Pastor v. American Telephone & Telegraph Co.

• Decision Date: 09 July 1940
• Citation: 76 F. Supp. 781
• Parties: PASTOR v. AMERICAN TELEPHONE & TELEGRAPH CO.
• Court: U.S. District Court — Southern District of New York

76 F. Supp. 781

PASTOR v. AMERICAN TELEPHONE & TELEGRAPH CO.

District Court, S. D. New York.

July 9, 1940.

George A. Brenner, of New York City (Bernard H. Fitzpatrick, of New York City, of counsel), for plaintiff.

Davis, Polk, Wardwell, Gardiner & Reed, of New York City (John H. Ray, Porter R. Chandler, James A. Farmer, and John W. Auchincloss, all of New York City, of counsel), for defendant.

LEIBELL, District Judge.

This is an action at law for treble damages under the Federal Anti-Trust Laws. 15 U.S.C.A. §§ 1 and 15. In his amended complaint the plaintiff alleges that he is the owner of a patent which gives him the right to make, use and vend a certain device known as an automatic repertory dial device, which is designed to be attached to what is commonly known as a dial telephone. The device reduces the number of manipulations of the selecting mechanism in calling a number and furnishes a means by which certain pre-selected call stations may each be signalled by a single manipulation, pressing a button. This device is claimed to be of utility to the public in the use of telephones.

The amended complaint alleges that the defendant is engaged in the telephone business, operating toll telephone lines which carry upwards of 80% of the long distance telephone traffic in the United States and that the defendant controls a group of corporations engaged in the telephone business and auxiliary fields known as the Bell System. Further it is alleged that by means of control exercised over said corporations defendant is in a position to, and does in fact influence and control the character and specification of apparatus constituting or used in conjunction with subscribers' stations, and of any apparatus to be connected thereto. The latter, when not of Bell System manufacture or supply, are usually called "foreign attachments." About half of the service furnished by the Bell System to its subscribers is furnished by the so-called dial system. Thus, plaintiff alleges, the subscribers of the Bell System constitute the "chief potential market" for devices such as that which plaintiff has invented.

It is further alleged that the operating companies, in concert with the defendant, follow a common policy of excluding from connection to subscribers stations all devices which come under the classification of "foreign attachments." This policy, it is averred, has restrained and is now restraining the sale to the aforesaid potential market of devices such as the plaintiff's automatic dial connection and thus has prevented the plaintiff from marketing his said device. By reason of the foregoing the plaintiff, as holder of the patent aforementioned, claims to have been damaged. It is also alleged that "By reason of the restraint of trade aforesaid, plaintiff was damaged in the sum of One Million Five Hundred Thousand Dollars, and said restraint still continues against plaintiff." Plaintiff in this suit therefore seeks treble damages in the sum of $4,500,000.

There is a second count in the amended complaint which, after realleging the matters above summarized, states that the plaintiff made or caused to be made an application to the defendant for leave on the part of the Bell System subscribers to attach or cause to be attached automatic dial devices to subscribers stations and that the defendant rejected the application, although plaintiff was ready, willing and able to cause to be manufactured and sold to Bell System subscribers the said automatic device. Plaintiff's counsel in his brief, consents to the dismissal of this second cause of action since the depositions establish that, contrary to the allegations in said second count, no applications were ever made to defendant by subscribers for the installation of any automatic dialing devices and further that plaintiff was never able to manufacture or cause to be manufactured such a device even if the demand by subscribers had been present.

Between the time of the original joinder of issue and the service of the amended complaint an examination before trial of the plaintiff was conducted and certain other witnesses were examined, including Dr. F. B. Jewett, an officer of the defendant.

Defendant moves (1) for judgment dismissing the amended complaint upon the ground that it fails to state a claim against defendant upon which relief can be granted, or (2) in the alternative, upon the pleadings and upon the depositions of plaintiff and the witnesses heretofore taken, for summary judgment in favor of defendant upon the ground (a) that there is no genuine issue as to any material fact and that defendant is entitled to judgment as a matter of law and (b) that plaintiff's cause of action, if any, accrued more than six years prior to the commencement of this action and is barred by the statute of limitations.

In opposing said motion plaintiff's attorney in his brief asserts:

"1. That a telephone company is obliged either

"(a) To provide on a commercial basis for the subscriber all equipment reasonably necessary or desirable for the convenient use of the telephone. Or (b) To permit the subscriber to provide the same for himself after assuring itself that the device selected by the subscriber is of such character as will not injure the equipment of the company nor impair its service to others.

"2. That if a telephone company does not itself provide, on a commercial basis, such equipment, its refusal to permit others to provide the same is an unreasonable restraint of a trade which, if the prospective trade be interstate in character and if the restraint be imposed by a combination such as the Bell System as a policy of that combination, constitutes a violation of the first section of the Sherman Act."

It will be more satisfactory to dispose of this matter on the questions arising upon the motion for summary judgment. Counsel for both parties have argued the issues with full reference to the facts adduced upon the depositions taken in this case. Upon a consideration of the allegations of the pleadings and the testimony taken in the depositions and the exhibits introduced in connection therewith, I am of...