Gordon v. Loew's Incorporated

• Decision Date: 31 July 1957
• Docket Number: 12215.,No. 12214,12214
• Citation: 247 F.2d 451
• Parties: Frank I. GORDON and Marion V. Gordon, Appellants, v. LOEW'S Incorporated, a Delaware Corporation, Paramount Film Distributing Corporation, a Delaware Corporation, RKO Radio Pictures, Inc., a Delaware Corporation, Twentieth Century-Fox Film Corporation, a Delaware Corporation, Warner Bros. Pictures Distributing Corporation, a New York Corporation, Columbia Pictures Corporation, a New York Corporation, Universal Film Exchanges, Inc., a Delaware Corporation, and United Artists Corporation, a Delaware Corporation. John C. GORDON, Helen Gordon and Joseph Gordon, Appellants, v. LOEW'S Incorporated, a Delaware Corporation, Paramount Film Distributing Corporation, a Delaware Corporation, RKO Radio Pictures, Inc., a Delaware Corporation, Twentieth Century-Fox Film Corporation, a Delaware Corporation, Warner Bros. Pictures Distributing Corporation, a New York Corporation, Columbia Pictures Corporation, a New York Corporation, Universal Film Exchanges, Inc., a Delaware Corporation, and United Artists Corporation, a Delaware Corporation.
• Court: U.S. Court of Appeals — Third Circuit

247 F.2d 451 (1957)

Frank I. GORDON and Marion V. Gordon, Appellants, v. LOEW'S Incorporated, a Delaware Corporation, Paramount Film Distributing Corporation, a Delaware Corporation, RKO Radio Pictures, Inc., a Delaware Corporation, Twentieth Century-Fox Film Corporation, a Delaware Corporation, Warner Bros. Pictures Distributing Corporation, a New York Corporation, Columbia Pictures Corporation, a New York Corporation, Universal Film Exchanges, Inc., a Delaware Corporation, and United Artists Corporation, a Delaware Corporation.

John C. GORDON, Helen Gordon and Joseph Gordon, Appellants, v. LOEW'S Incorporated, a Delaware Corporation, Paramount Film Distributing Corporation, a Delaware Corporation, RKO Radio Pictures, Inc., a Delaware Corporation, Twentieth Century-Fox Film Corporation, a Delaware Corporation, Warner Bros. Pictures Distributing Corporation, a New York Corporation, Columbia Pictures Corporation, a New York Corporation, Universal Film Exchanges, Inc., a Delaware Corporation, and United Artists Corporation, a Delaware Corporation.

Nos. 12214, 12215.

United States Court of Appeals Third Circuit.

Argued June 11, 1957.

Decided July 31, 1957.

As amended on Denial of Rehearing September 16, 1957.

Richard Orlikoff, Chicago, Ill. (Howard Engel, Stein, Stein & Engel, Jersey City, N. J., Wolff, Frankel, Pennish & Orlikoff, Chicago, Ill., on the brief), for appellant.

Willard G. Woelper, Newark, N. J. (Toner, Crowley, Woelper & Vanderbilt, Newark, N. J., John F. Caskey, Stanley

Godofsky, Leonard Stecher, E. Compton Timberlake, Marvin H. Ginsky, Bernard E. Kalman, New York City, on the brief), for appellees.

Before MARIS, STALEY and HASTIE, Circuit Judges.

MARIS, Circuit Judge.

These appeals from summary judgments entered by the District Court for the District of New Jersey in favor of the defendants raise the question whether the plaintiffs' actions for treble damages under section 4 of the Clayton Act¹ are barred by an applicable statute of limitations.

The complaints, one by Frank I. Gordon and Marion V. Gordon and the other by John C. Gordon, Helen Gordon and Joseph Gordon, were each filed in the district court on March 3, 1955 against the same defendants, Loew's Incorporated, a Delaware corporation, Paramount Film Distributing Corporation, a Delaware corporation, Paramount Pictures, Inc., a New York corporation, RKO Radio Pictures, Inc., a Delaware corporation, Twentieth Century-Fox Film Corporation, a New York corporation, Twentieth Century-Fox Film Corporation, a Delaware corporation, Warner Bros. Pictures Distributing Corporation, a New York corporation, Columbia Pictures Corporation, a New York corporation, Universal Film Exchanges, Inc., a Delaware corporation, and United Artists Corporation, a Delaware corporation, all of which were motion picture producers or distributors.

Plaintiffs Frank and Marion Gordon asserted in their complaint that they were the sole stockholders of Northwest Theatre Company, an Illinois corporation which had been dissolved on February 16, 1950 and which had leased and operated the Wicker Park Theatre in Chicago from April 15, 1929 to May 14, 1949. Plaintiffs John, Helen and Joseph Gordon asserted in their complaint that they were the sole stockholders of Gordon Brothers Treatre Company, an Illinois corporation which had been dissolved on January 25, 1949 and which had operated the Chopin Theatre in Chicago from September 1, 1922 to January 1, 1947.

