industrial goods

Gray-market goods consist of foreign-manufactured products bearing valid United States trademarks that enter the domestic market without the consent of the United States trademark holder. Three primary contexts produced such imports. A domestic firm might purchase trademark rights from an independent foreign manufacturer. A domestic firm might register a trademark for goods manufactured by an affiliated foreign entity. A domestic trademark holder might authorize an independent foreign manufacturer to use the mark abroad while restricting importation into the United States. Congress addressed parallel importation in 1922. It enacted section 526 of the Tariff Act of 1922 in response to a Court of Appeals decision that declined to enjoin such imports. The provision was later reenacted as section 526 of the 1930 Tariff Act. That statute generally prohibits importation of foreign-manufactured merchandise bearing a United States trademark without the owner's written consent. The Customs Service implemented the statute through regulations for over fifty years. Those regulations included exceptions from the general prohibition. The regulation at 19 CFR § 133.21(c) (1987) created a common-control exception. It allowed imports when the foreign and domestic trademarks were owned by the same entity or subject to common ownership or control. The regulation also created an authorized-use exception. It permitted imports when the foreign manufacturer applied the mark under authorization from the United States owner. In February 1984 the Coalition to Preserve the Integrity of American Trademarks and two member companies filed suit. Respondents brought suit in Federal District Court in February 1984 seeking a declaration that the Customs Service regulation is invalid and an injunction against its enforcement. The plaintiffs sought a declaration that the common-control and authorized-use exceptions were invalid. They also sought an injunction against enforcement. K Mart Corporation and 47th Street Photo intervened as defendants. The District Court upheld the regulation in 1984. The Court of Appeals for the District of Columbia Circuit reversed in 1986. It held the regulation inconsistent with the statute. The Supreme Court granted certiorari to resolve a conflict among the circuits. It affirmed jurisdiction in an earlier opinion and set the cases for reargument on the merits before issuing its decision in 1988.

In the early hours of October 31, 1970, Kirk Daly, a 36-year-old attorney, was driving his Opel automobile southbound on the Harbor Freeway in Los Angeles at a speed of 50-70 miles per hour. The vehicle collided with and damaged 50 feet of metal divider fence. After the initial impact between the left side of the vehicle and the fence, the Opel spun counterclockwise. The driver's door was thrown open, and Daly was forcibly ejected from the car, sustaining fatal head injuries. It was undisputed that had the deceased remained in the Opel his injuries would in all probability have been relatively minor. There were no eyewitnesses to the accident. Plaintiffs, who are decedent's widow and three surviving minor children, sued General Motors Corporation, Boulevard Buick, Underwriter's Auto Leasing, and Alco Leasing Company. These defendants were the successive links in the Opel's manufacturing and distribution chain. The sole theory of plaintiffs' complaint was strict liability for damages allegedly caused by a defective product. The product was an improperly designed door latch claimed to have been activated by the impact. It was further asserted that but for the faulty latch decedent would have been restrained in the vehicle and although perhaps injured would not have been killed. At trial the jury heard conflicting expert versions as to the functioning of the latch mechanism during the accident. Plaintiffs' principal witness testified that the Opel's door was caused to open when the latch button on the exterior handle of the driver's door was forcibly depressed by some protruding portion of the divider fence. It was his opinion that the exposed push button constituted a design defect. Plaintiffs also introduced evidence that other vehicular door latch designs used in production models of the same and prior years afforded substantially greater protection. Defendants' experts countered with their opinions that the force of the impact was sufficiently strong that it would have caused the door to open, resulting in Daly's death even if the Opel had been equipped with door latches of the alternative designs suggested by plaintiffs. Over plaintiffs' objections, defendants were permitted to introduce evidence indicating that the Opel was equipped with a seat belt-shoulder harness system and a door lock, either of which if used would have prevented Daly's ejection from the vehicle. Daly used neither the harness system nor the lock. The 1970 Opel owner's manual contained warnings that seat belts should be worn and doors locked when the car was in motion for accident security. Daly was intoxicated at the time of collision. The evidence was admitted for the limited purpose of determining whether decedent had used the vehicle's safety equipment. After relatively brief deliberations the jury returned a verdict favoring all defendants. Plaintiffs appealed from the ensuing adverse judgment to the Supreme Court of California. They contended that the trial court erred in instructing the jury that plaintiffs' recovery could be barred or diminished by decedent's contributory negligence and in refusing to instruct on the theory of crashworthiness.

The United States secured an indictment against appellee in the district court for southern Georgia. It charged him with violation of section 15(a)(1), (2) and (5) of the Fair Labor Standards Act of 1938. The indictment alleged that appellee, in the State of Georgia, is engaged in acquiring raw materials which he manufactures into finished lumber with the intent, when manufactured, to ship it in interstate commerce to customers outside the State. He does in fact so ship a large part of the lumber so produced. There are counts charging the shipment in interstate commerce from Georgia to points outside the State of lumber in the production of which appellee employed workmen at less than the prescribed minimum wage or in excess of the prescribed maximum hours without payment of overtime. Other counts charge the employment by appellee of workmen in the production of lumber for interstate commerce at wages of less than 25 cents an hour or for more than the maximum hours per week without payment of the prescribed overtime wage. Still another count charges appellee with failure to keep records showing the hours worked each day and week by each of his employees as required by section 11(c) and the regulations of the administrator. Appellee demurred to the indictment. The district court sustained the demurrer and quashed the indictment. The case comes here on direct appeal under the statutes authorizing review when the judgment sustaining the demurrer is based upon the invalidity or construction of the statute upon which the indictment is founded. The case was argued on December 19 and 20, 1940 and decided on February 3, 1941, as amended February 17, 1941.

A father filed a bill in the United States District Court for the Western District of North Carolina. He acted in his own behalf and as next friend of his two minor sons. One son was under the age of fourteen years. The other son was between the ages of fourteen and sixteen years. The sons worked as employees in a cotton mill at Charlotte, North Carolina. The suit sought to enjoin enforcement of the Act of Congress of September 1, 1916. That statute was intended to prevent interstate commerce in the products of child labor. The first section prohibited any producer, manufacturer, or dealer from shipping or delivering for shipment in interstate or foreign commerce any article produced in a mine or factory where children under fourteen had worked within thirty days prior to removal. It also barred shipment where children aged fourteen to sixteen had worked more than eight hours daily, more than six days weekly, or between seven o'clock postmeridian and six o'clock antemeridian. Other sections provided for enforcement and prescribed penalties. The District Court held the act unconstitutional. It entered a decree enjoining enforcement. This appeal brings the case to the Supreme Court.