Source: http://www.carsandracingstuff.com/library/government/353US586.php
Timestamp: 2019-04-25 13:42:19+00:00

Document:
Case:   UNITED STATES V. E.I. DU PONT DE NEMOURS & CO.
NO. 3.  ARGUED NOVEMBER 14-15, 1956 - DECIDED JUNE 3, 1957 - 126 F.
SUPP. 235, REVERSED AND REMANDED.
OFFENSIVE TO THE STATUTE.  PP. 588-608.
COME WITHIN THE PURVIEW OF THE ACT.  P. 590.
MAKE THEM A "LINE OF COMMERCE" WITHIN THE MEANING OF THE CLAYTON ACT.
MARKET FOR AUTOMOTIVE FINISHES AND FABRICS.  PP. 593-595.
1949, BASED UPON AN ACQUISITION OF STOCK WHICH OCCURRED IN 1917-1919.
LESSENING OF COMPETITION.  PP. 597-598.
AND WAS NOT GAINED SOLELY ON COMPETITIVE MERIT.  PP. 600-605.
SHOW THAT RESTRAINT OR MONOPOLY WAS INTENDED.  P. 607.
UNITED STATES V. E.I. DU PONT DE NEMOURS & CO. ET AL.
THE CREATION OF A MONOPOLY OF A LINE OF COMMERCE.
CORPORATION OF ALL OR ANY PART OF THE STOCK OF ANY OTHER CORPORATION.
CORPORATE ACQUISITIONS OF STOCK OF COMPETITORS.
ACQUISITIONS, 168 (1955), H.R. DOC. NO. 169, 84TH CONG., 1ST SESS.
(THE 1914 ACT) APPLIES ONLY TO THE SO-CALLED HORIZONTAL MERGERS  ..
VERTICAL AND CONGLOMERATE AS WELL AS HORIZONTAL  ..  .""
COMMERCE IN ANY SECTION OR COMMUNITY BUT ALLEGES THAT THE EFFECT WAS "
..  TOO TEND TO CREATE A MONOPOLY IN PARTICULAR LINES OF COMMERCE  ..
DOES AID AND SUPPORT OUR CONSTRUCTION.
SUIT A REASONABLE LIKELIHOOD OF A MONOPOLY OF ANY LINE OF COMMERCE.
DETERMINE THE EXISTENCE OF A TENDENCY TO MONOPOLY IN  ..  ANNY  ..
WHICH MONOPOLY POWER MIGHT BE EXERCISED MUST FIRST BE DETERMINED  ..
OF FABRIC USED BY THE AUTOMOBILE INDUSTRY.
THE MARKET AFFECTED MUST BE SUBSTANTIAL.  STANDARD FASHION CO. V.
THAT COMPETITION MAY BE "FORECLOSED IN A SUBSTANTIAL SHARE OF  ..
(THHAT MARKET)."  (FN15)  BOTH REQUIREMENTS ARE SATISFIED IN THIS CASE.
THAT MARKET IS FULLY ESTABLISHED IN THE EVIDENCE.
THE THINNER USED TO APPLY "DUCO" TOTALED $12,224,798 (65%), AND "DULUX"
ARGUMENT MISCONCEIVES THE OBJECTIVE TOWARD WHICH SEC. 7 IS DIRECTED.
NEAR THE TIME OF ACQUISITION.  SEE, E.G., INTERNATIONAL SHOE CO. V.
615, REV'D IN PART ON ANOTHER GROUND, 272 U.S. 554; UNITED STATES V.
A THREAT OF THE PROHIBITED EFFECTS IS EVIDENT.
AS IT FORGED AHEAD TO ITS PRESENT PLACE IN THE INDUSTRY.
RECONSTITUTED AS THE DU PONT FABRIKOID COMPANY IN 1913.
CONSUMER OF PRODUCTS OF THE KIND OFFERED BY DU PONT," AND THAT JOHN J.
MORE STOCK IN GENERAL MOTORS.
AUTOMOBILES GIVES ANOTHER COMMON INTEREST."
CONCLUSION THAT THE PURCHASE WAS MADE "SOLELY FOR INVESTMENT."
ADOPTION (DU PONT'S ARTIFICIAL LEATHER)."
