Amicus Curiae Brief — Universal Oil Products Co. v. William Whitman Co.

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CITATIONS

CASES:

Altoona Publix Theatres, Inc. v. American Tri-Ergon Cor-

poration, 72 F. 2d 53, reversed, 294 U.S. 477 ___________ ll

Art Metal Works v. Abraham & Straus, 107 F. 2d 940 and

944, certiorari denied, 308 U.S. 621 __.____.__._.._________ 8

Hazel-Atlas Co. v. Hartford-Empire Co., 322 U.S. 238 ____ 6,8

Luckenbach S. S. Co. v. United States, 272 U.S. 533 ______ 7

Universal Oil Products Co. v. Root Refining Co., 328 U.S.

Na a sh en yA eee 6

Universal Oil Products Co. v. Root Refining Co., Nos. 439-

MUTINY INO ince See ee al ahi tele Un oie eo |

MISCELLANEOUS:

Federal Rules of Civil Procedure, Rule 52(a) ____________ 9

H. Rep. No. 1639, 79th Cong., 2d sess. _...._.-.-___-______ 4

+

Inthe Supreme Court of the Waited States

OctToBEeR TERM, 1948

No. 441

AMERICAN SaFetTy TABLE CoMPANY, Petitioner

¥,

Srncer SEWING MACHINE COMPANY

On Petition for Writ of Certiorari to the United States Court

of Appeals for the Third Circuit

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE IN

OPPOSITION *

The opinion of the Court of Appeals for the

Third Circuit (Op. 41-54)? is reported at 169 F.

2d 514, 539.

1 This case is a companion case to Universal Oil Products Co,

v. Root Refining Co., Nos. 439-440, this Term (the Root cases).

As in the Root cases, the United States, although designated as

amicus curiae, was more than merely amicus. The court be-

low authorized the appearance of the United States as amicus

by its order of June 20, 1947 (Op. 43). The duties of the

United States in the court below, as in the Root cases, were to

‘‘present to the court the available evidence bearing upon the

charges whether or not in support thereof, to the end that the

truth might be ascertained’ (Op. 44-45).

* Petitioner here, as in the Root cases, has moved to dispense

with printing of the voluminous record for the purposes of

the petition for writ of certiorari. The United States does not

oppose the granting of this motion. However, in the Root

cases, we have filed printed copies of the opinion below in

these cases which includes the opinion in this case. The ref-

erences in this brief to (Op. ........ ) are to that printed opinion.

2

JURISDICTION

The judgment of the Court of Appeals for the

Third Circuit was entered July 6, 1948. The

time for filing a petition for writ of certiorari wag

extended on September 10, 1948, by Mr. Justice

Burton to and inzluding December 1, 1948. The

petition for writ of certiorari was filed on Decem-

ber 1, 1948. The jurisdiction of this Court is in-

voked under 28 U. 8S. C. 1254 (1).

QUESTIONS PRESENTED

1. Whether, in the exercise of its inherent power

to protect the integrity of its judgments, a court

of appeals has jurisdiction (a) to institute after

the expiration of the term an inquiry into whether

a judgment has been tainted by corruption; (b)

to hear the evidence relative thereto; and (c)

upon finding that the judgment was corrupt, to

direct that the judgment be vacated and the com-

plaint dismissed, although respondent Singer Sew-

ing Machine Company originally prayed only for

reargument.

2. Whether the evidence here supported the

court’s finding that American Safety Table Com-

pany employed Morgan 8. Kaufman with the ex-

pectation that he would improperly influence the

action of Judge J. Warren Davis, formerly a judge

of the Cireuit Court of Appeals for the Third Cir-

cuit, in this case.

—

3

STATEMENT

On March 9, 1938, a court consisting of Buffing-

ton and Davis, Circuit Judges, and Johnson, Dis-

trict Judge, in an opinion by Judge Buffington,

reversed the decision of the District Court of the

Eastern District of Pennsylvania and held that a

patent of American Safety Table Company (Amer-

ican) was valid and infringed by Singer Sewing

Machine Company (Singer), 95 F. 2d 543. After

this Court’s denial of certiorari (305 U. 8S. 622),

the case was remanded to the district court where

a master was apopinted to take account of dam-

ages and profits.’

