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August 9, 1967

SCHENLEY INDUSTRIES, INC., Schenley Distillers, Inc., and Affiliated Distillers Brands Corp., Plaintiffs,

The opinion of the court was delivered by: COOLAHAN

COOLAHAN, District Judge:


 This is an action for injunctive relief and damages under the Sherman and Clayton Acts, 15 U.S.C. §§ 1, 2, 15 and 26. Venue lies since each defendant is an inhabitant or is found in the District of New Jersey. 15 U.S.C. § 15.

 The plaintiffs are Schenley Industries, Inc., a Delaware Corporation engaged in distilling, blending, importing and distributing alcoholic beverages, and two of its wholly owned subsidiaries, Schenley Distillers, Inc., also a Delaware Corporation, and Affiliated Distillers Brands Corp. ["Affiliated"], a New York Corporation.

 The defendants are the New Jersey Wine & Spirits Wholesalers Association ["Association"]; twenty-seven corporate members of the Association, all wholesalers of wine and distilled spirits in New Jersey [sometimes referred to as "defendant Wholesalers"]; thirty individuals who are principal officers or stockholders, or both, of the various defendant Wholesalers; and Mr. Milton H. Cooper, the Executive Director of the Association. Each of the individuals is alleged to have participated, for at least the last four years, in the adoption and execution of Association policies.

 The production, importation and distribution of alcoholic beverages in which plaintiffs are collectively engaged constitute "commerce" within the meaning of the antitrust laws; this is not disputed.

 Schenley [Unless otherwise noted "Schenley" is hereafter used to refer to all three plaintiffs collectively] charges that defendants have unlawfully restrained this commerce by dominating the wholesale of liquor in New Jersey. The complaint alleges that they conspired to and have fixed prices and profit margins at the wholesale level; attempted to and have monopolized the wholesale of liquor in this State; and have restrained Schenley's effort to promote competition in the industry.

 The thrust of Schenley's grievance is twofold: First, it claims that through the Association machinery the defendants maintained unreasonably high profit margins by coercing individual wholesalers to reject pricing proposals suggested by Schenley. This was accompanied by an agreement among wholesalers handling Schenley products to restrict its market share by favoring competing products in their sales efforts.

 Second, Schenley's attempt to circumvent the defendants by selling directly to retailers under Affiliated's wholesale license was unlawfully prevented by concerted lobbying on behalf of two recently enacted New Jersey statutes which preclude distiller-controlled companies from direct distribution to retailers in the State. Schenley also alleges improper attempts to influence decisions of the Division of Alcoholic Beverage Control, New Jersey Department of Law and Public Safety [hereafter referred to, and commonly known as, the "A.B.C."].

 For convenience, I refer to the alleged attempts to influence the New Jersey Legislature and the A.B.C. as the "lobbying charges"; the remaining grievances in the complaint are denominated the "price fixing charges."

 Defendants move for dismissal on the ground that, apart from whether plaintiffs can sustain their charges, both the alleged lobbying and the alleged price-fixing are protected from action under the antitrust laws; the former by recent Supreme Court interpretation of the Sherman Act, and the latter because it is sanctioned under New Jersey's comprehensive regulation of liquor pursuant to its power under the Twenty-first Amendment to the United States Constitution.


 Movants for dismissal of a complaint must accept the facts alleged in the complaint as true for purpose of their motion. Continental Collieries v. Shober, 130 F.2d 631 (3rd Cir., 1942.) It must appear to a certainty that plaintiff is not entitled to relief under any state of facts which could be proved to support his claim. "No matter how likely it may seem that the pleader will be unable to prove his case, he is entitled, upon averring a claim, to an opportunity to try to prove it." Ibid. 130 F.2d 635.

 The necessary Background to the issues thus joined includes New Jersey's powers under that Amendment vis-a-vis the antitrust laws; the statutes and regulations enacted by New Jersey to control the sale of liquor and the underlying policy they reflect; and the history of Schenley's conflict with the Association.

