Before: SWAN, MEDINA and WATERMAN, Circuit Judges.
After our former remand, 236 F.2d 522, and subsequent proceedings below, plaintiff now appeals from an order and judgment dismissing its complaint for treble damages under 15 U.S.C. §§ 1, 13, 13a and 15, United States District Court for the Northern District of New York, Brennan, Chief Judge. Opinion below not reported. Plaintiff also appeals from earlier orders precluding evidence and setting side appellant's demand that defendants admit facts. The judgment dismissing the complaint is reversed, the preclusion order is ordered modified, the order setting aside appellant's motion to admit facts is affirmed, the cause is remanded.
WATERMAN, Circuit Judge: In November of 1952 plaintiff, the Syracuse Broadcasting Corporation, filed suit in the Northern District of New York against Samuel I. Newhouse, the Herald Company, the Post-Standard Company, and the Central New York Broadcasting Corporation, alleging violations of the Sherman and Clayton Acts. Plaintiff (WNDR) and the Central New York Broadcasting Corporation (WSYR and WSYR-TV) are broadcasting corporations located in Syracuse, New York. The other two corporate defendants are the sole daily and Sunday newspapers in that city. The Post-Standard Company is wholly owned by the Herald Company. Herald Company and Central New York Broadcasting Corporation in turn are in the control of the individual defendant Samuel I. Newhouse. The district court granted summary judgment for the defendants on one of plaintiff's claims and dismissed the others for failure to state claims upon which relief could be granted. On appeal, Syracuse Broadcasting Corporation v. Newhouse, 236 F.2d 522 (2 Cir. 1956), we agreed with the district court that plaintiff was not entitled to go to trial on its monopoly charge under Section 2 of the Sherman Act, 15 U.S.C. 2, its complaint of mergers and interlocking directorates in violation of the Clayton Act, 15 U.S.C. §§ 18 and 19, and its allegation that defendant newspapers refused to accept advertising unless WSYR was also patronized. However, we reversed the judgment below in part and remanded the cause to the district court for further proceedings below. We held that the "interests of justice" required a trial of the remaining issues - i.e., the charge of discrimination in violation of Section 2 of the Clayton Act, 15 U.S.C. § 13; and the charge under Section 1 of the Sherman Act, 15 U.S.C. § 1, that a conspiracy existed to restrain trade to plaintiff's damage by the use of a unit rate for advertising in the two newspapers, by the circulation of false rumors about plaintiff, by the refusal to publish in the newspapers items favorable to the plaintiff, and by the giving of discriminatory advantages to WSYR.
After the remand pre-trial hearings were held; and, on February 12, 1957, on motion of the defendants, the district court, so as to particularize the issues involved, directed plaintiff to furnish defendants with the factual information upon which it based its claims. Extensions of time were granted and early in April plaintiff submitted a lengthy compliance document together with a demand that defendants admit all the facts contained therein. Conferences and argument were had with respect to plaintiff's compliance with the court's direction, and, after the submission of a further compliance document by plaintiff on June 20, the district court entered orders, dated July 27, 1957. These orders struck out plaintiff's demand that the defendants admit facts and also precluded plaintiff from presenting evidence with respect to those areas of alleged wrongdoing where the court believed that plaintiff had not properly complied with the pretrial order to furnish factual information. Plaintiff did nothing until October when it moved that the preclusion order against it be modified in certain particulars and that the order striking its demand that defendants admit facts be vacated. After lengthy argument these motions of plaintiff were denied without prejudice to subsequent compliance. On November 14 the defendants moved to dismiss the complaint in its entirety on the grounds that plaintiff had failed to comply with an order of the court and that there was complete legal insufficiency in plaintiff's proof. At the same time plaintiff moved once more to have the preclusion order of July 27 modified, and also moved to have vacated the order striking its demand that the defendants admit facts. In a memorandum decision, dated January 10, 1958, the district court denied all plaintiff's requests; and, in granting defendants' motion, dismissed the complaint.
On this appeal plaintiff contests the order dismissing its complaint, the order precluding the admission of evidence, and the order setting aside its demand that the defendants admit facts. We shall deal with these contentions in that order.
In dismissing the action the district court relied upon Rules 16 and 41(b).Rule 16 appears to have been invoked on the theory that dismissal at the pretrial stage is proper where it clearly appears that plaintiff will be unable to prove the allegations of its complaint. We hold, however, that Rule 16 confers no special power of dismissal not otherwise contained in the rules. Rule 12(b) and Rule 12(c) provide that summary judgment, under Rule 56, is mandatory when matters outside the pleadings are considered in disposing of a motion to dismiss for failure to state a cognizable claim, or for judgment on the pleadings. Disposition under Rule 56 would appear to be no less mandatory when analogous motions are considered at the pre-trial stage. Rule 56 played no part in the court's decision to dismiss. This is clear inferentially from the fact that the court did not rule upon defendants' motion for summary judgment which accompanied the motion to dismiss. Moreover, the court expressly stated that a reason for dismissal was plaintiff's failure to bring the action to the stage where the factual issues became clear.
While we do not question that Rule 41(b) authorizes a court in a proper case to dismiss a complaint for non-compliance with a pre-trial order,*fn1 we observe that here the district court did not regard plaintiff's response to the order for further information as sufficiently contumacious in and of itself to justify dismissal. Absent the court's erroneous reliance on Rule 16, there appears to be no reason to believe that the dismissal motion would have been granted. Dismissal with prejudice is a drastic sanction to be applied only in extreme situations, Gill v. Stolow, 240 F.2d 669 (2 Cir. 1957); Producers Releasing Corp. de Cuba v. PRC Pictures, 176 F.2d 93 (2 Cir. 1949), and here the preclusion order seems an ample penalty for any lack of cooperation on plaintiff's part.
We hold that dismissal was improper.
Interested persons have long been aware that the "big" case, such as is often encountered in antitrust and patent litigation, requires special administrative treatment. See The Report on Procedure in Anti-Trust and Other Protracted Cases Adopted by the Judicial Conference of the United States, 13 F.R.D. 62; Seminars on Protracted Cases for United States Circuit and District Judges, 21 F.R.D. 395, 23 F.R.D. 319. Especially is this true with respect to the situation that confronted the district court here - the formulization of the issues to be tried.
"It is not practical to proceed in these cases as in a lawsuit of ordinary complexity and bulk; that is, to let the parties exhaust the cross fire of pleading, to conduct open court pre-trial hearings, or to let counsel try the case as they please. The potential range of issues, evidence and argument is so great, and the necessities of adversary representation so compelling, that the activities of counsel will result in records of ...