Buckeye Powder Co. v. E.I. Du Pont de Nemours Powder Co.

• Decision Date: 28 March 1912
• Citation: 196 F. 514
• Parties: BUCKEYE POWDER CO. v. E.I. DU PONT DE NEMOURS POWDER CO. et al.
• Court: U.S. District Court — District of New Jersey

196 F. 514

BUCKEYE POWDER CO. v. E.I. DU PONT DE NEMOURS POWDER CO. et al.

United States District Court, D. New Jersey.

March 28, 1912

Frank S. Katzenbach, Jr., of Trenton, N.J. (Robert H. McCarter George S. Graham, and Thomas J. Laffey, on the brief), for the rule.

MacFarland Taylor & Costello, of New York City (Willard U. Taylor Twyman O. Abbott, and Walter J. Bartnett, on the brief) contra.

RELLSTAB District Judge.

The plaintiff has filed his declaration against 28 persons (defendants so called), and this motion is made on behalf of the E. I. Du Pont de Nemours Powder Company, Eastern Dynamite Company, and International Smokeless Powder & Chemical Company, three of the four defendants who were served with process. The motion is founded on section 110 of the New Jersey Practice Act (P.L. 1903, p. 569), which section is as follows:

'The court or a judge may on four days' notice strike out any pleading which is irregular or defective, or is so framed as to prejudice, embarrass or delay a fair trial of the action.'

The motion takes the place of a special demurrer, deals with the form and not the substance of the pleading, and is addressed to the sound discretion of the court. More strictness is required in stating the substance of a cause of action than the form of it.

The practice here authorized by the state statute, by virtue of section 914, R.S., derived from section 5 of the 'Conformity Act' of June 1, 1872 (chapter 255, 17 Stat. 197 (U.S. Comp. St. 1901, p. 684)), will be followed 'as near as may be,' but not 'where it would be inconsistent with the terms or defeat the purposes of the legislation of Congress. * * * State statutes which defeat or incumber the administration of the law under federal statutes are not required to be followed in the federal courts. Mexican Cen. R.R. Co. v. Pinkney, 149 U.S. 207, 13 Sup.Ct. 859, 37 L.Ed. 699. It follows that, where the state statute or practice is not adequate to afford the relief which Congress has provided in a given statute, resort must be had to the power of the federal court to adapt its practice and issue its writs and administer its remedies so as to enforce the federal law. ' Hills & Co. v. Hoover, 220 U.S. 329, 336, 31 Sup.Ct. 402, 55 L.Ed. 485. The motion will not be granted unless it is clear that a fair trial of the action on its merits is prejudiced by the form of the stated cause of action.

The alleged cause of action is said to arise under section 7 of the act entitled, 'An act to protect trade and commerce against unlawful restraints and monopolies,' approved July 2, 1890, popularly known as the 'Sherman Anti-Trust Act' (3 U.S. Comp. Stat. 1901, p. 3200). Said section is as follows:

'Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefore in any Circuit Court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.'

The unlawful things alleged to have been done by the defendants to the injury of the plaintiff are said to be denounced by sections 1 and 2 of such act, which sections are as follows:

'Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

'Sec. 2. Every person who shall monopolize, or attempt to monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.'

The first section of this act denounces restraint of interstate trade in two ways-- by contract and by a combination or conspiracy-- and in the second section the monopolizing and attempt to monopolize any of such trade is denounced. To maintain an action under this act, therefore, the plaintiff must allege as well as prove that the defendant committed one of such forbidden acts, and that in consequence he was injured in his business or property. Northern Securities Co. v. U.S., 193 U.S. 197-403, 24 Sup.Ct. 436, 48 L.Ed. 679; Rice v. Standard Oil Co. (C.C.) 134 F. 464; Cilley v. United Shoe Mach. Co. (C.C.) 152 F. 726; People's Tobacco Co. v. American Tobacco Co., 170 F. 396-407, 95 C.C.A. 566; Ware-Kramer Tobacco Co. v. American Tobacco Co. (C.C.) 180 F. 160. In the pleading, plaintiff must declare the forbidden acts and consequent injuries in such clear and unambiguous language, and with such reasonable certainty, that the defendants and the court may be apprised of the alleged cause of action, that it may be known by the former how to answer and prepare for trial, and by the latter what is the nature of the issue, and, if it be one of fact, to control the character of the proofs offered at the trial, and to pronounce and enforce a judgment that will settle the rights involved in such issues.

