Opinion ID: 330248
Heading Depth: 2
Heading Rank: 2

Heading: The in commerce requirement.

Text: 39 Section 7 applies when a corporation engaged in commerce acquires the stock or assets of another corporation engaged also in commerce. At the time this case was tried, the Third Circuit was committed to the proposition that the Clayton Act § 7, like §§ 1 and 2 of the Sherman Act, represented an exercise of Congress' full powers under the commerce clause. In Transamerica Corp. v. Board of Governors, 206 F.2d 163, 166 (3d Cir.), cert. denied,346 U.S. 901, 74 S.Ct. 225, 98 L.Ed. 401 (1953), Judge Maris wrote that Congress, in enacting § 7, intended to exercise its power under the commerce clause of the Constitution to the fullest extent. 40 Had the district court been possessed of perfect foresight, it would have foreseen a major development in § 7 law that was just over the horizon. In United States v. American Building Maintenance Industries, --- U.S. ---, 95 S.Ct. 2150, 45 L.Ed.2d 177 (1975), the Supreme Court considered the jurisdictional reach of § 7. 7 It concluded that unlike §§ 1 and 2 of the Sherman Act, § 7 did not encompass the whole of the commerce power. Effectively, Transamerica Corp. v. Board of Governors, supra, had been overruled. The Supreme Court wrote: 41 In sum, neither the legislative history nor the remedial purpose of § 7 of the Clayton Act, as amended and re-enacted in 1950, supports an expansion of the scope of § 7 beyond that defined by its express language. Accordingly, we hold that the phrase 'engaged in commerce' as used in § 7 of the Clayton Act means engaged in the flow of interstate commerce, and was not intended to reach all corporations engaged in activities subject to the federal commerce power. --- U.S. at ---, 95 S.Ct. at 2157. 42 Applying this new standard to the record before us is a problem of no little difficulty. In fact, had the district court granted a motion to dismiss at the close of the plaintiffs' case, on the ground that the new § 7 threshold had not been met, we might have been inclined to affirm that decision. There was, however, some evidence in the record to suggest that at least some of the acquired bowling centers may have made purchases of pins, pinsetter parts and perhaps other supplies, directly from Brunswick, rather than from local distributors. Thus, they arguably were engaged in the flow of interstate commerce within the meaning of the new § 7 test. We think it would be unjust, given the intervening change in the law, to find that the evidence presented was insufficient to cross the jurisdictional threshold and thus order that the district court dismiss the case. We think it more appropriate, consistent with the way in which we will ultimately dispose of the case, to have the in commerce question relitigated, with the plaintiffs' being given an opportunity to satisfy the new and more stringent jurisdictional test. See 28 U.S.C. § 2106. 43