Samson Crane Co. v. Union Nat. Sales, Civ. A. No. 8550.
| Decision Date | 04 November 1949 |
| Docket Number | Civ. A. No. 8550. |
| Citation | 87 F. Supp. 218 |
| Parties | SAMSON CRANE CO. v. UNION NAT. SALES, Inc., et al. |
| Court | U.S. District Court — District of Massachusetts |
Slater & Goldman, Boston, Mass., John S. Slater, Boston, Mass., Charles M. Goldman, Boston, Mass., for plaintiff.
Foley, Hoag & Eliot, Boston, Mass., Henry E. Foley, Boston, Mass., for defendant Union Nat. Sales, Inc.
Robert M. Segal, Boston, Mass., Jerome Y. Sturm, New York City, for defendants Dist. Lodge 38, International Assn. of Machinists & Paul Tobias.
Plaintiff in this action seeks to enjoin the continuance of certain alleged unfair trade practices of defendants, and to recover for damages allegedly caused to it by said practices. Plaintiff, the Samson Crane Company, is a Massachusetts corporation operating a number of retail clothing stores, chiefly in eastern Massachusetts. Defendant Union National Sales Incorporated is a Connecticut corporation operating a retail clothing store in Cambridge, Massachusetts. Defendant International Association of Machinists is an international labor union with headquarters in Washington, D. C., and defendant District Lodge 38, International Association of Machinists is a branch of said international union with a principal place of business in Boston, Massachusetts. Defendant Hayes is alleged to be president of the international union and defendants Kirkland and Tobias to be officers of District Lodge 38. The latter two individual defendants are alleged to be residents of Massachusetts.
Plaintiff alleges that defendant Union National Sales Incorporated operates its retail store in Cambridge under the name "I. A. M. or "I. A. M. District Lodge 38 Clothing Project" in order to represent to the public that the store is being operated by defendant unions or for their benefit; that all of the defendants have conspired to represent to the public that said store is operated by one or both of said unions; that these representations are false in that neither of said unions has any financial interest in said store or receives any financial return from its operation. It further alleges that defendant Union National Sales Incorporated has caused to be placed at the entrance of said store a person dressed as a police officer to create the impression that only persons with union cards are allowed to enter and make purchases, and that such representation is false in that non-members of unions are in fact permitted to enter and make purchases.
Defendant International Association of Machinists and individual defendants Hayes and Kirkland have appeared specially to move to dismiss the action as to them on the ground that they have not been properly served with process. In view of the action to be taken on the motions of the other defendants, these motions will be allowed.
The other defendants have moved to dismiss on the grounds that this court lacks jurisdiction and that the complaint fails to state a claim upon which relief can be granted. Jurisdiction here cannot be based on diversity of citizenship. The plaintiff is a Massachusetts corporation. The individual defendants Kirkland and Tobias are alleged in the complaint to be Massachusetts residents. They are also the only named members of defendant District Lodge 38. Steele v. Guaranty Trust Co., 2 Cir., 164 F.2d 387. Consequently, it is not necessary here to inquire whether any claim is stated for which relief could be granted under the common law or any applicable state statute, and plaintiff's case must stand or fall on the question of whether it states any cause of action under the Constitution or laws of the United States.
Plaintiff relies on two statutory provisions as giving such a cause of action: Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.A. § 45(a),1 and Section 43(a) of the Lanham Trade Mark Act, 15 U.S.C.A. § 1125(a).2
The Federal Trade Commission Act while declaring certain acts and practices unlawful, gives no right of action to private litigants based on such unlawful acts. The Federal Trade Commission is set up to enforce the provisions of the Act, and relief from alleged violations must be sought from the Commission in the first instance and not from the courts. Moore v. New York Cotton Exchange, 270 U.S. 593, 603, 46 S.Ct. 367, 70 L.Ed. 750, 45 A.L.R. 1370; National Fruit Product Co. v. Dwinell-Wright Co., D.C., 47 F.Supp. 499, 504. Moreover, even if such a right of action did exist, it could be based only on practices taking place "in commerce", which, as defined in the Act, means "in interstate commerce." Here there is no allegation that any of the acts of which plaintiff complains have taken place in interstate commerce. The general allegation that defendant National Union Sales Incorporated is engaged in interstate commerce is not a sufficient allegation that the subject matter of this suit involves interstate commerce. The specific allegations of the complaint deal solely with practices in the conduct of a single retail clothing store, a business essentially local in character. Brosious v. Pepsi-Cola Co., 3 Cir., 155 F.2d 99, and cases there cited. There is no allegation that such local activity has even an indirect effect on interstate commerce. Moreover, to bring such activities within the scope of the Federal Trade Commission Act, they must themselves be in commerce; it is not enough that they affect commerce. Federal Trade Commission v. Bunte Brothers, Inc., 312 U.S. 349, 355, 61 S.Ct. 580, 85 L.Ed. 881.
For the same reason, the plaintiff has stated no cause of action under Section 43(a) of the Lanham Trade Mark Act. There is no allegation that after the making of any misrepresentation in regard to the goods any of the defendants caused such goods to enter into commerce or transported or used them in commerce, even though an allegation of such subsequent connection of the goods with commerce is an essential element of the cause of action created by the Act. It is true that "commerce" as used in the Act is defined broadly as "all commerce...
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