1. A strike by employees, intended to prevent through illegal
picketing and intimidation of workers the continued manufacture of
goods by their employer and having that effect, is not a conspiracy
to restrain interstate commerce within the Anti-Trust Act, even
though the strikers know that the products when made are to be
shipped in interstate commerce to fill orders already received and
accepted from the employer's customers in other states, provided
there be no actual or attempted interference with the free
transport of the products, when manufactured, from the factory to
their destination in other states or with their sale in those
states.
United Mine Workers v. Coronado Co., 259 U.
S. 344. P.
265 U. S.
464.
Page 265 U. S. 458
2. The mere reduction of the supply of an article to be shipped
in interstate commerce by illegal and tortious prevention of its
manufacture is ordinarily an indirect and remote obstruction to
that commerce; it is only when the intent or the necessary effect
is to enable those preventing the manufacture to monopolize the
supply, control prices, or discriminate as between would-be
purchasers that the unlawful interference can be said directly to
burden interstate commerce. P.
265 U. S.
471.
284 F. 446 reversed.
Appeal from a decree of the circuit court of appeals which
affirmed a final decree of the district court, granting an
injunction in a suit by divers manufacturers of trunks and leather
goods against striking employees and labor unions.
Page 265 U. S. 461
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
This suit was begun by a bill in equity filed in the District
Court for the Eastern District of Missouri by the Herkert &
Meisel Trunk Company and four others, all corporations of Missouri,
engaged in making trunks and leather goods in St. Louis, against
the United Leather Workers' Union, Local Lodge No. 66, an
unincorporated association, its officers and agents, and a number
of its members. The bill averred that each of the complainants had
built up a valuable business in making, selling, and shipping in
interstate commerce trunks and leather goods; that each received
large quantities of raw material by interstate commerce, and
employed a large
Page 265 U. S. 462
number of persons, men and girls; that, on February 28, 1920,
defendants demanded that their shops be unionized and conducted as
closed shops, and announced that, if complainants refused, they
would ruin the interstate commerce business of each of them; that,
on April 10, 1920, the defendants, acting individually and on
behalf of the defendant union, in order to destroy the
complainants' business and to prevent their employees from
continuing in their employment unless complainants would yield to
their demands, began a strike, assaulted and threatened
complainants' employees, and intimidated them so as to force them
against their wills to quit complainants' employment, and that they
thereby prevented complainants from engaging in and carrying on
their interstate business and interfered and obstructed them in
manufacture and shipment of the products of their factories sold to
be shipped in interstate commerce. The bill charged that defendants
were carrying out their illegal conspiracy and purposes by mass
picketing and intimidation; that the interference with
complainants' interstate commerce was intentional and malicious,
and was intended to destroy it; that it was in violation of the
Anti-Trust Law and the Clayton Act, and that they had already
inflicted, and unless restrained would continue to inflict,
irreparable injury upon such business. The bill shows that each
complainant's damage threatened exceeded three thousand dollars.
The prayer was for a temporary and then a final injunction to
prevent the intimidation, illegal picketing, and other interference
with complainants' manufacturing and interstate business and with
its employees or would-be employees engaged in carrying it on.
Certain of the defendants answered the bill and denied the
picketing, intimidation, and violence and the purpose to interfere
with complainants' interstate business as charged, and averred that
they and the fellow members of the union had lawfully quit the
employment of complainants
Page 265 U. S. 463
because they could not agree upon the terms of a new agreement.
The district court, upon preliminary hearing, granted a temporary
injunction, and, upon final hearing, granted a final decree
enjoining defendants as prayed. The case was taken on appeal to the
circuit court of appeals, where the decree of the district court
was affirmed, one judge dissenting. 284 F. 446. The cause now comes
before us on appeal under ยง 241, Judicial Code.
The evidence adduced before the district court showed that the
defendant, the Local Union No. 66 of the United Leather Workers,
having declared a strike against the complainants and withdrawn its
members from their employ, instituted an illegal picketing campaign
of intimidation against their employees who were willing to remain
and against others willing to take the places of the striking
employees, that the effect of this campaign was to prevent the
complainants from continuing to manufacture their goods needed to
fill the orders they had received from regular customers and
would-be purchasers in other states, that such orders covered 90
percent of all goods manufactured by complainants, that the
character of their business was known to the defendants, and that
the illegal strike campaign of defendants thus interfered with and
obstructed complainants' interstate commerce business to their
great loss. There was no evidence whatever to show that
complainants were obstructed by the strike or the strikers in
shipping to other states the products they had ready to ship or in
their receipt of materials from other states needed to make their
goods. While the bill averred that defendants had instituted a
boycott against complainants and were prosecuting the same by
illegal methods, there was no evidence whatever that any attempt
was made to boycott the sale of the complainants' products in other
states or anywhere, or to interfere with its interstate shipments
of goods ready to ship.
