On Petition for Rehearing.
In a petition for rehearing, appellant Parker observes that the briefs and oral arguments before this court did not deal with the question whether Parker might also be held in contempt of the interlocutory decree. Accordingly we gave leave to appellant to file a memorandum setting forth any reason or reasons why he should not be held in civil contempt of this decree. Such a memorandum has been filed, and an answering memorandum has been submitted by the United States.
It is true that the Government's petition for attachment for contempt, filed on December 19, 1939, contained no reference to the temporary injunction. We mentioned this fact in our original opinion, and went on to point out that in the reference to the master the issues were broadened so as to include an inquiry into the extent to which Green Valley Creamery, Inc., failed to comply with the temporary injunction as well as with the final decree, and an inquiry into all of the acts and conduct of Parker which might have constituted a violation of each of these decrees. The issues were fought out before the master on this broader basis and he made his findings and conclusions thereon. Under these circumstances, the narrower scope of the petition for attachment for contempt becomes unimportant. See Rule 15(b), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.
Appellant urges that we did not consider the effect of two previous contempt petitions, dated respectively December 21, 1937, and January 27, 1938, not appearing in the record now before us, as a result of which, in each instance, the district court entered an order adjudging Green Valley (not Parker) in contempt and imposing a fine of $1,000 upon the corporation. If these were compensatory fines appropriate to civil contempt, and were paid over to the market administrator in reduction of the indebtedness of Green Valley to the market administrator, the district court will of course make corresponding allowance therefor in determining the amount of the compensatory fine to be imposed upon Parker, upon remand of the present case. Apart from this, we think these earlier contempt proceedings have no bearing upon the liability of Parker for contempt of the interlocutory decree, other than to emphasize the persistent and deliberate character of his contumacy.
Further, Parker contends, no adjudication for civil contempt of an interlocutory decree can be made after entry of a final decree; "after the entry of a final decree an interlocutory decree becomes functus officio and so ceases to provide the necessary foundation for an order adjudicating a person in civil contempt." No authority cited by appellant, and none that we can find, supports this proposition. It is true, a final decree merges and supersedes the terms of an interlocutory decree so that acts taking place after the date of the final decree can be adjudged in contempt only insofar as they may violate the terms incorporated in the final decree. This is all that was decided in Gardner v. Gardner, 1882, 87 N.Y. 14, cited by appellant. In Worden v. Searls, 1887, 121 U.S. 14, 7 S. Ct. 814, 820, 30 L. Ed. 853, which was a suit for alleged patent infringement, the circuit court imposed a compensatory fine upon the defendants for violation of a preliminary injunction. Thereafter a final decree went in favor of the plaintiff, but on appeal the Supreme Court held that the final decree should be reversed and the bill dismissed. Of course, in these circumstances, the Supreme Court also reversed the interlocutory order of the circuit court adjudging the defendants in civil contempt and imposing a fine upon them payable to the plaintiff, because "the fines were, in fact, measured by the damages the plaintiff had sustained and the expenses he had incurred. They were incidents of his claims in the suit. His right to them was, if it existed at all, founded on his right to the injunction, and that was founded on the validity of his patent." That case furnishes no support to appellant, because in the case at bar the final decree went in favor of the plaintiff and was affirmed by us on appeal. Worden v. Searls is significant, however, as indicating a reason why the district court may find it appropriate to wait until the plaintiff's right in the main litigation has been established by final decree before adjudicating a defendant in civil contempt of an interlocutory decree, and imposing upon him a compensatory fine payable to the plaintiff, on the basis of contumacious acts committed by the defendant while the temporary injunction was in force and before it had been superseded by the final decree. Certainly, the case has no tendency to support the proposition that an adjudication for civil contempt of an interlocutory decree cannot be made after entry of a final decree.
Finally, appellant urges that in our original opinion we took no account of § 25 of the Clayton Act, 38 Stat. 730, 740, 28 U.S.C.A. § 390, providing that "no proceeding for contempt shall be instituted against any person unless begun within one year from the date of the act complained of; * * * ." That section, must be read in the light of §§ 21, 22, 23 and 24, 28 U.S.C.A. §§ 386-389, as part of an integrated statute dealing with the punishment for contempt. Sections 21-25 of the Clayton Act were derived from H.R. 22591, 62d Cong., which passed the House in 1912 but not the Senate. See H. Rep. 613, 62d Cong., 2d Sess. (1912). The provisions of that bill, with no substantial changes, became §§ 21-25 of the Clayton Act enacted in 1914. See H. Rep. 627, 63d Cong., 2d Sess. (1914) p. 21.
There are two answers to appellant's contention as to the applicability of the contempt provisions of the Clayton Act to the case at bar.
In the first place it is evident both from the legislative history and from the text of the statute that §§ 21-25 as an entirety refer only to punishment for criminal contempt. Michaelson v. United States, 1924, 266 U.S. 42, 64-67, 45 S. Ct. 18, 69 L. Ed. 162, 35 A.L.R. 451; Odell v. Bausch & Lomb Optical Co., 7 Cir., 1937, 91 F.2d 359, 361. The "proceeding for contempt" referred to in § 25 is a separate and independent proceeding at law for criminal contempt. It does not refer to a petition for attachment for civil contempt filed as part of an original equity cause as in the case at bar. See Michaelson v. United States, supra, 266 U.S. at pages 64, 65, 45 S. Ct. 18, 69 L. Ed. 162, 35 A.L.R. 451; Leman v. Krentler-Arnold Hinge Last Co., 1932, 284 U.S. 448, 452-454, 52 S. Ct. 238, 76 L. Ed. 389.
In the second place the one-year period of limitation set forth in § 25, even as to proceedings for criminal contempt, is by the express exception in § 24 rendered inapplicable where the contempt relates to disobedience of any lawful decree "entered in any suit or action brought or prosecuted in the name of, or on behalf of, the United States" - as in the case at bar. United States v. Goldman, 1928, 277 U.S. 229, 237-239, 48 S. Ct. 486, 72 L. Ed. 862; Hill v. United States, 1937, 300 U.S. 105, 108, 57 S. Ct. 347, 81 L. Ed. 537.See also the codification of §§ 21-25 of the Clayton Act in 28 U.S.C.A. §§ 386-390.
The petition for rehearing is denied.