1. Allegations of a complaint filed in a federal district court
pursuant to § 4 of the Sherman Antitrust Act to prevent and
restrain the defendants from violating §§ 1 and 2 of the Act,
charging a combination and conspiracy to restrain and to monopolize
interstate trade and commerce in the sale of motor vehicles for use
as taxicabs to the principal cab operating companies in Chicago,
Pittsburgh, New York City, and Minneapolis,
held
sufficient to state a claim upon which relief might be granted. Pp.
332 U. S.
220-228.
(a) A conspiracy to control the purchase of taxicabs by the
principal operating companies in Chicago, Pittsburgh, New York
City, and Minneapolis, whereby they purchase their cabs exclusively
from a Michigan manufacturer and are prevented from purchasing from
other manufacturers, is in restraint of interstate commerce. Pp.
332 U. S.
224-225,
332 U. S.
226.
(b) In determining whether the complaint charges a violation of
§ 1 or § 2 of the Sherman Act, it is enough if some appreciable
part of interstate commerce is affected by the restraint or
monopoly. P.
332 U. S.
225.
(c) Interstate purchases of replacements of some 5,000 licensed
taxicabs in four cities is an appreciable amount of commerce. P.
332 U. S.
225.
Page 332 U. S. 219
(d) The importance of the interstate commerce affected in
relation to the entire amount of that type of commerce in the
United States is irrelevant. P.
332 U. S.
226.
(e) The complaint is not defective by reason of its failure to
allege that the manufacturer involved has a monopoly with reference
to the total number of taxicabs manufactured and sold in the United
States. P.
332 U. S.
226.
(f) The fact that the corporate defendants, by virtue of
affiliation and common ownership, constitute a "vertically
integrated enterprise" does not necessarily render inapplicable the
prohibitions of the Sherman Act. P.
332 U. S.
227.
2. Allegations of a conspiracy whereby two of the defendants
will not compete with a third defendant for contracts with
railroads or railroad terminal associations to transport passengers
and their luggage between railroad stations in Chicago
held sufficient to charge a violation of the Sherman Act.
Pp.
332 U. S.
228-229.
(a) The transportation of passengers and their luggage between
railroad stations in Chicago is a part of the stream of interstate
commerce. P.
332 U. S.
228.
(b) When persons or goods move from a point of origin in one
state to a point of destination in another, the fact that a part of
that journey consists of transportation by an independent agency
solely within the boundaries of one state does not make that
portion of the trip any less interstate in character. P.
332 U. S.
228.
(c) Although exclusive contracts for the transportation service
in question are not illegal, it is nevertheless a violation of the
Sherman Act to conspire to eliminate competition in obtaining such
contracts. P.
332 U.S.
229.
(d) The fact that the competition restrained is that between
affiliated corporations does not negative the statutory violation
where the affiliation itself is one of the means of effectuating
the illegal conspiracy not to compete. P.
332 U.S. 229.
3. The service rendered by local taxicabs in conveying
interstate passengers between their homes and railroad stations, in
the normal course of their independent local service, is not an
integral part of interstate transportation, and a restraint on or
monopoly of that general local service, without more, is not
proscribed by the Sherman Act. Pp.
332 U. S.
230-234.
69 F.
Supp. 170, reversed.
A complaint filed by the United States to prevent and restrain
alleged violations of §§ 1 and 2 of the Sherman
Page 332 U. S. 220
Antitrust Act was dismissed by the district court for failure to
state a claim upon which relief might be granted.
69 F. Supp.
170. The United States appealed directly to this Court.
Reversed and remanded, p.
332 U. S. 234.
MR. JUSTICE MURPHY delivered the opinion of the Court.
The United States filed a complaint in the federal district
court below pursuant to § 4 of the Sherman Anti-Trust Act, 26 Stat.
