The opinion of the court was delivered by: MISHLER
Memorandum of Decision and Order
This is an action by the Metropolitan Federal Savings and Loan Association of New York (Metropolitan Federal), a savings and loan association incorporated pursuant to the Home Owners' Loan Act of 1933, 12 U.S.C. §§ 1461-1468, to enjoin defendants East Brooklyn Savings Bank (East Brooklyn), also known as Metropolitan Savings Bank, and Brevoort Savings Bank (Brevoort), soon to be acquired by East Brooklyn, from using the name Metropolitan as part of their corporate name. Plaintiff bases its claims for relief on the law of unfair competition and the antitrust laws, Sherman Act § 1, 15 U.S.C.A. § 1, and Clayton Act § 7, 15 U.S.C. § 18.
During the pretrial proceedings, defendants asserted and subsequently withdrew
a challenge to the jurisdiction of the court over the subject matter of the action. The parties, however, cannot confer subject matter jurisdiction upon the court by agreement. The issue therefore remains before the court.
The court has jurisdiction over the antitrust claim, 28 U.S.C. § 1337, notwithstanding plaintiff's failure to allege in its complaint that defendants' planned merger under and use of the name Metropolitan for the purpose of pirating plaintiff's good will will have an adverse effect on commerce. In view of the late stage in the proceedings at which the antitrust claim was asserted, the absence of any claim of surprise by defendants, and the fact that this defect can easily be cured by an amendment, the court does not regard the defect as fatal. David & David, Inc. v. Myerson, 277 F.Supp. 973 (E.D.N.Y.1966), affirmed, 388 F.2d 292 (2d Cir. 1968).
Having decided that the court has federal jurisdiction of plaintiff's antitrust claim, it is unnecessary to reach the question of whether plaintiff's unfair competition claim itself 'arises under the Constitution, laws, or treaties of the United States,' 28 U.S.C. § 1331, or 'any Act of Congress regulating commerce or protecting trade or commerce against restraints and monopolies,' 28 U.S.C. § 1337. First, since plaintiff's claim for unfair competition plainly shares a common nucleus of operative fact with the antitrust claim, the court would have pendent jurisdiction over it if it were based on state law. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966). Second, even if the court were to determine that the unfair competition claim presented a federal question -- a conclusion warranted in this case only if it were decided that the congressional policy manifested in the Home Owners' Loan Act of 1933 mandates the application of federal common law, see Ivy Broadcasting Co. v. American Tel. and Tel. Co., 391 F.2d 486 (2d Cir. 1968); Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir.), cert. denied 393 U.S. 826, 89 S. Ct. 86, 21 L. Ed. 2d 96 (1968); Murphy v. Colonial Fed. Sav. and Loan Ass'n, 388 F.2d 609 (2d Cir. 1967); McFaddin Express, Inc. v. Adley Corp., 346 F.2d 424 (2d Cir. 1965), cert. denied 382 U.S. 1026, 86 S. Ct. 643, 15 L. Ed. 2d 539 (1966); T. B. Harms Co v. Eliscu, 339 F.2d 823 (2d Cir. 1964), cert. denied 381 U.S. 915, 85 S. Ct. 1534, 14 L. Ed. 2d 435 (1965) -- the body of law applied to the claim would not differ from that applied if it were decided that state law governed the resolution of the issue. There is no appreciable difference between the federal and New York laws of unfair competition. Blisscraft of Hollywood v. United Plastics Co., 294 F.2d 694, 697 (2d Cir. 1961); Hygienic Specialties Co. v. H. G. Salzman, Inc., 302 F.2d 614, 619 (2d Cir. 1962).
The plaintiff was originally chartered as a savings and loan association under the laws of the State of New York in 1953 with the corporate title, 'The Metropolitan Savings and Loan Association.' Plaintiff had one office, its main office, at 75-25 Metropolitan Avenue, Middle Village, in the Borough of Queens, City and State of New York. In the year 1960, it opened a branch office at 116-22 Metropolitan Avenue, Kew Gardens, in the Borough of Queens. The offices are within two miles of each other and service the Kew Gardens and Middle Village sections of Queens.
In 1967, plaintiff converted to a federal savings and loan association pursuant to the Home Owners' Loan Act of 1933. The federal Home Loan Bank Board authorized the use of the name Metropolitan Federal Savings and Loan Association of New York.
Defendant, East Brooklyn, was organized in 1860 under the name East Brooklyn Savings Bank of the City of Brooklyn, which name was subsequently abbreviated, in 1925, to East Brooklyn Savings Bank.
On November 15, 1968, East Brooklyn filed an application with the Superintendent of Banks of the State of New York for permission to change its name to Metropolitan Savings Bank. Said defendant's application assigned as a reason for the change that the Board of Trustees of the bank believed that the proposed name would more accurately describe 'the geographic scope of the bank's services than the present name.' The application for the change was published in a weekly bulletin issued by the Banking Department of the State of New York on November 22, 1968. The use of the name was vigorously contested by the Manhattan Savings Bank on the ground that it had merged with a bank known as Metropolitan Savings Institution in 1942 and therefore had some right in the name Metropolitan in relation to its use in banking. The Superintendent of Banks rejected the claim and a notice of approval was published in the weekly bulletin issued by the Banking Department on August 8, 1969. On October 3, 1969 the weekly bulletin published an authorization for a change of name from East Brooklyn Savings Bank to Metropolitan Savings Bank effective at the close of business on September 30, 1969. East Brooklyn has four offices, all located in Brooklyn.
On December 9, 1969, defendants, East Brooklyn and Brevoort, applied to the Superintendent of Banks for permission to merge under the name Metropolitan Savings Bank. Brovoort has five offices, four located in Brooklyn, and one located at 64-02 -- 108th Street, Forest Hills, Queens, New York.
On December 22, 1969, the plaintiff filed an objection to defendants' use of the name Metropolitan Savings Bank with the Superintendent of Banks. The Superintendent approved the merger in the name ...