In a civil proceeding brought by the United States against
foreign corporations and individuals, seeking equitable relief upon
a charge that the defendants were engaged in a conspiracy to
restrain and monopolize commerce of the United States with foreign
nations in gem and industrial diamonds, in violation of §§ 1 and 2
of the Sherman Act and § 73 of the Wilson Tariff Act, the district
court granted a preliminary injunction restraining the corporate
defendants from withdrawing, selling, transferring, or disposing of
any property belonging to them in the United States until the cause
finally shall have been determined and the defendants shall have
complied with all orders of the court.
Held:
Page 325 U. S. 213
1. The order of the district court granting the preliminary
injunction was reviewable here by certiorari under § 262 of the
Judicial Code. P.
325 U. S.
217.
(a) If the preliminary injunction here granted, unless set
aside, will stand throughout the course of the trial and for an
indefinite period thereafter, and if the order was beyond the
powers conferred upon the court, the case is an appropriate one for
the exercise of jurisdiction by this Court under § 262.
United
States Alkali Export Assn. v. United States, ante p.
325 U. S. 196. P.
325 U. S.
217.
(b) The order did not grant such relief as could be afforded by
any final injunction, but dealt with matters lying wholly outside
the issues in the case; no decision of the suit on the merits could
redress any injury done by the order, and, unless it can be
reviewed under § 262, it can never be corrected if beyond the power
of the trial court. P.
325 U. S.
217.
2. The preliminary injunction here issued was not authorized by
statute or by the usages of equity, and the order granting it must
be reversed. P.
325 U. S.
219.
(a) Rule 70 of the Rules of Civil Procedure, which permits the
issue of a writ of attachment or sequestration against the property
of a disobedient party to compel satisfaction of a judgment, is
operative only after a judgment is entered. P.
325 U. S.
218.
(b) The preliminary injunction here issued was not authorized by
§ 4 of the Sherman Act or by § 262 of the Judicial Code. P.
325 U. S.
218.
(c) The preliminary injunction here issued deals with a matter
lying wholly outside the issues in the suit; it deals with property
which in no circumstances can be dealt with in any final injunction
that may be entered. P.
325 U. S.
220.
(d) Cases involving interlocutory injunctions granted with
respect to funds or property which would have been the subject of
the provisions of final decrees, and cases involving injunctions by
federal courts to restrain interference with their jurisdiction, do
not sustain the preliminary injunction here issued. P.
325 U. S.
220.
(e) The practice in respect of writs of
ne exeat is not
analogous. P.
325 U. S.
221.
(f) Since, under the circumstances, the district court is
without jurisdiction to demand security, it is equally without
authority to compel the furnishing of a bond by the seizure of
property. P.
325 U. S.
222.
Reversed.
Certiorari, 324 U.S. 839, to review an order of the district
court granting a preliminary injunction against defendants
Page 325 U. S. 214
in a suit brought by the United States to restrain alleged
violations of the Sherman Act and the Wilson Tariff Act.
MR. JUSTICE ROBERTS delivered the opinion of the Court.
These cases come before the court on petitions for certiorari
presented pursuant to § 262 of the Judicial Code. [
Footnote 1] Each petition is by several of
the defendants in a single suit pending in the District Court.
Two matters are presented: the propriety of review of the action
below by certiorari, and the alleged excess of jurisdiction by the
court below in making the order of which the petitioners complain.
An understanding of the issues requires a statement of the nature
of the suit, and of the order made.
The United States filed a complaint in the District Court
against the three petitioners in No. 1189, which are corporations
organized under the laws of South Africa; the petitioners in No.