209, as amended, to prevent and restrain the appellees from
violating §§ 1 and 2 of the Act. The complaint alleged that the
appellees have been and are engaged in a combination and conspiracy
to restrain and to monopolize interstate trade and commerce (1) in
the sale of motor vehicles for use as taxicabs to the principal cab
operating companies in Chicago, Pittsburgh, New York City, and
Minneapolis, and (2) in the business of furnishing cab services for
hire in Chicago and vicinity. The appellees moved to dismiss the
complaint for failure to state a claim upon which relief might be
granted. That motion was sustained.
69 F. Supp.
170. The case is now here on direct appeal by the United
States.
The alleged facts, as set forth in the complaint, may be
summarized briefly. In January, 1929, one Morris Markin and others
commenced negotiations to merge the
Page 332 U. S. 221
more important cab operating companies in Chicago, New York, and
other cities. Markin was then president and general manager, as
well as the controlling stockholder, of the Checker Cab
Manufacturing Corporation (CCM). That company was engaged in the
business of manufacturing taxicabs at its factory in Kalamazoo,
Michigan, and shipping them to purchasers in various states.
Parmelee Transportation Company (Parmelee) was organized in
April, 1929, with 62% of its stock being owned by CCM. It promptly
took over the business of operating special unlicensed cabs to
transport passengers and their luggage between railroad stations in
Chicago, pursuant to contracts with railroads and railroad terminal
associations. It then acquired a controlling interest in the
Chicago Yellow Cab Company, Inc. (Chicago Yellow). This latter
company holds all the capital stock of Yellow Cab Company (Yellow),
the owner and operator of "Yellow" cabs in Chicago and vicinity.
Yellow presently holds 53% of the taxicab licenses outstanding in
Chicago. In addition, Parmelee acquired or organized subsidiary
companies which now hold 100% of the taxicab licenses outstanding
in Pittsburgh, 58% of those in Minneapolis, and 15% of those in New
York City. [
Footnote 1]
In January, 1930, Cab Sales and Parts Corporation (Cab Sales)
was incorporated. At all times, Markin has been the active manager
of this company; since 1934, he
Page 332 U. S. 222
has been the sole stockholder. It now owns and operates the
"Checker" cabs in Chicago and vicinity, using licenses held in the
name of Checker Taxi Company (Checker). [
Footnote 2] Checker presently has no employees and no
property other than 1,000 Chicago taxicab licenses, or one-third of
the total outstanding, which it leases to Cab Sales; nearly all of
its stock is owned by associates of Markin. [
Footnote 3]
Markin also obtained a substantial interest in the Deluxe Motor
Cab Company, which was the third largest cab operating company in
Chicago in 1929 with its 400 licenses. He caused all of its stock
to be sold to Parmelee. It was then consolidated into a new
company; in 1932, Cab Sales bought a controlling interest in this
consolidated concern and caused it to suspend operations. Thus, by
the end of 1932, Markin had gained control of the three largest
taxicab companies operating in Chicago, and, through Parmelee, had
substantial footholds in the taxicab business in New York City,
Pittsburgh, and Minneapolis.
Yellow and Checker have consistently held a vast majority of the
Chicago taxicab licenses. There were 5,289
Page 332 U. S. 223
licenses outstanding in January, 1929, of which Yellow held
2,335 (44%) and Checker 1,750 (33%). In September, 1929, the City
of Chicago adopted an ordinance to the effect that no more licenses
should be issued, except for renewals, unless it should be found
that the public convenience and necessity required otherwise. The
substance of this provision was repeated in an ordinance adopted in
May, 1934. Yellow and Checker subsequently made agreements to
reduce the number of cabs in operation and to induce the city to
lower the number of licenses outstanding to $3,000, of which Yellow
would hold 1,500 and Checker 1,000.
