Source: http://law.justia.com/cases/federal/appellate-courts/F2/288/245/185620/
Timestamp: 2017-09-21 14:11:36
Document Index: 777261952

Matched Legal Cases: ['§ 2283', '§ 265', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283', '§ 2283']

Sperry Rand Corporation, Plaintiff-appellant, v. Bernard J. Rothlein et al., Defendants-appellees, 288 F.2d 245 (2d Cir. 1961) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1961 › Sperry Rand Corporation, Plaintiff-appellant, v. Bernard J. Rothlein et al., Defendants-appellees
Sperry Rand Corporation, Plaintiff-appellant, v. Bernard J. Rothlein et al., Defendants-appellees, 288 F.2d 245 (2d Cir. 1961)
U.S. Court of Appeals for the Second Circuit - 288 F.2d 245 (2d Cir. 1961)
Argued February 6, 1961
Decided March 21, 1961
Together with the answer, the defendants filed a seven-page list of interrogatories under Rule 33 of the Federal Rules of Civil Procedure. The interrogatories requested the plaintiff to identify the inventions, trade secrets, and processes allegedly misappropriated and provide further detailed information regarding the subjects of the complaint. The plaintiff objected to the interrogatories as burdensome and oppressive. This objection was overruled by the district judge on September 18, 1959. On the same day, however, the judge entered an order, pursuant to plaintiff's "additional objections" to the interrogatories, directing that the plaintiff not be required to answer any of the interrogatories but one (requesting identification of the "inventions" misappropriated), until "its own discovery proceedings are completed." This order was without prejudice to the defendant to move for a modification for good cause during the course of discovery proceedings.
"Nothing in this order shall be construed to prevent the introduction of any competent and relevant evidence by any party in any judicial proceeding subject to whatever orders the court may make at that time to protect the parties."
The appellant first challenges the authority of the district court to enter an order such as the one before us and cites 28 U.S.C. § 2283 as authority for its contention. That statute, enacted in 1948 as an amendment to the former § 265 of the Judicial Code, reads as follows:
It is clear that the command of § 2283, which has its roots in a long-established policy dating back to the Judiciary Act of 1793, may not be avoided by addressing the injunction to a party instead of to the state court, e. g., Furnish v. Board of Medical Examiners, 9 Cir., 257 F.2d 520, certiorari denied 1958, 358 U.S. 882, 79 S. Ct. 123, 3 L. Ed. 2d 111, or by enjoining just one necessary step in the state-court proceedings, see Hill v. Martin, 1935, 296 U.S. 393, 403, 56 S. Ct. 278, 80 L. Ed. 293. The history of § 2283 and its predecessors reveals a firm Congressional policy against interference by federal courts in state judicial proceedings. This policy has been strictly invoked by the Supreme Court in those cases in which it had occasion to pass on questions relating to the construction of § 2283 and its predecessors. See Hart & Wechsler, The Federal Courts and The Federal System 1057-58, 1073-78 (1953); Note, 74 Harv. L. Rev. 726 (1961). The approach taken in Toucey v. New York Life Insurance Co., 1941, 314 U.S. 118, 62 S. Ct. 139, 86 L. Ed. 100, which circumscribed the powers of the federal courts to interfere in state-court proceedings to several narrowly defined areas, has survived the 1948 amendment of the statute, 62 Stat. 968. In Amalgamated Clothing Workers of America v. Richman Bros., 1955, 348 U.S. 511, 515-516, 75 S. Ct. 452, 455, 99 L. Ed. 600, Mr. Justice Frankfurter, speaking for a majority of the Court, said of § 2283:
Although the order in this case did, in effect, prevent the appellant from proceeding in the Connecticut state court, we hold that it was not in violation of 28 U.S.C. § 2283 for two reasons:
First, we hold that Judge Anderson's order did not "stay proceedings in a state court" within the meaning and purpose of § 2283. By prohibiting the use of material divulged during discovery proceedings in the federal court, the district judge was putting the plaintiff-appellant where it would have been had it gone immediately to a state court and not first instituted an action in the federal court. No avenue available to it in the state courts was closed by the order; only use of the fruits of the federal court discovery was denied.
