A group of trucking companies and their trade association sued
under §4 of the Clayton Act for treble damages and injunctive
relief against a group of railroads, a railroad association and a
public relations firm, charging that the defendants had conspired
to restrain trade in, and monopolize, the long-distance freight
business, in violation of §§ 1 and 2 of the Sherman Act. They
alleged,
inter alia, that the railroads had engaged the
public relations firm to conduct a publicity campaign against the
truckers designed to foster the adoption and retention of laws and
law enforcement practices destructive of the trucking business, to
create an atmosphere of distaste for the truckers among the general
public, and to impair the relationships existing between the
truckers and their customers. After a trial, the District Court
entered a judgment awarding damages to the plaintiffs and enjoining
the practices complained of.
Held: The judgment is reversed. Pp.
365 U. S.
128-145.
(a) No violation of the Sherman Act can be predicated upon mere
attempts to influence the passage or enforcement of laws. Pp.
365 U. S.
135-136.
(b) The Sherman Act does not prohibit two or more persons from
associating together in an attempt to persuade the legislature or
the executive to take particular action with respect to a law that
would produce a restraint or monopoly; and it does not apply to the
activities of these railroads, at least insofar as those activities
comprised mere solicitation of governmental action with respect to
the passage and enforcement of laws. Pp.
365 U. S.
136-138.
(c) At least insofar as the railroads' campaign was directed
toward obtaining governmental action, it was not made violative of
the Sherman Act by any anticompetitive purpose it may have had,
such as a purpose to destroy the truckers as competitors for the
long-distance freight business. Pp.
365 U. S.
138-140.
Page 365 U. S. 128
(d) Nor was the railroads' campaign made violative of the
Sherman Act by their use of the so-called third-party technique,
whereby propaganda actually circulated by a party in interest is
given the appearance of being the spontaneously expressed views of
independent persons and civic groups. Pp.
365 U. S.
140-142.
(e) A different conclusion is not required by the finding of the
District Court that the railroads' campaign was intended to, and
did in fact, injure the truckers in their relationships with the
public and with their customers. Pp.
365 U. S.
142-145.
273 F.2d 218, reversed.
MR. JUSTICE BLACK delivered the opinion of the Court.
American railroads have always largely depended upon income from
the long-distance transportation of heavy freight for economic
survival. During the early years of their existence, they had
virtually no competition in this aspect of their business, but, as
early as the 1920's, the growth of the trucking industry in this
country began to bring about changes in this situation. For the
truckers found, just as the railroads had learned earlier, that a
very profitable part of the transportation business was the long
hauling of heavy freight. As the trucking industry became more and
more powerful, the competition between it and the railroads for
this business became increasingly intense until, during the period
following the conclusion of World War II, at least the railroads,
if not both of the competing groups, came to view the struggle
Page 365 U. S. 129
as one of economic life or death for their method of
transportation. The present litigation is an outgrowth of one part
of that struggle.
The case was commenced by a complaint filed in the United States
District Court in Pennsylvania on behalf of 41 Pennsylvania truck
operators and their trade association, the Pennsylvania Motor Truck
Association. This complaint, which named as defendants 24 Eastern
railroads, an association of the presidents of those railroads
known as the Eastern Railroad Presidents Conference, and a public
relations firm, Carl Byoir & Associates, Inc., charged that the
defendants had conspired to restrain trade in and monopolize the
long-distance freight business in violation of §§ 1 [
Footnote 1] and 2 [
Footnote 2] of the Sherman Act. The gist of the
conspiracy alleged was that the railroads had engaged Byoir to
conduct a publicity campaign against the truckers designed to
foster the adoption and retention of laws and law enforcement
practices destructive of the trucking business, to create an
atmosphere of distaste for the truckers among the general public,
and to impair the relationships existing between the truckers and
their customers. The campaign so conducted was described in the
complaint as "vicious, corrupt, and fraudulent," first, in that the
sole motivation behind it was the desire on the part of the
railroads to injure the truckers and eventually to destroy them as
competitors in the long-distance freight business, and, secondly,
in that the defendants utilized the
Page 365 U. S. 130
so-called third-party technique, that is, the publicity matter
circulated in the campaign was made to appear as spontaneously
expressed views of independent persons and civic groups when, in
fact, it was largely prepared and produced by Byoir and paid for by
the railroads. [
Footnote 3] The
complaint then went on to supplement these more or less general
allegations with specific charges as to particular instances in
which the railroads had attempted to influence legislation by means
of their publicity campaign. One of several such charges was that
the defendants had succeeded in persuading the Governor of
Pennsylvania to veto a measure known as the "Fair Truck Bill,"
[
Footnote 4] which would have
permitted truckers to carry heavier loads over Pennsylvania
roads.
