Source: https://supreme.justia.com/cases/federal/us/308/188/
Timestamp: 2019-04-20 16:42:04+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 308 › United States v. Borden Co.
1. A judgment quashing a count upon the ground of duplicity is not appealable to this Court under the Criminal Appeals Act. P. 193.
2. The construction of an indictment by the District Court binds this Court on an appeal under the Criminal Appeals Act. P. 308 U. S. 194.
3. A decision of the District Court holding that an indictment failed to charge an offense under the Sherman Anti-Trust Act because of the effect on that Act of later statutes, held a construction of the Sherman Act and reviewable under the Criminal Appeals Act. P. 308 U. S. 195.
4. Repeals by implication are not favored. When there are two Acts upon the same subject, effect should be given to both if possible. P. 308 U. S. 198.
5. The Agricultural Marketing Agreement Act of 1937 does not operate to repeal the Sherman Anti-Trust Act in its application to agreements of producers, distributors and others, restricting interstate commerce in milk, when such agreements are not participated in or directed by the Secretary of Agriculture in pursuance of the former Act. Pp. 308 U. S. 196-202.
With respect to interstate commerce in agricultural commodities or their products, an agreement made with the Secretary as a party, or an order made by him, or an arbitration award or agreement approved by him, pursuant to the authority conferred by the Agricultural Act and within the terms of the immunity described by §§ 8(b) and 3(d), would be a defense to a prosecution under the Sherman Act to the extent that the prosecution sought to penalize what was thus validly agreed upon or directed by the Secretary. Further than that the Agricultural Act does not go.
6. A license issued by the Secretary of Agriculture with respect to the marketing of milk in a given area is not a defense to an indictment under the Sherman Act for conspiracies in restraint of that commerce, alleged to have been continued after the license had expired. P. 308 U. S. 202.
7. An order issued under the Agricultural Marketing Agreement Act regulating marketing of milk is not a defense to an indictment of producers, distributors and others under the Sherman Act charging conspiracies engaged in before the period covered by the order. P. 308 U. S. 202.
8. The Capper-Volstead Act, in authorizing producers of agricultural products, including dairymen, to act together in collectively processing, preparing for market, handling and marketing their products in interstate and foreign commerce, and to have marketing agencies in common and make necessary agreements to effect these purposes, did not authorize a conspiracy of dairymen with distributors, labor officials, municipal officials, and others, to maintain artificial and noncompetitive prices to be paid to all producers for all fluid milk produced in Illinois and neighboring States and marketed in the Chicago area, which would compel independent distributors to exact a like price from their customers and would control the supply of fluid milk permitted to be brought to the city. P. 308 U. S. 203.
9. Under § 2 of the Capper-Volstead Act, the Secretary of Agriculture is authorized to determine, subject to judicial review, whether any such cooperative association monopolizes or restrains interstate trade to such an extent that the price of any agricultural product is unduly enhanced, and to issue a cease and desist order. But this qualifying procedure was not intended to replace, postpone, or prevent prosecution under § 1 of the Sherman Act for the punishment of conspiracies by producers and others such as are described in the last preceding paragraph. P. 308 U. S. 205.
10. Where the District Court has based its decision on a particular construction of the underlying statute, the review here under the Criminal Appeals Act is confined to the question of the propriety of that construction. Distinguishing United States v. Curtiss-Wright Corp., 299 U. S. 304. P. 308 U. S. 206.
28 F.2d 177, in part, reversed.
and conspiracy in violation of § 1 of the Sherman Anti-Trust Act. As to one of the counts, the appeal is dismissed.
The Government appeals from a judgment of the District Court sustaining demurrers and dismissing an indictment charging combination and conspiracy in violation of § 1 of the Sherman Anti-Trust Act. 28 F.Supp. 177.
The trade and commerce alleged to be involved is the transportation to the Chicago market of fluid milk produced on dairy farms in Illinois, Indiana, Michigan and Wisconsin and the distribution of the milk in that market. The Government divides the defendants into five groups -- (1) distributors and allied groups which include a number of corporations described as major distributors and their officers and agents, the Associated Milk Dealers, Inc., a trade association of milk distributors, and its officers and agents, and the Milk Dealers Bottle Exchange, a corporation controlled by the major distributors; (2) the Pure Milk Association, a cooperative association of milk producers incorporated in Illinois, and its officers and agents; (3) the Milk Wagon Drivers Union, Local 753, engaged in the distribution of milk in Chicago, and certain labor officials; (4) municipal officials, including the president of the Board of Health of Chicago and certain subordinate officials; (5) two persons who arbitrated a dispute between the major distributors and the Pure Milk Association, fixing the price of milk to be paid to the members of the association.
