Carlson v. Coca-Cola Co.

Before ELY and HUFSTEDLER, Circuit Judges, and SOLOMON, District Judge.

ELY, Circuit Judge:

Acting individually and, purportedly as class representatives, appellants initiated this action against The Coca-Cola Company for damages. The complaint alleged that Coca-Cola had engaged in a nationwide promotional game, Big Name Bingo, that was deceptively structured to deprive many participants of prize money to which they were allegedly entitled under the rules of the game. Under Federal Rule of Civil Procedure 12, the District Court, 318 F.Supp. 785, dismissed the complaint for failing to establish a requisite basis for federal jurisdiction. We affirm.

Appellants sought to ground general federal jurisdiction upon 28 U.S.C. § 1337, which provides:

“The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies.”

The specific Act of Congress under which this action was alleged to have arisen is section 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1):

“Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful.”

Here, the pivotal question is thus whether private litigants may invoke the jurisdiction of federal district courts solely by. alleging that defendants engaged in business practices proscribed by section 5(a)(1). Whether the District Court had jurisdiction depends upwhether this action was one “arising under” section 5(a)(1).

“Arising under”, in the context of 28 U.S.C. § 1337, requires a plaintiff seeking jurisdiction to state a claim arising under a federal act regulating commerce. To acquire federal jurisdiction, a plaintiff must assert a colorable right to a remedy under a particular federal statute. The statutory provision invoked by the appellants in this case provided them with no direct remedy, either explicitly or implicitly. This conclusion is supported by solid authority of long standing. See Amalgamated Workers v. Edison Co., 309 U.S. 261, 268, 60 S.Ct. 561, 84 L.Ed. 738 (1940) (dictum); Moore v. New York Cotton Exchange, 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750 (1926); Holloway v. Bristol-Myers Corp., 485 F.2d 986 (D.C.Cir. 1973); United States v. St. Regis Paper Co., 355 F.2d 688, 693 (2d Cir. 1966) (dictum); New Jersey Wood Finishing Co. v. Minnesota Mining & Manufacturing Co., 332 F.2d 346, 352 (3d Cir. 1964) (dictum), aff’d, 381 U.S. 311, 85 S.Ct. 1473, 14 L.Ed.2d 405 (1965); Holloway v. Bristol-Myers Corp., 327 F.Supp. 17 (D.D.C. 1971); La Salle Street Press, Inc. v. McCormick & Henderson, Inc., 293 F. Supp. 1004 (N.D.Ill.1968); Smith-Victor Corp. v. Sylvania Electric Products, Inc., 242 F.Supp. 302 (N.D.Ill. 1965); L’Aiglon Apparel, Inc. v. Lana Labell, Inc., 118 F.Supp. 251 (E.D.Pa. 1953); Samson Crane Co. v. Union National Sales, Inc., 87 F.Supp. 218, 221 (D.Mass.1949), aff’d, 180 F.2d 896 (1st Cir. 1950); National Fruit Product Co. v. Dwinell-Wright Co., 47 F.Supp. 499 (D.Mass.1942); Atlanta Brick Co. v. O’Neal, 44 F.Supp. 39 (E.D.Tex.1942). The protection against unfair trade practices afforded by the Act vests initial remedial power solely in the Federal Trade Commission. See id.

Section 5(a)(1) equips the Federal Trade Commission with a flexible tool with which to combat unfair trade practices. See e. g., New Jersey Wood Finishing Co. v. Minnesota Mining & Manufacturing Co., supra at 352. Consumers cannot transmute that tool into a crowbar for prying open door 1337 to the federal courthouse.

Affirmed.

The Honorable Gus J. Solomon, Senior United States District Judge, Portland, Oregon, sitting by designation.

. Judicial interpretations of “arising under” are equally applicable to 28 U.S.C. § 1331 and 28 U.S.C. § 1337. See Russo v. Kirby, 453 F.2d 548, 551 n.2 (2d Cir. 1971).