Humble Oil & Refining Company v. American Oil Company

• Decision Date: 09 January 1969
• Docket Number: No. 18596.,18596.
• Parties: HUMBLE OIL & REFINING COMPANY, a Corporation, Esso, Incorporated, a Corporation, and Standard Oil Company, a New Jersey Corporation, Appellants, v. AMERICAN OIL COMPANY, a Corporation, and Standard Oil Company, an Indiana Corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

405 F.2d 803 (1969)

HUMBLE OIL & REFINING COMPANY, a Corporation, Esso, Incorporated, a Corporation, and Standard Oil Company, a New Jersey Corporation, Appellants, v. AMERICAN OIL COMPANY, a Corporation, and Standard Oil Company, an Indiana Corporation, Appellees.

No. 18596.

United States Court of Appeals Eighth Circuit.

January 9, 1969.

David W. Peck, of Sullivan & Cromwell, New York City, for appellants, Arthur H. Dean, Roy H. Steyer and Richard E. Carlton, New York City, and Walter R. Mayne, Thomas Rowe Schwarz and P. Terence Crebs, of Fordyce, Mayne, Hartman, Renard & Stribling, St. Louis, Mo., and Dillard Baker, Houston, Tex., with him on the brief and reply brief.

Richmond C. Coburn, of Coburn, Croft & Kohn, St. Louis, Mo., for appellees; Alan E. Popkin, St. Louis, Mo., and Richard J. Farrell, Ernest L. Godshalk, L. Bates Lea, John W. Sherman and Paul B. Uhlenhop, Chicago, Ill., and Walter T. Kuhlmey, Reuben L. Hedlund and Donald W. West, of Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, Ill., with him on the brief.

Before BLACKMUN, GIBSON and LAY, Circuit Judges.

BLACKMUN, Circuit Judge.

This appeal provides yet another chapter in the story of Standard Oil and of the many Standard Oil controversies which have added color to the body of our law of trademarks, trade names, and restraint of trade.¹

The plaintiffs appeal from a judgment of the district court dismissing their complaint (filed July 9, 1963) by which they seek, under Rule 60(b), Fed.R.Civ. P., to modify and amend that court's injunction issued July 8, 1937, and affirmed by this court in Esso, Inc. v. Standard Oil Co., 98 F.2d 1 (8 Cir. 1938).

The plaintiffs are three:

Standard Oil Company, a New Jersey corporation, hereinafter called Jersey Standard or Jersey. The corporation was not an original party-plaintiff but was made such, on motion of the defendants, by district court order pursuant to Rule 19(a), Fed.R.Civ.P.

Jersey\'s wholly-owned subsidiary, Humble Oil & Refining Company, a Delaware corporation and successor to Standard Oil Company of New Jersey, a Delaware corporation. Since Humble became Jersey\'s wholly-owned subsidiary in 1960, it has been its parent\'s nationwide marketing affiliate in the United States. Jersey itself does not carry on any marketing operations.

Humble\'s wholly-owned subsidiary, Esso, Incorporated, a Delaware corporation.

The defendants are two:

Standard Oil Company, an Indiana corporation, hereinafter called Indiana Standard or Indiana.

Indiana\'s wholly-owned subsidiary, American Oil Company, a Maryland corporation. Since January 1, 1961, American has conducted all of Indiana\'s marketing operations in the United States.

What the plaintiffs seek, as the amended complaint asserts, is "to permit Humble to use its trademark ESSO and marks containing `Esso' in the marketing by Humble of its petroleum products in fifteen midwestern states in which American now markets." Judge Meredith, after a full trial, denied the relief requested (a) on the merits and (b) by application of the doctrine of unclean hands. Accordingly, he dismissed the complaint and "continued in full force and effect" the 1937 decree. The district court's findings, conclusions, and supporting memorandum are reported as Humble Oil & Refining Co. v. American Oil Co., 259 F. Supp. 559 (E.D.Mo.1966).

Background litigation. 1. In 1909 the United States Circuit Court for the Eastern District of Missouri, with Judges Walter H. Sanborn, Van Devanter (soon thereafter Mr. Justice Van Devanter), Hook, and Adams (being all the circuit judges in the Eighth Circuit's then geographical area) constituting the court, issued its opinion holding that Standard Oil Company of New Jersey (which owned controlling interests in a number of other Standard Oil companies, including Indiana, and other corporations), seven individuals and 37 additional corporate defendants, including Indiana, were "in restraint of trade and commerce in petroleum and its products among the several states", in violation of the Sherman Act. By its decree the court enjoined the continuance of that violation. United States v. Standard Oil Co., 173 F. 177, 197-200 (C.C.E.D.Mo.1909).

2. On appeal, the Supreme Court of the United States, in an opinion by Mr. Chief Justice White, affirmed the circuit court's decree "except as to * * * minor matters." Standard Oil Co. v. United States, 221 U.S. 1, 82, 31 S.Ct. 502, 55 L.Ed. 619 (1911). In so doing the Court recognized that the circuit court's decree "commanded the dissolution of the combination, and therefore in effect, directed the transfer by the New Jersey corporation back to the stockholders of the various subsidiary corporations * * * of the stock which had been turned over to the New Jersey company * * *." 221 U.S. at 78, 31 S.Ct. at 523. The first Mr. Justice Harlan separately concurred in part but dissented as to the "minor matters." 221 U.S. at 82-106, 31 S.Ct. 502.

