Sunbeam Corporation v. Hall of Distributors
| Decision Date | 20 July 1956 |
| Docket Number | No. 14000.,14000. |
| Citation | 142 F. Supp. 609 |
| Parties | SUNBEAM CORPORATION, an Illinois corporation, Plaintiff, v. HALL OF DISTRIBUTORS, Incorporated, a Michigan corporation, Defendant. |
| Court | U.S. District Court — Western District of Michigan |
Herman T. VanMell, Chicago, Ill., Hill, Lewis, Andrews, Granse & Adams, Detroit, Mich., for plaintiff.
Nathan L. Milstein and Charles Rubiner, Detroit, Mich., for defendant.
This is an action by Sunbeam Corporation against Hall of Distributors, Incorporated, to enjoin the defendant from inducing plaintiff's wholesale and retail distributors to breach their fair-trade contracts with plaintiff and to account for profits derived by defendant, a nonsigner, and for damages suffered by plaintiff as a result of the alleged wrongful acts of defendant. A temporary injunction was issued by this court, D.C., 131 F.Supp. 791, which was later vacated on motion of defendant following decision of the Michigan Supreme Court in the case of Argus Cameras, Inc., v. Hall of Distributors, Inc., 343 Mich. 54, 72 N.W.2d 152.
Defendant now moves to dismiss the complaint on the ground that fair-trade agreements are contrary to the public policy of Michigan and are, therefore, unenforceable against defendant, a non-signer, at law or in equity.
Defendant contends that fair-trade contracts offend the public policy of Michigan as declared by the Supreme Court of Michigan in the Argus case and the earlier case of Shakespeare Co. v. Lippman's Tool Shop Sporting Goods Co., 334 Mich. 109, 54 N.W.2d 268, and argues that the basis of the ruling of the Michigan Supreme Court in the Argus case was that fair-trade contracts are in violation of Michigan public policy insofar as non-signers are concerned.
Plaintiff argues that the decision in the Argus case was limited to the specific situation there involved and that the state court merely held that the plaintiff had failed to state a case for equitable relief and contends that the complaint in the instant case does state a cause of action for money damages.
The sole question here is whether the complaint states a claim for which relief in the nature of an action at law for damages can be granted. The applicable substantive law is that of the State of Michigan.
The Michigan Supreme Court in the Shakespeare case held the Fair Trade Act of Michigan, Act No. 50, P.A.1937, C.L.1948, Sec. 445.151 et seq., Stat.Ann. 1951, Cum.Sup., Sec. 19.321 et seq., unconstitutional as applied to non-signers since such Act did not bear any reasonable relation to public health, safety, morals or the general welfare and therefore constituted a deprivation of property without due process of law prohibited by Article II, Sec. 16, of the Constitution of Michigan.
In the Argus case, 343 Mich. 54, 72 N.W.2d 154 the Michigan Supreme Court stated that the Shakespeare decision "laid down a principle of law, the fair implication of which is such that under the law of Michigan thus established" non-signers of so-called fair-trade agreements must not be enjoined from purchasing fair-trade products from signers, nor from selling such products at prices less than prices fixed by the manufacturer. In deciding the Argus case, the Michigan Supreme Court quoted with approval from 4...
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