In anticipation of a suit by petitioner for treble damages under
the Sherman and Clayton Acts, the prospective defendant brought
suit against petitioner in a Federal District Court for a
declaratory judgment which would have settled some of the key
issues in such an antitrust suit, and prayed that the bringing of
such a suit be enjoined pending outcome of the declaratory judgment
litigation. Petitioner filed a counterclaim raising the issues
which would have been raised in the antitrust suit for treble
damages, and demanded a jury trial. Purporting to act in the
exercise of its discretion under Rules 42(b) and 57 of the Federal
Rules of Civil Procedure, the District Court ruled that it would
try in equity, without a jury, the issues common to both
proceedings before trying petitioner's counterclaim. The Court of
Appeals held that the District Court had acted within the proper
scope of its discretion, and it denied petitioner's application for
a writ of mandamus requiring the District Court to set aside its
ruling.
Held: the judgment of the Court of Appeals is reversed.
Pp.
359 U. S.
501-511.
1. The District Court's finding that the complaint for
declaratory relief presented basically equitable issues draws no
support from the Declaratory Judgment Act, which specifically
preserves the right to a jury trial for both parties. P.
359 U. S.
504.
2. If petitioner would have been entitled to a jury trial in a
treble damage suit, he cannot be deprived of that right merely
because the prospective defendant took advantage of the
availability of declaratory relief to sue petitioner first. P.
359 U. S.
504.
3. Since the right to trial by jury applies to treble damage
suits under the antitrust laws, and is an essential part of the
congressional plan for making competition, rather than monopoly,
the rule of trade, the antitrust issues raised in the declaratory
judgment suit were essentially jury questions. P.
359 U. S.
504.
4. Assuming that the pleadings can be construed to support a
request for an injunction against threats of lawsuits, and as
alleging the kind of harassment by a multiplicity of lawsuits which
would traditionally have justified equity in taking jurisdiction
and settling
Page 359 U. S. 501
the case in one suit, nevertheless, under the Declaratory
Judgment Act and the Federal Rules of Civil Procedure, neither
claim can justify denying petitioner a trial by jury of all the
issues in the antitrust controversy. Pp.
359 U. S.
506-511.
(a) Today, the existence of irreparable harm and inadequacy of
legal remedies as a basis of injunctive relief must be determined
not by precedents under discarded procedures, but in the light of
the remedies now made available by the Declaratory Judgment Act and
the Federal Rules of Civil Procedure. Pp.
359 U. S.
506-510.
(b) Viewed in this manner, the use of discretion by the District
Court under Rule 42(b) to deprive petitioner of a full jury trial
of the issues in the antitrust controversy cannot be justified. P.
359 U. S.
508.
5. Mandamus is available under the All Writs Act, 28 U.S.C. §
1651, to require jury trial where it has been improperly denied. P.
359 U. S.
511.
252 F.2d 864 reversed.
MR. JUSTICE BLACK delivered the opinion of the Court.
Petitioner, Beacon Theatres, Inc., sought by mandamus to require
a district judge in the Southern District of California to vacate
certain orders alleged to deprive it of a jury trial of issues
arising in a suit brought against it by Fox West Coast Theatres,
Inc. The Court of Appeals for the Ninth Circuit refused the writ,
holding that the trial judge had acted within his proper discretion
in denying petitioner's request for a jury. 252 F.2d 864. We
granted certiorari, 356 U.S. 956, because
"Maintenance of the jury as a factfinding body is of such
importance and occupies so firm a place in our history and
jurisprudence that any seeming curtailment of the right to a jury
trial should be scrutinized with the utmost care."
Dimick v. Schiedt, 293 U. S. 474,
293 U. S.
486.
Page 359 U. S. 502
Fox had asked for declaratory relief against Beacon, alleging a
controversy arising under the Sherman Antitrust Act, 26 Stat. 209,
as amended, 15 U.S.C. §§ 1, 2, and under the Clayton Act, 38 Stat.
731, 15 U.S.C. § 15, which authorizes suits for treble damages
against Sherman Act violators. According to the complaint, Fox
operates a movie theatre in San Bernardino, California, and has
long been exhibiting films under contracts with movie distributors.
These contracts grant it the exclusive right to show "first run"
pictures in the "San Bernardino competitive area" and provide for
"clearance" -- a period of time during which no other theatre can
exhibit the same pictures. After building a drive-in theatre about
11 miles from San Bernardino, Beacon notified Fox that it
considered contracts barring simultaneous exhibitions of first-run
films in the two theatres to be overt acts in violation of the
antitrust laws. [
Footnote 1]
Fox's complaint alleged that this notification, together with
threats of treble damage suits against Fox and its distributors,
gave rise to "duress and coercion" which deprived Fox of a valuable
property right, the right to negotiate for exclusive first-run
contracts. Unless Beacon was restrained, the complaint continued,
irreparable harm would result. Accordingly, while its pleading was
styled a "Complaint for Declaratory Relief," Fox prayed both for a
declaration that a grant of clearance between the Fox and Beacon
theatres is reasonable and
Page 359 U. S. 503
not in violation of the antitrust laws, and for an injunction,
pending final resolution of the litigation, to prevent Beacon from
instituting any action under the antitrust laws against Fox and its
distributors arising out of the controversy alleged in the
complaint. [
Footnote 2] Beacon
filed an answer, a counterclaim against Fox, and a cross-claim
against an exhibitor who had intervened. These denied the threats
and asserted that there was no substantial competition between the
two theatres, that the clearances granted were therefore
unreasonable, and that a conspiracy existed between Fox and its
distributors to manipulate contracts and clearances so as to
restrain trade and monopolize first-run pictures in violation of
the antitrust laws. Treble damages were asked.