1190, which are respectively corporations organized under the laws
of the Belgian Congo and under the laws of Portugal, and four other
corporations, one organized under the laws of Belgium, one under
the laws of the Belgian Congo, and two under the laws of the United
Kingdom of Great Britain and Northern
Page 325 U. S. 215
Ireland, and seven individuals respectively characterized as
stockholder, or stockholder and director, or stockholder and
employee, or managing agent, or managing director of one or more of
the corporations. The complaint sought equitable relief based upon
a charge that the defendants were engaged in a conspiracy to
restrain and monopolize the commerce of the United States with
foreign nations in gem and industrial diamonds, in violation of §§
1 and 2 of the Sherman Act [
Footnote 2] and § 73 of the Wilson Tariff Act. [
Footnote 3] The complaint alleged that
all of the corporate defendants were doing business within the
United States.
With the complaint, the United States filed a motion for a
preliminary injunction in which it prayed that all of the corporate
defendants be restrained from withdrawing from the country any
property located in the United States, and from selling,
transferring, or disposing of any property in the United States
"until such time as this Court shall have determined the issues of
this case and defendant corporations shall have complied with its
orders." The reason given in support of the motion was:
"The injury to the United States of America from the withdrawal
of said deposits, diamonds, or other property would be irreparable
because sequestration of said property is the only means of
enforcing this Court's orders or decree against said foreign
corporate defendants. The principal business of said defendants is
carried on in foreign countries, and they could quickly withdraw
their assets from the United States, and so prevent enforcement of
any order or decree which this Court may render."
Amongst other supporting papers was an affidavit by counsel for
the United States which stated that
"the investigation which he has made shows the foreign corporate
defendants named herein have endeavored to avoid subjecting
Page 325 U. S. 216
themselves to the jurisdiction of the courts of the United
States by making their sales abroad only, and requiring customers
to pay in advance for all purchases."
There was also a motion for a restraining order without notice.
The requested restraining order was issued and served on a number
of banks; one, a bank in which de Beers had, the same day,
established a credit of $59,320; others in which Forestiere had
credits of approximately $632,000. Bank credits of petitioner
Diamantes affected aggregate approximately $47,000. Both the two
last named petitioners had purchased machinery and supplies in the
United States of an approximate value of $100,000, which were
covered by the injunction. Upon a showing that as the corporate
defendants were foreign corporations, and would be required to
obtain information and affidavits in support of their contention
that service of process in the suit had not been made upon them,
and in support of other motions addressed to failure to state a
cause of action under the statutes, time to plead or answer was
extended, and the injunction was from time to time modified and
continued. Counsel for the petitioners, appearing specially, moved
for dissolution of the injunction. The case was heard on affidavits
and oral argument, the application was denied, and the injunction
was continued in force. Thereupon, the petitioners applied to this
court for certiorari under § 262. That section provides in
part:
"The Supreme Court, the circuit courts of appeals, and the
district courts shall have power to issue all writs not
specifically provided for by statute, which may be necessary for
the exercise of their respective jurisdictions and agreeable to the
usages and principles of law."
All the petitioners attack the order as, in substance, a
sequestration of property beyond the power of the court and an
abuse of discretion in the circumstances. The petitioners in No.
1189 also seek a reversal on the ground that the complaint does not
state a claim cognizable by United States courts, and that the
affidavits filed by these petitioners
Page 325 U. S. 217
establish that the court below has no jurisdiction over the
persons of the defendants. It is obvious from the record that these
contentions are still open in the court below, and that court has
not yet passed upon them. In the view we take of the case, it is
unnecessary for us presently to consider them.
In
United States Alkali Export Assn., Inc. et al. v.
United States,
and California Alkali Export Assn. v. United
States, ante, p.
325 U. S. 196, the
court has discussed the propriety of review under § 262 in a suit
brought under the Anti-Trust laws where there is a substantial
question whether the District Court has jurisdiction of a suit
which it has retained for trial on the merits. What is there said
applies in this instance. If the preliminary injunction here
granted, unless set aside, will stand throughout the course of the
trial and for an indefinite period after its termination, and if
the order was beyond the powers conferred upon the court, it is
plain, under the decisions mentioned, that the petitions present an
appropriate case for the exercise of our jurisdiction under § 262.
