Document: 341 U.S. 384 71 S.Ct. 745 95 L.Ed. 1035 SCHWEGMANN BROS. et al.v.CALVERT DISTILLERS CORP. al. v. SEAGRAM Nos. 442, 443. Argued April 9—10, 1951. Decided May 21, Rehearing Denied June 4, See 956, 1011. On Writs of Certiorari to the United States Court Appeals for Fifth Circuit. Messrs. Saul Stone, John Minor Wisdom, New Orleans, La., petitioners. Mr. Monte M. Lemann, respondents. Justice DOUGLAS delivered opinion Court. 1 Respondents, Maryland and Delaware corporations, are distributors gin whiskey. They sell their products wholesalers in Louisiana, who turn retailers. Respondents have a price-fixing scheme whereby they try maintain uniform retail prices products. endeavor make retailers sign contracts under which buyers promise at not less than stated respondents' schedules. indeed succeeded getting over one hundred Louisiana these agreements. Petitioner, retailer refused agree sold cut-rate price. thereupon brought this suit District by reason diversity citizenship enjoin petitioner from selling minimum fixed 2 It is clear our decisions Sherman Act, 26 Stat. 209, 15 U.S.C.A. §§ 1—7, note, that interstate marketing arrangement would be illegal, it enjoined, draw civil criminal penalties, no court enforce it. Fixing prices, like other types price fixing, illegal per se. Socony-Vacuum Oil Co., 310 150, 60 811, 84 1129; Kiefer-Stewart Co. Joseph E. Seagram & Sons, 340 211, 259. Resale maintenance was struck down Dr. Miles Medical D. Park Sons 220 373, 31 376, 55 502. The fact state authorizes fixing does not, course, give immunity scheme, absent approval Congress. 3 however, seek find legality Miller-Tydings Act enacted 1937 as an amendment § Act. 50 693, U.S.C. 1, 1. That provides material part 'nothing herein contained shall render or agreements prescribing resale' specified commodities when 'contracts description lawful applied intrastate transactions' local law.1 (Italics added.) 4 has such law. No. 13 1936, La.Gen.Stat. 9809.1 seq., LSA—RS 51:391 seq. permits 'contract' sale resale commodity provide buyer will resell 'except stipulated vendor.' statute goes further, only allows distributor price; but once there pricefixing 'contract,' known seller, with any state, also condemns unfair competition even though seller party 'contract.'2 In words, enforces against parties nonsigners. So far law concerned, can enforced all single agrees on And argument same range fixing. 5 phrased follows: present action outlawed Act—the apart—only if contract, combination, conspiracy restraint trade. But contract agreement vice, then terms immunized, provided immunized true vice conspiracy, since presupposes agreement. essence view Appeals, affirmed divided vote judgment district enjoining cutting. 184 F.2d 11. 6 first blush appeal. we think offends statutory scheme. 7 We note begin critical differences between Louisiana's latter exempts resale'. hand, sanctions maximum well provision start federal act respondents suggest, states handling whole problem type commodity. What granted limited immunity—a limitation further emphasized inclusion exclusion nonsigner provision. omission fatal position unless perform distinct legislative function reading into meticulously omitted 8 A refusal read makes sense take words normal customary meaning. agreements'. If more want agree, combine, conspire fix price, do so permits. Their conspiracy—hitherto illegal—is made lawful. pursuant impunity. When seek, impose persons contracted agreed situation vastly different. agreement; compulsion. following path consensual resort coercion. 9 Much import may force nonsigners line. said attaches condition every therefore Such condition, implied, creates respecting sales sales. Yet exempted articles purchased, agreements' practices non-contracting competitors contracting 10 should noted connection expressly continues prohibitions 'horizontal' those each functional level.3 Therefore, compels follow parallel policy, demands private conduct forbids. Parker Brown, 317 341, 350, 63 307, 313, 87 315. Elimination level may, lawfully result successfully negotiates individual 'vertical' his forced abandon competition, driven compact violation spirit proviso forbids real sanction given power voluntary engagements. Otherwise, exception swallows destroys its practical effectiveness. 