 The long evolution of Federal and State regulation of liquor need not be repeated here, except to emphasize that the Twenty-first Amendment cedes vast plenary powers to the States, under which they can either exclude liquor entirely from their territory or stringently regulate such liquor as is permitted to be manufactured within or brought into their domain. See my opinion in Epstein v. Lordi, 261 F. Supp. 921, passim (D.N.J., three Judge court, 1966) "Note, The Evolving Scope of State Power under the Twenty-first Amendment", 19 Rutgers L.Rev. 759 (1965). Moreover where New Jersey's power under the Amendment attaches to liquor for distribution or use within the State, it operates to the exclusion of conflicting Federal statutes under the Commerce Clause. Epstein v. Lordi, supra. See p. 9, infra.

 In 1933 New Jersey enacted the Alcoholic Beverage Control Law, N.J.S.A. 33:1-1 et seq., establishing the Department of Alcoholic Beverage Control. *fn1" The framework provided by this statute, as amended, makes New Jersey a so-called "Open State", in which liquor is sold to the public through private channels that are in turn regulated by State agencies. That is, unlike some of her sister States which conduct the wholesale and retail of liquor as a State monopoly, *fn2" New Jersey has chosen to achieve the desired degree of control over distribution and sales through supervision of private enterprise by the A.B.C.

 Much of the regulation involves detailed supervision of wholesale and retail operations which do not concern us; the New Jersey pricing system does. This system has undergone considerable evolution since its inception, but operates today essentially as follows.

 The manufacturer (distiller, importer, or national distributor) must periodically list, or "post", with the A.B.C. the price at which it will sell each item to wholesalers for that period. Once posted, the prices are binding and must be uniform for all wholesalers without discrimination. In addition, it posts a second set of prices, which are the minimum resale prices to the consumer. This resale price list is distributed to all retailers by the A.B.C. which enforces compliance.

 Third, wholesalers must file the price at which they will sell each item to retailers. They too must sell at the posted price to all retailers without discrimination. In the case of wholesale prices, however, there is a further procedure. *fn3" The Regulations provide a brief inspection period after the wholesale prices are initially posted, in which wholesalers can examine all posted prices and raise or lower their own to meet competing prices. Once adjusted, the new prices then become binding and must be offered to all retailers alike. N.J.A.B.C. Regulations 30, 34. *fn4"

 To review, it should be clear that by fixing both the consumer and the manufacturer's price, the distiller sets the outer limits within which a wholesaler can establish his profit margin. Once the producer has set those two prices, the wholesaler's determination of the price charged retailers not only sets his own profit margin, but also, in conjunction with the consumer price, sets the retailer's profit margin as well.


 Although some semantical confusion has crept into the arguments, the basic nature of Schenley's grievance is readily comprehensible in terms of business realities without Talmudic exegesis of the pleadings.

 Schenley is dissatisfied with its share of the New Jersey market. It feels that its competitive efforts are hindered by inflexible maintenance of unreasonably high wholesale profit margins. It has proposed to individual wholesalers that they decrease their profit margin on certain Schenley items, thereby partially absorbing a proposed decrease in the ultimate consumer price, which would also be shouldered by Schenley at the manufacturer's price level. Presumably, both Schenley and the wholesaler would realize net benefits from increased volume, notwithstanding the decrease in their respective profit margins. *fn5"

 This elementary review helps put the charges and counter-charges in context. I deem Schenley's complaint to be that when Affiliated has proposed such mutual reductions in profit margin at the manufacturer and the wholesale price levels, some individual wholesalers have been amenable to the suggestion. But such tentative receptions of the possibility have been cancelled thereafter, Schenley claims, because the projected pricing framework was then rejected by the Association as a whole, or the bulk of it members acting collectively, in order to perpetuate uniform and unreasonably high profit margins.

 Schenley alleges that through such group pressure, and threatened boycott of items for which Schenley's prices were found unsatisfactory, the defendants have collectively demanded a uniform profit margin for all items including those purchased from Schenley.