The prayer of the complaint was for treble damages under § 4 of
the Clayton Act [
Footnote 5]
and an injunction restraining the defendants from further acts in
pursuance of the conspiracy. Insofar as the prayer for damages was
concerned, a stipulation was entered that the only damages suffered
by the individual truck operators was the loss of business that
resulted from the veto of the "Fair Truck Bill" by the Governor of
Pennsylvania, and, accordingly, the claim for damages was limited
to an amount based upon the loss of profits as a result of this
veto plus the expenses incurred by the truckers' trade
association
Page 365 U. S. 131
for the purpose of combatting the railroads' publicity campaign.
The prayer for injunctive relief was much broader, however, asking
that the defendants be restrained from disseminating any
disparaging information about the truckers without disclosing
railroad participation, from attempting to exert any pressure upon
the legislature or Governor of Pennsylvania through the medium of
front organizations, from paying any private or public
organizations to propagate the arguments of the railroads against
the truckers or their business, and from doing "any other act or
thing to further . . . the objects and purposes" of the
conspiracy.
In their answer to this complaint, the railroads admitted that
they had conducted a publicity campaign designed to influence the
passage of state laws relating to truck weight limits and tax rates
on heavy trucks, and to encourage a more rigid enforcement of state
laws penalizing trucks for overweight loads and other traffic
violations, but they denied that their campaign was motivated
either by a desire to destroy the trucking business as a competitor
or to interfere with the relationships between the truckers and
their customers. Rather, they insisted, the campaign was conducted
in furtherance of their rights
"to inform the public and the legislatures of the several states
of the truth with regard to the enormous damage done to the roads
by the operators of heavy and especially of overweight trucks, with
regard to their repeated and deliberate violations of the law
limiting the weight and speed of big trucks, with regard to their
failure to pay their fair share of the cost of constructing,
maintaining and repairing the roads, and with regard to the driving
hazards they create. . . ."
Such a campaign, the defendants maintained, did not constitute a
violation of the Sherman Act, presumably because that Act could not
properly be interpreted to apply either to restraints of trade or
monopolizations that result from the passage or enforcement of
laws
Page 365 U. S. 132
or to efforts of individuals to bring about the passage or
enforcement of laws. [
Footnote
6]
Subsequently, defendants broadened the scope of the litigation
by filing a counterclaim in which they charged that the truckers
had themselves violated §§ 1 and 2 of the Sherman Act by conspiring
to destroy the railroads' competition in the long-distance freight
business and to monopolize that business for heavy trucks. The
means of the conspiracy alleged in the counterclaim were much the
same as those with which the truckers had charged the railroads in
the original complaint, including allegations of the conduct of a
malicious publicity campaign designed to destroy the railroads'
business by law, to create an atmosphere hostile to the railroads
among the general public, and to interfere with relationships
existing between the railroads and their customers. The prayer for
relief of the counterclaim, like that of the truckers' original
complaint, was for treble damages and an injunction restraining
continuance of the allegedly unlawful practices. In their reply to
this counterclaim, the truckers denied each of the allegations that
charged a violation of the Sherman Act and, in addition, interposed
a number of affirmative defenses, none of which is relevant
here.
