Source: https://openjurist.org/274/us/445
Timestamp: 2019-04-18 10:42:15+00:00

Document:
FRINK DAIRY CO. et al.
Messrs. Jean S. Breitenstein, of Boulder, Colo., and Joseph P. O'Connell, Paul M. Segal, and Wm. L. Boatright, all of Denver, Colo., for appellant.
Messrs. Hudson Moore and Ernest B. Fowler, both of Denver, Colo., for appellees.
This is a direct appeal under section 238 of the Judicial Code, as amended by the Act of February 13, 1925, c. 229, 43 Stat. 936 (Comp. St. § 1215), from a final decree of the United States District Court of Colorado, three judges sitting, granting a permanent injunction against the enforcement by a state officer of a state law on the ground of its unconstitutionality. The bill was brought by the Frink Dairy Company, the Windsor Farm Dairy Company, and the Climax Dairy Company, corporations of Colorado, and H. Brown Cannon, Clarence Frink, A. T. McClintock, and Morris Robinson, citizens and residents of the same state, against Foster Cline, the district attorney for the city and county of Denver, Colo.
The bill alleges that the suit involves for decision the question of the validity under the Constitution of the United States of what is known as the Colorado Anti-Trust Act, being chapter 161 of the Session Laws of the State of Colorado for 1913, approved April 7th of that year. It avers that the three dairy companies have been separately conducting for years, in Danver, Colo., and its vicinity, the sale and distribution of milk, butter, and all manner of dairy products; that each has invested in its business more than $100,000; that they are also engaged in interstate commerce, buying and selling from without the limits of the state; that the individual plaintiffs, Connon, Frink, and Morrison, are respectively officers and stockholders of the three plaintiff companies; that McClintock, the other individual plaintiff, is an officer and stockholder of the Beatrice Creamery Company, a corporation of Delaware, also in the dairy business in Denver; that the individual plaintiffs, experienced dairymen, by painstaking effort, fair dealing, and careful management, have gained thousands of customers and a well-established trade; and that their companies, in addition to their tangible property and assets, have good wills of great value. The bill sets out in full the Colorado anti-trust law, which punishes as a crime combinations of persons and corporations to restrain trade or commerce, with certain exceptions, and makes it the duty of the defendant, the district attorney, to prosecute alleged violations thereof, and to institute actions for forfeiture of charters of associations engaged therein. All contracts violating the act are avoided; violation of the act is made a good defense to a suit for merchandise that was sold in pursuance of a combination under it; and a right of action for damages against the combiners is given to any one injured by the combination. One charge of the bill, among others, is that the act violates the Fourteenth Amendment of the Constitution, in that it deprives the plaintiffs of their liberty without due process of law, because it is indefinite and uncertain, and fails to fix any informing standard of criminality.
The bill alleges that Foster Cline, the defendant, in his capacity as district attorney of Denver city and county, has been, and still is, claiming that the plaintiffs and their competitors have been and now are acting in violation of the anti-trust law; that he has caused an information to be filed in the criminal division of the district court of the city and county of Denver, in which the plaintiffs and the beatrice Creamery Company, a Delaware corporation, are charged with conspiracy to violate the Anti-Trust Act; that he expects to press the case to trial; that since the case was instituted the grand jury has been in session, and many witnesses summoned and questioned about the plaintiffs' milk business; that the defendant Cline has threatened to, and unless restrained by the court will, institute further prosecutions, file further informations, and attempt to procure indictments of the plaintiffs by the grand jury; and that Cline by this multiplicity of criminal suits and prosecutions, as well as by the civil suits for forfeiture of the corporate plaintiffs' charters he has threatened to bring, has already inflicted serious loss to the businesses and properties of the plaintiffs, and that they will be irreparably and immeasureably damaged thereby unless he is restrained.
