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