United States v. Railway Employes' Dept., American Federation of Labor

• Decision Date: 05 January 1923
• Docket Number: 2943.
• Court: U.S. District Court — Northern District of Illinois
• Parties: UNITED STATES v. RAILWAY EMPLOYES' DEPARTMENT, AMERICAN FEDERATION OF LABOR, et al.

286 F. 228

UNITED STATES v. RAILWAY EMPLOYES' DEPARTMENT, AMERICAN FEDERATION OF LABOR, et al.

No. 2943.

United States District Court, N.D. Illinois, Eastern Division.

January 5, 1923

Charles F. Clyne, U.S. Atty., of Chicago, Ill., H. M. Daugherty Atty. Gen., Blackburn Esterline, Asst. Sol. Gen., of Chicago Ill., and Orville J. Taylor, Jr., and Jacob M. Dickinson, Sp Asst. Attys. Gen. for the United States.

Donald R. Richberg, of Chicago, Ill., Frank L. Mulholland, of Toledo, Ohio, and James S. Easby-Smith, of Washington, D.C for defendants.

WILKERSON District Judge.

The defendants filed their joint and several answers on October 6, 1922. Thereupon they presented their motion for a dissolution of the temporary injunction granted September 23, 1922, 283 F. 479, and for a dismissal of the bill. This motion was argued at length, and briefs have been filed on both sides. The answer contains 56 printed pages, and so far as this motion is concerned may be treated as denying the substantial averments of the bill relative to the alleged unlawful conspiracy to obstruct interstate commerce and the carriage of the mails. The answer also sets up new matter relating to the controversies between the railroad companies and the members of the Federated Shop Crafts the attempts to adjust these controversies prior to the filing of the bill, and the settlements with certain railway companies made subsequent to the filing of the bill.

The principal affirmative contentions in the answer are that the strike was justified by oppressive and unlawful conduct on the part of the managers of the railway companies; that it was prolonged by the refusal of the railway managers to comply with proposals for settlement made by the President and the United States Railroad Labor Board; that the bill in this case, while filed in the name of the United States, was really brought in the interest of an unlawful combination of railway managers; and that the bill cannot be maintained any longer, and cannot proceed to a decree because of settlements between the Federated Shop Crafts and a large number of the railway companies involved, and the abandonment by the defendants of the conspiracy charged in the bill, if one ever existed.

By equity rule 29 (198 F. xxvi, 115 C.C.A. xxvi) demurrers and pleas are abolished. Defense must be either by motion to dismiss or by answer. While it is within the discretion of the court to entertain a motion to dismiss for want of equity, apparent upon the face of the bill, at any time before the hearing, the rule contemplates that it be made before the answer is filed. The rule provides:

'If the defendant move to dismiss the bill or any part thereof, the motion may be set down for hearing by either party upon five days' notice, and, if it be denied, answer shall be filed within five days thereafter or decree pro confesso be entered.'

The defendant may not, by filing his answer, move to dismiss upon denials of the allegations of the bill or by new matter set up in his answer. The motion must be heard and decided upon the allegations of the bill as upon demurrer. The rule which prevails in courts of equity, in disposing of motions to dismiss because the bill does not set up facts sufficient to constitute a cause of action, is to overrule the motion and let the case go to hearing, unless it is founded upon an absolutely clear proposition that, taking the allegations to be true, the bill must be dismissed at the hearing. A case in equity involving important matters should go to issue and proofs, where a doubtful question is raised by the pleadings. Kansas v. Colorado, 185 U.S. 125, 144, 22 Sup.Ct. 552, 46 L.Ed. 838; Krouse v. Brevard Tannin Co. et al., 249 F. 538, 548, 161 C.C.A. 464.

Defendants assert that the bill should be dismissed because there is a prayer for relief which, under the provisions of the Clayton Act (38 Stat. 730), the court is without power to grant. It is well established that the bill will not be dismissed if it presents a case for any relief. In Kansas v. Colorado, 185 U.S.at page 145, 22 Sup.Ct.at page 559 (46 L.Ed. 838), it was said:

'Doubtless the specific prayers of this bill are in many respects open to objection, but there is a prayer for general relief, and in that such appropriate decree as the facts might be found to justify could be entered, if consistent with the case made by the bill, and not inconsistent with the specific prayers in whole or in part, if that were also essential. Tayloe v. Merchants' Insurance Co., 9 How. 390, 406; Daniell, Ch. Pr. (4th Am. Ed.) 380.'