Beacon demanded a jury trial of the factual issues in the case,
as provided by Federal Rule of Civil Procedure 38(b). The District
Court, however, viewed the issues raised by the "Complaint for
Declaratory Relief," including the question of competition between
the two theatres, as essentially equitable. Acting under the
purported authority of Rules 42(b) and 57, it directed that these
issues be tried to the court before jury determination of the
validity of the charges of antitrust violations made in the
counterclaim and cross-claim. [
Footnote 3] A common issue of the "Complaint for
Declaratory Relief," the counterclaim, and the cross-claim was the
reasonableness of the clearances granted to Fox, which depended, in
part, on the
Page 359 U. S. 504
existence of competition between the two theatres. Thus, the
effect of the action of the District Court could be, as the Court
of Appeals believed, "to limit the petitioner's opportunity fully
to try to a jury every issue which has a bearing upon its treble
damage suit," for determination of the issue of clearances by the
judge might
"operate either by way of
res judicata or collateral
estoppel so as to conclude both parties with respect thereto at the
subsequent trial of the treble damage claim."
252 F.2d at 874.
The District Court's finding that the Complaint for Declaratory
Relief presented basically equitable issues draws no support from
the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202; Fed.Rules
Civ.Proc. 57.
See also 48 Stat. 955, 28 U.S.C. (1940 ed.)
§ 400. That statute, while allowing prospective defendants to sue
to establish their nonliability, specifically preserves the right
to jury trial for both parties. [
Footnote 4] It follows that, if Beacon would have been
entitled to a jury trial in a treble damage suit against Fox, it
cannot be deprived of that right merely because Fox took advantage
of the availability of declaratory relief to sue Beacon first.
Since the right to trial by jury applies to treble damage suits
under the antitrust laws, and is, in fact, an essential part of the
congressional plan for making competition, rather than monopoly,
the rule of trade,
see Fleitmann v. Welsbach Street Lighting
Co., 240 U. S. 27,
240 U. S. 29,
the Sherman and Clayton Act issues on which Fox sought a
declaration were essentially jury questions.
Nevertheless, the Court of Appeals refused to upset the order of
the district judge. It held that the question of whether a right to
jury trial existed was to be judged
Page 359 U. S. 505
by Fox's complaint read as a whole. In addition to seeking a
declaratory judgment, the court said, Fox's complaint can be read
as making out a valid plea for injunctive relief, thus stating a
claim traditionally cognizable in equity. A party who is entitled
to maintain a suit in equity for an injunction, said the court, may
have all the issues in his suit determined by the judge without a
jury, regardless of whether legal rights are involved. The court
then rejected the argument that equitable relief, traditionally
available only when legal remedies are inadequate, was rendered
unnecessary in this case by the filing of the counterclaim and
cross-claim which presented all the issues necessary to a
determination of the right to injunctive relief. Relying on
American Life Ins. Co. v. Stewart, 300 U.
S. 203,
300 U. S. 215,
decided before the enactment of the Federal Rules of Civil
Procedure, it invoked the principle that a court sitting in equity
could retain jurisdiction even though later a legal remedy became
available. In such instances, the equity court had discretion to
enjoin the later lawsuit in order to allow the whole dispute to be
determined in one case in one court. [
Footnote 5] Reasoning by analogy, the Court of Appeals
held it was not an abuse of discretion for the district judge,
acting under Federal Rule of Civil Procedure 42(b), to try the
equitable cause first, even though this might, through collateral
estoppel, prevent a full jury trial of the counterclaim and
cross-claim which were as effectively stopped as by an equity
injunction. [
Footnote 6]
Page 359 U. S. 506
Beacon takes issue with the holding of the Court of Appeals that
the complaint stated a claim upon which equitable relief could be
granted. As initially filed, the complaint alleged that threats of
lawsuits by petitioner against Fox and its distributors were
causing irreparable harm to Fox's business relationships. The
prayer for relief, however, made no mention of the threats, but
asked only that, pending litigation of the claim for declaratory
judgment, Beacon be enjoined from beginning any lawsuits under the
antitrust laws against Fox and its distributors arising out of the
controversy alleged in the complaint. Evidently of the opinion that
this prayer did not state a good claim for equitable relief, the
Court of Appeals construed it to include a request for an
injunction against threats of lawsuits. This liberal construction
of a pleading is in line with Rule 8 of the Federal Rules of Civil
Procedure.
