The United States brought a civil antitrust action against an
agricultural cooperative marketing association composed of about
2,000 Maryland and Virginia dairy farmers supplying about 86% of
the milk purchased by all milk dealers in the Washington, D.C.,
metropolitan area. The complaint charged that the association had
(1) monopolized and attempted to monopolize interstate trade and
commerce in fluid milk in Maryland, Virginia and the District of
Columbia, in violation of § 2 of the Sherman Act; (2) through
contracts and agreements combined and conspired with Embassy Dairy
and others to eliminate and foreclose competition in the same milk
market area, in violation of § 3 of the Sherman Act; and (3) bought
all assets of Embassy Dairy (the largest milk dealer in the area
which competed with the association's dealers), the effect of which
might be to substantially lessen competition or tend to create a
monopoly in violation of § 7 of the Clayton Act. The District Court
dismissed the charge under § 2 of the Sherman Act, but it found for
the Government on the charges under § 3 of the Sherman Act and § 7
of the Clayton Act and granted part, but not all, of the relief
sought by the Government with respect to those charges.
Held:
1. Section 2 of the Capper-Volstead Act, which authorizes the
Secretary of Agriculture to issue a cease and desist order upon
finding that a cooperative has monopolized or restrained trade to
such an extent that the price of an agricultural commodity has been
"unduly enhanced," does not exclude all prosecutions under the
Sherman Act.
United States v. Borden Co., 308 U.
S. 188. Pp.
362 U. S.
462-463.
2. Neither § 6 of the Clayton Act nor § 1 of the Capper-Volstead
Act leaves agricultural cooperatives free to engage in practices
against others which are designed to monopolize trade or to
restrain and suppress competition. Pp.
362 U. S.
463-468.
Page 362 U. S. 459
3. The allegations of the complaint and the statement of
particulars in this case charge anticompetitive activities which
are so far outside the legitimate objects of a cooperative that, if
proved, they would constitute clear violations of § 2 of the
Sherman Act; and the District Court erred in dismissing the charge
of violating § 2. P.
362 U. S.
468.
4. On the record in this case, the District Court properly found
that the acquisition of Embassy Dairy by the association tended to
create a monopoly or to substantially lessen competition, in
violation of § 7 of the Clayton Act. Pp.
362 U. S.
468-469.
5. The acquisition of Embassy Dairy by the association was not
exempted from the provisions of § 7 of the Clayton Act by the last
paragraph of that section, since there is no "statutory provision"
that vests power in the Secretary of Agriculture to approve a
transaction, and thereby exempt a cooperative from the antitrust
laws under the circumstances of this case, which involves no
agricultural marketing agreement with the Secretary. Pp.
362 U. S.
469-470.
6. The privilege the Capper-Volstead Act grants producers to
conduct their affairs collectively does not include a privilege to
combine with competitors so as to use a monopoly position as a
lever further to suppress competition by and among independent
producers and processors, and the record sustains the District
Court's finding that the association had violated § 3 of the
Sherman Act. Pp.
362 U. S.
470-472.
7. Having entered a decree ordering the association to divest
itself of all assets acquired from Embassy Dairy and to cancel all
contracts ancillary to their acquisition, and having retained
jurisdiction to grant such further relief as might be appropriate,
the District Court did not err in denying part of the relief sought
by the Government. Pp.
362 U. S.
472-473.
167 F. Supp.
45 reversed.
167 F.
Supp. 799,
168 F.
Supp. 880, affirmed.
Page 362 U. S. 460
MR. JUSTICE BLACK delivered the opinion of the Court.