Apart from those portions of the prayer for relief, which it claimed contravene sections 6 and 20 of the Clayton Act (Comp. St. Secs. 8835f, 1243d), the bill certainly charges a combination and conspiracy to do acts which are unlawful in themselves, and which by reason of their inherent nature prejudice the public interests by unduly obstructing the course of trade. Nash v. United States, 229 U.S. 373, 376, 33 Sup.Ct. 780, 57 L.Ed. 1232; Duplex Printing Press Co. v. Deering, 254 U.S. 443, 468, 470, 41 Sup.Ct. 172, 65 L.Ed. 349, 16 A.L.R. 196.

The argument of the defendants that the bill, if its scope is thus narrowed, becomes merely a bill to enjoin the commission of crimes, overlooks the provisions of the Sherman Law (Comp. St. Secs. 8820-8823, 8827-8830) and Clayton Law (38 Stat. 730), which invest the District Courts of the United States with jurisdiction to prevent and restrain violations of those laws. In United States v. Trans-Missouri Freight Association, 166 U.S. 290, 342, 17 Sup.Ct. 540, 559 (41 L.Ed. 1007) the court said:

'The civil remedy by injunction and the liability to punishment under the criminal provisions of the (Sherman) Act are entirely distinct. * * * Congress, having the control of interstate commerce, has also the duty of protecting it, and it is entirely competent for that body to give the remedy by injunction as more efficient than any other civil remedy. The subject is fully and ably discussed in the case of In re Debs, 158 U.S. 564.'

Defendants claim that the bill should be dismissed, because the alleged basis for relief no longer exists. It is asserted in the answer and affidavits that the strike has been settled on many of the railroads involved, and that the conspiracy charged in the bill has disappeared. It is argued, therefore, that, inasmuch as decrees in equity are based upon circumstances and rights existing at the time of the entry of the decree, there is no reason why this suit should proceed further. Here, again, defendants overlook the fact that this objection does not arise on the allegations of the bill, and therefore furnishes no ground for its dismissal. Dixon v. Anderson, 252 F. 694, 696, 164 C.C.A. 534; Krouse v. Brevard Tannin Co., 249 F. 538, 548, 161 C.C.A. 464.

However, this objection to proceeding with the cause, even if it were properly raised, is without merit. In United States v. Trans-missouri Freight Association, 166 U.S. 290, 17 Sup.Ct. 540, 41 L.Ed. 1007, it was urged that there should not be a hearing of the appeal because the association against which complaint was made in the bill had been dissolved. The Supreme Court had no difficulty in denying this contention. The court said: 'The mere dissolution of the association is not the most important object of this litigation. The judgment of the court is sought upon the question of the legality of the agreement itself, for the carrying out of which the association was formed, and, if such agreement be declared to be illegal, the court is asked, not only to dissolve the association named in the bill, but that the defendants should be enjoined for the future. The defendants, in bringing to the notice of the court the fact of the dissolution of the association, take pains to show that such dissolution had no connection or relation whatever with the pendency of this suit, and that the association was not terminated on that account. They do not admit the illegality of the agreement, nor do they allege their purpose not to enter into a similar one in the immediate future. On the contrary, by their answers the defendants claim that the agreement is a perfectly proper, legitimate, and salutary one. and that it, or one like it, is necessary to the prosperity of the companies. * * * Private parties may settle their controversies at any time, and rights which a plaintiff may have had at the time of the commencement of the action may terminate before judgment is obtained, or while the case is on appeal, and in any such case the court, being informed of the facts, will proceed no further in the action. Here, however, there has been no extinguishment of the rights (whatever they are) of the public, the enforcement of which the government has endeavored to procure by a judgment of a court under the provisions of the act of Congress above cited.'

Section 5 of the Clayton Act (Comp. St. Sec. 8835e) provides that a decree in a proceeding in equity brought by the United States under the anti-trust laws, to the effect that a defendant has violated such laws shall be prima facie evidence against such defendant in any suit or proceeding brought by any party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto.

The situation here is analogous to the one in Southern Pacific Co. v. Interstate Commerce Commission, 219 U.S. 433, 31 Sup.Ct. 288, 55 L.Ed. 283, where it was claimed that the questions arising for decision were moot because, in view of the lapse of time, the order of the Interstate Commerce Commission had spent its force. The court pointed out that clearly the suggestion was without merit--

'in view of the possible...