaintiff by ing equipment from any third person ( except showing that its lower price to a purchaser as may result from any bona fide purchase or purchasers was made in good faith to meet an equalJy low price of a competitor, or sale agreement, without more); or or did not have the effect of substantially (H) Hinder, restrict, limit or prevent any lessening competition; person from setling any power switching equipment to any third person (except as Provided that in any of the foregoing cases may result from any bona fide purchase or any such prospective purchaser is financially sale agreement, without more). able, and is not delinquent in his account, to purchase such equipment and such de­ V fendant is able in accordance with its usual and customary production and delivery sched­ [Refusal to Sell, Discrimination] uling procedures to supply such equipment Each of the consenting defendants is to the purchaser at or about the time re­ enjoined and restrained from directly or quested by the purchaser; indirectly: (D) Conditioning the sale to any person (A) Communicating to or exchanging with of any power switching equipment, as ordi­ any manufacturer or seller of any power narily sold ( except for repair or replace­ switching equipment any prices applicable ment purposes) by such defendant to other U.S. v. Federal Pacific Electric Co.

persons in the same commercial class, upon such defendant between January 1, 1958 the purchase from such defendant of any and May 19, 1960, provided that the con­ other item of electrical equipment. senting defendants may arrange collectively Provided, however, in any instance in to send a single such copy to each such which such defendant reasonably believes purchaser to which such sales were made that the use intended to be made of the by one or more of such defendants. equipment will expose such defendant to (C) Each of the consenting defendants a substantial risk of liability, nothing in is ordered and directed for a period of ten subsections (C) and (D) of this Section V (10) years from the effective date of this shall be deemed to prohibit such defendant subsection ( C) annually to notify each Fed­ from requiring as a term of sale that the eral, State and local governmental agency purchaser agree in writing to hold such to which such defendant has, within the defendant harmless and to give a reason­ preceding year, submitted a successful sealed ably adequate bond (or, at the purchaser's bid for any power switching equipment, option, to maintain reasonably adequate in­ that such defendant has been ordered, and surance) to secure such agreement insofar each such defendant is hereby so ordered as it re1ates to claims by third persons. for such period plus one year, to submit a statement in the form set forth in the VI Appendix hereto with each sealed bid for [Price Review] any power switching equipment submitted to such agency in response to an invitation (A) Each of the consenting defendants to bid which requests such statement. is ordered and directed, not later than one year following the effective date of this sub­ (D) Each consenting defendant is ordered section (A), individually and independently and directed, for a period of ten (10) years (1) to review and determine its book prices from the effective date of this subsection for power switching equipment based upon (D), when submitting a bid or quotation lawful considerations, and (2) to announce for the sale of any power switching equip­ such prices determined under (1) above; ment (for which a price is included by such provided, however, that the price review, · defendant in the calculation of its bid or determination and announcement referred quotation) combined with other major items to above shall not be required with respect of electrical equipment, to set forth and to any power switching equipment as to itemize separately the total amount included which such defendant, within one year fol­ in such bid or quotation for the power lowing the effective date of this subsection switching equipment. (A), files with this Court, with a copy sent to the Assistant Attorney General in charge VII of the Antitrust Division, an affidavit stat­ [Permissive Provisions] ing that such defendant, prior to the effective Nothing contained in this Final Judgment date of this subsection (A) and subsequent shall be deemed to prohibit any of the con­ to May 19, 1960, reviewed, determined and senting defendants, announced the price of the product in ac­ cordance with the requirements of this sub­ (A) Where in order to sell or offer to section (A); and provided, further, that sell electrical equipment which includes any nothing contained in this subsection (A) power switching equipment any person must shall prevent any such defendant from de­ have an item or items of electrical equip­ viating from, modifying, or otherwise chang­ ment {i) which it does not itself manufac­ ing the prices announced in accordance with ture or assemble to combine with items of this subsection (A). such equipment which it does itself manu­ facture, assemble or purchase from others, (B) Each consenting defendant is ordered (ii) or if it does manufacture such an item, and directed to send a copy of this Final the item is of such a type or quality that Judgment not later than one hundred and it cannot competitively sell or offer to sell eighty (180) days following the effective its own item, (iii) or where such person date of this subsection (B) to each of. the could not singly perform the contract con­ Federal, State and local agencies and any templated by any such sale or offer to sell: other governmental awarding authorities to which sales pursuant to bids for any power (1) from formulating or submitting, in switching equipment were made by any combination with any person, a bona fide U.S. v. Federal Pacific Electric Co.

