Opinion · Supreme Court of the United States

Fleitmann Ex Rel. Stockholders of the Consolidated Street Lighting Co. v. Welsbach Street Lighting Co.

Fleitmann Ex Rel. S’holders of the Consol. St. Lighting Co. v. Welsbach St. Lighting Co., 240 U.S. 27 (1916)

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1916-01-24
Topic
general

How later courts describe this case

  • declaring claims for treble damages should be heard by a jury
  • "[W]hen a penalty of triple damages is sought to be inflicted [under the Sherman Act], the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law."
  • “[W]hen a penalty of triple damages is sought to be inflicted, the [Sherman Act] statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law.”
  • “[W]e agree with the courts below that when a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law.”
  • which recognized a due process "complexity" exception

Citator

UpLaw has not yet analyzed Fleitmann Ex Rel. Stockholders of the Consolidated Street Lighting Co. v. Welsbach Street Lighting Co.. The absence of a flag is not a finding that it is good law.

Cited by
122 opinions

Headnotes

  1. Antitrust & Competition Law — Sherman Act — Remedies Where a plaintiff seeks to recover the penalty of treble damages under § 7 of the Sherman Act, that liability can be enforced only through the verdict of a jury in a court of common law; the statute plainly provides that remedy and provides no other, and it should not be read as authorizing enforcement of the penalty in a non-jury proceeding. 240 U.S. at 32
  2. Antitrust & Competition Law — Sherman Act — Statutory Remedies The Clayton Act of October 15, 1914, which authorizes private parties to obtain an injunction against threatened loss, goes no farther in terms than that relief and does not enlarge the remedies available to enforce the treble-damages penalty under § 7 of the Sherman Act. 240 U.S. at 32
  3. Business & Corporate Law — Derivative Actions A single stockholder of a corporation cannot maintain a suit in equity against that corporation and other corporations to compel the other defendants to pay treble damages under § 7 of the Sherman Act to the stockholder's corporation, because the claim is that of the corporation alone and, if the corporation were proceeding directly under the statute, its only remedy would be at law; that a stockholder cannot persuade the party holding the cause of action to sue does not remove the defendants' right to a jury trial on the principal liability. 240 U.S. at 31–32
  4. Business & Corporate Law — Derivative Actions A stockholder's bill seeking treble damages under the Sherman Act cannot be sustained on the theory of a decree directing the corporation to sue, or permitting the stockholder to sue in its name and on its behalf, where the bill is not framed for that purpose. 240 U.S. at 32
FLEITMANN,v. WELSBACH CO.,240 U.S. 27(1916)
36 S.Ct. 233
FLEITMANN, SUING ON BEHALF OF STOCKHOLDERS OF THE CONSOLIDATED STREET
LIGHTING COMPANY,v. WELSBACH STREET LIGHTING COMPANY.
SAMEv. SHAW.
APPEALS FROM THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.
Nos. 145, 146.
Argued December 17, 1915.
Decided January 24, 1916.
When the penalty of triple damages is sought under § 7 of the Anti-Trust Act the liability can only be enforced through the verdict of a jury in a court of common law. While under the Act of October 15, 1914, private parties can obtain an injunction against threatened loss, that act, in terms, goes no farther. A suit in equity by a single stockholder of a corporation against that and other corporations to require the latter to pay to the former threefold damages under § 7 of the Sherman Act cannot be maintained, nor, in such a case, can there be a decree requiring the corporation of which plaintiff is a stockholder to sue the other corporations or permitting him to sue in its name and on its behalf. 211 F. 103, affirmed.
THE facts, which involve the right of a single stockholder to
maintain a suit against the corporation under § 7 of the Sherman
Act, are stated in the opinion.
Mr. Henry L. Scheuerman, with whomMr. Henry A. WiseandMr. Harry F. Melawere on the brief, for appellant.Mr. Edward W. Hatch, with whomMr. William F. Sheehanwas on the brief, for appellees.
MR. JUSTICE HOLMES delivered the opinion of the court.
This is a bill by a stockholder of the Consolidated Street Lighting Company, against that Company and a numberPage 28of other corporations and individuals, to compel the defendants other than his own company to pay to the latter threefold damages under the Sherman Act. July 2, 1890, c. 647, § 7;26 Stat. 209, 210. According to the allegations the other defendants conspired to control the business of municipal lighting, c. throughout the United States and in pursuance of their conspiracy procured their agent to purchase from the former owners a majority of the stock in the plaintiff's company, and then proceeded to ruin it and drive it out of business by misconducting its affairs. The plaintiff has demanded of his company and its officers to institute proceedings but they have refused. The bill was dismissed by the District Court on motion of the appellees in the two appeals before this court, and the decree was affirmed by the Circuit Court of Appeals. 211 F. 103. 128 C. C.A. 31.

The bill alleges in terms that it is brought to recover threefold the damages alleged; a decree for such damages was the relief prayed. The only specific error assigned on appeal to the Circuit Court of Appeals was holding that such a suit in equity could not be maintained by a single stockholder; that was the only question dealt with by the District Court and that was the ground of decision in the Circuit Court of Appeals. It really is the only question in the case.

Of course the claim set up is that of the corporation alone, and if the corporation were proceeding directly under the statute no one can doubt that its only remedy would be at law. Therefore the inquiry at once arises why the defendants' right to a jury trial should be taken away because the present plaintiff cannot persuade the only party having a cause of action to sue — how the liability which is the principal matter can be converted into an incident of the plaintiff's domestic difficulties with the company that has been wronged.

No doubt there are cases in which the nature of thePage 29right asserted for the company, or the failure of the defendants concerned to insist upon their rights, or a different state system, has led to the whole matter being disposed of in equity; but we agree with the courts below that when a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law. On the contrary it plainly provides the latter remedy and it provides no other.Pollardv.Bailey, 20 Wall. 520. Even the Act of October 15, 1914, c. 323, § 16,38 Stat. 730, 737, passed since this suit was begun, does not go farther in terms than to give an injunction to private persons against threatened loss.

It now is suggested, evidently as an afterthought since the decision in the District Court, that there might be a decree directing the corporation to sue or, if it fails to do so, permitting the plaintiff to sue in its name and on its behalf. But the bill is not framed for that purpose, as the court below held.Decree affirmed.

MR. JUSTICE McKENNA and MR. JUSTICE PITNEY dissent.Page 30