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JOSEPH BANCROFT & SONS CO. v. SHELLEY KNITTING MIL

September 2, 1965

JOSEPH BANCROFT & SONS COMPANY
v.
SHELLEY KNITTING MILLS, INC.



The opinion of the court was delivered by: KRAFT

 The history and subject-matter of this action appear in detail in 3 Cir., 268 F.2d 569, and in our adjudication, D.C., 212 F. Supp. 715. It is sufficient for present purposes to state that Bancroft sought injunctive and other relief herein, based on allegations of trademark infringement, unfair competition and breach of contract.

 Some months after the filing of our adjudication of December 26, 1962, and while the case was before a Master appointed pursuant to Rule 53 of the Federal Rules of Civil Procedure, Shelley filed suit against Bancroft in the Court of Common Pleas No. 7, Philadelphia County, at No. 5521, June Term, 1963, charging Bancroft with malicious abuse of process in the institution of the instant case. That suit by Shelley is now pending before this Court as Civil Action 34244, by reason of removal.

 About the same time, Shelley also filed another suit against Bancroft and others in the Court of Common Pleas No. 1, Philadelphia County, at No. 5522, June Term, 1963, in which it alleged that the instant case was part of an unlawful conspiracy among the defendants to "ruin Shelley and drive it out of business."

 Bancroft, thereupon, filed a motion in the instant case to enjoin Shelley from prosecution of its two pending suits.

 In the course of the lengthy proceedings in the present case, Shelly's counsel, in the presence and hearing of the trial judge, repeatedly charged Bancroft with bad faith in the institution of the action and declared Shelly's intention to sue Bancroft for misuse of the Court's process. Shelley did not, however, formally tender these issues in its pleadings, its pre-trial memoranda or at pre-trial conference and its failure so to do led the trial judge to conclude, apparently mistakenly, that Shelley's counsel, for tactical and sundry other reasons, made these statements to Bancroft's counsel with tongue in cheek. However, mindful of our inherent power and duty to prevent abuse of the Court's process, 21 C.J.S. Courts ยง 88, p. 138, we gave serious and deliberate consideration to the question of Bancroft's motivation in bringing suit, because of our awareness of the statements of Shelley's counsel. Although we made no specific findings on these issues which were not among those framed at final pre-trial conference, our adjudication in Bancroft's favor necessarily reflected our conclusion that Bancroft brought the action in good faith and with no ulterior motive.

 Consideration of Bancroft's present motion to enjoin Shelley's suits persuaded us that we should now make specific findings on the issues posed, and that, in the circumstances, it would be only fair to afford the parties opportunity to offer further evidence on these issues, if they so desired. Accordingly, without deciding Bancroft's motion, we filed a memorandum and order in which we stated that, since the instant suit was still within our jurisdiction, we deemed it incumbent upon us to make full inquiry into the motivation and purpose of Bancroft in the institution of its suit, and fixed a time for further hearing.

 Presently before us is Shelley's motion to vacate that order.

 Shelley contends that the Court lacks jurisdiction to conduct the proposed inquiry and to make the proposed findings of fact.

 We think our jurisdiction is clear. It is fundamental that "a court may not permit its process to be abused." United States v. Powell, 379 U.S. 48, 58, 85 S. Ct. 248, 255, 13 L. Ed. 2d 112 (1964). If a court finds that its process has been abused, it should dismiss the cause. As stated in Pueblo de Taos v. Archuleta, 64 F.2d 807, at p. 812 (10th Cir. 1933):

 
"But all such objections may be brushed aside with the statement that the court is the protector of the purity of its own process, and may take such steps as are necessary to protect against its abuse, on its own motion, or upon the suggestion of a stranger; and neither state statutes nor ordinary procedural rules can thwart a prompt and efficacious discharge of that paramount obligation. Gumbel v. Pitkin, 124 U.S. 131, 8 S. Ct. 379, 31 L. Ed. 374; Lord v. Veazie, 49 U.S. (8 How.) 251, 12 L. Ed. 1067; Cleveland v. Chamberlain, 66 U.S. 419, 1 Black, 419, 17 L. Ed. 93; Haley v. Eureka County Bank, 21 Nev. 127, 26 P. 64, 12 L.R.A. 815; In re Burdick, 162 Ill. 48, 44 N.E. 413; Consolidated Liquor Co. v. Scotello & Nizzi, 21 N.M. 485, 155 P. 1089."

 In Pueblo, the Court sustained the dismissal of an action on the ground that it had been brought for an ulterior purpose, and stated at p. 813 of 64 F.2d:

 
"A court has inherent power to determine whether its process is used for the purpose of vexation or fraud, instead of the single purpose for which it is intended - the adjudication of bona fide controversies. It is the duty of the court to prevent such abuse, and a dismissal of the cause is an appropriate way to discharge that duty. Pueblo of Santa Rosa v. Fall, 273 U.S. 315, 319, 47 S. Ct. 361, 71 L. Ed. 658; Houston v. City and County of San Francisco (C.C.) 47 F. 337. In Gumbel v. Pitkin, 124 U.S. 131, 145, 8 S. Ct. 379, 384, 31 L. Ed. 374, the Supreme Court said: 'As we have already seen, and as has been many times declared by this court, the equitable powers of the courts of the United States, sitting as courts of law, over their own process, to prevent abuse, oppression, and injustice, are inherent, and as extensive and efficient as may be ...

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