On December 22, 1937, the City of Chicago passed an ordinance
providing for a method of voluntary surrender by licensees of a
sufficient number of their licenses to reduce the number
outstanding to 3,000. It was also provided that, if the number of
authorized licenses should later be increased above the 3,000
figure, such additional licenses should first be issued to the
original licensees in proportion to, and up to, the number which
they had surrendered. Yellow and Checker then made an agreement to
implement this ordinance; Yellow agreed to surrender 571 licenses
(leaving it with 1,595) and Checker agreed to surrender 500
(leaving it with 1,000); both parties promised to attempt to secure
for Yellow 60% and for Checker 40% of any licenses in excess of
3,000 which the city might later issue. As a result, 3,000 licenses
were left outstanding.
On January 16, 1946, the city authorized the issuance of 250
licenses to war veterans. Yellow was notified that 234 of its
licenses, representing that number of cabs which had not been in
operation, would be canceled. Checker was given a similar notice as
to 87 licenses. Yellow and Checker then brought suit in an Illinois
court to enjoin the city from issuing the new licenses and from
canceling
Page 332 U. S. 224
any of the ones issued to them; they claimed that economic
conditions prevented them from procuring taxicabs to replace those
which had become inoperable. The Illinois courts held that the 1937
ordinance created a contract between the city and the licensees,
and that the city could not issue licenses to the war veterans
without first replacing the licenses which Yellow and Checker had
surrendered; it was further held that no monopoly existed, since
the number of licenses and the rights of the licensees were subject
to the control of the city.
Yellow Cab Co. v. City of
Chicago, 396 Ill. 388, 71 N.E.2d 652.
Such is the nature of the facts set forth in the complaint.
Those facts allegedly give rise to a combination and conspiracy on
the part of the appellees (Yellow, Chicago Yellow, Parmelee, Cab
Sales, Checker, CCM and Markin) in violation of the Sherman Act.
The problems thereby raised can best be considered in relation to
the purported terms of this combination and conspiracy. For present
purposes, of course, we must assume, without deciding or implying,
that the various facts and allegations in the complaint are
true.
I
It is said that the appellees have agreed to control the
operation and purchase of taxicabs by the principal operating
companies in Chicago, New York City, Pittsburgh, and Minneapolis,
insisting that they purchase their cabs exclusively from CCM. This
excludes all other manufacturers of taxicabs from 86% of the
Chicago market, 15% of the New York City market, 100% of the
Pittsburgh market, and 58% of the Minneapolis market. At the same
time, the trade of the controlled cab companies is restrained,
since they are prevented from purchasing cabs from manufacturers
other than CCM. The result allegedly is that these companies must
pay more for cabs
Page 332 U. S. 225
than they would otherwise pay, their other expenditures are
increased unnecessarily, and the public is charged high rates for
the transportation services rendered.
The commerce which is asserted to be restrained in this manner
has a character that is undeniably interstate. The various cab
operating companies do business in Illinois, New York,
Pennsylvania, and Minnesota. By virtue of the conspiracy, they must
purchase all of their cabs from CCM. Since CCM's factory is located
in Michigan, interstate sales and shipments are inevitable if the
conspiracy is to be effectuated. The conspiracy also prevents those
operating companies from purchasing cabs from other manufacturers,
thus precluding all interstate sales and shipments between each
individual cab operating company and manufacturers (other than CCM)
located in other states. Interstate trade, in short, is of the very
essence of this aspect of the conspiracy.
But the amount of interstate trade thus affected by the
conspiracy is immaterial in determining whether a violation of the
Sherman Act has been charged in the complaint. Section 1 of the Act
outlaws unreasonable restraints on interstate commerce, regardless
of the amount of the commerce affected.
United States v.
Socony-Vacuum Oil Co., 310 U. S. 150,
note 59 page 225;
Apex
Hosiery Co. v. Leader, 310 U. S. 469,
310 U. S. 485.
And § 2 of the Act makes it unlawful to conspire to monopolize "any
part" of interstate commerce, without specifying how large a part
must be affected. Hence, it is enough if some appreciable part of
interstate commerce is the subject of a monopoly, a restraint, or a
conspiracy. The complaint in this case deals with interstate
purchases of replacements of some 5,000 licensed taxicabs in four
cities. [
Footnote 4] That is an
appreciable
Page 332 U. S. 226
amount of commerce under any standard.
