Rosen v. Albern Color Research, Inc.
Decision Date | 20 June 1963 |
Docket Number | Civ. A. No. 28067. |
Citation | 218 F. Supp. 473 |
Parties | Alvin ROSEN v. ALBERN COLOR RESEARCH, INC., et al. |
Court | U.S. District Court — Eastern District of Pennsylvania |
Blank, Rudenko, Klaus & Rome, Henry J. Morgan, Philadelphia, Pa., for plaintiff.
George J. Ivins, Philadelphia, Pa., for defendants Albern, Love and Mandelbaum.
Edward Unterberger, Philadelphia, Pa., for Joyce Marks.
This case poses an interesting and important question, and apparently one of first impression.
Plaintiff brought his action under the provisions of the Securities Exchange Act of 1934, to recover damages claimed as the result of alleged misrepresentations and failures to disclose on the part of defendants, or some of them, in the sale of certain securities by the plaintiff. Presently before us are defendants' motions to dismiss the complaint for lack of jurisdiction.
It may be noted at the outset that defendants have erred in a matter of procedure. Paragraph 1 of the amended complaint alleges:
"The Court has jurisdiction of this action by virtue of the provisions of Sections 10(b), 27 and 29(b) of the Securities Exchange Act of 1934, and Rule X-10B-5 of the Securities Exchange Commission."
The allegation alone is sufficient to empower this Court to assume jurisdiction over the case. Defendants' real contention is that the complaint fails to state a cause of action under the statute. The situation here is essentially identical with that presented in Romero v. International Terminal Operating Co., 358 U.S., 354, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959), and the Court's remarks there are equally pertinent here (p. 359 of 358 U.S., p. 473 of 79 S.Ct.):
However, since the facts are undisputed, and the case presents only a question of law, we shall treat the motion as one for summary judgment.
Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b) provides:
It is unnecessary, for present purposes, to consider the implementing Rule X-10B-5, of the Securities Exchange Commission.
Briefly stated, the transactions in question were effected through telephone conversations between plaintiff, speaking from a telephone (Market 7-8032) located at 1011 Chestnut Street, Philadelphia, Pennsylvania, and Samuel Chavenson, speaking from a telephone (Evergreen 6-7400) located at 3316 Spring Garden Street, in the same City. Each call was transmitted from the number calling to that number's exchange, thence over a "direct trunk" to the exchange of the number called, and thence to the number called. All the wires carrying the calls were located within Philadelphia. The telephone lines between Market 7-8032 and the Market Exchange, and between Evergreen 6-7400 and the Evergreen Exchange, were susceptible to use and were, on occasion, used for both intrastate and interstate calls.
The precise question, then, is whether, under these agreed facts, the transactions here involved were effected "by the use of any means or instrumentality of interstate commerce", within the meaning of the statute. We think they were not.
The telephone is, of course, an instrument of interstate commerce. 15 C.J.S., Commerce § 41. It is as well an instrument of intrastate commerce. "The question as to whether a particular instrumentality is one of interstate commerce is to be determined by the use to which it is put, rather than its nature." Id., § 34. In the phrase of Mr. Justice Holmes, dealing in like context with a locomotive, "Its character as an instrument of commerce depended on its employment at the time not upon remote probabilities or upon accidental later events." Minneapolis & St. Louis R. R. Co. v. Winters, 242 U.S. 353, 357, 37 S. Ct. 170, 172, 61 L.Ed. 358 (1917).
Since the telephone was concededly employed here to effect a purely local transaction,...
To continue reading
Request your trial-
Smith v. Manausa
...221 F.Supp. 571, 573 (1963); contra Burke v. Triple A Machine Shop, Inc., 9th Cir., 438 F.2d 978 (1971); Rosen v. Albern Color Research, Inc., E.D. Pa., 218 F.Supp. 473, 476 (1963). 9 Johns Hopkins University v. Hutton, 4th Cir., 422 F.2d 1124, 1128-1129 (1970), cert. denied 416 U.S. 916, 9......
-
Securities and Exchange Commission v. Crofters, Inc.
...Mendenhall, 234 F. Supp. 59 (N.D.Ohio, 1964); Nemitz v. Cunny, 221 F.Supp. 571 (N.D.Ill., 1963); see contra, Rosen v. Albern Color Research, Inc., 218 F.Supp. 473 (E.D.Pa., 1963). Trueblood and Kerr first discussed the transactions over the telephone in Denver (Trueblood dep., pp. 6-9, Two ......
-
United States v. De Sapio
...in interstate commerce." This has been held to mean that the communication itself must be interstate. See Rosen v. Albern Color Research, Inc., 218 F.Supp. 473 (E.D.Pa.1963). On the other hand, § 10 of the 1934 act (15 U. S.C. § 78j) speaks of "the use of any means or instrumentality of int......
-
Myzel v. Fields
...special administratrix for the estate of her deceased husband, Joseph, who was originally a plaintiff. 2 See Rosen v. Albern Color Research, Inc., 218 F.Supp. 473 (E.D.Pa.1963). The Rosen case relies upon Northern Trust Co. v. Essaness Theatres Corp., 103 F.Supp. 954 at 964 (N.D.Ill.1952), ......