 Having been thwarted in its efforts, Schenley decided to activate the wholesale license which for many years had been held and renewed by Affiliated. *fn6" Warehouse space was purchased, truckers hired, and other arrangements completed for Affiliated's direct sale and distribution of Schenley products to retailers. In April of 1966, Affiliated filed a wholesale price list with the A.B.C. for the summer period. The A.B.C. indicated it was too late for that period and would be treated as an application for filing in the subsequent period beginning in September.

 Meanwhile, after this action had been instituted, the aforementioned statutes were passed with impressive alacrity by the New Jersey Legislature. Chapters 58, 59, 1966 Session Laws. Essentially they prohibit any distiller, or company owning an interest in or connected with a distiller, from engaging in the wholesale of alcoholic beverages to retailers in this State. Plaintiffs allege that both the rejection of the price filing and the statutes resulted from improper lobbying.

 The statutes were enacted before any proceedings could go forward in this Court. Following their passage Affiliated sued the State in the Chancery Division of the Essex County Superior Court for a judgment that the two provisions were unconstitutional. Affiliated Distillers Brands Corp. v. Arthur J. Sills and Joseph P. Lordi, Docket No. C-3085-65 (Sup.Ct.Ch., Essex). That action is still pending. A group of New Jersey wholesalers who are also defendants here were denied the right to intervene. Affiliated v. Sills and Lordi, supra. Order of November 22, 1966. *fn7"



 Defendants contend that the price-fixing charges raise a "head on clash" between New Jersey's power under the Twenty-first Amendment and the Commerce Clause power underlying the Federal antitrust laws. They claim that at such an impasse, it is the antitrust laws which must give way to State regulation of liquor for use or consumption within its territory. *fn8"

 Schenley denies a confrontation. Assuming, arguendo, that State power under the Amendment would prevail if such a clash existed, *fn9" Schenley contends it does not arise since the enforcement of the Sherman Act it seeks would not defeat New Jersey's regulatory scheme.

 Is the price-fixing activity alleged protected by New Jersey law? Defendants present voluminous materials on the legislative history and evolution of the Alcoholic Beverage Control Act and Regulations. Boiled down, they indicate the following. New Jersey has chosen vigorous control of the industry. With recent memory of the evils rampant during Prohibition, the regulatory scheme has been fashioned and amended with one central theme: the preservation of an orderly market so as to prevent cutthroat competition, price discrimination, revival of racketeering, or unduly cheap liquor. Grand Union Co. v. Sills, 43 N.J. 390, 397-400, 204 A.2d 853 (1964); and see the Preamble, 1939 Amendment to the Act, L.1939, c. 87, p. 174; N.J.S.A. 33:1-3, 39. *fn10" To the extent traditional free competition conflicts with the above aims, New Jersey has forsaken the dynamics of an open market for these other social goals. Grand Union Co. v. Sills, supra, 43 N.J. at 397-398, 204 A.2d 853.

 These policies are implemented by the pricing system and the enforcement program. Listed prices, binding on all purchases, prevent discrimination. The inspection period for readjustment of initially posted prices to meet competing ones encourages uniform price levels. Defendants assert that the challenged practices flow from such regulation and thus fail to state a claim on which relief can be granted.

 Unless a State has affirmatively adopted a policy of price fixing by private groups, such action is not protected by the Twenty-first Amendment. United States v. Frankfort Distilleries, 324 U.S. 293, 65 S. Ct. 661, 89 L. Ed. 951 (1945); *fn11" accord, United States v. Erie County Malt Beverage Distributors, 264 F.2d 731 (3rd Cir., 1959). That policy may be indicated either by a direct price fixing statute requiring such action, or by permissive sanction. Frankfort Distilleries, supra, 324 U.S. at 301, 65 S. Ct. 661 (Mr. Justice Frankfurter concurring), but it should not be lightly implied unless clearly expressed by State statute or case law. Ibid. A Federal court should hesitate to find such a conflict between the Sherman Act and State law unless it clearly exists. Joseph E. Seagram & Sons, Inc. v. Hostetter, supra, 384 U.S. at 45, 86 S. Ct. 1254. It should be slow to assume New Jersey has sanctioned a conspiracy in violation of the Sherman Act. Washington Brewers Institute v. United States, 137 F.2d 964, 968 (9th Cir., 1943) cert. denied, 320 U.S. 776, 64 S. Ct. 89, 88 L. Ed. 465 (1943).

