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“ SEC. 266c. That no restraining order or injunction shall be granted by any court of the United States, or a judge or the judges thereof, in any case between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving or growing out of a dispute concerning terms or conditions of employment, unless necessary to prevent irreparable injury to property or to a property right of the party making the application, for which injury there is no adequate remedy at law, and such property or property right must be described with particularity in the application, which must be in writing and sworn to by. the applicant or by his agent or attorney.
“And no such restraining order or injunction shall prohibit any person or persons from terminating any relation of employment, or from ceasing to perform any work or labor, or from recommending, advising, or persuading others by peaceful means so to do; or from attending at or near a house or place where any person resides or works, or carries on business, or happens to be for the purpose of peacefully obtaining or communicating information, or of peacefully persuading any person to work or to abstain from working; or from ceasing to patronize or to employ any party to such dispute; or from recommending, advising, or persuading others by peaceful means so to do; or from paying or giving to or withholding from any person engaged in such dispute any strike benefits or other moneys or things of value; or from peaceably assembling at any place in a lawful manner and for lawful purposes; or from doing any act or thing which might lawfully be done in the absence of such dispute by any party thereto.”
The CHAIRMAN. We will proceed and hear Mr. Walker first.
STATEMENT OF MR. ALBERT H. WALKER, OF NEW YORK.
Mr. WALKER. Mr. Chairman, I desire to call attention to three or four matters of criticism in respect of this bill. I do not appear in opposition to the bill in its entirety; but I do wish to suggest to the committee some changes that ought to be made in it, if it is to be reported. The first suggestion which I wish to make relates to the first section and to the last sentence of that section only. That sentence reads as follows:
Every such order shall be indorsed with the date and hour of issuance, shall be forthwith entered of record, shall define the injury, and state why it is irreparable, and why the order was granted without notice; and shall by its terms expire within such time after entry, not to exceed seven days, as the court or judge may fix, unless within the time so fixed the order is extended or renewed for a like period, after notice to those previously served, if any, and for good cause shown, and the reasons for such extension shall be entered of record.
My objections to that sentence are the following:
It provides for prolixity of records and of proceedings, in that it provides that the order which is served upon the defendant, restraining him from doing a particular thing, shall not only define the injury which he is restrained from inflicting, but also shall state to him why it is irreparable, and state to him why the order was granted without notice. That is to say, the judge, when he issues an order to a defendant to refrain from doing a particular thing, shall give that defendant elaborate information as to why the order is issued. That is inconsistent with courts of equity and a new departure. A judge issues an order and that order is to be obeyed; but this section makes it obligatory on the judge to explain to the defendant why the order was issued, and also explain to him why the order was issued without notice. That is to say, the judge must, argumentatively and otherwise, vindicate his action to the defendant, instead of simply issuing an order to him, as called for by the principles and dignity which surround courts of equity.
Senator CHILTON. Do you object to these things being stated in the order when the court enters it? Do you object to that part of it? I mean in the court's decree.
Mr. WALKER. This section does not distinguish, as I think it should, between the decree that is entered in the record of the court and the paper that is served on the defendant.
Senator CHILTON. You see no objection to putting those things in the order of the court, do you?
Mr. WALKER. It depends upon what is meant by the word “ order." Senator CHILTON. I mean in the decree that the court enters?
Mr. WALKER. This sentence does not contemplate any decree. This is only a restraining order, issued without notice, and served upon the defendant. That word "order" in this section means the paper that is served on the defendant, and is not a decree that is entered in the records of the court. In equity proceedings in general, we know that a decree is entered in the records of the court, and then a writ of injunction is issued and served upon the defendant in pursuance of that decree. I know very well that decrees do and should set forth the grounds upon which they are granted. But the writs of injunctions granted and served upon defendants in pursuance of those decrees never have heretofore copied the decree in those respects, and there is no reason why they should.
Senator Chilton. I was going to suggest if you would enter this in the decree of the court and then serve a copy of that decree upon the defendant, that would be the same as we are talking about now.