Page 265 U. S. 464
The sole question here is whether a strike against manufacturers
by their employees, intended by the strikers to prevent, through
illegal picketing and intimidation, continued manufacture, and
having such effect, was a conspiracy to restrain interstate
commerce under the Anti-Trust Act because such products, when made,
were, to the knowledge of the strikers, to be shipped in interstate
commerce to fill orders given and accepted by would-be purchasers
in other states, in the absence of evidence that the strikers
interfered or attempted in interfere with the free transport and
delivery of the products when manufactured from the factories to
their destination in other states, or with their sale in those
states.
We think that this question was already been answered in the
negative by this Court. In
United Mine Workers v. Coronado
Co., 259 U. S. 344, a
coal mining company in Arkansas changed its arrangement with its
employees from a closed shop to an open shop. The local union
resented the change and the avowed purpose of the company to
protect nonunion employees by armed guards. Violence, murder, and
arson were resorted to by the union. Seventy-five percent of the
output of the mine was to be shipped out of the state, and a car of
coal prepared for interstate shipment was destroyed by the mob of
strikers and their sympathizers. It was contended that as the
result of the conspiracy was to reduce the interstate shipment of
coal from the mines by 5,000 tons or more a week, this conspiracy
was directed against interstate commerce, and triple damages for
the injury inflicted could be recovered under the federal
Anti-Trust Law. But this Court held otherwise, and reversed a
judgment for a large amount on the ground that the evidence did not
disclose a conspiracy against interstate commerce justifying
recovery under the law. The language of the Court was (p.
259 U. S.
407):
Page 265 U. S. 465
"Coal mining is not interstate commerce, and the power of
Congress does not extend to its regulation as such. In
Hammer
v. Dagenhart, 247 U. S. 251,
247 U. S.
272, we said:"
"The making of goods and the mining of coal are not commerce,
nor does the fact that these things are to be afterwards shipped or
used in interstate commerce make their production a part thereof.
Delaware, Lackawanna & Western R. Co. v. Yurkonis,
238 U. S.
439."
"Obstruction to coal mining is not a direct obstruction to
interstate commerce in coal, although it, of course, may affect it
by reducing the amount of coal to be carried in that commerce."
The same rule was followed in
Gable v. Tonnegut Machinery
Co., 274 F. 66, 73-74.
The same general principles are affirmed in
Heisler v.
Thomas Colliery Co., 260 U. S. 245,
260 U. S. 259;
Crescent Oil Co. v. Mississippi, 257 U.
S. 129,
257 U. S. 136;
Arkadelphia Co. v. St. Louis, S.W. Ry. Co., 249 U.
S. 134,
249 U. S. 151;
McCluskey v. Marysville Ry. Co., 243 U. S.
36,
243 U. S. 38;
Diamond Glue Co. v. U.S. Glue
Co., 187 U. S. 611,
187 U. S. 616;
Capital City Dairy Co. v. Ohio, 183 U.
S. 238,
183 U. S. 245;
United States v. E. C. Knight Co., 156 U. S.
1,
156 U. S. 12-13;
Kidd v. Pearson, 128 U. S. 1,
128 U. S. 20-21;
Coe v. Errol, 116 U. S. 517,
116 U. S.
528.
The circuit court of appeals seems first to have based its
conclusion on cases like
Rearick v. Pennsylvania,
203 U. S. 507,
Caldwell v. North Carolina, 187 U.
S. 622,
Brennan v. Titusville, 153 U.
S. 289, and
Robbins v. Shelby Taxing District,
120 U. S. 489,
120 U. S. 497.
These dealt directly with the sale of goods in interstate commerce.
They were cases of state taxation upon the solicitation and
acceptance of orders of goods to be sent from one state to another.
The subject matter taxed was contracts of sale proposed or made for
deliveries of goods in interstate commerce. It is a far cry from
such cases to a strike to induce the employers to make better terms
with their employees when no interference with the transportation
or
Page 265 U. S. 466
future sale of the goods by the strikers is attempted or
shown.
The circuit court of appeals found further justification for its
conclusion in cases like
Eureka Pipe Line Co. v. Hallanan,
257 U. S. 265,
United Gas Co. v. Hallanan, 257 U.
S. 277,
Dahnke-Walker Milling Co. v. Bondurant,
257 U. S. 282, and
Lemke v. Farmers' Grain Co., 258 U. S.
50. They present the practical conception of interstate
commerce elaborated in
Swift & Co. v. United States,
196 U. S. 375,
hereafter to be discussed, as a flowing stream created by a course
of business to be protected against state invasion, but it must be
a real and direct invasion, and not something incidental or remote.