See Conley v. Gibson, 355 U. S.
41,
355 U. S. 47-48.
But this fact does not solve our problem. Assuming that the
pleadings can be construed to support such a request, and assuming
additionally that the complaint can be read as alleging the kind of
harassment by a multiplicity of lawsuits which would traditionally
have justified equity to take jurisdiction and settle the case in
one suit, [
Footnote 7] we are
nevertheless of the opinion that, under the Declaratory Judgment
Act and the Federal Rules of Civil Procedure, neither claim can
justify denying Beacon a trial by jury of all the issues in the
antitrust controversy.
The basis of injunctive relief in the federal courts has always
been irreparable harm and inadequacy of legal
Page 359 U. S. 507
remedies. [
Footnote 8] At
least as much is required to justify a trial court in using its
discretion under the Federal Rules to allow claims of equitable
origins to be tried ahead of legal ones, since this has the same
effect as an equitable injunction of the legal claims. And it is
immaterial, in judging if that discretion is properly employed,
that, before the Federal Rules and the Declaratory Judgment Act
were passed, courts of equity, exercising a jurisdiction separate
from courts of law, were, in some cass, allowed to enjoin
subsequent legal actions between the same parties involving the
same controversy. This was because the subsequent legal action,
though providing an opportunity to try the case to a jury, might
not protect the right of the equity plaintiff to a fair and orderly
adjudication of the controversy.
See, e.g., New York Life Ins.
Co. v. Seymour, 45 F.2d 47. Under such circumstances, the
legal remedy could quite naturally be deemed inadequate. Inadequacy
of remedy and irreparable harm are practical terms, however. As
such, their existence today must be determined not by precedents
decided under discarded procedures, but in the light of the
remedies now made available by the Declaratory Judgment Act and the
Federal Rules. [
Footnote 9]
Page 359 U. S. 508
Viewed in this manner, the use of discretion by the trial court
under Rule 42(b) to deprive Beacon of a full jury trial on its
counterclaim and cross-claim, as well as on Fox's plea for
declaratory relief, cannot be justified. Under the Federal Rules,
the same court may try both legal and equitable causes in the same
action. Fed.Rules Civ.Proc. 1, 2, 18. Thus, any defenses, equitable
or legal, Fox may have to charges of antitrust violations can be
raised either in its suit for declaratory relief or in answer to
Beacon's counterclaim. On proper showing, harassment by threats of
other suits, or other suits actually brought, involving the issues
being tried in this case, could be temporarily enjoined pending the
outcome of this litigation. Whatever permanent injunctive relief
Fox might be entitled to on the basis of the decision in this case
could, of course, be given by the court after the jury renders its
verdict. In this way, the issues between these parties could be
settled in one suit giving Beacon a full jury trial of every
antitrust issue.
Cf. Ring v. Spina, 166 F.2d 546. By
contrast, the holding of the court below while granting Fox no
additional protection unless the avoidance of jury trial be
considered as such, would compel Beacon to split his antitrust
case, trying part to a judge and part to a jury. [
Footnote 10] Such a result, which involves
the postponement and subordination of Fox's own legal claim for
declaratory relief, as well as of the counterclaim which Beacon was
compelled by the Federal Rules to bring, [
Footnote 11] is not permissible.
Our decision is consistent with the plan of the Federal Rules
and the Declaratory Judgment Act to effect
Page 359 U. S. 509
substantial procedural reform while retaining a distinction
between jury and nonjury issues and leaving substantive rights
unchanged. [
Footnote 12]
Since, in the federal courts, equity has always acted only when
legal remedies were inadequate, [
Footnote 13] the expansion of adequate legal remedies
provided by the Declaratory Judgment Act and the Federal Rules
necessarily affects the scope of equity. Thus, the justification
for equity's deciding legal issues once it obtains jurisdiction,
and refusing to dismiss a case merely because subsequently a legal
remedy becomes available, must be reevaluated in the light of the
liberal joinder provisions of the Federal Rules which allow legal
and equitable causes to be brought and resolved in one civil
action. [
Footnote 14]
Similarly, the need for, and therefore the availability of, such
equitable remedies as Bills of Peace, Quia Timet, and Injunction
must be reconsidered in view of the existence of the Declaratory
Judgment Act, as well as the liberal joinder provision of the
Rules. [
Footnote 15] This is
not only in accord with the spirit of the Rules and the Act,
Page 359 U. S. 510
but is required by the provision in the Rules that
"[t]he right of trial by jury as declared by the Seventh
Amendment to the Constitution or as given by a statute of the
United States shall be preserved . . . inviolate. [
Footnote 16]"
If there should be cases where the availability of declaratory
judgment or joinder in one suit of legal and equitable causes would
not in all respects protect the plaintiff seeking equitable relief
from irreparable harm while affording a jury trial in the legal
cause, the trial court will necessarily have to use its discretion
in deciding whether the legal or equitable cause should be tried
first. Since the right to jury trial is a constitutional one,
however, while no similar requirement protects trials by the court,
[
Footnote 17] that
discretion is very narrowly limited, and must, wherever possible,
be exercised to preserve jury trial. As this Court said in
Scott v. Neely, 140 U. S. 106,
140 U. S.
109-110:
"In the Federal courts, this [jury] right cannot be dispensed
with except by the assent of the parties entitled to it, nor can it
be impaired by any blending with a claim, properly cognizable at
law, of a demand for equitable relief in aid of the legal action,
or during its pendency. [
Footnote 18]"
This longstanding principle of equity dictates that only under
the
Page 359 U. S. 511
most imperative circumstances, circumstances which, in view of
the flexible procedures of the Federal Rules, we cannot now
anticipate, [
Footnote 19]
can the right to a jury trial of legal issues be lost through prior
determination of equitable claims.
