Zenith Radio Corp. v. Hazeltine Research, Inc.

United States Supreme Court

401 U.S. 321

Zenith Radio Corp.  v.  Hazeltine Research, Inc.

Certiorari to the United States Court of Appeals for the Seventh Circuit

No. 80.  Argued: November 10, 1970 --- Decided: February 24, 1971

Respondent (HRI) brought a patent infringement suit against petitioner (Zenith) in 1959, and in 1963 Zenith counterclaimed for damages alleging violations of the Sherman and Clayton Acts by HRI's participation in patent pools in Canada, Great Britain, and Australia, restricting Zenith's operations in those countries. A year after evidence was closed, the trial judge entered preliminary findings of fact and conclusions of law favoring Zenith. HRI then moved to amend its reply to the counterclaim and to reopen the record for taking additional evidence. HRI sought to assert defenses of the statute of limitations, and release, claiming that part of the damages awarded Zenith for 1959-1963 were caused by pre-1959 conduct and thus barred by the statute of limitations, or were barred by a 1957 release given by Zenith to certain American companies in settlement of a civil treble-damage action. The trial judge permitted the defenses to be filed but refused to reopen the record or modify his findings and conclusions concerning the Canadian market. The Court of Appeals reversed on the ground that Zenith had failed to prove injury to its business. This Court reversed with respect to Canada, holding that there was ample evidence of damage in the Canadian market and noting that the trial judge had either rejectd the limitations and release defenses on the merits of deemed them waived, 395 U.S. 100. On remand the Court of Appeals held that the trial judge erroneously rejected the defenses on their merits. That court, while doubting that Zenith's claim that the statute of limitations was tolled (by reason of a Government antitrust suit pending from 1958 to 1963 against various companies participating along with HRI in the Canadian patent pool), was properly before it, since no formal plea had been entered, rejected the tolling argument, concluding that tolling takes place only with respect to parties in a Government suit and HRI was not such a party. The court further ordered evidence to determine the extent of reduction of damages by virtue of the defenses it sustained.

Held:

1. Under the circumstances of this case, the trial judge did not abuse his discretion if his rejection of the limitations and release defenses was based on HRI's waiver due to untimeliness of their presentation. Pp. 328-333.

2. The Court of Appeals erroneously rejected Zenith's claim that the statute of limitations was tolled during the pendency of the Government's antitrust suit against the other participants in the patent pool. Pp. 333-338.

(a) Where, as here, a plaintiff has no reason to anticipate that a claim of limitations will be raised against him, he need not set forth his claim of tolling until the limitations claim is raised. P. 334.

(b) Under 28 U.S.C. § 16 (b), the statute of limitations is tolled against all participants in a conspiracy that is the object of a Government suit, whether or not they are named as defendants or conspirators therein. Pp. 335-338.

3. A plaintiff in an antitrust action may recover damages occurring within the statutory limitation period that are the result of conduct occurring prior to that period if, at the time of the conduct, those damages were speculative, uncertain, or otherwise incapable of proof. Pp. 338-342.

4. The effect of a release upon coconspirators is to be determined in accordance with the intention of the parties, and here HRI, which was neither a party to the 1957 release nor a parent or subsidiary of a party, is not entitled to the benefit of the release, as the agreement to exchange releases provided expressly that they were "to bind or benefit" the party and "the parent and subsidiaries of the party giving or receiving such release." Pp. 342-348.

418 F. 2d 21, reversed and remanded.

WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACK, DOUGLAS, BRENNAN, MARSHALL, and BLACKMUN, JJ., joined. HARLAN, J., filed an opinion concurring in the result, in which STEWART, J., joined, post, p. 349.

Thomas C. McConnell argued the cause for petitioner. With him on the briefs were Philip J. Curtis and Francis J. McConnell.

Victor P. Kayser argued the cause for respondent. With him on the briefs were John T. Chadwell, C. Lee Cook, Jr., Joseph V. Giffin, Robert F. Ward, and Laurence B. Dodds.

Notes