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PARKE, DAVIS & CO. v. JARVIS DRUG CO.

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.


September 10, 1962.

Parke, Davis & Company
v.
Jarvis Drug Co., Inc.

The opinion of the court was delivered by: BONSAL

Memorandum

BONSAL, District Judge:

Plaintiff, Parke, Davis & Company, moved for a preliminary injunction against defendant's sale of plaintiff's trademarked products at price less than those contained in plaintiff's fair trade contracts in effect with certain retailers in the State of New York. The injunction was sought pursuant to New York General Business Law ยง 369. In a memorandum opinion dated May 1, 1962 this Court, on the basis of the affidavits submitted and oral argument, denied plaintiff's application for a preliminary injunction without prejudice to its making a

 further application upon the showing that its fair trade policy is being enforced, not only diligently, but across the boards, against all retailers alike, regardless of their size and their volume of sales of its product.

 The plaintiff moved to reargue its application, and on July 9, 1962 a hearing was held to determine the single factual issue of whether plaintiff is enforcing its fair trade policy in conformity with the above standard. Plaintiff offered the testimony of its "Assistant Manager in Sales" having responsibility for the New York area, and the testimony of an attorney in the office of its counsel engaged on the plaintiff's fair trade program. The defendant cross-examined plaintiff's witnesses, but did not call any witnesses of its own.

 The evidence at the hearing and the affidavits submitted by plaintiff on the motion for reargument satisfy the Court that the plaintiff is pursuing a regular and diligent enforcement program and that it is not discriminating as between the small and the large retailer.

 Plaintiff's witnesses gave detailed testimony about the enforcement efforts against certain large retailers in the New York Metropolitan Area. It was testified that S. Klein, without suit, has entered into a voluntary agreement to maintain fair trade prices; Goldsmith Brothers entered into a consent arrangement after suit had been commenced against it; Hudson Drug discontinued its price cutting after suit had been started; and Macy's, including its branch stores, has been enjoined from price violations of plaintiff's products.

 Over 365 retailers have been investigated by plaintiff's counsel, and more than 200 warning letters have been sent out. One hundred twenty-three suits have been started. Fifty-four permanent injunctions had been obtained by the plaintiff at the time of the hearing, as well as three preliminary injunctions. Seven contempt proceedings have been brought.

 Defendant claims that this Court is without jurisdiction because the amount of plaintiff's drugs sold by it is less than the jurisdictional amount of $10,000., and therefore plaintiff's damages cannot exceed that amount. Defendant misconstrues the nature of the damage plaintiff claims. Plaintiff brings this action to protect its good will, and it is not controverted that the value of its good will is in excess of $10,000. Johnson & Johnson v. Wagonfeld , 206 F.Supp. 30 (S.D.N.Y. 1960); Upjohn Co. v. Liberty Drug Co. , 193 F.Supp. 701 (S.D.N.Y. 1959).

 It is true that some of the evidence at the hearing relates to enforcement activities that have taken place since plaintiff's original motion was made, and indeed subsequent to the Court's decision of May 1, 1962. However, plaintiff's enforcement program is necessarily of a continuing nature. It would be a useless exercise in form to require the plaintiff to bring another motion which could only lead to the same result reached here. The burden plaintiff must bear is to demonstrate that regardless of its past pratices, it is presently vigorously and without discrimination enforcing its fair trade rights. This was why the Court stated in its opinion of May 1, 1962 that the decision therein made was "without prejudice to plaintiff's making a further application ..." See Johnson & Johnson v. Wagonfeld, supra , at 32.

 Plaintiff's application for a preliminary injunction is granted. Settle order on notice.

19620910

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