Gibbs v. Buck
Gibbs v. Buck
Opinion of the Court
delivered the opinion of the Court.
This is an' appeal frofn the order of a three-judge court refusing to dismiss a bill of complaint on motion for failure to set out facts sufficient to show federal or equity jurisdiction, or to constitute a cause of action, and granting an interlocutory injunction against the enforcement of a Florida statute aimed at combinations fixing the price for-the privilege of rendering privately or publicly for profit copyrighted musical compositions. § 266, Jud. Code.
The appellant, the state Attorney General and various State Attorneys, are officers of the State of Florida charged with the enforcement of the act. The appellees, complainants below, are the American Society of Composers, Authors and Publishers, an unincorporated association organized under the laws of the State of New York; Gene Buck as president of the Society; various corporations publishing musical compositions; a number of authors and composers of copyrighted music; and several next of kin of deceased , composers and authors. This suit was brought by complainants on behalf of themselves and others similarly situated, members of the Society, too numerous to make it practicable to join them as plaintiffs in a matter of common and general interest.
One of the rights given by the Copyright Act is the exclusive right to perform copyrighted musical compositions in public for profit.
The bill attacked the statute as contrary to the Constitution and.laws of the United States and the constitution of Florida. More specifically, 'it urged that the law impinged upon rights given by the Copyright Act of 1909, deprived complainants of rights without due process of law and without the equal protection of the laws, impaired the obligation of contracts already executed, and operated as an ex post facto law.
There was a formal allegation that the matter in controversy exceeded $3,000, exclusive of interest and costs. In addition, the bill alleged that' the three publishers owned copyrights of a value in excess of $1,000,000 while each of the individual complainants owned copyrights
A motion for a temporary injunction was made on February 7, 1938, the same day the bill was filed. Voluminous affidavits were presented in support of the motion. They tend to substantiate, the allegations, of the complaint on the value of the copyrights and the income from the Society. Each publisher deposed that it had received more than $50,000 from the Society in 1936, that its contract with the Society had a value in excess of $200,000, and that to fix prices on each composition for each use in Florida would require an expenditure of more than $25,000.. The affidavits of the individuals showed annual incomes to them from the Society of from $3,000 to $9,000; contracts with the Society which the affiants valued in the thousands of dollars and an expense, in one instance, as high as $5,000 to comply with the requirements of the Florida statute.
On March 3, 1938, the appellants moved to dismiss on several grounds: (1) absence of jurisdictional amount; (2) failure to state a cause of action; (3) want of equity and other objections not strongly pressed at this time.
The district court granted an interlocutory injunction and denied the motion to dismiss the bill. It thought, that great damage would result unless the injunction issued and that there was grave doubt of the constitutionality of the act. Its findings of fact and conclusions of law were filed about a month and a half after the
Federal Jurisdiction. — The issue was raised in the lower court by a motion to dismiss on the ground that it affirmatively appears “from the allegations of the bill . . . that the jurisdictional amount of $3,000.00 ... is not involved ... in that it appears that the suit is brought for the benefit of the members of' the American Society of Composers, Authors and Publishers . . . and it does not affirmatively appear that the loss of any member of said society due to the enforcement of [the challenged act] would amount to the . . . necessary jurisdictional amount.” Other jurisdictional averments of the motion state that the Society cannot suffer any loss from the legislation because it affirmatively appears that the Society divides all its proceeds from licensing between its members and affiliates and “therefore, the loss, if any, sustained due to the enforcement of said Florida laws would fall on the members of the Society, and not on the Society itself.” Finally the motion sets out the lack of jurisdiction because it affirmatively appears from the allegations of the bill that the jurisdictional amount is not involved “because the' plaintiffs have not shown the extent of loss or damage they would suffer by réason of the enforcement of said State law, as compared with the amount of profit they would make by the non-enforcement of said law.” As the form of the motion on the jurisdiction admitted the bill’s statements, it was submitted on the allegations without the production of any evidence.
