Opinion ID: 1503668
Heading Depth: 1
Heading Rank: 9

Heading: The Remedies.

Text: Nearly five years have passed since the evidence was closed; during that time the aluminum industry, like most other industries, has been revolutionized by the nation's efforts in a great crisis. That alone would make it impossible to dispose of the action upon the basis of the record as we have it; and so both sides agree; both appeal to us to take judicial notice of what has taken place meanwhile, though they differ as to what should be the result. The plaintiff wishes us to enter a judgment that Alcoa shall be dissolved, and that we shall direct it presently to submit a plan, whose execution, however, is to be deferred until after the war. It also asks a termination of all shareholding in common between Alcoa and Limited; and that injunctions shall go against any resumption of the putative unlawful practices. On the other hand, Alcoa argues that, when we look at the changes that have taken place  particularly the enormous capacity of plaintiff's aluminum plants  it appears that, even though we should conclude that it had monopolized the ingot industry up to 1941, the plaintiff now has in its hands the means to prevent any possible monopolization of the industry after the war, which it may use as it wills; and that the occasion has therefore passed forever which might call for, or justify, a dissolution: the litigation has become moot. Limited on its part argues that, so far as concerns the Alliance  the only practice which we are holding unlawful  the war has killed it forever; and, more particularly, that the decision in United States v. Hamburg-Amerikanische Packet-Fahrt, 239 U.S. 466, 36 S.Ct. 212, 60 L.Ed. 387, is on all fours. We do not agree with either side; but, before giving our reasons, we must determine for what purposes we may look outside the record. Both sides agree that the judgment in this action should speak from the time of its entry, like a decree upon an old bill in equity (indeed, until the advent of the New Rules, the action would have been a suit in equity, though the bill was until then more properly described as a petition and the plaintiff as a petitioner). There is no reason why an appellate court upon deciding an appeal from such a judgment should not direct the district court what judgment to enter; and so it often does. Nor is there any reason why in deciding what judgment to direct, it should not advise itself from outside the record of such facts as appear to admit of no genuine dispute: i.e. should take notice of whatever the district court itself might take notice. Indeed, it would otherwise be impossible for an appellate court ever to dismiss an action upon the ground that it had become moot. We may, and we do, accept the figures of aluminum production in the report of the so-called Truman Committee as of March, 1944, which showed that the annual production of Alcoa's plants was about 828 million pounds; that the production of plants owned by the plaintiff which it had leased to Alcoa, was about 1293 million pounds; and that the production of the Reynolds and Olin plants was together, 202 million pounds: a total of about 2300 million pounds. The case is otherwise as to any facts already existing in August, 1940, such as the amount of bauxite in Arkansas, as to which the Truman Report also contains figures. Even though we took notice of these, the report would not be conclusive, or more than evidence. We could not constitutionally substitute it for the findings of a court after a trial: facts which a court may judicially notice do not for that reason become indisputable. Wigmore, § 2567a. At most we could do no more than treat the report as newly discovered evidence, and send the issue back for another trial, which in the present case we should under no circumstances be willing to do. For these reasons we refuse to take notice of facts relevant to the correctness of the findings; but we do take notice of those relevant to remedies. After doing so, it is impossible to say what will be Alcoa's position in the industry after the war. The plaintiff has leased to it all its new plants and the leases do not expire until 1947 and 1948, though they may be surrendered earlier. No one can now forecast in the remotest way what will be the form of the industry after the plaintiff has disposed of these plants, upon their surrender. It may be able to transfer all of them to persons who can effectively compete with Alcoa; it may be able to transfer some; conceivably, it may be unable to dispose of any. The measure of its success will be at least one condition upon the propriety of dissolution, and upon the form which it should take, if there is to be any. It is as idle for the plaintiff to assume that dissolution will be proper, as it is for Alcoa to assume that it will not be; and it would be particularly fatuous to prepare a plan now, even if we could be sure that eventually some form of dissolution will be proper. Dissolution is not a penalty but a remedy; if the industry will not need it for its protection, it will be a disservice to break up an aggregation which has for so long demonstrated its efficiency. The need for such a remedy will be for the district court in the first instance, and there is a peculiar propriety in our saying nothing to control its decision, because the appeal from any judgment which