This is a civil antitrust action brought by the United States in
a Federal District Court against an agricultural cooperative, the
Maryland and Virginia Milk Producers Association, Inc. The
Association supplies about 86% of the milk purchased by all milk
dealers in the Washington, D.C., metropolitan area, and has as
members about 2,000 Maryland and Virginia dairy farmers. The
complaint charged that the Association had: (1) attempted to
monopolize and had monopolized interstate trade and commerce in
fluid milk in Maryland, Virginia and the District of Columbia in
violation of § 2 of the Sherman Act; [
Footnote 1] (2) through contracts and agreements, combined
and conspired with Embassy Dairy and others to eliminate and
foreclose competition in the same milk market area in violation of
§ 3 of that Act; [
Footnote 2]
and (3) bought all the assets of Embassy Dairy, the largest milk
dealer in the area which competed with the Association's dealers,
the effect of which acquisition might be substantially to lessen
competition or to tend to create
Page 362 U. S. 461
a monopoly in violation of § 7 of the Clayton Act. [
Footnote 3] The chief defense set up by
the Association was that, because of its being a cooperative
composed exclusively of dairy farmers, § 6 of the Clayton Act
[
Footnote 4] and §§ 1 and 2 of
the Capper-Volstead Act [
Footnote
5] completely exempted and immunized it from the antitrust laws
with respect to the charges made in the Government's complaint. The
District Court concluded after arguments that
"an agricultural cooperative is entirely exempt from the
provisions of the antitrust laws, both as to its very existence as
well as to all of its activities, provided it does not enter into
conspiracies or combinations with persons who are not producers of
agricultural commodities."
167 F. Supp.
45, 52.
Page 362 U. S. 462
Accordingly, the court dismissed the Sherman Act § 2
monopolization charge, where the Association was not alleged to
have acted in combination with others, but upheld the right of the
Government to go to trial on the Sherman Act § 3 and Clayton Act §
7 charges because they involved alleged activities with the owners
of Embassy and other persons who were not agricultural producers.
After trial, the court found for the United States on the latter
two charges and entered a decree ordering the Association to divest
itself within a reasonable time of all assets acquired from Embassy
and to cancel all contracts ancillary to the acquisition.
167 F.
Supp. 799;
168 F.
Supp. 880. The court refused to grant additional relief the
United States asked for. It is from this refusal and the dismissal
of its Sherman Act § 2 monopolization charge that the Government
appealed directly to this Court under the Expediting Act. [
Footnote 6] The Association similarly
appealed to review the judgments against it on the Sherman Act § 3
charge and the Clayton Act § 7 charge. We noted probable
jurisdiction, 360 U.S. 927, and treat both appeals in this
opinion.
The Association's chief argument for antitrust exemption is
based on § 2 of the Capper-Volstead Act, which authorizes the
Secretary of Agriculture to issue a cease and desist order upon a
finding that a cooperative has monopolized or restrained trade to
such an extent that the price of an agricultural commodity has been
"unduly enhanced." [
Footnote 7]
The contention is that this provision was
Page 362 U. S. 463
intended to give the Secretary of Agriculture primary
jurisdiction, and thereby exclude any prosecutions at all under the
Sherman Act. This Court unequivocally rejected the same contention
in
United States v. Borden Co., 308 U.
S. 188,
308 U. S. 206,
after full consideration of the same legislative history that we
are now asked to review again. We adhere to the reasoning and
holding of the
Borden opinion on this point.
The Association also argues that, without regard to § 2 of the
Capper-Volstead Act, § 1 of that Act and § 6 of the Clayton Act
demonstrate a purpose wholly to exempt agricultural associations
from the antitrust laws. In the
Borden case, this Court
held that neither § 6 of the Clayton Act nor the Capper-Volstead
Act granted immunity from prosecution for the combination of a
cooperative and others to restrain trade there charged as a
violation of § 1 of the Sherman Act. Although the Court was not
confronted with charges under § 2 of the Sherman Act in that case,
we do not believe that Congress intended to immunize cooperatives
engaged in competition-stifling practices from prosecution under
the anti-monopolization provisions of § 2 of the Sherman Act, while
making them responsible for such practices as violations of the
anti-trade restraint provisions of §§ 1 and 3 of that Act. These
sections closely overlap, and the same kind of predatory practices
may show violations of all. [
Footnote 8] The reasons underlying the Court's holding in
the
Borden case that the cooperative there was not
completely exempt under § 1 apply equally well to §§ 2 and 3. The
Clayton
Page 362 U. S. 464
and Capper-Volstead Acts, construed in the light of their
background, do not lend themselves to such an incongruous immunity
distinction between the sections as that urged here.