The declaration contains one count composed of 17 lengthy paragraphs, set out in the margin hereof. ^[1] Broadly stated, the gravamen of the declaration is that the defendants entered into contracts and combinations and conspiracies to monopolize interstate trade in powder and other explosives, and that in carrying out their monopolistic purposes they conspired to coerce the plaintiff to yield its independence as a competitor and join with the defendants on their terms in the furtherance of such unlawful purpose, or to drive it out of such business, and that they eventually succeeded in accomplishing the latter, to its great damage

The grounds of the motion to strike out are two: First, duplicity; second, that the allegations are so defective as to prejudice the defense.

As to the charge of duplicity. The defendants contend that the plaintiff has not only combined in one count all three causes for which actions are given by the Anti-Trust Act, but also alleged causes for which actions are not given by such act. Paragraph 4 of such declaration is said to allege the causes of action founded on such act, and paragraphs 5, 14, and 17 the other causes of action. Paragraph 4 does charge the making of unlawful agreements, the entering into unlawful combinations, and the maintenance of a practically complete monopoly. If in so doing the pleader has combined two or more distinct causes of action, the pleading is bad for duplicity. Rice v. Standard Oil Co., supra. But as a conspiracy may be accomplished by any number or variety of steps, some of which may be in the form of contracts, others as combinations, if the contracts and the combinations referred to in the declaration are but steps in such conspiracy, and such conspiracy has for its purpose the alleged monopoly, the whole constitutes but one cause of action. Connors v. United States, 158 U.S. 408, 15 Sup.Ct. 951, 39 L.Ed. 1033; United States v. Swift (D.C.) 188 F. 92. The matter of the fourth paragraph relates largely to transactions prior to the plaintiff's engaging in the manufacture and sales of powder, etc. In that respect it is but introductory to, and an underlaying of, the various steps constituting the conspiracy which are said to have followed, and which history is offered as furnishing the light in which such subsequent steps are to be interpreted. This is not objectionable, and may be essential to a right understanding of the cause of action said to arise from the Anti-Trust Act. United States v. E. I. Du Pont de Nemours (C.C.) 188 F. 127, 134, 151. Out of the matter stated in this paragraph emerges that in the year 1903, the year that the plaintiff engaged in such powder trade, the defendant the E. I. Du Pont de Nemours Powder Company (hereinafter called the New Jersey Company) was incorporated under the laws of the state of New Jersey as a holding company, and to which, it is alleged, was transferred the controlling interest in the capital stock and properties of a large number of (named) corporations which had theretofore been engaged in such trade, including the served defendants, and in it it is alleged that certain (named) individuals erroneously called defendants, as officers and directors of two of the moving defendants, viz., the New Jersey Company and the International Smokeless Powder & Chemical Company, 'instituted, directed, ratified, or approved the various unlawful and wrongful acts hereinbefore and hereinafter complained of; * * * that, by reason of the matters and things alleged and set forth in this paragraph, the defendants succeeded in establishing within themselves, and have ever since maintained, a practically complete monopoly in interstate trade in powder and other explosives amounting to about ninety-five per cent. (95%) of said entire trade, and ever since have been, and now are, engaged in a combination and conspiracy to unreasonably restrain and monopolize said trade throughout the United States and foreign countries, and have suppressed competition and have fixed prices of powder and other explosives arbitrarily and unreasonably, and have driven independent...