Ex-Cell-O Corporation v. City of Chicago

Decision Date14 November 1940
Docket Number7334.,No. 7237,7237
PartiesEX-CELL-O CORPORATION v. CITY OF CHICAGO et al. AMERICAN CAN CO. v. SAME.
CourtU.S. Court of Appeals — Seventh Circuit

Owen Rall, of Chicago, Ill., for appellant Ex-Cell-O Corp.

Andrew D. Collins, of Chicago, Ill., for appellant American Can Co.

Barnett Hodes, Corp. Counsel, Walter V. Schaefer and Chas. P. Horan, Assts. Corp. Counsel, and Alfred Kamin, all of Chicago, Ill., for appellees.

Before EVANS and TREANOR, Circuit Judges, and LINDLEY, District Judge.

LINDLEY, District Judge.

In 7237 plaintiff is a manufacturer of patented machines for the production of paper milk bottles. It licenses certain milk distributors in Chicago to make and sell such bottles and collects valuable license fees therefor dependent upon the number of bottles made and sold. In 7334, plaintiff is a manufacturer of similar bottles which it sells for profit to dairy companies in Chicago. In each complaint, plaintiff sought to obtain a declaratory judgment that the milk ordinance of the City of Chicago does not prohibit the use of paper milk containers, or if it does, that it is invalid. The District Court held that neither plaintiff had any such direct interest in the purpose of the suits as to enable it to maintain the action. From the resulting judgment dismissing the complaint, each plaintiff appeals.

The general rule controlling the decision in this cause is announced by the Supreme Court in Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 601, 67 L. Ed. 1078, as follows: "The party who invokes the power must be able to show, not only that the statute is invalid, but that he has sustained or is immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally."

The immediate question, therefore, is whether either plaintiff is sustaining or in danger of sustaining some direct injury. It is obvious that each plaintiff has an ultimate pecuniary interest in the practical results of the alleged invalid ordinance or the averred erroneous interpretation of the ordinance by the municipal authorities. Is that interest direct, growing out of direct injury within the meaning of the Supreme Court's announcement? As to this, the parties are in sad disagreement.

The courts may, at the suit of proper parties, determine, whether specific acts are unconstitutional or invalid under the law. They may, under similar circumstances, determine whether actions of administrative officials in interpretation and administration of legislative acts, violate the constitutional or legal rights of the suitor. In either instance the power of the court is the same, namely: To determine whether constitutional provision or legislative enactment is transcended either by the legislative act itself or by the administration thereof. This power of judicial determination is delicate in character, one to be exercised with caution and care, for it may result in disapproval of acts of the legislative department or of actions of the executive department, both co-ordinate branches of the government. This care, this caution has been proverbially observed by the courts, lest in their zeal to prevent what they deem unjust, they exceed their judicial authority, assert an unwarranted superiority over their co-ordinate governmental branches and invade fields of policy preserved to the legislative arm or the realm of administrative discretion lodged in the executive branch. Obviously such determination may not be had at the suit of any and all members of the public or in an ex parte proceeding. It can be secured only at the suit of one directly and not remotely interested.

In the present case the American Can Company is not engaged in the distribution of milk. It manufactures and sells paper bottles. The ordinance complained of or the administrative acts of defendants in interpretation and administration thereof, in no wise forbid such manufacture and sale. The act, as interpreted by defendants, is asserted by them to forbid the use of paper milk bottles in Chicago. Defendant is free to manufacture and to sell such bottles wherever it may desire, even in Chicago. Obviously, few, if any, persons will purchase them for use there, but that result we deem incidental, consequential and indirect. Were plaintiff forbidden to manufacture and sell paper milk bottles in Chicago, the effect upon its business would be direct and inevitable.

Thus it is apparent that inevitable financial pecuniary damage is not the test of the sufficiency of plaintiff's interest. Otherwise the right to sue might be extended indefinitely to parties far removed, such as workmen in plaintiff's factories whose wages are reduced or lost because of lack of realization of profits by their employer. Just as clearly, privity of contract is not essential, for defendants are liable for their torts which directly affect the plaintiff, and for breach of their legal duties in that respect, defendants are liable in damages. Rather the whole question is whether the damage claimed springs directly to plaintiff from defendants. If it is incidental, if it is indirect, defendants may not invoke the court's jurisdiction. In L'Hote v. City of New Orleans, 177 U. S. 587, 20 S.Ct. 788, 793, 44 L.Ed. 899, the question presented was whether an ordinance of New Orleans prescribing limits outside of which no woman of lewd character should dwell deprived plaintiffs of their property rights. Plaintiffs owned real estate adjacent to the limited area and alleged that the enforcement of the ordinance would wholly destroy or substantially depreciate the value of their estate. The court held that their property was not directly touched by the legislative action but was affected only in an incidental and consequential way, saying: "Here the ordinance in no manner touched the property of the plaintiffs. It subjected that property to no burden, it cast no duty or restraint upon it, and only in an indirect way can it be said that its pecuniary value was affected by this ordinance. * * * Under these circumstances we are of the opinion that the ordinance in question is not one of which the plaintiffs in error can complain."

In Sproles v. Binford, D.C., 52 F.2d 730, 733, a court of three judges was convened at the suit of the Wichita Falls Motor Company et al. to determine the validity of a state statute which limited the size and weight of motor vehicles operated on the public highways of the state. The Wichita Falls Company was engaged in the manufacture and sale of motor vehicles of the prohibited size. By the act their market in Texas was destroyed, — an effect similar to that upon plaintiff in the present instance. The court said: "The Wichita Falls Motor Company is not using the highways. The basis of its complaint is that it is now, and has been for many years, engaged in the manufacture and sale (frequently on credit) of a (and yet has many on hand), which, uncertain type or certain types of vehicles der the act, it alleges cannot be used on the public highways of Texas, and it therefore cannot sell them, nor collect for those already sold, and that its business will be wrecked by the enforcement of this act. It relies upon Pierce v. Society of the Sisters, 268 U.S. 510 532, 45 S.Ct. 571, 69 L.Ed. 1070 1077, 39 A.L.R. 468, and other similar cases. Such cases, however, are, we think, distinguishable from the case here presented by the motor company. We think the injury alleged by it is too remote to bring it within the rule of such cases."

Other instances of judicial refusal to entertain suits at the instance of parties similarly situated are Georgia Music Operators Association v. City of Atlanta, 183 Ga. 794, 190 S.E. 32; Davis & Farnum Mfg. Co. v. Los Angeles, 189 U.S. 207, 23 S.Ct. 498, 47 L.Ed. 778; Connelly v. Department of Agriculture & Markets et al., 162 Misc. 73, 293 N.Y.S. 711; Meyer Const. Co. v. Corbett, D.C., 7 F.Supp. 616; Arkansas Power & Light Co. v. West Memphis Power & Water Co., 184 Ark. 206, 41 S.W.2d 755; Danciger et al. v. American Express Co., 247 Mo. 209, 152 S.W. 302; Cumberland Pipe Line Co. v....

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