292), and the Agricultural Marketing Agreement Act. With respect to count three, the District Court held that it was duplicitous in the view that it charged several separate conspiracies and also that it did not definitely charge a restraint of interstate commerce.
The judgment expressly overruled the demurrers and motions to quash so far as they challenged the constitutionality of the Sherman Act or the sufficiency of the allegations of unlawful conspiracy, and also so far as it was contended that interstate commerce was not involved in counts one, two and four. The court added that it overruled all the defendants' contentions which it had not specifically overruled or sustained. The judgment ends by dismissing the indictment as to all defendants.
one which permits review where a decision quashing or sustaining a demurrer to an indictment or any of its counts is based upon the "construction of the statute upon which the indictment is founded." The decision below was not predicated upon invalidity of the statute.
The established principles governing our review are these: (1) Appeal does not lie from a judgment which rests on the mere deficiencies of the indictment as a pleading, as distinguished from a construction of the statute which underlies the indictment. (2) Nor will an appeal lie in a case where the District Court has considered the construction of the statute but has also rested its decision upon the independent ground of a defect in pleading which is not subject to our examination. In that case, we cannot disturb the judgment, and the question of construction becomes abstract. (3) This Court must accept the construction given to the indictment by the District Court, as that is a matter we are not authorized to review. (4) When the District Court holds that the indictment, not merely because of some deficiency in pleading, but with respect to the substance of the charge, does not allege a violation of the statute upon which the indictment is founded, that is necessarily a construction of that statute. (5) When the District Court has rested its decision upon the construction of the underlying statute, this Court is not at liberty to go beyond the question of the correctness of that construction and consider other objections to the indictment. The Government's appeal does not open the whole case.
First. The first two of these principles, as the Government concedes, preclude our review of the decision below as to count three. For that count was held bad upon the independent ground that it is defective as a pleading, being duplicitous and also lacking in definiteness. United States v. Keitel, 211 U. S. 370, 211 U. S. 397-399; United States v.
Carter, 231 U. S. 492, 231 U. S. 493; United States v. Hastings, 296 U. S. 188, 296 U. S. 192-194. The appeal as to count three must be dismissed.
"Count 1 charges a conspiracy 'to arbitrarily fix, maintain and control artificial and noncompetitive prices to be paid to all producers by all distributors for all fluid milk produced on approved dairy farms located in the states of Illinois, Indiana, Michigan and Wisconsin,' and shipped to Chicago."
"Count 2 charges a conspiracy 'to fix and maintain by common and concerted action, uniform, arbitrary and noncompetitive prices for the sale by the distributors in the city of Chicago of fluid milk shipped into the said city from the states of Illinois, Indiana, Michigan and Wisconsin.'"
"Count 4 charges a conspiracy 'to restrict, limit and control and to restrain and obstruct the supply of fluid milk moving in the channels of interstate commerce into the city of Chicago from the states of Illinois, Indiana, Michigan and Wisconsin.'"
The District Court further summarized the allegations in these counts as to the methods by which the alleged conspiracies were intended to be effected. 28 F.Supp. pp. 179-181. This construction of the indictment is binding upon this Court on this appeal. United States v. Patten, 226 U. S. 525, 226 U. S. 535, 226 U. S. 540; United States v. Colgate & Co., 250 U. S. 300, 250 U. S. 301; United States v. Schrader's Son, 252 U. S. 85, 252 U. S. 98; United States v. Yuginovich, 256 U. S. 450, 256 U. S. 461; United States v. Hastings, supra, p. 296 U. S. 192.
of the effect of the later statutes, these counts did not charge an offense under § 1 of the Sherman Act. This was necessarily a construction of the Sherman Act. United States v. Patten, supra; United States v. Birdsall, 233 U. S. 223, 233 U. S. 230; United States v. Kapp, 302 U. S. 214, 302 U. S. 217. We are not impressed with the argument that the court simply construed the later statutes. The effect of those statutes was considered in determining whether the Sherman Act has been so modified and limited that it no longer applies to such combinations and conspiracies as are charged in counts one, two and four. Thus, the Sherman Act was not the less construed because it was construed in the light of the subsequent legislation.
We have jurisdiction under the Criminal Appeals Act to determine whether the construction thus placed upon the Sherman Act is correct.
