United States v. Ingersoll-Rand Company, 14405.

• Decision Date: 05 June 1963
• Docket Number: No. 14405.,14405.
• Citation: 320 F.2d 509
• Parties: UNITED STATES of America v. INGERSOLL-RAND COMPANY, Goodman Manufacturing Company, Lee-Norse Company and Galis Electric and Machine Company, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

320 F.2d 509 (1963)

UNITED STATES of America v. INGERSOLL-RAND COMPANY, Goodman Manufacturing Company, Lee-Norse Company and Galis Electric and Machine Company, Appellants.

No. 14405.

United States Court of Appeals Third Circuit.

Argued April 22, 1963.

Decided June 5, 1963.

As Amended October 29, 1963.

Joseph W. Burns, New York City, for Ingersoll-Rand Co.

Lionel Kestenbaum, Dept. of Justice, Washington, D. C., for appellee.

Before BIGGS, Chief Judge, and HASTIE and GANEY, Circuit Judges.

BIGGS, Chief Judge.

On March 6, 1963, in a suit filed by the United States against the defendants based on Section 7 of the Clayton Act, 15 U.S.C.A. § 18, the court below entered an interlocutory injunction to prevent the defendants from carrying out agreements contemplating corporate acquisitions by Ingersoll-Rand of companies engaged in manufacturing underground coal mining machinery in the United States. The basis for the issuance of the interlocutory injunction was "that the effect of the proposed acquisitions may be substantially to lessen competition, or to tend to create a monopoly."¹ The order issuing the interlocutory injunction is the subject of the appeal at bar.

I.

We are faced in limine with the question as to whether the interlocutory order at bar is an appealable order under 28 U.S.C.A. § 1292(a) (1) (1962 Supp.). That Section provides, in pertinent part: "Interlocutory decisions. (a) The courts of appeals shall have jurisdiction of appeals from: (1) Interlocutory orders of the district courts of the United States * * * or of the judges thereof, granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court * * *." (Emphasis added.)² The italicized phrase, "Except where a direct review may be had in the Supreme Court" may tell us all or may tell us nothing. But whatever its terms may be, they must be considered.

It is clear that a final order of a district court in a case under the antitrust laws is appealable directly and only to the Supreme Court. Section 2 of the Expediting Act of 1903, 15 U.S.C.A. § 29, now provides: "In every civil action brought in any district court of the United States under any of said Antitrust Acts, wherein the United States is complainant, an appeal from the final judgment of the district court will lie only to the Supreme Court."³

The road of appeal, had the order of the court below of March 6, 1963, been a final order and not interlocutory in its nature, would therefore be clearly marked, broad and open, and would lead directly to the Supreme Court of the United States. But, as the United States candidly points out in the opening sentences of its brief on this point in favor of a contrary view, "It is a commonplace of antitrust practice that Section 2 of the Expediting Act of 1903 * * * bars appeals from interlocutory orders in government civil antitrust cases either to the Supreme Court or the courts of appeals", citing United States v. California Cooperative Canneries, 279 U.S. 553, 558, 49 S.Ct. 423, 73 L.Ed. 838 (1929). It is our task to determine whether or not the "commonplace" of antitrust practice shall stand or fall at this stage of the proceedings. To this end, a careful examination of the terms and legislative history of 28 U.S.C.A. § 1292(a) (1) is necessary.

Section 1292(a) (1) is derived from Section 7 of the Evarts Act, the Act of March 3, 1891, 26 Stat. 828, which provided: "That where, upon a hearing in equity in a district court, or in an existing circuit court, an injunction shall be granted or continued by an interlocutory order or decree, in a cause in which an appeal from a final decree may be taken under the provisions of this act to the circuit court of appeals, an appeal may be taken from such interlocutory order or decree granting or continuing such injunction to the circuit court of appeals * * *." (Emphasis added.)

The substance of this Act was repeated in the Act of June 6, 1900, ch. 803, 31 Stat. 660, referred to hereinafter in connection with United States v. California Coöperative Canneries, 279 U.S. 553, 49 S.Ct. 423, 73 L.Ed. 838 (1929).

It would appear that since interlocutory injunction orders were unreviewable in many cases subject to direct appeal to the Supreme Court at that time, the undesirable practice arose of alleging spurious constitutional questions to bring cases within one such class of direct appeal and therefore to foreclose review of orders relating to preliminary injunctions.⁴ It is stated by the United States on its brief that Congress had thought to remedy this situation by amending Section 7 of the Evarts Act, "To bring within the court of appeals' jurisdiction interlocutory injunction orders `in any cause'."

