Donnelly Garment Co. v. INTERNATIONAL LADIES'GW UNION

• Decision Date: 14 February 1944
• Docket Number: No. 2924.,2924.
• Citation: 55 F. Supp. 572
• 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

55 F. Supp. 572

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.

February 14, 1944.

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

Emil Schlesinger, of New York City, Charles A. Horsky, and John T. Sapienza, both of Washington, D. C., and Clifton Langsdale, of Kansas City, Mo. (Covington, Burling, Rublee, Acheson & Shorb, of Washington, D. C., of counsel), for defendants.

Frank E. Tyler and Lucian Lane, both of Kansas City, Mo., for interveners.

NORDBYE, District Judge.

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

The factual background has been so frequently stated in prior decisions that no further recital seems necessary in this proceeding. Suffice it to say that on July 5, 1937, plaintiffs instituted this suit to enjoin the defendants from certain acts allegedly done or threatened in furtherance of a conspiracy to destroy plaintiffs' interstate trade or commerce in violation of the antitrust laws of the United States. A restraining order was issued on July 5, 1937. A motion to dismiss the bill and to vacate the restraining order was denied on August 13, 1937. D.C., 20 F.Supp. 767. A subsequent motion was made to dismiss the bill and to vacate the restraining order, which motion, together with an application for a temporary injunction, was referred to a three-judge court. The motion to dismiss was denied, and a temporary injunction was issued by the three-judge court on December 31, 1937 (D.C., 21 F.Supp. 807), which injunction was vacated by the Supreme Court of the United States on May 16, 1938 (304 U.S. 243, 58 S.Ct. 875, 82 L.Ed. 1316) for lack of jurisdiction, and on July 18, 1938, the restraining order of July 5, 1937, was continued with modifications during the appeal from an order of this court wherein the bill of complaint was dismissed (D.C., 23 F.Supp. 998). The order dismissing the bill of complaint, however, was reversed by the Circuit Court of Appeals on January 28, 1939. 8 Cir., 99 F.2d 309. The matter went to trial on its merits, and on April 26, 1939, a permanent injunction was issued. On August 29, 1941, the latter decree was vacated for want of jurisdiction (8 Cir., 119 F.2d 892), but the court on rehearing (8 Cir., 121 F.2d 561) permitted the plaintiffs to apply to the trial court for leave to dismiss as to the resident defendants and to retain jurisdiction on the grounds of diversity of citizenship as against the remaining defendants. This procedure was followed and the court permitted the dismissal and retained as defendants the non-residents against whom the action proceeded to trial de novo. D.C., 47 F.Supp. 61; Donnelly Garment Co. v. Dubinsky, D.C., 47 F.Supp. 65. As of this date, the Court has filed its decision denying any injunctive relief to the plaintiffs and the interveners as against the remaining defendants. The application for assessment of costs, expenses and attorneys' fees, however, is lodged in the original Sherman anti-trust action.

We commence, therefore, with the premise that all of the restraining orders and injunctions were erroneously issued because at no time did the court have jurisdiction. The decision of the court on August 29, 1941, finally determined that the Sherman Act did not vest jurisdiction in the court and hence any injunctive orders which had been issued were void. Bonds were required as a condition for the issuance of the temporary restraining order of July 5, 1937, in the sum of $2,000; for the issuance of the three-judge court temporary injunction of December 31, 1937, in the sum of $10,000; and for the continuation with modifications of the original restraining order of July 18, 1938, in the sum of $25,000. The Central Surety Company was surety on the three bonds mentioned. No bond was required in connection with the issuance of the permanent injunction. The plaintiffs, interveners and surety have answered and have raised no objection to the jurisdiction of this Court to determine the liability of the principals and the surety on the respective bonds in the original proceeding. The power of this Court to determine in this proceeding the question of liability on the bonds and to assess the amount of damages is recognized by Tullock v. Mullvane, 1901, 184 U.S. 497, 22 S.Ct. 372, 46 L.Ed. 657; Meyers v. Block, 120 U.S. 206, 7 S.Ct. 525, 30 L.Ed. 642; Russell v. Farley, 105 U.S. 433, 26 L.Ed. 1060.

