decided: May 25, 1959.
BEACON THEATRES, INC
WESTOVER, U.S. DISTRICT JUDGE, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Warren, Black, Douglas, Clark, Harlan, Brennan, Whittaker, Stewart; Frankfurter took no part in the consideration or decision of this case.
[ 359 U.S. Page 501]
MR. JUSTICE BLACK delivered the opinion of the Court.
Petitioner, Beacon Theatres, Inc., sought by mandamus to require a district judge in the Southern District of California to vacate certain orders alleged to deprive it of a jury trial of issues arising in a suit brought against it by Fox West Coast Theatres, Inc. The Court of Appeals for the Ninth Circuit refused the writ, holding that the trial judge had acted within his proper discretion in denying petitioner's request for a jury. 252 F.2d 864. We granted certiorari, 356 U.S. 956, because "Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care." Dimick v. Schiedt, 293 U.S. 474, 486.
[ 359 U.S. Page 502]
Fox had asked for declaratory relief against Beacon alleging a controversy arising under the Sherman Anti-trust Act, 26 Stat. 209, as amended, 15 U. S. C. §§ 1, 2, and under the Clayton Act, 38 Stat. 731, 15 U. S. C. § 15, which authorizes suits for treble damages against Sherman Act violators. According to the complaint Fox operates a movie theatre in San Bernardino, California, and has long been exhibiting films under contracts with movie distributors. These contracts grant it the exclusive right to show "first run" pictures in the "San Bernardino competitive area" and provide for "clearance" -- a period of time during which no other theatre can exhibit the same pictures. After building a drive-in theatre about 11 miles from San Bernardino, Beacon notified Fox that it considered contracts barring simultaneous exhibitions of first-run films in the two theatres to be overt acts in violation of the antitrust laws.*fn1 Fox's complaint alleged that this notification, together with threats of treble damage suits against Fox and its distributors, gave rise to "duress and coercion" which deprived Fox of a valuable property right, the right to negotiate for exclusive first-run contracts. Unless Beacon was restrained, the complaint continued, irreparable harm would result. Accordingly, while its pleading was styled a "Complaint for Declaratory Relief," Fox prayed both for a declaration that a grant of clearance between the Fox and Beacon theatres is reasonable and
[ 359 U.S. Page 503]
not in violation of the antitrust laws, and for an injunction, pending final resolution of the litigation, to prevent Beacon from instituting any action under the antitrust laws against Fox and its distributors arising out of the controversy alleged in the complaint.*fn2 Beacon filed an answer, a counterclaim against Fox, and a cross-claim against an exhibitor who had intervened. These denied the threats and asserted that there was no substantial competition between the two theatres, that the clearances granted were therefore unreasonable, and that a conspiracy existed between Fox and its distributors to manipulate contracts and clearances so as to restrain trade and monopolize first-run pictures in violation of the antitrust laws. Treble damages were asked.
Beacon demanded a jury trial of the factual issues in the case as provided by Federal Rule of Civil Procedure 38 (b). The District Court, however, viewed the issues raised by the "Complaint for Declaratory Relief," including the question of competition between the two theatres, as essentially equitable. Acting under the purported authority of Rules 42 (b) and 57, it directed that these issues be tried to the court before jury determination of the validity of the charges of antitrust violations made in the counterclaim and cross-claim.*fn3 A common issue of the "Complaint for Declaratory Relief," the counterclaim, and the cross-claim was the reasonableness of the clearances granted to Fox, which depended, in part, on the
[ 359 U.S. Page 504]
existence of competition between the two theatres. Thus the effect of the action of the District Court could be, as the Court of Appeals believed, "to limit the petitioner's opportunity fully to try to a jury every issue which has a bearing upon its treble damage suit," for determination of the issue of clearances by the judge might "operate either by way of res judicata or collateral estoppel so as to conclude both parties with respect thereto at the subsequent trial of the treble damage claim." 252 F.2d, at 874.
The District Court's finding that the Complaint for Declaratory Relief presented basically equitable issues draws no support from the Declaratory Judgment Act, 28 U. S. C. §§ 2201, 2202; Fed. Rules Civ. Proc., 57. See also 48 Stat. 955, 28 U. S. C. (1940 ed.) § 400. That statute, while allowing prospective defendants to sue to establish their non-liability, specifically preserves the right to jury trial for both parties.*fn4 It follows that if Beacon would have been entitled to a jury trial in a treble damage suit against Fox it cannot be deprived of that right merely because Fox took advantage of the availability of declaratory relief to sue Beacon first. Since the right to trial by jury applies to treble damage suits under the antitrust laws, and is, in fact, an essential part of the congressional plan for making competition rather than monopoly the rule of trade, see Fleitmann v. Welsbach Street Lighting Co., 240 U.S. 27, 29, the Sherman and Clayton Act issues on which Fox sought a declaration were essentially jury questions.
