299 U.S. 248 (1936), 221, Landis v. North American Co.

Docket Nº:No. 221
Citation:299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153
Party Name:Landis v. North American Co.
Case Date:December 07, 1936
Court:United States Supreme Court
 
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Page 248

299 U.S. 248 (1936)

57 S.Ct. 163, 81 L.Ed. 153

Landis

v.

North American Co.

No. 221

United States Supreme Court

Dec. 7, 1936

Argued November 9, 1936

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA

Syllabus

1. The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. P. 254.

2. There is power, applicable especially in cases of extraordinary public interest, to stay one suit to abide proceedings in another, although in the two the parties are not the same and the issues not identical; the burden of making out the wisdom and justice of a stay in such cases lies heavily on him who seeks the stay, and discretion is abused if the stay is not kept within the bounds of moderation. P. 254.

3. Suits brought in the District of Columbia by two holding companies, to restrain the Securities & Exchange Commission and other officials from enforcing the Holding Company Act, were stayed to await decision of a like suit brought by the Commission and still pending in another District Court.

Held:

(1) That to grant the stay until decision of the other case by this Court on appeal was abuse of discretion. P. 256.

(2) The question whether the stay would have been proper under the conditions which existed when it was granted, had it been granted to continue only until decision of the other case by the District Court, is a question which this Court will not decide, because the conditions have changed. P. 258.

(3) The cause is remanded to the court which granted the stay for a rehearing at which it will determine, in the light of the situation then existing and developed, and of the principles laid down in this opinion, what, if any, stay should be ordered, not to extend beyond the time when the other case shall be decided by the other District Court. P. 258.

66 App.D.C. 141, 85 F.2d 398, reversed.

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Certiorari to review a decision on special appeal which reversed orders of the District Court of the United States for the District of Columbia granting a sty of proceedings in two cases.

CARDOZO, J., lead opinion

MR. JUSTICE CARDOZO delivered the opinion of the Court.

The controversy hinges upon the power of a court to stay proceedings in one suit until the decision of another, and upon the propriety of using such a power in a given situation.

Respondents, nonregistered holding companies, brought suit in the District Court [57 S.Ct. 164] for the District of Columbia to enjoin enforcement of the Public Utility Holding Company Act of 1935 (c. 687, 49 Stat. 803) on the ground that the Act in its entirety is unconstitutional and void. The complaint in No. 221 (the suit by the North American Company) was filed November 26, 1935; the complaint in No. 222 (the suit by the American Water Works & Electric Company) was filed the next day. By concession, the two plaintiffs are holding companies within the meaning of the Act, and must register thereunder if the Act is valid as to them. One plaintiff, the North American Company, is at the apex of a pyramid which includes subsidiary holding companies as well as

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subsidiary operating companies, these last being engaged as public utilities in supplying gas and electricity to consumers in different states. The other plaintiff, American Water Works & Electric Company, is at the apex of another pyramid including like subsidiaries. The defendants in both suits (petitioners in this Court) are the members of the Securities and Exchange Commission, the Attorney General of the United States, and the Postmaster General.

On November 26, 1935, the Commission filed a bill of complaint in the District Court of the United States for the Southern District of New York to compel other holding companies, members of a different public utility system, to register with the Commission in accordance with the statute. At the beginning, the defendants were the Electric Bond & Share Company, the parent holding company, and five intermediate holding company subsidiaries. Sixteen other holding company subsidiaries were later added as defendants with the Government's consent. All the twenty-two defendants, parties to that suit, appeared and answered the complaint. All joined in a cross-bill contesting the validity of the Act and praying a decree restraining its enforcement. To give opportunity for full relief, the present petitioners appeared as cross-defendants, answering the cross-bill and opposing an injunction.

On December 7, 1935, the Attorney General filed a notice of motion in behalf of the petitioners for a stay of proceedings in Nos. 221 and 222, pending at that time in the District of Columbia. The petitioners had not yet submitted their answer to the bills, but their position as supporters of the statute in its application to respondents was made abundantly apparent. By the notice of motion, it...

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