See Montague &
Co. v. Lowry, 193 U. S. 38.
Likewise irrelevant is the importance of the interstate commerce
affected in relation to the entire amount of that type of commerce
in the United States. The Sherman Act is concerned with more than
the large, nationwide obstacles in the channels of interstate
trade. It is designed to sweep away all appreciable obstructions so
that the statutory policy of free trade might be effectively
achieved. As this Court stated in
Indiana Farmer's Guide Pub.
Co. v. Prairie Farmer Pub. Co., 293 U.
S. 268,
293 U. S.
279,
"The provisions of §§ 1 and 2 have both a geographical and
distributive significance and apply to any part of the United
States, as distinguished from the whole and to any part of the
classes of things forming a part of interstate commerce."
It follows that the complaint in this case is not defective for
failure to allege that CCM has a monopoly with reference to the
total number of taxicabs manufactured and sold in the United
States. Its relative position in the field of cab production has no
necessary relation to the ability of the appellees to conspire to
monopolize or restrain, in violation of the Act, an appreciable
segment of interstate cab sales. An allegation that such a segment
has been or may be monopolized or restrained is sufficient.
Nor can it be doubted that combinations and conspiracies of the
type alleged in this case fall within the ban of the Sherman Act.
By excluding all cab manufacturers other than CCM from that part of
the market represented by the cab operating companies under their
control, the appellees effectively limit the outlets through which
cabs may be sold in interstate commerce. Limitations of that nature
have been condemned time and again as violative of the Act.
Associated Press v. United States, 326 U. S.
1,
326 U. S. 18-19,
a and cases cited. In addition, by preventing the cab operating
companies under their control from purchasing
Page 332 U. S. 227
cabs from manufacturers other than CCM, the appellees deny those
companies the opportunity to purchase cabs in a free competitive
market. [
Footnote 5] The
Sherman Act has never been thought to sanction such a conspiracy to
restrain the free purchase of goods in interstate commerce.
See
Montague & Co. v. Lowry, supra; Binderup v. Pathe
Exchange, 263 U. S. 291.
The fact that these restraints occur in a setting described by
the appellees as a vertically integrated enterprise does not
necessarily remove the ban of the Sherman Act. The test of
illegality under the Act is the presence or absence of an
unreasonable restraint on interstate commerce. Such a restraint may
result as readily from a conspiracy among those who are affiliated
or integrated under common ownership as from a conspiracy among
those who are otherwise independent. Similarly, any affiliation or
integration flowing from an illegal conspiracy cannot insulate the
conspirators from the sanctions which Congress has imposed. The
corporate interrelationships of the conspirators, in other words,
are not determinative of the applicability of the Sherman Act. That
statute is aimed at substance, rather than form.
See
Appalachian Coals, Inc. v. United States, 228
U. S. 344,
228 U. S.
360-361,
228 U. S.
376-377.
And so, in this case, the common ownership and control of the
various corporate appellees are impotent to liberate the alleged
combination and conspiracy from the impact of the Act. The
complaint charges that the restraint of interstate trade was not
only effected by the combination of the appellees, but was the
primary object of the combination. The theory of the complaint, to
borrow language from
United States v. Reading Co.,
253 U. S. 26,
253 U. S. 57, is
that "dominating power" over the cab operating companies
"was not obtained by normal expansion to meet
Page 332 U. S. 228
the demands of a business growing as a result of superior and
enterprising management, but by deliberate, calculated purchase for
control."
If that theory is borne out in this case by the evidence,
coupled with proof of an undue restraint of interstate trade, a
plain violation of the Act has occurred.
Cf. United States v.
Crescent Amusement Co., 323 U. S. 173,
323 U. S.
189.
