Deborah Leslie, Ltd. v. Rona, Inc.

• Decision Date: 26 March 1986
• Docket Number: Civ. A. No. 84-0759-S.
• Citation: 630 F. Supp. 1250
• Parties: DEBORAH LESLIE, LTD., Plaintiff, v. RONA, INC. and Erwin Rona, Defendants.
• Court: U.S. District Court — District of Rhode Island

630 F. Supp. 1250

DEBORAH LESLIE, LTD., Plaintiff, v. RONA, INC. and Erwin Rona, Defendants.

Civ. A. No. 84-0759-S.

United States District Court, D. Rhode Island.

March 26, 1986.

Higgins, Cavanagh & Cooney, Gerald C. DeMaria, Robert J. Quigley, Jr., Providence, R.I., for plaintiff.

Mandell, Goodman, Famiglietti & Schwartz, Ltd., Mark S. Mandell, Susan Marcotte Carlin, Providence, R.I., for defendants.

MEMORANDUM AND ORDER

SELYA, District Judge.

This is a civil action brought by means of an eight count complaint filed on December 6, 1985. This court's jurisdiction is premised on the existence of both federal law questions, 28 U.S.C. § 1331, and the presence of diversity of citizenship (including the requisite minimum amount in controversy). 28 U.S.C. § 1332(a).

At issue is the right to a jury trial under the auspices of the National Stamping Act, 15 U.S.C. § 291 et seq. (Act). The inquiry is one of apparent first impression.

I.

In the first two counts of the complaint, the plaintiff, Deborah Leslie, Ltd. (Leslie), seeks compensatory and punitive damages and attorneys' fees under a specific provision of the Act, viz., 15 U.S.C. § 298(b).¹ Leslie is a Delaware corporation headquartered in New York. Plaintiff contends that defendant Rona, Inc. and (inferentially) its sole shareholder and president, Erwin Rona,² entered into an agreement whereby they would supply Leslie with sterling silver castings. The plaintiff alleges that the castings contemplated by the contract were subject to the provisions of the Act, and that the castings actually furnished by Rona, although marked with the word "sterling," failed to contain enough pure silver to warrant the defendants' use of that nomenclature. (Congress has declared that the words "sterling" or "sterling silver" may not be marked on any "article, or upon any tag, card or label attached thereto, or upon any box, package, cover, or wrapper in which such article is encased or enclosed ... unless such article or parts thereof purporting to be silver contains nine hundred and twenty-five one-thousandth parts pure silver," with an allowed divergence in the fineness of "four one thousandth parts from the foregoing standards ..." 15 U.S.C. § 296.) The Bard of Avon, dealing with a somewhat different (but equally suspect) precious metal, captured the essence of the plaintiff's jeremiad poetically:

All that glitters is not gold/

Often have you heard that told.

W. Shakespeare, The Merchant of Venice, act II, sc. vii, 1. 65-66 (1597).

The complaint was answered in due course and the defendants demanded a trial by jury. See Fed.R.Civ.P. 38(b). The court then held the initial scheduling conference mandated by Fed.R.Civ.P. 16(b). At that time, the defendants' jury demand became the cynosure of all eyes. More specifically, its propriety was called into question. Because the defense (as was its due) insisted on pressing the demand and because the plaintiff expressed the opinion that jury intervention was impermissible in a suit under the Act, the court entered an order to show cause why the Rule 38(b) demand should not be stricken and established a briefing schedule. The parties have filed memoranda on the issue. (The last such brief was received on March 7, 1986.) Oral argument has been waived. This rescript comprises the court's conclusions concerning this metalline issue.

II.

The National Gold and Silver Stamping Act of 1906 was amended in 1970 to provide civil remediation for misrepresentation of the quality of articles made from gold and silver. See Pub.L. No. 91-366, § 1(b), 84 Stat. 690 (1970). To delve deeper into the congressional alchemy, section 1(b) of Pub.L. No. 91-366 added sections (b)-(e) to 15 U.S.C. § 298. Id. Subsection (b) (which governs the first two counts of Leslie's complaint) granted private rights of action to competitors, customers of competitors, and subsequent purchasers of materials covered by the Act. 15 U.S.C. § 298(b). Congress provided a relatively full panoply of remedies for violations of this sort. The statute, in addition to injunctive relief, allowed recovery of damages "without respect to the amount in controversy," as well as costs of suit and attorneys' fees. Id.

The benefices of the Act also extended to so-called jewelry trade associations (JTAs). JTAs were allowed to bring suit for injunctive relief in order to prevent offenders from transgressing the law's requirements. 15 U.S.C. § 298(c).³ If successful, an association could recover costs of suit (including counsel fees). Id. The Act is evenhanded; it erects several barriers to deter those who may be inclined to utilize the statute frivolously or maliciously, e.g., 15 U.S.C. §§ 298(c), 298(d), but exegetic treatment of those salutary provisions seems impertinent at this juncture.