See Leimer v. Woods,
196 F.2d 828, 833-836. As we have shown, this is far from being
such a case.
Respondent claims mandamus is not available under the All Writs
Act, 28 U.S.C. § 1651. Whatever differences of opinion there may be
in other types of cases, we think the right to grant mandamus to
require jury trial where it has been improperly denied is settled.
[
Footnote 20]
The judgment of the Court of Appeals is
Reversed.
MR. JUSTICE FRANKFURTER took no part in the consideration or
decision of this case.
[
Footnote 1]
Beacon allegedly stated that the clearances granted violated
both the antitrust laws and the decrees issued in
United States
v. Paramount Pictures, Inc., 66 F.
Supp. 323;
70 F. Supp.
53,
affirmed in part and reversed in part,
334 U. S. 334 U.S.
131,
subsequent proceedings in the District
Court, 85 F. Supp.
881. The decrees in that case set limits on what clearances
could be given when theatres were in competition with each other,
and held that there should be no clearances between theatres not in
substantial competition. Neither Beacon nor Fox, however, appears
to have been a party to those decrees. Their relevance, therefore,
seems to be only that of significant precedents.
[
Footnote 2]
Other prayers aside from the general equitable plea for "such
further relief as the court deems proper" added nothing material to
those set out.
[
Footnote 3]
Fed.Rules Civ.Proc., 42(b) reads:
"The court, in furtherance of convenience or to avoid prejudice,
may order a separate trial of any claim, cross-claim, counterclaim,
or third-party claim, or of any separate issue or of any number of
claims, cross-claims, counterclaims, third-party claims, or
issues."
Rule 57 reads in part: "The court may order a speedy hearing of
an action for a declaratory judgment, and may advance it on the
calendar."
[
Footnote 4]
See, e.g., (American) Lumbermens Mut. Cas. Co. of Illinois
v. Timms & Howard, Inc., 108 F.2d 497;
Hargrove v.
American Cent. Ins. Co., 125 F.2d 225;
Johnson v. Fidelity
& Casualty Co., 238 F.2d 322.
See Fed.Rules
Civ.Proc. 57, 38, 39.
[
Footnote 5]
Compare Enelow v. New York Life Ins. Co., 293 U.
S. 379,
with American Life Ins. Co. v. Stewart,
300 U. S. 203.
See also City of Morgantown v. Royal Ins. Co.,
337 U. S. 254;
Peake v. Lincoln Nat. Life Ins. Co., 15 F.2d 303.
[
Footnote 6]
252 F.2d at 874. In
Ettelson v. Metropolitan Life Ins.
Co., 317 U. S. 188,
317 U. S. 192,
this Court recognized that orders enabling equitable causes to be
tried before legal ones had the same effect as injunctions. In
City of Morgantown v. Royal Ins. Co., 337 U.
S. 254, the Court denied at least some such orders the
status of injunctions for the purposes of appealability. It did
not, of course, imply that, when the orders came to be reviewed,
they would be examined any less strictly than injunctions. 337 U.S.
at
337 U. S.
258.
[
Footnote 7]
See, e.g., Smyth v. Ames, 169 U.
S. 466,
169 U. S. 515;
Detroit of Detroit Citizens' Street R. Co., 184 U.
S. 368,
184 U. S.
378-382;
cf. Matthews v. Rodgers, 284 U.
S. 521.
[
Footnote 8]
E.g., 54 U. S. Wheeling
& Belmont Bridge Co., 13 How. 518,
54 U. S. 561;
Parker v. Winnipiseogee Lake
Cotton & Woollen Co., 2 Black 545,
67 U. S. 551;
Enelow v. New York Life Ins. Co., 293 U.
S. 379.
[
Footnote 9]
See, e.g., Cook, Cases on Equity (4th ed.), 18; 4
Pomeroy, Equity Jurisprudence (5th ed.), § 1370; 5 Moore, Federal
Practice, 154-158; Morris, Jury Trial Under the Federal Fusion of
Law and Equity, 20 Tex.L.Rev. 427, 441-443.
Cf. Maryland
Theater Corp. v. Brennan, 180 Md. 377, 389, 24 A.2d 911;
Hasselbring v. Koepke, 263 Mich. 466, 248 N.W. 869.