11 contrary conclusion vast devastating effect policies. were adopted, executed setting could Had Congress desired eliminate element permit blanketing wanted it, feel different measures been adopted—either included authorized without more. Certainly used connote Contracts convey idea cooperative arrangement, program recalcitrants dragged heels compelled submit 12 history supports construction. efforts override rule supra, long persistent. Many bills had introduced subject before Senator Tydings his. Thus 1929, Seventy-First Congress, Capper-Kelly fair trade bill offered.4 merely permitted respects classes declaring 'contract relating unlawful. As House Report legalized 'that vendee except price.'5 became model California passed 1931—the permitting maintenance.6 clause. Neither did Seventy-Second Congress.7 here identical predecessor. pass. time next introduced—three years later—the changed addition provision.8 1933. 1936 Seventy-Fourth Congress9 he followed substantially wrote His conditions By date several additional laws provisions.10 Even models bills, never added. Seventy-Fifth subsequent one. respect pattern appeared written concept utilized thus continued after appeared. inference, therefore, strong continuity preceding bills. built foundation; concerned provisions predecessors. conclude that, draftsman intended nonsigning coerced, strange accomplished result. 14 An reports debates nevertheless includes Senate bill, stating 'to purchaser resell' proposed 'does remove Federal obstacles enforcement themselves declared lawful.'11 second Seventy-fifth little reprint earlier report.12 Report, heavily relied here, gave extended analysis.13 referred acts authorizing providing 'third notice bound regardless whether it'; objective public policy having operate goods.14 This strongest statement found history. endorsed, attached Committee Columbia rider revenue bill. form debated passed. 16 quoted above15 measure House.16 Congressman debate validated 17 remarks face value. place, while referring describing typical act, drafted core Hence, General Statement sole 'fair acts' goods'; legalizing 'the maintenance, branded trade-marked goods.'17 18 about taken; sanctioned 'minimum prices' 'other conditions' well. dropped Why deleted appear. relevance problem, dealing conditions.' answer quite hold. question amount embraced might argued 'conditions' attaching liability nonsigner. stir doubt, doubt alone enough us skeptical full implications old report new 19 look definite clues; floor Tydings: 'What do? man manufactures article buys ultimate public. * *'18 Not refer suggest affect anyone signs contract. search sponsors indication coercive schemes arrangements permissible. none.19 expression fear minority effective passed.20 These fears presented King opposition amendment.21 emphasizes 'permissive' nature laws,22 pointing features. 20 doubts authoritative guide construction legislation. meaning doubt. what amendment, cannot right use club used—'contracts agreements'—suggest just contrary. 21 remembered designed accommodate. regulation way regulation. both relaxed agreements,' inference left noncontracting group governed preexisting writing meet specifications law, seem legislation 22 carved out now claimed willing assume took devious route yet failed purpose plain. 23 Reversed. 24 JACKSON, whom MINTON joins, concurring. 25 I Court's insofar rests upon language appear either necessity propriety going back Resort justified where inescapably ambiguous, go beyond reports, presumably considered carefully prepared. deny sometimes offended rule. select casual statements debates, always distinguished candor accuracy, basis making up minds enact substitute ourselves important functions. Rules Senate, Constitution, require three readings final enactment. intended, sure knows passing passes wants, formally reduced writing. business sum own Moreover, presidential approval, given. supposed signing President endorses Congressional Record. For undertake reconstruct enactment involve political controversies proper place interpretation. 27 reasons why accept whenever possible reveals face. Laws people live by; offices learn rights are. Here controversy affects merchant many States. Aside few larger cities, materials available lawyer afford neither cost acquisition, housing, repeatedly examining congressional could, know anticipating impress members controlling. To modify inaccessible large country. 