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WOOHYUNG SHIM, KOREA HOUSE TRADING CORP. v. KIKKOM

January 15, 1981

Woohyung SHIM, Korea House Trading Corp., Korea House Inc., Ho Sam Trading Co., Inc., Orion Oriental Food, Ltd., Plaintiffs,
v.
KIKKOMAN INTERNATIONAL CORP., and Nomura and Company, Defendants



The opinion of the court was delivered by: BIUNNO

The complaint in this case was filed April 17, 1979 setting out six counts alleging violations of the anti-trust laws (secs. 1 and 2 of the Sherman Act, sec. 2 of the Clayton Act as amended by the Robinson-Patman Act and sec. 3 of the Robinson-Patman Act).

 The relief sought is a declaration of unlawfulness of certain alleged trade practices for the sale of oriental foodstuffs, treble damages, costs and attorneys fees.

 Return on an alias summons directed to defendant Nomura showed service on July 9, 1979. Within 35 days of service, Nomura served and filed a like notice of demand to post security for costs under the same rule. This was filed July 23, 1979.

 Thereafter, there was no activity whatever in the case, until December 5, 1980, which is 501 days or nearly 16.5 months later, when the clerk filed and issued a Notice of Call for Dismissal for failure to prosecute, under General Rule 30 of this District, *fn2" returnable January 12, 1981.

 On December 18, 1980, about two weeks later, the sum of $ 300 was deposited in the Registry of the court as security for costs, and on the same day plaintiffs' attorney served and filed notice thereof dated December 15, 1980.

 On December 22, 1980 plaintiffs filed three affidavits. The first is by Seokjun Han, president of Ho Sam Trading Co., Inc. a/k/a Jin Han II, said to be a plaintiff not only in the present suit but also in two other actions in this court, Civ. 78-574 and 78-1049. *fn3" Mr. Han says he has been called to testify before a federal grand jury in the District of Maryland in connection with business dealings with Kikkoman, and produced records requested by lawyers from the anti-trust division of the Department of Justice. He says he and the other plaintiffs feel the present suit should be delayed to enable him to make available all his records in order not to hinder the investigation of the Department of Justice. He also says that in the earlier two actions, he was left with nothing but frustration while Japan Food Corporation (not a party in this suit) obtained more than 20,000 documents and had at least 6 days of depositions, by way of discovery in those other suits.

 The second affidavit is by John S. Choi, president of Korea House Trading Co. He also recites giving testimony during May, 1980, and providing documents, for the same grand jury in connection with rice transactions with Japan Food Corporation (now known as JFC International), with Pacific International Rice Milling of Woodlands, California (neither of which is a party to this suit) and with defendant Nomura. He too says he has instructed plaintiffs' attorney to cooperate fully with the lawyers for the Department of Justice, that many records of his company have been provided as a result, and that he understands the grand jury should be completed in the near future. No indication is given whether the grand jury proceedings are in any way connected with the rice transactions involved in the so-called "Koreagate" investigation involving some members of the Congress, and which appears to have been closed at the congressional level.

 The third affidavit is by plaintiffs' attorney, Mr. Dexter. He explains that soon after filing this complaint he was contacted by a lawyer of the anti-trust division of the Department of Justice who was starting an informal investigation of business practices of Japan Food Corporation, and promised to provide full cooperation. Within a few months, he was told that the matter was now a formal investigation, and so reported to Judge H. Curtis Meanor of this District, to which Civ. 78-545 had been assigned.

 He says that the demand to provide security for costs gave him the opportunity, by failing to make the deposit, to avoid discovery demands in this case while facilitating cooperation with the Department of Justice. This strategy is also described as providing a means to isolate plaintiffs from further testimony before appearing at the grand jury proceedings. In his own words:

 
"All that was necessary was for plaintiffs not to post security and so no security was posted."

 Both defendants point out that under General Rule 35D(1), each non-resident plaintiff is required to post a surety bond or cash for $ 100., conditioned on prosecuting the action with effect, and until the security is posted, the action is stayed. Since there are 5 non-resident plaintiffs, and two defendants who have served notice of demand, the required security is $ 1,000., not the $ 300. provided, absent a specific order otherwise under General Rule 35D(3) or (4). See the text of the entire rule in footnote 1, supra.

 On this aspect of the case, then, it is clear from plaintiffs' own papers in response to the Clerk's notice of call for dismissal, that the failure to post security was deliberate and for the specific purpose of avoiding any prosecution of the action with effect. The affidavits thus fail to meet the motion, which is granted for failure to take any ...


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