Ferguson v. Ford Motor Co.

• Decision Date: 21 April 1948
• Citation: 77 F. Supp. 425
• Parties: FERGUSON et al. v. FORD MOTOR CO. et al.
• Court: U.S. District Court — Southern District of New York

77 F. Supp. 425

FERGUSON et al. v. FORD MOTOR CO. et al.

District Court, S. D. New York.

April 21, 1948.

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Cahill, Gordon, Zachry & Reindel, of New York City (James A. Fowler, Jr., and Mathias F. Correa, both of New York City, of counsel), and Carlson, Pitzner, Hubbard & Wolfe, of New York City (Richard R. Wolfe, of Chicago, Ill., of counsel), for plaintiffs.

Simpson, Thacher & Bartlett, of Washington, D. C. (Whitney North Seymour, of New York City, of counsel), for defendants Ford Motor Company and Henry Ford, II.

Cravath, Swaine & Moore, of New York City (Bruce Bromley, of New York City, of counsel), for defendants Dearborn Motors Corporation and Ernest C. Kanzler.

Duncombe, Pleasants & Donovan, of New York City (Samuel A. Pleasants, of New York City, of counsel), for defendant Sherman Tractor & Equipment Co., Inc. RYAN, District Judge.

Defendants move to dismiss the complaint on the ground that the District Court for the Southern District of New York is not the appropriate forum for the trial of this action, claiming that a determination of the issues would be had at greater convenience to the parties and witnesses if the action were brought in the United States District Court, Eastern Disrict of Michigan, Southern Division, Detroit; and, in addition and as to the second cause of action, that this court has no jurisdiction because the venue requirements for patent infringement suits are not satisfied. The defendant, Dearborn Motors Corporation, adds as a further ground for dismissal that to require it to defend this action in the Southern District of New York would be an undue burden on interstate commerce.

We shall consider only the facts involving those defendants who have been served by plaintiffs, to wit: Ford Motor Company, Dearborn Motors Corporation and its president, Ernest C. Kanzler, Henry Ford II and Sherman Tractor & Equipment Co., Incorporated.

Ford Motor Company is a Delaware corporation qualified to do business in the State of New York, maintaining a regular and established place of business in this district. Dearborn Motors Corporation is also a Delaware corporation and transacts business regularly here. Ernest C. Kanzler and Henry Ford II are residents of Michigan. Sherman Tractor & Equipment Co., Incorporated, is a New York corporation and maintains a regular and established place of business within this district. The plaintiffs are Harry Ferguson, as an individual and a British citizen, and Harry Ferguson, Inc., a Delaware corporation. The complaint alleges three claims for relief against twelve defendants.

The first cause of action alleges, in substance, that in 1938, the late Henry Ford and Harry Ferguson entered into an oral agreement terminable by either party at any time, for the production and sale of a farm tractor, invented and patented by Ferguson; that operations were continued under this agreement between Ford Motor Company and the corporate plaintiff from 1938 until the end of 1946; that it was a relationship of good faith and mutual confidence; that defendants conspired to breach the alleged agreement, to destroy plaintiffs' business and to appropriate it through defendant, Dearborn Motors. It is alleged that this conspiracy violated sections 1 and 2 of the Sherman Act and sections 3 and 7 of the Clayton Act with damages of $80,000,000 and a prayer for treble that sum under section 4 of the Clayton Act. 15 U.S.C.A. §§ 1, 2, 14, 15 and 18.

The second cause of action alleges the same facts as to the conspiracy but claims that one facet of the plan was to infringe deliberately certain patents of Ferguson's by copying the Ferguson system tractor and selling such allegedly infringing tractors in violation of these patents, with resulting damage of $3,700,000 and asking judgment in three times this amount. 35 U.S.C.A. § 67.

The third cause of action is an alleged equitable claim, as well as a tort claim, based upon and incorporating the allegations of the first and second causes of action, but alleged to be ancillary to them, and does not ask for damages additional to their total of $251,100,000.

Many of the affidavits and a large portion of the briefs submitted discuss the alleged merits (as well as the lack of merit) of plaintiffs' claims. The consideration of these matters is neither proper nor necessary to the determination of the motion now before us; their appraisal is to be arrived at after trial only. Much, too, has been said by plaintiffs of the impossibility of securing a jury in Detroit "which would be wholly unbiased and without prejudice in this case," and to support this contention have submitted copies of proceedings had in a suit brought by Henry Ford, plaintiff, against The Tribune Company et al., defendants, in the Michigan Circuit Court for the County of Wayne. An opinion of the court in that litigation in February, 1919, also submitted, held that "it would be impossible to secure a jury from the body of this County Wayne that would be wholly without prejudice in a case in which Henry Ford is one of the parties litigant," and granted a change of venue to an adjoining county. We reject this finding of a local court, made almost thirty years ago, not only as remote and of no value as an indication of present bias, but upon careful review conclude that it should receive no weight whatsoever even to demonstrate conditions as allleged to have existed in Detroit in 1919.

