Vendo Company v. Lektro-Vend Corporation

PETITIONER: Vendo Company
RESPONDENT: Lektro-Vend Corporation
LOCATION: United States Department of Health, Education, and Welfare

DOCKET NO.: 76-156
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 433 US 623 (1977)
ARGUED: Jan 19, 1977
DECIDED: Jun 29, 1977

ADVOCATES:
Barnabas F. Sears - for respondents
Earl E. Pollock - for petitioner

Facts of the case

Question

Media for Vendo Company v. Lektro-Vend Corporation

Audio Transcription for Oral Argument - January 19, 1977 in Vendo Company v. Lektro-Vend Corporation

Warren E. Burger:

We will hear arguments next in 76-156, Vendo Company against Lektro-Vend Corporation.

Mr. Pollock.

Earl E. Pollock:

Mr. Chief Justice and may it please the Court.

This case involves a preliminary injunction against an ongoing State Court preceding, but more specifically the injunction enjoins a State Court proceeding to collect final State Court judgments in the amount of seven-and-a-half million dollars.

Final State Court judgment resulting after 10 years of litigation in the Illinois courts, final judgments fully reviewed by the Illinois Supreme Court and unanimously affirmed by that court in a very thorough opinion by Judge Walter Schaefer, and final judgments which this Court declined to review on petition for certiorari.

Furthermore, the preliminary injunction was issued by the District Court on precisely the same federal grounds which the state defendants have specifically raised by formal pleading in the state preceding as a defense.

A defense which the State Courts, indeed the Illinois Appellate Court, specifically ruled was within the jurisdiction of the Illinois courts to adjudicate.

A defense, however, which when the case was then remanded for trial on that defense in the State Trial Court the state defendants, immediately before trial, moved to withdraw the federal antitrust defense.

That was in 1971, and never again reasserted that federal defense in the state proceeding.

Thurgood Marshall:

It was significant that they withdrew it without prejudice.

Earl E. Pollock:

I do not think so Your Honor, certainly I could have no effect on the either of the Section 2283 question which we are dealing with today, or comity and federalism questions, because obviously any litigant cannot determine for himself by removing a defense or client without prejudice that whether that shall affect the application of principles of comity and federalism.

I thank that so far as this case is concerned regardless of what may have been the right of the state defendants at some later date in the state preceding to again raise the federal defense.

They withdraw that defense without prejudice in 1971 can have no effect for the reason that during the next four years of the State Court proceeding the state defendants never chose to reassert that federal defense.

John Paul Stevens:

But Mr. Pollock, it was then in the Federal Court all this period, wasn?t it?

For some time prior to this trial they had been asserting their federal antitrust theory, had they not?

Earl E. Pollock:

Yes, in a treble damage action which is still pending and which indeed will be going to trial.

John Paul Stevens:

Which was more or less set on the backburners, phrase we used to use, while a state preceding was completed.

Earl E. Pollock:

It was set on the backburner over the objection of my client, Vendo.

We have set forth in a supplement to our brief, supplement B, a full statement of various continuances obtained by the state defendants in the federal case with respect to the treble damage claim.

I would also point out Mr. Justice Stevens that throughout the 10-year period of the State Court proceedings, 1965-1975, at no time where there ever any intimation that at the conclusion of the state case.

The state defendants in there federal case which they have filed after the state proceedings initiated, there is never any information that the state defendants or the federal plaintiffs would ever seek to enjoin the results of the state litigation, but instead every statement by the state defendants or the federal plaintiffs in the federal case was to the effect that if Vendo is successful in its state preceding to recover judgments as it did then the state defendants would seek damages based in part on the State Court proceeding, but not until January 1975 was there ever the slightest intimation, even one word in the record, about obtaining a preliminary injunction against State Court?s decision.

John Paul Stevens:

You will rely and this is the waiver.

They did not have any need for an injunction as long as they are willing to try out the state issues in the State Court.

Earl E. Pollock:

Mr. Justice Stevens we are not arguing waiver, for example we are not contending that the federal plaintiffs are barred from proceeding with their treble damage action.

John Paul Stevens:

You are really just relying on the anti-injunction statute, as I understand it.

Earl E. Pollock:

I relied on the anti-injunction statute, and in addition Your Honor, the principles of comity and federalism in this context where you have a final state judgment.

John Paul Stevens:

But what I am suggesting is the issues would be exactly the same if the problem arose ten years ago instead of today, the legal issues.

Earl E. Pollock:

With respect to Section 2283, I think that is correct, but the additional issue as presented in our petition relating to the application of fundamental principles of federal state relations, are effected very substantially by the fact that here you have State Court defenders who has specifically raised the federal defense, and then went all the way up to the Illinois Appellate Court insisting that they have the right to have the State Court determine that issue.

They persuaded the Illinois Appellate Court that they did have, the Illinois courts did have jurisdiction.

Having persuaded the Illinois courts that the Illinois courts have such jurisdiction -- and that opinion of the Illinois Appellate Court is at Pages 77-79 of the Appendix.