After the adverse decision in the district court,

American had added a New York patent firm to its

staff on the case, and after its main brief in the

appeal was filed, it put the appeal in charge of

Morgan S. Kaufman, who retained Thomas G.

Haight and Samuel E. Darby, patent practitioners,

who prepared reply briefs and argued the appeal.

(Op. 41-42.)

On September 26, 1944, after the court below on

June 15, 1944, had vacated its original judgments

in the Root cases (Br. for U. 8. in Opp. in Nos, 439,

440, pp. 4-5), Singer filed a petition with the court

below for recall of mandate and for reargument

on the merits on the ground that there had existed

a corrupt and illicit combination between Kaufman

"The proceeding before the master is still pending.

4

and Judge Davis to obstruct justice.* In reply,

American denied, inter alia, any improper conduct

on its part or the existence of any unlawful combi-

nation between Dav. and Kaufman in this case,

The questions thus raised were argued before the

court below March 6, 1945, and decisions was with-

held during the proceedings then pending in the

Root cases. On. June 20, 1947, the court simultane-

ously with its similar order in the Root cases (Br.

in Opp. Nos. 439-440, pp. 5-6), ordered American to

show cause why the relief prayed by Singer should

not be granted by reason of American’s alleged

corruption practiced on the court, and further au-

thorized the Attorney General to appear as amicus.

In reply, American reaffirmed its denial of any im-

proper conduct in this case on its part or on the

part of Kaufman. The designation of the judges

for this case was made by the Chief Justice and

proceedings were taken paralleling those in the

Root cases (Br. in Opp. Nos. 489-440, pp. 6-7).

On April 6, 1948, the court issued an order sub-

stantially the same as that issued in the Root cases

*The petition also charged that Judge Buffington was

disqualified to sit in the bearing of the appeal because of the

infirmities of old age and his consequent reliance upon Judge

Davis. By supplement to the petition, Singer charged that

Judge Johnson was also disqualified and unfit to participate by

reason of his improper official conduct as District Judge in

the Middle District of Pennsylvania as set out in Report No.

1639 of the House Committee on the Judiciary, 79th Cong., 2d

sess.

apt

5

(Br. in Opp. Nos. 439-440, pp. 7-9). In this case,

the court, as it formulated the charges that had

been made,* undertook to determine, inter alia (Op.

44):

(ec) Whether Morgan S. Kaufman was em-

ployed or retained by American Safety Table

Company in connection with this case and, if

so, whether the purpose of such employment

or retainer was with the expectation of Ameri-

can Safety Table Company that Kaufman

would exercise or endeavor to exercise an im-

proper influence upon Judge Davis in order to

secure favorable judicial action by him in con-

nection with this case.*

This case was consolidated for trial with the Root

cases, as subsequently stipulated, to the extent that

the testimony of the witnesses and the exhibits in

that case should be offered, es part of the record

here, subject to objection on the ground of admis-

sibility and without limitation upon the right of

either party to offer additional testimony. Hear-

ings of the testimony were begun on May 10, 1948

———_-

5 The United States and Singer had filed statements alleging

the substance of these charges (Documents N, P, and R which

are on file with the Court as part of the original transcript).

® At a subsequent pretrial conference at which the question

whether the inquiry should be limited to the propriety of va-

eating the court’s original judgment and submitting the case

to the court for reargument, the parties, including American,

assented to the hearing of the case upon the issues formulated

in the order of April 6 and that the court should not restrict

itself, in case the charges were sustained, to ordering a reargu-

ment on the appeal (Op. 45).

6

and were conducted in accordance with the order of

April 6 and the stipulation of the parties.

On July 6, 1948, the court issued its findings and

opinion based on the evidence introduced at the

hearings. It found that Kaufman ‘‘had only one

asset to offer his employer [American], and that

was, his personal intimacy and influence with Judge

Davis. We cannot escape the conclusion that it

was for this purpose, and this purpose only, that

he was employed by American in this case.’’ (Op.