But cf. 1 Pomeroy, Equity Jurisprudence (5th ed.), §§ 182,
183. Significantly the Court of Appeals itself relied on the
procedural changes brought about by the Federal Rules when it found
the plea for equitable relief valid, for it did so by relying on
Conley v. Gibson, 355 U. S. 41, which
emphasized the liberal construction policies of the Rules.
[
Footnote 10]
Since the issue of violation of the antitrust laws often turns
on the reasonableness of a restraint on trade in the light of all
the facts,
see, e.g., Standard Oil Co. v. United States,
221 U. S. 1,
221 U. S. 60, it
is particularly undesirable to have some of the relevant
considerations tried by one factfinder, and some by another.
[
Footnote 11]
Fed.Rules Civ.Proc., 13(a).
[
Footnote 12]
See 28 U.S.C. § 2072; Fed.Rules Civ.Proc. 39(a), 57.
See also Stainback v. Mo Hock Ke Lok Po, 336 U.
S. 368,
336 U. S. 382,
note 26;
United States v. Yellow Cab Co., 340 U.
S. 543,
340 U. S.
555-556.
[
Footnote 13]
See 36 Stat. 1163, derived from Act of Sept. 24, 1789,
§ 16, 1 Stat. 82. This provision, which antedates the Seventh
Amendment, is discussed in 5 Moore, Federal Practice, 32.
See,
e.g., 60 U. S. Town of
Babin, 19 How. 271,
60 U. S.
277-278;
Insurance Co. v.
Bailey, 13 Wall. 616,
80 U. S.
620-621;
Grand Chute v.
Winegar, 15 Wall. 373;
Buzard v. Houston,
119 U. S. 347,
119 U. S.
351-352.
[
Footnote 14]
See Fed.Rules Civ.Proc., 1, 2, 18.
Cf. Prudential
Ins. Co. of America v. Saxe, 77 U.S.App.D.C. 144, 134 F.2d 16,
31-34; Morris, Jury Trial Under the Federal Fusion of Law and
Equity, 20 Tex.L.Rev. 427, 441-443.
[
Footnote 15]
See 1 Pomeroy, Equity Jurisprudence (5th ed.) §§ 251
3/4, 254, 264(b); 5 Moore, Federal Practice, 32;
but cf.
id., 209-211.
See also Note, The Joinder Rules and
Equity Jurisdiction in the Avoidance of a Multiplicity of Suits, 12
Md.L.Rev. 88. Of course, unless there is an issue of a right to
jury trial or of other rights which depend on whether the cause is
a "legal" or "equitable" one, the question of adequacy of legal
remedies is purely academic, and need not arise.
[
Footnote 16]
Fed.Rules Civ.Proc. 38(a). In delegating to the Supreme Court
responsibility for drawing up rules, Congress declared that:
"Such rules shall not abridge, enlarge or modify any substantive
right, and shall preserve the right of trial by jury as at common
law and as declared by the Seventh Amendment to the
Constitution."
28 U.S.C. § 2072. The Seventh Amendment reads:
"In Suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be
preserved, and no fact tried by a jury, shall be otherwise
reexamined in any Court of the United States than according to the
rules of the common law."
[
Footnote 17]
See Hurwitz v. Hurwitz, 78 U.S.App.D.C. 66, 136 F.2d
796, 798-799;
cf. 53 U. S.
Fitzhugh, 12 How. 443,
53 U. S.
459-460.
[
Footnote 18]
This Court has long emphasized the importance of the jury trial.
See Parsons v.
Bedford, 3 Pet. 433,
28 U. S. 446.
See also Galloway v. United States, 319 U.
S. 372.
Id. at
319 U. S. 396
(dissenting opinion).
[
Footnote 19]
For an example of the flexible procedures available under the
Federal Rules,
see Ring v. Spina, 166 F.2d 546, 550.
[
Footnote 20]
E.g., Ex parte Simons, 247 U.
S. 231,
247 U. S.
239-240;
Ex parte Peterson, 253 U.
S. 300,
253 U. S.
305-306;
Bereslavsky v. Caffey, 161 F.2d 499
(C.A. 2d Cir.);
Canister Co. v. Leahy, 191 F.2d 255;
Black v. Boyd, 248 F.2d 156, 160-161 (C.A. 6th Cir.).
Cf. Bruckman v. Hollzer, 152 F.2d 730 (C.A. 9th Cir.).
But cf. In re Chappell & Co., 201 F.2d 343 (C.A. 1st
Cir.).
See also La Buy v. Howes Leather Co., 352 U.
S. 249.
MR. JUSTICE STEWART, with whom MR. JUSTICE HARLAN and MR.
JUSTICE WHITTAKER concur, dissenting.
There can be no doubt that a litigant is entitled to a writ of
mandamus to protect a clear constitutional or statutory right to a
jury trial. But there was no denial of such a right here. The
district judge simply exercised his inherent discretion, now
explicitly confirmed by the Federal Rules of Civil Procedure, to
schedule the trial of an equitable claim in advance of an action at
law. Even an abuse of such discretion could not, I think, be
attacked
Page 359 U. S. 512
by the extraordinary writ of mandamus. [
Footnote 2/1] In any event, no abuse of discretion is
apparent in this case.