 On the one hand, the Wholesalers claim that since New Jersey provides the vehicle of Regulation 34 to promote price coordination, any concerted action resulting in uniformity is sanctioned by the State in the sense required by Frankfort Distilleries. Schenley, on the other hand, argues that no statute or judicial decision warrants the inference, let alone holds, that New Jersey sanctions pricefixing in the manner alleged. That is the cutting edge of this issue. Unquestionably New Jersey sanctions price uniformity. Grant also that it provides considerable machinery and procedures to foster such uniformity at the wholesale level. The critical question which remains is whether it has authorized collective coercion designed to force individual wholesalers to set prices they would not choose on their own, merely because such coercion produces price uniformity. Simply put, the defendants' theory reduces to a claim that the end justifies the means; the goal being price uniformity, any means collectively taken by the wholesalers to that end is sanctioned. *fn12" This is an extremely dubious proposition to say the least. *fn13"

 Defendants have not shown this to be the case. From their presentation thus far, it appears that New Jersey merely sanctions price adjustment under Regulation 34, plus coordination of cost and pricing data. But dissemination of coordinated analyses or even suggested prices is not the same as coercion or discipline of members who decide to differ. Cf. Maple Flooring Mfrs.' Assn. v. United States, 268 U.S. 563, 45 S. Ct. 578, 69 L. Ed. 1093 (1925). There is no indication that New Jersey's sanction of private action in pursuit of an orderly market extends to the elimination of an individual's right to set his own price and, concomitantly, to freely discuss this price with his supplier. Yet coercion of wholesalers who were willing to consider Schenley's proposals for reduced profit margins forms the heart of its price-fixing charge.

 Defendants are right that if the Director is dissatisfied with the prices produced by the present machinery, he can set other prices himself. However, he has not yet chosen to go this far. Until he does, this potential power, though indicative of State policy, is not tantamount to a present requirement of a single set price. In the meanwhile, the State has not abrogated all competition in marketing alcoholic beverages, and the Federal concern remains facilitating that competition within the limits set by the State framework. *fn14"


 Defendants' several subsidiary contentions are also without merit. The argument that the Complaint reveals Schenley's own attempted price-fixing conspiracy is flawed by the assumption that Affiliated is a horizontal competitor of the defendant wholesalers in regard to the present charges. *fn15"

 Alternatively, Schenley's complaint that it could not bargain individually with each wholesaler is said to contravene New Jersey policy against undue pressure exerted by the distiller on a wholesaler. Canada Dry Ginger Ale, Inc. v. F. & A. Distributing Co., supra, 28 N.J. at 455, 147 A.2d 15. The inarticulated premise here is that through individual negotiations over proposed pricing Schenley sought to dictate prices to wholesalers, who would only enter such a Faustian bargain because of undue leverage on Schenley's part.

 Extraneous factual assertions are not a basis for a motion to dismiss the Complaint. The trial will be the place for proof of such leverage. But Schenley's present allegation is that each wholesaler was free to decide whether he wished to handle Schenley's products within the proposed price framework, while Schenley had a right to try to convince him, free from external threat and coercion, that it would be profitable.

 Next, defendants claim that the price filing and inspection procedure relies on private industry to accomplish the desired price regulation; they conclude that, even apart from the effect of the Twenty-first Amendment, such delegation of State authority casts them as public agents and protects their collective efforts from the Sherman Act. Parker v. Brown, 317 U.S. 341, 63 S. Ct. 307, 87 L. Ed. 315 (1942). Parker v. Brown upheld a State proration plan which limited production and fixed prices for California raisin growers. That case and Asheville Tobacco Bd. of Trade v. FTC, 263 F.2d 502 (4th Cir., 1959) are easily distinguished. *fn16" Moreover, as I have just noted, even if some delegation could be implied, there is no indication it authorizes coercion of Association members.