The amending Act to Section 7 of the Evarts Act, the Act of April 14, 1906, 34 Stat. 116, provided: "That where, upon a hearing in equity in a district or in a circuit court, or by a judge thereof in vacation, an injunction shall be granted or continued, or a receiver appointed by an interlocutory order or decree, in any cause an appeal may be taken from such interlocutory order or decree granting or continuing such injunction, or appointing such receiver, to the circuit court of appeals * * *." (Emphasis added.)

Whatever may have been the intention of Congress in enacting this amendment, as asserted by the United States, the practical effect seems to have been to include orders appointing receivers within the ambit of immediately reviewable interlocutory orders and the old question remained unanswered, insofar as we can determine, namely, whether or not an interlocutory appeal could be allowed to a court which did not have jurisdiction to hear and adjudicate the appeal upon a final judgment.

The United States asserts, however, that the legislative purpose of the previously quoted 1906 amendment to Section 7 of the Evarts Act was to permit review of such interlocutory injunction orders by the courts of appeals. In support of this assertion, the United States points to the subsequent codification of Section 7 of the Evarts Act by the Judicial Code of 1911, 36 Stat. 1087, 1134. The 1911 Code, which was positive law as is the present Judicial Code, deleted the phrase "in any cause" which had been added to Section 7 of the Evarts Act by the 1906 amendment, and in its place inserted in Section 129 of the new Code the following clause: "notwithstanding an appeal in such case might, upon final decree under the statutes regulating the same, be taken directly to the Supreme Court." This quoted clause assuredly had the effect, at least as of the effective date of the Judicial Code of 1911, of permitting an appeal from an interlocutory order even in an antitrust case, such as the order sub judice, to a court of appeals. Indeed, the Senate Report on the bill which was to enact the 1911 Code states that the change was made "to remove any doubt upon this point."⁵

In 1925, however, the Judicial Code of 1911 was amended by the celebrated "Judges' Bill", 43 Stat. 936, 937, whereby the certiorari jurisdiction of the Supreme Court as we know it today was inaugurated. The 1925 amendments obliterated the previously quoted "notwithstanding" clause of Section 129 of the 1911 Code, leaving, however, the remainder of Section 129 essentially unchanged. The memorandum which accompanied the "Judges' Bill", prepared under the auspices of the Supreme Court, stated that the "notwithstanding" clause of Section 129 of the 1911 Code had been "eliminated as having no further application in view of the repeal of the existing provisions of Section 238 providing for direct appeals."⁶

The United States contends that the meaning of the words quoted is clarified by an examination of Section 238 of the 1911 Code and the amendments to that section proposed by the Judges' Bill and effected by Congress in 1925. Section 238 of the 1911 Code, 36 Stat. 1087, 1157, as it was prior to the amendments simply specified the cases in which direct appeals and writs of error were allowed to the Supreme Court.⁷ But the Judges' Memorandum states the following: "The amended section 238 sets forth the only remaining instances in which there is a right of direct review in the Supreme Court of decisions of the district courts, following the repeal of the existing provisions of section 238 and of the provisions of the act of March 3, 1887, authorizing direct appeals from the district court to the Supreme Court in suits against the United States and expressly repealed in section 13 of the bill."⁸

Examination of Section 238 of the Judicial Code as amended in 1925, 43 Stat. 938, demonstrates the types of civil cases in which direct appeals of interlocutory injunctions to the Supreme Court of the United States were to be allowed. Most of these are cases of the kind colloquially known today as "Three-Judge Cases", presently embraced in Chapter 155 of Title 28 U.S.C.A. The 1925 amendment to Section 238, 43 Stat. 938, expressly provided: "A direct review by the Supreme Court of an interlocutory or final judgment or decree of a district court may be had where it is so provided in the following Acts or parts of Acts, and not otherwise: (1) Section 2 of the Act of February 11, 1903, `to expedite the hearing and determination' of certain suits brought by the United States under the antitrust or interstate commerce laws, and so forth." But Section 2 of the Expediting Act, the Act of February 11, 1903, 15 U.S.C.A. § 29, had and has no provision for a direct appeal of an interlocutory order to the Supreme Court or to a court of appeals. Since the appeal is from a decree of a single district judge the provisions of 28 U.S.C.A. § 1253 are not available to aid the defendants here.

The United States alleges in an intricate and ingenious argument that the "notwithstanding" caveat of Section 129 of the 1911 Code was eliminated because Congress and the Justices of ...