Nagler v. Admiral Corporation

• Decision Date: 02 October 1957
• Docket Number: Docket 24249.,No. 364,364
• Parties: Julius NAGLER et al., Plaintiffs-Appellants, v. ADMIRAL CORPORATION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

248 F.2d 319 (1957)

Julius NAGLER et al., Plaintiffs-Appellants, v. ADMIRAL CORPORATION et al., Defendants-Appellees.

No. 364, Docket 24249.

United States Court of Appeals Second Circuit.

Argued June 11, 1957.

Decided October 2, 1957.

COPYRIGHT MATERIAL OMITTED

Arnold Malkan, New York City (Paul Lewin, New York City, on the brief), for plaintiffs-appellants.

George A. Raftery, of O'Brien, Driscoll & Raftery, New York City, for defendants-appellees Admiral Corp. and Admiral Corp. New York Distributing Division, Inc.

Donovan, Leisure, Newton & Irvine, New York City, for defendants-appellees Philco Corp. and Philco Distributors, Inc.

Weil, Gotshal & Manges, New York City, for defendant-appellee Davega Stores Corp.

Cravath, Swaine & Moore, New York City, for defendant-appellee Times Appliance Co., Inc.

Adelman & Shapiro, New York City, for defendant-appellee Warren-Connelly, Inc.

Moses Block, New York City, for defendant-appellee Maytag-Atlantic Co., Inc.

Samuel Spiegel, New York City, for defendants-appellees Roto Broil Corp. of America and Jay Kay Metal Specialties Corp.

William D. Friedmann, of O'Brien, Driscoll & Raftery, New York City, and Melville C. Williams, of Pope & Ballard, Chicago, Ill., on the brief, for defendants-appellees.

Before CLARK, Chief Judge, and CHASE and HINCKS, Circuit Judges.

CLARK, Chief Judge.

This is an antitrust and price-discrimination action for injunction and damages by thirteen retailers in the Greater New York area of radio, television, and electrical appliances. It is brought against twenty-six defendants, of whom twenty-four are "suppliers," i. e., manufacturers, wholesalers, and distributors, and two are retailers operating chain stores in this area. The case is founded upon the allegation that these two defendant-retailers, Davega Stores Corporation and Vim Television and Appliance Stores, Inc., received special price concessions from the supplier defendants. The complaint is in twenty-nine paragraphs and three counts, or "causes of action" as they are labeled. The first cause is for "Defendants' Discrimination Against Plaintiffs in Violation of the Robinson-Patman Act," 15 U.S.C. § 13; while the other causes, reincorporating the allegations of the first, are for violations of the Sherman Act, 15 U.S.C. §§ 1, 2. Ten of the defendants joined in a motion to dismiss for improper pleading under Fed.Rules Civ.Proc., rule 8(a) and (e), and for misjoinder of parties; alternatively they asked for relief under F.R. 10(b), 12(e) and (f), i. e., for separate statements as to each defendant, for a more definite statement, and for striking parts of the complaint. Other defendants have moved for more definite statements; but such motions are not before us, nor have these defendants appeared as appellees. The court, in a substantial opinion, D.C.S.D.N.Y., 144 F. Supp. 772, granted dismissal on the grounds urged and dismissed the complaint as to all the defendants. This appeal followed.

The drastic remedy here granted for pleading errors is unusual, since outright dismissal for reasons not going to the merits is viewed with disfavor in the federal courts. See for recent expressions of the fundamental policy: Atwood v. Humble Oil & Refining Co., 5 Cir., 243 F.2d 885; Rennie & Laughlin, Inc. v. Chrysler Corp., 9 Cir., 242 F.2d 208, 213; Cooper v. R. J. Reynolds Tobacco Co., 1 Cir., 234 F.2d 170, and other cases cited below. And this has been true generally in both English and American law and legal history, for cases are not finally disposed of on mere points of pleading alone.¹ Courts naturally shrink from the injustice of denying legal rights to a litigant for the mistakes in technical form of his attorney. Moreover there are, or would be, serious questions of res judicata; and since this doctrine is two-edged, its application may well present problems for defendants as well as plaintiffs. Quite possibly those defendants who have not sought the relief they have been given (and who are not here to support the grant) may have been motivated by doubts as to what they have won. For are the plaintiffs merely relegated to initiating a new action or are they permanently barred? Compare Griffin v. Griffin, 183 Va. 443, 32 S.E.2d 700, with Gould v. Evansville & C. R. Co., 91 U.S. 526, 23 L.Ed. 416; and see Lawlor v. National Screen Service Corp., 349 U.S. 322, 75 S.Ct. 865, 99 L.Ed. 1122, and Von Moschzisker, Res Judicata, 38 Yale L.J. 299, 318-320. We are clear, therefore, that the case must go back for some less final disposition at least permitting the plaintiffs to amend. But because of their practical importance in routine litigation, we think some elaboration of both the pleading and the joinder issues is desirable.