This method of testing the jurisdiction properly raises the question. No issue is made as to the standing of the Society or its members to sue. The basis of the attack is that there is a lack of the essential allegations as ■to the value of the matter in controversy. , As there is no statutory direction for procedure upon an issue of ju
The bill alleges that the value of the matter in dispute exceeds the jurisdictional amount. Such a general allegation when not traversed is sufficient, unless it is qualified by others which so detract from it that the court must dismiss sua sponte or on defendants’ motion.
This Society, an unincorporated association with a membership of more than a- thousand of the leading authors, composers and publishers of music, has received by assignment and possesses, for a five-year period which covers the time here involved, the “exclusive right to
The essential matter in controversy here is the right of the members, in association through the Society, to conduct the business of licensing the public performance for profit of their copyrights. This method of combining for contracts is interdicted by the Florida statute. It is not a question of taxation or regulation but prohibition. Under such circumstances, the issue on jurisdiction is the value of this right to conduct the business free of the prohibition of the statute.
McNutt v. General Motors Acceptance Corp.
Failure to State a Cause of Action. — The motion to dismiss also presents generally the issue whether the bill states facts sufficient to constitute a cause of action. By the submission of the motion this issue was left to the Court on the facts alleged in the bill. The elaboration of these facts, contained in the affidavits supporting and objecting to the motion for temporary injunction, is not available for consideration, as these affidavits are a part of the record only for the purpose of determining the propriety of a temporary injunction.
Other Assignments. — The other material assignmerts of error to the interlocutory order specified on the appeal are addressed (1) to the lack of equity in the bill, (2) to the exercise of discretion in ordering a temporary injunction, (3) to the lack of findings before the order of temporary injunction and (4) to the failure to strike from the bill allegations as to certain sections which deal with contract relations between the Society and users of the musical compositions because these sections are not enforced by the state officers. We treat of them briefly: (1) It is clear that there is equitable jurisdiction to prevent irreparable injury, if the sections of the state statute outlawing the Society raise issues of constitutionality. The heavy penalties for violation and the prohibition of the issue of licenses or collection of fees show the need to protect complainants.
Affirmed.
Equity Rule 38.
Act of March 4, 1909, § 1 (e), c. 320, 35 Stat. 1075, 17 U. S. C. § 1 (e).
Fla. Gen. Laws 1937, Yol. I, c. 17807.
Wetmore v. Rymer, 169 U. S. 115, 120, 121; McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 184; KVOS, Inc. v. Associated Press, 299 U. S. 269, 278.
KVOS, Inc. v. Associated Press, 299 U. S. 269, 277; McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 189.
McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 189.
Grosjean v. American Press Co., 297 U. S. 233, 241—242. Clark v. Paul Gray, Inc., 306 U. S. 583.
Article XV, § 1, of the articles-of association, reads as follows: “Apportionment of Royalties — ■
“Section 1. All royalties and license fees collected by the Society shall be from time to time-as ordered by the Board of Directors distributed among its members, provided, however:
' “ (a) • That all expenses of operation of the Society and sums payable to foreign affiliated Societies shall be deducted therefrom and duly paid; and
“(b) That the Board of Directors, by two-thirds vote of those present at any regular meeting may -add to the Reserve Fund
' “(e) That the net amount remaining after such deduction for distribution shall be apportioned as follows: one-half (%) thereof to be distributed among the 'Music Publisher’ members, and one-half (%) among the 'Composer and Author’ members respectively.”
Cf. Troy Bank v. Whitehead & Co., 222 U. S. 39; Shields v. Thomas, 17 How. 3.
Scott v. Donald, 165 U. S. 107, 114; cf. Hunt v. New York Cotton Exchange, 205 U. S. 322, 334; McNeil v. Southern Ry. Co., 202 U. S. 543; Bitterman v. Louisville & N. R. Co., 207 U. S. 205; Packard v. Banton, 264 U. S. 140.
Packard v. Banton, 264 U. S. 140; Petroleum Exploration, Inc. v. Public Service Comm’n, 304 U. S. 209, 215; Healy v. Ratta, 292 U. S. 263; Buck v. Gallagher, post p. 95.
Polk Company v. Glover, 305 U. S. 5, 9.
