Johnson & Johnson v. Weissbard

• Decision Date: 02 March 1953
• Docket Number: A--54,Nos. A--53,s. A--53
• Citation: 11 N.J. 552,95 A.2d 403
• Parties: JOHNSON & JOHNSON et al. v. WEISSBARD et al. BURROUGHS WELLCOME & CO. (U.S.A.) inc. v. WEISSBARD et al.
• Court: New Jersey Supreme Court

Page 552

11 N.J. 552

95 A.2d 403

JOHNSON & JOHNSON et al. v. WEISSBARD et al.

BURROUGHS WELLCOME & CO. (U.S.A.) inc. v. WEISSBARD et al.

Nos. A--53, A--54.

Supreme Court of New Jersey.

Argued Nov. 24, 1952.

Decided March 2, 1953.

Joseph H. Stamler, Newark, argued the cause for appellant Johnson & Johnson (Lorentz & Stamler, Newark, attorneys).

Edward J. O'Mara, Jersey City, argued the cause for appellant Colgate-Palmolive-Peet Co. (O'Mara, Schumann, Davis & Lynch, Jersey City, attorneys).

William H. Osborne, Jr., Newark, argued the cause for appellant Lambert Pharmacal Co. (Pitney, Hardin & Ward, Newark, attorneys).

Leo Blumberg, Newark, argued the cause for appellant Burroughs Wellcome & Co., (U.S.A.) Inc. (Gross & Blumberg, Newark, attorneys).

Sanford Freedman, Newark, argued the cause for respondents (Samuel Kaufman and John M. Kaufman, Newark, on the brief; Bilder, Bilder & Kaufman, Newark, attorneys).

The opinion of the court was delivered by

HEHER, J.

The issues here are ruled by the principles applied in the companion cases of Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 95 A.2d 391 and Hoffmann-LaRoche Inc. v. Weissbard Bros., 11 N.J. 541, 95 A.2d 398.

The judgments or orders under appeal vacated injunctions directed to defendants, prohibiting the advertising for sale, offering for sale, and the sale at retail of trade-marked and branded pharmaceutical preparations, surgical dressings and bandages, medicated toilet articles, and like commodities severally produced, sold and distributed by plaintiffs, at less than the retail prices established by plaintiffs for the trade 'from time to time' pursuant to the New Jersey Fair Trade Act. R.S. 56:4--3 et seq., N.J.S.A. The injunctions issued in accordance with final decrees of the old Court of Chancery entered June 1, 1937 on a bill of complaint tendered by the plaintiffs in A--53, Johnson & Johnson, Colgate-Palmolive-Peet Company, and Lambert Pharmacal Company, and on June 23, 1941 on the complaint of the plaintiff in A--54, Burroughs Wellcome & Co. (U.S.A.) Inc., Johnson & Johnson v. Weissbard Bros., 121 N.J.Eq. 585, 191 A. 873 (E. & A.1937); Burroughs Wellcome & Co. (U.S.A.) Inc. v. Weissbard Bros., 129 N.J.Eq. 563, 20 A.2d 445 (Ch.1941), affirmed 130 N.J.Eq. 605, 23 A.2d 396 (E. & A.1942).

Defendants are noncontracting retailers. They invoke the Sherman Anti-Trust Act of July 2, 1890 (26 Stat. 209, c. 647; 15 U.S.C.A. § 1), following the holding of the United States Supreme Court in Schwegmann Bros. v. Calvert Distillers Corporation, 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035, 19 A.L.R.2d 1119 (1952), that the immunizing provision of the Miller-Tydings amendment of the Sherman Act adopted August 17, 1937 (50 Stat. 673, 693, c. 690; 15 U.S.C.A. § 1) has reference to voluntary contracts or agreements prescribing minimum resale prices for the specified commodities in interstate commerce and does not encompass 'nonsigners.'

It is said that the motions to vacate the injunctions were improvidently granted for want of a ground recognized by Rule 3:60--2. 'Mistake, inadvertence, surprise, or excusable neglect,' 'newly discovered evidence,' 'fraud, misrepresentation, or other misconduct of an adverse party,' are ruled out; and it is urged that the underlying decrees are not void for want of jurisdiction of the subject matter or the parties. But the rule also provides that a final judgment or order may be vacated where, subdivision (5), 'it is no longer equitable that the judgment or order should have prospective application,' or, subdivision (6), for 'any other reason testifying relief from the operation of the judgment or order,' and these provisions comprehend the grounds advanced here.

Quite apart from the rule, a court of equity has inherent jurisdiction to vacate or modify an injunction when by reason of a subsequent alteration in the rights and interests of the parties or a change of circumstances, the continued enforcement of the injunctive process would be inequitable, oppressive, or unjust, or in contravention of the policy of the law. Milk Wagon Drivers Union v. Meadowmoor Dairies, 312 U.S. 287, 61 S.Ct. 552, 85 L.Ed. 836 (1941). An injunction is necessarily ambulatory. Its remedial efficacy varies with time and circumstance; and it is controlled accordingly to serve the ends of essential justice. Even without a reservation of power to modify the decree for an injunction,

'power there still would be by force of principles inherent in the jurisdiction of the chancery. A continuing decree of injunction directed to events to come is subject always to adaptation as events may shape the need. * * * The distinction is between restraints that give protection to rights fully accrued upon facts so nearly permanent as to be substantially impervious to change, and those that involve the supervision of changing conduct or conditions and are thus provisional and tentative. * * * The result is all one whether the decree has been entered after litigation or by consent. * * * In either event, a court does not abdicate its power to revoke or modify its mandate, if satisfied that what it has been doing has been turned through changing circumstances into an instrument of wrong. We reject the argument for the interveners that a decree entered upon consent is to be treated as a contract and not as a judicial act. A different view would not help them, for they were not parties to the contract, if any there was.' United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 462, 76 L.Ed. 999 (1931).

See, also, Ladner v. Siegel, 298 Pa. 487, 148 A. 699, 68 A.L.R. 1172 (Sup.Ct.1930).

But it is said in A--53 that neither in the notice of the motion to vacate the injunction nor in the stipulation is it shown that 'it would have been grossly unjust or inequitable to continue the effectiveness of the Injunction'; and that the Miller-Tydings Act 'had absolutely no effect upon the decree entered prior to its passage,' and the 'determination of the constitutionality' of the State Fair Trade Act by the Court of Errors and Appeals 'has been in no wise affected by the Schwegmann decision.'

Where compliance with the injunction of the state court would result in the restraint of interstate trade interdicted by the Sherman Act, the injunction must be vacated in keeping with the Supremacy Clause of the United States Constitution. Article VI, paragraph 2. The cases cited Contra are not in point. It goes without saying that a continuing injunction commanding adherence to a price-maintenance arrangement in violation of the Sherman Act has no legal force or vitality....