Source: https://supreme.justia.com/cases/federal/us/286/106/
Timestamp: 2019-04-19 04:36:06+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 286 › United States v. Swift & Co.
United States v. Swift & Co.
1. A court of equity has power to modify a continuing decree of injunction which is directed not to the protection of rights fully accrued upon facts substantially permanent, but to the supervision of future conduct in relation to changing conditions. P. 286 U. S. 114.
2. This power, if not reserved expressly in the decree, is still inherent, and it is the same whether the decree was entered by consent or after litigation. Id.
3. The decree in this case is to be treated as a judicial act, not as a contract; the consent to it was directed to events as they then were, and was not an abandonment of the right to exact revision in the future, if revision should become necessary in adaptation to events to be. P. 286 U. S. 115.
4. Mere size is not an offense against the Sherman Act unless it amounts to a monopoly, but size carries with it opportunity for abuse that is not to be ignored when the opportunity is proved to have been utilized in the past. P. 286 U. S. 116.
(1) The question is not of reviewing the decree to determine whether it was right or wrong originally, but is whether, having been made to include the collateral lines of trade with the consent of each defendant, it should now be relaxed because of changed conditions. P. 286 U. S. 119.
(2) The changes that would justify removing this restraint would be such as did away with the reasons upon which it was founded. Id.
(3) In the absence of proof that the reasons for the restraint have vanished, or that the hardships of the decree amount to oppression, the injunction should not be modified. P. 286 U. S. 117 et. seq.
Appeals from a decree modifying an injunction in a suit under the Sherman Law. For other phases of the same litigation, see Swift & Co. v. United States, 276 U. S. 311, and United States v. California Canneries, 279 U. S. 553. One of the present appeals was by the United States, the other two were by associations of wholesale grocers which intervened to oppose the application.
A decree of the Supreme Court of the District of Columbia has modified an earlier decree of the same court which enjoined the continuance of a combination in restraint of trade and commerce.
Separate appeals, one by the United States of America and the others by associations of wholesale grocers intervening by leave of court, have brought the case here. Judicial Code § 238, U.S.Code, Title 28, § 345.
"fish, vegetables, either fresh or canned, fruits, cereals, milk, poultry, butter, eggs, cheese and other substitute foods ordinarily handled by wholesale grocers or produce dealers."
other devices, there came about, in the view of the government, an unlawful monopoly of a large part of the food supply of the nation. The prayer was for an injunction appropriate to the case exhibited by the bill.
any time hereafter any application which the parties may make" with reference thereto.
The expectation would have been reasonable that a decree entered upon consent would be accepted by the defendants and by those allied with them as a definitive adjudication setting controversy at rest. The events that were to follow recount a different tale. In April, 1922, the California Cooperative Canneries Corporation filed an intervening petition alleging that the effect of the injunction was to interfere with the performance by Armour & Co. of a contract by which Armour had agreed to buy large quantities of California canned fruit, and praying that the decree be vacated for lack of jurisdiction. Leave to intervene was granted by the Court of Appeals of the District, which ordered "that such further proceedings thereupon be had as are necessary to determine the issue raised." In November, 1924, motions for like relief were made by Swift and by Armour, their subsidiaries and officers. The motions were denied by the Supreme Court of the District, and thereafter were considered by this Court, which upheld the consent decree in the face of a vigorous assault. Swift & Co. v. United States, 276 U. S. 311. In the meantime, however, an order had been made on May 1, 1925, by the Supreme Court of the District at the instance of the California Canneries whereby the operation of the decree as a whole was suspended "until further order of the court to be made, if at all, after a full hearing on the merits according to the usual course of chancery proceedings," see United States v. California Canneries, 279 U. S. 553, 279 U. S. 555. This order of suspension remained in force till May, 1929, when a decision of this Court swept the obstacle aside. United States v. California Canneries, supra.
