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HomeMy Public PortalAbout01-04-1965 12 MINUTES OF THE I°FETING OF THE CO'rTi1ON COUNCIL OF THE CITY OF R.ICHMOND, INDIANA, SERVING AS A COMMITTEE IN CHARGE OF THE OPERATION OF THE RICHMOND POWER AND LIGHT. The Common Council of the City of Richmond, Indiana, serving as a committee in charge of the operation of the Richmond Power and Light, met "in regular session in the Council Chambers in the City Hall in said City, Monday January 4, 1965 at the hour of 7:00 o'clock (est). Councilman Yount presiding with the following members being present: Messrs. Backmeyer, Bell, Henn, Hilligoss, Hollingsworth, Marino, Paust and Youngflesh. The following business was had to-wit: Councilman Marino moved the minutes of the previous meeting be dispensed with, seconded by Councilman Hollingsworth and on voice vote was unanimously carried. Councilman Youngflesh moved the claims be allowed, seconded by Councilman Bell and on voice vote was unanaimously. carried. APPROVED THE FOLLOWING: Bills in the amount of $ 65,856.61 Two Payrolls 83,002.93 Payment of City Dividend 661,505.97 Councilman Yount stated that he as President of the Common Council had appointed Councilman Youngflesh to be Chairman of this committee for the ensuing year of 1965. General Manager Beck reported that the Payroll machine belonging to the Richmond Power which was purchased September 1952 should be replaced. He said that he had received a quote from the Burroughs Co., through Mr. Sam Simmons in the amount of approximately $8,000.00. This machine isn't quite suitable for the purpose. The National Cash Register Company quoted on a machine that was more desirable in the sum of $6,055.00 net. Mr. Beck recommended the purchase of the quote from National Cash Register Company and that the old machine be retained in case of a break- down in the new lane. Councilman Marino moved the General Manager be authorized to make purchase of the National Cash Register Company payroll machine in the amount of $6,055.00 and re- tain the 1952 machine. This motion was seconded by Councilman Youngflesh and on voice vote was unanimously carried. Mr.Kemper, City Attorney, read the following: SEYMOUR F. SIMON .Attorney at Law 19 South LaSalle Street Chicago 3, Illinois December 18, 1964 J.Richard Kemper, Esq. 205 Medical Arts Building Richmond, Indiana 47374 Re: Electrical Antitrust Cases Dear Mr.Kemper: Pursuant to your letter written authorization of November 12, 1964, a conference was held with the honorable Edwin A. Robson, in his Chambers, on November 16, 1964. Present were Mr. Raymond K. Berg, of our office, and Mr. John McHugh, of the firm of Chadwell, Keck, Kayser, Ruggles & McLaren, who represented all defendants in the City of Richmond cases. Enclosed please find two transcripts of the proceedings. As you will note, the Court concluded that the offer of $69,000.00 by defendants, to dismiss all of the City of Richmond lawsuits, is fair and reasonable to the City of Richmond, Indiana and defendants. We concur in this opinion. Our evaluation of the offer is based upon several factors which we have summarized as follows: 1. Judge Robson presently intends to try the City of Richmond Turbine case in mid- Fegruary, 1965. If the City of Richmond should decide to refuse this settlement offer, we would seek to postpone the trial date. However, any postponement Judge Robson might grant would probably be for only a short period of time. 2. City of Richmond officials, past and present will have to devote a great deal of time to the preparation and trial of this case. A rigid and consuming discovery schedule will be followed, calling for depositions, answers to interrogatories and production of documents. 11 ,? 3. Economists, engineers and possibly accountants will have to be hired tt a substantial expense, to assist in the preparation and prosecution of the case. ` 4. Under Section 5 of the Clayton :act, the pleas of guilty entered by the turbine defendants to the indictment, charging them with a conspiracy between the years 1956 and 1960, will not be prima-facie evidence of the defendants' guilt in 1951. We will have to prove that a conspiracy existed in 1951, the year the City of Richmond purchased the turbine. 5. Since the turbine was purchased during the Korean war, the defendants will prob- ably argue that turbines were under U.S.Government price controls and that the price of the City of Richmond turbine could not have been conspiratorily fixed. 