The first question is whether the practice and precedents in equity justified the granting of relief by injunction, where one criminal prosecution had been begun, and where many others, together with suits for forfeiture of corporate franchises, were threatened. The general rule is that a court of equity is without jurisdiction to restrain criminal proceedings to try the same right that is in issue before it; but an exception to this rule exists when the prevention of such prosecutions under alleged unconstitutional enactments is essential to the safeguarding of rights of property, and when the circumstances are exceptional and the danger of irreparable loss is both great and immediate. Fenner v. Boykin, 271 U. S. 240, 243, 46 S. Ct. 492, 70 L. Ed. 927; Packard v. Banton, 264 U. S. 140, 44 S. Ct. 257, 68 L. Ed. 596; Hygrade Provision Co. v. Sherman, 266 U. S. 497, 502, 45 S. Ct. 141, 69 L. Ed. 402; Terrace v. Thompson, 263 U. S. 197, 214, 44 S. Ct. 15, 68 L. Ed. 255; Ex parte Young, 209 U. S. 123, 28 S. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Davis & Farnum Mfg. Co. v. Los Angeles, 189 U. S. 207, 218, 23 S. Ct. 498, 47 L. Ed. 778; Dobbins v. Los Angeles, 195 U. S. 223, 236, 241, 25 S. Ct. 18, 49 L. Ed. 169; In re Sawyer, 124 U. S. 200, 209, 211, 8 S. Ct. 482, 31 L. Ed. 402.
The opinion cites in support of its conclusion, United States v. Reese, 92 U. S. 214, 219, 220, 23 L. Ed. 563; United States v. Brewer, 139 U. S. 278, 288, 11 S. Ct. 538, 35 L .ed. 190; Todd v. United States, 158 U. S. 278, 282, 15 S. Ct. 889, 39 L. Ed. 982; United States v. Sharp, 27 Fed. Cas. 1041, 1043, No. 16,264; Chicago & Northwestern Ry. Co. v. Dey (C. C.) 35 F. 866, 876; Tozer v. United States (C. C.) 52 F. 917, 919, 920; United States v. Capital Traction Co., 34 App. D. C. 592; United States v. Pennsylvania R. R. Co., 242 U. S. 208, 237, 238, 37 S. Ct. 95, 61 L. Ed. 251; also International Harvester Co. v. Kentucky, 234 U. S. 216, 221, 34 S. Ct. 853, 58 L. Ed. 1284; Collins v. Kentucky, 234 U. S. 635, 637, 34 S. Ct. 924, 58 L. Ed. 1510; American Seeding Machine Co. v. Kentucky, 236 U. S. 660, 662, 35 S. Ct. 456, 59 L. Ed. 773.
'And all such combinations are hereby declared to be against public policy, unlawful and void: Provided, that no agreement or association shall be deemed to be unlawful or within the provisions of this act, the object and purposes of which are to conduct operations at a reasonable profit or to market at a reasonable profit those products which cannot otherwise be so marketed: Provided, further that it shall not be deemed to be unlawful, or within the provisions of this act, for persons, firms, or corporations engaged in the business of selling or manufacturing commodities of a similar or like character to employ, form, organize or own any interest in any association, firm or corporation, having as its object or purpose the transportation, marketing or delivering of such commodities. * * *' Section 1.
The effect of the first proviso is that combinations, with the purposes defined in the first, second, third, fourth, and fifth paragraphs of section 1, and declared thereby to be unlawful and void, are not to be regarded as unlawful if their purpose shall be to obtain only a reasonable profit in such products or merchandise as can not yield a reasonable profit except by marketing them under the combinations previously condemned. The second is like the first in declaring that it shall not be unlawful or within the condemnatory provisions of the act for persons engaged in the business of selling or manufacturing commodities of a class that can only be dealt with at a reasonable profit by such previously condemned trust methods, to employ or own interests in an association having as its object the transportation, marketing, or delivering of such commodities at a reasonable profit. These provisos make the line between lawfulness and criminality to depend upon, first, what commodities need to be handled according to the trust methods condemned in the first part of the act to enable those engaged in dealing in them to secure a reasonable profit therefrom; second, to determine what generally would be a reasonable profit for such a business; and, third, what would be a reasonable profit for the defendant under the circumstances of his particular business. It would, therefore, be a complete defense for the defendant to prove in this case that it is impossible to sell milk or milk products, except by trust methods and make a reasonable profit, if he also showed that by such methods he had in fact only made a reasonable profit.