O’Keefe v. New Orleans, 273 F. 560; Wright v. Barnard, 233 F. 329; Doherty v. McDowell, 276 F. 728; Ralston Steel Car Co. v. National Dump Car Co., 222 F. 590, 592. Compare Kansas v. Colorado, 185 U. S. 125, 144-145; Wisconsin v. Illinois, 270 U. S. 634. Wilshire Oil Co. v. United States, 295 U. S. 100, 102-103.
Fine $50 to $5,000 and. imprisonment one to ten years or either, § 8, Fla. Gen. Laws, 1937, c. 17807.
Borden’s Farm Products Co. v. Baldwin, 293 U. S. 194, 211-213. Polk Co. v. Glover, 305 U. S. 5.
Ex parte Young, 209 U. S. 123, 165; Terrace v. Thompson, 263 U. S. 197, 215.
Alabama v. United States, 279 U. S. 229, 231; Ohio Oil Co. v. Conway, 279 U. S. 813.
§ 10, Fla. Gen. Laws, 1937, c. 17807.
Terrace v. Thompson, 263 U. S. 197, 214-16; Cline v. Frink Dairy Co., 274 U. S. 445, 451-52.
Cf. Borden’s Co. v. Baldwin, 293 U. S. 194, 203; Aetna Ins. Co. v. Hyde, 275 U. S. 440, 447; Public Service Comm’n v. Great Northern Utilities Co., 289 U. S. 130, 136, 137.
Dissenting Opinion
dissenting.
I believe the decree enjoining and suspending Florida’s law prohibiting monopolistic price
(1) No showing has been made that casts any doubt upon a State’s power to prohibit monopolistic price fixing,
(2) Complainants (appellees here) failed to sustain their burden of showing $3,000.00 in controversy, as. required by statute,
(3) The court below failed to require a bond or other conditions adequate to protect the people in Florida who might be injured by the injunction.
First. Do general allegations of unconstitutionality,
The enjoined Attorney General and prosecuting attorneys of Florida do not have, and expressly disclaim any duty to enforce the statute against appellees unless they combine to fix monopolistic prices. Therefore, this injunction, cannot rest upon the alleged unconstitutionality of any provisions of the statute other than those prohibiting monopolistic price fixing. And allegations of the
Tf the issue is not narrowed to this single point, approval is given to the enjoining of state officials from action which they have no duty to perform and have solemnly disclaimed both here and in the District Court.
Even according to the comparatively new judicial formula here applied, the only issue is whether “novel . . . unique” or “grave constitutional questions” are raised by the charge that these state officials will perform their sole duty under the Florida statute of prosecuting appellees for violations of the prohibitions against monopolistic price fixing. Paraphrasing this formula, the question here actually becomes: When complainants charge in a federal court of equity that a State has passed, and its officers are about to enforce, a law against monopolistic price fixing, is there so much doubt about the power of the State to prohibit monopolistic price fixing that operation of the law must be' enjoined and effect denied to it until evidence is heard by the Court?
Here, both the very bill upon which the injunction now approved was granted and affidavits of record establish beyond dispute appellees’ flagrant violation of the Florida law by combining to fix prices. This combination apparently includes practically all (probably 95%) American and foreign copyright owners controlling rendi
We have here a price fixing combination that actually wields the power of life and death over every business in Florida, and elsewhere, dependent upon copyrighted musical compositions for existence. Such a monopolistic combination’s power to fix prices is the power to destroy. Should a court of equity grant .this combination the privilege of violating a state anti-monopoly law?
It is my position that a state law prohibiting monopolistic price fixing in restraint of. trade is not “novel” and “unique” and raises no “grave constitutional questions.” The constitutional-right of the States to pass laws against monopolies should now be beyond possibility of controversy. “That state legislatures have the right ... to prevent unlawful combinations to prevent competition and in restraint of trade, and to prohibit and punish monopolies, is not open to question,”
If the States have somehow lost their historic power to prohibit monopolistic price fixing combinations before
It was expressly conceded at the bar that Florida had the Constitutional power to prohibit price fixing combinations unless the copyright laws limited this power. And, since argument of the present case, a decision rendered by us February 13, this year, made clear the principle that the copyright laws grant no immunity to copyright owners from statutes prohibiting monopolistic practices and agreements. We there declared that “An agreement illegal [by statute] because it suppresses competition is not any less so because the competitive article is copyrighted.”
