Moore v. New York Cotton Exchange

The New York Cotton Exchange (the New York exchange) (defendant) is in the business of making contracts for the future sale of cotton. The New York exchange collects quotations of cotton prices and uses telegraph services to distribute the quotations to recipients approved by the New York exchange. The Odd-Lot Cotton Exchange (the Odd-Lot exchange) applied to receive quotations from the New York exchange. The New York exchange denied the application on the grounds that the Odd-Lot exchange was essentially a successor to a previous exchange that had been convicted of fraudulent activity and that it had been organized for the purpose of conducting fraudulent activity. The Odd-Lot exchange's president, Moore (plaintiff), brought a federal antitrust complaint, alleging that the New York exchange had a monopoly over cotton quotations. The complaint sought to enjoin the New York exchange from refusing to furnish quotations to the Odd-Lot exchange. The New York exchange’s answer asserted a counterclaim, alleging that although Odd-Lot was not permitted to receive quotations, it had nevertheless obtained them through unauthorized means and was using them to engage in fraudulent activity. The New York exchange’s counterclaim sought an injunction to stop this practice. Both parties requested interlocutory injunctions. The district court granted the New York exchange’s request and denied the Odd-Lot exchange’s request. The United States Court of Appeals for the Second Circuit affirmed the orders. The district court ultimately dismissed the Odd-Lot exchange’s antitrust cause of action. The Odd-Lot exchange appealed the district court’s grant of the injunction sought in the New York exchange’s counterclaim. The Odd-Lot exchange argued that dismissal of the counterclaim was required, because (1) the counterclaim did not arise out of the same transaction that was the subject matter of the suit, and (2) there was no independent basis for jurisdiction.