We have examined the opinions of the Supreme Court of Colorado in reference to the construction and operation of these provisos in the Colorado anti-trust law (Campbell v. People, 72 Colo. 213, 210 P. 841; Johnson v. People, 72 Colo. 218, 210 P. 843; People v. Apostolos, 73 Colo. 71; 213 P. 331), and we find nothing there which is in conflict with our construction of them. Such an exception in the statute leaves the whole statute without a fixed standard of guilt in an adjudication affecting the liberty of the one accused. An attempt to enforce the section will be to penalize and punish all combinations in restraint of trade in a commodity when in the judgment of the court and jury they are not necessary to enable those engaged in it to make it reasonably profitable, but not otherwise. Such a basis for judgment of a crime would be more impracticable and complicated than the much simpler question in the Cohen Grocery Case, whether a price charged was unreasonable or excessive. The real issue which the proviso would submit to the jury would be legislative, not judicial. To compel defendants to guess on the peril of an indictment whether one or more of the restrictions of the statute will destroy all profit or reduce it below what would be reasonable, would tax the human ingenuity in much the same way as that which this court refused to allow as a proper standard of criminality in International Harvester Co. v. Kentucky, 234 U. S. 216, 222, 223, 34 S. Ct. 853, 58 L. Ed. 1284.
The Cohen Case was a violation of a federal law and involved the Fifth and Sixth Amendments, the first providing that no person shall be deprived of life, liberty, or property without due process of law, and the second that in all criminal prosecutions the accused shall enjoy the right to be informed of the nature and cause of the accusation. We are now considering a case of state legislation and threatened prosecutions in a state court where only the Fourteenth Amendment applies, but that requires that there should be due process of law and this certainly imposes upon a state an obligation to frame its criminal statutes so that those to whom they are addressed may know what standard of conduct is intended to be required. And such is the effect of our cases. Connally v. General Construction Co., 269 U. S. 385, 46 S. Ct. 126, 70 L. Ed. 322; International Harvester Co. v. Kentucky, 234 U. S. 216, 34 S. Ct. 853, 58 L. Ed. 1284; Collins v. Kentucky, 234 U. S. 364, 34 S. Ct. 924, 58 L. Ed. 1510; American Seeding Machine Co. v. Kentucky, 236 U. S. 660, 35 S. Ct. 456, 59 L. Ed. 773; Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 S. Ct. 220, 53 L. Ed. 417; Fox v. Washington, 236 U. S. 273, 35 S. Ct. 383, 59 L. Ed. 573; Omaechevarria v. Idaho, 246 U. S. 343, 38 S. Ct. 323, 62 L. Ed. 763; Miller v. Strahl, 239 U. S. 426, 36 S. Ct. 147, 60 L. Ed. 364; Tedrow v. Lewis & Son Co., 255 U. S. 98, 41 S. Ct. 303, 65 L. Ed. 524; Weeds, Inc., v. United States, 255 U. S. 109, 41 S. Ct. 306, 65 L. Ed. 537, and Kinnane v. Detroit Creamery Co., 255 U. S. 102, 41 S. Ct. 304, 65 L. Ed. 531.
The chief authority upon which counsel for the appellant rely is the case of Nash v. United States, 229 U. S. 373, 376, 33 S. Ct. 780, 57 L. Ed. 1232. That case involved the question whether the Sherman Anti-Trust Law (Comp. St. § 8820 et seq.), in making criminal every contract and all monopolies in restraint of interstate trade or commerce, fixed a permissible and ascertainable standard of guilt. It was held that it did. Because this Colorado act is an anti-trust law, punishing with even more detail of description all combinations in restraint of trade in Colorado, with the excepting provisos, it is supposed that the Nash Case has direct application and supports the claim of validity for the act. It is first to be noted that the court in its consideration of the Cohen Case had before it the Nash Case, and found nothing in that case inconsistent with its Cohen Case ruling.