ARRANGEMENT SET UP BETWEEN HIMSELF AND THE DU PONT SALES ORGANIZATION.
WORKS AND LATER DISSOLVED IT.
BUT THEY WOULDN'T MIND SEEING THINGS GOING A LITTLE FASTER."  PIERRE S.
SUGGESTED THAT "A DRIVE SHOULD BE MADE FOR THE FISHER BODY BUSINESS.
IS THERE ANY REASON WHY THEY HAVE NOT DEALT WITH US?"
FISHER BODY WAS STUBBORNLY RESISTANT TO DU PONT SALES PRESSURE.
ESTABLISHED GIVING THE FISHER BROTHERS BROAD POWERS OF MANAGEMENT.
BY OTHER GENERAL MOTORS DIVISIONS.
GAINED SOLELY ON COMPETITIVE MERIT.
AND SERVICE WERE NOT OVERLOOKED BY EITHER DU PONT OR GENERAL MOTORS.
RESTRAINT OR MONOPOLY WAS INTENDED.
PARTICULAR CASE."  INTERNATIONAL SALT CO. V. UNITED STATES, 332 U.S.
GRANTED.  IT IS SO ORDERED.
PROBABLE JURISDICTION.  350 U.S. 815.
FN2  126 F. SUPP. 235.
FN3  38 STAT. 736, 15 U.S.C. (1946 ED.)  SEC.  25.
PRIOR TO 1950.  64 STAT. 1125, 15 U.S.C. SEC. 18.
THE SHERMAN ACT.  26 STAT. 209, AS AMENDED, 50 STAT. 693, 15 U.S.C.
FN6  38 STAT. 731, 15 U.S.C. (1946 ED.)  SEC.  18.
U.S.C. (1946 ED.)  SEC.  18.
FN8  SEE, E.G., S. REP. NO. 698, 63D CONG., 2D SESS. 13; H.R. REP.
NO. 627, 63D CONG., 2D SESS. 17.
FN9  51 CONG. REC. 16002.
DU PONT AND FOR WHICH ITS TRADEMARK IS 'DUCO' ..  .
THE CAR WAS DELIVERED  ..  .""
IT ON A LOWER PRICE THAN THAT QUOTED BY ANY OTHER COMPETITOR, DO YOU?
"A.  WELL, WE DON'T KNOW.  WE GO IN AND WE BID BASED ON OUR COSTS.
FINISHES, 126 F. SUPP., AT 288-292, AS TO FABRICS, ID., AT 296-300.
COMMERCE' LITERALLY ARE SATISFIED."  278 U.S., AT 253.
CONSTITUTE A MARKET LARGE ENOUGH FOR THE GOVERNMENT TO RELY ON."
CORPORATIONS, JULY 1956, P. 2.
FN18  N.Y. TIMES, FEB. 3, 1956, P. 1, COL. 3.
USE AS AN AUTOMOTIVE FINISH.
REFRIGERATORS, ALSO MANUFACTURED BY GENERAL MOTORS.
FN21  126 F. SUPP., AT 295.
FN23  STANDARD FASHION CO. V. MAGRANE-HOUSTON CO., 258 U.S. 346.
OF COMPETITION  ..  .""  38 STAT. 731, 15 U.S.C. (1946 ED.)  SEC.  18.
FN26  126 F. SUPP., AT 335.
FABRICS.  126 F. SUPP., AT 297.
FN30  126 F. SUPP., AT 243.
FN31  126 F. SUPP., AT 241.
FN32  126 F. SUPP., AT 241.
FN33  126 F. SUPP., AT 245.
FN34  126 F. SUPP., AT 267.
IN MY MIND MORE THAN OVER-BALANCES CONSIDERATION OF LOCAL CONDITIONS.
THAT YOU HAVE THE BEST SERVICE AND PRICE POSSIBLE.
SECONDARY, AND I AM SURE THIS IS YOUR FEELING."
ENJOIN ALLEGED VIOLATIONS OF SECS. 1 AND 2 OF THE SHERMAN ACT, AND SEC.
UNLAWFULLY WITH GENERAL MOTORS' PURCHASING AND MANUFACTURING POLICIES.