Fourth. In reaching its conclusion, the District Court referred to § 6 of the Clayton Act, §§ 1 and 2 of the Capper-Volstead Act, and the Agricultural Adjustment Act of 1933, as amended in 1935 and as reenacted and amended by the Agricultural Marketing Agreement Act of 1937.
broad and sweeping terms of the Sherman Act. Such cooperative organizations, in and of themselves, were not to be construed as illegal combinations or conspiracies in restraint of trade under the antitrust laws."
28 F.Supp. 183. But the court did not hold that, by these provisions of the Clayton Act, either the defendants Pure Milk Association and its officers and agents or the defendants Milk Wagon Drivers Union, Local 753, and its officials, (albeit these organizations were not in themselves illegal combinations or conspiracies) were rendered immune from prosecution under the Sherman Act for their alleged participation in the combinations and conspiracies charged in counts one, two and four of the indictment. The Sherman Act was not construed by the District Court as having been limited to that extent by the Clayton Act.
The court invoked the Capper-Volstead Act, [Footnote 3] as its judgment shows, only in relation to certain defendants, that is, the Pure Milk Association, an agricultural cooperative organization, and its officers and agents. We shall consider later the effect of that statute upon the charge against those defendants.
Department, acting through the Secretary of Agriculture, full, complete and plenary power over the production and marketing, in interstate commerce, of agricultural products, including milk."
"To what extent he should act, the quantum of regulation, is solely one for his judgment and decision. If conditions require, he must act; if they do not require action, then all marketing conditions are deemed satisfactory, and the purpose of the act is effectuated. Nonaction by the Secretary of Agriculture, in any given marketing area, is equivalent to a declaration that the policy of the act, in that area, is being carried out. If the policy of the act, in any given milk area, is being violated, it becomes the duty of the Secretary of Agriculture to intervene and invoke the powers conferred upon him by the act."
"It results, from what has been said, that the power of regulation, supervision and control of the milk industry, in any given milk shed, is, by the Agricultural Marketing Agreement Act of 1937, vested exclusively in the Secretary of Agriculture. It follows further that the Secretary of Agriculture cannot, by his own action or inaction, divest himself of this power so long as the statute remains in force. The marketing of the agricultural products, including milk, covered by the Agricultural Marketing Agreement Act, is removed from the purview of the Sherman Act. In other words, so far as the marketing of agricultural commodities, including milk, is concerned, no indictment will lie under section 1 of the Sherman Act."
vested in the Secretary of Agriculture, although unexercised, wholly destroys the operation of § 1 of the Sherman Act with respect to the marketing of agricultural commodities.
"to establish that subsequent laws cover some or even all of the cases provided for by [the prior act]; for they may be merely affirmative, or cumulative, or auxiliary."
"a positive repugnancy between the provisions of the new law and those of the old, and even then the old law is repealed by implication only pro tanto, to the extent of the repugnancy."
See also Posados v. National City Bank, 296 U. S. 497, 296 U. S. 504.
"through the exercise of the powers conferred upon the Secretary of Agriculture under this chapter, to establish and maintain such orderly marketing conditions for agricultural commodities in interstate commerce as will establish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period"
actual party to the agreements. § 8b. [Footnote 7] The orders are also to be made by the Secretary for the purpose of regulating the handling of the agricultural commodity to which the particular order relates. § 8c(3)(4). [Footnote 8] That the field covered by the Agricultural Act is not coterminous with that covered by the Sherman Act is manifest from the fact that the former is thus delimited by the prescribed action participated in and directed by an officer of government proceeding under the authority specifically conferred by Congress. As to agreements and arrangements not thus agreed upon or directed by the Secretary, the Agricultural Act in no way impinges upon the prohibitions and penalties of the Sherman Act, and its condemnation of private action in entering into combinations and conspiracies which impose the prohibited restraint upon interstate commerce remains untouched.
such commodity or product thereof. The making of any such agreement shall not be held to be in violation of any of the antitrust laws of the United States, and any such agreement shall be deemed to be lawful: Provided, That no such agreement shall remain in force after the termination of this chapter."
"No meeting so held and no award or agreement so approved shall be deemed to be in violation of any of the antitrust laws of the United States."
These explicit provisions requiring official participation and authorizations show beyond question how far Congress intended that the Agricultural Act should operate to render the Sherman Act inapplicable. [Footnote 13] If Congress had desired to grant any further immunity, Congress doubtless would have said so.
agreed upon or directed by the Secretary. Further than that the Agricultural Act does not go.
