325 U.S. 212 (1945), 1189, De Beers Consolidated Mines, Ltd. v. United States

• Citation: 325 U.S. 212, 65 S.Ct. 1130, 89 L.Ed. 1566
• Party Name: De Beers Consolidated Mines, Ltd. v. United States
• Case Date: May 21, 1945
• Court: U.S. Supreme Court

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325 U.S. 212 (1945)

65 S.Ct. 1130, 89 L.Ed. 1566

De Beers Consolidated Mines, Ltd.

v.

United States

No. 1189

United States Supreme Court

May 21, 1945

Argued May 2, 1945

CERTIORARI TO THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

In a civil proceeding brought by the United States against foreign corporations and individuals, seeking equitable relief upon a charge that the defendants were engaged in a conspiracy to restrain and monopolize commerce of the United States with foreign nations in gem and industrial diamonds, in violation of §§ 1 and 2 of the Sherman Act and § 73 of the Wilson Tariff Act, the district court granted a preliminary injunction restraining the corporate defendants from withdrawing, selling, transferring, or disposing of any property belonging to them in the United States until the cause finally shall have been determined and the defendants shall have complied with all orders of the court.

Held:

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1. The order of the district court granting the preliminary injunction was reviewable here by certiorari under § 262 of the Judicial Code. P. 217.

(a) If the preliminary injunction here granted, unless set aside, will stand throughout the course of the trial and for an indefinite period thereafter, and if the order was beyond the powers conferred upon the court, the case is an appropriate one for the exercise of jurisdiction by this Court under § 262. United States Alkali Export Assn. v. United States, ante p. 196. P. 217.

(b) The order did not grant such relief as could be afforded by any final injunction, but dealt with matters lying wholly outside the issues in the case; no decision of the suit on the merits could redress any injury done by the order, and, unless it can be reviewed under § 262, it can never be corrected if beyond the power of the trial court. P. 217.

2. The preliminary injunction here issued was not authorized by statute or by the usages of equity, and the order granting it must be reversed. P. 219.

(a) Rule 70 of the Rules of Civil Procedure, which permits the issue of a writ of attachment or sequestration against the property of a disobedient party to compel satisfaction of a judgment, is operative only after a judgment is entered. P. 218.

(b) The preliminary injunction here issued was not authorized by § 4 of the Sherman Act or by § 262 of the Judicial Code. P. 218.

(c) The preliminary injunction here issued deals with a matter lying wholly outside the issues in the suit; it deals with property which in no circumstances can be dealt with in any final injunction that may be entered. P. 220.

(d) Cases involving interlocutory injunctions granted with respect to funds or property which would have been the subject of the provisions of final decrees, and cases involving injunctions by federal courts to restrain interference with their jurisdiction, do not sustain the preliminary injunction here issued. P. 220.

(e) The practice in respect of writs of ne exeat is not analogous. P. 221.

(f) Since, under the circumstances, the district court is without jurisdiction to demand security, it is equally without authority to compel the furnishing of a bond by the seizure of property. P. 222.

Reversed.

Certiorari, 324 U.S. 839, to review an order of the district court granting a preliminary injunction against defendants

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in a suit brought by the United States to restrain alleged violations of the Sherman Act and the Wilson Tariff Act.

ROBERTS, J., lead opinion

MR. JUSTICE ROBERTS delivered the opinion of the Court.

These cases come before the court on petitions for certiorari presented pursuant to § 262 of the Judicial Code.¹ Each petition is by several of the defendants in a single suit pending in the District Court.

Two matters are presented: the propriety of review of the action below by certiorari, and the alleged excess of jurisdiction by the court below in making the order of which the petitioners complain. An understanding of the issues requires a statement of the nature of the suit, and of the order made.