In this posture, the case went to trial. After hearings, the
trial court entered a judgment, based upon extensive findings of
fact and conclusions of law, that the railroads'
Page 365 U. S. 133
publicity campaign had violated the Sherman Act, while that of
the truckers had not. [
Footnote
7] In reaching this conclusion, the trial court expressly
disclaimed any purpose to condemn as illegal mere efforts on the
part of the railroads to influence the passage of new legislation
or the enforcement of existing law. Instead, it rested its judgment
upon findings, first, that the railroads' publicity campaign,
insofar as it was actually directed at lawmaking and law
enforcement authorities, was malicious and fraudulent -- malicious
in that its only purpose was to destroy the truckers as
competitors, and fraudulent in that it was predicated upon the
deceiving of those authorities through the use of the third-party
technique; [
Footnote 8] and,
secondly, that the railroads' campaign also had as an important, if
not overriding, purpose the destruction of the truckers' goodwill,
among both the general public and the truckers' existing customers,
and thus injured the truckers in ways unrelated to the passage or
enforcement of law. In line with its theory that restraints of
trade and monopolizations resulting from valid laws are not
actionable under the Sherman Act, however, the trial court awarded
only nominal damages to the individual truckers, holding that no
damages were recoverable for loss of business due to the veto of
the Pennsylvania "Fair Truck Bill." The judgment did, however,
award substantial damages to the
Page 365 U. S. 134
truckers' trade association as well as the broad injunction
asked for in the complaint. [
Footnote 9]
The conclusion that the truckers' publicity campaign had not
violated the Sherman Act was reached despite findings that the
truckers also had engaged in a publicity campaign designed to
influence legislation, as charged in the counterclaim, and despite
findings that the truckers had utilized the third-party technique
in this campaign. Resting largely upon the fact that the efforts of
the truckers were directed, at least for the most part, [
Footnote 10] at trying to get
legislation passed that was beneficial to them, rather than harmful
to the railroads, the trial court found that the truckers' campaign
was purely defensive in purpose, and concluded that the truckers'
campaign differed from that of the railroads in that the truckers
were not trying to destroy a competitor. Accordingly, it held that
the truckers' campaign, though technically in restraint of trade,
was well within the rule of reason which
Page 365 U. S. 135
governs the interpretation of §§ 1 and 2 of the Sherman Act, and
consequently dismissed the counterclaim.
The railroads appealed from this judgment, both as to the
conclusion that they had violated the Sherman Act as charged in the
original complaint and as to the conclusion that the truckers had
not violated the Act as charged in the counterclaim. The Court of
Appeals for the Third Circuit, one judge dissenting in part, upheld
the judgment of the District Court in every respect, stating that
the findings amply support the judgment and that there was
sufficient evidence to support all of the findings. [
Footnote 11] This was followed by a
petition for certiorari filed on behalf of the railroads and Byoir
limited to the question of the correctness of the judgment insofar
as it held that they had violated the Sherman Act. Because the case
presents a new and unusual application of the Sherman Act and
involves severe restrictions upon the rights of these railroads and
others to seek the passage or defeat of legislation when deemed
desirable, we granted that petition. [
Footnote 12]
We accept, as the starting point for our consideration of the
case, the same basic construction of the Sherman Act adopted by the
courts below -- that no violation of the Act can be predicated upon
mere attempts to influence the passage or enforcement of laws. It
has been recognized, at least since the landmark decision of this
Court in
Standard Oil Co. v. United States, [
Footnote 13] that the Sherman Act
forbids only those trade restraints and monopolizations
Page 365 U. S. 136
that are created, or attempted, by the acts of "individuals or
combinations of individuals or corporations." [
Footnote 14] Accordingly, it has been held that,
where a restraint upon trade or monopolization is the result of
valid governmental action, as opposed to private action, no
violation of the Act can be made out. [
Footnote 15] These decisions rest upon the fact that,
under our form of government, the question whether a law of that
kind should pass, or, if passed, be enforced, is the responsibility
of the appropriate legislative or executive branch of government so
long as the law itself does not violate some provision of the
Constitution.
