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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.

This is an action at law.

The plaintiff is engaged in the manufacture, sale, and distribution of cast-iron soil pipe and fittings. the defendants Alabama Pipe Company, the Hedges-Walsh-Wiedner Company, Central Foundry Company, Inc., Reading Foundry & Supply Company, horner Foundry Company, Sanitary Company of America Corporation, and A. Weiskittel & Son Company are engaged also in the same business.

 The Continuous Sales Corporation is alleged to be the agent of the Hedges-Walsh-Wiedner Company in the sale and distribution of its product; and Louis B. Laddoux, Inc., similarly is alleged to be the agent of the Reading Foundry & Supply Company for the sale and distribution of its product, in what is designated in the complaint as the "metropolitan" district of New York; Herman Greenberg and Benjamin Greenberg are alleged to be agents of the Horner Foundry Company for the sale of its fittings in the metropolitan district of New York and the borough of Brooklyn; and A.L. Gunther is alleged to be an agent of the Sanitary Company of America Corporation for the sale of its products in the metropolitan district of New York.

 It is alleged that all of the defendants are subject to the provisions of the National Industrial Recovery Act (48 Stat. 195) and a Code of Fair Competition for the Cast-Iron Soil Pipe Industry, approved by the President of the United States on September 7, 1933.

 It is then alleged that since that date and while engaged in interstate shipment, sale, and distribution, these defendants violated the provisions of that Code, in that they failed to publish and maintain schedules of their prices as required by paragraph 13 of the Code; also that in violation of paragraph 12 of the Code, they have shipped large quantities of soil pipe and fittings into the metropolitan district of New York, on consignment, and distributed them in small quantities; also that defendants, in violation of paragraph 9, subparagraph (d) of the Code, sell in the metropolitan district of New York small quantities of soil pipe and fittings weighing "two thousand pounds or more," in this same district, at net prices which are below the reasonable cost of production, and likewise in violation of paragraph 13 of the Code.

 Lastly, it is alleged that these unlawful acts and unfair trade practices have damaged the plaintiff in the sum of $100,000; and it, therefore, seeks judgment in that amount.

 The Alabama Pipe Company and the Central Foundry Company, Inc., move to dismiss the complaint on various grounds; that from the complaint it appears that the court has no jurisdiction over the subject-matter; that the plaintiff has not legal capacity to sue; and that the complaint does not state facts sufficient to constitute a cause of action.

 The defendant the Hedges-Walsh-Wiedner Company appears specially in support of the motion for an order to vacate and set aside the alleged service of process upon the defendant on the ground that the defendant is a foreign corporation and not doing business within the Eastern District of New York or the State of New York.

 It is apparent that the gist of the alleged wrongs of which the plaintiff complains are alleged violations of the National Industrial Recovery Act.

 The Code in question, entitled "Code of Fair Competition for the Cast-Iron Soil Pipe Industry," is in effect a statute of the United States. It is fundamental that any remedy for the enforcement of rights under this Code must be prescribed by the Code itself or by the National Industrial Recovery Act.

 Subdivision (b) of section 9 of the Code provides: "Recommendations for dealing with any inequalities that may otherwise arise to endanger the stability of the industry and of production and employment. Such recommendations, when approved by the President of the United States, shall have the same force and effect as any other provisions of this Code. Such agency is also set up to cooperate with the Administrator in making investifations as to the functioning and observance of any of the provisions of this Code, at its own instance or on complaint of any person affected, and to report the same to the Administrator." Section 10 also bears on the subject of complaint, and reads: "If formal complaint is made to the Cast-Iron Soil Pipe Association that the provisions of this Code have been violated by any employer the Planning and Fair Practice Agency provided for in section 9 shall investigate the facts and to that end may cause such examination or audit to be made as may be necessary."

 Obviously, neither of these provisions empowers the plaintiff to institute an action arising out of a breach of Code provisions, in this court. Indeed, it may be noted that no provision in the Code giving the plaintiff such status is relied upon by the plaintiff; at least, none is cited.

 One is left, therefore, to an examination of the provisions of the National Industrial Recovery Act, title 15, U.S.C. Section 703, subdivision (c), 15 USCA § 703 (c), relates to the jurisdiction of the court, and reads: "The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code of fair competition approved under this chapter; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations." And the same section, subdivision (f), 15 USCA § 703 (f), provides a penalty for violation of the Code, and reads: "When a code of fair competition has been approved or prescribed by the President under this chapter, any violation of any provision thereof in any transaction in or affecting interstate or foreign commerce ...


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