As hereafter noted, the order in question was not made to grant
interlocutory relief such as could be afforded by any final
injunction, but is one respecting a matter lying wholly outside the
issues in the case; no decision of the suit on the merits can
redress any injury done by the order, and therefore, unless it can
be reviewed under § 262, it can never be corrected if beyond the
power of the court below. [
Footnote
4] When Congress withholds interlocutory reviews, § 262 can, of
course, not be availed of to correct a mere error in the exercise
of conceded judicial power. But when a court has no judicial power
to do what it purports to do -- when its action is not mere error,
but usurpation of power -- the situation falls precisely within the
allowable use of § 262. We proceed, therefore, to inquire whether
the District Court is empowered to enter the order under
attack.
Page 325 U. S. 218
Although the Government based its motion upon the theory that
the entry of the requested injunction would amount to a
sequestration of the defendants' assets, and so argued in the court
below, it has abandoned that position, because Rule 70 of the Rules
of Civil Procedure, [
Footnote
5] which permits the issue of a writ of attachment or
sequestration against the property of a disobedient party to compel
satisfaction of a judgment, is operative only after a judgment is
entered.
The Government disclaims any benefit of Rule 64, which provides
for an attachment at the commencement of, or during the course of,
an action for the purpose of securing payment of any judgment
ultimately obtained, under and in accordance with the law of the
state in which the court sits or under any existing federal
statute. It is admitted that there is no applicable federal
statute, and that, under the law of New York, an attachment may
issue only in an action seeking a money judgment, and will not
issue in an equity suit, such as the instant one. [
Footnote 6]
The court below deduced the power to grant the injunction from §
4 of the Sherman Act [
Footnote
7] and from § 262 of the Judicial Code, the section under which
petitioners seek review in this court. The respondent seeks to
sustain the injunction under the same statutory provisions.
Section 4 of the Sherman Act confers jurisdiction on District
Courts "to prevent and restrain violations of this act." That
jurisdiction, as we have held, [
Footnote 8] is to be exercised according to the general
principles which govern
Page 325 U. S. 219
the granting of equitable relief. Since it confers no new or
different power than those traditionally exercised by courts of
equity, we are remitted to examination of the practice of such
courts, unless § 262 has enlarged those powers. That section
empowers District Courts to issue all writs not specifically
provided for by statute which may be necessary for the exercise of
their respective jurisdictions and agreeable to the usages and
principles of law. It turns out, therefore, that we are again
remitted to an inquiry as to what is the usage, and what are the
principles of equity applicable in such a case.
Preliminary to a discussion of the course of decision in
chancery, it will be well to note exactly what is the substance of
the injunction, since the name given to the process is not
determinative. In truth, the purpose and effect of the injunction
is to provide security for performance of a future order which may
be entered by the court. Its issue presupposes or assumes the
following things: (1) that the court has obtained jurisdiction of
the persons of the defendants; (2) that it may be found and
adjudged that the United States has stated a cause of action in its
complaint; (3) that a decree may be entered after trial on the
merits enjoining and restraining the defendants from certain future
conduct; (4) that the defendants may disobey the decree entered;
(5) that a proceeding may be instituted for contempt, and will
result adversely to the defendants; (6) that a fine may be imposed;
(7) that the defendants may neglect or refuse to pay the fine; (8)
that an execution issued for the collection of the fine pursuant to
18 U.S.C. § 569, may be ineffectual to seize property or money of
the defendants in liquidation of the fine unless the moneys and
properties covered by the injunction are held to await the
event.
Under the Sherman Act and the Wilson Tariff Act, the District
Court has no jurisdiction in this suit to enter a money judgment.
