Meeropol v. Nizer

• Decision Date: 17 October 1974
• Docket Number: No. 1246,D,1246
• Citation: 505 F.2d 232
• Parties: , 183 U.S.P.Q. 513 Michael MEEROPOL and Robert MEEROPOL, APPELLANTS, v. Louis NIZER and Doubleday & Co., Inc., Appellees, and Fawcett Publications, Inc., Intervenor-Appellee. ocket 74-1587.
• Court: U.S. Court of Appeals — Second Circuit

Page 232

505 F.2d 232

42 A.L.R.Fed. 582, 183 U.S.P.Q. 513

Michael MEEROPOL and Robert MEEROPOL, APPELLANTS, v. Louis NIZER and Doubleday & Co., Inc., Appellees, and Fawcett Publications, Inc., Intervenor-Appellee.

No. 1246, Docket 74-1587.

United States Court of Appeals, Second Circuit.

Argued Aug. 16, 1974.

Decided Oct. 17, 1974.

Marshall Perlin, New York City (Samuel Gruber, Stamford, Conn., Max R. Millman, Philadelphia, Pa., of counsel), for appellants.

Robert M. Callagy, New York City (James F. Rittinger, George Berger, Martin Stein, New York City, of counsel), for appellees.

Before OAKES, Circuit Judge, and FRANKEL and KELLEHER, District judges. ^*

OAKES, Circuit Judge:

This appeal involves two related federal actions brought by the children of Julius and Ethel Rosenberg (the Meeropols). The first was commenced in the United States District Court for the Southern District of New York against Louis Nizer (Nizer), the author of The Implosion Conspiracy, and his hard cover publisher, Doubleday & Co., Inc. (Doubleday); the second was commenced in the United States District Court for the District of Connecticut against fawcett publications, Inc. (Fawcett), the paperback publisher-licensee of the same book. The New York action set forth three counts: (1) for statutory copyright infringement, 17 U.S.C. 101, in connection with the use of letters of Julius and Ethel Rosenberg, ¹ (2) for malicious defamation and invasion of privacy through publication of the book; and (3) for common law infringement of and for injury to appellants' property rights in unpublished and uncopyrighted works of their parents. In the subsequent Connecticut action against Fawcett, the Meeropols' complaint asserted the first and third counts of the New York complaint but they subsequently amended their pleadings to include a cause of action for malicious libel and invasion of privacy along the lines of the second count of the New York complaint.

This appeal is from an order of United States District Judge Harold R. Tyler, Jr., in the Southern District of New York staying the appellants from prosecuting the Connecticut action. To understand this opinion fully, it will be necessary to set forth in some further detail the rather complex procedural history of this litigation.

On June 19, 1973, when the Meeropols instituted the New York action, they moved simultaneously for a preliminary injunction enjoining Nizer and Doubleday from continuing the alleged infringement of their parents' letters (supra note 1). On July 18, 1973, Judge Tyler denied the motion for a preliminary injunction and a cross motion of Nizer and Doubleday to dismiss the first count of the complaint. Meeropol v. Nizer, 361 F.Supp. 1063 (S.D.N.Y.1973). Answers were filed by Nizer and Doubleday admitting authorship and publication but placing in issue other material allegations of the complaint and pleading various affirmative defenses; these answers were followed by extensive discovery proceedings and pretrial motions by both parties. To date, the litigation has generated a number of written opinions and orders on the part of Judge Tyler.

In December, 1973, the Meeropols learned that Fawcett intended to publish a paperback edition of The Implosion Conspiracy which had been a hard cover best seller and book club selection. On December 7, 1973, their lawyer wrote a letter to Fawcett demanding that it cease and desist from printing, publishing or distributing the paperback edition, sending along a copy of the complaint against Nizer and Doubleday. Receiving no answer, the Meeropols instituted the Connecticut action on March 6, 1974, and sought, by way of an order to show cause, a preliminary injunction returnable before District Judge Newman on March 29, 1974. ²

On March 19, 1974, Fawcett, which was not a party to the New York action, ³ applied to Judge Tyler for, and was granted, an order to show cause on March 22, 1974, why a stay of the Connecticut action should not be granted, and a temporary restraining order staying the Connecticut action until March 22 was signed. The supporting papers included an affidavit of the attorney appearing for both Fawcett and Doubleday, which presented as the principal ground for the application for a stay the argument that the defenses applicable to defendants Nizer and Doubleday in New York 'will equally be applicable to Fawcett in Connecticut' by virtue of certain contractual indemnification agreements between the parties. Further, it was argued that it would be in the interests of judicial economy to have all of the defendants litigate all of the issues in one court.