We think it equally clear that the Sherman Act does not prohibit
two or more persons from associating together in an attempt to
persuade the legislature or the executive to take particular action
with respect to a law that would produce a restraint or a monopoly.
Although such associations could perhaps, through a process of
expansive construction, be brought within the general proscription
of "combination[s] . . . in restraint of trade," they bear very
little if any resemblance to the combinations normally held
violative of the Sherman Act, combinations ordinarily characterized
by an express or implied agreement or understanding that the
participants will jointly give up their trade freedom, or help one
another to take away the trade freedom of others through the use of
such devices as price-fixing agreements, boycotts, market-division
agreements, and other similar arrangements. [
Footnote 16] This essential dissimilarity
between an agreement jointly to seek legislation or law enforcement
and the agreements traditionally condemned by § 1 of the Act, even
if not itself conclusive on the question of the applicability of
the
Page 365 U. S. 137
Act, does constitute a warning against treating the defendants'
conduct as though it amounted to a common law trade restraint. And
we do think that the question is conclusively settled, against the
application of the Act, when this factor of essential dissimilarity
is considered along with the other difficulties that would be
presented by a holding that the Sherman Act forbids associations
for the purpose of influencing the passage or enforcement of
laws.
In the first place, such a holding would substantially impair
the power of government to take actions through its legislature and
executive that operate to restrain trade. In a representative
democracy such as this, these branches of government act on behalf
of the people and, to a very large extent, the whole concept of
representation depends upon the ability of the people to make their
wishes known to their representatives. To hold that the government
retains the power to act in this representative capacity and yet
hold, at the same time, that the people cannot freely inform the
government of their wishes would impute to the Sherman Act a
purpose to regulate, not business activity, but political activity,
a purpose which would have no basis whatever in the legislative
history of that Act. [
Footnote
17] Secondly, and of at least equal significance,
Page 365 U. S. 138
such a construction of the Sherman Act would raise important
constitutional questions. The right of petition is one of the
freedoms protected by the Bill of Rights, and we cannot, of course,
lightly impute to Congress an intent to invade these freedoms.
Indeed, such an imputation would be particularly unjustified in
this case in view of all the countervailing considerations
enumerated above. For these reasons, we think it clear that the
Sherman Act does not apply to the activities of the railroads, at
least insofar as those activities comprised mere solicitation of
governmental action with respect to the passage and enforcement of
laws. We are thus called upon to consider whether the courts below
were correct in holding that, notwithstanding this principle, the
Act was violated here because of the presence in the railroads'
publicity campaign of additional factors sufficient to take the
case out of the area in which the principle is controlling.
The first such factor relied upon was the fact, established by
the finding of the District Court, that the railroads' sole purpose
in seeking to influence the passage and enforcement of laws was to
destroy the truckers as competitors for the long-distance freight
business. But we do not see how this fact, even if adequately
supported in the record, [
Footnote 18] could transform conduct otherwise lawful
Page 365 U. S. 139
into a violation of the Sherman Act. All of the considerations
that have led us to the conclusion that the Act does not apply to
mere group solicitation of governmental action are equally
applicable in spite of the addition of this factor. The right of
the people to inform their representatives in government of their
desires with respect to the passage or enforcement of laws cannot
properly be made to depend upon their intent in doing so. It is
neither unusual nor illegal for people to seek action on laws in
the hope that they may bring about an advantage to themselves and a
disadvantage to their competitors. This Court has expressly
recognized this fact in its opinion in
United States v. Rock
Royal Co-op., where it was said:
"If ulterior motives of corporate aggrandizement stimulated
their activities, their efforts were not thereby rendered unlawful.