joint bid or quotation, where such joint employees of such defendant, who may have bid or quotation is denominated as such counsel present, regarding any such matters. or known to the purchaser to be such; or A consenting defendant, upon written re­ (2) from conducting bona fide nego­ quest of the Attorney General or the As­ tiations for or entering into any lawful sistant Attorney General in charge of the agreement with any person for a bona. Antitrust Division, and upon reasonable notice fide purchase from or sale to each other, made to its principal office, shall submit provided, that each party to the transac­ such written reports, under oath if it is tion is free to sell or offer to sell on terms requested, with respect to any of the mat­ independently determined by it; ters contained in this Final Judgment as from time to time may be necessary and (B) Where required directly or indirectly requested for the enforcement of this Final by a governmentalagency from formulat- Judgment. No information obtained by the ing or submitting in combination with any means provided in this Section shall be per.son a bona fide joint bid or quotation divulged by any representative of the De­ which is denominated as such or known partment of Justice to any person cexcept to the purchaser to be such; a duly authorized representative of the Execu- (C) From entering into, creating, carry- tive Branch of the United States except in ing out or implementing by lawful conduct the course of legal proceedings to which any otherwise lawful contract, agreement, the United States is a party for the purpose arrangement, understanding, plan or pro- of securing compliance with this Final Judg­ gram with any reseller relating to the sale ment, or as otherwise required by law. If of any power switching equipment purchased any such information is divulged to a duly from the defendant; or authorized representative of the Executive (D) From lawfully contracting with any Branch, outside the Department of Justice, person for the supply to or by such person such information shall be given after notice of any power switching equipment embody- to the defendant and on the condition that ing the proprietary design of or specially it will not be revealed to any person out­ designed for, the purchaser upon terms pro- side of such represtntative's Department or hibiting the supplier from selling equipment Agency except where required by regula­ embodying such design to all others ( except tion or statute or pursuant to court process. that the purchaser may authorize sales for repair or replacement purposes). IX [Jurisdiction Retained] VIII Jurisdiction is retained for the purpose [Inspection and Compliance] of enabling any of the parties consenting to For the purpose of determining or secur­ this Final Judgment to apply to this Court ing compliance with this Final Judgment, at any time for such further orders or duly authorized representatives of the De­ directions as may be necessary or appro­ partment of Justice shall, upon' written re­ priate for the construction of or carrying quest of the Attorney General or the Assistant out of this Final Judgment, or for the Attorney General in charge of the Antitrust modification of any of the provisions there­ Division, and on reasonable notice to any of, and for the purpose of enabling the consenting defendant made to its principal plaintiff to apply to this Court for the en­ office, be permitted, subject to any legally forcement of compliance therewith and the recognized privilege: punishment of violations thereof. (A) Reasonable access during the office X hours of such defendant to all books, ledgers, accounts, correspondence, memoranda and [Effective Dates] other records and documents in the posses­ Except as herein provided, the provisions sion or under the control of such defendant of this Final Judgment shall become effec­ relating to any matters contained in this tive upon entry hereof. Subsection V(C) Final Judgment; and and Section VI of this Final Judgment (B) Subject to the reasonable convenience shall not become effective until entry of a of such defendant and without restraint or Final Judgment, not subject to further interference from it, to interview officers or appeal, against the last remaining defend- ant in this action; provided, however, that (2) The prices, terms or conditions ot upon motion of any party consenting hereto, said bid have not been communicated by on thirty (30) days' notice to the other the undersigned nor by any employee or parties, and for good cause shown, this agent of ...... (name of Conrt may enter an order making any or defendant), to any other seller of power all ·of such Section or subsection effective switching equipment and will not be com­ as to any or all of the consenting defend­ municated to any such seller prior to the ants at any earlier or later date the Court official opening of said bid, may deem appropriate. in violation of the Final Judgment in Civil APPENDIX No. 28088 entered by the United States Affidavit District Court for the Eastern District of Pennsylvania on ...... , 1963. The undersigned hereby certify to their best knowledge and belief that: Dated: (1) The bid to ...... (name of recipient of bid) dated ...... Signature of person responsible ...... has not been prepared by for the preparation of the bid ...... (name of defendant) in collusion with any other seller of power Signature of person supervising switching equipment, and the above person, where feasible