In the early 1900's, when agricultural cooperatives were growing
in effectiveness, there was widespread concern because the mere
organization of farmers for mutual help was often considered to be
a violation of the antitrust laws. Some state courts had sustained
antitrust charges against agricultural cooperatives, [
Footnote 9] and, as a result, eventually all
the States passed Acts authorizing their existence. [
Footnote 10] It was to bar such
prosecutions by the Federal Government as to interstate
transactions that Congress in 1914 inserted § 6 in the Clayton Act,
exempting agricultural organizations, along with labor unions, from
the antitrust laws. This Court has held that the provisions of that
section, set out below, [
Footnote 11] relating to labor
Page 362 U. S. 465
unions do not manifest "a congressional purpose wholly to
exempt" them from the antitrust laws, [
Footnote 12] and neither the language nor the
legislative history of the section indicates a congressional
purpose to grant any broader immunity to agricultural cooperatives.
The language shows no more than a purpose to allow farmers to act
together in cooperative associations without the associations as
such being "held or construed to be illegal combinations or
conspiracies in restraint of trade, under the antitrust laws," as
they otherwise might have been. This interpretation is supported by
the House and Senate Committee Reports on the bill. [
Footnote 13] Thus, the full effect of § 6
is that a group of farmers acting together as a single entity in an
association cannot be restrained "from lawfully carrying out
the legitimate objects thereof" (emphasis supplied), but
the section cannot support the contention that it gives such an
entity full freedom to
Page 362 U. S. 466
engage in predatory trade practices at will.
See United
States v. King, 229 F. 275; 250 F. 908, 910.
Cf. United
States v. Borden Co., 308 U. S. 188,
308 U. S.
203-205.
The Capper-Volstead Act of 1922 extended § 6 of the Clayton Act
exemption to capital stock agricultural cooperatives which had not
previously been covered by that section. [
Footnote 14] Section 1 of the Capper-Volstead Act also
provided that among "the legitimate objects" of farmer
organizations were "collectively processing, preparing for market,
handling, and marketing" products through common marketing
agencies, and the making of "necessary contracts and agreements to
effect such purposes." We believe it is reasonably clear from the
very language of the Capper-Volstead Act, as it was in § 6 of the
Clayton Act, that the general philosophy of both was simply that
individual farmers should be given, through agricultural
cooperatives acting as entities, the same unified competitive
advantage -- and responsibility -- available to businessmen acting
through corporations as entities. As the House Report on the
Capper-Volstead Act said:
"Instead of granting a class privilege, it aims to equalize
existing privileges by changing the law applicable to the ordinary
business corporations so the farmers can take advantage of it.
[
Footnote 15]"
This indicates a purpose to make it possible for
farmer-producers to organize together, set association policy, fix
prices at which their cooperative will sell their produce, and
otherwise carry on like a business corporation without thereby
violating the antitrust laws. It does not suggest
Page 362 U. S. 467
a congressional desire to vest cooperatives with unrestricted
power to restrain trade or to achieve monopoly by preying on
independent producers, processors or dealers intent on carrying on
their own businesses in their own legitimate way. In the Senate
hearings on the Capper-Volstead Act, the Secretary of Agriculture,
who was given a large measure of authority under this Act, and the
Solicitor of his Department, testified that the Act would not
authorize cooperatives to engage in predatory practices in
violation of the Sherman Act. [
Footnote 16] And the House Committee Report assured the
Congress that:
"In the event that associations authorized by this bill shall do
anything forbidden by the Sherman Antitrust Act, they will be
subject to the penalties imposed by that law. [
Footnote 17]"
Although contrary inferences could be drawn from some parts of
the legislative history, we are satisfied that the part of the
House Committee Report just quoted correctly interpreted the
Capper-Volstead Act, and that the Act did not leave cooperatives
free to engage in practices against other persons in order to
monopolize trade, or restrain and suppress competition with the
cooperative.
Page 362 U. S. 468
Therefore, we turn now to a consideration of the District
Court's judgments in this case.
Sherman Act § 2 Dismissal. -- The complaint charging
monopolization alleged that the Association had
"[t]hreatened and undertaken diverse actions to induce or compel
dealers to purchase milk from the defendant [Association], and
induced and assisted others to acquire dealer outlets"
which were not purchasing milk from the Association. It also
alleged that the Association
"[e]xcluded, eliminated, and attempted to eliminate others,
including producers and producers' agricultural cooperative
associations not affiliated with defendant, from supplying milk to
dealers."
