UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT.
filed: February 18, 1959.
ORDNANCE GAUGE COMPANY
JACQUARD KNITTING MACHINE CO., INC.
Before BIGGS, Chief Judge, and McLAUGHLIN and KALODNER, Circuit Judges.
Opinion of the Court
By BIGGS, Chief Judge: The court below dismissed without prejudice a suit filed by the appellant, Ordnance Gauge Company, against Jacquard Knitting Machine Company. Ordnance has appealed.
Extensive litigation between the parties commenced on April 19, 1950 when Jacquard, defendant-appellee in the instant case, filed a complaint against Ordnance, at Civil Action No. 10,850 in the court below, alleging infringement of the United States Patent No. 2,397,456. The patent discloses a method of transferring stitches from one needle to another in knitting machines or in a loop-receiving device. Ordnance filed an answer and a counterclaim denying infringement and sought to have the patent declared invalid and also prayed for an injunction restraining Jacquard from instituting or threatening suit against its, Ordnance's, customers alleging that they had infringed Jacquard's patent.
After the filing of the answer and counterclaim in Civil Action No. 10,850, but before the trial of that action, Ordnance on May 3, 1951, filed the suit at bar, Civil Action No. 12,206 in the court below.Ordnance's complaint alleges violation by Jacquard of the antitrust laws in connection with United States Patent No. 2,397,456, makes reference to the suit at Civil Action No. 10,850, alleges that Patent No. 2,397,456 is invalid and was not infringed, asserts that Jacquard was guilty of unfair competition, trade libel and slander, and seeks damages and other relief. An answer was filed by Jacquard on June 29, 1951, but no further action of any kind, insofar as the record shows, was taken in the suit for a period of more than five years, indeed not until November 8, 1956. The trial of Civil Action No. 10,850 was commenced on July 19, 1951 and was concluded April 16, 1952. The court below filed an opinion*fn1 and entered judgment on November 14, 1952, holding the patent invalid and denying relief to Ordnance on its counterclaim. Jacquard and Ordnance crossappealed to this court. We affirmed the judgment of the court below.*fn2
On November 8, 1956 the Clerk of the court below mailed to the attorneys for both Jacquard and Ordnance a notice*fn3 that Civil Action No. 12,206 would be dismissed under the local "Two-Year Rule",*fn4 unless application was made to the district court. Ordnance responded on November 21, 1956 by filing a praecipe directing the Clerk of the District Court to place the case on the jury trial calendar. The Clerk prepared a "calendar card"*fn5 and gave the case a number for the preparation of the list for preliminary call. Two days later, on November 23, 1956, Ordnance filed an application to the court that the action should not be "deemed to be abandoned nor dismissed."*fn6 Ordnance's application was listed for argument on December 16, 1956. There was a continuance, however, at Jacquard's request and on March 17, 1957 Jacquard filed a motion pursuant to Rule 41(b), Fed. R. Civ. Proc., 28 U.S.C., to dismiss the suit at bar for want of prosecution with due diligence. Affidavits were filed.*fn7
Ordnance's application that the suit should not be deemed to be abandoned or dismissed and Jacquard's motion to dismiss were argued together on June 24, 1957. On August 19, 1957 the court below granted Jacquard's motion to dismiss the suit at bar for failure to prosecute it diligently pursuant to Rule 41(b) and without opinion ordered the action at bar dismissed. Ordnance filed a petition for rehearing.*fn8 A hearing was had on this petition and on January 21, 1958, the court below filed an opinion,*fn9 ruling against Jacquard, vacated its judgment of August 19, 1957, but ordered Ordnance's action dismissed without prejudice under the Two-Year Rule. Ordnance now appeals from this judgment.
