Milk Producers Assn. v. United States,
Annotate this Case
362 U.S. 458 (1960)
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U.S. Supreme Court
Milk Producers Assn. v. United States, 362 U.S. 458 (1960)
Maryland and Virginia Milk Producers Assn., Inc. v. United States
Argued January 19-20, 1960
Decided May 2, 1960*
362 U.S. 458
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.
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.
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.