Supporting this charge, the statement of particulars listed a
number of instances in which the Association attempted to interfere
with truck shipments of nonmembers' milk, and an attempt during
1939-1942 to induce a Washington dairy to switch its
non-Association producers to the Baltimore market. The statement of
particulars also included charges that the Association engaged in a
boycott of a feed and farm supply store to compel its owner, who
also owned an Alexandria dairy, to purchase milk from the
Association, and that it compelled a dairy to buy its milk by using
the leverage of that dairy's indebtedness to the Association. We
are satisfied that the allegations of the complaint and the
statement of particulars, only a part of which we have set out,
charge anticompetitive activities which are so far outside the
"legitimate objects" of a cooperative that, if proved, they would
constitute clear violations of § 2 of the Sherman Act by this
Association, a fact, indeed, which the Association does not really
dispute if it is subject to liability under this section. It was
error for the District Court to dismiss the § 2 charge.
Clayton Act § 7 Judgment. -- In 1954, the Association
purchased the assets of Embassy Dairy in Washington. The complaint
charged that this acquisition constituted
Page 362 U. S. 469
a violation of § 7 of the Clayton Act, which prohibits a
corporation engaged in commerce from acquiring all or any part of
the assets of another corporation so engaged where the effect may
be to tend to create a monopoly or substantially lessen
competition. A trial was had before the District Court on this
charge, and the court found that the motive for and result of the
Embassy acquisition was to: eliminate the largest purchaser of
non-Association milk in the area; force former Embassy
non-Association producers either to join the Association or to ship
to Baltimore, thus both bringing more milk to the Association and
diverting competing milk to another market; eliminate the
Association's prime competitive dealer from government contract
milk bidding; and increase the Association's control of the
Washington market. On these findings, amply supported by evidence,
the District Court could properly conclude, as it did, that the
Embassy acquisition tended to create a monopoly or substantially
lessen competition, and was therefore a violation of § 7. [
Footnote 18]
This leaves the contention that the acquisition of Embassy was
protected by the last paragraph of § 7 of the Clayton Act which, in
pertinent part, provides that:
"Nothing contained in this section shall apply to transactions
duly consummated pursuant to authority given by . . . the Secretary
of Agriculture under any statutory provision vesting such power in
such . . . Secretary. . . . [
Footnote 19]"
The Association contends that its purchase of Embassy Dairy was
"consummated pursuant to authority given by . . . the Secretary of
Agriculture." The trouble with this contention is that there is no
"statutory provision" that vests power in the Secretary of
Agriculture to approve a transaction, and thereby exempt a
cooperative
Page 362 U. S. 470
from the antitrust laws under the circumstances of this case.
While there is a "statutory provision" vesting power in the
Secretary of Agriculture to enter into agricultural marketing
agreements which "shall be deemed to be lawful" and "not . . . be
in violation of any of the antitrust laws of the United States," no
such marketing agreement is involved here. [
Footnote 20]
Sherman Act § 3 Judgment. -- The complaint charged that
the Association, Embassy and others had violated § 3 of the Sherman
Act by engaging in a combination and conspiracy to eliminate and
foreclose competition with the Association and with dealers
purchasing milk from the Association. The District Court, with the
consent of the parties, considered and decided this § 3 charge on
the evidence offered on the § 7 Clayton Act charge. A crucial
element in this charge of concerted action was the Association's
purchase of Embassy's assets under a contract containing an
agreement by the former owners of Embassy not to compete with the
Association in the milk business in the Washington area for 10
years, and to attempt to have all former Embassy producers either
join the Association or ship their milk to the Baltimore market.
Also, particularly pertinent to the charge of a § 3 combination,
was evidence showing a long and spirited business rivalry between
the Association and its producers, on the one hand, and Embassy and
its independent producers, on the other. The Association had been
"unhappy" about Embassy's price cutting and its generally
"disruptive" competitive practices that had made Embassy a "thorn
in the side of the Association for many years." There was also
evidence emphasized by the court in its
Page 362 U. S. 471
Clayton Act § 7 opinion that "the price paid by the Association
for the transfer was far in excess of the actual and intrinsic
value of the property purchased."