Nevertheless the Court of Appeals refused to upset the order of the district judge. It held that the question of whether a right to jury trial existed was to be judged
[ 359 U.S. Page 505]
by Fox's complaint read as a whole. In addition to seeking a declaratory judgment, the court said, Fox's complaint can be read as making out a valid plea for injunctive relief, thus stating a claim traditionally cognizable in equity. A party who is entitled to maintain a suit in equity for an injunction, said the court, may have all the issues in his suit determined by the judge without a jury regardless of whether legal rights are involved. The court then rejected the argument that equitable relief, traditionally available only when legal remedies are inadequate, was rendered unnecessary in this case by the filing of the counterclaim and cross-claim which presented all the issues necessary to a determination of the right to injunctive relief. Relying on American Life Ins. Co. v. Stewart, 300 U.S. 203, 215, decided before the enactment of the Federal Rules of Civil Procedure, it invoked the principle that a court sitting in equity could retain jurisdiction even though later a legal remedy became available. In such instances the equity court had discretion to enjoin the later lawsuit in order to allow the whole dispute to be determined in one case in one court.*fn5 Reasoning by analogy, the Court of Appeals held it was not an abuse of discretion for the district judge, acting under Federal Rule of Civil Procedure 42 (b), to try the equitable cause first even though this might, through collateral estoppel, prevent a full jury trial of the counterclaim and cross-claim which were as effectively stopped as by an equity injunction.*fn6
[ 359 U.S. Page 506]
Beacon takes issue with the holding of the Court of Appeals that the complaint stated a claim upon which equitable relief could be granted. As initially filed the complaint alleged that threats of lawsuits by petitioner against Fox and its distributors were causing irreparable harm to Fox's business relationships. The prayer for relief, however, made no mention of the threats but asked only that pending litigation of the claim for declaratory judgment, Beacon be enjoined from beginning any lawsuits under the antitrust laws against Fox and its distributors arising out of the controversy alleged in the complaint. Evidently of the opinion that this prayer did not state a good claim for equitable relief, the Court of Appeals construed it to include a request for an injunction against threats of lawsuits. This liberal construction of a pleading is in line with Rule 8 of the Federal Rules of Civil Procedure. See Conley v. Gibson, 355 U.S. 41, 47-48. But this fact does not solve our problem. Assuming that the pleadings can be construed to support such a request and assuming additionally that the complaint can be read as alleging the kind of harassment by a multiplicity of lawsuits which would traditionally have justified equity to take jurisdiction and settle the case in one suit,*fn7 we are nevertheless of the opinion that, under the Declaratory Judgment Act and the Federal Rules of Civil Procedure, neither claim can justify denying Beacon a trial by jury of all the issues in the antitrust controversy.
The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal
[ 359 U.S. Page 507]
remedies.*fn8 At least as much is required to justify a trial court in using its discretion under the Federal Rules to allow claims of equitable origins to be tried ahead of legal ones, since this has the same effect as an equitable injunction of the legal claims. And it is immaterial, in judging if that discretion is properly employed, that before the Federal Rules and the Declaratory Judgment Act were passed, courts of equity, exercising a jurisdiction separate from courts of law, were, in some cases, allowed to enjoin subsequent legal actions between the same parties involving the same controversy. This was because the subsequent legal action, though providing an opportunity to try the case to a jury, might not protect the right of the equity plaintiff to a fair and orderly adjudication of the controversy. See, e. g., New York Life Ins. Co. v. Seymour, 45 F.2d 47. Under such circumstances the legal remedy could quite naturally be deemed inadequate. Inadequacy of remedy and irreparable harm are practical terms, however. As such their existence today must be determined, not by precedents decided under discarded procedures, but in the light of the remedies now made available by the Declaratory Judgment Act and the Federal Rules.*fn9
[ 359 U.S. Page 508]
Viewed in this manner, the use of discretion by the trial court under Rule 42 (b) to deprive Beacon of a full jury trial on its counterclaim and cross-claim, as well as on Fox's plea for declaratory relief, cannot be justified. Under the Federal Rules the same court may try both legal and equitable causes in the same action. Fed. Rules Civ. Proc., 1, 2, 18. Thus any defenses, equitable or legal, Fox may have to charges of antitrust violations can be raised either in its suit for declaratory relief or in answer to Beacon's counterclaim. On proper showing, harassment by threats of other suits, or other suits actually brought, involving the issues being tried in this case, could be temporarily enjoined pending the outcome of this litigation. Whatever permanent injunctive relief Fox might be entitled to on the basis of the decision in this case could, of course, be given by the court after the jury renders its verdict. In this way the issues between these parties could be settled in one suit giving Beacon a full jury trial of every antitrust issue. Cf. Ring v. Spina, 166 F.2d 546. By contrast, the holding of the court below while granting Fox no additional protection unless the avoidance of jury trial be considered as such, would compel Beacon to split his antitrust case, trying part to a judge and part to a jury.*fn10 Such a result, which involves the postponement and subordination of Fox's own legal claim for declaratory relief as well as of the counterclaim which Beacon was compelled by the Federal Rules to bring,*fn11 is not permissible.