Its only power is to restrain the future
Page 325 U. S. 220
continuance of actions or conduct intended to monopolize or
restrain commerce. It, of course, has the power, pending final
action in this respect, to retrain action or conduct violative of
the statute. A preliminary injunction is always appropriate to
grant intermediate relief of the same character as that which may
be granted finally. The injunction in question is not of this
character. It is not an injunction in the cause, and it deals with
a matter lying wholly outside the issues in the suit. It deals with
property which in no circumstances can be dealt with in any final
injunction that may be entered. It is not a form of seizure of
property used in offending against the statute for the property is
not such as might be seized under § 6 of the Sherman Act, [
Footnote 9] or under § 76 of the Wilson
Act, [
Footnote 10] and the
complaint and affidavits do not purport so to charge. This process
is, and can only be, sustained as a method of providing security
for compliance with other process which conceivably may be issued
for satisfaction of a money judgment for contempt.
The parties agree that neither of them can find any decision or
textbook authority for the requisition of such security on the
footing of a complaint in equity. The respondent refers us to
certain cases as analogous, but, upon examination, they are all
found to be cases in which an interlocutory injunction was granted
with respect to a fund or property which would have been the
subject of the provisions of any final decree in the cause,
[
Footnote 11] or against
action which would ultimately have been subject to injunction by
final decree. [
Footnote 12]
The Government also refers us to cases where federal courts have
enjoined interference
Page 325 U. S. 221
with their jurisdiction. [
Footnote 13] Thus, it argues that a court of equity has
inherent power to protect its jurisdiction. The fallacy in the
application of the principle here is that, if service of the
defendants is properly obtained and if the complaint states a cause
of action, no one questions the jurisdiction of the District Court
to enter an appropriate injunction against future conduct violative
of the Anti-Trust Acts. The injunction here granted cannot aid or
protect this exercise of its powers, and is not intended to do
so.
Federal and State courts appear consistently to have refused
relief of the nature here sought. [
Footnote 14] The Government nevertheless urges that
equity should extend its jurisdiction for the purpose envisaged in
the issue of the injunction, and advances several reasons in
support of its position. It suggests that, by analogy to the
practice of issuing writs
ne exeat, [
Footnote 15] the court, if it would restrain, by
such a writ, an individual defendant in a similar case, should
restrain the removal of the property of a corporate defendant from
the jurisdiction. The analogy is not a helpful one, for the writ
ne exeat would not be issued in a case of this sort where
the defendant presently owes no debt to the complainant, nor is
under any fixed duty by
Page 325 U. S. 222
reason of the receipt of moneys to account to the complainant
therefor. [
Footnote 16]
The Government urges that the supposed hardship imposed upon the
defendants by the entry of the injunction is exaggerated; that, by
giving a bond, the defendants could release their moneys and
property. To this there are several sufficient answers. If the
court is without jurisdiction to demand security under the
circumstances presented, it is equally without authority to compel
the proffer of a bond by the seizure of property. If the process be
justified in the present posture of the case, there is nothing to
prevent other and further seizures of property or money brought
into the United States in connection with transactions unrelated to
any supposed violation of the Anti-Trust laws. Moreover, the very
indefiniteness of the obligation, the remoteness of any possible
exoneration of the surety, and the citizenship of the defendants
would, as common experience tells us, require the posting of
collateral with any bondsman, which would, in effect, tie up assets
of value equal to that of those frozen by the injunction.
To sustain the challenged order would create a precedent of
sweeping effect. This suit, as we have said, is not to be
distinguished from any other suit in equity. What applies to it
applies to all such. Every suitor who resorts to chancery for any
sort of relief by injunction may, on a mere statement of belief
that the defendant can easily make away with or transport his money
or goods, impose an injunction on him, indefinite in duration,
disabling him to use so much of his funds or property as the court
deems necessary for security or compliance with its possible
decree. And, if so, it is difficult to see why a plaintiff in any
action for a personal judgment in tort or contract may not also
apply to the chancellor for a so-called injunction sequestrating
his opponent's assets pending recovery and
Page 325 U. S. 223
satisfaction of a judgment in such a law action. No relief of
this character has been thought justified in the long history of
equity jurisprudence.
We are of opinion that the injunction issued in this case is not
authorized either by statute or by the usages of equity, and that
the decree granting the injunction should be
Reversed.