3. Accordingly, the circuit court modified its decree on July 29, 1911; the holding company distributed the stocks; and the dissolution of the Standard Oil Trust was effected. See United States v. Standard Oil Co., 47 F.2d 288, 289 (E.D.Mo. 1931). The practical result of this was that each of the several Standard Oil companies, which had been part of the Trust, thereafter operated separately and independently and with exclusive use of the Standard name in that area of the nation which had been allotted to it originally. 221 U.S. at 77, 31 S.Ct. 502. See Fry v. Layne-Western Co., 282 F.2d 97, 106 (8 Cir. 1960). Indiana's area at the time consisted of 11 states, namely, Michigan, Indiana, Wisconsin, Illinois, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Kansas, and Oklahoma.

4. This division and subsequent natural growth understandably led to competition and this in turn to vigorously contested lawsuits over the right to use the Standard Oil name and its various derivatives and abbreviated forms. Some of these were controversies between Standard Oil companies of the original group; most, however, were between an established Standard Oil company and an outsider who sought to employ the name. The rulings in these cases consistently have been to the effect that the name Standard Oil has a secondary meaning in the trade and that, in the hands of the original user, it is entitled to protection against unfair use and unfair competition in the area where that user operates. Judge Meredith described it well when he said,

The particular Standard Oil Company which first and continuously used the name "Standard" and derivatives thereof in a particular trade area had the exclusive right to use that name and all derivatives therefrom to the exclusion of the other Standard Oil Companies and to the exclusion of all strangers who attempted to use the name. 259 F.Supp. at 560.

The reported cases include Standard Oil Co. Indiana v. Michie, 34 F.2d 802 (E. D.Mo.1929); Standard Oil Co. of New York v. Standard Oil Co. of Maine, 38 F. 2d 677 (D.Maine 1930), modified and aff'd, 45 F.2d 309 (1 Cir. 1930); Standard Oil Co. of New Mexico v. Standard Oil Co. of California, 56 F.2d 973 (10 Cir. 1932); Standard Oil Co. of Colorado v. Standard Oil Co. Indiana, 72 F.2d 524 (10 Cir. 1934), cert. denied, 293 U.S. 620, 55 S.Ct. 216, 79 L.Ed. 708; Esso Standard Oil Co. v. Bazerman, 99 F.Supp. 983 (E.D.N.Y.1951); Standard Oil Co. Indiana v. Standard Oil Co. of North Dakota, 123 F.Supp. 227 (D.N.D.1954); Standard Oil Co. Indiana v. Standard Oil Co. Ohio, 141 F.Supp. 876 (D.Wyo. 1956), aff'd 252 F.2d 65, 76 A.L.R.2d 600 (10 Cir. 1958); Esso Standard Oil Co. v. Standard Oil Co. of North Carolina, 112 U.S.P.Q. 265 (M.D.N.C.1956); and Esso Standard Oil Co. v. Standard Oil Co. of New England, 170 F.Supp. 71 (D.N.H. 1958). A decision initially to the contrary, evidently the only one, involving special facts, is Humble Oil & Refining Co. v. Standard Oil Co. (Kentucky), 229 F.Supp. 586 (S.D.Miss.1964); but this was reversed, 363 F.2d 945 (5 Cir. 1966), cert. denied, 385 U.S. 1007, 87 S.Ct. 714, 17 L.Ed.2d 545, and the final disposition of that litigation is in line with the other cited cases.²

It should perhaps be noted, for what it may be worth, that a Jersey affiliate, Esso Standard Oil Company, was a party in a number of the outsider cases and that it took the position in those cases, some of them within a decade of the institution of the present lawsuit, that the exclusive right to the Standard Oil name or derivatives in the territory in question belonged to it. It has taken a like position in registration and other proceedings.

5. It was the United States District Court for the Eastern District of Missouri and this court, however, which entertained the earliest litigation between constituent companies of the old Trust. That case was the one which resulted in the 1937 decree and its affirmance here. In 1935 Esso, Incorporated, opened three gasoline service stations in Saint Louis, Missouri, within the territory historically inhabited by Indiana. Indiana sued (Civil Action No. 11407 in the Eastern District) to enjoin Esso, Incorporated, from using "ESSO", alone or in combination, in Indiana's multistate area. The late Judge Moore ruled in favor of Indiana and on July 8, 1937, entered a decree, the injunctive portion of which is set forth in the margin.³ The court's supportive findings, described as "elaborate and in considerable detail", are summarized in the affirming opinion of this court. Esso, Inc. v. Standard Oil Co., supra, 98 F.2d at 3-4. We place in the margin pertinent portions of those findings and conclusions⁴ and pertinent portions of Judge Gardner's opinion⁵ describing the arguments advanced by Esso, Incorporated, and containing this court's response thereto. 98 F.2d at 5-7.

Thus the matter rested 30 years ago.⁶

Other background material. 1. After the dissolution of the Standard Oil Trust, some of the companies constituent thereto, including Jersey and Indiana,...