It is true that antitrust litigation may be of wide scope and without a central point of attack, so that defense must be diffuse, prolonged, and costly. So many defense lawyers have strongly advocated more particularized pleading in this area of litigation;² and recently the judges in the court below have treated it as accepted law that some special pleading — the extent is left unclear — is required in antitrust cases.³ But it is quite clear that the federal rules contain no special exceptions for antitrust cases. When the rules were adopted there was considerable pressure for separate provisions in patent, copyright, and other allegedly special types of litigation. Such arguments did not prevail; instead there was adopted a uniform system for all cases⁴ — one which nevertheless allows some discretion to the trial judge to require fuller disclosure in a particular case by more definite statement, F.R. 12(e), discovery and summary judgment, F.R. 26-35, 56, and pre-trial conference, F.R. 16. Perhaps the leading case making this clear is the oft-cited decision in Package Closure Corp. v. Sealright Co., 2 Cir., 141 F.2d 972, 978, where the late Judge Frank, speaking for the court, said: "It is urged by defendants that a stricter requirement as to a plaintiff's pleading in treble damage actions is necessary because of the expense often involved in such litigation. But in that respect such actions are not unique, for huge expense is involved, too, in many a patent infringement suit and in many a suit where jurisdiction rests on diversity of citizenship. To impose peculiarly stiff requirements in treble damage suits will be to frustrate the Congressional intent. * * * We see no reason whatever to believe that the Supreme Court intended its liberal rules governing pleadings to be inapplicable to a suit for treble damages." And he goes on to point out that if "the defendants, before trial, desire more detailed information from plaintiff, they can seek it by interrogatories, deposition or discovery." 141 F.2d 972, 979.

To the same general effect is United States v. Employing Plasterers Ass'n of Chicago, 347 U.S. 186, 74 S.Ct. 452, 98 L. Ed. 618, where the Supreme Court reversed the dismissal of a complaint, Howard v. Local 74 of the Wood, Wire & Metal Lathers, International Union of Chicago, D.C.N.D.Ill., 118 F.Supp. 387, for failure to state a cause of action for relief under the Sherman Act. As the opinions above and below show, the complaint was most broad and general. Speaking for the Court, Mr. Justice Black said, 347 U.S. 186, 189, 74 S.Ct. 452, 454: "The Government's complaint may be too long and too detailed in view of the modern practice looking to simplicity and reasonable brevity in pleading. It does not charge too little. It includes every essential to show a violation of the Sherman Act. And where a bona fide complaint is filed that charges every element necessary to recover, summary dismissal of a civil case for failure to set out evidential facts can seldom be justified. If a party needs more facts, it has a right to call for them under Rule 12(e) of the Federal Rules of Civil Procedure. And any time a claim is frivolous an expensive full dress trial can be avoided by invoking the summary judgment procedure under Rule 56." A like ruling is made in the companion case of United States v. Employing Lathers Ass'n of Chicago, 347 U.S. 198, 200, 74 S.Ct. 135, 98 L.Ed. 627. And in Radovich v. National Football League, 352 U. S. 445, 453, 454, 77 S.Ct. 390, 1 L.Ed.2d 456, the Court, in upholding a broad general complaint, stressed that it should not add pleading requirements to burden the private antitrust litigant favored by Congress beyond what is specifically set forth in the antitrust laws. Other cases of like tenor are cited in the footnote.⁵

In asserting a special rule of pleading for antitrust cases, our brothers below have in terms rejected the "modern `notice' theory of pleading" as here insufficient⁶ and said that an antitrust complaint must "state a cause of action instead of merely stating a claim."⁷ But while these essentially nebulous concepts often creep into pleading discussions, they are no part of the rules themselves, but were in fact rejected for more precise formulations. It is well to go back to the rules themselves and their intended purpose. To this end we accept as definitive the precise statement formulated by the Advisory Committee in the light of both purpose and experience to answer criticisms based on some dispute in the interpretation of the rules. This appears in the Report of Proposed Amendments, October 1955, pp. 18, 19, and Preliminary Draft, May 1954, pp. 8, 9, as a note explanatory of F.R. 8(a) (2) and the Committee's decision to recommend the retention of that rule in its present form. The following extracts therefrom are directly pertinent to our present discussion: "The intent and effect of the rules is to permit the claim to be stated in general terms; the rules are designed to discourage battles over mere form of statement and to sweep away the needless controversies which the codes permitted that served either to delay trial on the merits or to prevent a party from having a trial because of mistakes in statement. * *...