Our decision is consistent with the plan of the Federal Rules and the Declaratory Judgment Act to effect
[ 359 U.S. Page 509]
substantial procedural reform while retaining a distinction between jury and non-jury issues and leaving substantive rights unchanged.*fn12 Since in the federal courts equity has always acted only when legal remedies were inadequate,*fn13 the expansion of adequate legal remedies provided by the Declaratory Judgment Act and the Federal Rules necessarily affects the scope of equity. Thus, the justification for equity's deciding legal issues once it obtains jurisdiction, and refusing to dismiss a case, merely because subsequently a legal remedy becomes available, must be re-evaluated in the light of the liberal joinder provisions of the Federal Rules which allow legal and equitable causes to be brought and resolved in one civil action.*fn14 Similarly the need for, and therefore, the availability of such equitable remedies as Bills of Peace, Quia Timet and Injunction must be reconsidered in view of the existence of the Declaratory Judgment Act as well as the liberal joinder provision of the Rules.*fn15 This is not only in accord with the spirit of the Rules and the Act
[ 359 U.S. Page 510]
but is required by the provision in the Rules that "the right to trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States shall be preserved . . . inviolate."*fn16
If there should be cases where the availability of declaratory judgment or joinder in one suit of legal and equitable causes would not in all respects protect the plaintiff seeking equitable relief from irreparable harm while affording a jury trial in the legal cause, the trial court will necessarily have to use its discretion in deciding whether the legal or equitable cause should be tried first. Since the right to jury trial is a constitutional one, however, while no similar requirement protects trials by the court,*fn17 that discretion is very narrowly limited and must, wherever possible, be exercised to preserve jury trial. As this Court said in Scott v. Neely, 140 U.S. 106, 109-110: "In the Federal courts this [jury] right cannot be dispensed with, except by the assent of the parties entitled to it, nor can it be impaired by any blending with a claim, properly cognizable at law, of a demand for equitable relief in aid of the legal action or during its pendency."*fn18 This long-standing principle of equity dictates that only under the
[ 359 U.S. Page 511]
most imperative circumstances, circumstances which in view of the flexible procedures of the Federal Rules we cannot now anticipate,*fn19 can the right to a jury trial of legal issues be lost through prior determination of equitable claims. See Leimer v. Woods, 196 F.2d 828, 833-836. As we have shown, this is far from being such a case.
Respondent claims mandamus is not available under the All Writs Act, 28 U. S. C. § 1651. Whatever differences of opinion there may be in other types of cases, we think the right to grant mandamus to require jury trial where it has been improperly denied is settled.*fn20
The judgment of the Court of Appeals is
MR. JUSTICE FRANKFURTER took no part in the consideration or decision of this case.
252 F.2d 864, reversed.
MR. JUSTICE STEWART, with whom MR. JUSTICE HARLAN and MR. JUSTICE WHITTAKER concur, dissenting.
There can be no doubt that a litigant is entitled to a writ of mandamus to protect a clear constitutional or statutory right to a jury trial. But there was no denial of such a right here. The district judge simply exercised his inherent discretion, now explicitly confirmed by the Federal Rules of Civil Procedure, to schedule the trial of an equitable claim in advance of an action at law. Even an abuse of such discretion could not, I think, be attacked
[ 359 U.S. Page 512]
by the extraordinary writ of mandamus.*fn1 In any event no abuse of discretion is apparent in this case.
