In re Cold Metal Process Co.

• Decision Date: 28 January 1935
• Docket Number: No. 808.,808.
• Parties: In re COLD METAL PROCESS CO.
• Court: U.S. District Court — Western District of Pennsylvania

9 F. Supp. 992

In re COLD METAL PROCESS CO.

No. 808.

District Court, W. D. Pennsylvania.

January 28, 1935.

Reed, Smith, Shaw & McClay, of Pittsburgh, Pa. (by John G. Frazer, John J. Heard, and John C. Bane, Jr., all of Pittsburgh, Pa.), and Byrnes, Stebbins & Blenko, of Pittsburgh, Pa. (by Walter J. Blenko and W. H. Parmelee, both of Pittsburgh, Pa.), for petitioner.

Patterson, Crawford, Arensberg & Dunn, of Pittsburgh, Pa. (by C. F. C. Arensberg, of Pittsburgh, Pa.), and Brown, Critchlow & Flick, of Pittsburgh, Pa. (by Jo. Baily Brown and Paul N. Critchlow, both of Pittsburgh, Pa.), for respondent.

McVICAR, District Judge.

This case is now before us on the motion of the United Engineering & Foundry Company to dismiss the petition of the Cold Metal Process Company for the appointment of arbitrators, etc., under the United States Arbitration Act (9 USCA §§ 1-15). In considering this motion the material averments of fact contained in the petition must be taken as true. These averments so far as necessary to state herein are that the Cold Metal Process Company is a corporation of the state of Ohio, and the United Engineering & Foundry Company is a corporation of the state of Pennsylvania; that on June 20, 1927, these two corporations entered into a written contract which provided, inter alia, that, if certain claims in an application for a patent to the Commissioner of Patents of the United States were granted, the Cold Metal Process Company would grant to the United Engineering & Foundry Company an exclusive license to make, use, and sell rolling mills which included four high hot mills and four high cold mills in which the major portion of the power is supplied to the rolls directly. The contract further provided that, if the parties were unable to agree upon the payment on account of said license, the matter would be submitted to three arbitrators named therein.

The Cold Metal Process Company, at the time of the making of said contract, was not equipped to sell or distribute such rolling mills or rolling mill equipment throughout the United States. The United Engineering & Foundry Company was thus equipped, and had been engaged prior to June 20, 1927, and thereafter, in the manufacture and sale of rolling mill equipment of the character embraced within the contract aforesaid. It was the intention of the parties to the said contract that the United Engineering & Foundry Company should sell and deliver throughout the United States rolling mill equipment covered by the license referred to in said contract. The Cold Metal Process Company was granted a patent covering the claims referred to in said contract. The United Engineering & Foundry Company has made, used, and sold rolling mills under the claims referred to in said contract. It has not made any payment to the Cold Metal Process Company by reason of its use of the claims aforesaid. Two of the arbitrators named in the contract have died; the third has resigned.

The petition of the Cold Metal Process Company prays that this court assume jurisdiction of this petition under the provision of the United States Arbitration Act of February 12, 1925, §§ 1-15 (9 U. S. C. §§ 1 to 15 9 USCA §§ 1-15); that this court direct the parties to proceed to an arbitration to determine the amount payable to the petitioner, if any; to appoint three arbitrators to act under said contract and for general relief. The United Engineering & Foundry Company filed its motion to dismiss on the ground that this court was without jurisdiction under the act aforesaid. In the determination of this motion two questions are involved; the first is whether the Arbitration Act aforesaid is limited to maritime transactions and to contracts involving interstate commerce. If the act is limited to interstate commerce, then the second question arises, whether the contract of June 20, 1927, as to arbitration involves interstate commerce. The sections of the United States Arbitration Act aforesaid which relate to jurisdiction are the first four sections thereof. Section 1 (9 USCA § 1) defines maritime transactions and commerce. Commerce, it states, "means commerce among the several States or with foreign nations." Section 2 (9 USCA § 2) provides: "A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable."

Section 3 (9 USCA § 3) provides for the staying of proceedings under an agreement which contains an issue referable to arbitrators. Section 4 (9 USCA § 4) provides that: "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any court of the United States which, save for such agreement, would have jurisdiction under the judicial code at law, in equity, or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement."

While the act is not clear, I am of the opinion that it was the intent and purpose of Congress to limit the powers conferred in ...