Ordnance contends that the court below erred in dismissing its suit under the Two-Year Rule on January 21, 1958, as it had erred previously in dismissing the suit under Rule 41(b) on August 19, 1957. Ordnance asserts that the court below misconstrued the Two-Year Rule and applied it prejudicially contending that the court itself failed in its duty through the inaction of its Clerk's office in failing for more than three years to give notice to Ordnance that it would apply the Two-Year Rule when the rule itself required the Clerk to give notice "immediately" upon expiration of the prescribed two year period and that Ordnance's suit is now barred by the applicable statutes of limitations.*fn10 Quite aside from any of the foregoing, Ordnance asserts that the rule is inapplicable by its own terms to the case at bar and that the court has misconstrued it. There is no doubt that the court below dismissed the instant case by application of the Two-Year Rule for the final line of the opinion stated: "The case will . . . be dismissed without prejudice, under the local rule." 21 FRD at p. 577. We therefore must determine whether the court erred in applying this rule under the circumstances at bar.*fn11
The assertion that the court below misconstrued or misapplied the Two-Year Rule requires an examination of its provisions. Ordnance insists that the phrase "In every civil action not answered 'Ready for Trial' upon a preliminary call . . . shall . . ." be subject to the Rule's provisions, must be construed as if it read "In every civil action which shall have been on preliminary call and not answered 'Ready for Trial' . . . shall . . ." be subject to the Rule's provisions. This interpretation would exclude from the operation of the rule any case "not answered 'Ready for Trial' upon a preliminary call," such as the case at bar. We cannot accept this construction.The rule may not be as clear as it should be but its purpose as a successor to the former "Two-Year Dismissal Rule"*fn12 was to wipe dead cases from the court's civil docket. This interpretation sought by Ordnance would emasculate the rule and render it largely nugatory for it would not affect cases unless they had been on preliminary call. It cannot be supported. Under the local practice a case does not come up for preliminary call unless counsel "issues" a "trial order". If counsel for the defendant does not do so, and the burden of prosecuting an action is not on the defendant, the plaintiff could forever avoid a calendar call and thus avoid the impact of the Two-Year Rule by simply not issuing the "trial order" referred to.
Stated in its simplest terms the Two-Year Rule provides that if no action be taken in a suit for two consecutive years the Clerk shall "immediately" send notices to the counsel for the parties that unless the court, acting upon an application made within two weeks*fn13 orders the case restored, it shall stand dismissed. The latter part of the rule simply provides that if the court does not make an order restoring the case, the Clerk shall, acting for the court, enter an order upon the record phrased "Dismissed under the rule" and tax the costs against the plaintiff. Such a dismissal is without prejudice. The making of an application by the plaintiff, such as filing a praecipe or a petition that the action be deemed not dismissed, does not automatically save the suit from dismissal. If no application is made the Clerk, performing a ministerial duty, enters judgment against the plaintiff in the form just referred to. If an application is made to the court within the two weeks period, it then rests within the sound legal discretion of the court to grant the application and restore the case to the docket or to reject the application and refuse restoration.
The case lay dormant for nearly five and a half years. No action of any kind was taken by Ordnance until after the Clerk's notices were sent on November 8, 1956. The petition for rehearing filed on behalf of Ordnance does not state any sound legally cognizable reason for delay in the prosecution. What is stated appeals to mercy rather than to reason. Jacquard by its affidavits sets out reasons why it believes it would be prejudiced if the case was to be tried. We find these reasons none too convincing. The issue is one which lies within the sound legal discretion of the court below. Cf. Wholesale Supply Co. v. South Chester Tube Co ., 20 FRD 310, 313 (E.D. Pa. 1957).
But there is another issue. Ordnance insists that it was prejudiced because the Clerk did not give notice to its counsel "immediately" upon the expiration of the two year period, as the Two-Year Rule requires, viz ., on June 29, 1953, but waited over three years before doing so. This cannot be deemed to be compliance with the rule. We are not unmindful of the fact that the dismissal is without prejudice and we cannot say that Ordnance's claims are now barred by statutes of limitations. But where a suit is stricken from the docket of a court fairness would seem to require adherence to the strict terms of its own rule by the dismissing court. The sending of the notice three years after the expiration of the two year period does not meet the test of immediacy. The rule should be amended and should specify a period in which the notice must be sent.*fn14 We are of the opinion that it was properly applicable but improperly executed under the circumstances at bar.
We must now discuss the application of Rule 41(b), Fed. R. Civ. Proc., 28 U.S.C. The Court below in its opinion, 21 FRD 575 (E. D. Pa. 1958), disagreed with the ruling of Russo v. Sofia Bros ., 2 FRD 80 (S.D.N.Y. 1941), and held that Rule 41(b) authorized the dismissal of the suit. In the Russo case Judge Rifkind concluded that Rule 41(b) did not authorize the dismissal of a suit by a preliminary motion addressed to the pleading. In the Russo case a motion to dismiss a suit because the complaint had not stated a cause of action had been granted. When the suit was dismissed permission to amend the complaint had not been requested or granted. When the plaintiff later sought to file an amended complaint which did state a cause of action, Rule 41(b) was raised as a barrier. As we have said the court was of the view that Rule 41(b) was not applicable at the pleading stage. We think that the court in the Russo case was in error, at least insofar as it held that Rule 41(b) was inapplicable to dismissals for want of prosecution at the pleading stage. Field v. American-West African Line, Inc ., 154 F.2d 652 (2 Cir. 1946); 2 Barron & Holtzoff, Federal Practice § 918 (1950). Rule 41(b) provides that a case may be dismissed "For failure of the plaintiff to prosecute. . . ." There certainly was failure to prosecute here. That failure had lasted for a period of over five years. Whether such failure justified dismissal was within the discretion of the trial court. See, e.g., Russell v. Cunningham, 233 F.2d 806 (9 Cir. 1956), n. 3. A dismissal under Rule 41 (b) operates as a dismissal on the merits unless the court shall specify otherwise. See the last sentence of the rule. This provision apparently was overlooked by the court below. We hold that the suit at bar must stand dismissed under Rule 41(b) but that the dismissal should not operate as a dismissal on the merits.
