Chronicle Publishing Co. v. National Broadcasting Co.

294 F.2d 744
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 25, 1961
DocketNos. 17208, 17277
StatusPublished
Cited by19 cases

This text of 294 F.2d 744 (Chronicle Publishing Co. v. National Broadcasting Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chronicle Publishing Co. v. National Broadcasting Co., 294 F.2d 744 (9th Cir. 1961).

Opinion

MERRILL, Circuit Judge.

In these two cases, consolidated for our consideration, Chronicle Publishing Company challenges the propriety of an order of the district court staying further proceedings in a private antitrust action brought by Chronicle against National Broadcasting Company. In case number 17208 the challenge is by direct appeal and the matter is before us upon appellee’s motion to dismiss the appeal upon the ground that it is taken from a nonappealable order. In case number 17277 the challenge is by petition for writ of mandamus directing the district court to vacate its stay order and permit proceedings in the case below to continue.

NBC has entered into a contract to acquire from San Francisco-Oakland Television, Inc., its television station KTVU. The Chronicle owns station KRON-TV, which has for years been the San Francisco outlet for NBC programs. Should NBC acquire KTVU, that station as a matter of course will become the NBC outlet for the San Francisco area. The Chronicle will lose that valuable connection.

In the case below Chronicle alleges that NBC has, in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, engaged in a course of conduct designed to suppress competition in the sale of program and broadcast time; that acquisition by NBC of station KTVU and certain other stations sought by it throughout the country may tend to substantially lessen competition in specified lines of commerce in violation of § 7 of the Clayton Act, 15 U.S.C.A. § 18.

Before NBC can acquire KTVU, it must secure the approval of the Federal Communications Commission. It has applied to that agency for approval and those proceedings are pending. In those proceedings Chronicle has filed objections to the granting of approval and is taking an active part in support of its position.

The order here challenged stays all further proceedings in the case below until after the final determination by the FCC of the proceedings before it upon NBC’s application. The stay order does reserve to Chronicle the right to “hereafter apply for an injunction pendente lite to preserve the asserted status quo.”

The first question presented is that raised by appellees’ motion to dismiss the appeal in case number 17208: whether the stay order is an appealable order. If so, it must come within the provisions of 28 U.S.C. § 1292.1 The question thus is whether this order can, under that section, be regarded as an injunction.

Enelow v. New York Life Insurance Company, 1935, 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440, provides the rule. There, at pages 381-382 of 293 U.S. at page 311 of 55 S.Ct. it is stated:

“This section [the predecessor to 28 U.S.C. § 1292(a)], contemplates interlocutory orders or decrees which constitute an exercise of equitable jurisdiction in granting or refusing an injunction, as distinguished from a mere stay of proceedings which a court of law, as well as a court of equity, may grant in a cause pending before it by virtue of its inherent power to control the progress of the cause so as to maintain the orderly processes of . justice.”

Enelow was an action at law upon a life insurance policy. Defendant pleaded the equitable defense of fraud, prayed [746]*746for cancellation and moved to have the equitable issue raised by its defense determined by a chancellor in advance of a jury trial of the legal issues. The district court so ordered. The supreme court held this order appealable, stating at page 382 of 293 U.S. at page 311 of 55 S.Ct.

“The power to stay proceedings in another court appertains distinctively to equity in the enforcement of equitable principles, and the grant or refusal of such a stay by a court of equity of proceedings at law is a grant or refusal of an injunction within the meaning of § 129.”

Shanferoke Coal & Supply Corporation of Delaware v. Westchester Service Corporation, 1935, 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583, decided the same day as the Enelow case, involved an action at law upon a contract. Defendant, as a special defense, alleged that plaintiff had a duty to arbitrate and moved that the action be stayed pending arbitration. The supreme court held that the setting up of the arbitration agreement was an equitable defense for purposes of the Enelow rule and that the stay order was appealable as an injunction.

The rule of these cases has since been narrowly construed by the supreme court. We read Schoenamsgruber v. Hamburg-American Line, 1935, 294 U.S. 454, 55 S.Ct. 475, 79 L.Ed. 989; City of Morgantown, West Virginia v. Royal Insurance Company, 1944, 337 U.S. 254, 69 S.Ct. 1067, 93 L.Ed. 1347; and Baltimore Contractors v. Bodinger, 1955, 348 U.S. 176, 75 S.Ct. 249, 99 L.Ed. 233, as confining the rule of the Enelow and Shanferoke cases to those cases in which a defense equitable in its nature has been made the basis of a stay in an action which, before fusion of law and equity, was by its nature and action at law. Lyons v. Westinghouse Electric Corporation, 2 Cir., 1955, 222 F.2d 184 (majority opinion of Judge Medina) is to this effect.

The stay order here challenged was not granted pursuant to any equitable defense.

In Day v. Pennsylvania Railroad Company, 3 Cir., 1957, 243 F.2d 485, an action for damages was stayed pending the outcome of proceedings before the National Railroad Adjustment Board. The court, following the holdings of the supreme court in the cases heretofore cited, held that the ruling was “a step in controlling the litigation before the trial court” and not the granting of a temporary injunction. The court stated at page 487 of 243 F.2d:

“The distinction has been long recognized and it is well settled that the grant or denial of a stay of proceedings to await the determination of matters pending elsewhere is not an order granting or refusing an injunction and hence is not appeal-able.”

To the same effect is United Gas Pipe Line Company v. Tyler Gas Service Company, 5 Cir., 1957, 247 F.2d 681.

In case number 17208, the appeal is dismissed.

In case number 17277, the proceeding in mandamus, the issue is whether the action of the district court in granting the stay amounts to an abuse of discretion and constitutes an unjustified refusal to proceed to trial in the pending antitrust action.

Chronicle concedes that the district court has the general power to stay proceedings on equitable principles pending the outcome of some other proceeding.

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294 F.2d 744, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chronicle-publishing-co-v-national-broadcasting-co-ca9-1961.