Source: https://supreme.justia.com/cases/federal/us/372/29/
Timestamp: 2019-12-06 10:41:39
Document Index: 245403632

Matched Legal Cases: ['§ 3', '§ 13', '§ 3', '§ 1', '§ 3', '§ 3', '§ 3', '§ 2', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 13']

United States v. National Dairy Products Corp. :: 372 U.S. 29 (1963) :: Justia US Supreme Court Center
Justia › US Law › US Case Law › US Supreme Court › Volume 372 › United States v. National Dairy Products Corp.
Section 3 of the Robinson-Patman Act, making it a crime to sell goods at "unreasonably low prices for the purpose of destroying competition or eliminating a competitor," is not unconstitutionally vague or indefinite as applied to sales made below cost without any legitimate commercial objective and with specific intent to destroy competition. Pp. 372 U. S. 29-37.
This case involves the question whether § 3 of the Robinson-Patman Act, 15 U.S.C. § 13a, making it a crime to sell goods at "unreasonably low prices for the purpose of destroying competition or eliminating a competitor," is unconstitutionally vague and indefinite as applied to sales made below cost with such purpose. National Dairy and Raymond J. Wise, a vice-president and director, upon being charged, inter alia, with violating § 3 by making sales below cost for the purpose of destroying competition, moved for dismissal of the Robinson-Patman
The indictment charged violations of both the Sherman Act, 15 U.S.C. § 1, and the Robinson-Patman Act in Kansas City and in six local markets in the adjacent area. [Footnote 1] The Robinson-Patman counts charged National
National Dairy and Wise urge that § 3 is to be tested solely "on its face," rather than as applied to the conduct charged in the indictment, i.e., sales below cost for the purpose of destroying competition. The Government, on the other hand, places greater emphasis on the latter, contending that, whether or not there is doubt as to the validity of the statute in all of its possible applications,
United States v. Raines, 362 U. S. 17, 362 U. S. 22 (1960). The strong presumptive validity that attaches to an Act of Congress has led this Court to hold many times that statutes are not automatically invalidated as vague simply because difficulty is found in determining whether certain marginal offenses fall within their language. E.g., Jordan v. De George, 341 U. S. 223, 341 U. S. 231 (1951), and United States v. Petrillo, 332 U. S. 1, 331 U. S. 7 (1947). Indeed, we have consistently sought an interpretation which supports the constitutionality of legislation. E.g., United States v. Rumely, 345 U. S. 41, 345 U. S. 47 (1953); Crowell v. Benson, 285 U. S. 22, 285 U. S. 62 (1932); see Screws v. United States, 325 U. S. 91 (1945).
understand that his contemplated conduct is proscribed. United States v. Harriss, 347 U. S. 612, 347 U. S. 617 (1954). In determining the sufficiency of the notice, a statute must of necessity be examined in the light of the conduct with which a defendant is charged. Robinson v. United States, 324 U. S. 282 (1945). In view of these principles, we must conclude that, if § 3 of the Robinson-Patman Act gave National Dairy and Wise sufficient warning that selling below cost for the purpose of destroying competition is unlawful, the statute is constitutional as applied to them. [Footnote 2] This is not to say that a beadsight indictment can correct a blunderbuss statute, for the latter itself must be sufficiently focused to forewarn of both its reach and coverage. We therefore consider the vagueness attack solely in relation to whether the statute sufficiently warned National Dairy and Wise that selling "below cost" with predatory intent was within its prohibition of "unreasonably low prices."
The history of § 3 of the Robinson-Patman Act indicates that selling below cost, unless mitigated by some acceptable business exigency, was intended to be prohibited by the words "unreasonably low prices." That sales below cost without a justifying business reason may come within the proscriptions of the Sherman Act has long been established. See e.g., Standard Oil Co. v. United States, 221 U. S. 1 (1911). Further, when the Clayton Act was enacted in 1914 to strengthen the Sherman Act, Congress passed § 2 to cover price discrimination by large companies which compete by lowering prices, "oftentimes below the cost of production . . .
with the intent to destroy and make unprofitable the business of their competitors." H.R.Rep.No.627, 63d Cong., 2d Sess. 8. The 1936 enactment of the Robinson-Patman Act was for the purpose of "strengthening the Clayton Act provisions," Federal Trade Comm. v. Anheuser-Busch, Inc., 363 U. S. 536, 363 U. S. 544 (1960), and the Act was aimed at a specific weapon of the monopolist -- predatory pricing. Moreover, § 3 was described by Representative Utterback, a House manager of the joint conference committee, as attaching "criminal penalties in addition to the civil liabilities and remedies already provided by the Clayton Act." 80 Cong.Rec. 9419.
