152 F. 726 | U.S. Circuit Court for the District of Massachusetts | 1907
This is a suit brought under the provisions of Act Cong. July 2, 1890, 26 Stat. 209, c. 647 [U. S. Comp. St. 1901, p. 3202], in which the defendant is charged with making contracts in restraint of trade or commerce among the several states or with foreign nations, and with an attempt to monopolize such trade or commerce, whereby the plaintiff has been injured in his business and property. Section 7 of the act provides as follows:
“Any person who shall be injured in his business or property by any other person or corporation by .reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three-fold the damages by him sustained, and the costs of suit, including a reasonable attorney’s fee.”
Among the things forbidden or declared unlawful by the act are “every contract * * * in restraint of trade or commerce among the several states or with foreign nations,” and every “attempt to monopolize” such trade or commerce.
The case was heard on demurrer to the amended declaration. The grounds of demurrer on which the defendant relies are the following:
“(2) The declaration is insufficient in that it is too uncertain, vague, and indefinite to enable the defendant to know of what it is accused, of what damage the plaintiff has suffered, and to what it should direct its defense.
“(3) The declaration fails to set forth with substantial certainty the substantive facts necessary to show that the defendant has been guilty of anything forbidden or declared to be unlawful by the anti-trust act.”
The declaration then alleges that these manufacturers constitute the sole market for the sale of the plaintiff’s machines. The declaration further alleges that, by reason of these contracts, agreements, written leases, and other instruments, customers are prevented from buying or leasing the plaintiff’s machines, that by these means the plaintiff has been deprived of the right to an open market, and prevented from
It will be observed that the contracts in restraint of trade set forth in the declaration are described as “divers contracts 'and agreements with a great number of manufacturers of boots.and shoes throughout the several states and in foreign countries,” by the terms of which such manufacturers are bound to use no shoe machinery except such as is furnished by the defendant, and are prohibited from using the plaintiff’s machines if they use the machines furnished by the defendant. It will also be observed that the attempt to monopolize trade or commerce set forth in the declaration is described as endeavoring, “by divers means and methods unknown to the plaintiff,” to compel all manufacturers to acquire shoe machinery from the defendant alone, or, “by means of contracts, agreements, written leases, and other instruments,” to acquire shoe machinery from the defendant alone, and not to use any machines acquired from the defendant if any other part or process in shoe manufacture shall be done on any machine not acquired from the defendant.
It is manifest that these averments are of the most general character. No specific reference is made to any contract or contracts in restraint of trade entered into by the defendant, and no definite description is given of the terms of such contract or contracts. The declaration is also wanting in any definite description of the acts or contracts which constitute an attempt to monopolize trade or commerce. Presumablj- the defendant has made many contracts with manufacturers, and, before being required to plead, it is entitled to know upon what contracts the plaintiff relies, and the nature of» those contracts. So, also, the defendant is entitled to have pointed out the substantial facts upon which the plaintiff bases his allegation of an attempt to monopolize trade or commerce; and, if this attempt to monopolize is founded upon contracts or leases, the material parts of these contracts or leases should be set forth in the declaration.
Again, the declaration alleges that the plaintiff is the owner of certain interests in patents relating to shoe machinery. It also alleges that the defendant owns and controls certain shoe machinery. These and other allegations in the declaration indicate that the defendant’s control of shoe machinery is also based upon 'patents. If the defendant’s contracts with manufacturers are based upon patent rights, this fact should appear, because contracts with respect to patents are, as a general rule, outside the doctrine of restraint of trade, both at common law and under the federal statute.
In my opinion, the averments in this declaration are too uncertain, vague, and indefinite to enable the defendant properly to prepare its defense, or to enable the court to determine whether the alleged offenses are within the statute.
Under the act of July 2, 1890, it is not sufficient to frame the declaration in the words of the statute. The statute does not set forth the elements of the offenses which are forbidden; and, further, there may be contracts in restraint of trade between the states or with foreign countries, and attempts to monopolize such trade or commerce, which are not within the statute. These circumstances make it imperative
In the case of In re Greene (C. C.) 52 Fed. 104, 111, Judge Jackson said:
“The act does not undertake to define what constitutes a contract, combination, or conspiracy in restraint of trade, and recourse must therefore be had t.o the common law for the proper definition of these general terms, and to ascertain whether the acts charged come within the statute.”
In United States v. Patterson (C. C.) 55 Fed. 605, Judge Putnam said:
“This statute is not one of the class where it is always sufficient to declare in the words of the enactment, as ⅜ does not set forth all the elements of a crime. A contract or combination in restraint of trade may be not only not illegal, but praiseworthy; as, where parties attempt to engross the market by furnishing the best goods, or the cheapest. So that ordinarily a case cannot be made under the statute unless the means are shown to be illegal, and therefore it is ordinarily necessary to declare the moans by which it is intended to engross or monopolize the market. And by the well-settled rules of pleading it is not sufficient to allege the means in general language, but, if it is claimed that the means nsod are illegal, enough must be set out to enable tbe court to see that they are so, and to enable the defense to properly prepare to meet the charge against it.”
In the case of Rice v. Standard Oil Company (C. C.) 134 Fed. 464, 465, the court said:
“It is apparent, that mere proof that the defendant has entered into a contract or engaged in a combination or conspiracy in restraint of trade or commerce among the several States will not be sufficient to support a cause of action under tbe seventh section, for there must, in addition thereto, be proof that the plaintiff has, by reason thereof, sustained damage. In his declaration, therefore, the plaintiff must aver not only facts showing such a contract or combination or conspiracy as is declared by the act to be unlawful, but facts showing that by reason of such unlawful thing he has been injured in his business or property.”
In Bement v. National Harrow Company, 186 U. S. 70, 92, 22 Sup. Ct. 747, 756, 46 L. Ed. 1058, the court said:
“That statute clearly does not refer to that kind of a restraint of interstate -commerce which may arise from reasonable and legal conditions imposed upon the assignee or licensee of a patent by the owner thereof, restricting the terms upon which the article may be used and the price to he demanded therefor. Such a construction of the act we have no doubt was never contemplated by its framers.”
See, also, In re Corning (D. C.) 51 Fed. 205; United States v. Nelson (D. C.) 52 Fed. 646; Otis Elevator Co. v. Geiger (C. C.) 107 Fed. 131.
Demurrer sustained.