Court Opinion

ID: 8822163
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:36:19.594182+00
Date Added: 2024-06-11T17:04:40.123658
License: Public Domain

On Rehearing.
[5] Plaintiff has moved for a rehearing of that part of the ruling hereinabove sustaining defendants’ objections to plaintiff’s interrogatories on the ground that they may eventuate in the imposition of a penalty by way of treble damages, etc. Plaintiff’s claim in this behalf *629is that this proceeding is not “penal” or criminal in its nature, that a defendant is protected from being compelled to give evidence against himself only when such evidence may result in criminal proceedings being had against him, and that therefore there is no protection to be accorded to a defendant in a court of equity, with respect to a “discovery” of things done by him, the doing of which can in no wise subject him to criminal punishment. In support of his contention, plaintiff cites Huntington v. Attrill, 146 U. S. 657, 13 Sup. Ct. 224, 36 L. Ed. 1123; U. S. v. Nash (D. C.) 111 Fed. 528; Blum v. Widdicomb (C. C.) 90 Fed. 220; U. S. v. Southern Pacific Co. (D. C.) 162 Fed. 412; LaBourgoyne (D. C.) 104 Fed. 823; Masseth v. Johnston (C. C.) 59 Fed. 613; Untermeyer v. Freund, 58 Fed. 210, 7 C. C. A. 183; Walker on Patents (5th Ed.) § 568, p. 530; Quirk v. Quirk (D. C.) 259 Fed. 597.
In consequence of the elaborate argument made and the citation of the above authorities, no less than because of the intrinsic importance of the subject-matter, I have felt constrained to give the matter some considerable independent investigation. As a result of that, I am, I feel, compelled 1o adhere to the original ruling and deny the application for a rehearing. It may be conceded at the outset that a proceeding in a court of equity to enjoin infringement of a patent, and collect damages and profits for the infringement already suffered, is not a penal action. Nor does the possibility that the court may, in its discretion, award treble damages, convert such proceedings into a “penal” action, within the primary signification of that term. So the cases cited, by plaintiff and referred to hereinabove directed to that point may be passed over as being entirely inapplicable herein.
The interrogatories herein were filed pursuant to federal equity rule No. 58 (198 Fed. xxxiv, 115 C. C. A. xxxiv), which makes detailed, provision for the filing and enforced answering of interrogatories to be propounded by ehlier or both of the parties. These interrogatories, in the language of the rule, are intended to result in “the discover}'' by the opposite party or parties of the facts or documents material to the support or defense of the cause.” Ail parties herein seem to concede that the procedure for the discovery referred to in the rule is but a modern application of the proceeding known to the English Court of Chancery as a bill of discovery. Therefore, unless changed by statute or by the equity rule itself, it would seem most fitting and proper that, in taking advantage of this modern practice, the rules applied to ihe procedure formulated and adhered to by the Court of Chancery, which gave rise to the proceeding originally, should be adhered to.
Hare, in his work on Discovery (2d American Ed.) p. 131, says that, if an answer to the proposed discovery will subject the defendant to “any penalty or forfeiture or disability in the nature of a penalty,” no discovery will be ordered. Mr. Justice Story’s discerning treatise on Equity Pleadings (7th Ed.) § 575 et seq., has this to say:
“Another objection, which may he taken by way of demurrer to a bill oE -discovery, is that it may expose the defendant to a penalty or a forfeiture,, or that it may compel Mm to criminate himself. The rule is that the defend ant shall not be obliged to discover, what may subject him to a penalty or for*630feiture, or criminal accusation, and not wliat must only. * * * This doctrine seems founded on the great principles of constitutional right, settled in early times in England, and brought by our ancestors to America, by which it is established that no man is bound to accuse himself of any crime, or to furnish any evidence to convict himself of any crime. The maxim of the common law is, ‘Nemo tenetur seipsum prodere.’ It constituted one of the just objections to the Court of Star Chamber that, in criminal informations, it compelled the party accused to answer upon oath to the accusation, and thus, in arbitrary times, became an instrument of gross oppression and injustice. But the Court of Chancery has always steadily refused to compel any man to criminate himself, and, by analogy to disclose any fact which will subject Mm to a penalty or forfeiture; and it has thus assisted in carrying into complete effect the benign maxim of the common law above alluded to. So that it is the just boast of Lord Hardwicke that the general rule, established with great justice and tenderness in the law of England, is fully recognized and acted on in courts of equity, that no person shall be obliged to discover what may tend to subject him to a penalty or punishment, or to that wMeh is in the nature of a penalty or punishment.” (Italics supplied.)
In section 521 of the same work he announces that, unless a waiver of such penalty or forfeiture be made bjr the plaintiff, a demurrer to the discovery would lie. In a note to that section he cites many authorities pertinent to the question, including the statement of Lord Redesdale respecting treble tithes hereinafter referred to.