MEANING OF THE CLAYTON ACT."  126 F. SUPP. 235, 335.
TO CHANNEL GENERAL MOTORS' PURCHASES TO DU PONT."
APPLICABLE TO A STOCK ACQUISITION WHICH TOOK PLACE MANY YEARS BEFORE.
PRACTICE, AND ALL THE PRECEDENTS EXCEPT ONE DISTRICT COURT DECISION.
THAT THE FACTS OF THIS CASE FALL WITHIN ITS THEORY OF ILLEGALITY.
MERGERS.  (FN3)  IT DOES NOT APPLY TO ACQUISITIONS OF PHYSICAL ASSETS.
732, 15 U.S.C. (1946 ED.)  SEC.  18.
RESULT IN EITHER OF THOSE UNLAWFUL EFFECTS.
CONCLUSION THAT SEC. 7 DOES NOT APPLY TO VERTICAL ACQUISITIONS.
HOLDING COMPANIES.  H.R. REP. NO. 627, 63D CONG., 2D SESS. 17.
AN ORE PRODUCING CORPORATION, A CLASSIC TYPE OF VERTICAL INTEGRATION.
ACQUISITIONS (MAY 1955), 168, H.R. DOC. NO. 169, 84TH CONG., 1ST SESS.
REMEDY ITS INADEQUACIES.  THIS RESULT WAS ACHIEVED IN 1950.  64 STAT.
EVIDENCE OF THE PROPER SCOPE OF SEC. 7.  FEDERAL TRADE COMMISSION V.
BUNTE BROS., INC., 312 U.S. 349, 351-352.
FABRICS CO. V. VERNEY BRUNSWICK MILLS, INC., CCH TRADE CASES PARA.
CO. OF AMERICA V. FEDERAL TRADE COMMISSION, 284 F. 401 (C.A. 3D CIR.
IN TRANSAMERICA CORP. V. BOARD OF GOVERNORS, 206 F.2D 163 (C.A. 3D CIR.
CREATE A MONOPOLY.    FINALLY, THIS COURT HAS TWICE CONSTRUED OLD SEC.
THE ACQUIRED CORPORATION WAS IN A PRECARIOUS FINANCIAL CONDITION.
AFFIRMING IN PART AND REVERSING IN PART FEDERAL TRADE COMMISSION V.
APPARENTLY WILL BE OVERRULED SUB SILENTIO BY TODAY'S DECISION.
OTHER ISSUES WHICH MUST THEN BE REACHED.
CLAYTON ACT, AND ALL EXISTING ADMINISTRATIVE AND JUDICIAL PRECEDENTS.
THE FIRST PARAGRAPH OF SEC. 7 PROVIDES THAT "NO CORPORATION  ..
CONTINUE TO HOLD  .. THEE STOCK  ..  OFF ANOTHER CORPORATION  ..
IN "TWO OR MORE CORPORATIONS."  CONCEDEDLY, IT IS NOT APPLICABLE HERE.
CONSUMMATION."  S. REP. NO. 698, 63D CONG., 2D SESS. 1.
CONSTITUTES A RESTRAINT OF TRADE PROHIBITED BY THE SHERMAN ACT.
RENDERING THE ORIGINALLY LAWFUL ACQUISITION UNLAWFUL AB INITIO.
STRIKINGLY ENOUGH, ALL OF THESE FACTORS ARE INVOLVED IN THIS CASE.
THE TIME THEY MADE THEIR DECISION.
TRANSAMERICA CASE, 5 STAN.  L. REV. 179, 220-221.
F.2D 615 (C.A. 3D CIR. 1925), REV'D IN PART ON ANOTHER GROUND, 272 U.S.
554; UNITED STATES V. REPUBLIC STEEL CORP., 11 F. SUPP. 117 (D.C.N.D.
AT THE TIME OF ITS ACQUISITION AND NOT BY ITS SUBSEQUENT USE.
SUCH EFFECTS WERE "REASONABLY PROBABLE" AT THE TIME OF ACQUISITION.
DETERMINED ONLY IN TERMS OF THE MARKET AFFECTED," ANTE, P. 593.