6. Proof, of damages can be extremely difficult and uncertain. The chart pre- pared by the General Electric for the San Antonio, Texas and Washington, D.C. trials indicates that Springfield, Illinois paid 952,000.00 in April 1963 for the sane turbine that the City of Richmond purchased for 0984,540.00. General ' Electric will try to prove that the difference of 032,540.00 is the result of automation and technical advances. 7. The City of Richmond must also prepare for a trial in the middle of March, 1965 (if this settlement offer is refused, we will move to postpone this trial date as well) on the second priority product line, which includes power switchgear assemb- lies, power switching equipment and circuit breakers. The City of Richmond has three such cases and would have to engage in a rigid schedule of discovery similar to that involved in the turbine case. At the same time, national discovery will be conducted in the third priority product line, which includes condensers, distri- bution transformers, insulators, deters, and network transformers. The City of Richmond has five such cases. 8. If we go gorward with our preparations for trial in the turbine case, it may very well be that we will either default in our preparations for trial in the second priority product line or in our national discovery in the third priority product line. The result, of course, would be that these cases would either be dismissed by the Judge Robson or we would be forced to dismiss them ourselves. 9. By rejecting this settlement offer and choosing to go forward with the turbine IIItrial, we will commit ourselves to the trial of all cases. We will take the chance of not only losing the turbine case, but of losing the damages the City of Richmond would collect in allother product line cases. 10. There have been no settlements by any defendants on pre-1956 purchases of any product line. The most that has been offered to any plaintiff is the socalled "formula" adjustment, based on the plaintiff's post-1956 purchases of 200,000.00, the price adjustment is approximately 019,000.00. The defendants have offered the City of Richmond an additional 050,000.00 above the "formula" adjustment of 019,000.00. Will you please communicate to us in writing the City of Richmond's decision with regard to this offer? Will you also confirm, in writing, our arrangements for attorneys' fees, which is 18.5% of 069,000.00, or 012,765.00? It is understood that such fee will be divided equally between the law firm of Rhyne and Rhyne, our office and the City of Richmond. Very truly yours /s/ Seymour F.Simon. The foregoing letter to J. Richard Kemper, dated December 18, 1964 is approved by the undersigned. Rhyne & Rhyne . By /s/ Brice W. Rhyne. TRANSCRIPT OF PROCEEDINGS before HON. EDWIN A ROBSON JUDGE III I IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CONIIONZEALTH EDISON COMPANY,) et al., ) Plaintiffs, ) vs No. 61 C 1277 ALLIS-CHAL ERS MPG. CO. , ) and et al., ) related cases. Defendants. ) TRANSCRIPT OF PROCEEDINGS had in the above-entitled causes before the Honorable EDWIN A.ROBSON, one of the Judges of said Court, in his chambers in the United States Court House, Chicago, Illinois, on Monday, November 16, 1964, commencing at the hour of 2:00 o'clock p.m. A 4 PRESENT: Mr. Seymour Simon, (Suite 615, 39 South LaSalle Street, Chicago, Illinois), by Mr. Raymond K. Berg, appeared on behalf of the City of Richmond, Indiana. Messrs. Chadiaeli, Keck, Kayser, Ruggles & McLaren, (Suite 2360, 135 LaSalle Street, Chicago, Illinois, by Mir. John McHugh, appeared on behalf of all defendants. MR. McHUGH: Your Honor., Mr. Berg, counsel for the plaintiff in this action, and myself, appearing on behalf of all the defendants in the actions brought by the .. City of Richmond, Indiana in the electrical,cases, have come here this afternoon to your Honor in order to secure your Honor's judgement on the particular matter. We have laid before your Honor all of the relevant factors to be considered in the defendants' joint offer to the City of Richmond to dismiss their cases. We would urge your Honor to consider three factors and give us your judgement. Do you have any comments, Mx. Berg? • MR. BERG: No, your Honor, I believe you have all the facts and statistics before you. THE COURT: The City of Richmond, Indiana, plaintiff in Actions 62C 387, 62C 388, 62C 389, 62C 390, 62C 391, 62C 392, 62C 393, 62C 394, 62C 395, 62C 396, 62C 397, 62C 398, 62C 399, 62C 400 and 62C 401, and the defendants-electrical equipment manufacturers in those actions have asked this Court to review the circumstances surrounding a recently proposed offer of settlement made the City of Richmond, Indiana by the defendants. Counsel for the City of Richmond, Indiana has informed the Court of the details surrounding the purchases of all electrical equipment from the defendants by this plaintiff. The Court is thus aware