Court Opinion

ID: 9445630
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:34:47.345544+00
Date Added: 2024-06-11T17:30:21.277471
License: Public Domain

*691LUMBARD, Circuit Judge
(dissenting).
I dissent for the reasons so well stated by Judge Bicks below, D.C.S.D.N.Y.1956, 145 F.Supp. 57. The sales complained of took place in New York and New York may prohibit them. Accordingly the district court had the power and the duty to enjoin these New York sales, offers to sell and advertising.
Masters, Inc. of New York has frequently been before the New York courts for violation of the Feld-Crawford Act. In 1952, Masters, Inc. was enjoined from selling General Electric appliances below fair-traded prices, Sup., 122 N.Y.S.2d 14, and in 1953 was fined twice for violating the injunction. Not long thereafter, it set up in the District of Columbia (the nearest Metropolitan area without Fair Trade laws) a store which was separately incorporated, although wholly owned and controlled by Masters, Inc.
Despite the formal corporate separation, Masters, Inc. used the facilities of both the New York and Washington stores to exploit the New York market.1 Thus, Masters, Inc. widely advertised that although it could not sell General Electric appliances at its New York store, it could and would sell them by mail order from Washington, D. C. When customers sought to buy the appliance at the New York store, they were again informed that the appliances could be obtained at the Washington store and order blanks were provided in New York; moreover the advertising mailed by Masters Mail Order of Washington, D. C., although posted in Washington, was prepared in New York from the mailing lists and other facilities of the New York office.
It seems to me that it would be difficult to imagine a clearer case of evasion of the New York law. Regardless of how we ought to treat the wholly independent out-of-state mail order house, it seems to me, with all due deference to my brethren, that that is not the case before us. Insofar as the sales in question are concerned, the many contacts with New York establish that for all practical purposes the Masters organization is in the same position as a New York seller with an out-of-state warehouse and office staff. If we ignore that, and look only to such easily arranged formalities as separate incorporation, title passage and where the article is mailed, we merely facilitate the emasculation of fair trade by any discount house large enough to be able to afford such arrangements.2 These formalities may be material in other contexts, but they should not be given controlling significance here.
We must not forget that Congress has twice indicated — the second time despite strong opposition — that the states are to be allowed to prevent price-competition among those selling branded products in the home market. See H.R.Rep. No. 1516, 82d Cong. 2d Sess. (1952). This was to avoid damage to the good will of the manufacturer in the eyes of local consumers and to protect local small businessmen against the price-cutting powers of the large firms. See id. at 12, *69210. The defendant’s activities have frustrated and will continue to frustrate both purposes in the New York market unless they are enjoined.3

. Masters Mail Order of Washington, D. O. did most of its business in across the counter sales, but I think that that is immaterial to the issues before us since our concern is only with the substantial mail-order sales to the New York market.

. Stress on title passage seems to me to be particularly unfortunate for that would allow even a wholly in-stato retailer to evade his state’s fair trade law when selling to an out-of-state consumer by merely arranging that title pass in a free-trade state with some relevant contacts.

. Bissell Carpet Sweeper Co. v. Masters Mail Order Co. of Washington, D. C., D.C.Md.1956, 140 F.Supp. 165, affirmed 4 Cir., 1957, 240 F.2d 684, does not seem to me to be persuasive authority for a contrary result as to the McGuire Act since that dealt primarily with the Maryland statute. Nor is the decision of much assistance in construing the Feld-Crawford Act, for despite the similarity of language between the Maryland and New York acts, the New York legislature and the New York courts have already firmly indicated an intent to protect the home market as much as possible. See Raxor Corp. v. Goody, 1954, 307 N.Y. 229, 120 N.E.2d 802 certiorari denied, 1954, 348 U.S. 863, 75 S.Ct. 88, 99 L.Ed. 680 and Eastman Kodak Co. v. Masters, Inc., Sup.1956, 153 N.Y.S.2d 433. Moreover, in Bissell we do not have the many contacts by the seller with the fair trade state which make the transactions before us sales in New York for all practical purposes.