167 F.
Supp. 799, 806. After readopting its Clayton Act § 7 findings
regarding the anticompetitive motives and results of the Embassy
acquisition,
see p.
362 U. S. 469,
supra, the District Court made the three following
additional findings on the Sherman Act § 3 charge: (1) "that the
result of the transaction complained of was a foreclosure of
competition," (2) "that the transaction complained of was entered
into with the intent and purpose of restraining trade," [
Footnote 21] and (3)
"that an unreasonable restraint of trade, violative of the
Sherman Act, has resulted from the acquisition of Embassy Dairy by
the defendant [Association]."
On the basis of its findings and opinion, the court then
concluded that "the transaction involving the acquisition of
Embassy Dairy by the defendant constitutes a violation of Section 3
of the Sherman Act."
168 F.
Supp. 880, 881, 882.
The facts found by the court show a classic combination or
conspiracy to restrain trade, unless, as the Association contends,
"the transaction involving the acquisition of Embassy" upon which
the judgment against it was based is protected against Sherman Act
prosecutions by the Capper-Volstead Act's provisions that
cooperatives can lawfully make "the necessary contracts and
agreements" to process, handle and market milk for their producer
members. The Embassy assets the Association acquired are useful in
processing and marketing milk, and we may assume, as it is
contended, that their purchase simply for business use, without
more, often would be permitted and would be lawful under the
Capper-Volstead
Page 362 U. S. 472
Act. But even lawful contracts and business activities may help
to make up a pattern of conduct unlawful under the Sherman Act.
[
Footnote 22] The contract
of purchase here, viewed in the context of all the evidence and
findings, was not one made merely to advance the Association's own
permissible processing and marketing business; it was entered into
by both parties, according to the court's findings as we understand
them, because of its usefulness as a weapon to restrain and
suppress competitors and competition in the Washington metropolitan
area. We hold that the privilege the Capper-Volstead Act grants
producers to conduct their affairs collectively does not include a
privilege to combine with competitors [
Footnote 23] so as to use a monopoly position as a
lever further to suppress competition by and among independent
producers and processors.
Adequacy of Relief. -- The Government's appeal in this
case is directed in part at the relief granted it by the District
Court. The judgment requires the Association to
"dispose of as a unit and as a going dairy business all
[Embassy] assets . . . tangible or intangible, which it acquired on
July 26, 1954, and replacements therefor,"
and to do so in "good faith" to preserve the business in "as
good condition as possible." The District Court refused to go
further and require the Association to dispose of "all assets used"
in the Embassy operation, to prohibit the Association from
operating as a dealer in the Washington market for a period after
divestiture, to prevent the future acquisition of distributors
without prior approval of the Government, and to grant the
Government general "visitation rights" as to the Association's
records and employees. The District Court was of the view that the
Government would either be adequately
Page 362 U. S. 473
protected as to these matters by the "good faith" requirement or
by subsequent orders of the District Court when the occasion
necessitated. The formulation of decrees is largely left to the
discretion of the trial court, and we see no reason to reject the
judgment of the District Court that the relief it granted will be
effective in undoing the violation it found in view of the fact
that it also retains the cause for future orders, including the
right of visitation if deemed appropriate.
See Associated Press
v. United States, 326 U. S. 1,
326 U. S.
22-23.
Accordingly, the judgment of the District Court finding
violations of § 7 of the Clayton Act and § 3 of the Sherman Act is
affirmed, and its dismissal of the charges under § 2 of the Sherman
Act is reversed and remanded for a trial.
Affirmed in part, reversed and remanded in part.
* Together with No. 73,
United States v. Maryland and
Virginia Milk Producers Association, Inc., also on appeal from
the same Court.
[
Footnote 1]
Sherman Act § 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, and, on
conviction thereof, shall be punished by fine not exceeding fifty
thousand dollars, or by imprisonment not exceeding one year, or by
both said punishments, in the discretion of the court."
26 Stat. 209 (1890), as amended, 15 U.S.C. § 2.
[
Footnote 2]
Sherman Act § 3:
"Every contract, combination in form of trust or otherwise, or
conspiracy, in restraint of trade or commerce in any Territory of
the United States or of the District of Columbia . . . or between
the District of Columbia and any State or States or foreign
nations, is declared illegal. . . ."