“Due process” has been judicially endowed with great elasticity in relation to property rights, but it is inconceivable that it would afford refuge for monopolies deemed undesirable by the people’s representatives. When a legislature as a matter of public policy determines to prohibit monopolistic combinations, we cannot, under any doctrine of “due process,” rightfully “review their economics or their facts.”
Several of the general allegations in the bill are relied upon to justify suspension of the Florida statute until evidence is heard by a court. It is said the court should hear evidence because the “bill sets out that the exercise of rights granted by the Federal Copyright Act to control
It is said the bill alleges “property taken without compensation.” If the statute, of itself, takes property, (and no charge of unconstitutional application of the statute is made) is evidence required 'to show the manner of the taking? It is said the bill alleges that the statute violates “equal protection.” But the sole thing threatened is prosecution of an admitted price fixing combination— comprised of practically all the musical copyright owners and publishers in the nation. “. . . if an evil [of monopoly] is-specially experienced in a particular branch of business, the Constitution embodies no prohibition of laws confined to the evil, or doctrinaire requirement that they should be couched in all embracing terms. It does not forbid the cautious advance, step by step, and the distrust of generalities which sometimes have been the weakness, but often the strength, of English legislation.”
The present case illustrates how the recently fashioned judicial formula under which state laws must be enjoined if “grave constitutional questions” are presented in a complaint, actually results in an automatic judicial suspension of state statutes upon any general complaint to a federal court. The apparently inevitable operation of this formula runs counter to the Tenth Amendment intended to preserve the control of the States over their own local legislation, and opens the door to further evasions of the Eleventh Amendment protecting the States from suits in federal courts.
Careful scrutiny of appellees’ bill for injunction reveals no allegations indicating that Florida’s power to prohibit monopolistic price fixing would, even under the formula applied, be altered by proof of any “particular economic facts . . . which are . . . properly the sub
It is difficult to perceive how in the future — under this formula — any state law, directly or indirectly affecting property, can become effective until injunction proceedings have dragged their weary way through federal courts. All state statutes might hereafter well substitute for the expression “to take effect within” a certain period of time, the words “to take effect after the Federal courts have heard evidence to determine” their reasonableness (wisdom). And the formula likewise fits Congressional enactments. Had the pronouncement of this formula not been the culmination of gradual judicial advances, it would have been everywhere recognized as a
Florida can find little comfort in the admonition that “Ordinarily it would be expected that where a temporary injunction is considered necessary ... a final order would follow with all convenient speed.” This law has now already been suspended for a year, and experience demonstrates that injunctive suspension of state laws and state action can hang in the courts for many years before receiving final disposition.
Second. Jurisdictional Amount.
These eleven appellees alleged in their bill for injunction that they sued on behalf of themselves and the more than 1,000 other (American) members of the Society. No determination is made here “that for any member, who is a party, the matter in controversy is of the value of the jurisdictional amount” — $3,000. However, while appellees are not aided in establishing the jurisdictional amount by the “allegation that [they] . : . sued on behalf of others similarly situated,”
“Assuming that such a case as this may be called a class action, and . . . could be maintained as such . . . yet that it may be properly a class action does not affect the rule against aggregation [of claims for making up
Permissible joinder of many plaintiffs as a matter of convenience and economy is not a means of enlarging the jurisdiction of the District Court. Rule 38, under which this class or representative suit was brought, did
A common desire to disregard a state law cannot serve as a common and undivided interest for purposes of federal jurisdiction;
The enjoined state officials have only the duty to prosecute appellees if they continue to fix prices (i. e., to issue licenses) through monopolistic combinations, and these' officials have expressly disavowed any intention to do more.
• The loss of a right to an annual gross income of $1.50 cannot amount to the loss of a right valued at ten thousand dollars — as appellees allege — on' the theory that it would cost ten thousand dollars to collect the $1.50 income individually. And it is, of course, possible that if the Society in fact has no net income from Florida but operates there at a loss, each member’s ratable share of
The statutory monetary standard is precise and the amount in controversy therefore cannot be conjectural. “It is impossible to foresee into what mazes of speculation and conjecture we may not be led by a departure from the simplicity of the statutory provision.