The complaint filed by Fox stated a claim traditionally
cognizable in equity. That claim, in brief, was that Beacon had
wrongfully interfered with the right of Fox to compete freely with
Beacon and other distributors for the licensing of films for
first-run exhibition in the San Bernardino area. The complaint
alleged that the plaintiff was without an adequate remedy at law,
and would be irreparably harmed unless the defendant were
restrained from continuing to interfere -- by coercion and threats
of litigation -- with the plaintiff's lawful business
relationships.
The Court of Appeals found that the complaint, although
inartistically drawn, contained allegations entitling the
petitioner to equitable relief. [
Footnote 2/2] That finding is accepted in the prevailing
opinion today. If the complaint had been answered simply by a
general denial, therefore, the issues would, under traditional
principles, have been triable as a proceeding in equity. Instead of
just putting in issue the allegations of the complaint, however,
Beacon filed pleadings which affirmatively alleged the existence of
a broad conspiracy among the plaintiff and other theatre owners to
monopolize the first-run exhibition of films in the San Bernardino
area to refrain from competing among themselves, and to
discriminate against Beacon in granting film licenses. Based upon
these allegations, Beacon asked damages in the amount of $300,000.
Clearly these conspiracy allegations stated a cause of action
triable as of right by a
Page 359 U. S. 513
jury. What was demanded by Beacon, however, was a jury trial not
only of this cause of action, but also of the issues presented by
the original complaint.
Upon motion of Fox, the trial judge ordered the original action
for declaratory and equitable relief to be tried separately to the
court and in advance of the trial of the defendant's counterclaim
and cross-claim for damages. The court's order, which carefully
preserved the right to trial by jury upon the conspiracy and damage
issues raised by the counterclaim and cross-claim, was in
conformity with the specific provisions of the Federal Rules of
Civil Procedure. [
Footnote 2/3] Yet
it is decided today that the Court of Appeals must compel the
district judge to rescind it.
Assuming the existence of a factual issue common both to the
plaintiff's original action and the defendant's counterclaim for
damages, I cannot agree that the District Court must be compelled
to try the counterclaim first. [
Footnote 2/4]
Page 359 U. S. 514
It is, of course, a matter of no great moment in what order the
issues between the parties in the present litigation are tried.
What is disturbing is the process by which the Court arrives at its
decision -- a process which appears to disregard the historic
relationship between equity and law.
I
The Court suggests that "the expansion of adequate legal
remedies provided by the Declaratory Judgment Act . . . necessarily
affects the scope of equity." Does the Court mean to say that the
mere availability of an action for a declaratory judgment operates
to furnish "an adequate remedy at law," so as to deprive a court of
equity of the power to act? That novel line of reasoning is at
least implied in the Court's opinion. But the Declaratory Judgment
Act did not "expand" the substantive law.
Page 359 U. S. 515
That Act merely provided a new statutory remedy, neither legal
nor equitable, but available in the areas of both equity and law.
When declaratory relief is sought, the right to trial by jury
depends upon the basic context in which the issues are presented.
See Moore's Federal Practice (2d ed.) §§ 38.29, 57.30;
Borchard, Declaratory Judgments (2d ed.), 399-404. If the basic
issues in an action for declaratory relief are of a kind
traditionally cognizable in equity,
e.g., a suit for
cancellation of a written instrument, the declaratory judgment is
not a "remedy at law." [
Footnote
2/5] If, on the other hand, the issues arise in a context
traditionally cognizable at common law, the right to a jury trial,
of course, remains unimpaired, even though the only relief demanded
is a declaratory judgment. [
Footnote
2/6]
Thus, if, in this case, the complaint had asked merely for a
judgment declaring that the plaintiff's specified manner of
business dealings with distributors and other exhibitors did not
render it liable to Beacon under the antitrust laws, this would
have been simply a "juxtaposition of parties" case in which Beacon
could have demanded a jury trial. [
Footnote 2/7] But the complaint in the present case, as
the Court recognizes, presented issues of exclusively equitable
cognizance, going well beyond a mere defense to any subsequent
action at law. Fox sought from the court protection against
Beacon's allegedly unlawful interference with its business
relationships -- protection which this
Page 359 U. S. 516
Court seems to recognize might not have been afforded by a
declaratory judgment, unsupplemented by equitable relief. The
availability of a declaratory judgment did not, therefore, operate
to confer upon Beacon the right to trial by jury with respect to
the issues raised by the complaint.
II
The Court's opinion does not, of course, hold or even suggest
that a court of equity may never determine "legal rights." For
indeed it is precisely such rights which the Chancellor, when his
jurisdiction has been properly invoked, has often been called upon
to decide. Issues of fact are rarely either "legal" or "equitable."
All depends upon the context in which they arise. The examples
cited by Chief Judge Pope in his thorough opinion in the Court of
Appeals in this case are illustrative:
". . . [I]n a suit by one in possession of real property to
quiet title, or to remove a cloud on title, the court of equity may
determine the legal title. In a suit for specific performance of a
contract, the court may determine the making, validity and the
terms of the contract involved. In a suit for an injunction against
trespass to real property, the court may determine the legal right
of the plaintiff to the possession of that property.
