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NATIONAL FOUNDRY CO. OF NEW YORK v. ALABAMA PIPE C

July 16, 1934

NATIONAL FOUNDRY CO. OF NEW YORK, Inc.,
v.
ALABAMA PIPE CO. et al.



The opinion of the court was delivered by: GALSTON

GALSTON, District Judge.

The complaint sets forth that the defendants are engaged in the business of manufacturing, selling, and distributing cast-iron soil pipe and fittings shipped in interstate commerce to New York and distributed in the so called "metropolitan" area of New York.

The gist of the allegations of the complaint is that the defendants have violated the anti-trust laws. In this respect it differs from the complaint in the law action pending in this court between the parties, which, as will appear from the opinion filed concurrently herewith (7 F. Supp. 821), sets forth a violation by these defendants of the Cast-Iron Soil Pipe Code of Fair Competition.

 It is alleged that the defendants conferred with one another and exchanged information with an unincorporated group of corporations and individuals, known as the Cast-Iron Soil Pipe Association, regarding the establishment of prices and terms, conditions, and practices in connection with the use of said prices in the sale of cast-iron soil pipe and fittings; also that the defendants, during the six months preceding the filing of the bill, have "by various acts, unjustified reductions in prices, changes in terms, conditions and practices, and by other unjustified and unfair schemes and devices, demoralized the cast iron soil pipe trade in the City of New York, and have created a condition which is destructive to petitioner's business," and further that the defendants "seek to disrupt and destroy the good relations existing between petitioner and its customers, by the circulation of false and unfounded rumors to the effect that petitioner was and is engaged in the manufacture of cast iron soil pipe and fittings in violation of certain statutes of the United States," and that petitioner operates the only cast-iron soil pipe foundry in the city of New York.

 It is alleged that the plaintiff has been caused great damage by these defendants; that the acts amount to unfair and unjust trade and also amount to a substantial monopoly of the said trade in New York City.

 It is also alleged that in quantities of less than 40,000 pounds, by common agreement, the defendants offered to sell, and do sell, their products at less than cost of production in New York City; and that they are seeking to eliminate the plaintiff from the industry.

 Though the suit is in equity, the plaintiff seeks a judgment in the sum of $100,000, and treble damages, and an injunction.

 A number of the defendants have moved to dismiss the complaint on various grounds: First, that it appears from the face of the complaint that the court has no jurisdiction over the subject-matter of the action; secondly, that the plaintiff has not legal capacity to sue; and, thirdly, because the facts alleged do not state a cause of action.

 The defendants, in seeking a dismissal of this complaint, mistakenly read into it the allegations of the law action. Since the motion is one for a dismissal, the sufficiency of the complaint can be adjudged only by what the allegations of the complaint set forth. There is no reference in this complaint to the National Industrial Recovery Act or the Trade Code.

 In consequence, the argument that is advanced that plaintiff as a private corporation has no status to bring suit for violation of the National Industrial Recovery Act (48 Stat. 195), is without applicability. In saying this, however, I do not mean for a moment to indicate that the real facts, not the ostensible facts, may present such a situation either at the trial or on a motion for a preliminary injunction as may make that defense available.

 In the present state of the case, however, and based solely on a consideration of the complaint, it is idle also for the defendants to argue that the anti-trust laws are tolled by the National Industrial Recovery Act, title 15, U.S.C. § 705 (15 USCA § 705), for that section provides merely that while the National Industrial Recovery Act is in effect and for sixty days thereafter "any code, agreement, or license approved * * * and in effect under this chapter, and any action complying with the provisions thereof * * * shall be exempt from the provisions of the antitrust laws of the United States."

 Therefore, the residual question is whether the complaint sets forth a cause of action under the anti-trust laws. If it does, then plaintiff is given status to bring the action by virtue of the Clayton Act, title 15, U.S.C. § 26 (15 USCA § 26), which provides: "Any person, firm, corporation * * * shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws * * * when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity. * * *"

 It may be noted that this section does not go further in terms, however, than to give an injunction to private persons against threatened loss.

 An award of triple damages provided by section 15 of title 15, U.S.C. (15 USCA § 15), cannot be given in equity. Fleitmann et al. v. Welsbach Street Lighting Company, 240 U.S. 27, 36 S. Ct. 233, 234, 60 L. Ed. 505. In that case a stockholder brought an action against the Consolidated Street Lighting Company and a number of other corporations and individuals, to compel the defendants, other than his own company, to pay to the latter threefold damages under the Sherman Anti-Trust Act (15 USCA § 15 note). Mr. Justice Holmes wrote: "We agree with the courts below that when a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common ...


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