“Accordingly this Court has uniformly been strict to adhere to and enforce it.”
Rigid enforcement of the jurisdictional requirement will limit the interference of federal courts in state legislation and will accord with the policy of Congress in narrowing the jurisdiction of federal courts by successive increases in the jurisdictional amount.
Third. The otherwise complete suspension of Florida’s law was limited only by the condition that appellees make bond, of five thousand dollars payable to the Attorney General of Florida and the District Attorneys of the State. Manifestly, these officials have no individual interest in the monopoly prohibited by the Florida law. The major injuries accruing from the suspension of the law will not be inflicted upon them, but upon the people of Florida who are required to pay monopoly prices while the law remains enjoined. Thus, while the Jaw is suspended, these non-resident appellees can carry on a monopolistic business in Florida contrary to its prohibitions, and the people of Florida who must pay monopoly prices are granted no protection. We have recently declared the governing principle that “it is the. duty of a court of equity granting injunctive relief to do so upon conditions that will protect all — including the public — whose inter
. Nevertheless, this Court now refuses to correct the grossly unjust failure to protect those who may suffer irreparable injury from the suspension of the Florida law. on the ground that “No objection appears as to the adequacy of the bond of the other terms of the injunction. These remain under the control of the lower court.” However, the lower court has already exercised its control resulting in manifestly injurious error apparent on the record.
They who attack the constitutionality of a law, obtain its judicial suspension, and then continue to violate its
The interlocutory inj unction/ should be vacated.
Borden’s Co. v. Baldwin, supra, 203.
Cf., Carroll v. Greenwich Insurance Co., 199 U. S. 401, 412.
Gilchrist v. Interborough Co., 279 U. S. 159, 207; Fenner v. Boykin, 271 U. S. 240, 243-4; cf., Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 43; and see Clark, Brandéis, JJ., dissenting, Cincinnati v. Cincinnati & H. Traction Co., 245 U. S. 446, 461.
28 U. S. C. 41; c. 726, 50 Stat. 738, 48 Stat. 775, 47 Stat. 70, 43 Stat. 938, 36 Stat. 1162, amended 37 Stat. 1013.
Defiance Water Co, v. Defiance, 191 U. S. 184, 194.
See Spielman Motor Co. v. Dodge, 295 U. S. 89, 96; Cincinnati v. Cincinnati & H. Traction Co., supra, 454, 455; Virginia v. West Virginia, 231 U. S. 89, 91; cf. Des Moines v. City Ry. Co., 214 U. S. 179, 184. This injunction makes strikingly pertinent the question of Justice Harlan, dissenting, in Ex parte Young, 209 U. S. 123, 179 (1908): “If the Federal court could thus prohibit the law officer of the State from representing it in a suit brought in the state court, why might not the bill in the Federal court be so amended that that court could reach all the district attorneys in Minnesota and forbid them from bringing to the attention of grand juries and the state courts violations of the state act . . .?” ' His apprehensive prophecy has more than come true in the present case.
Cf., Continental Wall Paper Co. v Voight & Sons Co., 212 U. S. 227, 262, affirming 148 F. 939; Gibbs v. Baltimore Gas Co., 130 U. S. 396, 412. McConnell v. Camors-McConnell Co., 152 F. 321; Pacific
Waters-Pierce Oil Co. v. Texas (No. 1), 212 U. S. 86, 107. “There is nothing in the Constitution of the United States which precludes a State from adopting and enforcing [statutes which secure competition and preclude combinations which tend to defeat it] . . . To so decide would be stepping backwards.” International Harvester Co. v. Missouri, 234 U. S. 199, 209. See, Atlantic & Pac. Tea Co. v. Grosjean, 301 U. S. 412, 425-6; Nebbia v. New York, 291 U. S 502, 529; Rast v. Van Deman & Lewis Co., 240 U. S. 342, 366-7.
National Cotton Oil Co. v. Texas, 197 U. S. 115, 129; Carroll v. Greenwich Ins. Co., supra, 411.
Puerto Rico v. Shell Co., 302 U. S. 253, 260, 261.