 Finally, the defendants have raised the spectre of abstention, and argue that because the sufficiency of the Complaint depends upon questions of New Jersey law and policy, this lawsuit should be stayed until those questions are resolved in the State courts.

 Generally, Federal courts have a duty to hear over matters entrusted to its jurisdiction, Propper v. Clark, 337 U.S. 472, 69 S. Ct. 1333, 93 L. Ed. 1480 (1949) notwithstanding the pendency in a State court of an action concerning the same matter, McClellan v. Carland, 217 U.S. 268, 30 S. Ct. 501, 54 L. Ed. 762, or the necessity to resolve difficult questions of State law required to reach judgment on the Federal matter. Meredith v. City of Winter Haven, 320 U.S. 228, 64 S. Ct. 7, 88 L. Ed. 9 (1943); Siler v. Louisville & N.R.R., 213 U.S. 175, 29 S. Ct. 451, 53 L. Ed. 753 (1909). A fortiori, it is the duty of this Court to decide cases and questions arising under Federal statutes which vest exclusive jurisdiction in the District Courts, such as the Clayton Act, 15 U.S.C. § 15. Mach-Tronics v. Zirpoli, 316 F.2d 820 (9th Cir., 1963); Lyons v. Westinghouse Electric Corp., 222 F.2d 184 (2nd Cir., 1955), cert. denied, 350 U.S. 825, 76 S. Ct. 52, 100 L. Ed. 737.

 An exception lies in a narrowly specified class of unusual cases when a Federal court may properly abstain from proceeding to decide a matter within its jurisdiction in order to permit State court adjudication of State law and policy involved in the Federal case. The Supreme Court has warned that such abstention is an extraordinary disruption of Federal jurisdiction, to be used "only in the exceptional circumstances where the order to the parties * * * would clearly serve an important countervailing interest". County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-189, 79 S. Ct. 1060, 1063, 3 L. Ed. 2d 1163 (1959).

 Three main types of countervailing interests are grouped under the general heading of "abstention." Thus, the doctrine has been applied where prior disposition of questions of State law might obviate a Federal constitutional issue, Railroad Comm. of Texas v. Pullman Co., 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941), or might materially alter or reduce the constitutional problem. Harrison v. NAACP, 360 U.S. 167, 79 S. Ct. 1025, 3 L. Ed. 2d 1152 (1959). A second use is to avoid needless friction with a State's administration of its own affairs and internal policy, Stefanelli v. Minard, 342 U.S. 117, 72 S. Ct. 118, 96 L. Ed. 138 (1951) (State criminal law); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S. Ct. 1070, 87 L. Ed. 1407 (1943) (State taxes), particularly where a complicated regulatory system of local law involves important public policies. Burford v. Sun Oil, 319 U.S. 315, 63 S. Ct. 1098, 87 L. Ed. 1424 (1943); Alabama Public Service Comm. v. Southern R. Co., 341 U.S. 341, 71 S. Ct. 762, 95 L. Ed. 1002 (1951). Finally, abstention has been ordered in diversity cases where difficult questions of State law arise in sufficiently special circumstances to warrant the comity of federalism. Compare Meredith v. City of Winter Haven, supra; Louisiana Power and Light Co. v. Thibodaux City, 360 U.S. 25, 79 S. Ct. 1070, 3 L. Ed. 2d 1058 (1959); and County of Allegheny v. Frank Mashuda Co., supra. *fn17"

 Abstention was rejected in Mach-Tronics v. Zirpoli, supra, since none of these factors - constitutionality, friction with State regulation or prerogative or unclear State law - was present, 316 F.2d at 827-828. In fact, Mach-Tronics and Lyons, supra, involved the converse of the usual abstention situation, and presented at most the propriety of abatement. *fn18" They teach the need for uniform application of the antitrust laws, unfettered by anticipatory findings in the State tribunals, in order to fully vindicate private rights and the national policy embodied in the punitive two thirds of treble damage recovery. Lyons, supra, 222 F.2d at 189.

