Doubleday v. Macy

Last month Publisher Nelson Doubleday and Lawyer Morris Leopold Ernst took a quick trip to Europe & back. Last week Doubleday, Doran & Co., publishers, along with Doubleday, Doran Bookshops, Inc., retail booksellers, sued R. H. Macy & Co. for price-cutting on Doubleday books. Whether or not publisher and lawyer had gone abroad to plan their campaign in the privacy of the high seas, their action involved the validity of the Feld-Crawford Fair Trade Act, affected Listerine, Lysol, Jello, Postum, many another nonliterary product.

The Feld-Crawford Act, passed by the New York Legislature last spring, is closely modeled on a California act passed in 1931. It permits the manufacturer of a trademarked article to fix the resale price of his product. If any retailer contracts not to sell the article below the specified price, this price is binding on all other retailers, even if they have not signed such a contract. Doubleday (publishing house) contracted with Doubleday (booksellers) to sell Vogue's Book of Etiquette at not less than $3, the Garden Notebook at not less than $1.50, and Novelist Ruby Ayres' Some Day at not less than $2. Macy's sold Vogue's Book of Etiquette at $2.54, Garden Notebook at $1.31, Some Day at $1.76.

Nelson Doubleday, not through his book stores but through his mail order sales & book clubs, is himself a price-cutter and for that reason is by no means popular in the book trade. Jack Strauss, Macy's bookman, is his good friend. But shrewd Mr. Doubleday wanted a test-case on the law, and Macy's supplied a perfect one. Sole issue was the constitutionality of the State law. For Macy's, Lawyer Leon Lauterstein argued that the department store was being deprived of property without due process of law. He said that the books belonged to Macy's, that Macy's had the inalienable right to sell its belongings at its own figures. Particularly stressed was the point that Macy's had signed no contract with Doubleday, that two strangers had made an arbitrary agreement which the State law said Macy's must observe. For Doubleday, small, swart, smart Lawyer Ernst admitted various U. S. Supreme Court decisions against price maintenance, but pointed out that the Double-day-Macy argument was an intrastate affair. He said that New York courts could overrule the New York Legislature only when the legislative act could be shown to be arbitrary and unreasonable. But there was nothing unreasonable about admitting that the maker of a trademarked article continued to have an interest in his product until it had reached the consumer. As to Macy not being party to the contract, what good, he asked, would the contract do either publisher or signer if some non-signing retailer could ignore it and undersell the contractual party? New York Supreme Court Justice Frederick P. Close reserved decision.

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