* Together with No. 1190,
Societe Internationale Forestiere
et Miniere du Congo et al. v. United States, also on
certiorari to the District Court of the United States for the
Southern District of New York.
[
Footnote 1]
28 U.S.C. § 377.
[
Footnote 2]
26 Stat. 209 as amended 15 U.S.C. §§ 1, 2.
[
Footnote 3]
28 Stat. 570 as amended 15 U.S.C. § 8.
[
Footnote 4]
See In re Chetwood, 165 U. S. 443,
165 U. S. 462;
Maryland v. Soper, 270 U. S. 9,
270 U. S. 30.
[
Footnote 5]
28 U.S.C. foll. § 723c.
[
Footnote 6]
N.Y.Civil Practice Act, § 902; 7 Carmody, New York Practice, §
309;
Thorington v. Merrick, 101 N.Y. 5, 3 N.E. 794;
Brown v. Chaminade, Velours, Inc., 176 Misc. 238, 26
N.Y.S.2d 1009;
Avery v. Avery, 119 App.Div. 698, 104
N.Y.S. 290.
Compare Lazenby v. Codman, 28 F. Supp. 949;
Shiel v. Patrick, 59 F. 992.
[
Footnote 7]
15 U.S.C. § 4.
[
Footnote 8]
Appalachian Coals Inc. v. United States, 288 U.
S. 344,
288 U. S.
377.
[
Footnote 9]
15 U.S.C. § 6.
[
Footnote 10]
15 U.S.C. § 11.
[
Footnote 11]
Deckert v. Independence Shares Corp., 311 U.
S. 282.
[
Footnote 12]
Looney v. Eastern Texas R. Co., 247 U.
S. 214;
Ohio Oil Co. v. Conway, 279 U.
S. 813;
Virginian R. Co. v. System Federation,
300 U. S. 515;
Gibbs v. Buck, 307 U. S. 66.
[
Footnote 13]
This power has often been exercised in cases where a court of
equity has first taken jurisdiction of a
res and where
some other court has thereafter essayed to deal with that
res. See, e.g., Wabash R. Co. v. Adelbert
College, 208 U. S. 38,
208 U. S. 45;
Palmer v. Texas, 212 U. S. 118,
212 U. S.
129-130;
Princess Lida v. Thompson,
305 U. S. 456,
305 U. S.
467.
[
Footnote 14]
Martin v. Berry Sons' Co., 83 F.2d 857;
Cities
Service Co. v. McDowell, 13 Del.Ch. 109, 116 A. 4;
Wahlgren v. Bausch & Lomb Optical Co., 77 F.2d 121;
Campbell v. Ernest, 64 Hun 188, 19 N.Y.S. 123;
Platt
v. Elias, 101 App.Div. 518, 91 N.Y.S. 1079;
Maine Products
Co. v. Alexander, 115 App.Div. 112, 100 N.Y.S. 711;
Goldin
v. Tauster, 68 Misc. 459, 125 N.Y.S. 83;
Wright Co. v.
Aero Corporation, 128 N.Y.S. 726;
Broadfoot v.
Miller, 106 Misc. 455, 174 N.Y.S. 497;
compare Gordon v.
Washington, 295 U. S. 30,
295 U. S.
37.
[
Footnote 15]
See 28 U.S.C. § 376.
[
Footnote 16]
Ginsberg & Sons v. Popkin, 285 U.
S. 204,
285 U. S.
208.
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK, MR. JUSTICE
MURPHY, and MR. JUSTICE RUTLEDGE concur, dissenting.
I think the writ should be dismissed. For I do not think this is
a proper case in which to exercise our jurisdiction under § 262 of
the Judicial Code, 28 U.S.C. § 377.
Our jurisdiction under § 262 has been fully reviewed by the
Chief Justice in
United States Alkali Export Assn., Inc. v.
United States, ante, p.