Despite the care and detail with which § 298 has been drafted, it fails to indicate explicitly whether the private rights of action which it forges are triable, in whole or in part, to a jury.

III.

The seventh amendment to the federal Constitution is the touchstone of any reasoned analysis anent the availability of civil jury trials in the federal courts. The seventh amendment intones:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.

As is clear from the text, the Framers preserved the right to jury trial in all suits at common law. Their basic purpose was to maintain the right to a jury trial as it existed when they adopted the amendment in 1791. In re U.S. Financial Securities Litigation, 609 F.2d 411, 421 (9th Cir.1979), cert. denied, 446 U.S. 929, 100 S.Ct. 1866, 64 L.Ed.2d 281 (1980), citing Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446-47, 7 L.Ed. 732 (1830). See generally James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 655-63 (1963). Because the seventh amendment speaks in terms of preservation, an historical test has been employed to determine its application. Suits in which traditionally legal rights were to be heard and determined have been jury-eligible; those wherein predominantly equitable remedies were to be administered were thought triable to the court. United States v. Missouri River Breaks Hunt Club, 641 F.2d 689, 692 (9th Cir.1981).

The proposition, however, is more easily stated than applied. The dividing line does not depend on the character of the overall action, but instead is determined by "the nature of the issue to be tried." Ross v. Bernhard, 396 U.S. 531, 538, 90 S.Ct. 733, 738, 24 L.Ed.2d 729 (1970). An issue is considered "legal" when its resolution involves the ascertainment and determination of legal rights or when it justifies a remedy traditionally granted by common law courts. See, e.g., In re Evangelist, 760 F.2d 27, 29 (1st Cir.1985); Whitlock v. Hause, 694 F.2d 861, 863 (1st Cir.1982). An "equitable" issue is one where, whether because of the inadequacy of conventional legal remedies or the need to defeat special kinds of unfairness, courts of chancery have historically intervened. Ex parte Boyd, 105 U.S. (15 Otto) 647, 657, 26 L.Ed. 1200 (1881). See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 478, 82 S.Ct. 894, 900, 8 L.Ed.2d 44 (1962) ("The necessary prerequisite to the right to maintain a suit for an equitable accounting, like all other equitable remedies, is ... the absence of an adequate remedy at law.") (footnote and citation omitted); Schoenthal v. Irving Trust Co., 287 U.S. 92, 95, 53 S.Ct. 50, 51, 77 L.Ed. 185 (1932) (legal remedy of trover adequate; jury trial permitted). Put another way, legal principles control except where some recognized ground of equity jurisprudence flourishes. See Tilton v. Cofield, 93 U.S. (3 Otto) 163, 167, 23 L.Ed. 858 (1876). Howsoever the standard is phrased, the balance is tilted in favor of trial by jury. E.g., Curtis v. Loether, 415 U.S. 189, 195, 94 S.Ct. 1005, 1009, 39 L.Ed.2d 260 (1974) ("When Congress provides for enforcement of statutory rights in a civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.") (footnote omitted).

IV.

Where, as here, an action is founded upon a federal statute, defining "the nature of the issue to be tried" is, in the first instance, a matter of congressional intent. Pernell v. Southall Realty, 416 U.S. 363, 375, 94 S.Ct. 1723, 1729, 40 L.Ed.2d 198 (1974); Pomon v. General Dynamics Corp., 574 F.Supp. 147, 149 (D.R.I.1983). The court thus turns to the archives of Congress in search of pay dirt.

As noted, see ante Part II, the Act itself does not expressly state whether a jury trial can be had under 15 U.S.C. § 298(b). The legislative history is likewise tenebrous. The report of the House Interstate and Foreign Commerce Committee, which discussed the purpose and meaning of Pub L. No. 91-366, does demonstrate that persons suing under the Act are eligible to "recover for any damages which they may have suffered as a result of the false marketing." H.R. Rep. No. 91-928, 91st Cong., 1st Sess. 1, reprinted in 1970 U.S. Code Cong. & Ad. News 3592. To a certain limited degree, this language would tend to indicate that Congress meant plaintiffs to be able to recover "actual" damages for the harm which they suffered. To the same effect, the Senate report to the bill stated that, under the then proposed and now enacted 15 U.S.C. § 298(b), successful plaintiffs "would be able to obtain an injunction and could recover for any actual monetary damage which they may have suffered as a result of the false marketing." Sen.R. No. 91-194, 91st Cong., 1st Sess. 1 (emphasis added). While these passages smack of the creation of a legal remedy, thereby permitting a jury...