The defendants and their allies had thus been thwarted in the attempt to invalidate the decree as of the date of its entry, and again the expectation would have been reasonable that there would be acquiescence in its restraints.
in groceries and other enumerated commodities, but maintained the injunction against dealing in them at retail. In every other respect, the decree of February 27, 1920, was continued in force as originally entered. The modifying decree, which was entered January 31, 1931, is the subject of this appeal.
doing has been turned through changing circumstances into an instrument of wrong. We reject the argument for the interveners that a decree entered upon consent is to be treated as a contract, and not as a judicial act. A different view would not help them, for they were not parties to the contract, if any there was. All the parties to the consent decree concede the jurisdiction of the court to change it. The interveners gain nothing from the fact that the decree was a contract as to others, if it was not one as to them. But, in truth, what was then adjudged was not a contract as to anyone. The consent is to be read as directed toward events as they then were. It was not an abandonment of the right to exact revision in the future if revision should become necessary in adaptation to events to be.
Power to modify existing, we are brought to the question whether enough has been shown to justify its exercise.
The defendants, controlled by experienced businessmen, renounced the privilege of trading in groceries, whether in concert or independently, and did this with their eyes open. Two reasons, and only two, for exacting the surrender of this adjunct of the business were stated in the bill of complaint. Whatever persuasiveness the reasons then had is theirs with undiminished force today.
The first was that, through the ownership of refrigerator cars and branch houses, as well as other facilities, the defendants were in a position to distribute substitute foods and other unrelated commodities with substantially no increase of overhead. There is no doubt that they are equally in that position now. Their capacity to make such distribution cheaply by reason of their existing facilities is one of the chief reasons why the sale of groceries has been permitted by the modified decree, and this in the face of the fact that it is also one of the chief reasons why the decree as originally entered took the privilege away.
The second reason stated in the bill of complaint is the practice followed by the defendants of fixing prices for groceries so low over temporary periods of time as to eliminate competition by rivals less favorably situated.
had offered opposition. Instead, they chose to consent, and the injunction, right or wrong, became the judgment of the court. Groceries and other enumerated articles they were not to sell at all, either by wholesale or by retail. Even the things that they were free to sell -- meats and meat products -- they were not to sell by retail. The court below annulled the restraint upon sales of groceries by wholesale, but retained the prohibition in respect of sale by retail both for groceries and for meats. The one prohibition, equally with the other, was directed against abuse of power by the individual units after the monopoly was over, and the death of the monopoly -- the breaking up of the combination -- if an adequate reason for terminating one of them, is an adequate reason for terminating both.
to the interests of the classes whom this particular restraint was intended to protect. Much is made in the defendants' argument of the rise of the chain stores to affluence and power, and especially of chains for the sale of groceries and other foods. Nothing in that development eradicates the ancient peril. Few of the chain stores produce the foods they have for sale, and then chiefly in special lines. Much -- indeed most -- of what they offer they are constrained to buy from others. They look to the defendants for their meats, and, if the ban of this decree is lifted, they will look to the defendants for other things as well. Meats and groceries today are retailed at the same shops, departments of a single business. The defendants, the largest packers in the country, will thus hold a post of vantage, as compared with other wholesale grocers, in their dealings with the chains. They will hold a post of vantage in their dealings with others outside the chains. When they add groceries to meats, they will do so, they assure us, with substantially no increase of the existing overhead. Thus, in the race of competition, they will be able, by their own admission, to lay a handicap on rivals overweighted at the start. The opportunity will be theirs to renew the war of extermination that they waged in years gone by.
were born of that fear. The difficulty of ferreting out these evils and repressing them when discovered supplies an additional reason why we should leave the defendants where we find them, especially since the place where we find them is the one where they agreed to be.