Thus, in the
Pipe Line Company and
Gas Company
cases, the State of West Virginia sought to tax a stream of oil and
gas flowing constantly through the state and out of it. It was held
that the mere power of those who directed the stream to divert it
from interstate commerce, when, as a course of business, it was
constantly interstate, with only incidental and minor diversions to
intrastate commerce, did not expose to the taxing power of the
state that part of the flow which crossed state lines. The burden
and invasion of interstate commerce was direct. In the
Bondurant case, a Tennessee milling company bought a crop
of grain in Kentucky, to be delivered on board the cars in Kentucky
for shipment to Tennessee in accord with a course of business
between the parties. It was held that an effort by the State of
Kentucky to require a license of the Tennessee company before it
could buy and ship grain from Kentucky to Tennessee was a burden
on, and invasion of, interstate commerce even though the milling
company might have stopped the grain in Kentucky contrary to the
usual course.
In
Lemke v. Farmers' Grain Co., a state law of North
Dakota subjected the purchase price of all grain flowing in a
regular course of business from that state to the
Page 265 U. S. 467
market in Minneapolis, Minnesota, to a North Dakota inspector
who was required to fix the price and determine thereby the profit
the buyer should make after paying the freight to Minneapolis at
the market price in that city. This was held to be a direct burden
and restraint upon the interstate commerce in the grain from one
state to the other. It was a direct limitation on that
commerce.
None of these cases, although they all illustrate the practical
conception of interstate commerce as a flowing stream from one
state to another formed by a regular course of business, can
properly be said to support the argument that mere intentional
cutting down of manufacture or production is a direct restraint of
commerce in the product intended to be shipped when ready, or to be
any departure from the general rule last announced in the
Coronado case and uniformly applied in all the cases
referred to above, which it followed. The effect upon interstate
commerce in the four cases just cited, on the other hand, was
directly burdensome and restraining.
Then the circuit court of appeals found sustaining precedent in
Swift & Co. v. United States, 196 U.
S. 375. In that case, the defendants were charged with a
conspiracy to monopolize interstate commerce in cattle, step by
step from the purchase of them on the western plains, in the
transportation of them by the railroads through to the stockyards
at Chicago, their sale and distribution there, their slaughter and
preparation as meats in the packing houses of that city, and their
distribution and sale in the east. This Court held that such a
conspiracy was a violation of the federal Anti-Trust Law because it
was an intended obstruction to the flow of interstate commerce
which Congress, in the Anti-Trust Law, intended to keep free and
untrammeled. It held that the intent to monopolize and restrain the
stream of interstate commerce,
Page 265 U. S. 468
and the probability that, by such methods and steps as were
attempted, the purpose of the conspiracy could be effected brought
the whole machinery of the conspiracy within the federal
jurisdiction. The case rested wholly on the probably effective
intent of the conspirators directed against interstate
commerce.
The case of
Addyston Pipe Co. v. United States,
175 U. S. 211, was
an agreement between those who made and sold iron pipe in different
states to fix prices as between themselves and not sell and deliver
pipe from their foundries across state lines in competition with
each other. Their intent and ability to control prices and prevent
the public from having the benefit of competition in interstate
trade brought them within the federal Anti-Trust Act.
So, in the case of
Montague & Co. v. Lowry,
193 U. S. 38,
manufacturers of eastern states in tiles and grates agreed with
manufacturers and dealers in California not to sell tiles and
grates to local dealers who would not agree to keep up prices. The
intent to control commerce between the eastern states and local
dealers in California, and thus to maintain prices, was held to
constitute a conspiracy in restraint of interstate commerce.
On the other hand,
Hopkins v. United States,
171 U. S. 578,
Anderson v. United States, 171 U.
S. 604, and
United States v. E. C. Knight Co.,
156 U. S. 1, were
held not to come within the federal Anti-Trust Law because the
facts of those cases were not thought to reveal the probably
effective intent directly to compass the restraint on interstate
commerce.
The
Knight case has been looked upon by many as
qualified by subsequent decisions of this Court. The case is to be
sustained only by the view that there was no proof of steps to be
taken with intent to monopolize or restrain interstate commerce in
sugar, but only proof of the acquisition of stock in sugar
manufacturing companies to
Page 265 U. S. 469
control its making. As intimated in the
Swift case,
196 U. S. 397,
the
Knight case was very near the line.
See also
the distinction pointed out by the circuit court of appeals in
Pennsylvania Sugar R. Co. v. American Sugar Refining
Company, 166 F. 254, 256, between that case and the
Knight case. The
Knight case emphasizes the
difference between manufacture and interstate commerce. But the
Knight case was a far stronger case for federal
jurisdiction under the Anti-Trust Law because of the probable
relation between the monopoly of manufacture and sale in interstate
commerce than the case at bar, in which there is present no element
of intended and probable monopoly or discrimination in interstate
commerce. The same element was lacking in the
Coronado
case.