We have ruled on the applicability of Rule 41(b) because of the well established doctrine that a judgment appealed from may be affirmed on a valid ground, even if the basis asserted by the court below as the basis of its decision is insufficient or invalid. Parkway Baking Co. v. Freihofer Baking Co ., 255 F.2d 641, 647 (3 Cir. 1958); Lanova Corp. v. National Supply Co ., 116 F.2d 235, 239 (3 Cir. 1941). The court below was correct in its first order dismissing the case at bar for want of prosecution under Rule 41(b). Since the court below was of the view that the case should be dismissed without prejudice and thought that it could not do so under Rule 41(b), and the provision of Rule 41(b) as to adjudication upon the merits can be treated, under the circumstances of the case at bar as the equivalent of a dismissal without prejudice, we can perceive no reason why the judgment of the court below should not be affirmed.
In view of our ruling we see no reason for passing upon the contentions of Jacquard that the issues presented by the case at bar were adjudicated by the judgment of the court below at Civil Action No. 10,850.
Accordingly, the judgment of the court below will be affirmed.
ON PETITION FOR REHEARING
Opinion of the Court
Per Curiam: Ordnance has filed a petition for rehearing based in part on the application of the so-called "Two Year" Rules of the court below and has filed also an extensive tabulation of cases dismissed by the court below under these rules. We did not affirm the dismissal of Ordnance's action under these rules and it follows that this portion of the petition for rehearing is irrelevant.
The real thrust of the petition for rehearing is directed to language in the opinion in Societe Internationale v. Rogers, 357 U.S. 197, 206-208 (1958). We had this decision before us at the time our opinion was handed down but we considered that it was not relevant to the issues presented. However, since Ordnance has laid so much emphasis upon this decision in its petition for rehearing we think it desirable to discuss the decision in this opinion.
In our prior opinion, as appears, we expressed our disagreement wiht the ruling in Russo v. Sofia Bros ., 2F.R.D. 80 (S.D.N.Y. 1941), which concluded that Rule 41(b), Fed. R. Civ. Proc., 28 U.S.C., did not authorize the dismissal of a suit by a preliminary motion addressed to the sufficiency of the pleading.
In Societe Internationale v. Rogers, the Supreme Court held that Rule 41(b) could not serve as the basis for dismissal of an action when documents sought by the plaintiff had not been produced, and that the power of a court to dismiss a complaint because of non-compliance with a production order depended exclusively upon Rule 37. The Supreme Court, by Mr. Justice Harlan, after quoting the first sentence of Rule 41 (b), said inter alia,
"There is no need to resort to Rule 41(b) which appears in that part of the Rules concerned with trials and which lacks . . . specific references to discovery."
Ordnance lays much emphasis on the use of the word "trials " italicized by the Supreme Court, and in effect contends that the provisions of Rule 41(b) authorize dismissal only at trial. We cannot agree. The substance of the Supreme Court's ruling in Societe Internationale was that Rule 41(b) was not available to dismiss an action when documents were not produced pursuant to a demand made under Rule 34.
We are of the view that Chapter VI of the Federal Rules of Civil Procedure, relating to "Trials", is an appropriate and natural heading for a rule authorizing a motion by a defendant designed to bring a case to trial or cause its dismissal for want of prosecution, and if a plaintiff fails to prosecute, the defendant is entitled to move under the first sentence of Rule 41(b) to dismiss the action "For failure of the plaintiff to prosecute . . .", as Jacquard did here. See Burns Mortgage Co. v. Stoudt, 2 F.R.D. 219, 220 (E.D. Pa. 1942).
We know of no other provision of the Federal Rules of Civil Procedure which authorizes dismissal for failure to prosecute. If the provisions of Rule 41(b) quoted above are not applicable, the only remedy available to a defendant to cause the dismissal of an action for want of prosecution would be the local rules of the respective United States district courts, such as the "Two Year" Rule of 1952 of the court below. We cannot believe that this was the result intended by the framers of the Civil Rules.
For these reasons as well as for thse stated in our principal opinion we conclude that we have applied correctly the provisions of Rule 41(b) in the case at bar. Accordingly the petition for rehearing will be denied.