Mr. WALKER. This sentence contemplates that whatever order is made shall be served upon the defendant. My idea is whether the paper served upon the defendant is a writ of injunction in pursuance of a regularly entered decree or whether it is a restraining order issued without notice and pendente lite, and before there is any occasion for a decree, that that order should not be required by statute to defend itself to the defendant by explaining to the defendant the reason that actuated the judge in granting it. The order should speak ex cathedra and should not be required by statute to be supported by argument to justify its propriety. Whatever argument is necessary to justify its propriety may properly be entered in the final or interlocutory decree in pursuance of which the order is issued, but the order itself should go forth as an edict from the court.
A still more weighty objection to this sentence consists in the fact that it provides that these restraining orders, when issued without notice in emergencies, shall expire seven days from the time they are issued, subject to one renewal of seven days more in particular circumstances. It would often happen that one or more, and perhaps all, of the defendants would be able to evade service of the order for 7 days, and for 14 days, and it might be difficult to prove that the defendants had actual notice of the order in the absence of evidence that they were served with the order. So that if the defendants secrete themselves or otherwise evade actual service of an order for 7 days, or at the most for 14 days, then the order never would continue in effect any longer. The injury might be postponed by the defendant for 14" days and then perpetrated and perpetrated successfully. At present restraining orders as issued are liable to be vacated at any time within the discretion of the court, and the question as to how long restraining orders should be effective ought, as I think, always to be left to the discretion of the judge.
The Congress sitting here can not take into account all the circumstances that might wisely guide that discretion in every one of the 80 district courts of the United States during a long period of time, and the Federal judge sitting in a particular case, who has the particular circumstances before him, can judge much better than Congress can as to how long restraining orders should be in effect in order to work justice.
It has been suggested by the minority of the Judiciary Committee of the House, who reported against this bill and criticized it, that that fault would be corrected by making the seven days begin to run from the time notice was served upon defendants instead of making it begin to run from the time the order was entered. The report of Mr. Moon, presenting the views of the minority of the Judiciary Committee of the House, stated that that change would correct the trouble and remove the objection which the committee saw and which I have stated to this committee. But it seems to me that that change would not remove that trouble. And it would introduce an element of confusion also, because the seven days would begin to run, according to that suggestion, from the time the order was served on the respective defendants; so that as to some of the defendants the restraining order would be in force and as to others it would not. I think an order ought to be in force as to everybody or not in force as to anybody, as a general rule, at least; and that an element of uncertainty would be introduced by providing that the seven days during which an order should be living should begin to run in the case of each defendant from the time when the paper was served on him.
Besides, this section does not contemplate or take into account the well-known and necessary point in equity jurisprudence that injunctions are binding upon defendants who have actual kowledge of them without any service of any paper. It is well known to the members of the committee that if some defendant attends court in a case about to be decided and he infers, after the judge has been reading his decision for a while, that the decision is going to be against him and he immediately steps out of the court room and does the thing which he apprehends in 10 minutes he will be enjoined from doing, in such case he is as guilty of contempt as if a regular service of a writ of injunction had been made upon him.
All the learning and foundation upon which equity jurisprudence has been built for a long time to enable the courts of equity to prevent wrongs perpetrated by a defendant under the various circumstances under which they may be perpetrated, seem not to have been in the mind of the gentleman who drew this section. He dealt with the problem in much too simple terms, as if such proceedings nearly always follow one very narrow path, whereas they do not, but are as various as the cases are. Therefore I should recommend to the committee that the first section be amended by canceling nearly all the last sentence, or at least the latter part of the last sentence. I say at least the latter part of the last sentence, because the first part which provides that "Every order shall be indorsed with the date and hour of issuance and shall be forthwith entered of record," is a harmless provision which merely represents the present practice of
the courts. That first section purports to revise section 263 of the Revised Statutes. The rest of the bill purports to add three sections to the law, which have never been in the United States statutes before, and which constitute three new departures from the law as it now stands.
Let me now speak of section 266a, which is short, and I will read it into the record :
That no restraining order or interlocutory order of injunction shall issue except upon the giving of security by the applicant, in such sum as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained thereby.
The adverse report of the minority of the Judiciary Committee of the House stated that the gentlemen who signed it had no particular objection to that section, but they commented upon the circumstance that no reason had been submitted to the committee at any time for its enactment. I have a very strong objection to that section, which did not occur to the minority members of the House Judiciary Committee.
