Court Opinion

ID: 9442560
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:51:45.087513+00
Date Added: 2024-06-11T17:29:08.165643
License: Public Domain

On Petition for Rehearing.
LINDLEY, Circuit Judge.
It is the position of the defendants in their petition for rehearing that this court, having decided that plaintiff had waived its rights with respect to the razors in question, should have affirmed the judgment without modification, and that this is true irrespective of whether defendants are or are not engaged in the perpetration of a fraud upon the public. In support of the argument, defendants cite cases which hold, they say, that, absent violation of a private right, plaintiff has no standing in court as a protector of the public interest. Strongest of these is American Washboard Co. v. Saginaw Mfg. Co., 6 Cir., 103 F. 281, 285, 50 L.R.A. 609, in which the court declined to enjoin the defendant, a competitor of the plaintiff, from selling to the public washboards which were branded “Aluminum” but which were not, in fact, made of that metal, saying: “It ' is doubtless morally wrong and improper to impose upon the public by the sale of spurious goods, but this does not give rise to a private right of action unless the property rights of the plaintiff are thereby invaded. There are many wrongs which can only -be righted through public prosecution, and for which the legislature, and not the courts,' must provide a remedy. Courts of equity, in granting relief by injunction, are concerned with the property rights of complainant.” This decision was cited with apparent approval by the Supreme Court in Mosler Safe Co. v. Ely-Norris Safe Co., 273 U.S. 132, 47 S.Ct. 314, 71 L.Ed. 578, reversing 2 Cir., 7 F.2d 603, and in Federal Trade Commission v. Klesner, 280 U.S. 19, 27, 50 S.Ct. 1, 74 L.Ed. 138, 68 A.L.R. 838.
Plaintiff seeks to distinguish the Washboard case, as well as others cited by defendants, by pointing out that the plaintiffs in those cases not only had no private rights which had been infringed but had never had any such rights capable of being infringed by the other party, whereas in the case at bar plaintiff does have rights which would have been infringed but for its waiver. Plaintiff also suggests that this court and other federal courts have, in-cases in which it was held that no rights-of the plaintiff had been violated, so framed their judgments as to prevent the defendant from deceiving the public. This court’s-decision in Horlick’s Malted Milk Corp. v. Horlick, 7 Cir., 143 F.2d 32, (in which the-defendant was held to have a right to use-the name “Horlick” but was nonetheless-enjoined from using it except in combination with his first name and address, the court feeling that the possibility of confusion of the public warranted this restriction), and that of the Second Circuit in DuPont Cellophane Co. v. Waxed Products Co., 85 F.2d 75, (in which the defendant was held to be entitled to apply the-name “cellophane” to its product but was-required to indicate the source of origin so-as to avoid deception of the purchasing public), are strongly relied on by the plaintiff to support this proposition and to justify a. holding that the Federal Trade Commission is not the exclusive agency for the protection of the public from deceptive practices-in commerce.
While none of the decisions cited is-on all fours with the instant case, it cannot be denied that those relied on by defendants are very near and that the distinction sought to- be drawn by plaintiff between them and this case is a rather tenuous one. Even so, we think the trial court. *919in fhe instant case, aware that Congress has declared unlawful “unfair or deceptive acts or practices in commerce,” 15 U.S.C.A. § 45, and confronted with a record which Indicates that defendants are engaging in such deceptive acts or practices, had the inherent power to frame its decree, as it did in Horlick’s Malted Milk Corp. v. Horlick, 7 Cir., 143 F.2d 32, and as other courts have done in other cases, DuPont Cellophane Co. v. Waxed Products Co., 2 Cir., 85 F.2d 75; Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 67 S.Ct. 1136, 91 L.Ed. 1386, in such a manner as to protect the public •against the continuation of those unlawful acts and practices, and this without regard ■to violation or non-violation of any rights •of plaintiff. It should be borne in mind that our modification of the District Court’s .judgment does not accord to plaintiff the relief it sought, or amount to a recognition •of the existence of the trade-mark or fair trade rights asserted by the plaintiff, for •defendants are not prohibited from selling the razors with plaintiff’s trade-mark thereon at prices lower than the fair trade prices ■established by plaintiff, but are merely required to inform the public of the defective condition of those razors. The obvious purpose of the directed modification is to protect the public from fraud and deception; any benefit to plaintiff is only incidental to realization of that purpose. We conclude, therefore, that the cases cited in our opinion, as well as those now relied on by plaintiff, justify the modification. If, on the other hand, as defendants insist, it is the law that the court, because it determined that plaintiff had suffered no legal wrong at the hands of defendants, was powerless to prevent the perpetration of an admitted fraud upon the public, it would seem that the Supreme Court should be accorded an opportunity so to decide.
Defendants maintain that they admitted only for the purposes of the disposition of their motion for summary judgment, that the razors they are offering to the public are, in fact, defective. But the admission, though made for that limited purpose, is still binding on them, for their motion was granted by the trial court, and this court has not reversed that court but, affirming the allowance of the motion for summary judgment, has merely indicated its belief that, on the basis of the admitted facts, the terms of the judgment should be modified. Thus defendants’ motion never having been overruled, the admission is still effective. This case is readily distinguished from Fountain v. Filson, 336 U.S. 681, 69 S.Ct. 754, 93 L.Ed. 971, relied on by defendants, for there the court reversed the judgment entered by the trial court and then proceeded to direct the entry of a personal money judgment for appellant.
The petition for rehearing is denied.