26 Stat. 209 (1890), as amended, 15 U.S.C. § 3. Section 1
declares the same prohibition as to commerce "among the several
States." Although there was also a charge against the Association
under § 1, there was no judgment against it on this section, and
that charge is no longer relevant here.
[
Footnote 3]
Clayton Act § 7:
"No corporation engaged in commerce shall acquire, directly or
indirectly, the whole or any part of the stock or other share
capital and no corporation subject to the jurisdiction of the
Federal Trade Commission shall acquire the whole or any part of the
assets of another corporation engaged also in commerce, where in
any line of commerce in any section of the country, the effect of
such acquisition may be substantially to lessen competition, or to
tend to create a monopoly."
"
* * * *"
"Nothing contained in this section shall apply to transactions
duly consummated pursuant to authority given by the . . .
[independent regulatory commissions] or the Secretary of
Agriculture under any statutory provision vesting such power in
such Commission, Secretary, or Board."
38 Stat. 731 (1914), 15 U.S.C. § 18.
[
Footnote 4]
38 Stat. 731 (1914), as amended, 15 U.S.C. § 17, set forth in
note 11 infra.
[
Footnote 5]
Capper-Volstead Act § 1:
"Persons engaged in the production of agricultural products as
farmers, planters, ranchmen, dairymen, nut or fruit growers may act
together in associations, corporate or otherwise, with or without
capital stock, in collectively processing, preparing for market,
handling, and marketing in interstate and foreign commerce, such
products of persons so engaged. Such associations may have
marketing agencies in common; and such associations and their
members may make the necessary contracts and agreements to effect
such purposes. . . ."
42 Stat. 388 (1922). Section 2 is set forth in
note 7 infra.
[
Footnote 6]
32 Stat. 823 (1903), as amended, 15 U.S.C. § 29.
[
Footnote 7]
Capper-Volstead Act § 2:
"If the Secretary of Agriculture shall have reason to believe
that any such association monopolizes or restrains trade in
interstate or foreign commerce to such an extent that the price of
any agricultural product is unduly enhanced by reason thereof
[after a 'show cause' hearing, he may direct] such association . .
. to cease and desist from monopolization or restraint of trade. .
. ."
This order may be enforced by the Attorney General if not obeyed
by the association. 42 Stat. 388 (1922), 7 U.S.C. § 292.
[
Footnote 8]
Klor's, Inc., v. Broadway-Hale Stores, Inc.,
359 U. S. 207,
359 U. S. 211;
United States v. Socony-Vacuum Oil Co., 310 U.
S. 150,
310 U. S. 226,
note 59;
Standard Oil Co. of New Jersey v. United States,
221 U. S. 1,
221 U. S.
59-60.
[
Footnote 9]
See, e.g., Reeves v. Decorah Farmers' Cooperative
Society, 160 Iowa 194, 140 N.W. 844 (1913);
Burns v. Wray
Farmers' Grain Co., 65 Colo. 425, 176 P. 487 (1918);
Ford
v. Chicago Milk Shippers' Ass'n, 155 Ill. 166, 39 N.E. 651
(1895).
Contra, Burley Tobacco Society v. Gillaspy, 51
Ind.App. 583, 100 N.E. 89 (1912). Hanna, Antitrust Immunities of
Cooperative Associations, 13 Law and Contemp.Prob. 488-490 (1948);
Hanna, Cooperative Associations and the Public, 29 Mich.L.Rev. 148,
163-165 (1930); Jensen, The Bill of Rights of U.S. Cooperative
Agriculture, 20 Rocky Mt.L.Rev. 181, 184-189 (1948).
See
generally Att'y Gen. Nat'l Comm. Antitrust Rep. (1955),
306-313; Note, 57 Mich.L.Rev. 921 (1959).
[
Footnote 10]
See statutes collected in Jensen, The Bill of Rights of
U.S. Co-operative Agriculture, 20 Rocky Mt.L.Rev. 181, 191, n. 29
(1948); Note, 38 Harv.L.Rev. 87, 89, n. 17 (1924).
