United States v. Cooper Corporation

• Decision Date: 16 February 1940
• Citation: 31 F. Supp. 848
• Parties: UNITED STATES v. COOPER CORPORATION et al.
• Court: U.S. District Court — Southern District of New York

31 F. Supp. 848

UNITED STATES v. COOPER CORPORATION et al.

District Court, S. D. New York.

February 16, 1940.

Allen Dobey, Sp. Asst. to Atty. Gen., Richard Decker and Joseph McDowell, Sp. Attys., both of Washington, D. C., Thurman Arnold, Asst. Atty. Gen., and Myles J. Lane, Sp. Asst. to Atty. Gen., for plaintiff.

Osborne Mitchell, of Youngstown, Ohio, and Henry Goldstein, of New York City, for defendants Cooper Corporation and Falls Rubber Co.

Charles Wesley Dunn, of New York City, for defendant B. F. Goodrich Co.

Pickrel, Schaeffer, Harshman, Young & Ebeling, of Dayton, Ohio, and Maurice P. Davidson, of New York City, for defendant Dayton Rubber Mfg. Corporation.

Kenefick, Cooke, Mitchell, Bass & Letchworth, and Lyman M. Bass, all of Buffalo, N. Y., for defendant Dunlop Tire & Rubber Co.

Luther Day, of Cleveland, Ohio, and Davidson, Moses & Sicher, of New York City, for defendant Firestone Tire & Rubber Co.

Dwight, Harris, Koegel & Caskey, of New York City, for defendant Fisk Rubber Corporation.

Sullivan & Cromwell, of New York City, for defendant General Tire & Rubber Co.

Frederick R. Wahl, of Akron, Ohio, and Wright, Gordon, Zachry & Parlin, of New

York City, for defendants Goodyear Tire & Rubber Co., Inc. and Kelly-Springfield Tire Co.

Spence, Windels, Walser, Hotchkiss & Angell, of New York City, for defendant Lee Tire & Rubber Co. of N. Y., Inc.

Slabaugh, Seiberling, Huber & Guinther, of Akron, Ohio, and Milton Dammann, of New York City, for defendants Mohawk Rubber Co. of N. Y., Inc., and Seiberling Rubber Co.

Ingram & Schenck, of New York City, for defendant Norwalk Tire & Rubber Co.

Jeffery, Escher & Murray, of New York City, for defendant Pennsylvania Rubber Co.

Arthur, Dry & Dole, of New York City, for defendants United States Rubber Products, Inc., and U. S. Dealers Corporation.

Luther Day, of Cleveland, Ohio, of counsel for all defendants' attorneys.

CONGER, District Judge.

This is a motion by the defendants to dismiss the complaint because it fails to state a claim upon which relief can be granted.

The complaint sets forth an alleged claim under Section 7 of the Sherman Act, 26 Stat. 210, 15 U.S.C.A. § 15 note, asking for treble damages allegedly suffered by the United States in purchasing tires from the defendants at uniform prices.

Section 7 of the Sherman Act reads as follows: "Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any district court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee."

The question involved is whether or not the United States can be considered a "person" with the right to sue under the above-quoted section.

Section 8 of the Sherman Act, 15 U.S.C. A. § 7, which defines a "person", reads as follows: "The word `person,' or `persons,' wherever used in this act section 1, 2, 3, or 15 of this chapter, shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country."

It might be noted at this time, that this is the first suit brought by the United States under this section since the Act was passed on July 2, 1890. The United States has limited itself, in the past, to the criminal and equitable injunction sections of the antitrust laws.

Section 8, supra, which defines a "person" includes corporations and associations existing under the laws of the United States, but fails to specifically include the government of the United States, and therefore, it rests upon the court to interpret this statute, and to determine whether or not the United States can be considered such a "person", entitled to sue.

There is very little precedent in the reported cases to aid in deciding this question, but from the cases that are reported, it is apparent that the courts, in the past, have been careful in distinguishing, not only between the criminal and civil sections of this Act, but also in distinguishing between what the United States can and cannot do under the Act. Nowhere is the United States expressly given the right to bring a civil action under Section 7; but nowhere is the United States specifically denied this right, either.

There are a number of cases wherein Section 7 and 8 of the Act have been construed, although not exactly on the precise point. Nevertheless there is very significant language in several of these cases, indicating that the courts have been careful to point out that Section 7 is restricted to private persons and that the remedy of the government is given in the criminal and equitable injunction sections of the Act.

For instance, in the case of Pidcock v. Harrington, C.C., 64 F. 821, 822, we find this language: "* * * a private person is given (section 7) the right to maintain an action at law. * * * The first three sections are penal statutes. They give no civil remedy. Section 4 vests the right to institute proceedings in equity in the district attorneys of the United States, and, together with section 5, prescribes the procedure in such suits. Section 6 provides for the seizure and forfeiture to the United States of property illegally owned under the provisions of the act. So far, then, the act is a public act providing no private remedy. * * The only section which gives a private remedy is the seventh * * *."

In Greer, Mills & Co. v. Stoller, C.C., 77 F. 1, 3, we find this language: "Section 7 gives to the private person `injured in his business or property by any other person or corporation by reason of anything forbidden, or declared to be unlawful by this act,' a right to sue in a circuit court of the United States in the district in which the defendant resides or is found for threefold damages by him sustained. The statute, being highly penal in its character, must be strictly construed; and, having created a new offense, and imposed new liabilities, and having provided the modes of redress to the public and the private citizen, by established rules of construction, these remedies are exclusive of all others. * * *"

In United States v. Patterson, D.C., 201 F. 697. 714, reversed on other grounds, 6 Cir., 222 F. 599, certiorari denied, 238 U.S. 635, 35 S.Ct. 939, 59 L.Ed. 1499, we find the following: "Hence the right given by section 7 to an individual to recover for injury to his business or property with threefold damages, and the right given by section 4 to the government to prevent by injunction a continuance of the acts complained of, are rights growing out of the commission of a crime, by whomsoever it may be, whose acts also subject him to the criminal penalties of the statute. If he has been guilty of a crime described in section 1 or 2, then he may be restrained by the government in a civil action, or be compelled by an individual who has been injured in his business or property to respond in threefold damages."

The language in the above cases would seem to indicate a denial of the civil rights under Section 7 being given to the federal government although this is not specifically stated. The courts have pointed out that violation of the Act was a statutory offense, of a penal nature, in which the right is given to an individual to recover for injury to his business or property with threefold damage; to the government to prevent by injunction a continuance of the acts, or to subject the offender to the criminal penalties of the statute. In accord that these remedies are exclusive and that this statute must be strictly construed: D. R. Wilder Mfg. Co. v. Corn Products Refining Co....