NO RESTRAINT FOR 30 YEARS, THE JUDGMENT BELOW MUST BE AFFIRMED.
SEC. 7 WAS VIOLATED BY THIS 1917-1919 STOCK ACQUISITION.
ARE AUTOMATICALLY AND COMPLETELY FORECLOSED FROM THE CUSTOMER'S TRADE.
FROM DU PONT'S STOCK INTEREST IN GENERAL MOTORS.  ANTE, PP. 588-589.
FINDINGS OF FACT OF THE DISTRICT COURT AS CLEARLY ERRONEOUS.  SEE FED.
PURCHASING AGENT AND PRESENTS A SEPARATE SELLING JOB.
PRINCIPAL MANUFACTURER OF FINISHES WAS ATTAINED MUCH EARLIER.
OLDSMOBILE.  126 F. SUPP., AT 288.
DURABLE LACQUER WHICH CONTAINED A LARGE AMOUNT OF FILM-FORMING SOLIDS.
COMPARABLE CARS "IN A USED CAR LOT" "IS THE PAINT."
WHICH CONTINUES TO FINISH PART OF ITS REFRIGERATORS WITH PORCELAIN.
SELLING A SUBSTANTIAL VOLUME OF THE FINISHES USED BY THAT DIVISION.
SUPPLANTED BY A COMPETITOR OFFERING BETTER SERVICE.
SCRAP BOUGHT FROM DU PONT COMPETITORS.
SUFFERED COMPETITIVELY FROM ITS SUBSTANTIAL USE OF DUCO."  126 F.
COTTON AND WOOL PRODUCTS OF WHICH MOST OF THE UPHOLSTERY IS COMPOSED.
SUPPLIED BY DU PONT'S COMPETITORS.
CHANGING REQUIREMENTS AS TO QUALITY, SERVICE AND DELIVERY."  126 F.
MAKES AND WHICH GENERAL MOTORS BUYS.
ECONOMIC INTERESTS WOULD BEST BE SERVED BY PURCHASING FROM DU PONT.
MATERIALS, SAFETY GLASS, AND SYNTHETIC RUBBER AND RUBBER CHEMICALS.
IMPROVED PRODUCT WAS ADOPTED BY ALL THE LARGE AUTO MANUFACTURERS.
PLEASED."  126 F. SUPP., AT 324.
INTEREST RATHER THAN COMPETITIVE CONSIDERATIONS.
ARE NOT ATTRIBUTABLE IN ANY WAY TO DEALINGS IN THE EARLIER PERIOD.
SUBSTANTIAL AMOUNTS TO THE SMALLER MEMBERS OF THE AUTOMOBILE INDUSTRY.
DIMINISHING DU PONT'S PARTICIPATION IN GENERAL MOTORS' AFFAIRS.
332, 339; UNITED STATES V. YELLOW CAB CO., 338 U.S. 338, 341-342.
ARE SUPPORTED BOTH BY CONTEMPORANEOUS DOCUMENTS AND BY ORAL TESTIMONY.
PRACTICE."  UNITED STATES V. UNITED SHOE MACHINERY CORP., 110 F. SUPP.
WILL GO TO SUBSTITUTE ONE COMMODITY FOR ANOTHER."  UNITED STATES V.
IS PRIMARILY ONE OF FACT.
PRODUCTS SUFFICIENTLY DISTINCT FROM ALL OTHER FINISHES AND FABRICS  ..
THAN FIXED PRICE SCHEDULES.  DULUX IS INCLUDED IN THE "AUTOMOBILE"
FABRICS - SUPPORT THIS CONCLUSION.
ITS TOTAL SALES, WERE TO PURCHASERS OTHER THAN AUTO MANUFACTURERS.
AS A FINISH HAVING THE UNSPECIFIED BUT "PECULIAR CHARACTERISTICS"
DISTINCTIVE OF "AUTOMOTIVE FINISHES."  ANTE, P. 593.
FROM DU PONT (38.5%) AND $5,815,000 FROM OVER 50 DU PONT COMPETITORS.
AS A MARKET OF DISTINCT PRODUCTS.
LEATHER, AND COATED FABRICS IS NOT SO LIMITED.