Mr. Daniell, in his Pleading and Practice of the High Court of Chancery (5th American Ed.) p. 387, in adverting to a discovery which might subject the defendant to a penalty or forfeiture, says:
“It is a rule in equity that no person can be compelled to make a discovery which may expose him to a penalty, or to anything in the nature of a forfeiture. As, however, the plaintiff is, in many eases, himself the only person who would benefit by the penalty or forfeiture, he may, if he pleases to waive that benefit, have the discovery he seeks. The effect of the waiver, in such cases, is to entitle the defendant (in case the plaintiff should proceed, upon the discovery which he has elicited by his bill, to enforce the penalty or forfeiture) to come to a court of equity for an injunction, which he could not do without such an express waiver. It is usual to insert this waiver in the prayer of the bill, and if it is omitted the bill will be liable to demurrer.”
This disposes -of plaintiff’s contention that it is only a “penalty” payable to, or inuring to the benefit of, the public, which will justify a court of equity in declining to compel a defendant to discover. A given plaintiff may not effectually waive a penalty or payment to be made to the public; the procedure based upon an effective and acceptable waiver demonstrates that a penalty going to an individual was as much the subject of protection as one going to the public.
Quoting Lord Redesdale, Mr. Daniell continues:
“Upon this same principle, if a rector or impropriator, or a vicar, file a bill for tithes, he must waive the penalty of the treble value, to which he is entitled by the statute of 2 & 3 Edward 'VI.: otherwise,' his bill will be liable to demurrer. It seems, however, that if the bill pray an account of the single value of the tithes only, such a prayer will amount to an implied waiver of the treble value, and that’ an injunction may be granted against suing for the penalty of the treble value, as well upon this implied waiver as upon the most express.”
In Livingston v. Tompkins, 4 Johns. Ch. (N. Y.) 432, 8 Am. Dec. 598, it was said:
*631“There are numerous cases; establishing the rule that no one is; bound to answer, so as to subject himself, either direct! v or evenlualty, to a forfeiture or penalty, or anything in the nature of a forfeiture or penalty.”
These authoritative expressions of practice obtaining in the Court of Chancery are clearly to the point that no discovery will he enforced against a defendant, if the immediate or eventual result thereof may operate to subject liim to anything in the nature of a forfeiture or penalty.
The only other question to be determined herein, then, is: Are the treble damages to which a defendant, decreed guilty of infringing a patent, may be subjected, “anything in the nature of a forfeiture or penalty”? That they are seems to me to be too clear for argument. In the language of the day, they are normally imposed as “smart money” or punishment. As 1 understand the rulings of the courts, although awarded in the discretion of the court, they are intended primarily to furnish “punitive” or “vindictive” damages, damages in excess of the actual compensation to be awarded to a plaintiff in virtue of a wrong suffered by him, and to operate as a punishment upon the defendant for either a wanton or willful or aggravated infringement of. or trespass upon, the rights of the plaintiff, accruing to him in virtue of his patent. That they are so considered, it seems to me, is well' settled by numerous decisions of the federal courts. See cases cited in 8 U. S. Comp. Stats. 1916, pp. 10452, 10591, 10592. _
_ Treble damages were considered by I,ord Redesdale in the instances cited by him to constitute a penalty, and therefore to be within the protection of the rule of practice of the High Court of Chancery. Added damages for failure to deliver a telegram, has been held to be a penalty. Kirby v. Western Union Telegraph Co., 4 S. D. 463, 57 N. W. 202. A similar ruling was announced in Langdon v. New York, etc. (Sup.) 9 N. Y. Supp. 245. In State v. Warner, 197 Mo. 650, 94 S. W. 962, the Supreme Court of Missouri held that, in the municipal law of England and America, the word “penalty” is used in various senses. Strictly speaking, it denotes punishment. It is also, however, it was said, commonly used as including any extraordinary liability to which the laws subject wrongdoers in favor of the persons wronged and not limited to the actual damage suffered. In 17 C. J. 997, it is said that multiple damages are provided for by statute in some (many) jurisdictions. “These statutes are penal or .punitive in character.” In Consolidated Rubber Tire Co. v. Diamond Rubber Co. (D. C.) 226 Fed. 455, Judge Teamed Hand, in making an award in the way of treble damages in the sum of $50,000, designated them as “punitive damages.” In 22 American & English Encyc. of Taw, p. 499, it is said that the court will increase damages in patent infringement, when the infringement is “deliberate and intentional, or wanton and persistent, but ordinarily not otherwise.” See, also, Missouri Pac. R. Co. v. Ault, 256 U. S. -, 41 Sup. Ct. 593, 65 L. Ed. -, decided June 1, 1921.
These authorities, it seems to me, justify the conclusion that treble damages, which may be awarded by a court of equity pursuant to the provisions of section 4921 of the Revised Statutes (Comp. St. § 9467), *632are so “in the nature of a penalty” as to justify a court of equit}*- in declining to compel a defendant to furnish the evidence by his own answers whereby such damages may be inflicted. The same conclusion was reached by Judge Betts in Finch v. Rikeman, Fed. Cas. No. 4,788, in which, construing section 14 of the Act of July 4, 1836 (5 Stats, at Large, 123), which is similar in all respects to section 4921 of the Revised Statutes in so far as the provision for treble damages is concerned, he held that he would make no order for the production of books to show the amount and extent of defendant’s alleged infringement, “in the absence of a relinquishment of all claim to the penalty of three times the amount of the damages” proven.
The petition for a rehearing of the objections to the proposed interrogatories is denied.