52.) In view of this finding, the court, applying

the principle that one who comes into a court of

equity must come with clean Sands and a suitor

who does not have clean hands will be denied all

relief, whatever the merits of he» slaim, ordered

that its original mandate be recalled, that its origi-

nal judgment be vacated and the case remanded to

the district court with directions to vacate its judg-

ment and dismiss the complaint (Op. 53).

ARGUMENT

The primary questions raised by American’s

petition are, as in the Root cases, factual in nature.

Here, as in Root, the jurisdictional contentions ad-

vanced have been passed on and rejected in Hazel-

Atlas Co. v. Hartford-Empire Co., 322 U. S. 238,

and Universal Oil Products Co. v. Root Refining

Co., 328 U. 8S. 575. Moreover, no questions of law

on the merits are raised ; petitioner does not ques-

tion that if the findings below are supported by

ample evidence, the court below had power at least,

to vacate its judgment and order reargument. Pe-

—

7

titioner does, however, attack the court’s findings

of fact ; these findings were made by the same speci-

ally designated court that made the findings in the

Root cases, and are, we submit, clearly supported

by ample evidence. There is, accordingly, no reason

for this Court to review factual questions which

of themselves do not warrant certiorari.” __

1. Jurisdictional Contentions: (a) The fallacy

in American’s contentions that the court was with-

out jurisdiction because there was no ‘‘case or con-

troversy’’ pending before it (Pet. 35-36) and that

the court, as an appellate court, was without juris-

diction itself to hear the evidence bearing on the

charges of fraud perpetrated on it (Pet. 32-34) has

already been discussed in our Brief in Opposition

in the Root cases (pp. 11-15), to which we re-

spectfully refer the Court. As to the ‘‘case or con-

troversy’’ argument, there is an additional reason

on the facts of this case why the contention is un-

sound; here, unlike the Root cases, the party

against whom the court’s original judgment was

entered is actively interested and participated in

the proceedings in the court below.

(b) American’s further claim that the court is

without jurisdiction to inquire into the integrity

of one of its judgments after the expiration of the

* Contrary to petitioner’s suggestion (Pet. pp. 24-25) ‘‘the

well settled rule * * * [is] that an appellate review is not es-

sential to due process of law, but is a matter of grace.’’

Luckenbach 8. 8. Co. v. United States, 272 U. S. 533, 536, and

eases there cited.

8

term in which the judgment was entered was

squarely rejected by this Court in the Hazel-Atlas

ease. It was there pointed out that ‘‘where the

situation has required, the court has, in some man-

ner, devitalized the judgment even though the term

at which it was entered had long since passed

away’’ (322 U.S. at 245). See, also, Art Metal

Works v. Abraham & Straus, 107 F. 2d 940 (C. ©.

A. 2); id, 107 F. 2d 944 (C. C. A. 2), certiorari de-

nied, 308 U. 8. 621.

(c) Ameriéan’s final contention that the court

improperly went beyond the relief prayed by Sin-

ger for reargument of the appeals, and ordered the

complaint dismissed ignores the nature and effect

of the proceedings below. Although Singer called

the court’s attention to the possible corruption in

the judgment in its petition for reargument, the in-

quiry into the integrity of that judgment was not

purely a controversy between private litigants but

rather an inquiry into ‘‘a wrong against the insti-

tutions set up to protect and safeguard the public,

institutions in which fraud caunot complacently be

tolerated consistently with the good order of so-

ciety.” Hazel-Atlas case, 322 U.S. at 246. And

accordingly, the court’s disposition of the case is

measured against the wrong done to these institu-

tions, and not merely by the relief prayed by an

adverse private litigant. See Hazel-Atlas case,

322 U.S. at 250-251. Moreover, American failed to

object to the court’s proposal that it not restrict

—

9

itself to orderiag reargument, if the charges were

sustained (Hearing of March 23, 1948, pp. 162,

164), and thereafter explicitly assented to this pro-

cedure. See supra, p. 5; fn. 6, p. 6.

