Hartford-Empire Co. v. Obear-Nester Glass Co.
Hartford-Empire Co. v. Obear-Nester Glass Co.
Opinion of the Court
Plaintiff has filed a motion to strike from Count V of the second amended and supplemental counterclaim all reference to the judgment, findings and record in the case of United States v. Hartford-Empire Co., et al., 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322
The pleadings have not been made up in this case. We do not consider the present procedure and motion the proper time and means to make a final ruling on admissibility of evidence. Aside from the record in the trial such matters could properly be disposed of at a pre-trial conference when the issues in the case have been made up. We propose to hold such a conference at the proper time. However, it may serve some purpose if we make some preliminary observations on the question presented.
We have read the briefs submitted. As we understand plaintiff’s position it is that proceedings in the Toledo case are inadmissible in any cause unless made admissible in •evidence under the antitrust statute, 15 U. S.C.A. § 16, and that the Toledo judgment is not admissible in trial of the issues in Count V of the counterclaim because it does not plead an action brought “under said laws” as provided in Section 16, 15 U.S.C. A. § 16. The statute provides that a final judgment or decree in any criminal prosecution or suit brought on behalf of the United States under the antitrust laws that a defendant has violated the antitrust laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any other party against the defendant “under” the antitrust laws as to which the decree in the Government action would be an estoppel as between the parties thereto.
As we view Count V of the amended counterclaim it presents two issues — at most. First, and principally — that any effort by plaintiff to avail itself of the decree of this Court in cause No. 7453, 71 F.Supp. 893, as a defense to Counts I, II, III and IV of the counterclaim would constitute a violation by plaintiff of the decree in the Toledo case.
Second, that the decree in cause No. 7453, 71 F.Supp. 893, was obtained by the plaintiff by fraud, and for that reason should be annulled.
I. We do not think Section 16 is decisive on the first question. Plaintiff instituted this litigation in 1938 by complaint charging defendant with infringement of certain patents alleged to be vested in the plaintiff. Plaintiff prayed for an injunction and an accounting. The decree in the Toledo case, entered October 31, 1945, stopped the plaintiff from proceeding under its complaint as the case then stood. Defendant then filed a counterclaim in two counts seeking damages under the provisions of Section 15 of the antitrust act, 15 U.S.C.A. § 15. To the counterclaim plaintiff filed a reply and as its “fifth” and “sixth” defenses . set up the judgment in case No. 7453, 71 F.Supp. 893, in favor of plaintiff and against the defendant, “that plaintiff was the owner of valid patent rights therein described; that defendant was infringing same; that plaintiff was entitled to the relief given and that defendant had no valid defense to such action” and that the defendant was bound by that judgment. Defendant then filed its second amended and supplemental counterclaim, adding Count V alleging (paragraph 13) that the fifth and sixth defense set up in the plaintiff’s reply was an attempt on plaintiff’s part “to make further use of * * * patents and of the decree adjudging said patents valid and infringed by this defendant” which action on the part of plaintiff was in violation of the injunctive order in .the Toledo case. What would have been defendant’s position under the pleadings as they stood prior to the filing of its second amended and supplemental counterclaim we are not called upon to decide. Federal Rules of Civil Procedure, rule 7, 28 U.S.C.A. following section
II. Plaintiff would construe Count V of the amended counterclaim as a suit in equity to set aside a judgment alleged to have been procured by fraud. Assuming, but not deciding, that this Court now has jurisdiction to entertain such a proceeding, would the record in the Toledo case be admissible in support of the defendant’s position? At the outset we observe that under Section 16, 15 U.S.C.A. § 16, only a “final judgment or decree” rendered in a Government proceeding “shall be prima facie evidence” in certain proceedings brought by a third party against the defendant in the Government action. Much more is contained in the pleading complained of by the plaintiff. However, it is plaintiff’s position that no part of the Toledo proceeding is admissible in evidence under Count V of the counterclaim because the counterclaim does present an action “under” the antitrust laws.
The authorities are not uniform in their holding, on the facts of the particular case, as to when a case may be said to arise under the Constitution or laws of the United States, and particularly under the antitrust laws, although they are all based on the well recognized principle of law that whenever it appears that the correct decision of the case depends on the construction of the law of the United States, or that some title, right, privilege or immunity on which recovery depends will be defeated by one construction of the law or sustained by the opposite construction, then a case arises under the Constitution and laws of the United States. Let us examine the facts of this case and see where plaintiff’s contention would lead. Plaintiff urges that the Toledo judgment is inadmissible in evidence in the trial of Count V. Therefore it must be plaintiff’s position that this Court must try de novo the issue of violation of the antitrust laws by the plaintiff which were, among others, tried and finally adjudicated in the Toledo case. If we should try that issue anew under Count V of the counterclaim and perchance reach the conclusion that the defendant has failed to sustain its position, the paradoxical situation would then be presented of plaintiff having been convicted of violating the antitrust laws in the district court in the State of Ohio, but on part of the same issues as were found against plaintiff in that case the plaintiff would be found innocent in the district court in Missouri and a judgment which the plaintiff was enjoined from taking any action on other than the dismissal by the Toledo, Ohio, district court would be found a valid judgment by the Missouri district court. Only the most persuasive authority of a superior court would lead this Court to a ruling on evidence contemplative of the possibility of such a result.
For all practical purposes defendant’s action is for damages and Count V of de
Order
Motion of plaintiff to strike from the second amended and supplemental counterclaim the allegations referred to in the motion, is overruled.
Reference
- Full Case Name
- HARTFORD-EMPIRE CO. v. OBEAR-NESTER GLASS CO.
- Status
- Published