that although the City of Richmohd, Indiana has made purchases of this equipment approximating $200,000.00 in the period from 1956 through 1959, the plaintiff has also made purchases of this equipment approx- imating : 2,400,000 in the period prior to 1956. Counsel for the defendants have informed the Court, and this Court is fully aware, that the defendants have not and will not make any price adjustments on purchases. made prior to 1956. This ,Court is also aware of the fact that the large number of electrical equipment cases which have heretofore been dismissed pursuant to price adjustments have not to this Court's knowledge involved price adjustments on purchases made by plaintiffs prior to 1956. In the past, this Court has on numerous occasions approved as fair and reasonable price adjustments where purchases made before 1956 by the respective plaintiffs were not included in those price adjustments. The defendants jointly have offered the City of Richmond, Indiana $69,000.00 to dismiss the actions brought by this plaintiff against the defendants. The Court is further aware that the offer made heretofore by the defendants was approximately $19,000.00.- It is thus evident to this Court that the defendants have now made a very substantial and generous additional offer to the City of Rich- mond, Indiana to dismiss its action against them. The actions brought by the City of Richmond, Indiana invoice numerous transactions with respect to many different types of electrical equipment. Pretrial proceedings have already been taken many months, and completion of preparation for trial and litigation to final judgement could take many months, involving a very substant- ial cost to all parties and expenditure of a vast amount of time of their officials, executives and engineering personnel that could be devoted to more constructive activities. Moreover, because of the interdependence of plaintiff and defendants in the domestic market for electrical equipment for use by municipal-utilities, the continuance of this litigation poses a threat to the health and well-being of an essential industry. There are still unresolved questions in this litigation, and while discovery proceedings have thus far delt with only part of the issues in hhese actions, it is apparent that they involve highly complex and difficult questions, that the ultimate outcome is uncertain and that no plaintiff or defendant has any assurance of a judgement in its favor, much less any assurance as to the amount of any recovery that might be obtained. The Court, after reviewing all facts and circumstances surrounding the actions of the City of Richmond, Indiana, is of the opinion that the offer of '$69,000.00 by defendants to dismiss the law suits id fair and reasonable to the City of Richmond, Indiana and to the defendants. Is there any additional comment? MR. McHUGH: I have no additional comments, your Honor. THE COURT: Mr. Berg, any additional comments? MR. BERG: I thank you very much, your Honor, for your consideration of all these facts, and your judgement of the offer that has been made to the City of Richmond. (WHICH were all of the proceedings had in the above entitled cause on the day and date aforesaid) . IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION COMMONWEALTH EDISON COMPANY,) . • et al., ) Plaintiffs, ) No. 61 C 1277 vs ) and ALLIS-CHALMERS MFG. CO., ) related cases et al., ) Defendants ) CERTIFICATE I HEREBY CERTIFY that the foregoing partial transcript of the proceedings had in the above entitled cause before the Honorable EDWIN A. ROBSON, one of the Judges of said Court on Monday, November 16, 1964, was reported in shorthand under my direction personal supervision, and that the foregoing partial transcript consist- ing of pages 1 to 6, inclusive, is true and correct transcript of the portion of the official shorthand notes made as aforesaid /s/ Claude W. Youker. Official Court Reporter, United States District Court, Northern. District of Illinois, Eastern Division. CHHADNELL, KECK, KAYSER, RUGGLES & McLAREN December 21, 1964 J. Richard Kemper, Esq. Vioni & Kemper 205 Medical Arts Building Richmond, Indiana Dear Mr. Kemper: This letter will confirm the agreement reached between your client, City of Richmond, Indiana, hereinafter referred to as "Customer", and the General Electric Company, Allis-Chalmers Manufacturing Company, and Westinghouse Electric Corpor- ation, hereinafter referred to as "Defendants", to compromise and settle the electrical equipment claims of.