The complaint filed by Fox stated a claim traditionally cognizable in equity. That claim, in brief, was that Beacon had wrongfully interfered with the right of Fox to compete freely with Beacon and other distributors for the licensing of films for first-run exhibition in the San Bernardino area. The complaint alleged that the plaintiff was without an adequate remedy at law and would be irreparably harmed unless the defendant were restrained from continuing to interfere -- by coercion and threats of litigation -- with the plaintiff's lawful business relationships.
The Court of Appeals found that the complaint, although inartistically drawn, contained allegations entitling the petitioner to equitable relief.*fn2 That finding is accepted in the prevailing opinion today. If the complaint had been answered simply by a general denial, therefore, the issues would under traditional principles have been triable as a proceeding in equity. Instead of just putting in issue the allegations of the complaint, however, Beacon filed pleadings which affirmatively alleged the existence of a broad conspiracy among the plaintiff and other theatre owners to monopolize the first-run exhibition of films in the San Bernardino area, to refrain from competing among themselves, and to discriminate against Beacon in granting film licenses. Based upon these allegations, Beacon asked damages in the amount of $300,000. Clearly these conspiracy allegations stated a cause of action triable as of right by a
[ 359 U.S. Page 513]
jury. What was demanded by Beacon, however, was a jury trial not only of this cause of action, but also of the issues presented by the original complaint.
Upon motion of Fox the trial judge ordered the original action for declaratory and equitable relief to be tried separately to the court and in advance of the trial of the defendant's counterclaim and cross-claim for damages. The court's order, which carefully preserved the right to trial by jury upon the conspiracy and damage issues raised by the counterclaim and cross-claim, was in conformity with the specific provisions of the Federal Rules of Civil Procedure.*fn3 Yet it is decided today that the Court of Appeals must compel the district judge to rescind it.
Assuming the existence of a factual issue common both to the plaintiff's original action and the defendant's counterclaim for damages, I cannot agree that the District Court must be compelled to try the counterclaim first.*fn4
[ 359 U.S. Page 514]
It is, of course, a matter of no great moment in what order the issues between the parties in the present litigation are tried. What is disturbing is the process by which the Court arrives at its decision -- a process which appears to disregard the historic relationship between equity and law.
The Court suggests that "the expansion of adequate legal remedies provided by the Declaratory Judgment Act . . . necessarily affects the scope of equity." Does the Court mean to say that the mere availability of an action for a declaratory judgment operates to furnish "an adequate remedy at law" so as to deprive a court of equity of the power to act? That novel line of reasoning is at least implied in the Court's opinion. But the Declaratory Judgment Act did not "expand" the substantive law.
[ 359 U.S. Page 515]
That Act merely provided a new statutory remedy, neither legal nor equitable, but available in the areas of both equity and law. When declaratory relief is sought, the right to trial by jury depends upon the basic context in which the issues are presented. See Moore's Federal Practice (2d ed.) §§ 38.29, 57.30; Borchard, Declaratory Judgments (2d ed.), 399-404. If the basic issues in an action for declaratory relief are of a kind traditionally cognizable in equity, e. g., a suit for cancellation of a written instrument, the declaratory judgment is not a "remedy at law."*fn5 If, on the other hand, the issues arise in a context traditionally cognizable at common law, the right to a jury trial of course remains unimpaired, even though the only relief demanded is a declaratory judgment.*fn6
Thus, if in this case the complaint had asked merely for a judgment declaring that the plaintiff's specified manner of business dealings with distributors and other exhibitors did not render it liable to Beacon under the anti-trust laws, this would have been simply a "juxtaposition of parties" case in which Beacon could have demanded a jury trial.*fn7 But the complaint in the present case, as the Court recognizes, presented issues of exclusively equitable cognizance, going well beyond a mere defense to any subsequent action at law. Fox sought from the court protection against Beacon's allegedly unlawful interference with its business relationships -- protection which this
[ 359 U.S. Page 516]
Court seems to recognize might not have been afforded by a declaratory judgment, unsupplemented by equitable relief. The availability of a declaratory judgment did not, therefore, operate to confer upon Beacon the right to trial by jury with respect to the issues raised by the complaint.