This Court, in Moore v. Mead's Fine Bread Co., 348 U. S. 115 (1954), a case based in part on § 3, recognized the applicability of the Robinson-Patman Act to conduct quite similar to that with which National Dairy and Wise are charged here. The Court said, "Congress by the Clayton Act and Robinson-Patman Act barred the use of interstate business to destroy local business" through programs in which "profits made in interstate activities would underwrite the losses of local price-cutting campaigns." Id. at 348 U. S. 119-120.
will be rendered academic by a showing that National Dairy sold below any of these cost levels. Therefore, we do not reach this issue here. As we said in Automatic Canteen Co. of American v. Federal Trade Comm., 346 U. S. 61, 346 U. S. 65 (1953):
Finally, we think the additional element of predatory intent alleged in the indictment and required by the Act provides further definition of the prohibited conduct. We believe the notice here is more specific than that which was held adequate in Screws v. United States, 325 U. S. 91 (1945), in which a requirement of intent served to "relieve the statute of the objection that it punishes without warning an offense of which the accused was unaware." Id. at 325 U. S. 102; see id. at 325 U. S. 101-107. Proscribed by the statute in Screws was the intentional achievement of a result, i.e., the willful deprivation of certain rights. The Act here, however, in prohibiting sales at unreasonably low prices for the purpose of destroying competition, listed as elements of the illegal conduct not only the intent to achieve a result -- destruction of competition -- but also the act -- selling at unreasonably low prices -- done in furtherance of that design or purpose. It seems clear that the necessary specificity of warning is afforded when, as here, separate, though related, statutory elements of prohibited activity come to focus on one course of conduct.
United States v. L. Cohen Grocery Co., 255 U. S. 81 (1921), on which much reliance is placed, is inapposite here. In Cohen, the Act proscribed "any unjust or unreasonable rate or charge." The charge in the indictment was in the exact language of the statute, and, in specifying the conduct covered by the charge, the indictment did
nothing more than state the price the defendant was alleged to have collected. Hence, the Court held that a "specific or definite" act was neither proscribed by the Act nor alleged in the indictment. Id. at 255 U. S. 89. Moreover, the standard held too vague in Cohen was without a meaningful referent in business practice or usage. "[T]here was no accepted and fairly stable commercial standard which could be regarded as impliedly taken up and adopted by the statute. . . ." Small Co. v. American Sugar Rfg. Co., 267 U. S. 233, 267 U. S. 240-241 (1925). In view of the business practices against which § 3 was unmistakably directed and the specificity of the violations charged in the indictment here, both absent in Cohen, the proffered analogy to that case must be rejected.
In this connection, we also note that the approach to "vagueness" governing a case like this is different from that followed in cases arising under the First Amendment. There, we are concerned with the vagueness of the statute "on its face" because such vagueness may in itself deter constitutionally protected and socially desirable conduct. See Thornhill v. Alabama, 310 U. S. 88, 310 U. S. 98 (1940); NAACP v. Button, 371 U. S. 415. No such factor is present here, where the statute is directed only at conduct designed to destroy competition, activity which is neither constitutionally protected nor socially desirable. We are thus permitted to consider the warning provided by § 3 not only in terms of the statute "on its face," but also in the light of the conduct to which it is applied. The reliance of National Dairy and Wise on First Amendment cases is therefore misplaced.
liquidation of excess, obsolete or perishable merchandise, or the need to meet a lawful, equally low price of a competitor. 80 Cong.Rec. 6332, 6334; see Ben Hur Coal Co. v. Wells, 242 F.2d 481 (C.A.10th Cir., 1957). Sales below cost in these instances would neither be "unreasonably low" nor made with predatory intent. But sales made below cost without legitimate commercial objective and with specific intent to destroy competition would clearly fall within the prohibitions of § 3.
Since the indictment charges the latter conduct and, as noted supra, n 2, we are bound by the well pleaded allegations of the indictment, we must conclude that National Dairy and Wise were adequately forewarned of the illegal conduct charged against them and remand the case for trial. Our holding, of course, does not foreclose proof on the merits as to the reasonableness of the alleged pricing conduct or, for that matter, the absence of the predatory intent necessary to conviction.
One Robinson-Patman count, number 13, charges Raymond J. Wise, a vice-president and director of National, with authorizing National's pricing practice and ordering its effectuation in the Kansas City market. United States v. Wise, 370 U. S. 405 (1962), involves two Sherman Act counts of the indictment which named Wise as a defendant.
It should be noted that, in reviewing a case in which a motion to dismiss was granted, we are required to accept well pleaded allegations of the indictment as the hypothesis for decision. Boyce Motor Lines v. United States, 342 U. S. 337, 342 U. S. 343 (1952).
The statute here involved makes it a crime to sell "goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor." 15 U.S.C. § 13a. In United States v. L. Cohen Grocery Co., 255 U. S. 81 (1921), this Court held unconstitutional and void for vagueness a statute which made it a crime "for any person willfully . . . to make any unjust or unreasonable rate or charge" in dealing in or with any necessaries. The rule established by that case has been often followed, [Footnote 2/1] is in my judgment sound, and should control this case. Accordingly,
"Doubts besetting Section 3's constitutionality seem well founded; no gloss imparted by history or adjudication has settled the vague contours of this harsh criminal law. [Footnote 2/2]"
E.g., Cline v. Frink Dairy Co., 274 U. S. 445 (1927); Lanzetta v. New Jersey, 306 U. S. 451 (1939); cf. United States v. Cardiff, 344 U. S. 174 (1952).
Oral Argument - March 21, 1962