366 U.S. 683 (1961), 56, Sam Fox Publishing Co., Inc. v. United States

Docket Nº:No. 56
Citation:366 U.S. 683, 81 S.Ct. 1309, 6 L.Ed.2d 604
Party Name:Sam Fox Publishing Co., Inc. v. United States
Case Date:May 29, 1961
Court:United States Supreme Court
 
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Page 683

366 U.S. 683 (1961)

81 S.Ct. 1309, 6 L.Ed.2d 604

Sam Fox Publishing Co., Inc.

v.

United States

No. 56

United States Supreme Court

May 29, 1961

Argued March 29-30, 1961

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

Under the Expediting Act, 15 U.S.C. § 29, appellants, who were small music publishers, appealed directly to this Court from an order of a Federal District Court denying their motions under Rule 24(a)(2) of the Federal Rules of Civil Procedure to intervene as of right in a proceeding by the Government to modify a consent decree previously entered in a government suit under § 1 of the Sherman Act against an unincorporated association of music writers and publishers (of which appellants were members), which took licenses to the works of its members, licensed such works for public performance, and distributed the resulting revenues among its members. The Government had proposed modification of the decree to improve provisions for democratic elections of the governing board by membership vote and for an equitable distribution of revenues, and appellants contended that the modifications proposed did not go far enough towards ameliorating the position of the small publishers as against a few large publishers who allegedly dominated the association.

Held: appellants were not bound by the parts of the decree as to which they sought intervention; they were not entitled to intervene as of right; the order denying intervention was not appealable; and the appeal is dismissed. Pp. 684-695.

(a) If appellants' interests are deemed aligned with the public interest in this case, they would not be bound by the outcome of the government antitrust litigation or precluded from enforcing their rights through private litigation. Therefore, they were not entitled to intervene as of right, and the order denying intervention was not appealable. Pp. 688-690.

(b) Though the Government's suit was against the unincorporated association both as an entity and as a representative of its members, and appellants may be bound by the decree insofar as it deals with the external affairs of the association, they are not bound by its provisions pertaining to the internal affairs of the association, as to which their interests are adverse to those of the association's governing board and could not be adequately represented by it. Pp. 690-693.

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(c) It was not necessary for the District Court to hold a hearing in order to determine to what extent appellants' interests diverged from those asserted by the association, since the record shows that appellants' interests could not be considered to be adequately represented by the association with respect to its internal affairs, and therefore they could not be bound by the decree. Pp. 693-694.

(d) A different conclusion is not required by the fact that, even if appellants are not legally precluded from bringing a private suit, nevertheless the very existence of the decree in the Government's suit might, as a matter of comity, limit the relief which some future equity court would decree. Pp. 694-695.

Appeal dismissed.

HARLAN, J., lead opinion

MR. JUSTICE HARLAN, delivered the opinion of the Court.

The appellants, proceeding under the Expediting Act, 15 U.S.C. § 29, appeal directly to this Court from an order of the District Court for the Southern District of New York denying their motions to intervene as of right in a proceeding to modify a consent decree previously entered in a government antitrust suit. The appellants were not named as parties either in the suit or modification

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proceeding.1 The motions were made pursuant to Rule 24, subdivision (a)(2) of the Federal Rules of Civil Procedure.2

[81 S.Ct. 1311] The matter arises in the following setting: in 1941, the United States brought suit under § 1 of the Sherman Act, 15 U.S.C. § 1, against the American Society of Composers, Authors and Publishers (ASCAP), an unincorporated association of which appellants are members, and certain of its officers. The Society and the defendant officers besides being named as an entity and individuals, respectively, were also sued as representatives of all members of the Society. The Society, comprising some 6,400 writers and publishers of musical compositions, was organized to take nonexclusive licenses to the works of its members, to license such works out for public performance, and to distribute among the members the revenues resulting therefrom. The three appellants are among the Society's publisher members.

The Government's complaint in the action was aimed at two distinct types of antitrust violation: (1) alleged restraint of trade arising out of ASCAP's mode of dealing with outsiders desiring licenses of compositions in the Society's catalogue; and (2) alleged restraint of competition among the Society's members inter sese, resulting

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from the asserted domination of the Society's affairs by a few of its large publisher members who, it was claimed, were able to control the complexion of the Board of Directors and the apportionment of the Society's revenues. As to the latter type of restraint, the prayer for relief sought to insure (a) that Board elections be by no method "other than by a membership vote in which all . . . members shall have the right to vote," and (b) that the distribution of revenue to members should be on a "fair and nondiscriminatory" basis. It is apparent from the record that appellants' particular interests in the suit related entirely to the second aspect of the Government's charges, that is, those involving the Society's internal affairs, and that their motions to intervene were so directed.

During the same year in which the suit was brought, it was settled by a consent...

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