The Court's opinion does not, of course, hold or even suggest that a court of equity may never determine "legal rights." For indeed it is precisely such rights which the Chancellor, when his jurisdiction has been properly invoked, has often been called upon to decide. Issues of fact are rarely either "legal" or "equitable." All depends upon the context in which they arise. The examples cited by Chief Judge Pope in his thorough opinion in the Court of Appeals in this case are illustrative: ". . . In a suit by one in possession of real property to quiet title, or to remove a cloud on title, the court of equity may determine the legal title. In a suit for specific performance of a contract, the court may determine the making, validity and the terms of the contract involved. In a suit for an injunction against trespass to real property the court may determine the legal right of the plaintiff to the possession of that property. Cf. Pomeroy, Equity Jurisprudence, 5th ed., §§ 138-221, 221a, 221b, 221d, 250." 252 F.2d 864, 874.
Though apparently not disputing these principles, the Court holds, quite apart from its reliance upon the Declaratory Judgment Act, that Beacon by filing its counterclaim and cross-claim acquired a right to trial by jury of issues which otherwise would have been properly triable to the court. Support for this position is found in the principle that, "in the federal courts equity has always acted only when legal remedies were inadequate. . . ." Yet that principle is not employed in its traditional sense as a limitation upon the exercise of power by a court of
[ 359 U.S. Page 517]
equity. This is apparent in the Court's recognition that the allegations of the complaint entitled Fox to equitable relief -- relief to which Fox would not have been entitled if it had had an adequate remedy at law. Instead, the principle is employed today to mean that because it is possible under the counterclaim to have a jury trial of the factual issue of substantial competition, that issue must be tried by a jury, even though the issue was primarily presented in the original claim for equitable relief. This is a marked departure from long-settled principles.
It has been an established rule "that equitable jurisdiction existing at the filing of a bill is not destroyed because an adequate legal remedy may have become available thereafter."*fn8 American Life Ins. Co. v. Stewart, 300 U.S. 203, 215. See Dawson v. Kentucky Distilleries Co., 255 U.S. 288, 296. It has also been long settled that the District Court in its discretion may order the trial of a suit in equity in advance of an action at law between the same parties, even if there is a factual issue common to both. In the words of Mr. Justice Cardozo, writing for a unanimous Court in American Life Ins. Co. v. Stewart, supra:
"A court has control over its own docket. . . . In the exercise of a sound discretion it may hold one lawsuit in abeyance to abide the outcome of another, especially where the parties and the issues are the same. . . . If request had been made by the respondents to suspend the suits in equity till the other causes were disposed of, the District Court could have considered whether justice would not be
[ 359 U.S. Page 518]
done by pursuing such a course, the remedy in equity being exceptional and the outcome of necessity. . . . There would be many circumstances to be weighed, as, for instance, the condition of the court calendar, whether the insurer had been precipitate or its adversaries dilatory, as well as other factors. In the end, benefit and hardship would have to be set off, the one against the other, and a balance ascertained." 300 U.S. 203, 215-216.*fn9
The Court today sweeps away these basic principles as "precedents decided under discarded procedures." It suggests that the Federal Rules of Civil Procedure have somehow worked an "expansion of adequate legal remedies" so as to oust the District Courts of equitable jurisdiction, as well as to deprive them of their traditional power to control their own dockets. But obviously the Federal Rules could not and did not "expand" the substantive law one whit.*fn10
Like the Declaratory Judgment Act, the Federal Rules preserve inviolate the right to trial by jury in actions historically cognizable at common law, as under the Constitution they must.*fn11 They do not create a right of trial
[ 359 U.S. Page 519]
by jury where that right "does not exist under the Constitution or statutes of the United States." Rule 39 (a). Since Beacon's counterclaim was compulsory under the Rules, see Rule 13 (a), it is apparent that by filing it Beacon could not be held to have waived its jury rights.*fn12 Compare American Mills Co. v. American Surety Co., 260 U.S. 360. But neither can the counterclaim be held to have transformed Fox's original complaint into an action at law.*fn13 See Bendix Aviation Corp. v. Glass, 81 F.Supp. 645.
The Rules make possible the trial of legal and equitable claims in the same proceeding, but they expressly affirm the power of a trial judge to determine the order in which claims shall be heard. Rule 42 (b). Certainly the Federal Rules were not intended to undermine the basic structure of equity jurisprudence, developed over the centuries and explicitly recognized in the United States Constitution.*fn14
For these reasons I think the petition for a writ of mandamus should have been dismissed.