INTERNATIONAL LADIES'GARMENT WU v. Donnelly G. Co.

• Decision Date: 11 July 1941
• Docket Number: No. 11605.,11605.
• Citation: 121 F.2d 561
• Parties: INTERNATIONAL LADIES' GARMENT WORKERS' UNION et al. v. DONNELLY GARMENT CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

121 F.2d 561 (1941)

INTERNATIONAL LADIES' GARMENT WORKERS' UNION et al. v. DONNELLY GARMENT CO. et al.

No. 11605.

Circuit Court of Appeals, Eighth Circuit.

July 11, 1941.

Emil Schlesinger, of New York City (Nathan Greene, of New York City, Charles A. Horsky, of Washington, D. C., Jerome Walsh, of Kansas City, Mo., and Joseph A. Padway and Graham Claytor, Jr., both of Washington, D. C., on the brief), for appellants.

James A. Reed and William S. Hogsett, both of Kansas City, Mo. (Robert J. Ingraham, of Kansas City, Mo., on the brief), for appellees Donnelly Garment Co. and Donnelly Garment Sales Co.

Frank E. Tyler, of Kansas City, Mo. (Thomas J. Patten and Lucian Lane, both of Kansas City, Mo., on the brief), for appellees Donnelly Garment Workers' Union.

Before GARDNER, SANBORN, and WOODROUGH, Circuit Judges.

SANBORN, Circuit Judge.

The appellees, in their petitions for rehearing, argue that we have misconstrued and misapplied the recent rulings of the Supreme Court referred to in our opinion. They assert that the record sufficiently discloses that the necessary effect of the threatened activities of appellants would be to create or to tend to create a monopoly and to affect prices to the prejudice of consumers, to bring the case within the Sherman Act. Appellees in effect reargue what we have decided. If we have misconstrued the rulings of the Supreme Court referred to in our opinion or have misapplied them to the facts of this case, it is reasonable to assume that that Court will grant certiorari and correct our mistake.

The petitions for rehearing are denied.

The appellees, by their motions to modify our opinion, judgment and mandate, have asked that, in the event their petitions for rehearing are denied, we eliminate from our opinion the direction that the complaint be dismissed for want of jurisdiction; that we substitute directions that the court below grant to the appellees who were plaintiffs in that court (Donnelly Garment Company and Donnelly Garment Sales Company) leave to dismiss this action without prejudice as to defendants who are citizens of Missouri, and to amend the complaint so that it will show diversity of citizenship between the plaintiffs and the remaining defendants and that the action is one of a civil nature in equity where the amount in controversy exceeds $3,000; that we also direct the court below to confine the evidence upon a new trial, after the complaint has been amended, to the question whether jurisdiction on the ground of diversity of citizenship exists; and that we authorize that court, if it finds the existence of such jurisdiction, to re-enter the decree which has been appealed from, with such modifications as we think should be made.

The appellants resist these motions. They challenge the power of the Court to grant the motions and the propriety of their being granted if the Court has the power. They point to the fact that the cause of action was based solely upon a law of the United States, namely, the Sherman Act. The appellants contend that to now substitute a cause of action in equity based upon diversity of citizenship would not be an amendment to the cause of action originally asserted, but would be equivalent to commencing a new and different action and conferring upon the court below jurisdiction of the persons of nonresident defendants who had appeared voluntarily, without according them any opportunity to question the right of that court to compel them to defend in Missouri against a new cause of action not based upon any law of the United States, but arising under the laws of Missouri. The appellants also contend that to authorize the court below to re-enter the present decree, which is now more than two years old and which the court was without jurisdiction to enter and which was based upon findings which that court was without jurisdiction to make, would not be justified and would have the effect of depriving some of the appellants of their rights to defend against a cause of action of which they had no notice until after the decision of this Court in this case.

The tendency of the federal courts has been consistently towards greater liberality in the allowance of amendments to pleadings. Under the rule announced in Union Pacific R. Co. v. Wyler, 1895, 158 U.S. 285, 295-297, 15 S.Ct. 877, 39 L.Ed. 983 (see and compare Whalen v. Gordon, 8 Cir., 95 F. 305), such an amendment as the appellees suggest would constitute a departure from law to law and the commencement of a new action. Union Pacific R. Co. v. Wyler, supra, however, showed that a plaintiff might introduce a completely new cause of action by amendment, but that such an amendment would not relate back to the commencement of his action so as to toll the statute of limitations. In Missouri, Kansas & Texas R. Co. v. Wulf, 226 U.S. 570, 575, 33 S.Ct. 135, 57 L.Ed. 355, Ann.Cas.1914B, 134, a plaintiff brought her suit in reliance upon a state statute. She was later permitted to amend and to recover under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq. If her amendment had constituted the commencement of a new action, it was barred by limitations. The Supreme Court said of the amendment (page 576 of 226 U.S., page 137 of 33 S.Ct., 57 L.Ed. 355, Ann.Cas.1914B, 134): "The change was in form rather than in substance * * *. It introduced no new or different cause of action, nor did it set up any different state of facts as the ground of action, and therefore it related back to the beginning of the suit."

In New York Central & Hudson River R. Co. v. Kinney, 260 U.S. 340, 43 S.Ct. 122, 67 L.Ed. 294, a plaintiff based her action upon the New York Employers' Liability Act, Consol.Laws c. 74, § 1 et seq. The case was tried several times in reliance upon that Act, and, after the case had been pending about eight years, the plaintiff was allowed to amend by alleging facts which brought her claim under the Federal Employers' Liability Act, and she recovered a judgment. The Supreme Court ruled (260 U.S. at page 346, 43 S.Ct. at page 123, 67 L.Ed. 294) that "the declaration was consistent with a wrong under the law of the State or of the United States as the facts might turn out. * * * `The facts constituting the tort were the same, whichever law gave them that effect.' Seaboard Air Line Ry. v. Koennecke, 239 U.S. 352, 354, 36 S.Ct. 126, 60 L.Ed. 324. See also St. Louis, San Francisco & Texas R. Co. v. Smith, 243 U.S. 630, 37 S.Ct. 477, 61 L.Ed. 938. Of course an argument can be made on the other side, but when a defendant has had notice from the beginning that the plaintiff sets up and is trying to enforce a claim against it because of specified conduct, the reasons for the statute of limitations do not exist, and we are of opinion that a liberal rule should be applied." See, also, Manhattan Oil Co. v. Mosby, 8 Cir., 72 F.2d 840, 843, 844; United States v....