Writs of injunction in Federal courts are the only effective means of enforcing the patent laws of the United States, and among all writs of injunction that are granted by the district courts of the United States those which are granted in cases of infringements of patents constitute by far the more numerous class. The law upon the subject of securities is well settled as a matter of case law. A case of patent litigation is conducted in this manner: A complaint is filed by a patentee against an alleged infringer, setting forth that the complainant's patent is valid and that the defendant has infringed it. Thereupon elaborate testimony and other evidence is taken upon those points, and ultimately, in many cases, perhaps in most cases, the court finds that the patent is valid, that the complainant owns it, and that the defendant has infringed it. Thereupon the court enters an interlocutory decree establishing those propositions and orders that an injunction shall issue against the defendant restraining him from infringing the patent any more, and also orders that a master in chancery shall take and state an account of the money recovery which the complainant is entitled to receive on account of the infringements which have already occurred. This writ of injunction is the only remedy of general applicability in patent cases, because our laws in respect of money recoveries in cases of infringement of patents are such that it is difficult for any considerable amount of money to be recovered even where infringement is undeniable. These are cases with which I am perfectly familiar after having studied the patent laws for 40 years; and, although it would take a long time to explain the subject fully to you, I assure the committee that I am right upon the point. The case law regarding giving security in patent cases is as follows:
It is within the discretion of the judge to refuse to grant any injunction, unless the complainant will give security for the damages to be inflicted on the defendant, in case the injunction is ultimately dissolved by a higher court. It is also within the discretion of the judge to refuse to grant an injunction at all if the defendant will give à bond to secure whatever damages may be inflicted upon the complainant, in case his right to the injunction shall thereafter be confirmed. So, the giving of bonds by the complainant, or the giving of bonds by the defendant, or the non-giving of bonds by anybody, is entirely within the discretion of the court; and that discretion has never, so far as I know, been unwisely exercised. I have been acquainted with patent cases all over the country for more than a quarter of a century, and I have read the reports of all of the cases that have been decided, except those decided recently; and I assure the members of the committee that there is no necessity for any legislation to regulate the discretion of judges in respect of requiring or nonrequiring of bonds in patent cases. But this section provides that no interlocutory injunction shall ever be granted to restrain the infringement of a patent, unless a bond is first given by the complainant; because the language is broad enough to comprehend patent cases. It says, that no restraining order or interlocutory order shall be granted, except after the complainant has given security in such sum as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained thereby. Now, how would that work. Let me state a concrete case in my own practice, and show to the committee how badly that would have worked if it had been the law.
Many years ago I had a client who had a patent on a railroad-car brake of very great utility and value. The Baltimore & Ohio Railroad Co. copied, on all its passenger cars, the drawings of that patent and, undeniably, willfully, and defiantly infringed the patent for many years. My client brought an equity suit against that corporation for that infringement. The case was decided in favor of my client, and the patent was found to be valid, and there was no denial of infringement. An interlocutory decree was entered referring the case to a master in chancery to state the amount of the money recovery that my client was entitled to, and also for an interlocutory injunction. If this section had been the law at that time, that injunction could not have been granted unless my client had given to the Baltimore & Ohio Railroad Co. a bond to secure whatever loss it might theoretically incur by being compelled to take those brakes off from all those cars.
There was not one chance in a million the Supreme Court would dissolve that injunction, but theoretically at that time the Baltimore & Ohio Railroad Co. had a right to appeal to that court from that decree, and such a statute as this would, therefore, have practically said to the circuit court, “You shall not grant any injunction to that man at all," because it would have been as impossible for my client to have given such a bond as the railroad company would have required as it would have been for him to pay the national debt.
Senator CHILTON. Don't they still leave it within the discretion of the court? It says “such sum as the court or judge may deem proper.”
Mr. WALKER. That discretion would not be properly exercised, unless the judge should make the bond commensurate with the injury that might theoretically be inflicted on the defendant, by ani improvident injunction. The defendants might say, “Your honor, if we are compelled to take those railroad brakes off, it will injure the Baltimore & Ohio Railroad Co. a million dollars.” “And if the