2. Factual Questions: As in the Root cases,

American’s attack on the findings that it employed

Kaufman for the purpose of improperly influenc-

ing Judge Davis’ action in this case does not war-

rant an exception from the usual rule against

review of factual questions. These findings were

made by an unanimous court, composed of three

judges who normally do not sit in the Third Cir-

cuit and who were specially designated by the

Chief Justice to act in this case. The findings were

arrived at after the court itself heard the testimony

and observed the demeanor of the witnesses in the

course of direct and cross examination (cf. Rule

52(a) of the Federal Rules of Civil Procedure),

and are supported by ample evidence, as the court’s

findings of subsidiary facts clearly demonstrate.

These subsidiary findings, which are largely undis-

puted except as to the inferences and conclusions to

be drawn therefrom, may be summarized as fol-

lows:

Since this case was thought to be of great im-

portance to American, American had as its leading

attorney in the district court, Augustus B. Stough-

ton, the dean of the Philadelphia patent bar, who

had practiced law since 1888 and who was thor-

oughly familiar with conditions in the Third Cir-

>.

cuit. When the case was lost, the firm of Levin-

sohn, Neiner and Levinsohn, a New York patent

firm, was also retained. After the main appellate

brief was filed, the Frankel brothers, who had es-

tablished American and owned its stock, were not

satisfied. Louis Frankel, American’s president,

determined to go to New York to confer with the

well-known law firm of Otterbourg, Steindler,

Houston and Rosen, which had guided the Frankel

family in legal matters since 1920. Charles A.

Houston of that firm was familiar with patent mat-

ters and actually conducted the final proceedings

for an accounting before the master ‘in this case.

(Op. 47-48.) Thus, as the court commented (Op.

48), ‘‘Obviously American did not lack access to

experienced men who could aid them in the selec-

tion of an additional counsel for the appeal if any

were necessary.”’

On his visit to New York, however, Louis Frankel

did not visit either the Otterbourg or the Levinsohn

firm. Instead, his brother David Frankel took him

to see Murray Becker, the attorney for William

Fox. In the course of the visit having to do with

business transactions between the Frankels and

Fox, the Frankels and Becker discussed this case,

and Becker advised the Frankels to retain Kauf-

man to handle the appeal for them (Op. 48).°

Thus it was Murray Becker, Fox’s attorney, who

recommended the retention of Kaufman. Becker

8 Kaufman was disbarred from practice in the court below

on November 10, 1944 (Op. 53, fn. 9).

_

11

was well acquainted with the Circuit Court of Ap-

peals for the Third Circuit, and especially the

Court composed of Judges Buffington, Davis and

Thompson. With Kaufman retained as local coun-

sel he had appeared successfully (on a $10,000 plus

contingent fee basis) before that court as counsel

for Fox in Altoona Publix Theatres Inc. v. Ameri-

can Tri-Ergon Corporation (opinion by Judge

Buffington, dated August 6, 1934), 72 F. 2d 53, re-

versed, 294 U. S. 477. Becker had also achieved

remarkable success for the Fox interests in the ap-

peals to that court in the Fox bankruptcy matters.”

During the course of this bankruptcy litigation,

which was still in active progress at the time

Becker recommended Kaufman to the Frankels,

Becker had ample opportunity to learn that Davis

and Kaufman were on intimate terms and that

Davis’ personal financial affairs had reached a

crisis. Moreover, subsequently in 1940, when the

relationship between Fox, Davis and Kaufman_was

under investigation, it was Becker who called Kauf-

man, to arrange a conference between Davis and

Fox. (Op. 48-49.)

When Kaufman was retained, the Frankels

agreed to advance him $5,000 to pay the lawyer’s

fees and costs of the appeal, and in addition, prom-

ised him 25% of any money which American might

® In the Root cases, the court found that there had existed an

illicit conspiracy to obstruct justice among Davis, Kaufman

and Fox in regard to these appeals (Op. 39).

