Gibbs v. Buck, 307 U.S. 66 (1939)

Gibbs v. Buck

No. 276

Argued January 10, 1939
Decided April 17, 1939
307 U.S. 66

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF FLORIDA

Syllabus

1. The question of jurisdictional amount is properly determined on the bill and motion to dismiss where the motion in effect traverses only a general allegation of the amount involved, and admits the other allegations, touching the subject, merely challenging their sufficiency to show jurisdiction. P. 71.

On submission of the question on bill and motion to dismiss, the burden of showing jurisdictional value in controversy is on the plaintiff. P. 72.

2. In a class suit by and on behalf of the members of a society who have a common and undivided interest, the jurisdictional amount or value is involved if for any member who is a party, the matter in controversy is of that value, or if, to the aggregate of all members in the suit, it is of that value. P. 72.

3. In a suit to restrain enforcement of a statute prohibiting a business, the amount in controversy is the value of the right to conduct the business free of such prohibition. P. 74.

The cost of compliance is evidence of the value of the right to be free from a statutory prohibition. P. 75.

4. Owners of the copyrights of musical compositions, with a view to protection against unlicensed public performances for profit for which they received no compensation, granted to an unincorporated association, of which they were the members, the exclusive right of public performance for a term of years. It was the function of the society to protect itself and its members from piracies, and to license public performances by others for royalties which, after certain deductions, it distributed among its members, pursuant to its articles of association. A Florida statute undertook to forbid and penalize such combinations as unlawful monopolies fixing prices in restraint of trade. In a suit by the Society and some of its members representing all, seeking to enjoin enforcement of the statute as an unconstitutional invasion of copyright, held:

(1) As the members own the copyrights, less the limited assignment to the Society of the right of public performance for profit, and share in the earnings through mandatory distribution under the articles of association, and not by way of dividends, they are proper parties to the action. P. 73.

(2) Since the members, because of the interposition of the statute, cannot in combination license production and collect fees in Florida, they have a common and undivided interest in the matter in controversy in this class suit. P. 74.

(3) Admitted allegations of the bill support a finding that the matter in controversy -- the value of the aggregate rights of all members to conduct their business through the Society -- exceeds $3,000 in value. P. 75.

McNutt v. General Motors Acceptance Corp., 298 U.S. 178, and KVOS, Inc. v. Associated Press, 299 U.S. 269, distinguished.

(4) In view of the allegations of the bill raising doubts of the constitutionality of the Act, and in view of the penalties attached to its violation, a motion to dismiss for failure to state a cause of action was properly overruled. P. 76.

5. A motion to dismiss a bill for failure to state a cause of action is determined on the face of the bill, without resort to affidavits used on the accompanying motion for a preliminary injunction. P. 76.

6. Whether to grant or refuse a motion to dismiss before answer is largely a matter of discretion for the trial court. P. 76.

7. Where the bill makes an attack upon the constitutionality of a state statute, supported by factual allegations sufficiently strong, as here, to raise grave doubts of the constitutionality of the Act in the mind of the trial court, the motion to dismiss for failure to state a cause of action should be denied. Id.

Affirmed. ,

Appeal from an order of the District Court, of three judges, overruling a motion to dismiss the bill and granting an interlocutory injunction, in a suit to restrain enforcement of a Florida statute forbidding combinations of owners of copyrighted musical compositions.