( ustomer. Within thirty (30) days after receipt of this Agreement, fully executed by you as Agent for the Customer, and the Certificate of Authorization, attached hereto as Exhibit 1, executed by Customer, the undersigned shall, as Agent for the De- fendants, pay you the sum of Sixty-Nine Thousand Dollars ($69,000.00) in settlement of the pending cases of the City of Richmond, Indiana filed in the United States District Court for the Northern District of Illinois as follows: 62C 387 Bushings 62G 388 Circuit Breakers 62C 3�s Condensers 62C 390 Distribution Transformers 620 391 Instrument Transformers 62C 392 Insulators 62C 393 Lightning Arresters 620 394 Meters 62C 395 Network Transformers 62C 396 Open Fuse Cutouts 62C 397 Power Capacitors 62C 398 Power Switchgear Assemblies 62C 399 P62Gr Switching Equipment 62C 400 Power Transformers 62C 401 Turbins-Generator Units as to each and every defendant named therein. Upon receipt of the amounts payable by Defendants hereunder, you, as Agent tor Customer, will execute covenants not to sue in the form annexed hereto as Exhibits II, III and IV and made a part hereof, and, you will move the Federal District Court for the Northern District of Illinois for an order dismissing, with prejudice, as against all Defendants each of the actions set out herein without court costs to any party. Very truly yours, DEFENDANTS By /s/ John J. McHugh, as Agent Councilman Backmeyer moved that a copy of a letter from Seymore Simon, Attorney, to J.Richard Kemper, City Attorney for the City of Richmond, Indiana, dated Dec- ember 18, 1964 and the transcript of proceedings held on November 16, 1964 before Honorable Edwin ::4. Robson, Judge, United. States District Court for the Northern District of Illinois, which letter and transcript have been presented to this meeting, be filed with and made a part of the permanent records of Richmond Power and Light. This motion was seconded by Councilman Henn and on voice vote was unanimously carried. Councilman Bell moved for the best interest of the City of Richmond, Indiana, and Richmond Power and Light, that the City of Richmond, Indiana accept the offer made by General Electric Company, Allis-Chalmers Manufacturing Company and Westinghouse Electric Corporation to pay to the City of Richmond, Indiana, the sum of Sixty- nine Thousand (- 69,000.00) Dollars in full compromise settlement of the following suits for damages arising out of electrical purchases from said companies in the United States District Court for the Northern District of Illinois, to-wit: 62C 387 Bushings 62C 388 Circuit Breakers 62C 389 Condensers 62C 390 Distribution Transformers • 62C 391 Instrument Transformers 62C 392 Insulators 62C 393 Lightning Arresters 02C 394 Meters 62C 395 Network Transformers 62C 396 Open Fuse Cutouts 62C 397 Power Capacitors 62C 398 Power Switchgear Assemblies 62C 399 Power Switching Equipment 62C 400 Power Transformers 62C 401 Turbine-Generator Units I move further that this offer of compromise settlement of these suits be accepted upon the terms set forth in the Letter Agreement for such compromise settlement from John J. McHugh, Agent for said companies, directed to J.Richard Kemper, City Attorney of the City of Richmond, Indiana, dated December 21, 1964, which Letter Agreement has been presented to and read to the Common Council of the City of Richmond, Indiana, acting as the Board of Directors of the Richmond Power and Light, at this meeting. Councilman Marino seconded this motion and on voice vote the motion was unanimously carried. Councilman Hilligoss moved that the Richmond Power and Light agree that upon re- ceipt by it of the sum of $69,000.00 in settlement of those suits filed by the City of Richmond, Indiana against General Electric Company, Allis-Chalmers Manu- facturing Company and Westinghouse Electric Corporation in the United States Dis- trict Court for the Northern District of Illinois, that it will pay as attorneys? fees in connection with these said suits, a sum equal fo 18.5% of 69,000.00, same being the sum of $12,765.00. These fees are to be divided as follows: One-third thereof shall be paid-tt6fSeymottir Simon;=Attorriaai f IC.hi cagq, : 7 la o s- 't3rie=third-' thereof-shall:be paid.;to llhyne teb R yric;'.Attornesy.,of Wa:hsingtanJD:%0'. =6rid='=Orid- third thereof shall be retained by the City of Richmond, Indiana, all in accord- ance with the letter from Seymour Simon to J. Richard Kemper, City Attorney of Richmond, Indiana, dated December 18, 1964, which letter has been presented to this meeting and ordered a part of the permanent records of Richmond Power and Light. This motion was seconded by Councilman Henn and on voice vote the motion was unanimously carried. There being no further business presented, on motion duly made, seconded and carried the meeting adjourned. C1:2' Charles O.Yount, 4man Attest: At -r J. Reeg, y Clerk