Each complaint asserted that the defendants had uniformly followed a system which violated the antitrust laws of releasing feature motion pictures for exhibition in Chicago to the injury of the theatre operated by the corporation of which the plaintiffs were surviving stockholders. Each complaint sought to recover treble damages for the alleged injury to the business and property of the corporation. All the plaintiffs claim the right to bring these suits as surviving stockholders of their respective corporations and, in addition, all of them except Joseph Gordon claim the right to bring the suits as assignees from their respective corporations of the causes of action sued on.

By an earlier order with which we are not here concerned the district court dismissed the complaints as against defendants Paramount Pictures, Inc., and Twentieth Century-Fox Film Corporation, New York corporations, for improper venue. Thereafter, the remaining defendants filed motions for summary judgment, asserting that the causes of action had abated at the expiration of two years after the dissolution of the respective corporations by virtue of the provisions of section 94 of the Illinois Business Corporation Act, S.H.A. ch. 32, § 157.94 or, in the alternative, that the actions were barred by the New Jersey statute of limitations. The district court decided that the causes of action had abated under the Illinois Business Corporation Act and accordingly entered judgment in each case dismissing the complaint. D.C., 147 F.Supp. 398. These appeals followed. Since substantially the same questions are involved in each case the appeals were consolidated and considered together in this court.

At the time these suits were instituted there was no federal statute of limitations applicable to suits under the federal antitrust laws,² it being then settled that the statutes of limitations of the state in which the district court was sitting were to be applied by that court to federal antitrust litigation.³ Accordingly, since these cases were brought in the District Court in New Jersey we must determine whether the statutes of that state operate to bar their prosecution.

At the outset we note that New Jersey has not enacted a so-called "borrowing statute," i. e., a law directing that the statute of limitations of the state in which a cause of action arose shall be applied to bar a suit on such cause of action if brought in New Jersey. New Jersey has thus not departed from the settled common law rule of conflict of laws that the forum applies only its own procedural statute of limitations and does not give effect to a statute of another state in which the cause of action arose unless that statute has been held by the state which enacted it to be substantive in nature, operating as a condition terminating the existence of the right instead of merely barring the remedy.⁴ For this reason we do not need to take account of the limitation imposed by section 94 of the Illinois Business Corporation Act⁵ to the extent that it is procedural in nature. And in view of our conclusion as to the applicability of the New Jersey statute we are not called upon to determine the question whether the Illinois statute can have the substantive effect of terminating at the expiration of two years after the dissolution of their respective corporations the causes of action which these plaintiffs as surviving stockholders assert have been given them by the federal antitrust laws.⁶

The sections of the New Jersey Revised Statutes, N.J.S.A., having possible applicability here as statutes of limitations are as follows:

"2A:14-1. 6 years

"Every action at law for trespass to real property, for any tortious injury to real or personal property, for taking, detaining, or converting personal property, for replevin of goods or chattels, for any tortious injury to the rights of another not stated in sections 2A:14-2 and 2A:14-3 of this title, or for recovery upon a contractual claim or liability, express or implied, not under seal, or upon an account other than one which concerns the trade or merchandise between merchant and merchant, their factors, agents and servants, shall be commenced within 6 years next after the cause of any such action shall have accrued." "2A:14-10. 2 years * * *; actions on penal statutes

"All actions at law brought for any forfeiture upon any penal statute made or to be made, shall be commenced within the periods of time herein prescribed:

* * * * * *

"b. Within 2 years next after the offense committed or to be committed against the statute, or cause of action accrued, when the benefit of the forfeiture and the action therefor is or shall be limited or given to the party aggrieved;

* * * * * *

"Where, however, by any statute made or to be made it is provided that any such action is to be brought within a shorter time than that prescribed by this section, such action shall be commenced within the time so provided by that statute." N.J. S.A. 2A:14-1, 10.

Upon examining these statutes we observe that the period of limitation applicable to the actions here in question is six years, as provided by section 2A:14-1 unless the plaintiffs' actions for treble damages under section 4 of the Clayton Act are to be regarded as actions brought for a forfeiture upon a penal statute within the meaning of section 2A:14-10, in which case the limitation of two years provided by that section is applicable.

In the action brought by John, Helen and Joseph Gordon it appears from the face of their complaint that the cause of action sued upon arose more than six years before the complaint was filed. For in that case it is alleged that their corporation ceased operating the theatre in question on January 1, 1947 and was dissolved on January 25, 1949, both dates being more than six years before the suit was instituted. It is therefore, perfectly clear that their suit is barred by section 2A:14-1⁷ if not by section 2A:14-10. The district court accordingly did not err in dismissing it.

In the suit brought by Frank and Marion Gordon, however, it appears from their complaint that their corporation operated the theatre in question up to May 14, 1949 and was not dissolved until February 16, 1950, both dates being less than six years but more than two years prior to the date the suit was instituted. Their suit was, therefore, not barred by section 2A:14-1 but would be barred by section 2A:14-10 if it is applicable.

This brings us to the question whether section 2A:14-10 of the Revised...