If the Act and Order are otherwise valid, the fact that their
effect would be to give cooperatives a monopoly of the market would
not violate the Sherman Act. . . . [
Footnote 19]"
Indeed, it is quite probably people with just such a hope of
personal advantage who provide much of the information upon which
governments must act. A construction of the Sherman Act that would
disqualify people from taking a public position on matters in which
they are financially interested would thus deprive the government
of a valuable source of information and, at the same time, deprive
the people of their right to petition in the very instances in
which that right may be of the most importance to them. We reject
such a construction of the Act, and hold that, at least insofar
Page 365 U. S. 140
as the railroads' campaign was directed toward obtaining
governmental action, its legality was not at all affected by any
anticompetitive purpose it may have had.
The second factor relied upon by the courts below to justify the
application of the Sherman Act to the railroads' publicity campaign
was the use in the campaign of the so-called third-party technique.
The theory under which this factor was related to the proscriptions
of the Sherman Act, though not entirely clear from any of the
opinions below, was apparently that it involved unethical business
conduct on the part of the railroads. As pointed out above, the
third-party technique, which was aptly characterized by the
District Court as involving "deception of the public, manufacture
of bogus sources of reference, [and] distortion of public sources
of information," depends upon giving propaganda actually circulated
by a party in interest the appearance of being spontaneous
declarations of independent groups. We can certainly agree with the
courts below that this technique, though in widespread use among
practitioners of the art of public relations, [
Footnote 20] is one which falls far short of the
ethical standards generally approved in this country. It does not
follow, however, that the use of the technique in a publicity
campaign designed to influence governmental action constitutes a
violation of the Sherman Act. Insofar as that Act sets up a code of
ethics at all, it is a code that condemns trade restraints, not
political activity, and, as we have already pointed out, a
publicity campaign to influence governmental action falls clearly
into the category
Page 365 U. S. 141
of political activity. The proscriptions of the Act, tailored as
they are for the business world, are not at all appropriate for
application in the political arena. Congress has traditionally
exercised extreme caution in legislating with respect to problems
relating to the conduct of political activities, a caution which
has been reflected in the decisions of this Court interpreting such
legislation. [
Footnote 21]
All of this caution would go for naught if we permitted an
extension of the Sherman Act to regulate activities of that nature
simply because those activities have a commercial impact and
involve conduct that can be termed unethical.
Moreover, we think the courts below themselves recognized this
fact to some extent, for their disposition of the case is
inconsistent with the position that the use of the third-party
technique alone could constitute a violation of the Sherman Act.
This much is apparent from the fact that the railroads'
counterclaim against the truckers was not allowed. Since it is
undisputed that the truckers were as guilty as the railroads of the
use of the technique, [
Footnote
22] this factor could not have been in any sense controlling of
the holding against the railroads. Rather,
Page 365 U. S. 142
it appears to have been relied upon primarily as an indication
of the vicious nature of the campaign against the truckers. But,
whatever its purpose, we have come to the conclusion that the
reliance of the lower courts upon this factor was misplaced, and
that the railroads' use of the third-party technique was, so far as
the Sherman Act is concerned, legally irrelevant.
In addition to the foregoing factors, both of which relate to
the intent and methods of the railroads in seeking governmental
action, the courts below rested their holding that the Sherman Act
had been violated upon a finding that the purpose of the railroads
was
"more than merely an attempt to obtain legislation.
It was
the purpose and intent . . . to hurt the truckers in every way
possible even though they secured no legislation."
(Emphasis in original.) Specifically, the District Court found
that the purpose of the railroads was to destroy the goodwill of
the truckers, among the public generally and among the truckers'
customers particularly, in the hope that, by doing so, the over-all
competitive position of the truckers would be weakened, and that
the railroads were successful in these efforts to the extent that
such injury was actually inflicted. The apparent effect of these
findings is to take this case out of the category of those that
involve restraints through governmental action, and thus render
inapplicable the principles announced above. But this effect is
only apparent, and cannot stand under close scrutiny. There are no
specific findings that the railroads attempted directly to persuade
anyone not to deal with the truckers. Moreover, all of the evidence
in the record, both oral and documentary, deals with the railroads'
efforts to influence the passage and enforcement of laws.
