In re Wiring Device Antitrust Litigation

• Citation: 498 F. Supp. 79
• Decision Date: 29 September 1980
• Docket Number: MDL No. 331 (JBW). No. 79-C-3007 (JBW).
• Parties: In re WIRING DEVICE ANTITRUST LITIGATION. ROBINETTE HARDWARE CO. v. SQUARE D COMPANY et al.
• Court: U.S. District Court — Eastern District of New York

498 F. Supp. 79

In re WIRING DEVICE ANTITRUST LITIGATION.

ROBINETTE HARDWARE CO. v. SQUARE D COMPANY et al.

MDL No. 331 (JBW). No. 79-C-3007 (JBW).

United States District Court, E. D. New York.

September 29, 1980.

COPYRIGHT MATERIAL OMITTED

I. Walton Bader, Bader & Bader, White Plains, N. Y., for plaintiff Robinette Hardware Co.

David C. Beckwith, Howard W. Fogt, Michael Fischer, Catherine B. Klarfeld, Foley, Lardner, Hollabaugh & Jacobs, Washington, D. C., for defendants Bell Elec. Co. Square D. Co.

Arthur Richenthal, Richenthal, Moss & Abrams, New York City, for defendant Leviton Mfg. Co., Inc.

Sidney Rosdeitcher, Howard Smith, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendant Circle F Industries.

Gilbert S. Edelson, Marc E. Kasowitz, Eugene A. Gaer, Rosenman Colin Freund Lewis & Cohen, New York City, for defendants Eagle Elec. Mfg. Co., Inc.

Laurence Greenwald, Jay P. Mayesh, Alan Kolod, Stroock & Stroock & Lavan, New York City, for defendant Slater Elec., Inc.

MEMORANDUM AND ORDER

WEINSTEIN, Chief Judge:

Plaintiff Robinette, a South Carolina corporation, purchased some seven thousand dollars worth of wiring devices from various distributors in South Carolina about ten years ago. The devices had been manufactured outside South Carolina by defendants, who they are incorporated and have their major place of business outside the state. Claiming that illegal price fixing by the manufacturers had taken place, plaintiff commenced suit in the state courts of South Carolina alleging a breach of that state's antitrust laws.

Defendants removed to the federal court. The case was then transferred to this court by the Judicial Panel on Multidistrict Litigation together with more than thirty other cases pending in the federal courts alleging violations of Section 1 of the Sherman Act. In re Wiring Device Antitrust Litigation, 444 F.Supp. 1348 (Jud.Pan.Mult.Lit.1978). All the federal claims have been disposed of by settlement or dismissal.

Plaintiff moves to remand. Defendants move to dismiss.

I. MOTION TO REMAND

A. Diversity

It is conceded that there is diversity between the parties. Plaintiff argues, however, that its ad damnum clause was expressly limited to less than ten thousand dollars and thus that the jurisdictional amount required for this court to exercise diversity jurisdiction is not present.

It is true that for purposes of calculating the jurisdictional amount a federal court may not look to any amount claimed as interest by the plaintiff which is attributable solely to a delay in payment or to a wrongful deprivation of funds. Such moratory interest, where not an essential ingredient of plaintiff's claim, is interest which has accrued prior to the filing of the complaint and, under the rule of this circuit and others, will be excluded from calculations of the jurisdictional amount. Rafter v. Newark Insurance Co., 355 F.2d 185, 186 (2d Cir. 1966), cert. den., 385 U.S. 828, 87 S.Ct. 60, 17 L.Ed. 63 (1966); Athan v. Hartford Fire Insurance, 73 F.2d 66 (2d Cir. 1934); Regan v. Marshall, 309 F.2d 677 (1st Cir. 1962).

Nevertheless, the sum of approximately eighty thousand dollars in legal fees attributable to this state question litigation is sought by plaintiff's counsel. While rejected in connection with the settlement of the federal question wiring devices cases, we can confidently assume that such a claim would be made in the state courts of South Carolina were this court to grant plaintiff's motion to remand and were there a judgment in favor of Robinette.

While we have found no South Carolina statute or case conferring attorneys' fees on a successful litigant in a state antitrust suit, it is evident that plaintiff would have argued that South Carolina law should be so construed. In that event, attorneys' fees sought in connection with the state litigation would be properly considered by a federal court in determining whether the amount in controversy requirement had been satisfied. Irby Construction Co. v. Universal Surety Co., 326 F.Supp. 1308 (D.Neb.1971); cf. Givens v. W. T. Grant Company, 457 F.2d 612 (2d Cir. 1972). Since more than ten thousand dollars is potentially in controversy, this court has diversity subject matter jurisdiction. 28 U.S.C. § 1332.

The fact that other members of the class plaintiff seeks to represent may have claims of less than ten thousand dollars does not, as plaintiff argues, defeat jurisdiction over those who, like plaintiff, may individually recover more than the jurisdictional amount. Zahn v. International Paper Company, 414 U.S. 291, 300-302, 94 S.Ct. 505, 511-512, 38 L.Ed.2d 511 (1973); Snyder v. Harris, 394 U.S. 332, 335-36, 89 S.Ct. 1053, 1056-57, 22 L.Ed.2d 319 (1969); Clark v. Paul Gray, Inc., 306 U.S. 583, 589-90, 59 S.Ct. 744, 748-49, 83 L.Ed. 1001 (1939). There has been no certification of the class and, as indicated below, dismissal will preclude anyone other than Robinette from becoming a party plaintiff.

