Sheldon-Claire Co. v. Judson Roberts Co.

• Decision Date: 11 October 1949
• Citation: 88 F. Supp. 120
• Parties: SHELDON-CLAIRE CO. v. JUDSON ROBERTS CO., Inc., et al.
• Court: U.S. District Court — Southern District of New York

88 F. Supp. 120

SHELDON-CLAIRE CO. v. JUDSON ROBERTS CO., Inc., et al.

United States District Court S. D. New York.

October 11, 1949.

Louis Waldman, New York City (Irving Choban, New York City, and Martin Markson, New York City, of counsel), for plaintiff.

Field, Goldman & Greene, New York City (Milton D. Goldman, New York City, of counsel), for defendants Judson-Roberts Co., Inc. and E. D. Davis.

COXE, District Judge.

These are motions (1) by plaintiff to strike two counterclaims and one defense in the answer of defendants Judson-Roberts Company and Davis, and (2) by plaintiff, and by defendants Judson-Roberts Company and Davis, to determine the order in which examinations before trial should proceed. The defendant Sadow has not been served with process.

The complaint contains three counts: (1) for infringement of plaintiff's copyrights, (2) for misappropriation and wrongful use of plaintiff's secret list of subscribers and customers, and (3) for unfair competition.

The material allegations of the complaint are that for many years plaintiff and its predecessors have been engaged in the business of creating, publishing and furnishing to its subscribers throughout the United States, who were employers of labor, educational programs, consisting of booklets, pamphlets and posters designed to teach, inspire and instruct workers and management in the improvement of labor-management relations, the development and maintenance of good-will towards each other, and the increase of production through greater cooperation between labor and management; that, during 1947, 1948 and 1949, two such programs, entitled "It's Up to All of Us" and "Produce Better — Live Better", were prepared and copyrighted; that the individual defendants, Davis and Sadow, had been employed by plaintiff as salesmen and in managerial capacities in its sales department for about six years prior to the end of 1948, and, in such capacities, had access to plaintiff's copyrighted material and private subscribers lists, which, when their employment by plaintiff terminated in 1948, they took with them; that Davis thereupon caused the defendant Judson-Roberts Company (hereafter referred to as "Judson") to be organized, of which both Davis and Sadow are now officers and employees; that Judson is engaged in the same line of business as plaintiff, and in competition with it; that defendants have produced, with the use of substantial parts of plaintiff's copyrighted material, a similar program, entitled "Production Power is Peace Power", which, by the use of such subscribers lists, they are seeking to sell and are selling to plaintiff's customers and others; and that defendants are unfairly competing with plaintiff by imitating in their program the distinctive format, size, type, layout and arrangement of printed and pictorial matter, etc., used by defendants with intent to deceive and mislead plaintiff's customers and the public into the belief that their program is published by plaintiff, by making various false representations to plaintiff's customers and others concerning plaintiff and its program and concerning the relationship of defendants and their program to plaintiff and its program, and by enticing away plaintiff's salesmen and having them solicit the same customers of plaintiff whom they had been soliciting while in plaintiff's employment.

First. — The first part of plaintiff's motion is to strike, under Federal Rules of Civil Procedure, rule 12(b), 28 U.S.C.A., the second counterclaim of defendant Judson on the ground that it does not state a claim upon which relief can be granted, and that this court does not have jurisdiction, or, in the alternative, to strike, pursuant to Rule 12(f), paragraphs twenty-sixth to thirty-three, inclusive, in the second counterclaim on the ground that the allegations are redundant, immaterial, impertinent, scandalous and prejudicial.

It is alleged in this counterclaim that plaintiff is engaged in a series of acts, policies and practices, to the prejudice of the public and the competitors of Judson, which constitute unfair methods of competition and tend to create a monopoly within the intent and meaning of the Federal Trade Commission Act 15 U.S.C.A. § 41 et seq., and the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note. These acts, policies and practices are alleged to be (1) advising customers of Judson to throw out the service of Judson, in which event they will be given plaintiff's service for the period covered by the Judson service, without charge; (2) advising prospective customers of Judson that plaintiff had received an injunction against Judson, so that any contract with Judson could not be performed; (3) advising prospective customers of Judson and others that the material used by Judson was stolen from plaintiff, that Judson's entire program was obtained through a cheating policy, and that any contract with Judson would result in a lawsuit to the customer; (4) advising customers and prospective customers of Judson and others that Judson is engaged in illegal competition, is not financially capable of remaining in business, and is and will be unable to fulfill its obligations under any contract with its customers, and (5) threatening completely to eradicate Judson as a competitive factor and stating that it will put Judson out of business. It is then alleged that these acts, policies and practices prevent Judson from engaging in its business in competition with plaintiff and from exercising its lawful trade and calling, for the purpose of creating a monopoly and practicing unfair competition; that these acts, policies and practices are unlawful, contrary to public policy, and constitute unfair methods of competition in interstate commerce under Section 5 of the Federal...