Source: https://openjurist.org/372/us/29
Timestamp: 2019-04-26 13:42:17+00:00

Document:
NATIONAL DAIRY PRODUCTS CORP. et al.
Rehearing Denied April 1, 1963.
This case involves the question whether § 3 of the Robinson-Patman Act, 15 U.S.C. § 13a, making it a crime to sell goods at 'unreasonably low prices for the purpose of destroying competition or eliminating a competitor,' is unconstitutionally vague and indefinite as applied to sales made below cost with such purpose. National Dairy and Raymond J. Wise, a vice-president and director, upon being charged, inter alia, with violating § 3 by making sales below cost for the purpose of destroying competition, moved for dismissal of the Robinson-Patman Act counts of the indictment on the ground that the statute is unconstitutionally vague and indefinite. The District Court granted the motion and ordered dismissal. On direct appeal under the Criminal Appeals Act, 18 U.S.C. § 3731, we noted probable jurisdiction, 368 U.S. 808, 82 S.Ct. 45, 7 L.Ed.2d 19, because of the importance of the issue in the administration of the Robinson-Patman Act. We have concluded that the order of dismissal was error and therefore remand the case for trial.
The indictment charged violations of both the Sherman Act, 15 U.S.C. § 1, and the Robinson-Patman Act in Kansas City and in six local markets in the adjacent area.1 The Robinson-Patman counts charged National Dairy and Wise with selling milk in those markets 'at unreasonably low prices for the purpose of destroying competition.' Further specifying the acts complained of, the indictment charged National Dairy with having 'utilized the advantages it possesses by reason of the fact that it operates in a great many different geographical localities in order to finance and subsidize a price war against the small dairies selling milk in competition with it * * * by intentionally selling milk (directly or to a distributor) at prices below National's cost.' In five of the markets National Dairy's pricing practice was alleged to have resulted in 'severe financial losses to small dairies,' and in two others the effect was claimed to have been to 'eliminate competition' and 'drive small dairies from' the market.
The history of § 3 of the Robinson-Patman Act indicates that selling below cost, unless mitigated by some acceptable business exigency, was intended to be prohibited by the words 'unreasonably low prices.' That sales below cost without a justifying business reason may come within the proscriptions of the Sherman Act has long been established. See e.g., Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). Further, when the Clayton Act was enacted in 1914 to strengthen the Sherman Act, Congress passed § 2 to cover price discrimination by large companies which compete by lowering prices, 'oftentimes below the cost of production * * *with the intent to destroy and make unprofitable the business of their competitors.' H.R.Rep.No.627, 63d Cong., 2d Sess. 8. The 1936 enactment of the Robinson-Patman Act was for the purpose of 'strengthening the Clayton Act provisions,' Federal Trade Comm. v. Anheuser-Busch, Inc., 363 U.S. 536, 544, 80 S.Ct. 1267, 1272, 4 L.Ed.2d 1385 (1960), and the Act was aimed at a specific weapon of the monopolist—predatory pricing. Moreover, § 3 was described by Representative Utterback, a House manager of the joint conference committee, as attaching 'criminal penalties in addition to the civil liabilities and remedies already provided by the Clayton Act.' 80 Cong.Rec. 9419.
Finally, we think the additional element of predatory intent alleged in the indictment and required by the Act provides further definition of the prohibited conduct. We believe the notice here is more specific than that which was held adequate in Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495 (1945), in which a requirement of intent served to 'relieve the statute of the objection that it punishes without warning an offense of which the accused was unaware.' Id. at 102, 65 S.Ct. at 1036; see id. at 101—107, 65 S.Ct. at 1035—1038. Proscribed by the statute in Screws was the intentional achievement of a result, i.e., the willful deprivation of certain rights. The Act here, however, in prohibiting sales at unreasonably low prices for the purpose of destroying competition, listed as elements of the illegal conduct not only the intent to achieve a result—destruction of competition but also the act—selling at unreasonably low prices—done in furtherance of that design or purpose. It seems clear that the necessary specificity of warning is afforded when, as here, separate, though related, statutory elements of prohibited activity come to focus on one course of conduct.
United States v. L. Cohen Grocery Co., 255 U.S. 81, 41 S.Ct. 298, 65 L.Ed. 516 (1921), on which much reliance is placed, is inapposite here. In Cohen the Act proscribed 'any unjust or unreasonable rate or charge.' The charge in the indictment was in the exact language of the statute, and, in specifying the conduct covered by the charge, the indictment did nothing more than state the price the defendant was alleged to have collected. Hence, the Court held that a 'specific or definite' act was neither proscribed by the Act nor alleged in the indictment. Id. at 89, 41 S.Ct. at 300. Moreover, the standard held too vague in Cohen was without a meaningful referent in business practice or usage. '(T)here was no accepted and fairly stable commercial standard which could be regarded as impliedly taken up and adopted by the statute * * *.' Small Co. v. American Sugar Rfg. Co., 267 U.S. 233, 240—241, 45 S.Ct. 295, 297, 69 L.Ed. 589 (1925). In view of the business practices against which § 3 was unmistakably directed and the specificity of the violations charged in the indictment here, both absent in Cohen, the proffered analogy to that case must be rejected.

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