it may enter, will perhaps be justiciable only by the Supreme Court, if there are then six justices qualified to sit. But there is another, and even more persuasive, reason why we should not now adjudge a dissolution of any kind. The Surplus Property Act of 1944 provides the method by which the plaintiff's surplus properties shall be disposed of: aluminum plants and facilities among the rest, § 19(a) (1). The Surplus Property Board, § 5(a), is to designate one or more Government agencies to act as disposal agencies, § 10(a), and they are to have responsibility and authority for the disposition of such property and for the care and handling of such property, pending its disposition, § 11(d), subject to the Board's regulations. These agencies may dispose of the properties by sale, exchange, lease, or transfer, for cash, credit, or other property, with or without warranty, and upon such other terms and conditions, as the agency deems proper § 15(a). The following, among other objectives, are to regulate the orderly disposal of surplus property: (b) to give maximum aid in the reestablishment of a peacetime economy of free independent private enterprise; (d) to discourage monopolistic practices and to strengthen and preserve the competitive position of small business concerns in an economy of free enterprise; (p) to foster the development of new independent enterprise; (r) to dispose of surplus property as promptly as feasible without fostering monopoly or restraint of trade   . So far as consistent with the usual and customary commercial practice preference is to be given to smaller purchasers, § 18(b); to whom, when proper, money may be lent § 18(f). Finally, no disposal agency shall even begin negotiations to sell a plant which has cost over a million dollars without advising the Attorney General of the probable terms or conditions of the sale; and he in turn must tell the agency whether the proposed disposition will violate the antitrust laws. The act must not be read to impair, amend, or modify those laws, or to prevent their application to purchasers of surplus property. In view of these declarations of the purpose of Congress, the agency which the Board designates to dispose of the plaintiff's aluminum plants and facilities may well believe that it cannot do so without some plan or design for the industry as a whole, some comprehensive model which shall, so far as practicable, re-establish free independent private enterprise, discourage monopoly, strengthen small competitors, foster independents and not foster monopoly or restraint of trade. If it should find this method desirable, it would have to learn what purchasers were in the market, how strong they were, what units they could finance and operate, and in what position they would be to compete. In such a model or design the agency would have to assign a place to Alcoa, and that place no one of course can now anticipate. Conceivably Alcoa might be left as it was; perhaps it might have to be dissolved; if dissolved, the dissolution would depend upon how the other plants were distributed. If the agency should find it wise to proceed in this way, it may succeed in inducing Alcoa to accept the place assigned to it, particularly if the plan has not been prepared ex parte. If it does not succeed, then, but then only, will it be appropriate for the district court to act. We do not of course mean that in deciding whether to dissolve Alcoa, or how to do it, that court must be governed by any plan which the agency may have devised, if it does devise one. But, plan or no plan, it must wait until it learns what the agency has in fact done. Moreover, if the agency does form a plan, it will have been an attempt to realize the same objectives for which the court itself must strive; and the court may well feel that it should accord to the agency's plan that presumptive validity which courts are properly coming more and more to recognize in the decisions of specialized tribunals. Nothing which we now say ought in any measure to limit the discretion of the agency to proceed in this way. Therefore we shall merely reverse the judgment, so far as it held that Alcoa was not monopolizing the ingot market, and remand the case to the district court. From what we have already said, we must deny the plaintiff's prayer that those shareholders who own shares in both Alcoa and Limited, shall dispose of one or the other. Since we have affirmed all the findings as to unlawful practices except the price squeeze, again it follows that no injunction will go as to these. As to the price squeeze itself, Alcoa insists that, even if it was unlawful, it has been discontinued now for twelve years, and that there is no likelihood that it will ever be resumed. Alcoa might add that, since there can be no squeeze if sheet rollers can buy ingot at competitive prices, there can be no need of an injunction, if that privilege is assured to them; and that, since it will be assured to them when the final judgment is entered, an injunction would only bring coals to Newcastle. We defer for the moment any general discussion as to when abandonment of a practice ought to bar an injunction, for we shall have to consider it more specifically in the case of Limited. It is enough here to say that, since Alcoa abandoned the squeeze only after it became aware that it was under investigation, it is in no position now