There is need to keep in mind steadily the limits of inquiry proper to the case before us. We are not framing a decree. We are asking ourselves whether anything has happened that will justify us now in changing a decree. The injunction, whether right or wrong, is not subject to impeachment in its application to the conditions that existed at its making. We are not at liberty to reverse under the guise of readjusting. Life is never static, and the passing of a decade has brought changes to the grocery business, as it has to every other. The inquiry for us is whether the changes are so important that dangers, once substantial, have become attenuated to a shadow. No doubt the defendants will be better off if the injunction is relaxed, but they are not suffering hardship so extreme and unexpected as to justify us in saying that they are the victims of oppression. Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned.
The case comes down to this: the defendants has abused their powers so grossly and persistently as to lead to the belief that, even when they were acting separately, their conduct should be subjected to extraordinary restraints. There was the fear that, even when so acting, they would still be ready and able to crush their feebler rivals in the sale of groceries and kindred products by forms of competition too ruthless and oppressive to be accepted as fair and just. Wisely or unwisely, they submitted to these restraints upon the exercise of powers that would normally be theirs. They chose to renounce what they might otherwise have claimed, and the decree of a court confirmed the renunciation and placed it beyond recall.
What was then solemnly adjudged as a final composition of an historic litigation will not lightly be undone at the suit of the offenders, and the composition held for nothing.
The decree should be reversed, and the petitions dismissed.
THE CHIEF JUSTICE, MR. JUSTICE SUTHERLAND, and MR. JUSTICE STONE took no part in the consideration and decision of this case.
* Together with No. 569, American Wholesale Grocers Assn. et al. v. Swift & Co. et al., and No. 570, National Wholesale Grocers Assn. v. Same.
The facts on which the District Supreme Court allowed modification of parts of the 1920 consent injunction are set forth in its findings prepared in accordance with Equity Rule 70 1/2. They are discussed and amplified in a painstaking opinion contained in the record. I think they are sustained by the evidence, and are sufficient to support the decree.
be carried on by integrated concerns in strong hands, which have taken over and are handling many products from the sources of production to consumers. More and more, meat, formerly distributed through shops selling little if anything else, is sold in stores carrying groceries and other articles of food. The diversification of the business of defendants permitted by the modification of the injunction is in harmony with present legitimate tendencies in the business of producing and selling meat, groceries, and other articles of food. In all branches of such activities, there is strong and active competition. The use by defendants of their employees and facilities for the sale and distribution of groceries as well as meat would not give them any undue advantage over their competitors. Under present conditions, the relief granted below would not enable them to inflict the evils of monopoly upon any part of the food industry. The denial of that relief makes against competition intended to be preserved by the Sherman Anti-Trust Act. Defendants should be permitted more efficiently to use their help and equipment to lessen their operating expenses. That makes for lower prices, and so is in the public interest.
The wholesale grocers, represented here by objecting interveners, are not entitled to the court's protection against the competition of nonmembers, or of defendants carrying on separately and competing actively. They may not avoid the burden of sustaining themselves in a free and open market by protestation of fear that, if allowed to engage in the grocery business at all, defendants will unfairly compete in violation of the federal antitrust laws. If and whenever shown necessary for the protection of the commerce safeguarded by the original decree, the government may have the modified provisions restored or new ones added.
"this stipulation shall not constitute or be considered as an admission, and the rendition or entry of the decree, or the decree itself, shall not constitute or be considered as an adjudication that the defendants, or any of them, have in fact violated any law of the United States."
And that provision was, in exact words, incorporated in and made a part of the decree. Thus, the government consented to, and the court adopted, this provision quite as much as the defendants consented to the other parts of the decree.
The fact that defendants thereafter applied to have the decree vacated upon grounds directed only to the power of the court to enter it ought not to be regarded as militating against them or their good faith -- particularly when it is recalled that this Court, when reviewing that proceeding, deemed the questions presented of sufficient importance to call for their argument a second time. 276 U. S. 311.
I am of opinion that the facts found, taken with those conceded or established by uncontradicted evidence, justly entitle appellees to the measure of relief given below, and that the modifying decree should be affirmed.
I am authorized to say that MR. JUSTICE VAN DEVANTER concurs in this opinion.

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