12

recover from Singer, against which percentage the

$5,000 was to be credited. American did pay Kauf-

man $5,000, and he retained Thomas Haight of Jer-

sey City and Samuel Darby of New York, well

qualified patent lawyers who prepared the reply

brief with the aid of the Levinsohn firm and argued

the case in the Court of Appeals. Kaufman paid

Darby $1,750 and Haight $1,250 for these services,

and kept $2,000 for himself. Subsequently, when

certiorari was sought and denied, Kaufman re-

ceived an additional $1,500 from American; he paid

Darby $500 for preparing the brief in opposition

and kept $1,000 himself. Thus, the lawyers who

did all the actual work received $3,500 in the aggre-

gate and Kaufman retained $3,000 himself. In ad-

dition, of course, Kaufman had a 25% interest in

American’s claim of $737,450.62, against Singer

(Kaufman’s interest amounted to about $184,000) ;

although the master initially awarded only $40,-

362.97, American excepted to the award as insuffi-

cient on the ground that the master failed to take

into account certain devices of Singer’s, which

American claimed to be infringements of the pat-

ent. The decision on that question has been held

in abeyance pending this proceeding (Op. 50-51).”

The court further found that despite the sums

actually paid and the promise of large additional

10 The decision of the district court on the master’s award

would, of course, have been appealable to the Third Circuit.

—

13

payments in case of success, Kaufman was not com-

petent to make any legitimate contributions to the

ease, and that he in fact made no such contribu-

tions (Op. 51). Although Frankel testified that

Kaufman was retained as general counsel in this

ease, so that he might in turn retain competent

patent lawyers to prepare the reply brief and ar-

gue the case in the appellate court, Kaufman him-

self, though experienced in bankruptcy matters,

was not competent to argue or brief a patent case.

After his appointment as the receiver in bank-

ruptey in 8. W. Strauss Company, his main occu-

pation, apart from the receivership, had been the

buying and selling of securities on the stock

market; he practically gave up the practice of the

law. Furthermore, he was not needed as local

counsel; there is seldom need for local counsel in

respect to a case in the Court of Appeals, and if

such need had arisen, Kaufman, whose headquar-

ters were in New York, was not conveniently avail-

able, whereas Stoughton maintained his offices in

Philadelphia where the court holds its regular ses-

sions and the clerk’s offices are located. (Op. 50.)

Moreover, the court found that Kaufman rendered

no substantial legal services in the litigation. His

file contained only copies of the opinion, briefs and

other papers prepared by the patent lawyers. While

it also contained 61 letters written by or to him

about the case, they were routine in nature and

showed merely that his interest in the progress of

——

14

the case, arranging conferences and conveying in-

formation from the Frankels to Darby, were due, in

large measure, to his substantial contingent share.

‘*Nothing in the file indicates that he made any in-

tellectual contribution to the case or performed

any routine service that would not have been per-

formed as a matter of course by the active lawyers

in the case if Kaufman had not been employed.”

(Op. 51-52.)

These findings, that Kaufman was recommended

by Murray Becker, who was well acquainted with

the conditions in the Third Circuit, particularly the

relationship between Davis and Kaufman; that

Kaufman was retained at a substantial fee; and

that he was neither competent to, nor in fact did,

perform any legitimate services in connection with

the case, are ample, we submit, to support the

court’s conclusion that Kaufman had only one

asset to offer his employer, and that was his per-

sonal intimacy and influence with Judge Davis.

‘*We cannot escape the conclusion that it was for

this purpose, and this purpose only, that he was

employed by American in this case.’’ (Op. 52.)

_

15

CONCLUSION

The court below had jurisdiction to proceed as

it did in this case and its findings are supported by

ample evidence. The petition for a writ of certiorari

should be denied.

Respectfully submitted,

J Pup B. PERLMAN,

Solicitor General.

d H. GrRaHAM Morison,

wise Attorney General.

ALFRED C. AURICH,

Special Assistant to the Attorney General.

¢ Pau A. SWEENEY,

MELVIN RIcHTER,

Attorneys.

January, 1949.

W U.S. GOVERNMENT PRINTING OFFICE 1948—818646/P.0. 691