 There is equally no need to abstain here, even though the applicability of the Sherman Act depends on the effect of New Jersey liquor laws. Within the framework provided by Frankfort Distilleries, no Federal constitutional problems arise. Nor would the relief requested disrupt operation of the regulatory scheme; the pricing system would still apply to the parties. Cf. Hostetter v. Idlewild, supra, 377 U.S. at 329, 84 S. Ct. 1293, 12 L. Ed. 2d 350. It would not produce friction with State policy for the reasons discussed above. As for the fact that a question of State law is involved, it is sufficiently clear that the statute and regulations do not sanction the activity alleged. Moreover, even if the question was closer, the considerations stressed in the Mach-Tronics case would outweigh that difficulty in the absence of other special circumstances. See note 17, supra.

 Finally, defendants' reference to the pending Chancery action is misplaced. Nothing that Court may decide will dispose of the issue of State law raised here, as Judge Herbert himself has stressed. See note 7, supra. Nor would relief here tie his hands in any way.


 The next issues is the request to strike parts of the Complaint which predicate illegal antitrust conspiracy upon lobbying. Despite extensive argument, it is not fully clear whether Schenley still asserts liability for lobbying or merely seeks to explore such activity as relevant evidence of the design and intent of the price-fixing conspiracy.

 Schenley concedes that neither defendants' concerted effort nor their anti-competitive purpose could make lobbying unlawful. Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 81 S. Ct. 523, 5 L. Ed. 2d 464 (1961); United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S. Ct. 1585, 14 L. Ed. 2d 626 (1966). It further agrees that no damages lie for lawful lobbying and that, in any event, the injunctive relief originally sought in this regard is now moot.

 Schenley now emphasizes its desire to prove lobbying as indicative of the defendants' hostility toward Schenley and of their scheme to block any competitive efforts which could undermine their oligopoly.

 In addition, however, Schenley continues to suggest that the lobbying itself, if sufficiently illegal apart from its antitrust aspect, is not shielded from liability under the Sherman Act. Schenley argues that Noerr and Pennington protect lobbying merely misleading or unethical, but do not extend to acts flagrantly violative of state law. Therefore, it seeks to retain those charges in the Complaint pending full discovery, at which time it will decide whether to offer lobbying so illegal as to fall within the antitrust laws, or merely to offer lobbying as collateral evidence on the remaining charges.

 For the following reasons, I disagree and conclude that the portions of the Complaint which allege lobbying as part of a conspiracy in violation of the Sherman Act shall be stricken. What this Court may later decide on the appropriate scope of discovery and admission of evidence at trial, is another matter; but an attempt at such delineation now would be premature.

 Noerr and Pennington make clear that concerted private effort to influence government action does not violate the Sherman Act, no matter how selfinterested, devious, or anti-competitive. " Noerr shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose." United Mine Workers of America v. Pennington, supra, 381 U.S. at 670, 85 S. Ct. at 1593. *fn19" The Supreme Court did reserve one exception to this broad protection; but it did not apply in Noerr and does not apply here. *fn20" To be sure, the impropriety alleged in Noerr was only deceptive use of a third party organization, ostensibly independent but actually railroad controlled. There was no issue of bribery, extortion or the like, although the exact status under Pennsylvania law of such partial disclosure is unclear from the opinion. But Schenley's attempt to limit Noerr and Pennington to their factual situations and to distinguish lobbying blatantly illegal under State law misses the basic point of those decisions. The antitrust laws simply do not comprehend such political activity as concerted lobbying to influence governmental action.

 Schenley reads Noerr as merely expressing the Court's disinterest in the sharp practices of misrepresentations of some lobbying specialists. On the contrary, the Court first weighed several considerations that convinced it Congress had not intended the Sherman Act to reach political activity which produced restraints on commerce via governmental acts or policies. *fn21" The Court then found the same considerations impelled the conclusion that the nature of the lobbying methods employed was legally irrelevant for antitrust purposes. Since political activity to influence public officials is beyond the purview of the Act, it does not matter that independently illegal acts can be shown; separate civil or criminal actions might lie against the perpetrators, but the lobbying is not thereby transmuted into a violation of the Act. A private antitrust complaint is not the appropriate vehicle for state criminal laws whose enforcement is entrusted to state or local prosecutors. *fn22"

