Opinion ID: 233491
Heading Depth: 2
Heading Rank: 1

Heading: The indictment sufficiently alleges restraint of the flow of commodities in interstate commerce

Text: The sufficiency of the 'in commerce' allegations of the indictment rests on the allegations showing the stream of commerce from out of state manufacturers and suppliers, thru the plumbing contractor as conduits to the final use and installation of the supplies in southern Nevada. The single allegation that plumbing contractors are essential for the installation of plumbing supplies shipped in interstate commerce, is not the whole indictment as appellants' argument (2 above) would infer, but is part of the 'conduit' or commerce allegations. The allegations of the indictment which allege restraint on the flow of plumbing supplies in interstate commerce are clearly sufficient. Comparable allegations as to restraints on the flow of commerce were found sufficient in U.S. v. Chrysler Corp. Parts Wholesalers, 9 Cir., 1950, 180 F.2d 557, 559. U.S. v. General Motors Acceptance Corp., 7 Cir., 1941, 121 F.2d 376, 401, certiorari denied 314 U.S. 618, 62 S.Ct. 105, 86 L.Ed 497; Lake Valley Farm Products, Inc., v. Milk Wagon Drivers Union, 7 Cir., 1940, 108 F.2d 436, 440, reversed on other grounds 311 U.S. 91, 61 S.Ct. 122, 85 L.Ed. 63; U.S. v. Mountain States Lumber Dealers Ass'n, D.C. Colo. 1941, 40 F.Supp. 460, 461. In Standard Oil Co. v. Federal Trade Commission, 7 Cir., 1949,173 F.2d 210, 214, reversed on other grounds, 340 U.S. 231, 71 S.Ct. 240, 95 L.Ed 239, Justice Minton, then on the Seventh Circuit, stated: 1 '   The modern concept of commerce is one which gives full sweep to the commerce clause of the Constitution within the limits of the implementing statute, and a realistic view of what business is doing as it moves across state lines to accomplish its purpose. The late cases support the view that the petitioner's operations are in commerce from the refinery to its customers.' 2 This concept was expressly affirmed by the Supreme Court, 340 U.S. 231, 236-238, 71 S.Ct. 240, 95 L.Ed. 239, although the case was reversed on a wholly different ground. Also: U.S. v. Minneapolis Elec. Contractors Ass'n, D.C. Minn. 1951, 99 F.Supp. 75, 79. U.S. v. Universal Milk Bottle Service, Inc., D.C. Ohio 1949, 85 F.Supp. 622, 629, affirmed 6 Cir., 1951, 188 F.2d 959. 3 Price fixing agreements are unreasonable per se- U.S. v. Socony-Vacuum Oil Co., 1940, 310 U.S. 150, 223, 60 S.Ct. 811, 84 L.Ed. 1129. 4 Agreements to divide a market for products moving in interstate commerce are unreasonable per se, Addyston Pipe & Steel Co. v. U.S., 1899, 175 U.S. 211, at page 241-245, 20 S.Ct. 96, 44 L.Ed 136. If an indictment alleges the flow of goods in interstate commerce and charges price fixing or a dividing up of the market for such goods, then the final effect of such illegal activities on such commerce and the substantiality of that effect becomes a question of law under the facts alleged. The indictment here alleges such a substantial effect. 5 B. The indictment sufficiently alleges that conspiracy therein charged, even if purely local or intrastate in nature, nevertheless affected interstate commerce in the flow of plumbing supplies 6 In our case the indictment, in Sec. V, alleges that the effect of the conspiracy charged has been and is to 'directly, unreasonably, arbitrarily and unlawfully restrain and obstruct the flow of plumbing and heating supplies in interstate commerce into southern Nevada, by: 7 '(a) suppressing and eliminating competition    8 '(b) narrowing and restraining the market   .' 9 The allegation is similar to an allegation which this court held sufficient as showing an effect on interstate commerce in U.S. v. Chrysler Corp. Parts Wholesalers, 180 F.2d at page 560, supra. 4 10 C. An effect on interstate commerce is present whether the restraints are applied before the interstate journey starts or after it ends. 11 Production and manufacturing processes are not necessarily outside the scope of the Act. 12 Restraints imposed in advance of the interstate movement affect commerce. Addyston Pipe & Steel Co. v. U.S., supra; U.S. v. General Motors Corp., 7 Cir., 1941, 121 F.2d 376, certiorari denied 314 U.S. 618, 62 S.Ct. 105, 86 L.Ed. 497; Mandeville Island Farms, Inc., v. American Crystal Sugar Co., supra. 13 Restraints imposed after the interstate movement has terminated, affect commerce. Eastern States Retail Lumber Dealers v. U.S., 1931, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490; Montrose Lumber Co. v. U.S., 10 Cir., 1941, 124 F.2d 573, 578; U.S. v. Minneapolis Electrical Contractors Ass'n, D.C. Minn. 1951, 99 F.Supp. 75; U.S. v. Northeast Texas Chapter, N.E.C.A., 5 Cir., 1950, 181 F.2d 30; Local 167 International Brotherhood of Teamsters v. U.S., 1934, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed 804. 14 Appellants contend that the defendant plumbing contractors fabricated articles of plumbing which were then installed and hence the activities of appellants are outside the scope of the Sherman Act. First, the sufficiency of the indictment on a motion to dismiss is tested by its allegations. Appellants, on the consideration of such a problem, cannot suppose or inject into the case what they think the facts may or did show at trial. 15 Secondly, and more fundamentally, even if it be conceded that the indictment shows fabrication of plumbing systems this no longer bars the way for an application of the Sherman Act if the acts complained of in the indictment affect interstate commerce. 5 The Mandeville Island Farms case, supra- 334 U.S. at page 241, 68 S.Ct. 996, rejected a contention similar to appellants. 16 'The broad form of respondent's argument cannot be accepted. It is a reversion to conceptions formerly held but no longer effective to restrict either Congress' power, Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.3e. 122, or the scope of the Sherman Act's coverage. The artificial and mechanical separation of 'production' and 'manufacturing' from 'commerce,' without regard to their economic continuity, the effects of the former two upon the latter,    no longer suffices to put either production or manufacturing and refining processes beyond reach of Congress' authority or the statute.' 334 U.S. at pages 228-229, 68 S.Ct. 996, 1002. 17 United States v. San Francisco Electrical Contractors Ass'n, D.C.N.D. Cal. 1944, 57 F.Supp. 57, relied on by the appellants is not controlling. The sufficiency of the indictment was not considered in the opinion. In fact, a demurrer to the indictment had been overruled previously by the court. A dismissal of the indictment was granted as to each defendant, on the ground that the evidence did not show a restraint of interstate commerce. 18 The court stated that 'activities strictly local which interfere with interstate commerce, come under the interdiction of the Act' 57 F.Supp. at page 60    and 'Direct control of prices of articles moving in interstate commerce, no matter how achieved, either in the state of origin, or in the state of destination, is a restraint within the Sherman Act, because it eliminates competition.   ' 57 F.Supp. at page 61. But the court held that the evidence presented did not show that the acts complained of had a direct and substantial effect upon the volume of electrical equipment moving in interstate commerce as charged in the indictment, 57 F.Supp. at page 64, and that if any interference with interstate commerce existed, it was indirect and unsubstantial, 57 F.Supp. at page 68. The case cannot be considered as authority for the proposition that the mere fabrication of supplies by the addition of labor thereto prevents the activity complained of from coming within the possible scope of the Sherman Act. The contrary was clearly demonstrated in the Mandeville Island Farms case, supra. 19 We conclude that appellants' contention that the indictment does not allege a violation of the Sherman Act is without merit.