SEMMES MOTORS, INC. v. FORD MOTOR CO.
Basis of underlying suit is that FORD spoke to Semmes customers, and discovered that Semmes was a bit crooked. Billed Ford for warranty repairs that didn’t actually make. Semmes feels like Ford is trodding on him – a franchise/franchisee response. Semmes is upset about customer contact- feels it is ruining his reputation.
1st suit is brought in NJ Superior Court by Semmes and Alliance (dealers organization).
Case was removable based on diversity if citizenship…removed to Fed Ct in NJ
Then in District Ct of NJ Semmes request for INJUNCTION is DENIED!
Semmes then decides to bring case in S.D.N.Y. To strengthen its position that court should continue in NJ it makes counterclaim and moves for dismissal of Alliance. Ford then files for stay of NY case. Judge Ryan denies this motion…. And then grants injunctive relief to Semme… he says Ford can’t contact customers.
So Ford appeals to 2nd Circuit. Friendly says this is reversible error. Friendly says all claims of Semmes must be made in NJ. The compulsory counterclaim doctrine says that Semme must have brought his claim – a counterclaim to Fords’ counterclaim- for relief from Ford calling its customers, raised in SDNY in the NJ court. Says that can’t start over in NY, rather must bring all claims in NJ.