Circulars, speeches, newspaper articles, editorials, magazine
articles, memoranda, and all other documents discuss in one way or
another the railroads' charges that heavy trucks injure the roads,
violate the
Page 365 U. S. 143
laws and create traffic hazards, and urge that truckers should
be forced to pay a fair share of the costs of rebuilding the roads,
that they should be compelled to obey the laws, and that limits
should be placed upon the weight of the loads they are permitted to
carry. In the light of this, the findings of the District Court
that the railroads' campaign was intended to and did in fact injure
the truckers in their relationships with the public and with their
customers can mean no more than that the truckers sustained some
direct injury as an incidental effect of the railroads' campaign to
influence governmental action, and that the railroads were hopeful
that this might happen. [
Footnote 23] Thus, the issue presented by the lower
courts' conclusion of a violation of the Sherman Act on the basis
of this injury is no different than the issue presented by the
factors already discussed. It is inevitable, whenever an attempt is
made to influence legislation by a campaign of publicity, that an
incidental effect of that campaign may be the infliction of some
direct injury upon the interests of the party against whom the
campaign is directed. And it seems equally inevitable that those
conducting the campaign would be aware of, and possibly even
pleased by, the prospect of such injury. To hold that the knowing
infliction of such injury renders the campaign itself illegal would
thus be tantamount to outlawing
Page 365 U. S. 144
all such campaigns. We have already discussed the reasons which
have led us to the conclusion that this has not been done by
anything in the Sherman Act.
There may be situations in which a publicity campaign,
ostensibly directed toward influencing governmental action, is a
mere sham to cover what is actually nothing more than an attempt to
interfere directly with the business relationships of a competitor
and the application of the Sherman Act would be justified. But this
certainly is not the case here. No one denies that the railroads
were making a genuine effort to influence legislation and law
enforcement practices. Indeed, if the version of the facts set
forth in the truckers' complaint is fully credited, as it was by
the courts below, that effort was not only genuine, but also highly
successful. Under these circumstances, we conclude that no attempt
to interfere with business relationships in a manner proscribed by
the Sherman Act is involved in this case.
In rejecting each of the grounds relied upon by the courts below
to justify application of the Sherman Act to the campaign of the
railroads, we have rejected the very grounds upon which those
courts relied to distinguish the campaign conducted by the
truckers. In doing so, we have restored what appears to be the true
nature of the case -- a "no-holds-barred fight" [
Footnote 24] between two industries, both
of which are seeking control of a profitable source of income.
[
Footnote 25] Inherent in
such fights, which are commonplace in the halls of legislative
bodies, is the possibility, and in many instances even the
probability, that one group or the other will get hurt by the
arguments that are made.
Page 365 U. S. 145
In this particular instance, each group appears to have utilized
all the political powers it could muster in an attempt to bring
about the passage of laws that would help it or injure the other.
But the contest itself appears to have been conducted along lines
normally accepted in our political system, except to the extent
that each group has deliberately deceived the public and public
officials. And that deception, reprehensible as it is, can be of no
consequence so far as the Sherman Act is concerned. That Act was
not violated by either the railroads or the truckers in their
respective campaigns to influence legislation and law enforcement.
Since the railroads have acquiesced in the dismissal of their
counterclaim by not challenging the Court of Appeals' affirmance of
that order in their petition for certiorari, we are here concerned
only with those parts of the judgments below holding the railroads
and Byoir liable for violations of the Sherman Act. And it follows
from what we have said that those parts of the judgments below are
wrong. They must be and are reversed.
Reversed.
[
Footnote 1]
"Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States, or with foreign nations, is declared to be illegal. . .
."
15 U.S.C. § 1.
[
Footnote 2]
"Every person who shall monopolize, or attempt to monopolize, or
combine or conspire with any other person or persons, to monopolize
any part of the trade or commerce among the several States, or with
foreign nations, shall be deemed guilty of a misdemeanor. . .
