Source: https://www.legalcrystal.com/case/102805/united-states-vs-greater-buffalo-press-inc
Timestamp: 2017-06-28 22:10:40
Document Index: 771226529

Matched Legal Cases: ['§ 7', '§ 1', '§ 7', '§ 7', '§ 18', '§ 1', '§ 1', '§ 2', '§ 29', '§ 7']

United States Vs Greater Buffalo Press Inc - Citation 102805 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize United States Vs. Greater Buffalo Press, Inc. - Court Judgment	LegalCrystal Citationlegalcrystal.com/102805CourtUS Supreme CourtDecided OnJun-01-1971Case Number402 U.S. 549AppellantUnited StatesRespondentGreater Buffalo Press, Inc.Excerpt:.....that the acquisition by greater buffalo press (buffalo) in 1955 of all the stock of international color printing co. (international) violated § 7 of the clayton act, and that buffalo, hearst corp., through its unincorporated division king features syndicate (king), newspaper enterprise assn., and others had conspired to restrain the sale to newspapers of the printing of color comic supplements in violation of § 1 of the sherman act. before trial, a consent decree was entered against hearst. buffalo, which does not control ownership of features or license them, prints the color supplements for newspapers and sells them. international prints color supplements only for king, which controls many popular comic features and is a licensor. international's owners wanted to sell, rather than..... Judgment:
United States v. Greater Buffalo Press, Inc. - 402 U.S. 549 (1971)
1. The line of commerce here is the color comic supplement printing business, which includes the printing of the supplements and their sale, and the "area of effective competition" encompasses the business of Buffalo, International, and King. While there may be submarkets within this broad market, "submarkets are not a
basis for the disregard of a broader line of commerce that has economic significance." Pp.
402 U. S. 552
2. The test of § 7 of the Clayton Act, whether the effect of an acquisition "may be substantially to lessen competition," is met here by Buffalo's control of about 75% of the independent color comic supplement printing business. P.
402 U. S. 555
3. The District Court erred in finding that the acquisition was within the "failing company" exception, as the two requirements, (a) that International's resources were "so depleted and the prospect of rehabilitation so remote that it faced the grave probability of a business failure," and (b) that there was no other prospective purchaser, were not satisfied. Pp.
4. The mere passage of time is no barrier to the divestiture of stock illegally acquired. P.
402 U. S. 556
5. The case is remanded to the District Court, which has the initial responsibility of the drafting of a decree that will provide an appropriate and effective remedy. Pp.
This is a civil antitrust case brought by the United States charging a violation of § 7 of the Clayton Act, [
as amended, 64 Stat. 1125, 15 U.S.C. § 18. The main thrust of the case involves the acquisition by Greater Buffalo Press, Inc. (Greater Buffalo), of all the stock of International Color Printing Co. (International). The complaint, at the secondary level, charged that Greater Buffalo, Hearst Corp., through its unincorporated division King Features Syndicate (King), Newspaper Enterprise Association, Inc. (NEA), and others, had conspired to restrain the sale to newspapers of the printing of comic supplements in violation of § 1 of the Sherman Act, as amended, 26 Stat. 209, 15 U.S.C. § 1. It also charged that Hearst and NEA were violators of certain tying arrangements involving the licensing of comic features and the sale of comic supplements. [
After full trial, the District Court dismissed the complaint. [
] The case came here under § 2 of the Expediting Act, as amended, 32 Stat. 823, 15 U.S.C. § 29. We noted probable jurisdiction, 400 U.S. 990. We reverse the judgment below.
"two distinct and separate categories: (1) the printing of color comic supplements for newspapers which do not print their own, and (2) the printing of color comic supplements for syndicates engaged in the sale of copyrighted comic features to newspapers. These are the lines of commerce -- to treat them together as one line of commerce,
the printing and sale of color comic supplements, would be to ignore the tremendous leverage of the syndicates which control the copyrighted features."
As we read the record, the printing of color comic supplements and their sale are component parts of the color comic supplement printing business. One firm or company may both print and sell; another may print, yet sell through a third organization, as does International through King. The "area of effective competition,"
-300 n. 5, comprises the business of Greater Buffalo, International, and King. There may be submarkets within this broad market for antitrust purposes (
), but, as we said in
399 U. S. 360
, "submarkets are not a basis for the disregard of a broader line of commerce that has economic significance."
The District Court, proceeding from its premise as to the relevant market, analyzed the effects on the competition between Greater Buffalo and International resulting from the purchase of the stock of the latter. The true import would include not only that, but also the effect on competition of the alliance with King, through the acquisition of King's client, International. The three of them were engaged in the single line of commerce consisting of the printing and distribution of color comic supplements. The printing of color comics is the same no matter for whom it is done or through whom they are distributed. The combination of those who print and sell comic supplements with those who sell comic supplements printed by others fastens more tightly the hold of the group on the side of supplement printing business. As a result of the acquisition, King has become dependent on Greater Buffalo for most of the printing which it sells in competition with Greater Buffalo. Greater Buffalo, it is said, had no long-term contract for King's business following the acquisition. Yet it had the almost certain right to print for King, its principal selling competitor, and a 10-year contract was entered into in the summer after the acquisition. There is evidence that Greater Buffalo has taken accounts from King since the acquisition. But existing competition between them is naturally restricted to sales at a price
Those practices ceased after the acquisition. Greater Buffalo acquired control of about 75% of independent color comic supplement printing, leaving King no reliable alternative supply. Greater Buffalo and International,
That test is met only if two requirements are satisfied: (1) that the resources of International were "so depleted and the prospect of rehabilitation so remote that it faced the grave probability of a business failure . . . ,"
, and (2) that there was no other prospective purchaser for it.
It is true that its owners wished to sell, rather than raise the capital needed for modernization and expansion, and that King, its sole customer, was threatening to place some of its business elsewhere. Yet King had not threatened to invoke, nor had it invoked, the six-month cancellation provision in the contract. Its expansion plans were being actively pursued, and it continued to pay dividends to its owners. Indeed, in the year of the sale, it had shown a substantial increase in profits.
Since the District Court found no violation of § 7, it naturally did not reach the question of remedy, though it said that, if there were a violation, it would not warrant "a court's exercising its discretion to order a divestiture fifteen years after the occurrence of the alleged illegal conduct." That is not the law; the passage of time
is no barrier to divestiture of stock illegally acquired.
United States v. Du Pont,
U.S. 316. Divestiture performs several functions, the foremost being the liquidation of the illegally acquired market power.
334 U. S. 127
is the question of the consent decree entered with Hearst. As to it the District Court said:
In the fifties, Greater Buffalo erected a printing plant at Lufkin, Texas, to improve its market in that area by saving transportation costs. There is some evidence that, in 1950, Greater Buffalo made a moral commitment to certain newspapers to build a plant in the
The status of the Sylacauga plant is a matter to be considered by the District Court under the controlling precedents.
See, e.g., United States v. Aluminum Co. of America,
247 F.Supp. 308,
382 U. S. 12