We have no occasion to decide whether, in any particular case, an indictment under the Sherman Act, by reason of its particular terms, would be subject to demurrer, or to a motion to quash, upon the ground that the indictment ran against the provisions of such an agreement or order. We have no such situation here. There is indeed a contention that there was a license (No. 30) issued by the Secretary of Agriculture in 1934, amended in January, 1935, and in force until March 2, 1935, which related to the marketing of milk in the Chicago area, and hence that defendants operating under that license were not subject to the charges of the conspiracies alleged to have begun in January, 1935. But the allegations of the indictment are that the unlawful conspiracies continued throughout all the period mentioned in the indictment, that is, up to the time of its presentment in November, 1938. This clearly imports that the conspiracies were operative after the license came to an end, and thus in the absence of any license. A conspiracy thus continued is, in effect, renewed during each day of its continuance. United States v. Kissel, 218 U. S. 601, 218 U. S. 607, 608; Hyde v. United States, 225 U. S. 347, 225 U. S. 369; Brown v. Elliott, 225 U. S. 392, 225 U. S. 400. It is also said that there is a recent marketing order under date of August 29, 1939, [Footnote 14] which relates to the Chicago marketing area, and hence that this cause is moot. But that order affects a period subsequent to the time covered by the indictment. These contentions are unavailing in relation to the question before us.
the Sherman Act as inapplicable to the charges contained in counts one, two and four.
(2) There remains the question whether the court below rightly held that the Capper-Volstead Act [Footnote 15] had modified the Sherman Act so as to exempt the Pure Milk Association, a cooperative agricultural organization, and its officers and agents from prosecution under these counts.
"This Act legalizes price-fixing for those within its purview. To that extent, it modifies the Sherman Act. It removes from the Sherman Act those organizations, cooperative in their nature, which come within the purview of the Capper-Volstead Act. Prior to the Capper-Volstead Act, farmers were treated no differently than others under the antitrust laws, so far as price-fixing was concerned. . . ."
"The Capper-Volstead Act does not condemn any kind of monopoly or restraint of trade, or any price-fixing, unless such monopoly or price-fixing unduly enhances the price of an agricultural product. The Act then, by section 2 thereof, commits to an officer of the executive department, the Secretary of Agriculture, the power of regulation and visitation."
"Under this act, farmers are favored under the antitrust laws in that they are given a qualified right, free from any criminal liability, to combine among themselves to monopolize and restrain interstate trade and commerce in farm products and to fix and enhance the price thereof."
'to such an extent that the price of any agricultural product is unduly enhanced.' Until the Secretary of Agriculture acts, the judicial power cannot be invoked."
28 F.Supp. pp. 183, 184.
We are unable to accept that view. We cannot find in the Capper-Volstead Act, any more than in the Agricultural Act, an intention to declare immunity for the combinations and conspiracies charged in the present indictment. Section 6 of the Clayton Act, enacted in 1914, [Footnote 16] had authorized the formation and operation of agricultural organizations provided they did not have capital stock or were conducted for profit, and it was there provided that the antitrust laws should not be construed to forbid members of such organizations "from lawfully carrying out the legitimate objects thereof." They were not to be held illegal combinations. The Capper-Volstead Act, enacted in 1922, [Footnote 17] was made applicable as well to cooperatives having capital stock. The persons to whom the Capper-Volstead Act applies are defined in § 1 as producers of agricultural products, "as farmers, planters, ranchmen, dairymen, nut or fruit growers." They are authorized to act together "in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce" their products. They may have "marketing agencies in common," and they may make "the necessary contracts and agreements to effect such purposes."
trade that these producers may see fit to devise. In this instance, the conspiracy charged is not that of merely forming a collective association of producers to market their products, but a conspiracy, or conspiracies, with major distributors and their allied groups, with labor officials, municipal officials, and others, in order to maintain artificial and noncompetitive prices to be paid to all producers for all fluid milk produced in Illinois and neighboring States and marketed in the Chicago area, and thus, in effect, as the indictment is construed by the court below, "to compel independent distributors to exact a like price from their customers," and also to control "the supply of fluid milk permitted to be brought to Chicago." 28 F.Supp. 180-182. Such a combined attempt of all the defendants, producers, distributors and their allies to control the market finds no justification in § 1 of the Capper-Volstead Act.
the association "to cease and desist" therefrom. Provision is made for judicial review.
