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Hanover Shoe Inc. v. United Shoe Machinery Corp.


May 18, 1967



Forman, Ganey and Freedman, Circuit Judges.

Author: Freedman

Supplemental Opinion

FREEDMAN, Circuit Judge:

Only one argument made in the petitions for rehearing calls for further comment. United argues in its petition, as it did before us, that the statute of limitations completely bars Hanover's claim for damages. Both parties had conceded at trial that the applicable six-year Pennsylvania statute of limitations had been extended backward by various tolling provisions to allow recovery of all damages incurred after 1939. We reduced the period of allowable damages to one beginning in 1946, when the American Tobacco case was decided, and we did not reach United's contention regarding the statute of limitations, because we reasoned that since United's conduct did not become illegal until 1946, Hanover's cause of action for damages could not have arisen any earlier.

United now argues that the statute of limitations began to run in 1912 or even earlier, when it first refused to sell its machinery, and that the statute was not tolled simply because the conduct which caused the injury was legal under the precedents of that time.*fn1 This, however, does not require a different result in this case, for United has misconceived the basic nature of Hanover's claim for damages.

United argues that where a refusal to deal causing damages has occurred well before the allowable period under the statute of limitations, no recovery may be had, even for damages following the reiteration of such a refusal to deal within the statutory period.*fn2 The cases relied on, however, are very different from the present case. First, they are antitrust conspiracy cases in which the plaintiff sought to recover damages for the full period both within and outside the statute of limitations, on the claim that the statute did not begin to run until the termination of the conspiracy. Here, however, Hanover does not seek to recover the damages it suffered before 1939; it concedes that any claims it had for conduct in that period are now barred and seeks only to recover for damages inflicted after 1939. Secondly, on the facts in the cases cited by United it would have been difficult to segregate damages which flowed from the original refusal to deal from damages attributable to the continued refusals within the statutory period. On the other hand, the specific collection of rentals every month within the statutory period provides a concrete standard for the measurement of the damages which occurred here within the statutory period by comparing the rentals with the reasonable sales value of the machinery.*fn3 Finally, in the cited cases the continuing conduct was that of a mere re-assertion of the refusal to deal. Here, however, United went beyond a mere continuation of the refusal to sell; it collected rentals on leases and entered into new leases when old machinery was no longer in working condition and required replacement.

The rule applicable to the facts in this case is that where the repeated and measurable invasion of a plaintiff's rights occurs both outside the statutory period and also within it, the fact that some of the injury and damage occurred outside the statutory period does not affect the plaintiff's right to recover for the separate invasion of its rights which occurred within the period.*fn4 Indeed, any other rule would be an affront to reason, for it would require the conclusion that injury and damages which were inflicted, as in this case, in 1955, by concrete and specific business transactions, were barred by the statute of limitations as long ago as 1918 or even earlier, because of similar but not identical conduct. The policy of the statute of limitations is maintained by allowing recovery for measurable injury within the period and barring recovery for injury beyond it. The operative facts underlying Hanover's claim occurred within the statutory period as tolled, and the traditional concern regarding lost witnesses and fading memories is thus fully satisfied. Moreover, we effectuate the general policy against stale claims in barring injury suffered before 1946. In so doing, however, we see no need to wipe out Hanover's current claim.*fn5

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