Decorative Stone Co. v. Building Trades Council

• Decision Date: 09 January 1928
• Docket Number: No. 105.,105.
• Citation: 23 F.2d 426
• Parties: DECORATIVE STONE CO. v. BUILDING TRADES COUNCIL OF WESTCHESTER COUNTY et al.
• Court: U.S. Court of Appeals — Second Circuit

23 F.2d 426 (1928)

DECORATIVE STONE CO. v. BUILDING TRADES COUNCIL OF WESTCHESTER COUNTY et al.

No. 105.

Circuit Court of Appeals, Second Circuit.

January 9, 1928.

Gleason, McLanahan, Merritt & Ingraham, of New York City (Walter Gordon Merritt and John W. Simpson, 2d, both of New York City, of counsel), for appellant.

Frank P. Walsh, of New York City (Henry T. Hunt, of New York City, of counsel), for appellees.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

SWAN, Circuit Judge (after stating the facts as above).

The appellant's contentions are based upon the premise that a court of equity, having jurisdiction for the purpose of awarding an injunction, should retain the cause and afford complete relief in accordance with established equitable principles. See Cathcart v. Robinson, 5 Pet. 264, 278, 8 L. Ed. 120; Hamilton Brown Shoe Co. v. Wolf Brothers, 240 U. S. 251, 259, 36 S. Ct. 269, 60 L. Ed. 629. More concretely, appellant urges, first, that the right of action for threefold damages expressly declared in section 4 of the Clayton Act (15 USCA § 15), may be enforced as an incident to the equitable suit authorized by section 16; and, second, that, if this be not true, then there is an implied right of action for actual damages sustained by reason of conduct made wrongful by the anti-trust laws, which right may be enforced as an incident to the suit under section 16.

As to the claim for triple damages, the answer is found in the doctrine of Fleitmann v. Welsbach Co., 240 U. S. 27, 36 S. Ct. 233, 60 L. Ed. 505, where it was held that damages under section 7 of the Sherman Act (26 Stat. 209, 210 15 USCA § 15) could not be awarded in a shareholder's representative action in equity, inasmuch as the act contemplated that the infliction of "the penalty of triple damages" should not be enforced, "otherwise than through the verdict of a jury in a court of common law." This interpretation of the Sherman Act is equally applicable to section 4 of the Clayton Act (38 Stat. 730, 731), which is similar to and substantially a re-enactment of said section 7. The nature of the common-law remedy created by the statute in favor of persons who sustain special damage from a violation of the anti-trust laws is not affected by the fact that section 16 of the Clayton Act has given them also a right to injunctive relief against threatened loss — an equitable remedy not available to them under the Sherman Act, as was held in Paine Lumber Co. v. Neal, 244 U. S. 459, 37 S. Ct. 718, 61 L. Ed. 1256.

The right to recover penal damages still remains a right enforceable only in a common-law action. Courts of equity do not award as incidental relief damages penal in character without express statutory authority, as has frequently been held in copyright and patent cases. Stevens v. Gladding, 17 How. 447, 453, 15 L. Ed. 155; Livingston v. Woodworth, 15 How. 546, 559, 14 L. Ed. 809; Elizabeth v. Pavement Co., 97 U. S. 126, 138, 24 L. Ed. 1000. See, also, United States v. Bernard, 202 F. 728, 732 (C. C. A. 9). The right to equitable relief against threatened loss provided by section 16 cannot be interpreted broadly enough to authorize the court, as incidental to its injunction, to award treble damages for past violations of the anti-trust laws. The reference to this section at page 29 of the Fleitmann opinion (36 S. Ct. 233) contains at least an implication to this effect. And the language of Mr. Justice Sutherland in Anderson v. Shipowners Ass'n, 272 U. S. 359, 47 S. Ct. 125, 71 L. Ed. 298, cannot be understood as asserting a contrary doctrine. His statement is merely: "This is a suit to enjoin the respondents * * * and to recover damages. Such a suit is authorized by sections 4 and 16 of the Clayton Act." We regard this as only descriptive of the general character of the suit; it furnishes no basis for the appellant's contention that he should receive treble damages in equity.

It follows as of course, we think, that the doctrine of the Fleitmann Case cannot be evaded by the complainant consenting to have damages assessed by a jury and waiving demands for triplication of the damages thus found. The jury summoned by a chancellor does not satisfy the requirement of a trial by jury in a common-law action (Cates v. Allen, 149 U. S. 451, 459, 13 S. Ct. 977, 37 L. Ed. 804), and such a trial is what section 7 of the Sherman Act and section 4 of the Clayton...