325 U. S. 196. I
agree that the exercise of our extraordinary jurisdiction was
appropriate in that case. For the question presented not only went
to the jurisdiction of the District Court to entertain the suit. If
the defendants in that suit were right in their contention, a trial
on the merits would have frustrated the statutory scheme which
Congress had designed for the control of antitrust activities.
But there is no such extraordinary situation presented here.
This is precisely the kind of decree which Congress, by the
Expediting Act of February 11, 1903, as amended, 15 U.S.C. § 29,
intended should not be brought here for review. With reference to
the change made by that Act, Mr. Justice Brandeis speaking for the
Court in
United States v. California Cooperative
Canneries, 279 U. S. 553,
279 U. S. 558,
said:
"These provisions governing appeals in general were amended by
the Expediting Act so that, in suits in equity under the Anti-Trust
Act 'in which the United States is complainant,' the appeal should
be direct to this
Page 325 U. S. 224
court from the final decree in the trial court. Thus, Congress
limited the right of review to an appeal from the decree which
disposed of all matters,
see Collins v. Miller,
252 U. S.
364, and it precluded the possibility of an appeal to
either court from an interlocutory decree."
To allow this appeal is to defeat that policy. Long ago, in
Bank of Columbia v.
Sweeney, 1 Pet. 567,
26 U. S. 569,
Chief Justice Marshall stated that an allowance of an appeal from
an interlocutory ruling where Congress permitted an appeal only
from a final judgment would be a "plain evasion" of the Act of
Congress. We made a like ruling only recently, in
Roche v.
Evaporated Milk Assn., 319 U. S. 21,
319 U. S. 30,
where we said:
"Where the appeal statutes establish the conditions of appellate
review, an appellate court cannot rightly exercise its discretion
to issue a writ whose only effect would be to avoid those
conditions and thwart the Congressional policy against piecemeal
appeals in criminal cases."
The present case presents no issue which warrants a departure
from that long settled practice. This case raises no question of
grave public importance. It is by no means comparable to
Ex
parte United States, 287 U. S. 241,
where the interlocutory decree was equivalent to a denial of the
absolute right of the government to put the accused on trial. It is
wholly unlike the cases cited in
United States Alkali Export
Assn., Inc. v. United States, supra, where writs were issued
under § 262, to review interlocutory orders which foreclosed the
adjudication of rights entrusted to the jurisdiction of a state
tribunal or which deprived a party of his basic right of trial by
jury. The public importance of the present question is not
apparent. The actual hardship imposed upon the defendants is no
more than the cost of procuring a bond. It has always been assumed
that mere hardship or inconvenience alone was not sufficient to
justify resort to the extraordinary course of review by way of §
262.
United States Alkali Export Assn. Inc. v. United
Page 325 U. S. 225
States, supra. Is the inconvenience of private
litigants to be the newly found ground for evading the Expediting
Act?
The reason advanced for departing from the long standing
practice is that "the order was beyond the powers conferred upon
the court." By that test, every interlocutory order which is wrong
can be reviewed here under § 262. That is novel doctrine. That
seems to be the test, for the Court says that the order can now be
reviewed because it involves "a matter lying wholly outside the
issues in the case." In other words, we look to the merits, and
take the case under § 262 if it appears that the District Court
exceeded its authority. But it always exceeds its authority when it
abuses its discretion. Thus, we must now entertain these appeals on
interlocutory orders, though Congress said we should not, in order
to determine whether the District Court kept within bounds.
Certainly Congress knew that some interlocutory orders might be
erroneous when it chose to make them nonreviewable. It did not draw
the distinction now suggested between interlocutory orders which
are an abuse of conceded judicial power and interlocutory orders
which otherwise exceed judicial authority. Congress, moreover, knew
that, if immediate review of interlocutory orders could not be had,
no decision on the merits might be able to "redress any injury done
by the order." But that was the choice which it made. We should
respect it.
The decision, if followed, will open the floodgates to review of
interlocutory decrees. It circumvents the policy of Congress to
restrict review in these cases to final judgments.