II
It is said that the appellees have agreed that Yellow and Cab
Sales will not compete with Parmelee for contracts with railroads
or railroad terminal associations to transport passengers and their
luggage between railroad stations in Chicago. The complaint points
out the well known fact that Chicago is the terminus of a large
number of railroads engaged in interstate passenger traffic, and
that a great majority of the persons making interstate railroad
trips which carry them through Chicago must disembark from a train
at one railroad station, travel from that station to another some
two blocks to two miles distant, and board another train at the
latter station. The railroads often contract with the passengers to
supply between-station transportation in Chicago. Parmelee then
contracts with the railroads and the railroad terminal associations
to provide this transportation by special cabs carrying seven to
ten passengers. Parmelee's contracts are exclusive in nature.
The transportation of such passengers and their luggage between
stations in Chicago is clearly a part of the stream of interstate
commerce. When persons or goods move from a point of origin in one
state to a point of destination in another, the fact that a part of
that journey consists of transportation by an independent agency
solely within the boundaries of one state does not make that
portion of the trip any less interstate in character.
The Daniel
Page 332 U. S. 229
Ball, 10 Wall. 557,
77 U. S. 565.
That portion must be viewed in its relation to the entire journey,
rather than in isolation. So viewed, it is an integral step in the
interstate movement.
See Stafford v. Wallace, 258 U.
S. 495.
Any attempt to monopolize or to impose an undue restraint on
such a constituent part of interstate commerce brings the Sherman
Act into operation. Here, there is an alleged conspiracy to bring
nearly all the Chicago taxicab companies under common control and
to eliminate competition among them relative to contracts for
supplying transportation for this transfer in the midst of
interstate journeys. Only Parmelee is free to attempt to procure
such contracts; Yellow and Cab Sales are forbidden to compete for
such contracts, despite the fact that they conceivably might
provide the same transportation service at lower cost to the
railroads. [
Footnote 6] The
complaint accordingly states a violation of the Sherman Act in this
respect.
See Addyston Pipe & Steel Co. v. United
States, 175 U. S. 211.
It is true, of course, that exclusive contracts for the
transportation service in question are not illegal.
Donovan v.
Pennsylvania Co., 199 U. S. 279. But
a conspiracy to eliminate competition in obtaining those exclusive
contracts is what is alleged in this case, and it is a conspiracy
of that type that runs afoul of the Sherman Act. Moreover, the fact
that the competition restrained is that between affiliated
corporations cannot serve to negative the statutory violation
where, as here, the affiliation is assertedly one of the means of
effectuating the illegal conspiracy not to compete.
Page 332 U. S. 230
III
Finally, it is said that the appellees have conspired to control
the principal taxicab operating companies in Chicago, and to
exclude others from engaging in the transportation of interstate
travelers to and from Chicago railroad stations. To that end, they
have conspired to induce the City of Chicago to limit the number of
licensed taxicabs to 3,000, to hold 2,595 (or 86%) of these
licenses themselves, to obtain for Yellow and Checker any licenses
above 3,000 which the city might later issue, and to prevent new
operators from entering the cab business in Chicago by having
Yellow and Checker annually renew licenses for cabs which they do
not operate and have no intention of operating.
The interstate commerce toward which this aspect of the
conspiracy is directed is claimed to arise out of the following
facts. Many persons are said to embark upon interstate journeys
from their homes, offices, and hotels in Chicago by using taxicabs
to transport themselves and their luggage to railroad stations in
Chicago. Conversely, in making journeys from other states to homes,
offices, and hotels in Chicago, many persons are said to complete
such trips by using taxicabs to transport themselves and their
luggage from railroad stations in Chicago to said homes, offices,
and hotels. Such transportation of persons and their luggage is
intermingled with the admittedly local operations of the Chicago
taxicabs. But it is that allegedly interstate part of the business
upon which rests the validity of the complaint in this
particular.