The United States filed a complaint in the District Court against the three petitioners in No. 1189, which are corporations organized under the laws of South Africa; the petitioners in No. 1190, which are respectively corporations organized under the laws of the Belgian Congo and under the laws of Portugal, and four other corporations, one organized under the laws of Belgium, one under the laws of the Belgian Congo, and two under the laws of the [65 S.Ct. 1132] United Kingdom of Great Britain and Northern

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Ireland, and seven individuals respectively characterized as stockholder, or stockholder and director, or stockholder and employee, or managing agent, or managing director of one or more of the corporations. The complaint sought equitable relief based upon a charge that the defendants were engaged in a conspiracy to restrain and monopolize the commerce of the United States with foreign nations in gem and industrial diamonds, in violation of §§ 1 and 2 of the Sherman Act² and § 73 of the Wilson Tariff Act.³ The complaint alleged that all of the corporate defendants were doing business within the United States.

With the complaint, the United States filed a motion for a preliminary injunction in which it prayed that all of the corporate defendants be restrained from withdrawing from the country any property located in the United States, and from selling, transferring, or disposing of any property in the United States "until such time as this Court shall have determined the issues of this case and defendant corporations shall have complied with its orders." The reason given in support of the motion was:

The injury to the United States of America from the withdrawal of said deposits, diamonds, or other property would be irreparable because sequestration of said property is the only means of enforcing this Court's orders or decree against said foreign corporate defendants. The principal business of said defendants is carried on in foreign countries, and they could quickly withdraw their assets from the United States, and so prevent enforcement of any order or decree which this Court may render.

Amongst other supporting papers was an affidavit by counsel for the United States which stated that

the investigation which he has made shows the foreign corporate defendants named herein have endeavored to avoid subjecting

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themselves to the jurisdiction of the courts of the United States by making their sales abroad only, and requiring customers to pay in advance for all purchases.

There was also a motion for a restraining order without notice. The requested restraining order was issued and served on a number of banks; one, a bank in which de Beers had, the same day, established a credit of $59,320; others in which Forestiere had credits of approximately $632,000. Bank credits of petitioner Diamantes affected aggregate approximately $47,000. Both the two last named petitioners had purchased machinery and supplies in the United States of an approximate value of $100,000, which were covered by the injunction. Upon a showing that as the corporate defendants were foreign corporations, and would be required to obtain information and affidavits in support of their contention that service of process in the suit had not been made upon them, and in support of other motions addressed to failure to state a cause of action under the statutes, time to plead or answer was extended, and the injunction was from time to time modified and continued. Counsel for the petitioners, appearing specially, moved for dissolution of the injunction. The case was heard on affidavits and oral argument, the application was denied, and the injunction was continued in force. Thereupon, the petitioners applied to this court for certiorari under § 262. That section provides in part:

The Supreme Court, the circuit courts of appeals, and the district courts shall have power to issue all writs not specifically provided for by statute, which may be necessary for the exercise of their respective jurisdictions and agreeable to the usages and principles of law.

All the petitioners attack the order as, in substance, a sequestration of property beyond the power of the court and an abuse of discretion in the circumstances. The petitioners in No. 1189 also seek a reversal on the ground that the complaint does not state a claim cognizable by United States courts, and that the affidavits filed by these petitioners

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establish that the court below has no jurisdiction over the persons of the defendants. It is obvious from the record that these contentions are still open in the court below, and that court has not yet passed upon them. In the view we take of the case, it is unnecessary for us presently to consider them.

In United States Alkali Export Assn., Inc.et al. v. United States, and California Alkali Export Assn. v. United States, ante, p. 196, the court has discussed the propriety of review under § 262 in a suit brought under the Anti-Trust laws where there is a substantial question whether the District Court has jurisdiction of a suit which it has retained for trial on the merits. What is there said applies in this instance. If the preliminary injunction here granted, unless set aside, will stand throughout the course of the trial and for an indefinite period after its termination, and if the order was beyond the powers conferred upon the court, it is plain, under the decisions mentioned, that the petitions present an appropriate case for the exercise of our jurisdiction under § 262. As hereafter noted, the order in question was not made to grant interlocutory relief such as could be afforded by any final injunction, but is one respecting a matter lying wholly outside the issues in the case; no decision of the suit on the merits can redress any injury...