Opinion
11-23-1934
RESTFUL SLIPPER CO., Inc. v. UNITED SHOE & LEATHER UNION et al.
Gross & Gross, of Jersey City, for complainant. Abraham J. Isserman, of Newark, for defendants.
Syllabus by the Court.
1. The statutory remedy for violations of the National Industrial Recovery Act is only available to the United States district attorneys or the Attorney General of the United States.
2. The protection of the State Recovery Act is only available to persons who have complied with its provisions.
3. Unless counterclaimant is entitled in his own right to maintain the cause of action which is the basis of a counterclaim, the counterclaim will be stricken.
Suit by the Restful Slipper Company, Incorporated, against the United Shoe & Leather Union and others, wherein defendants filed a counterclaim. On motion to strike counterclaim.
Motion granted.
Gross & Gross, of Jersey City, for complainant.
Abraham J. Isserman, of Newark, for defendants.
EGAN, Vice Chancellor.
This matter comes before me on a motion to strike the counterclaim filed by the defendants herein upon these grounds: "1. The said counterclaim does not set forth facts sufficient to constitute a cause of action, in behalfof these counterclaimants, cognizable in equity. 2. That these defendants have no status to assert the cause of action set out in the said counterclaim."
The counterclaim has been amended as follows:
"35a—Prior to the commission of the alleged unlawful acts of the complainant, a duly certified copy of the aforesaid Code of Fair Competition for the Boot and Shoe Industry was filed with the Governor of the State of New Jersey, pursuant to chapter 372 of New Jersey P. L. 1933 and in accordance with the provisions thereof."
Paragraph 36 of the counterclaim in effect alleges that the complainant "engages in intra state commerce in the State of New Jersey." In the face of this allegation, the counterclaimants seek to enjoin the complainant from continuing violating "the code of fair competition" or section 7(a) of the National Industrial Recovery Act (15 USCA § 707(a). The defendants' counterclaim cannot stand on either ground. Even though the complainant violated section 7(a) of the National Industrial Recovery Act, these defendants are without power to institute proceedings in equity to prevent and restrain such violations. Under 15 USCA § 703(c), the power to prevent and restrain violations, such as are charged in the counterclaim, is invested in the District Court of the United States, and proceedings must be instituted by the district attorneys of the United States in their respective districts under the direction of the Attorney General. The provision which governs reads as follows:
(c) "The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code of fair competition approved under this chapter; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations."
There are many decisions of the United States District Courts throughout the nation which have denied the right of any person or persons, other than the Attorney General or United States district attorneys, to institute proceedings to restrain violations of the National Industrial Recovery Act upon the ground that the statutory remedy is available only to the designated officer. Purvis et al. v. Bazemore (D. C.) 5 F. Supp. 230; Stanley v. Peabody Coal Co. (D. C.) 5 F. Supp. 612; Western Powder Manufacturing Co. v. Interstate Coal Co. (D. C.) 5 F. Supp. 619; Progressive Miners of America, Local Union No. 109 et al. v. Peabody Coal Co. et al. (D. C.) 7 F. Supp. 340.
The defendants can find no support for their stand under the New Jersey Recovery Act (P. L. 1933, c. 372, p. 1016 [N. J. St. Annual 1934, § *225—3 et seq.]), because they have failed to allege a compliance with section 3(b) thereof (N. J. St. Annual 1934, § *225—5(b). This lastmentioned section, in effect, provides that, where a code of fair competition shall affect intrastate commerce, application must first be made to the Governor for his approval of the code; and it further provides that the Governor may grant his ap proval if he finds no inequitable restraints are imposed; and also that the code is consistent with any like code approved or prescribed by the President; and that such code is not designed to promote monopolies.
There is no allegation or assertion in the counterclaim that the Governor ever approved any code of fair competition in intrastate commerce in this state for the boot and shoe manufacturing industry.
Paragraph 36 of the counterclaim reads as follows: "Complainant, in the operation of the above mentioned Jersey City plant, engages in intra state commerce in the State of New Jersey."
Notwithstanding this allegation of intrastate commerce, the defendants also invoke the aid of the federal statute. It is not necessary to comment upon the weakness of the defendants' position, because they have not observed the mandate of either the federal or state act. The above quotation from 15 USCA § 703(c), and the decisions of the federal courts above quoted, are dispositive of the defendants' right.
I shall advise an order striking the counterclaim upon the ground that the defendants are without power to invoke the provisions of section 7(a) of the National Industrial Recovery Act, and also for the further reason that, the provisions of the State Recovery Act not having been complied with, the defendants cannot therefore avail themselves of the provisions of that statute.