Cf.
Pomeroy, Equity Jurisprudence, 5th ed., §§ 138-221, 221a, 221b,
221d, 250."
252 F.2d 864, 874.
Though apparently not disputing these principles, the Court
holds, quite apart from its reliance upon the Declaratory Judgment
Act, that Beacon, by filing its counterclaim and cross-claim,
acquired a right to trial by jury of issues which otherwise would
have been properly triable to the court. Support for this position
is found in the principle that, "in the federal courts, equity has
always acted only when legal remedies were inadequate. . . ." Yet
that principle is not employed in its traditional sense as a
limitation upon the exercise of power by a court of
Page 359 U. S. 517
equity. This is apparent in the Court's recognition that the
allegations of the complaint entitled Fox to equitable relief --
relief to which Fox would not have been entitled if it had had an
adequate remedy at law. Instead, the principle is employed today to
mean that, because it is possible under the counterclaim to have a
jury trial of the factual issue of substantial competition, that
issue must be tried by a jury even though the issue was primarily
presented in the original claim for equitable relief. This is a
marked departure from long settled principles.
It has been an established rule
"that equitable jurisdiction existing at the filing of a bill is
not destroyed because an adequate legal remedy may have become
available thereafter. [
Footnote
2/8]"
American Life Ins. Co. v. Stewart, 300 U.
S. 203,
300 U. S. 215.
See Dawson v. Kentucky Distilleries & Warehouse Co.,
255 U. S. 288,
255 U. S. 296.
It has also been long settled that the District Court, in its
discretion, may order the trial of a suit in equity in advance of
an action at law between the same parties, even if there is a
factual issue common to both. In the words of Mr. Justice Cardozo,
writing for a unanimous Court in
American Life Ins. Co. v.
Stewart, supra:
"A court has control over its own docket. . . . In the exercise
of a sound discretion, it may hold one lawsuit in abeyance to abide
the outcome of another, especially where the parties and the issues
are the same. . . . If request had been made by the respondents to
suspend the suits in equity till the other causes were disposed of,
the District Court could have considered whether justice would not
be
Page 359 U. S. 518
done by pursuing such a course, the remedy in equity being
exceptional and the outcome of necessity. . . . There would be many
circumstances to be weighed, as, for instance, the condition of the
court calendar, whether the insurer had been precipitate or its
adversaries dilatory, as well as other factors. In the end, benefit
and hardship would have to be set off, the one against the other,
and a balance ascertained."
300 U. S. 300 U.S.
203,
300 U. S.
215-216. [
Footnote
2/9]
III
The Court today sweeps away these basic principles as
"precedents decided under discarded procedures." It suggests that
the Federal Rules of Civil Procedure have somehow worked an
"expansion of adequate legal remedies" so as to oust the District
Courts of equitable jurisdiction, as well as to deprive them of
their traditional power to control their own dockets. But obviously
the Federal Rules could not and did not "expand" the substantive
law one whit. [
Footnote 2/10]
Like the Declaratory Judgment Act, the Federal Rules preserve
inviolate the right to trial by jury in actions historically
cognizable at common law, as under the Constitution they must.
[
Footnote 2/11] They do not
create a right of trial
Page 359 U. S. 519
by jury where that right "does not exist under the Constitution
or statutes of the United States." Rule 39(a). Since Beacon's
counterclaim was compulsory under the Rules,
see Rule
13(a), it is apparent that, by filing it, Beacon could not be held
to have waived its jury rights. [
Footnote 2/12]
Compare American Mills Co. v.
American Surety Co., 260 U. S. 360. But
neither can the counterclaim be held to have transformed Fox's
original complaint into an action at law. [
Footnote 2/13]
See Bendix Aviation Corp. v.
Glass, 81 F. Supp.
645.
The Rules make possible the trial of legal and equitable claims
in the same proceeding, but they expressly affirm the power of a
trial judge to determine the order in which claims shall be heard.
Rule 42(b). Certainly the Federal Rules were not intended to
undermine the basic structure of equity jurisprudence, developed
over the centuries and explicitly recognized in the United States
Constitution. [
Footnote 2/14]
For these reasons, I think the petition for a writ of mandamus
should have been dismissed.
[
Footnote 2/1]
Compare Black v. Boyd, 248 F.2d 156,
with Black v.
Boyd, 251 F.2d 843.
[
Footnote 2/2]
Cf. De Groot v. Peters, 124 Cal. 406, 57 P. 209;
California Grape Control Bd. v. California P.
Corp., 4 Cal. App. 2d
242, 244, 40 P.2d 846.
Compare Kessler v. Eldred,
206 U. S. 285;
International News Service v. Associated Press,
248 U. S. 215,
248 U. S. 236;
Truax v. Raich, 239 U. S. 33,
239 U. S.
38.