In that three separate bonds are involved, it becomes necessary to discuss and consider the liability and scope of each bond. No damage other than costs, expenses and attorneys' fees in connection with the litigation are claimed. Defendants contend, however, that such damages, that is, costs and expenses and attorneys' fees, aggregate $102,913.57. These expenses were all paid by the International Ladies' Garment Workers' Union, as to which a dismissal was entered by the plaintiffs and interveners in pursuance of the permission granted by this Court. It is defendants' position that the surety is jointly liable with both plaintiffs and interveners for $37,000, the aggregate amount of the bonds; that the plaintiffs are liable for the full amount claimed; and in that the interveners did not become parties to this proceeding until September 23, 1937, and appear as principals only on the $10,000 and $25,000 bonds, their liability is computed to be $97,055.52. It fairly appears from the evidence that the sum of $102,913.57 was actually spent by International for expenses and attorneys' fees in connection with the litigation which was pending between the parties from July 5, 1937, until the Fall of 1941. In view, however, of the disposition of the application herein, the Court does not determine whether all of the expenses and attorneys' fees were necessary or reasonable.

It was on July 5, 1937, that this court, through Judge Otis, granted to plaintiffs a temporary restraining order as prayed returnable in five days, conditioned upon the filing of a bond in the sum of $2,000, to "pay such costs and damages as may be incurred or suffered by reason of the wrongful issuance of said restraining order or injunction." A bond in accordance therewith was filed conditioned for the payment of "all such costs and damages as may be incurred or suffered by reason of the wrongful issuance of said restraining order or injunction should it be thereafter dissolved or it be decided that said temporary restraining order was wrongfully obtained." It will be noted that neither the order of the court nor the provisions of this bond provided that any attorneys' fees or expenses should be secured. The condition of the bond is limited to "costs and damages" incurred or suffered. Furthermore, there is no provision in the bond which in any way secures the defendants for any costs and damages occasioned by any defense against the granting of any other injunctive relief sought in the same proceeding and which thereafter was denied. The broad provisions and undertaking as will be found in Section 7 of the Norris-LaGuardia Act, 29 U.S.C.A. § 107, are not included. The pertinent portion of this section in this regard reads:

"No temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security in an amount to be fixed by the court sufficient to recompense those enjoined for any loss, expense, or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs (together with a reasonable attorney's fee) and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the court."

The reasons for the variance between the provisions of the $2,000 bond and a bond required by the Norris-LaGuardia Act are evident. When this suit was commenced, plaintiffs did not assume to frame the bill of complaint under the Norris-LaGuardia Act. They took the position that a labor dispute was not involved; that there was no controversy between the employer and the employees as to wages, working conditions, or any other controversy. They asserted that the International and the individual defendants were mere interlopers carrying on a campaign to destroy the business of the plaintiffs by fraud, violence and secondary boycott. When the temporary restraining order of July 5, 1937, was issued, the court in construing the bill of complaint agreed that a labor dispute did not exist and therefore issued a temporary restraining order without requiring plaintiffs to meet the conditions precedent as outlined in the Norris-LaGuardia Act relative to the court's jurisdiction in granting a restraining order in a labor dispute. It is very clear, therefore, that the $2,000 bond which the court required was not the type of bond which was mandatory under the Norris-LaGuardia Act, but rather a bond which complied with the provisions of the Clayton Act, the pertinent portion of which reads:

"Except as otherwise provided in section 26 of Title 15, no restraining order or interlocutory order of injunction shall issue, except upon the giving of security by the applicant in such sum as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained thereby." 28 U.S.C.A. § 382.

Moreover, that the court, in granting the restraining order and requiring the particular form of bond to be issued, was of the opinion that a labor dispute did not exist as to the issues which were set forth in the bill of complaint, is substantiated by the court's order of August 13, 1937 (20 F. Supp. 767), wherein...