We find no ground for saying that this limited procedure is a substitute for the provisions of the Sherman Act, or has the result of permitting the sort of combinations and conspiracies here charged unless or until the Secretary of Agriculture takes action. That this provision of the Capper-Volstead Act does not cover the entire field of the Sherman Act is sufficiently clear. The Sherman Act authorizes criminal prosecutions and penalties. The Capper-Volstead Act provides only for a civil proceeding. The Sherman Act hits at attempts to monopolize as well as actual monopolization. And § 2 of the Capper-Volstead Act contains no provision giving immunity from the Sherman Act in the absence of a proceeding by the Secretary. We think that the procedure under § 2 of the Capper-Volstead Act is auxiliary, and was intended merely as a qualification of the authorization given to cooperative agricultural producers by § 1, so that, if the collective action of such producers, as there permitted, results in the opinion of the Secretary in monopolization or unduly enhanced prices, he may intervene and seek to control the action thus taken under § 1. But as § 1 cannot be regarded as authorizing the sort of conspiracies between producers and others that are charged in this indictment, the qualifying procedure for which § 2 provides is not to be deemed to be designed to take the place of, or to postpone or prevent, prosecution under § 1 of the Sherman Act for the purpose of punishing such conspiracies.
of the charge. For it is well settled that, where the District Court has based its decision on a particular construction of the underlying statute, the review here under the Criminal Appeals Act is confined to the question of the propriety of that construction. United States v. Keitel, supra; United States v. Kissel, supra, p. 218 U. S. 606; United States v. Miller, 223 U. S. 599, 223 U. S. 602; United States v. Carter, supra; United States v. Colgate & Co., supra; United States v. Schrader's Son, supra; United States v. Hastings, supra. The case of United States v. Curtiss-Wright Corporation, 299 U. S. 304, is not opposed, as there, the decision of the District Court was not based upon a particular construction of the underlying statute, but upon its invalidity, and the jurisdiction of this Court extended to the consideration of the rulings of the District Court which dealt with that question.
The limitation applicable in the instant case to the question of the District Court's construction of the Sherman Act disposes of the contention, urged by some of the defendants, that counts two and four do not show such a direct restraint upon interstate commerce as to bring the acts charged within the statute. The District Court said in its opinion that, in view of its rulings (above discussed) as to counts one, two and four, it was unnecessary to decide "whether or not the allegations of the indictment show that interstate commerce was or was not restrained." 28 F.Supp. p. 187. In its judgment, the court formally overruled all objections to these counts so far as the objections rested on the ground that interstate commerce was not involved. If these rulings be treated as dealing merely with the construction of the indictment, they must be accepted here. United States v. Patten, supra; United States v. Colgate & Co., supra; United States v. Hastings, supra. But, apart from that, the District Court certainly has not construed the Sherman Act as inapplicable upon the ground that interstate commerce is not involved, and the question of the bearing upon that commerce of the acts charged is not before us. Similarly, the contention of the defendants who are labor officials that the Sherman Act does not apply to labor unions or labor union activities is not open on this appeal. The District Court did not construe the Sherman Act as inapplicable to these defendants, and the Government's appeal, under the restriction of the Criminal Appeals Act, does not present that question.
The appeal as to count three is dismissed. The judgment is reversed as to counts one, two and four, and the cause is remanded to the District Court for further proceedings in conformity with this opinion.
"An appeal may be taken by and on behalf of the United States from the district courts direct to the Supreme Court of the United States in all criminal cases, in the following instances, to-wit:"
"From the decision or judgment sustaining a special plea in bar, when the defendant has not been put in jeopardy. . . ."
"Pending the prosecution and determination of the appeal in the foregoing instances, the defendant shall be admitted to bail on his own recognizance: Provided, That no appeal shall be taken by or allowed the United States in any case where there has been a verdict in favor of the defendant."
42 Stat. 388, 7 U.S.C. 291, 292.
The District Court referred, in passing, to the Cooperative Marketing Act of July 2, 1926 (44 Stat. 803, 7 U.S.C. 455), and to the provisions of the Agricultural Adjustment Act of 1933 (48 Stat. 31), as amended in 1935 (49 Stat. 750), which was followed by the Agricultural Marketing Agreement Act of 1937 (50 Stat. 246).
See General Motors Acceptance Corp. v. United States, 286 U. S. 49, 286 U. S. 61.
7 U.S.C. Supp. IV, 602(1).
7 U.S.C. Supp. IV, § 608b.
7 U.S.C. Supp. IV, § 608c(3), (4).
See 77 Cong.Rec. Pt. II, p. 1977; Pt. III, p. 3117.
Federal Register. August 30, 1939, Order No. 41, Vol. 4, pp. 3764-3768, 3770.

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