In carrying out the principle of comity announced by Congress in 28 U.S.C. § 2283, the federal courts must, of course, look not to the form which a requested order takes but to its actual impact. In this case it is not the fact that the order is addressed in terms to the introduction of evidence alone that persuades us that it is not the kind of injunction forbidden by § 2283. Rather, it is because the order does no more than deprive the plaintiff-appellant of the benefits of federal court discovery, which the district judge believed would be used inequitably, and because it leaves access to state processes otherwise unrestricted, that the injunction falls beyond the scope of § 2283.
Second, we hold that the injunction entered by Judge Anderson was necessary to effectuate his earlier order relating to the priority of discovery. Nothing in the concluding phrase of § 2283 — which authorizes injunctions against state-court proceedings when necessary "to protect or effectuate" federal-court judgments — limits its scope to final judgments. The policies which impelled Congress to enact 28 U.S.C. § 2283 in order to overrule the decision in Toucey v. New York Life Insurance Co., 1941, 314 U.S. 118, 62 S. Ct. 139, 86 L. Ed. 100, apply to interlocutory as well as to final decrees.
In this case the district court decided, after hearing argument from both parties and considering memoranda at a pre-trial conference, that the plaintiff was to be permitted to conclude its discovery before the defendants would begin theirs. This decision was a matter of discretion and was consistent with established procedure in this circuit. E. g., Sanib Corp. v. United Fruit Co., D.C.S.D.N.Y. 1955, 19 F.R.D. 9. Had the defendants then sought to undermine the ruling, which took the form of an order entered on the moving papers, by immediately instituting discovery proceedings in a state court, the district court would have been protecting its judgment by enjoining the proceedings in the state court. Similarly, the portion of the same judgment which calls for discovery by the defendants after the plaintiff has taken its turn is protected and effectuated by the order now before us.
Implicit in any schedule of discovery proceedings is the assumption that, absent unusual circumstances, interlocutory relief will not be granted until both parties have an equal opportunity to learn the facts and present their case to the court. It was this aspect of the order that the plaintiff was trying to nullify by proceeding in the state court instead of seeking similar relief in the federal court action. Enjoining this attempt to avoid the thrust of the federal court decree is not prohibited by 28 U.S.C. § 2283. Cf. Berman v. Denver Tramway Corp., 10 Cir., 1952, 197 F.2d 946; Jacksonville Blow Pipe Co. v. Reconstruction Finance Corp., 5 Cir., 1957, 244 F.2d 394, 400.
The appellant also maintains that if Judge Anderson's order was not prohibited by 28 U.S.C. § 2283 neither was it authorized by any statute, rule of procedure, or principle of law.
We hold, however, that under the particular circumstances of this case, the district court acted well within its equitable discretion in issuing the order irrespective of authority which may or may not exist under a statute or rule of procedure. Since, as we have held, the order is not of the type prohibited by 28 U.S.C. § 2283, the court could issue an injunction to prevent unnecessary or vexatious litigation. See Higgins v. California Prune & Apricot Growers, Inc., 2 Cir., 1922, 282 F. 550. Moreover, when, as in this case, the court believes that suit is being brought elsewhere to undermine a decision already made by the court, an injunction is proper. See Helene Curtis Industries, Inc. v. Sales Affiliates, Inc., 2 Cir., 1957, 247 F.2d 940. We do not now decide whether the provision in Rule 30(b) of the Federal Rules of Civil Procedure authorizing the district court which supervises oral depositions to "make any other order which justice requires to protect the party or witness from annoyance, embarrassment, or oppression" extends to orders, such as this one, which regulate the use to which a party may put information divulged during a deposition.
In the present case many factors combine overwhelmingly to justify the order issued by Judge Anderson. Not only was the state court proceeding contrary to the purpose of the pretrial order entered by the district court, but the issues to be presented to the state court were the same as those then pending in the federal court. The very same relief prayed for in the state court could have been granted, upon a showing that it was equitably justified, by the United States District Judge. The appellant's contention that full relief could not have been provided by the federal court since the National Semiconductor Corporation could not have been joined as a party defendant in the federal suit without destroying the requisite diversity of citizenship is without merit. The defendants in the federal suit controlled the corporation, so that an injunction issuing against them would, for all practical purposes, have been as effective as an order directed to the corporation. Moreover, the defendants agreed to stipulate in the district court that the terms of any order addressed to them would be binding on the National Semiconductor Corporation as well.