28 large, Holmes: 'We inquire legislature meant; ask means.' Holmes, Collected Legal Papers, 207. Soon Hing Crowley, 113 703, 710—711, 730, 734, 1145. better example unedifying unilluminating us. 29 FRANKFURTER, BLACK BURTON join, dissenting. 30 1890, Law, '(e)very combination trust otherwise, commerce among States, foreign nations'. July 2, 1937, Amendment. excepted Law valid State policy. Aug. 17, Title VIII, 673, Amendment legal extent 'Contracts surely narrower scope 'contract, conspiracy' Law. *s category content very section implies lingering doubts. depression 1929 impetus movement allow prices. 1931, allowing manufacturer establish binding voluntarily entered him. proved completely ineffective, 1933 amended her established person Grether, Experience Fair Trade Legislation Restricting Price Cutting, Calif.L.Rev. 640, 644 (1936). so-called 'non-signer' clause which, effect, allowed wholesaler product. Every trade' thereafter close laws. them. Today, 45 48 Commission Maintenance XXVII (Dec. 13, 1945). 32 substantial obstacle remained movement. 1911, decided There, 'non-signer,' held block, enacted. said, thereby meant bar retailer, mean formed integral 42 statutes Amemdment 33 Revenue Bill Columbia. S.Rep.No.2053, 74th Cong., 2d Sess.1 Conference (H.R.Rep.No.1413, 75th 1st Sess.), contains five lines concerning rider. measure. came surprise House, already practically Miller Bill, reported favorably Judiciary. H.R.Rep.No.382, Sess. Both them substance Miller- speak themselves, attach appendices opinion. 402, 754. see how, invalid Law—unless, is, depart accorded scores cases during last decade. collected Commissioner Internal Estate Church, 335 632, 687, Appendix A, 69 322, 337, 355, 93 288. clearly revealed here.2 questioned committee charge report, elucidations 34 suggested done so. confirm plain reports. statement: attempted books. simply acts, all; code national board N.R.A. State, correct immediately abuses develop.' 81 Cong.Rec. 7496. 35 Representative Dirksen member Committee. He case Old Dearborn Distributing Distillers Corp., 299 183, 57 139, 109, Illinois violate Due Process Clause. continued: 'A arose Anti-Trust 1890 transactions sprang commerce. Judiciary determined reporting essentially nothing enabling placed stamp notwithstanding 1890.' 8138. 36 'back up'—the 'stamp approval'—contained demonstrated experience California, futile holds cover provisions. conflict interpretation Commission,3 Department Justice,4 adversely affected laws.5 unsound matter economics. Perhaps pass extraneous influence exerts avoiding veto; perhaps restrict relevant subject, required constitutions three-fourths matters concern. Where indicate respected. notion done. 37 APPENDIX Opinion Frankfurter. 38 382, 39 Judiciary, (H.R. 1611) amend entitled 'An protect unlawful restraints monopolies', approved consideration, recommendation 40 Strike enacting insert lieu thereof following: 41 'That (U.S.Code, title 15, sec. 1), "Section nations, hereby illegal. engage deemed guilty misdemeanor, and, conviction thereof, punished fine exceeding $5,000, imprisonment year, punishments, discretion court. Nothing bears, label container mark, brand, name producer free open general class produced distributed others, transactions, statute, hereafter Territory, made, transported resale, method 5, supplemented, create Commission, define powers duties, purposes', September 26, 1914 45)." 43 goods within fairtrade legalize class. 44 accomplish end, amends Antitrust declares adds sentence section, limitation, substance, therein made; decision Supreme 502, cases, doubtful, least, Acts 46 typically provide, first, competitive goods. Second, third 47 pertinent recently constitutional Seagram-Distillers Corporation, 's No owner others contract: 49 '(1) vendor. '(2) another turn, vendee. 51 'Such contain imply resold reference cases: 52 closing owner's stock discontinuing delivery commodity: Provided, offered original invoice least ten (10) days 53 damaged deteriorated quality, thereof. 54 '(3) officer acting orders 2. Wilfully knowingly advertising, offering sale, actionable thereby.' 