MAY BE FORECLOSED FROM A SUBSTANTIAL SHARE OF THE RELEVANT MARKET.
PRIVATE ACTION FOR TREBLE DAMAGES.
ORIGINAL LANGUAGE OF SEC. 7 AND NOT BY SEC. 7, AS AMENDED.
THAT SEC. 7 DID NOT PROHIBIT ASSET ACQUISITIONS.  1 F.T.C. 541-542.
ORIGINAL CLAYTON ACT HAD BEEN INADVERTENT.  SEE, E.G., 96 CONG. REC.
14316, 14420, 14456; H.R. REP. NO. 627, 63D CONG., 2D SESS. 17; S. REP.
NO. 698, 63D CONG., 2D SESS. 13.
SYNONYMOUS WITH THE SUBSTANTIALLY LESSEN COMPETITION CLAUSE.
CHILTON); ID., AT 16320 (REPRESENTATIVE FLOYD).
CUMMINS, AND OTHERS THOUGHT WOULD BE QUITE DIFFICULT.  SEE 51 CONG.
AGAINST MY AMENDMENT.  I DO NOT CLAIM THAT THIS WILL STOP EVERYTHING.
14455.  NO ONE DISPUTED SENATOR REED'S INTERPRETATION OF SEC. 7.
BEFORE A SUBCOMMITTEE OF THE SENATE COMMITTEE ON THE JUDICIARY ON H.R.
ALLEGATION STATED A CAUSE OF ACTION UNDER SEC. 7 OF THE CLAYTON ACT.
SOUGHT TO STRIKE OUT THE "TEND TO CREATE A MONOPOLY" LANGUAGE OF SEC.
LANGUAGE WOULD BE CONSIDERED AS AN IMPLIED REPEAL OF THE SHERMAN ACT.
THAT WHAT THEY DID ADD INCLUDED VERTICAL ACQUISITIONS.
COULD BE DEALT WITH UNDER THE SHERMAN ACT.
PONT'S 23% STOCK INTEREST  ..  .""  ANTE, P. 607, N. 36.
AN IMPORTANT BEARING ON THIS PROBLEM.
SUBSTANTIAL PORTION OF A MARKET IS RESTRAINED.
PRODUCTS FROM COMPETITORS OF DU PONT.
THE SUSPENSION OF AUTOMOBILE PRODUCTION DURING THE WAR.
OR 71% OF THE TOTAL, WAS FINISHES.
OF $30,000 IN THAT YEAR; ONE COMPANY SOLD AS MUCH AS $3,205,000.
GENERAL MOTORS IN THAT YEAR.
DUCO HAS ALWAYS BEEN THE FURNITURE INDUSTRY.
EXCELLENT, AND I DON'T KNOW HOW YOU COULD SAY, ANY BETTER."
IT IS APPROPRIATE BY WAY OF ILLUSTRATION.  ANTE, PP. 606-607, N. 35.
CONSIDERATION IS TO DO THE BEST THING FOR DELCO-LIGHT COMPANY  ..  .""
OF DELCO WAS THE RESULT.
..  .""  ANTE, P. 606.
THAT DU PONT PURCHASED GENERAL MOTORS' STOCK SOLELY FOR INVESTMENT.
ON A COMPETITIVE BASIS."  126 F. SUPP., AT 242, 243.
COMMISSION, 66 F.2D 37, AFF'D BY AN EQUALLY DIVIDED COURT, 291 U.S.
SEC. 7, EXPRESSLY EXCEPTING ACQUISITIONS MADE "SOLELY FOR INVESTMENT."
AUTOMOBILE DUCO PRODUCTION IN 1941 AND 83% IN 1947."  ANTE, P. 605.
WERE 8.1% OF THE INDUSTRY.
HAD OTHER READILY AVAILABLE SOURCES OF SUPPLY.
RESPECTIVELY, OF THE NATIONAL MARKET WOULD REMAIN OPEN TO THEM.
TEND TO CREATE A MONOPOLY OF ANY LINE OF COMMERCE.
THE PENAL PROVISIONS THEREOF OR THE CIVIL REMEDIES THEREIN PROVIDED."
38 STAT. 731-732, 15 U.S.C. (1946 ED.)  SEC.  18.

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