 Nor does Schenley's portrayal of the alleged lobbying as a subsidiary conspiracy in the overall scheme to dominate the wholesale industry make such lobbying actionable under the antitrust laws. Speaking for the Court in Pennington, Mr. Justice White rejected the trial instruction that the jury "was free to find an illegal conspiracy based solely on the Walsh-Healey and TVA episodes, or in any event to attribute illegality to those acts as part of a general plan to eliminate Phillips and other operators similarly situated." 381 U.S. at 670, 85 S. Ct. at 1593. The Justice concluded:


"Neither finding, however, is permitted by Noerr for the reasons stated in that case. Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act." Ibid.

 Thus, even if the lobbying is viewed in the context of a larger scheme to fix profits and prices, its characterization as a supplementary phase of that conspiracy affords no basis for imputing illegality. Since no claim for relief may be predicated on the allegations that defendant Wholesalers sought to influence governmental action, such allegations should be stricken from the complaint. A.B.T. Sightseeing Tours v. Gray Line New York Tours, 242 F. Supp. 365, 369 (S.D.N.Y.1965).

 Schenley's alternative position, stressed at oral argument, is retention of the lobbying charges in the Complaint as explanatory of evidence it will offer to substantiate the Wholesalers' evil designs. In a footnote to the Pennington opinion, the Supreme Court did leave open the use of evidence on protected lobbying activity in the manner Schenley proposes, namely, to demonstrate anticompetitive intent. *fn23"

 Nonetheless, the Complaint framed pleads the lobbying as part of the conspiratorial behavior for which damages are sought. This is invalid. And as an evidentiary pleading, the allegations are subject to judicial pruning.

 Schenley has discretion to frame its pleadings as it sees fit. While a complaint, under Rule 8, F.R.Civ.P., need only recite "a short and plain statement of the claim showing that the pleader is entitled to relief," material allegations elaborating the claim on which relief is sought may be included in appropriate circumstances. Such gratuitous charges can be stricken, however, to avoid prejudice and to avoid requiring a defendant to plead to matters of evidence. Minnesota Mining & Mfg. v. Carborundum Co., 7 FR Serv. 12 f. 21; 3 F.R.D. 5 (D.Del., 1943). On the particular facts at Bar, the nature of the alleged conspiracy is amply spelled out by the remainder of the detailed complaint. Any additional enlightenment which retention of the lobbying charges might now provide is clearly outweighed by the prejudicial connotations the term "lobbying" has acquired in common usage and by the emotional reaction such material might engender in the trier of fact.

 Moreover, under the footnote in Pennington, on which Schenley relies, it is within the province of the trial court to exclude such evidence even at trial if it is insufficiently probative or unduly prejudicial or dilatory. United States v. Johns-Manville Corp., 259 F. Supp. 440, 453 (E.D.Pa., 1966). *fn24"

 Finally, there is the important consideration that the bounds of proper discovery are set by the pleadings. Unquestionably, the present skirmish on this portion of the Complaint is tied to the larger battles over discovery which loom on the horizon. Since I have stayed discovery pending my ruling on the Complaint, Schenley's evidentiary argument presents the Court with something of a "chicken or the egg" question of priority. *fn25"

  Almost unanimously, the many judicial conferences and expert panels which have considered discovery in protracted cases recommend containing it within manageable proportions by first narrowing the issues and pruning the complaint through appropriate motions or other pretrial proceedings. On the other hand, the antitrust conspiracy is by nature secretive and hard to establish; plaintiffs are often forced to plead generalities at the outset until some discovery permits them to specify the relationship among their claims.

 With both these considerations in mind, I still find it appropriate to dismiss those portions of the Complaint alleging lobbying in furtherance of the antitrust conspiracy. Subsequently, the Court will entertain motions on specific discovery regarding attempts to influence governmental action, with the burden on plaintiffs to demonstrate its relevance and necessity for the prosecution of the remainder of this action. See United States v. Johns-Manville, supra.