B. Federal Question

Plaintiff's complaint has, in addition, raised a federal question grounded in the federal antitrust laws over which federal courts have jurisdiction. 28 U.S.C. § 1337. While plaintiff has alleged only state law claims in his complaint and argues strenuously that by so doing federal jurisdiction has been precluded, it is nevertheless evident that a federal antitrust question is integral to its claims.

Robinette's complaint is based on horizontal price-fixing charges identical in all particulars to those which have previously been asserted against these same defendants in a federal indictment and in more than thirty civil class action suits brought by direct purchasers under section 1 of the Sherman Act. 15 U.S.C. § 1. All of those complaints, like plaintiff's, are in large measure carbon copies of the government's criminal charges.

A federal court need not blind itself to the real gravamen of a claim because plaintiff tenders a blindfold in the form of artificial characterizations in its complaint. Peeking to determine reality is particularly appropriate where it is apparent that the central federal claim is inseparable from the state law theory, and where the question of federal jurisdiction turns on the out-of-state status of the parties and the interstate nature of transactions complained of. Beech-Nut, Inc. v. Warner-Lambert Company, 346 F.Supp. 547 (S.D.N. Y.1972), aff'd, 480 F.2d 801 (2d Cir. 1973); Ulichny v. General Electric Company, 309 F.Supp. 437 (N.D.N.Y.1970); Sylgab Steel & Wire Corp. v. Strickland Transportation Co., 270 F.Supp. 264 (E.D.N.Y.1967); Table Talk Pies of Westchester v. Strauss, 237 F.Supp. 514 (S.D.N.Y.1964); Minkoff v. Scranton Frocks, Inc., 172 F.Supp. 870 (S.D. N.Y.1959); Fay v. American Cystoscope Makers, 98 F.Supp. 278 (S.D.N.Y.1951). Where, as here, all defendants are unquestionably engaged in interstate commerce, those who are damaged from an alleged restraint of trade find a remedy in the federal, not the state, antitrust laws. This conclusion is buttressed in this case by the longstanding holding of the South Carolina Supreme Court, described in more detail below, that the state antitrust statute under which plaintiffs have attempted to bring their action applies only to intrastate commerce and does not reach interstate commerce of any kind. State v. Virginia-Carolina Chemical Co., 71 S.C. 544, 51 S.E. 455 (1905).

In Beech-Nut, Inc. v. Warner-Lambert Company, 346 F.Supp. 547, 548 (S.D.N.Y. 1970), aff'd, 480 F.2d 801 (2d Cir. 1973), a trademark infringement—unfair competition case, the district court held that removal was proper although plaintiff had alleged only state law claims in his complaint, because "the case could have been commenced here under § 43(a) of the Lanham Act ..." This court denied plaintiff's motion to remand in Sylgab Steel & Wire Corp. v. Strickland Transportation Co., 270 F.Supp. 267, 268 (E.D.N.Y.1967), stating that "the mere fact ... that plaintiff makes no specific reference to federal law in his pleading and strenuously objects to the inference that his cause of action is so based, cannot be decisive in determining jurisdiction." The court held in Sylgab that plaintiff's claim, although cast as a state breach of contract action, "arose under" the 1906 Carmack amendment to the Interstate Commerce Act since the federal substantive element involved in plaintiff's claim "was at least sufficiently central to the dispute ... to have some impact on its outcome." Id. at 268.

Under any other rule, "a plaintiff could artfully defeat the right of the defendant to have the cause determined in a federal forum." Minkoff v. Scranton Frocks, Inc., 172 F.Supp. 870, 873 (S.D.N.Y.1959). Investigation beyond the face of the complaint is appropriate where "federal jurisdiction hinges on the parties', or one of them, having a particular status, ..." Fay v. American Cystoscope Makers, Inc., 98 F.Supp. 278, 280 (S.D.N.Y.1951).

In denying a motion to remand in a case virtually identical to the one at bar, the district court for the District of South Carolina found that plaintiffs' careful avoidance of any federal allegation while drafting their complaint did not "prevent removal to the federal court where the main thrust of the complaint is federal in nature." Three J Farms, Inc. v. Alton Box Board Co., 1979-1 Trade Cas. (CCH) (D.S.C.1978), ¶¶ 62,423, 76,547, 76,550, rev'd on other grounds, 609 F.2d 112 (4th Cir. 1979), cert. den., 445 U.S. 911, 100 S.Ct. 1090, 63 L.Ed.2d 327 (1980). And the court went on to hold, in light of the South Carolina Supreme Court's decision in State v. Virginia-Carolina Chemical Co., 71 S.C. 544, 51 S.E. 455 (1905), that "any claim for damages resulting from the importation or the sale of imported corrugated containers is not a South Carolina claim, but purely a federal claim." Id. As in Three J Farms, plaintiff cannot argue that it has brought its action under the antitrust laws of South Carolina since South Carolina has...