The common-law precedents as to forbidden and permissible restraints of trade were reviewed at great length by the Circuit Court of Appeals of the Sixth Circuit in a case under the federal Anti-Trust Act in United States v. Addyston Pipe Co. (C. C. A.) 85 F. 271, 46 L. R. A. 122. It subsequently came to this court, and is reported in 175 U. S. 211, 20 S. Ct. 96, 44 L. Ed. 136. The federal Anti-Trust Act declares every contract, combination in the form of trust or other wise, or conspiracy in restraint of interstate trade to be illegal and every one taking part in it to be guilty of a misdemeanor. In United States v. Trans-Missouri Freight Association, 166 U. S. 290, 17 S. Ct. 540, 41 L. Ed. 1007, and United States v. Joint Traffic Association, 171 U. S. 505, 19 S. Ct. 25, 43 L. Ed. 259, the opinions of the court left the impression among many that every contract in restraint of trade, no matter whether lawful and reasonable or void and unenforceable at common law, was within the penalty of the statute. Such a conclusion was not necessary to the decision, and it was quite evident, when the opinions were analyzed, that it was recognized in their text that there were incidental restraints of trade that the statute was not intended to cover. This was made clear by the later decision in Cincinnati Packet Co. v. Bay, 200 U. S. 179, 26 S. Ct. 208, 50 L. Ed. 428. The view was fully confirmed in United States v. Standard Oil Co., 221 U. S. 1, 31 S. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734, and United States v. American Tobacco Co., 221 U. S. 106, 31 S. Ct. 632, 55 L. Ed. 663, where the language of the federal statute was read in the light of the common law, and in accordance with its reason, and was construed not to penalize such partial restraints of trade as at common law were not only permitted, but were promoted in the interest of the freedom of trade itself.
This review showing what was the standard of criminality in the federal anti-trust law, indicates clearly that the decision in the Cohen Grocery Case was not inconsistent with the Nash Case, because the latter did not relate to the reasonableness or excessiveness of prices charged for necessaries without more as a basis for criminality, while the former plainly did. The same reasons show that there is nothing inconsistent between the Cohen Case and that of Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 S. Ct. 220, 53 L. Ed. 417.
Following the authority in the Nash Case, we sustained in Miller v. Oregon, per curiam, January 17, 1927, 273 U. S. 657, 47 S. Ct. 344, 71 L. Ed. —, a conviction of manslaughter under a statute of Oregon, which made the following rule of conduct a standard of criminality: 'Every person operating a motor vehicle on the public highways of this state shall drive the same in a careful and prudent manner, not to exceed thirty miles per hour, and within the limit of incorporated cities and towns not to exceed twenty miles per hour, and at intersections and school houses not to exceed twelve miles per hour, and in no case at a rate of speed that will endanger the property of another, or the life and limb of any person.' Chapter 371, General Laws of Oregon 1921, § 2, subd. 16.
The indictment was framed under the last clause of this statute. Such standard for the driver of an automobile on a highway is one to which it is neither harsh nor arbitrary to hold those criminally who operate such a possibly dangerous instrument of locomotion, and who are or ought to be aware of what degree of care is necessary to avoid injury to others under the conditions that prevail on a highway. See Hess v. Pawloski, 274 U. S. 352, 47 S. Ct. 632, 71 L. Ed. 1091, decided May 16, 1927.
We conclude that the anti-trust statute of Colorado is void, in that those who are prosecuted and convicted under it will be denied due process of law.
The decree of District Court to enjoin proceedings which the defendant threatens to bring under the act against the plaintiffs should be affirmed, but the decree below is modified and reversed, so far as it purports to enjoin the defendant from proceeding further in prosecuting the information under that act against the plaintiffs now pending in the state criminal court.

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