SANI-TOP v. North American Aviation, 15831.

• Decision Date: 10 November 1958
• Docket Number: No. 15831.,15831.
• Citation: 261 F.2d 342
• Parties: SANI-TOP, Inc., a corporation, Appellant, v. NORTH AMERICAN AVIATION, Inc., a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

261 F.2d 342 (1958)

SANI-TOP, Inc., a corporation, Appellant, v. NORTH AMERICAN AVIATION, Inc., a corporation, Appellee.

No. 15831.

United States Court of Appeals Ninth Circuit.

November 10, 1958.

Albert M. Herzig, Herzig & Jessup, Los Angeles, Cal., for appellant.

Flint & MacKay, Edward L. Compton, Arch R. Tuthill, Los Angeles, Cal., for appellee.

Before FEE, CHAMBERS and JERTBERG, Circuit Judges.

PER CURIAM.

Sani-Top, a California corporation, sought below a declaratory judgment¹ against North American. Sani-Top wanted the district court to tell it whether United States Patent No. 2,433,643 owned by North American is valid and whether Sani-Top is infringing it. Apparently, the patented process has something to do with "postforming" or bending flat sheets of formica. Sani-Top, we take it, makes some kind of tops or drainboards for kitchen sinks and uses a postforming process on formica sheets.

Sani-Top's complaint pleaded too much evidence, including an affidavit of one of its attorneys. Defendant responded with a motion to dismiss and supported it by an affidavit of its counsel. Essentially the affidavit of defendant's counsel is that he hasn't said what plaintiff's attorney said he has said, or perhaps there was a misunderstanding. The motion to dismiss plaintiff's complaint made by defendant is not self-sufficient. It refers to pleadings in two other cases brought in the same district court in which this action was brought.² Also, it refers to reasons for dismissal. These reasons have not been printed. No one has brought to this court the pleadings in the other cases.

After a hearing upon the motion to dismiss, the court entered an order for the dismissal of the action. Judgment pursuant to the order was entered. Out of the judgment, we extract the following:

"* * * It appearing to the Court and the Court finds that the Complaint fails to allege an actual controversy between the parties and that this Court lacks jurisdiction over the subject matter, and the Court having granted said motion to Dismiss;

"Now, Therefore, It Is Ordered and Adjudged:

"(1) That the above-entitled action be and the same hereby is dismissed;

"(2) That the aforesaid dismissal shall not constitute an adjudication upon the merits."

Sani-Top appeals and the decision and the judgment of this court will be that the judgment of the district court is vacated and set aside.

Of course, such abrupt action deserves some explanation. On this appeal we do not have a full record. Proceedings and issues in the two other cases are attempted to be supplied by affidavits from the file in this case and piecemeal snatches of the record in the other cases. Also, the briefs of both parties take the liberty of telling us about the other cases.

Without detailing the circumstances, we do not find appellee wholly free from blame on the matter of our record. Therefore, we should not apply a rule that the missing parts sustain the court's action. Furthermore, the judgment says, "The complaint fails to allege an actual controversy." We think it does (in too many words) allege an actual controversy between the parties but before the complaint is done it almost "unalleges" a controversy. And in what sense, in the judgment, the phrase — "lacks jurisdiction over the subject matter" — is used with reference to this complaint and the motion to dismiss is unclear. Further, if this court were to let the judgment stand as it is, we are inclined to believe we would soon have the problem back with us as to what the judgment meant and what was its effect.

Our best analysis of the judgment is that it does constitute a binding adjudication that the validity of the patent, and, if valid, the issue of infringement cannot be tried by declaratory judgment proceedings.

It may be assumed that the trial court was not using the word "jurisdiction" in the sense of naked power. If the case had been tried upon the complaint, one may assume that a judgment thereon would be valid against collateral attack. It may have meant that it was satisfied the case was one not meeting proper standards for a declaratory judgment suit; that is, on the basis of the statute and decisions a trial would not be properly permissible, or it could have had in mind its discretion to hear controversies or not hear them which are implicit in the word "may" in the federal declaratory judgments act. See 28 U.S.C.A. § 2201. This "may" does not mean "shall," but the discretion must be reasonably exercised. It follows the traditional equity concepts.

Naturally, the court would not want to schedule a lengthy patent trial without determining...