We hold, however, that such transportation is too unrelated to
interstate commerce to constitute a part thereof within the meaning
of the Sherman Act. These taxicabs, in transporting passengers and
their luggage to and from Chicago railroad stations, admittedly
cross no state lines; by ordinance, their service is confined to
transportation
Page 332 U. S. 231
"between any two points within the corporate limits of the
City." None of them serves only railroad passengers, all of them
being required to serve "every person" within the limits of
Chicago. They have no contractual or other arrangement with the
interstate railroads. Nor are their fares paid or collected as part
of the railroad fares. In short, their relationship to interstate
transit is only casual and incidental.
In a sense, of course, a traveler starts an interstate journey
when he boards a conveyance near his home, office, or hotel to
travel to the railroad station, from which the journey is continued
by train, and such a journey ends when he alights from a conveyance
near the home, office, or hotel which constitutes his ultimate
destination. Indeed, the terminal points of an interstate journey
may be traced even further to the moment when the traveler leaves
or enters his room or office and descends or ascends the building
by elevator.
But interstate commerce is an intensely practical concept drawn
from the normal and accepted course of business.
Swift &
Co. v. United States, 196 U. S. 375,
196 U. S. 398;
North American Co. v. Securities & Exchange Comm'n,
327 U. S. 686,
327 U. S. 705.
And interstate journeys are to be measured by "the commonly
accepted sense of the transportation concept."
United States v.
Capital Transit Co., 325 U. S. 357,
325 U. S. 363.
Moreover, what may fairly be said to be the limits of an interstate
shipment of goods and chattels may not necessarily be the commonly
accepted limits of an individual's interstate journey. We must
accordingly mark the beginning and end of a particular kind of
interstate commerce by its own practical considerations.
Here, we believe that the common understanding is that a
traveler intending to make an interstate rail journey begins his
interstate movement when he boards the train at the station, and
that his journey ends when he disembarks at the station in the city
of destination.
Page 332 U. S. 232
What happens prior or subsequent to that rail journey, at least
in the absence of some special arrangement, is not a constituent
part of the interstate movement. The traveler has complete freedom
to arrive at or leave the station by taxicab, trolley, bus, subway,
elevated train, private automobile, his own two legs, or various
other means of conveyance. Taxicab service is thus but one of many
that may be used. It is contracted for independently of the
railroad journey, and may be utilized whenever the traveler so
desires. From the standpoints of time and continuity, the taxicab
trip may be quite distinct and separate from the interstate
journey. To the taxicab driver, it is just another local fare.
Pennsylvania R. Co. v. Knight, 192 U. S.
21, demonstrates this common understanding. The Court
there held that the Pennsylvania Railroad Company was subject to a
state franchise tax by reason of the fact that it maintained a cab
service within the boundaries of New York City for the sole benefit
of its rail passengers. Its cabs transported the passengers between
its ferry station and their residences and hotels. The Court stated
that this cab service was an independent local service, preliminary
or subsequent to any interstate transportation and not included in
the contract of railroad carriage. Hence, it was subject to state
taxation. It is true that this ruling as to the extent of a state's
taxing power is not conclusive as to the boundaries of interstate
commerce for federal purposes.
Bacon v. Illinois,
227 U. S. 504,
227 U. S. 516;
Binderup v. Pathe Exchange, supra, at
263 U. S. 311.
But it does illustrate the normal and accepted concept of the outer
limits of this type of interstate journey. And it is that concept
that is determinative here.
We do not mean to establish any absolute rule that local taxicab
service to and from railroad stations is completely beyond the
reach of federal power, or even beyond
Page 332 U. S. 233
the scope of the Sherman Act. In
Stafford v. Wallace,
supra, at
258 U. S. 528,
the Court made plain that nothing in the
Knight case was
authority for the proposition that,
"if such an agency [local cab service] could be and were used in
a conspiracy unduly and constantly to monopolize interstate
passenger traffic, it might not be brought within federal
restraint."