Accepting these arguments as valid, Judge Tyler subsequently granted the requested stay. While the order of Judge Tyler granting a temporary restraining order on the application of a non-party, see Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969), seems beyond his powers, we note that the order was for only a three-day period pending oral argument on March 22, 1974. At that time Judge Tyler ruled that he would stay the Connecticut action pending final disposition of the New York action on the condition that Fawcett intervene in the New York action. Thus, whatever jurisdiction the court below lacked at the time of issuing the temporary restraining order it gained when on March 28, 1974, Fawcett did move for leave to intervene and when, on April 3, 1974, that motion was granted. It is that same order of April 3, 1974, permanently staying the appellants from prosecuting the Connecticut action pending final judgment in the New York action which is the order here under appeal.

The appellants argue first that the district court had no jurisdiction to enjoin the Connecticut suit. As we have said, we assume they are correct as of the time the court below granted the temporary restraining order, since Fawcett was then a stranger to the New York proceeding. But when Fawcett was granted leave to intervene in the New York suit, the district court obtained jurisdiction for the order already granted. Where an action is brought in one federal district court and a later action embracing the same issue is brought in another federal court, the first court has jurisdiction to enjoin the prosecution of the second action. See Coakley & Booth, Inc. v. Baltimore Contractors, Inc., 367 F.2d 151 (2d Cir. 1966); National Equipment Rental, Ltd. v. Fowler, 287 F.2d 43 (2d Cir. 1961). This rule is applicable even where the parties in the two actions are not identical. See, e.g., Telephonics Corp. v. Lindly & Co., 291 F.2d 445 (2dCir. 1961) (where an alleged infringer had sued for declaratory judgment invalidity, a subsequent suit by the patent holder against the alleged infringer's customer would be enjoined where there was an indemnity agreement running from the alleged infringer to the customer and where the customer was added as a plaintiff in the suit for declaratory relief); MacLaren v. B-I-W Group, Inc., 329 F.Supp. 545 (S.D.N.Y.1971) (where the court in an action for a patent infringement in the Southern District of New York enjoined a suit by the patent holder against the alleged infringer's manufacturer in the Western District of New York where there was an indemnity agreement between the manufacturer and the alleged infringer, the stay of the Western District action being on condition that the defendant manufacturer in the Western District intervene as a party defendant in the Southern District action). See also Urbain v. Knapp Brothers Manufacturing Co., 217 F.2d 810 (6th Cir. 1954), cert. denied, 349 U.S. 930, 75 S.Ct. 772, 99 L. Ed. 1260 (1955).

By contract, Doubleday has agreed to indemnify Fawcett for claims arising from its publication of the paperback version of Nizer's book. Paragraph 7 of their agreement dated April 27, 1973, contains a warranty by Doubleday that the rights granted to Fawcett are owned by Doubleday and that 'the book does not infringe upon any statutory or other copyright, or any right of others whatsoever; also that the book contains no matter which is contrary to law.' It also contains in the same paragraph an indemnification agreement by which Doubleday agrees to hold Fawcett harmless against any loss or expense, including counsel fees, 'arising out of any breach or alleged breach of any of the foregoing warranties.' We see no conflict of interest between Doubleday and Fawcett, and indeed for all practical purposes Doubleday is the real party in interest in the Connecticut action. Under Fed.R.Civ.P. 24(a), Fawcett therefore intervened as of right in the New York action since the disposition of the New York suit might as a practical matter have impaired or impeded Fawcett's ability to protect its interests; by intervening, Fawcett was merely following the procedure essentially approved of, if not applied, in Cresta Blanca Wine Co. v. Eastern Wine Corp., 143 F.2d 1012 (2d Cir. 1944), and International Nickel Co. v. Ford Motor Co., 108 F.Supp. 833 (S.D.N.Y.1952). It is significant that there has been no appeal from that portion of Judge Tyler's order of April 3, 1974, which granted Fawcett's motion for leave to intervene in the New York action.

Appellants argue next that in any event the district court erred as a matter of discretion in enjoining the Connecticut proceedings because the defendants in the two cases are not 'in privity' and that adjudication of the issues in the New York action 'would not be dispositive of the issues' in the Connecticut case. As to the question of privity, as previously stated, there is an agreement by Doubleday to indemnify Fawcett against claims arising out of the publication of the paperback edition. Appellants argue that the Doubleday-Fawcett indemnification is significantly more limited than one between Nizer and Doubleday since the former does not specifically cover liability for libelous writing or any violation of any right of privacy. We do not read the...