Donnelly Garment Co. v. INTERNATIONAL LADIES'GWU

• Decision Date: 10 December 1941
• Docket Number: No. 2924.,2924.
• Citation: 47 F. Supp. 61
• Parties: DONNELLY GARMENT CO. et al. v. INTERNATIONAL LADIES' GARMENT WORKERS' UNION et al. (DONNELLY GARMENT WORKERS' UNION et al., Interveners).
• Court: U.S. District Court — Western District of Missouri

47 F. Supp. 61

DONNELLY GARMENT CO. et al. v. INTERNATIONAL LADIES' GARMENT WORKERS' UNION et al. (DONNELLY GARMENT WORKERS' UNION et al., Interveners).

No. 2924.

District Court, W. D. Missouri, W. D.

December 10, 1941.

James A. Reed, William S. Hogsett, and Robert J. Ingraham, all of Kansas City, Mo., for plaintiffs.

Emil Schlesinger, of New York City, Charles A. Horsky, of Washington, D.C., and Jerome Walsh, of Kansas City, Mo., for defendants.

Gossett, Ellis, Dietrich & Tyler, of Kansas City, Mo., for interveners.

NORDBYE, District Judge (Acting under special assignment to the Western District of Missouri.)

The motions will be considered in the order referred to above. A decree was entered herein enjoining defendants from committing acts of fraud and violence and from conducting a secondary boycott in furtherance of a conspiracy to restrain the interstate trade and commerce of the plaintiffs. On appeal (8 Cir., 119 F.2d 892), the court found that the findings of fact of the court below were sustained by substantial evidence and would be affirmed with some modification if jurisdiction had existed. The court, however, dismissed the complaint because the trial court was without jurisdiction under the Sherman Act, 15 U. S.C.A. § 1, et seq. On petition for rehearing and motion to modify opinion, judgment and mandate, the Circuit Court filed its decision (8 Cir., 121 F.2d 561, 563), wherein it reversed for want of jurisdiction, but remanded the case to the court below for further proceedings not inconsistent with the opinion which was rendered. In that decision, the court granted permission to the plaintiffs to apply to this Court for leave to file their amended complaint showing jurisdiction based upon diversity of citizenship. It was made clear to and by the Appellate Court that, in order to amend, it would be necessary to dismiss the action as to the defendants who were residents of the State of Missouri. The Circuit Court further stated that, if leave to amend be granted, it was for this Court to determine "whether the amendment allowed constitutes the commencement of a new action requiring a complete new trial; whether a new trial must be had in any event upon some or all of the issues under the amended pleadings; whether that court can or should base a decree upon the present record, with or without supplementation; and what decree shall finally be entered."

A reading of the opinion (121 F.2d 561) impels the conclusion that the Circuit Court has unmistakably decided that this Court has the authority to permit the dismissal as to the resident defendants and to permit an amendment of the complaint so as to establish jurisdiction on the grounds of diversity of citizenship. It is fair to assume that the Appellate Court would not have remanded the controversy if it did not entertain the view that this Court possessed the authority to entertain the present motions of the plaintiffs. But it is equally clear that the Circuit Court did not assume to direct this Court in its exercise of such discretion.

The gravamen of the grievance of the plaintiffs against the defendants consists of certain alleged acts of fraud, violence and secondary boycott which were alleged to be the result of a conspiracy in restraint of interstate trade and commerce. The basic facts which are now asserted in the second amended complaint are substantially the same as in the original bill. Under the original bill as amended, it was plaintiffs' theory that the facts alleged constituted a conspiracy in restraint of interstate commerce. Under the second amended complaint, they allege substantially the same facts and contend that they are entitled to the same remedy by way of injunctive relief in a tort action where jurisdiction exists by way of diversity of citizenship. As pointed out by the Circuit Court (121 F.2d 561, 563): "The defendants in this case have all had notice from the beginning of this action of the conduct upon which the plaintiffs base their claimed right to an injunction." The court also stated (121 F.2d at page 563): "The Supreme Court of the United States has fixed the limits of permissible amendment with increasing liberality and has ruled that a change of the legal theory of the action is no longer accepted as a test of the propriety of a proposed amendment. United States v. Memphis Cotton Oil Co., 288 U.S. 62, 68, 53 S.Ct. 278, 77 L.Ed. 619." If, during the trial of this action, the motion to dismiss had been made with leave to establish jurisdiction by reason of diversity of citizenship, no serious question would have arisen as to the authority or the propriety of the Court's entertaining and granting such motions. The fact that non-resident defendants voluntarily appeared in a case in which the legal theory for redress was based on the Sherman Act would in no way limit the discretion of the Court in proceeding to retain jurisdiction. Presumably, when any defendant appears generally in an action, he is deemed to have made an appearance with the knowledge that amendments are granted liberally and will be allowed and freely given when justice requires it. The proposed amendment at this time, rather than during the course of the trial, does not materially change the situation except that the Court must be zealous in protecting the defendants from any prejudice thereby. However, if it is true that these non-resident defendants are guilty of wrongful conduct to plaintiffs' damage, no sufficient reason is suggested why the "increasing liberality" rule in permitting amendments should not be judiciously exercised under the instant circumstances. "The facts constituting the tort were the same, whichever law gave them that effect." Seaboard Air Line Ry. v. Koennecke, 239 U.S. 352, 354, 36 S.Ct. 126, 127, 60 L.Ed....