 Treble damage actions under the Sherman Act and Clayton Act must be commenced within 4 years "after the cause of action accrued." 15 U.S.C. § 15b. The cause of action accrues from a specific overt act causing damage, rather than from the mere inception of an antitrust conspiracy, Farbenfabriken Bayer, A. G. v. Sterling Drug Co., 153 F. Supp. 589 (D.N.J.1957) aff'd on other grounds, 307 F.2d 210 (3rd Cir., 1962) cert. denied, 372 U.S. 929, 83 S. Ct. 872, 9 L. Ed. 2d 733 (1965). Hence, Schenley concedes that it must show an overt act within four years preceding the Complaint which proximately caused damage.

 Defendants would carry this a step further. They argue that Schenley cannot recover at all for acts which occurred more than four years prior to the complaint, and, therefore, that allegation of such acts should be stricken.

 At the least, such acts are admissible evidence and proper areas of discovery, within the limits imposed on both discovery and admissibility by other considerations. "The asserted history of the conspiracy and not the scope of plaintiff's damage provides the temporal boundary for the discovery." Hillside Amusement Co. v. Warner Bros., 7 F.R.D. 260 (S.D.N.Y., 1944).

 Schenley contends that overt acts within four years past are necessary to start the Statute running anew, but that, once in the courthouse door, it can even recover for damages caused by earlier acts which are part of a continuing conspiracy.

 Insofar as such acts are alleged to have caused damage within the last four years, I agree. In the first place, the legislative intent behind Section 4B of the Clayton Act, 15 U.S.C. § 15b, was not so much the expunction of long standing claims as it was the effective enforcement of the Act through a uniform period of limitations throughout the nation which would reduce forum shopping. Westinghouse Electric Corp. v. Pacific Gas & Electric Co., 326 F.2d 575, 580 (9 Cir., 1964) (and authorities cited).

 Secondly, the defendants' reference to the so-called "overt act doctrine" in this Circuit is misleading, since the Farbenfabriken Bayer case turned on the absence of any overt act alleged within the period of limitations. Moreover, even within that frame of reference, the opinion by Judge Smith is not very helpful to the defendants since he concluded that the statute of limitations runs "from the commission of the last overt act alleged to have caused damage." 153 F. Supp. at 593. Thus, where the Complaint alleges a conspiracy still ongoing at the commencement of the action, the statute would be no bar under a strict application of this theory. Also distinguishable is the situation in which overt acts were alleged within the statutory period but had caused no new damage, and the last acts causing damage had occurred more than four years past. E.g. Garelick v. Goerlich's Inc., 323 F.2d 854 (6 Cir., 1963).

 The Courts have resorted to a variety of metaphysical theories to deal with the conceptual complexities of an antitrust conspiracy in a sizeable industry. They are reviewed and disposed of to the satisfaction of this Court by the excellent and comprehensive opinion of Judge J. Skelly Wright in Delta Theaters, Inc. v. Paramount Pictures, 158 F. Supp. 644 (D.La.1958). I agree with Judge Wright that in the case of a continuing conspiracy, the plaintiff may recover for any damage which occurs within the period of limitations. See authorities cited in Delta Theaters, supra, 158 F.Supp at 649, n. 20, 21. But the thrust of this decision, as I understand it, is not that Schenley cannot plead and prove activities of the conspiracy prior to that period. It merely limits the damage for which Schenley seeks recovery to damages demonstrably arising within the 4 years prior to the Complaint. See Hanover Shoe Inc. v. United Shoe Machinery, 245 F. Supp. 258 (M.D.Pa., 1965); Streiffer v. Seafarers Sea Chest Corp., 162 F. Supp. 602 (E.D.La., 1958); but see Viking Theatre Corp. v. Warner Bros. Pictures, 264 F. Supp. 665 (E.D.Pa., 1967).

 Finally, it should be noted that apart from the issue of damages, conspiratorial acts would be relevant to the determination of the prayer for injunctive relief, even though they took place more than four years ago. For all these reasons, the request to strike portions of the Complaint alleging acts more than four years prior to the filing of the Complaint is denied.

 Let an appropriate Order be submitted, on notice to all parties.

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