American Fomon Co. v. United Dyewood Corp.

1 F.R.D. 171, 1 Fed. R. Serv. 109, 1938 U.S. Dist. LEXIS 1260
CourtDistrict Court, S.D. New York
DecidedSeptember 19, 1938
StatusPublished

This text of 1 F.R.D. 171 (American Fomon Co. v. United Dyewood Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Fomon Co. v. United Dyewood Corp., 1 F.R.D. 171, 1 Fed. R. Serv. 109, 1938 U.S. Dist. LEXIS 1260 (S.D.N.Y. 1938).

Opinion

CAFFEY, District Judge.

So far as concerns the pertinent substantive law, I find no occasion to go further than to rely on the opinion of Judge Bondy dated July 5,1938.1 Insofar as 1 deal with the same matters now, that is binding on me. Commercial Union of America v. Anglo-South American Bank, 2 Cir., 10 F.2d 937. Moreover, I agree with it.

I think it clear that this court has no jurisdiction of the amended bill any more than it had of the original bill. I do not think the changes have cured essential defects found by Judge Bondy.

It is true that his order of July 16, 1938, did not direct that the causes of action be separately stated and numbered. I take it that his reason for this was that he dismissed the bill. True he granted leave to amend, without prescribing as a condition that the amended bill separately state and number the causes of action. Yet it seems to me implicit in his opinion that he thought that in the amended bill there should be separate statement and numbering of the causes of action. This seems to be so because in his opinion he definitely said that (1) the bill “sets forth several causes of action” and (2) he did not intimate a view as to “the sufficiency of the allegations of any of the causes of action.”

Paragraph 26 of the amended bill omits a single word; paragraphs 28, 30, 31, 33, 43 and 45 contain minor additions, which are unsubstantial; paragraph 29 substitutes “another” for “a later;” and paragraph 37 by typographical error uses “cover,” where manifestly “over” is intended. These alterations are immaterial to any issue now involved and will be ignored.

Paragraphs 3 (c) and 46 allege the amount in controversy in each separate cause of action. In form, however, it is not stated, in conformity with subdivison (1) of Section 24 of the Judicial Code, 28 U.S.C.A. § 41(1), that such amount is “exclusive of interest and costs.” This fault is insignificant and can be easily corrected. It will, therefore, be disregarded.

In paragraph 3 (d) Section 737 of the Revised Statutes, 28 U.S.C.A. § 111, is set up as a ground of jurisdiction. Obviously, however, this provision has no bearing on jurisdiction. I read nothing to the contrary in Brown v. Guarantee Trust & Safe-Deposit Co., 128 U.S. 403, 9 S.Ct. 127, 32 L.Ed. 468. The section merely deals with instances where parties are not served or are not inhabitants of or found in the district of suit. Here all parties have appeared generally and none of them has contested venue. In determining the question of jurisdiction here we are confined to Section 24 of the Judicial Code.

In paragraphs 3 (a) and 3 (b) the plaintiffs rely exclusively on two clauses of Section 24. These are subdivision (7), relating to the patent laws of the United States, and subdivision (1) (b), relating to diversity of citizenship. The issue of jurisdiction turns exclusively on those clauses.

In paragraph 1 (b) of the amended bill the Delaware plaintiff says it does not join the Delaware defendant in causes of action later set forth “for unlawful appropriation of the invention of Urquhart prior to the issue of the patent thereon.” In paragraph 1 (c) the Pennsylvania plaintiff says he does not join the Pennsylvania defendant in causes of action “for personal damages due to his (the Pennsylvania plaintiff’s) being deprived of gainful employment and for unlawful appropriation of his invention prior to the issuance of the patent thereon.” Of the causes of action thus alleged to be excepted the plaintiffs concede, as is manifestly true, that this court has no jurisdiction. In the fourth and fifth prayers also the plaintiffs undertake to recast their demands for relief to correspond with [173]*173the amendments of paragraphs 1 (b) and 1 (c) of the new bill.

Inasmuch as, without dispute, there is jurisdiction of a cause of action for patent infringement, the prayers dealing with that phase of the bill need not be mentioned. Other supplements to the prayers need not be considered, as will hereafter appear.

As presented by the parties, the jurisdictional controversy turns chiefly, if not wholly, on the portions of paragraphs 1 (b) and 1 (c) added in the body of the amended bill. It is doubtful if the fourth and fifth prayers for relief cut any figure in reaching a conclusion; but that I do not determine.

In his opinion Judge Bondy stated that the original bill contained “several” causes of action. In their brief the plaintiffs identify, by paragraph numbers, five causes of action in the amended bill. For present purposes there is no need for deciding how many there are. Whatever the number, I am persuaded that, on the motions under consideration, the least relief the court can afford the defendants is to require the plaintiffs separately to state and number the causes of action. In this respect, however, I feel that the plaintiffs should be left free to formulate their own fresh pleading if leave to plead over be granted at all.

I shall not go into the law as it stood prior to the coming into operation of the Rules of Civil Procedure for district courts recently adopted by the Supreme Court. 28 U.S.C.A. following section 723c. It is plain that Rule 10(b) confers on this court power to compel different causes of action to be stated in separate counts.

Do the rules apply to this case? I think they do.

The rules are now in effect. The present •action was pending when they took effect. I am clear that it would be feasible and would not work injustice to apply them to the action. Indeed, if the authority to apply them exists, I am convinced that, in so far as the issue under consideration is concerned, it would be unjust to the defendants, as well as a great inconvenience to the court itself, not to apply them.

This brings us to the question of jurisdiction. Has the court jurisdiction of the suit as stated in the amended bill?

It is without dispute that if the allegations of patent infringement were the only reliance of the plaintiffs, there would be jurisdiction. It is equally incontrovertible, as in essence Judge Bondy has held, that there is not jurisdiction, predicated solely on the diversity of citizenship provision of Section 24 of the Judicial Code, of the causes of action which rest on allegations apart from patent infringement (paragraphs 4 to 39). As I see it, mere disclaimer of seeking a decree against two of the defendants by two citizens of the same States, respectively, of which those defendants are residents and citizens, with respect to some of the charges made in the amended bill does not cure the defect of lack of jurisdiction which Judge Bondy held existed under the original bill.

It is settled by a long line of decisions of the Supreme Court that there is always a presumption against jurisdiction of any cause by a United States district court; also that in a diversity of citizenship case, .unless jurisdiction be made affirmatively to appear, it is the duty of the district court to dismiss the suit. See, for example, Grace v. American Cent. Ins. Co., 109 U.S. 278, 283, 284, 3 S.Ct. 207, 27 L. Ed. 932; Matson Navigation Co. v. United States, 284 U.S. 352, 359, 52 S.Ct. 162, 76 L.Ed.

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Related

Grace v. American Central Insurance
109 U.S. 278 (Supreme Court, 1883)
Brown v. Guarantee Trust & Safe Deposit Co.
128 U.S. 403 (Supreme Court, 1888)
United States v. Moser
266 U.S. 236 (Supreme Court, 1924)
Matson Navigation Co. v. United States
284 U.S. 352 (Supreme Court, 1932)
Nashville, C. & St. LR Co. v. Wallace
288 U.S. 249 (Supreme Court, 1933)

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1 F.R.D. 171, 1 Fed. R. Serv. 109, 1938 U.S. Dist. LEXIS 1260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-fomon-co-v-united-dyewood-corp-nysd-1938.