In
Loewe v.Lawlor, 208 U. S. 274, and
in
Duplex Co. v. Deering, 254 U.
S. 443, members of labor unions having a controversy
with their employers sought to embarrass the sales by their
employers of the product of their manufacture in other states by
boycott and otherwise. They were held guilty of a conspiracy
against interstate commerce because of their palpable intent to
achieve their purpose by direct obstruction of that commerce.
The cases of
Stafford v. Wallace, 258 U.
S. 495, and
Chicago Board of Trade v. Olsen,
262 U. S. 1, are
also supposed in some way to sustain the view that a strike against
the manufacture of commodities intended to be shipped in interstate
commerce is a conspiracy against that commerce. What those cases
decided was that, when Congress found from investigation that more
or less constant abusive practices and a course of business,
usually only within state police cognizance, threatened to obstruct
or unduly to burden the freedom of interstate commerce, it could by
law institute supervision of such course of business in order to
prevent the abuses having such effect. As said in
Stafford v.
Wallace (p.
258 U. S.
520):
Page 265 U. S. 470
"The reasonable fear by Congress that such acts, usually lawful
and affecting only intrastate commerce when considered alone, will
probably and more or less constantly be used in conspiracies
against interstate commerce or constitute a direct and undue burden
on it, expressed in this remedial legislation, serves the same
purpose as the intent charged in the Swift indictment to bring acts
of a similar character into the current of interstate commerce for
federal restraint."
In
United States v. Patten, 226 U.
S. 525,
226 U. S. 543,
running a corner in the available supply of a staple commodity,
normally the subject of interstate commerce, in order to enhance
its price artificially in the whole country, although the corner
was carried on only in New York by sale of cotton futures, was held
to be a monopoly of interstate commerce in violation of the federal
Anti-Trust Act. It was the intent to monopolize such commerce and
its probability of success which sustained the indictment.
In the
Coronado case, supra (p.
259 U. S.
410), this Court referred to the
Patten case
and the difference between that and the Coronado case as
follows:
"The difference between the
Patten case and that of
Ware & Leland v. Mobile County, 209 U. S.
405, illustrates a distinction to be drawn in cases
which do not involve interstate commerce intrinsically, but which
may or may not be regarded as affecting interstate commerce so
directly as to be within the federal regulatory power. In the
Ware & Leland case, the question was whether a state
could tax the business of a broker dealing in contracts for the
future delivery of cotton where there was no obligation to ship
from one state to another. The tax was sustained, and dealing in
cotton futures was held not to be interstate commerce, and yet
thereafter such dealings in cotton futures as were alleged in the
Patten case, where they were part of a conspiracy to bring
the entire cotton trade within its influence, were held to be in
restraint of
Page 265 U. S. 471
interstate commerce. And so, in the case at bar, coal mining is
not interstate commerce, and obstruction of coal mining, though it
may prevent coal from going into interstate commerce, is not a
restraint of that commerce unless the obstruction to mining is
intended to restrain commerce in it or has necessarily such a
direct, material, and substantial effect to restrain it that the
intent reasonably must be inferred."
This review of the cases makes it clear that the mere reduction
in the supply of an article to be shipped in interstate commerce by
the illegal or tortious prevention of its manufacture is ordinarily
an indirect and remote obstruction to that commerce. It is only
when the intent or the necessary effect upon such commerce in the
article is to enable those preventing the manufacture to monopolize
its supply or control its price, or discriminate as between its
would-be purchasers, that the unlawful interference with its
manufacture can be said directly to burden interstate commerce.
The record is entirely without evidence or circumstances to show
that the defendants, in their conspiracy to deprive the
complainants of their workers, were thus directing their scheme
against interstate commerce. It is true that they were, in this
labor controversy, hoping that the loss of business in selling
goods would furnish a motive to the complainants to yield to
demands in respect to the terms of employment; but they did nothing
which in any way directly interfered with the interstate
transportation or sales of the complainants' product.
We concur with the dissenting judge in the circuit court of
appeals when, in speaking of the conclusion of the majority, he
said:
"The natural, logical and inevitable result will be that every
strike in any industry or even in any single factory will be within
the Sherman Act and subject to federal jurisdiction provided any
appreciable amount of its product enters into interstate
commerce."
284 F. 446, 464.
Page 265 U. S. 472
We cannot think that Congress intended any such result in the
enactment of the Anti-Trust Act, or that the decisions of this
Court warrant such construction.
Decree reversed.
MR. JUSTICE McKENNA, MR. JUSTICE VAN DEVANTER, and MR. JUSTICE
BUTLER dissent.