56 advised, adopted acts: Washington, Oregon, Montana, Wyoming, Arizona, Mexico, Utah, North Dakota, South Kansas, Arkansas, Iowa, Wisconsin, Illinois, Kentucky, Tennessee, Indiana, Ohio, Georgia, Virginia, West Pennsylvania, Maryland, York, Jersey, Rhode Island. advised house bill: Carolina, Idaho, Colorado, Oklahoma. 58 pending Legislatures Nevada, Michigan, Minnesota, Texas, Mississippi, Delaware, Missouri, Connecticut, Massachusetts, Hampshire, Maine; Vermont, definitely rejected character. Economic Aspects 59 anticipated economic effects proponents opponents hearings subcommittee hand urged predatory cutting weapon monopolistic crush small businessmen. contended price-maintenance tends unduly enhance consumer. answered play manufacturers prevent However, committee, arguments properly addressed legislatures considering acts. legislature's responsibility State. seeks help effectuate application fit act. 61 invites attention paragraph Court, heretofore to, upholding constitutionality speaking through Sutherland: 62 'There great body tending show dealers injurious good identified goods, evidence voluminous; serve useful review enlarge subject. True, evidence, opinion, contrary; concern determine weight lies. need say regarded fairly proceeds former view; determination respect, circumstances disclosed, conclusive concerned. facts debatable carry legislature. Radice (People of) 264 292, 294, 325, 326, 68 690; Zahn Board Public Works (of City Los Angeles), 274 328, 594, 595, 1074, cited'. (299 145.) Effectuation Policy Your respectfully sound Government lies direction lending assistance regard internal affairs. submitted especially assistance, instance, consists removing handicap resulting surrender Government. 64 2053, 65 consideration (S. 3822) 66 bears name, producer. 67 expressed title, trade-mark owners, distributors, uneconomic distribution standard quality particular practice directed 'loss-leader selling.' Since passage similar namely, Island (the introduction bill). still stipulating common 70 loss-leader merchandise operates fraud consumer producer's goodwill independent competitor. recommending S. 3822 fully recognizing evils selling, effectiveness device same. 72 sufficient unquestionably disastrous monopoly, number evil mitigated, eliminated, 73 called remedy, put remedy effective. 74 Though specific adjudication believed performed lawful, move 75 Consequently, domiciled unwilling run risk violating fair-trade seriously impaired. 76 removes applicability performed. 77 78 applicable, follows closely 'in others.' 79 authorize enter compel him permissive. 80 horizontal contracts, say, manufacturers, producers, wholesalers, apply restrain competition. fact, increase monopoly. 82 most important, standpoint function, restraint, sphere, commit 83 bear, others. Excluded brokers, factors, persons, firms corporations other. reads 'Wilfully (§ 9809.1) 'Provided agreement, establishment involved, retailers, firms, other.' 240, 71st Sess.; H.R.11, H.R.Rep.No. 536, H.R.Rep.No.536, Sess., p. Cal.Stat.1931, c. 278. Junior Capper-Kelly.' Control Under (1939) 54. 97, 72d Cal.Stat.1933, 260: Business Professions Code, Pt. 3, 16904. 3822, 80th 1007. Ill.Laws 1935, 1436, Ill.Rev.Stat.1949, 121 1/2, 188 seq.; Iowa 106, I.C.A. 550.1 Md.Laws 212, 2; N.J.Laws 58, N.J.S.A. 56:4—6; N.Y.Laws 976, Or.Laws 295, Pa.Laws 115, P.S. 8; Wash.Laws 1935. 177, 4; Wis.Laws 52. S.Rep.No.257, Id., Id. See, e.g., Rep. Dirksen, conferee, 7495. H.R.Rep.No.1413, House) stated: 'This antitrust certain commodities, commerce, being laws.' S.Rep.No.879, 7491. Part 6. quotes text report. intricate verbal support clarity (1) inapplicable 'nonsigner' clauses explicit vertical agree- ments, example, manufacturers. Tydings, 7487, wording proviso, thought implicit (2) 1931 later beside mark. Amendment, affirmative recover nonsigners, something purport do. course used. (3) refers containing phrase conjunction scarcely anything 'conditions prices.' (4) 'Permissive' '(The acts) permissive.' letter Chairman S.Doc.No.58, pp. 2—3. LXII appears instituted prosecutions because Assistant Attorney played repeal Thurman Arnold, T.N.E.C. Hearings, 18162—18165. contention two 1937. Calamia Goldsmith Bros., Inc., N.Y. 636, N.E.2d 50; 795, 687; Pepsodent Krauss D.C., F.Supp. 922. both, rejected.

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