See Connolly
v. Union Sewer Pipe Co., 184 U. S. 540,
184 U. S.
556-558 (1902), holding Illinois exemption statute
unconstitutional,
and see dissent per McKenna, J., 184
U.S. at
184 U. S. 565,
184 U. S. 571,
overruled by Tigner v. State of Texas, 310 U.
S. 141 (1940).
[
Footnote 11]
Clayton Act § 6:
"The labor of a human being is not a commodity or article of
commerce. Nothing contained in the antitrust laws shall be
construed to forbid the existence and operation of labor,
agricultural, or horticultural organizations, instituted for the
purposes of mutual help, and not having capital stock or conducted
for profit, or to forbid or restrain individual members of such
organizations from lawfully carrying out the legitimate objects
thereof; nor shall such organizations, or the members thereof, be
held or construed to be illegal combinations or conspiracies in
restraint of trade, under the antitrust laws."
38 Stat. 731 (1914), 15 U.S.C. § 17.
[
Footnote 12]
Allen Bradley Co. v. Local Union No. 3, 325 U.
S. 797,
325 U. S. 805;
Duplex Printing Press Co. v. Deering, 254 U.
S. 443,
254 U. S.
468-469.
Cf. United States v. Hutcheson,
312 U. S. 219.
[
Footnote 13]
"In the light of previous decisions of the courts and in view of
a possible interpretation of the law which would empower the courts
to order the dissolution of such organizations and associations,
your committee feels that all doubt should be removed as to the
legality of the existence and operations of these
organizations and associations, and that the law should not be
construed in such a way as to authorize their dissolution by the
courts under the antitrust laws or to forbid the individual members
of such associations from carrying out the
legitimate and
lawful objects of their associations."
(Emphasis supplied.) H.R.Rep. No. 627, 63d Cong., 2d Sess. 16;
S.Rep. No. 698, 63d Cong., 2d Sess. 12.
[
Footnote 14]
Some Congressmen opposed § 6 of the Clayton Act because it did
not include agricultural associations with capital stock.
"Under the provisions of section 7 [now § 6] of this bill,
farmers' organizations with capital stock, organized for profit,
would be left subject to the provisions of the Sherman antitrust
law."
H.R.Rep. No. 627, Pt. 4, 63d Cong., 2d Sess. 4.
And see
id., Pt. 3, 10.
[
Footnote 15]
H.R.Rep. No. 24, 67th Cong., 1st Sess. 2.
[
Footnote 16]
The Solicitor of the Department of Agriculture testified that it
was his
"opinion that, if the farmers want to create monopolies or want
to engage in unfair practices in commerce, this bill certainly
would not give them the right to do it, and they would have to get
another bill. . . . [T]hese organizations would not be allowed to
adopt any illegal means or methods of conducting their
business,"
and, if they
"engaged in some practice that prevented other people from
selling their milk . . . , they would be subject to the antitrust
laws. . . . It does not say . . . that they may adopt any unfair
methods of competition."
The Secretary of Agriculture testified to the same effect.
Hearings before a Subcommittee of the Senate Judiciary Committee on
H.R. 2373, 67th Cong., 1st Sess. 203, 204, 205.
[
Footnote 17]
Op. cit., supra, note 15 at 3
[
Footnote 18]
167 F.
Supp. 799, 807-808.
[
Footnote 19]
See note 3
supra.
[
Footnote 20]
Agricultural Adjustment Act, § 8b, as amended, 7 U.S.C. § 608b.
United States v. Borden Co., 308 U.
S. 188,
308 U. S.
198-202;
United States v. Rock Royal Cooperative,
Inc., 307 U. S. 533,
307 U. S. 560;
United States v. Maryland & Virginia Milk Producers' Ass'n,
Inc., 90 F. Supp.
681, 688.
[
Footnote 21]
See United States v. Griffith, 334 U.
S. 100,
334 U. S. 105.
Cf. United States v. Columbia Steel Co., 334 U.
S. 495,
334 U. S. 525;
United States v. Paramount Pictures, Inc., 334 U.
S. 131,
334 U. S.
173.
[
Footnote 22]
See Schine Chain Theatres, Inc. v. United States,
334 U. S. 110,
334 U. S.
119.
[
Footnote 23]
See United States v. Maryland Cooperative Milk Producers,
Inc., 145 F.
Supp. 151.