Randustrial Corp. v. Dunlap, Civ. A. No. 66-479.

• Court: United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
• Citation: 595 F. Supp. 873
• Docket Number: Civ. A. No. 66-479.
• Parties: RANDUSTRIAL CORPORATION, formerly known as Ranco Industrial Products Corporation, Plaintiffs, v. Edward B. DUNLAP, United Industrial Maintenance, Inc., Robert F. Klein and Bernard J. Berry, Defendants.
• Decision Date: 11 October 1984

595 F. Supp. 873

RANDUSTRIAL CORPORATION, formerly known as Ranco Industrial Products Corporation, Plaintiffs,
v.
Edward B. DUNLAP, United Industrial Maintenance, Inc., Robert F. Klein and Bernard J. Berry, Defendants.

Civ. A. No. 66-479.

United States District Court, W.D. Pennsylvania.

October 11, 1984.

595 F. Supp. 874

Howard D. Schwartz, Pittsburgh, Pa., for plaintiffs.

James A. Lewis, Pittsburgh, Pa., for defendant, Edward B. Dunlap.

OPINION

MARSH, District Judge.

This case is before us on the plaintiff's motion to punish for contempt. A hearing on said motion was held on September 10, 1985. Upon conclusion of said hearing, the court ordered both parties to file proposed findings of fact and conclusions of law. Also before the court is the defendant's motion to rescind or modify the court order dated May 19, 1966 which is the subject of plaintiff's motion to punish for contempt.

This litigation began with a complaint and motion for preliminary injunction filed on April 20, 1966 alleging a violation by Edward B. Dunlap (hereinafter Dunlap) of his sales representative agreement with Ranco Industrial Products Corporation now Randustrial Corporation (hereinafter Randustrial) and further alleging that Dunlap and others induced or attempted to induce employees of Randustrial to violate their sales representative agreements or employment agreements. A third count of the complaint involved an infringement of a copyright which is not an issue in the present case.

The original complaint and motion for preliminary injunction was not adjudicated on the merits. Instead, the parties settled the case by an agreement dated May 11, 1966 and presented a consent order which was signed by the court on May 19, 1966.

Motion to Rescind or Modify Consent Order

We shall first address the defendant's motion to rescind or modify the consent order which shall be treated as a motion for relief from final judgment pursuant to Rule 60(b), Fed.R.Civ.P. The only grounds applicable to said relief are encompassed in Sections (5) and (6) of said rule.

This portion of the rule provides as follows:

"On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: ... (5) the judgment has been satisfied, released or discharged, or a prior judgment upon which it has been based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment."

We note that the standards for reopening a consent judgment are strict. Philadelphia Welfare Rights Org'n v. Shapp, 602 F.2d 1114, 1119 (3rd Cir.1979). For example, in Mayberry v. Maroney, 558 F.2d 1159, 1163 (3rd Cir.1977), the Third

595 F. Supp. 875

Circuit Court of Appeals reversed the decision of a district court which vacated a consent judgment. In so doing the court stated

"... it is settled that such relief is extraordinary and may be granted only upon a showing of `exceptional circumstances.' (Citations omitted.) ... Thus a party seeking such relief must bear a heavy burden of showing circumstances so changed that `dangers once substantial, have become attenuated to a shadow,' United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76 L.Ed. 999 (1932), and that, absent such relief an `extreme' and `unexpected' hardship will result."

Similarly, in United States Steel Corp. v. Fraternal Ass'n, Etc., 601 F.2d 1269, 1274 (3rd Cir.1979), the Court of Appeals vacated a district court decision modifying a consent injunction. In so doing the Court stated:

"And when, as in this case, the appellants made a free, calculated and deliberate choice to submit to an agreed upon decree rather than seek a more favorable litigated judgment, their burden under Rule 60(b) is perhaps even more formidable than had they litigated and lost."

We further note that this matter has been discussed by Professor Wright who comments:

"It is clear that a strong showing is required before an injunction or other prospective judgment will be modified. Mere passage of time is not enough." (Citations omitted; emphasis supplied.) Wright, & Miller, Federal Practice and Procedure: Civil § 2863.

A review of the record does not reveal that defendant has sustained his burden to show "exceptional circumstances" for relief from this court's consent order of May 19, 1966. The record reflects that at the time of the original complaint, defendant's company, United Industrial Maintenance (hereinafter United), was competitive with Randustrial with respect to twenty-five percent (25%) of its business; that is, in the sale of industrial maintenance supplies. Presently, Dunlap's new company, Consolidated Enterprises, is competitive with Randustrial with respect to twenty percent (20%) of its business. Although the consent order allowed Dunlap to compete with Randustrial after a period of three years, we use these facts merely to illustrate that there was little change from 1966 to the present in the percentage of competition between the two companies.

Since the requisite of showing "exceptional circumstances" to justify a modification of the consent order was not shown,...