."
15 U.S.C. § 2.
[
Footnote 3]
For a discussion of the mechanics of this technique and the
purposes generally underlying its use by public relations firms,
see Ross, The Image Merchants, at 118, 226-227 and
266-267.
[
Footnote 4]
The "Fair Truck Bill" referred to was introduced in the
Pennsylvania Legislature in May 1951, as Senate bill 615.
[
Footnote 5]
"Any person who shall be injured in his business or property by
reason of anything forbidden in the antitrust laws may sue therefor
in any district court of the United States in the district in which
the defendant resides or is found or has an agent, without respect
to the amount in controversy, and shall recover threefold the
damages by him sustained, and the cost of suit, including a
reasonable attorney's fee."
15 U.S.C. § 15.
[
Footnote 6]
The answer to the truckers' complaint also interposed a number
of other defenses, including the contention that the activities
complained of were constitutionally protected under the First
Amendment and the contention that the truckers were barred from
prosecuting this suit by reason of the fact that they had
themselves engaged in conduct identical to that about which they
were complaining with regard to the railroads, and were thus
in
pari delicto. Because of the view we take of the proper
construction of the Sherman Act, we find it unnecessary to consider
any of these other defenses.
[
Footnote 7]
The opinion of the District Court on the merits of the
controversy is reported at
155 F.
Supp. 768. An additional opinion dealing with the question of
relief is reported at
166 F.
Supp. 163. For reports of earlier opinions dealing with
preliminary motions,
see 113 F.
Supp. 737; 14 F.R.D. 189, and 19 F.R.D. 146.
[
Footnote 8]
The District Court did not expressly find that any particular
part of the railroads' publicity campaign was false in its content.
Rather, it found that the technique of the railroads was "to take a
dramatic fragment of truth and, by emphasis and repetition, distort
it into falsehood." 155 F. Supp. at 814.
[
Footnote 9]
If anything, the injunction was even broader than had been
requested in the complaint for it effectively enjoined the
defendants from any publicity activities against the truckers
whether or not the third-party technique was used.
See 166
F. Supp. at 172-173.
[
Footnote 10]
The trial court did recognize that, on at least one occasion,
the truckers attempted to encourage legislation that would have
been directly harmful to the railroads, rather than beneficial to
themselves. Thus, the court found:
"About the middle of the decade [the 1940's], PMTA had a tax
manual prepared charging that the railroads of Pennsylvania
themselves did not pay their fair share of taxes as compared with
other states, and made a wide distribution of it to legislators,
banks, security investment houses, etc."
The trial court found, however, that this action of the truckers
also lay within the rule of reason, because
"the truckers had been the target of a strong campaign directed
to the public with the purpose of convincing the public that trucks
did not pay their fair share of taxes,"
thus making it necessary for the truckers to "be permitted to
likewise show the public that their competitors, the railroads,
were actually guilty of the fault charged against the truckers."
155 F. Supp. at 803.
[
Footnote 11]
273 F.2d 218. Chief Judge Biggs dissented from the opinion of
the majority of the Court of Appeals insofar as it upheld the
District Court's conclusion that the railroads and Byoir had
violated the Sherman Act. For similar reasons, he concurred in that
part of the majority opinion which upheld the conclusion that the
truckers had not violated the Act.
[
Footnote 12]
362 U.S. 947.
[
Footnote 13]
221 U. S. 221 U.S.
1, at
221 U. S.
51-62.
[
Footnote 14]
Id. at
221 U. S. 57.
[
Footnote 15]
United States v. Rock Royal Co-op., 307 U.
S. 533;
Parker v. Brown, 317 U.
S. 341.
[
Footnote 16]
See Apex Hosiery Co. v. Leader, 310 U.
S. 469,
310 U. S.
491-493.