[
Footnote 2/3]
Rule 42(b) provides:
"(b) Separate Trials. The court, in furtherance of convenience
or to avoid prejudice, may order a separate trial of any claim,
cross-claim, counterclaim, or third-party claim, or of any separate
issue or of any number of claims, cross-claims, counterclaims,
third-party claims, or issues."
The Note to Rule 39 of the Advisory Committee on Rules states
that,
"When certain of the issues are to be tried by jury and others
by the court, the court may determine the sequence in which such
issues shall be tried."
This language was at one time contained in a draft of the Rules,
but was deleted because "the power is adequately given by Rule
42(b). . . ." Moore's Federal Practice (2d. ed.) § 39.12, n. 8.
See also Rule 57, which provides,
inter alia,
that "The court may order a speedy hearing of an action for a
declaratory judgment and may advance it on the calendar."
[
Footnote 2/4]
It is not altogether clear at this stage of the proceedings
whether the existence of substantial competition between Fox and
Beacon is actually a material issue of fact common to both the
equitable claim and the counterclaim for damages. The respondent
ingeniously argues that determination in the equitable suit of the
issue of competition between the theatres would be determinative of
little or nothing in the counterclaim for damages.
"The fact issue in the action for equitable and declaratory
relief is whether the Fox West Coast California Theatre and the
Petitioner's drive-in are substantially competitive with each
other. The fact issue in the counterclaim is whether the
cross-defendants and co-conspirators therein named conspired
together in restraint of trade and to monopolize in the manner
alleged in the counterclaim. Absent conspiracy, whether or not the
distributors licensed a single first run picture to Petitioner's
drive-in, be it in substantial competition or not in substantial
competition with other first run theatres in the San Bernardino
area, Petitioner will not have made out a case on its counterclaim.
. . . If Petitioner, on its counterclaim, should fail to prove
conspiracy, the issue of competition between the theatres is
meaningless. If petitioner, on the other hand, succeeds in proving
the allegations of its counterclaim, the conspiracy to monopolize
first run and to discriminate against the new drive-in, the
existence or nonexistence of competition between the theatres would
exculpate none of the alleged wrongdoers, although, if there was an
absence of competition between the drive-in and the other first run
theatres, as Petitioner contended in its answer to the complaint,
it might have some difficulty proving injury to its business."
[
Footnote 2/5]
State Farm Mut. Auto. Ins. Co. v. Mossey, 195 F.2d 56,
60;
Connecticut General Life Ins. Co. v. Candimat
Co., 83 F. Supp.
1.
[
Footnote 2/6]
Dickinson v. General Accident F. & L. Assur. Corp.,
147 F.2d 396;
Hargrove v. American Cent. Ins. Co., 125
F.2d 225;
Pacific Indemnity Co. v. McDonald, 107 F.2d
446.
[
Footnote 2/7]
Moore's Federal Practice (2d ed.) § 57.31(2). "Transposition of
parties" would perhaps be a more accurate description. A typical
such case is one in which a plaintiff uses the declaratory judgment
procedure to seek a determination of nonliability to a legal claim
asserted by the defendant. The defendant in such a case is, of
course, entitled to a jury trial.
[
Footnote 2/8]
The suggestion by the Court that
"This was because the subsequent legal action, though providing
an opportunity to try the case to a jury, might not protect the
right of the equity plaintiff to a fair and orderly adjudication of
the controversy"
is plainly inconsistent with many of the cases in which the rule
has been applied.
See, e.g., Beedle v. Bennett,
122 U. S. 71;
Clark v. Wooster, 119 U. S.
332.
[
Footnote 2/9]
It is arguable that, if a case factually similar to
American
Life Ins. Co. v. Stewart were to arise under the Declaratory
Judgment Act, the defendant would be entitled to a jury trial.
See footnote 7 But
cf. 5 Moore's Federal Practice (2d ed.), p. 158.
[
Footnote 2/10]
Congressional authorization of the Rules expressly provided that
"Said rules shall neither abridge, enlarge, nor modify the
substantive rights of any litigant." 48 Stat. 1064.
See 28
U.S.C. § 2072.
[
Footnote 2/11]
"In Suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be
preserved, and no fact tried by a jury shall be otherwise
reexamined in any Court of the United States than according to the
rules of the common law."
U.S.Const., Amend. VII.
See Rules 38, 39, Fed.Rules
Civ.Proc.
[
Footnote 2/12]
This is not, of course, to suggest that the filing of a
permissive "legal" counterclaim to an "equitable" complaint would
amount to a waiver of jury rights on the issues raised by the
counterclaim.
[
Footnote 2/13]
Determination of whether a claim stated by the complaint is
triable by the court or by a jury will normally not be dependent
upon the "legal" or "equitable" character of the counterclaim.
See Borchard, Declaratory Judgments (2d ed.), p. 404.
There are situations, however, such as a case in which the
plaintiff seeks a declaration of invalidity or non-infringement of
a patent, in which the relief sought by the counterclaim will
determine the nature of the entire case.
See Moore's
Federal Practice (2d ed.) § 38.29.
[
Footnote 2/14]
"The judicial Power shall extend to all Cases, in Law and
Equity. . . ." Art. III, § 2.