We come then to the substantial issues presented on this motion.

The Supreme Court has clearly established that federal courts do have inherent power to dismiss complaints on the ground of forum non conveniens. Gulf Oil Corporation v. Gilbert, 1947, 330 U.S. 501, 67 S.Ct. 839. The Court distinguished the cases of Miles v. Illinois Cent. R. Co., 1942, 315 U.S. 698, 62 S.Ct. 827, 86 L.Ed. 1129, and Baltimore & O. R. Co. v. Kepner, 1941, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28, 136 A.L.R. 1222, for the reason that the venue provision of the Federal Employers' Liability Act, 45 U.S.C.A. § 56, was a "special venue" provision, and that Congress in enacting it intended to prohibit the application of this principle.

Plaintiffs contend that the venue provisions of the Clayton Act, under which this action is brought, are also special venue statutes and are governed by the same rule. They maintain that this court does not have authority to dismiss their first cause of action on the ground of forum non conveniens. Neither the Supreme Court nor any federal appellate court appears to have passed on this question. The United States District Court for the Southern District of California did first hold that civil suits under the Clayton Act fell within the special venue category United States v. Standard Oil Co. of California, D.C., July, 1947, 7 F.R.D. 338, but later limited the classification to include only those venue sections whose legislative history and background indicated legislative intent to foreclose the question of forum non conveniens and not to include all venue sections drafted for particular causes of action. United States v. National City Lines, Inc., Sept. 1947, D.C., 7 F.R.D. 456. It is interesting to note that although in the former case the doctrine was held inapplicable, in a subsequent criminal action involving exactly the same facts defendant was granted a change of venue to a more convenient forum under Rule 21(b) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. following section 687. United States v. National City Lines, Inc., D.C. Aug. 1947, 7 F.R.D. 393. The United States District Court for the Western District of Pennsylvania has held that the venue section of the Securities Act of 1933, 15 U.S.C.A. § 77v(a), is a special venue provision for the purposes of this rule. Securities Exchange Commission v. Wimer, D.C., 75 F.Supp. 955. This court in a recent anti-trust case, after holding that the facts did not call for the exercise of discretion in favor of the defendant, by way of dictum expressed the thought that in any event the doctrine of forum non conveniens was not applicable to suits under the anti-trust laws. 15 U.C.S.A. §§ 15, 22; Fifth & Walnut, Inc., et al. v. Loew's Inc., et al., S.D.N.Y., 76 F.Supp. 64. However, with the issue now directly posed, re-examination of all relevant factors has been made. While Mr. Justice Jackson in the Gulf Oil case, supra, spoke in terms of "special venue" statutes foreclosing the doctrine of forum non conveniens, it is to be noted that the Supreme Court examined the particular legislative background of the FELA venue provision when passing upon this question in Miles v. Illinois Central R. Co., supra; and only after so doing did it conclude that the Congress deliberately chose to give plaintiff in such actions the absolute right to select any forum within the statute's scope. Following a recognized canon of statutory construction (Moore Ice Cream Co. v. Rose, 1933, 289 U.S. 373, 377, 53 S.Ct. 620, 77 L.Ed. 1265), the Court also looked to the circumstances under which the statute was passed and the expressions of Congress to find that as for FELA actions, that body "loaded the dice" in favor of a plaintiff.

There are other factors which persuade that the special venue statute rule is applicable only on the basis of individual legislative history.

The United States Code is replete with venue sections for particular types of suits, viz., FELA, 45 U.S.C.A. § 56; Clayton Act, 15 U.S.C.A. §§ 15, 22; Judicial Code, 28 U.S.C.A. § 105; Copyright Actions, 17 U.S. C.A. § 35; Stockholders' Derivative Suits, 28 U.S.C.A. § 112; Securities Act, 15 U.S. C.A. § 77v(a). To exclude the doctrine of forum non conveniens from all such suits and from suits on similar causes of action would be to emasculate it. It seems that had the Supreme Court meant to limit the operation of the rule so much it would have done so explicitly. Finally, the Supreme Court in the case of Koster v. Lumbermens Mutual Co., 1947, 330 U.S. 518...