to complain of whatever stigma there may be in an injunction; in such a setting there is no place for sensibilities; nor should lapse of time secure immunity. More can be said for the argument that Alcoa will be unable to squeeze at all, if it loses its monopoly; but no one can be sure how the industry may change, and it is impossible to say that the same practice may not in the future commend itself to those who may come into control; and at any rate there can be no injustice in making assurance doubly sure. An injunction will go against any resumption of the price squeeze; the terms to be decided by the district court. Unless the issue has become moot, Limited also must be enjoined from entering into any cartel, or agreement like that of 1936, covering imports into the United States; and even though it had become moot we should have to reverse the judgment, though we should then dismiss the complaint without prejudice, as in United States v. Hamburg-Amerikanische Packet-Fahrt, supra, 239 U.S. 466, 36 S.Ct. 212, 60 L.Ed. 387. We think, however, that the issue has not become moot, and that there are vital distinctions between the situation before us and that then before the Supreme Court. A number of steamship lines had there agreed to apportion between them the carriage of steerage passengers upon a non-competitive basis. Two or three of the lines were German, and the agreement was to end in any event on December 3, 1915. Moreover, it provided that the withdrawal of any one of the lines from the contract should release all others from all future obligation unless the others agreed among themselves to continue, 239 U.S. at page 472, 36 S.Ct. 215. The decision was rendered on January 10, 1916, after the contract had come to an end, and after war had been waged for over a year between Germany and the Allies. The court treated the last circumstance as putting an end to the contract which certainly it did, so far as concerned the German lines. As between the other parties the contract was also terminated, if the exclusion of the Germans because of the war was a withdrawal from the contract, as it should have been regarded. Besides, the contract was of such a kind that the exclusion of the German lines probably made impossible the realization of its purposes in any part; for the traffic divided was only between European ports and the United States and Canada, and it would scarcely have value to any of the parties unless all the large lines joined. The agreement of 1936 on the other hand, was to last for 99 years, though it could be terminated on six months' notice by any shareholder who held 200 shares, and all held as many as 200. As we have seen, the two German smelters had been exempted from royalties; and it is not altogether clear what future part remained for them in the enterprise, although some past obligations were compromised. It is true that some eighteen months before war was declared the other shareholders ceased to perform the agreement, but no one ever gave the prescribed notice of dissolution and, formally at least, the agreement continued and still continues. Indeed, it is possible that all but the German shareholders can start up the system again without renewal, if they please. The only doubt is whether the termination of the Germans' connection by the war automatically put an end to the agreement as between the others; and at least a strong argument can be made, in view of the provision for dissolution by notice, that it was not to be dissolved by the mere withdrawal of shareholders, certainly of shareholders who were not within the quota and did not share the royalties. Finally, the two situations differ in the fact that the Alliance itself, as a corporation, still persists, and all the original shareholders presumably remain such. The mere cessation of an unlawful activity before suit does not deprive the court of jurisdiction to provide against its resumption; a case or controversy may remain to be disposed of. There are plentiful authorities so holding. Southern Pacific T. Co. v. Interstate Commerce Commission, 219 U.S. 498, 514-516, 31 S.Ct. 279, 55 L.Ed. 310; Goshen Manufacturing Co. v. Myers Manufacturing Co., 242 U.S. 202, 37 S.Ct. 105, 61 L.Ed. 248; National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 271, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307; Federal Trade Commission v. Goodyear Co., 304 U.S. 257, 260, 58 S.Ct. 863, 82 L.Ed. 1326; Walling v. Haile Gold Mines, 4 Cir., 136 F.2d 102, 105. To disarm the court it must appear that there is no reasonable expectation that the wrong will be repeated. That is not true in the case at bar. Unless we are to grant an injunction, we ought not pass upon the issue; if we do not pass upon the issue, we are by no means persuaded that Limited, when peace comes, will not enter into another cartel which again attempts to restrict imports. It has insistently argued that the Act does not cover such an agreement; and it alleges that it was forced into the cartel, if it was to do a European business at all. It may be forced to do so again, unless a judgment forbids. The judgment dismissing the complaint against the Goods Company will stand. The injunctions granted will embrace the officers of those corporate defendants against which they run. Judgment reversed, and cause remanded for further proceedings not inconsistent with the foregoing.