Likewise, we are not to be understood in this case as deciding
that all conspiracies among local cab drivers are so unrelated to
interstate commerce as to fall outside the federal ken. A
conspiracy to burden or eliminate transportation of passengers to
and from a railroad station where interstate journeys begin and end
might have sufficient effect upon interstate commerce to justify
the imposition of the Sherman Act or other federal laws resting on
the commerce power of Congress.
All that we hold here is that, when local taxicabs merely convey
interstate train passengers between their homes and the railroad
station in the normal course of their independent local service,
that service is not an integral part of interstate transportation.
And a restraint on or monopoly of that general local service,
without more, is not proscribed by the Sherman Act.
It follows that the complaint, insofar as it is based on such
local taxicab service, fails to state a cause of action under the
Sherman Act. It thus becomes unnecessary to discuss the points
raised as to the substance of that part of the alleged conspiracy
relating to this local service. Our conclusion in this respect,
however, does not lead to an affirmance of the District Court's
dismissal of the complaint. For the reasons set forth in Parts I
and II of this opinion, the complaint does state a cause of action
under the Act entitling the United States to a trial on the merits.
Since the portion of the complaint dealt with in Part III of this
opinion is defective, appropriate steps should be taken to delete
the charges in relation thereto.
Page 332 U. S. 234
With that, understanding, we reverse the judgment of the
District Court and remand the case for further proceedings
consistent with this opinion.
Reversed.
MR. JUSTICE BLACK and MR. JUSTICE RUTLEDGE agree with Parts I
and II of this opinion, but dissent from the holding in Part
III.
MR. JUSTICE BURTON concurs in Part III of this opinion. However,
he believes that the complaint as a whole fails to state a cause of
action, and that therefore the judgment of the District Court
dismissing it should be affirmed.
MR. JUSTICE DOUGLAS took no part in the consideration or
decision of this case.
[
Footnote 1]
Between October, 1929, and June, 1930, Parmelee acquired all the
taxicab companies operating in Pittsburgh; it now operates the cabs
through two wholly owned subsidiaries. Early in 1931, Parmelee
formed a company to operate cabs in Minneapolis; a wholly owned
subsidiary now operates 125 of the 214 cabs licensed in that city.
Beginning early in 1929, Parmelee acquired certain companies
operating cabs in New York City; it later consolidated them in a
wholly owned subsidiary now holding 2,000 of the 13,000 licenses
outstanding in that city.
[
Footnote 2]
Checker originally was a cooperative company, the stockholders
of which were the various owners of "Checker" cabs. In February,
1930, as part of a settlement of litigation between it and CCM,
Checker agreed that its drivers would purchase all of their
taxicabs from Cab Sales for a period of five years at $2,350 per
cab. At the same time, CCM appointed Cab Sales as exclusive agent
for these sales, and agreed to sell its cabs to Cab Sales at $1,906
per cab. During the five-year life of this agreement, Checker
drivers bought a large number of cabs from Cab Sales at prices
about $400 above those at which Cab Sales bought them from CCM. As
these drivers defaulted in their payments from time to time, Cab
Sales would foreclose and take over the ownership and operation of
the cabs. Since 1941, it has owned and operated all of these
cabs.
[
Footnote 3]
By 1932, Cab Sales had acquired over 97% of the stock of
Checker. Markin caused this stock to be sold to certain of his
associates in 1942.
[
Footnote 4]
2,595 licenses in Chicago, 2,000 in New York City, 125 in
Minneapolis, and an estimated 280 in Pittsburgh.
[
Footnote 5]
To the extent that the controlled operating companies are
charged higher than the open market prices, they are injured.
[
Footnote 6]
The District Court thought that Parmelee's equipment and
services are so totally different from the taxicab business of
Yellow and Cab Sales as to make competition for the contracts
impractical and unlikely. But that is a matter for determination at
the trial on the merits, and does not negative the sufficiency of
the complaint.