Proper v. John Bene & Sons, Inc.
| Decision Date | 30 November 1923 |
| Citation | 295 F. 729 |
| Parties | PROPER v. JOHN BENE & SONS, Inc., et al. |
| Court | U.S. District Court — Eastern District of New York |
Edward P. Sobel, of New York City, for plaintiff.
Frederick N. Van Zandt, of New York City, for defendants.
This is a motion for an order striking out paragraphs twelfth thirteenth, and fourteenth of the first alleged cause of action set forth in the amended complaint, such part of paragraph thirtieth of the third alleged cause of action as realleges the contents of the first three mentioned paragraphs, and the entire third alleged cause of action.
The suit is brought to recover treble damages for injuries caused to plaintiff's business by the unlawful acts of defendants. The first cause of action is for treble damages and is based upon defendants' attempt to monopolize the trade in disinfectants in a manner constituting a violation of the Act of Congress approved July 2, 1890, known as the Sherman Anti-Trust Law (Comp. St. Secs. 8820-8823 8827-8830). The second cause of action is likewise for treble damages sustained as a result of a fraudulent and criminal combination and conspiracy by defendants to prevent lawful competition in the sale of disinfectants in such a manner as also constituted a violation of the Anti-Trust Law. The third cause of action is based upon the same allegations of fact upon which the first cause of action rests, except that the amended complaint alleges that they constitute a violation of the Act of Congress entitled 'An act to create a Federal Trade Commission,' which became a law on September 26 1914 (Comp. St. Secs. 8836a-8836k). Under this cause of action only actual damages are demanded.
Paragraph twelfth sets forth certain proceedings which were had before the Federal Trade Commission, its findings and order entered thereon. Paragraph thirteenth alleges that the proceeding before the Federal Trade Commission is a proceeding in equity on behalf of the United States under the Anti-Trust Laws and that the findings of that Commission as to the facts are conclusive. Paragraph fourteenth alleges that defendants employed unfair methods of competition in Interstate Commerce in violation of the act to create a Federal Trade Commission and the Sherman Anti-Trust Act.
It is true, as urged by plaintiff, that the power to strike out should be exercised with caution. Irrelevant and redundant allegations as such do no harm, and motions to strike them from a pleading are frequently denied. We have therefore to examine the amended complaint with care, to ascertain whether the paragraphs to which objection is taken contain allegations of facts which cannot be proved at the trial and reference to which would be prejudicial to defendants.
The proceeding before the Federal Trade Commission was against John Bene & Sons, Inc., only. It is difficult to see, therefore, how it can be competent as res adjudicata in this action. Any prior adjudication must have been a determination of the same issues between the same parties, or their privies, as pointed out in Fish v. Vanderlip, 218 N.Y. 29, 112 N.E. 425, Ann. Cas. 1916E, 150. Furthermore the proceedings before the Federal Trade Commission did not result in a final judgment or decree. The result of the proceedings before the Commission is an order which has no effect in itself, unless made operative by the Circuit Court of Appeals, which has power of review. The doctrine of res adjudicata has no application unless a final judgment is involved. Webb v. Buckelew, 82 N.Y. 555, and authorities therein cited.
Of course, it may be conceded that any allegations have a proper place in any pleading, if their presence is specifically authorized by statute, and the plaintiff vigorously contends that there is such authorization by section 5 of the Act of Congress known as the Clayton Law, which went into effect October 15, 1914. Section 5, supra (Comp. St. Sec. 8835e), provides:
'That a final judgment or decree hereafter rendered in any criminal prosecution or in any suit or proceeding in equity brought by or on behalf of the United States under the anti-trust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto: Provided, this section shall not apply to consent judgments or decrees entered before any testimony has been taken: Provided further, this section shall not apply to consent judgments or decrees rendered...
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Farmington Dowel Products Co. v. Forster Mfg. Co.
...could get no evidentiary assistance from the Commission pursuant to section 5(a). The gospel was written in 1923 in Proper v. John Bene & Sons, Inc., 295 F. 729 (E.D.N.Y.), wherein the district court concluded, for many reasons,7 that a Commission order could not be admitted pursuant to sec......
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New Jersey Wood Finishing Co. v. Minnesota Min. & Mfg. Co.
...The bare order had "no effect in itself, unless made operative by the Circuit Court of Appeals, * * *." Proper v. John Bene and Sons, Inc., 295 F. 729, 731 (E.D.N.Y.1923). The FTC functioned as an investigatory body which would judge and note violations of the Acts. In formulating its findi......
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Highland Supply Corp. v. Reynolds Metals Co.
...has "no application to an order * * * of the Federal Trade Commission" (Toulmin, Anti-Trust Laws, Vol. 2, p. 118; Proper v. John Bene & Sons, Inc. (D.C.N.Y.), 295 F. 729), we hold that any reference made to the F.T.C. proceedings in the instant complaint was insufficient to toll the statute......
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In re Antibiotic Antitrust Actions
...under § 5 of the FTC Act. Y & Y Popcorn Supply Co. v. ABC Vending Corp., 263 F.Supp. 709 (E.D.Pa.1967); Proper v. John Bene & Sons, Inc., 295 F. 729 (E. D.N.Y.1923). And the cases relied on by plaintiffs are distinguishable from the present case. In Farmington Dowel Products Co. v. Forster ......