Interstate Circuit, Inc. v. United States, 306 U. S. 208, 230.
Central Lumber Co. v. South Dakota, 226 U. S. 157, 161.
Waters-Pierce Oil Co. v. Texas (No. 1), supra, 108.
Carroll v. Greenwich Ins. Co., supra, 411; Central Lumber Co. v. South Dakota, supra,. 160. “A legislature may hit at an abuse which it has found, even though it has failed to strike at another.” United States v. Carotene Products Co., 304 U. S. 144, 151.
Cf. Ex parte Young, 209 U. S. 123, Harlan, J., dissenting, 168-204; and see Fitts v. McGhee, 172 U. S. 516, 528, 530; In re Ayers, 123 U. S. 443, 496, 497, 505.
Polk Co. v. Glover, 305 U. S. 5.
Borden’s Co. v. Baldwin, supra, at 210.
See dissent, McCart v. Indianapolis Water Co., 302 U. S. 419, 435, and note.
Lion Bonding Co. v. Karatz, 262 U. S. 77, 86.
Eberhard v. Northwestern Mutual Life Ins. Co., 241 F. 353, 356, referred to with apparent approval in Lion Bonding Co. v. Karatz, supra.
Smith v. Swormstedt, 16 How. 288.
Beatty v. Kurtz, 2 Pet. 566.
Eberhard case, supra, 356.
Shields v. Thomas, 17 How. 3, but see Chapman v. Handley, 151 U. S. 443.
Troy Bank v. Whitehead & Co., 222 U. S. 39, 41.
Alaska Packers Assn. v. Pillsbury, 301 U. S. 174, 177; Christopher v. Brusselback, 302 U. S. 500, 505; see, KVOS, Inc. v. Associated Press, 299 U. S. 269, 279.
Pope v. Blanton, 10 F. Supp. 15, 18, dismissed per curiam for lack of requisite jurisdictional amount in controversy, 299 U. S. 521; Gavica v. Donaugh, 93 F. 2d 173.
Rogers v. Hennepin County, 239 U. S. 621. The complaint appears in the original records of this Court, No. 411, Oct. Term 1915. Cf., Robbins v. Western Auto Ins. Co., 4 F. 2d 249, cert. den., 268 U. S. 698; Woods v. Thompson, 14 F. 2d 951, and Illinois Bankers’ Life Assn. v. Parris, 21 F. 2d 1014, cert. den., 276 U. S. 621.
Cf., Carroll v. Greenwich Ins. Co., supra, 412.
Scott v. Donald, 165 U. S. 107, 114, 115.
Cf., Glenwood Light & W. Co. v. Mutual Light Co., 239 U. S. 121, 125, 126; KVOS, Inc. v. Associated Press, 299 U. S. 269, 277.
“Cost of compliance” with an assailed legislative act may be considered the measure of the amount in controversy when a right of complainant is regulated, or where he is required to take affirmative action.. Cf., Kroger Grocery Co. v. Lutz, 299 U. S. 300, 301; McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 181. But appellees have not been required to take any affirmative steps, nor are they permitted to fix prices on condition that they “comply” with regulations. The fixing of prices through combinations has been prohibited. Obviously, appellees cannot be prohibited from doing that which they may also do by “complying” with the statute.
Elgin v. Marshall, 106 U. S. 578, 581.
See Healy v. Ratta, 292 U. S. 263, 270.
Inland Steel Co. v. United States, 306 U. S. 153, 157.
See, Lamb v. Cramer, 285 U. S. 217, 222; United States v. Tennessee & Coosa R. Co., 176 U. S. 242, 256; Revised Rules of the Supreme Court of the United States, 27, paragraph 6; cf., Mahler v. Eby, 264 U. S. 32, 45.
United States v. Rio Grande Irrigation Co., 184 U. S. 416, 423; Cincinnati v. Cincinnati & H. Traction. Co., supra, 454; Ridings v. Johnson, 128 U. S. 212, 218; cf., Patterson v. Alabama, 294 U. S. 600, 607.
Reference
- Full Case Name
- GIBBS, ATTORNEY GENERAL, Et Al. v. BUCK Et Al.
- Cited By
- 614 cases
- Status
- Published