[
Footnote 17]
In
Parker v. Brown, supra, this Court was unanimous in
the conclusion that the language and legislative history of the
Sherman Act would not warrant the invalidation of a state
regulatory program as an unlawful restraint upon trade. In so
holding, we rejected the contention that the program's validity
under the Sherman Act was affected by the nature of the political
support necessary for its implementation -- a contention not unlike
that rejected here. The reasoning underlying that conclusion was
stated succinctly by Mr. Chief Justice Stone:
"Here, the state command to the Commission and to the program
committee of the California Prorate Act is not rendered unlawful by
the Sherman Act, since, in view of the latter's words and history,
it must be taken to be a prohibition of individual, and not state,
action. It is the state which has created the machinery for
establishing the prorate program. Although the organization of a
prorate zone is proposed by producers, and a prorate program,
approved by the Commission, must also be approved by referendum of
producers, it is the state, acting through the Commission, which
adopts the program and which enforces it with penal sanctions, in
the execution of a governmental policy. The prerequisite approval
of the program upon referendum by a prescribed number of producers
is not the imposition by them of their will upon the minority by
force of agreement or combination which the Sherman Act prohibits.
The state itself exercises its legislative authority in making the
regulation and in prescribing the conditions of its
application."
317 U.S. at
317 U. S.
352.
[
Footnote 18]
A study of the record reveals that the only evidence or
subsidiary findings upon which this conclusory finding could be
based is the undisputed fact that the railroads did seek laws by
arguments and propaganda that could have had the effect of damaging
the competitive position of the truckers. There is thus an absence
of evidence of intent independent of the efforts that were made to
influence legislation and law enforcement. We nonetheless accept
the finding of the District Court on this issue, for, in our view,
the disposition of this case must be the same regardless of that
fact.
[
Footnote 19]
307 U. S. 307 U.S.
533,
307 U. S.
560.
[
Footnote 20]
The extent to which the third-party technique is utilized in the
public relations field is demonstrated by the fact, found by the
District Court, that each of the several public relations firms
interviewed by the railroads before they finally decided to hire
the Byoir organization to conduct their publicity campaign included
the use of this technique in its outline of proposed activities
submitted for consideration by the railroads.
See 155 F.
Supp. at 778.
[
Footnote 21]
See, e.g., United States v. Harriss, 347 U.
S. 612.
Cf. United States v. Rumely,
345 U. S. 41.
[
Footnote 22]
The District Court expressly recognized this fact in its
opinion: "The record discloses that both sides used, or wanted to
use, fronts and/or the propaganda technique." 155 F. Supp. at 816.
This conclusion was amply supported by specific findings. Thus, the
court found:
"The record establishes that the truckers wrote to and made
personal contacts with legislators in support of bills increasing
the weight of trucks; that they had representatives of other
industries write and make personal contacts with legislators in
Harrisburg without disclosing trucker connections; and that they
had such persons intentionally refrain from advising the
legislators and the said officials that the letters and contacts
had been solicited; that they solicited from legislators statements
in support of their position and had news releases issued
thereon."
155 F. Supp. at 803.
[
Footnote 23]
Here again, the petitioners have leveled a vigorous attack upon
the trial court's findings. As a part of this attack, they urge
that there is no basis in reason for the finding that some shippers
quit doing business with the truckers as a result of the railroads'
publicity campaign. Their contention is that, since the theme of
the campaign was that the truckers had an unfair competitive
advantage and could consequently charge unfairly low prices, the
campaign would have encouraged, rather than discouraged, shippers
who availed themselves of the truckers' services. This argument has
considerable appeal, but, as before, we find it unnecessary to pass
upon the validity of these findings, for we think the conclusion
must be the same whether they are allowed to stand or not.
[
Footnote 24]
We borrow this phrase from the dissenting opinion below of Chief
Judge Biggs.
[
Footnote 25]
Since the commencement of this litigation, a new bill increasing
truck weight limits has passed the Pennsylvania Legislature, and
has become law by virtue of the Governor's approval. Thus, the
fight goes on.