Document: 56 L.Ed.2d 728 98 S.Ct. 2122 436 U.S. 816 NATIONAL BROILER MARKETING ASSOCIATION, Petitioner,v.UNITED STATES. No. 77-117. Argued Feb. 21, 1978. Decided June 12, Syllabus The United States brought an antitrust suit against petitioner, a nonprofit cooperative association the members of which are integrated producers broiler chickens. complaint alleged that performs various marketing and purchasing functions for its members, had conspired with others, including in violation § 1 Sherman Act. Petitioner asserted activities were sheltered from under Capper-Volstead Act, permits "[p]ersons engaged production agricultural products as farmers" to join associations. District Court concluded petitioner's justified their classification farmers protection claimed was therefore available. Appeals reversed, holding not all "farmers" ordinary meaning word it used at time Act passed. Held: Because qualify is entitled laws afforded by Case-Swayne Co. v. Sunkist Growers, Inc., 389 384, 88 528, 19 621 (1967). Pp. 822-829. (a) language reveal persons form cooperatives protected P. 823. (b) legislative history reveals Congress did intend extend processors packers whom sold goods, even when relationship such bore part risks fluctuating market. 824-827. (c) Those among who own neither breeder flock nor hatchery maintain no "grow-out" facility flocks raised whose economic roles essentially those or processors, within 827-829. 550 F.2d 1380, 5 Cir., affirmed remanded. Richard A. Posner, Chicago, Ill., petitioner. John H. Shenefield, respondent. Mr. Justice BLACKMUN delivered opinion Court. Once again,1 this context, confronted issue concerning poultry operations. phrases substantially follows: 2 Is producer chickens precluded qualifying "farmer," CapperVolstead employs independent contractor tend during phase chick mature chicken?2 3 apparently importance industry administration laws.3 4 * In April 1973, Northern Georgia, petitioner National Broiler Marketing Association (NBMA). It NBMA others named, but NBMA, 26 Stat. 209, amended, 15 U.S.C. (1976 ed.). prayed injunctive relief "be ordered make whatever changes necessary organization operation insure compliance judgment" court. Record 10. answer alleged, other things, status, products, liability acts also known Cooperative Associations 42 388, 7 291 ed.).4 On motion cross-motion partial summary judgment, involvement sufficient justify "farmers," limited exemption afforded. 1975-2 Trade Cases ¶ 60,509. 6 appeal,5 Fifth Circuit reversed. held ordinary, popular employed 1922 became law. 1380 (1977). community laws, we granted certiorari. 434 888, 260, 54 173 II organized 1970 Georgia law.6 on behalf members. App. 7.7 Its membership has varied somewhat course litigation, included many 75 separate entities. Id., 172. 8 These involved chickens.8 Production involves number distinct stages: placement, raising, breeding produce eggs be hatched chicks; hatching placement tho e feed raising chicks period, exceed, apparently, 10 weeks; catching, cooping, hauling "grown-out" processing facilities; facilities process prepare broilers 7. 9 become highly efficient departmentalized recent years,9 stages past might have been performed one enterprise may now split divided several, each specialized function. No longer necessarily where they laid, hatched. Conversely, some different enterprises combined controlled single entity. Also, owner plant. All "integrated," is, more than these production. Many, if all, directly indirectly operate plant slaughtered dressed contract growers grow-out least part, usually substantial flocks. 8. Often placed grower member's produced member then places provides feed, veterinary service, supplies, and, employees, collects grower. Generally, retains title birds while care Ibid. 11 established, however, ibid.; Brief n. 2, six do control any offspring broilers, And appears record three hatchery, facility.10 buy already place them growers, enter line only later stages. III 12 removed proscription formed certain otherwise would competing efforts bring goods market.11 But includes so privileged statute act colle tively, Thus, order enjoy consequence, avoid collective activity, must qualified collectively. enough typical qualify, most NBMA's qualify. We determine whether Act's protection. 13 protects farmers, planters, ranchmen, dairymen, nut fruit " (emphasis added). A common-sense reading language12 clearly leads conclude together obtain benefits: italicized phrase restricts limits broader preceding . ."13 14 purposes revealed history, confirm conclusion bringing market exempt statute, retain exemption. passed remove threat restrictions kinds handling, undertaken Similar organizations farming, well laborers, entitled, since 1914, special treatme t Clayton 38 731, 17 ed.).14 This treatment, proved inadequate. Only nonstock groups discovered best serve needs accumulation capital required. With capital, associations could develop provide handling services needed before members' sold. clear formation result organization, without consequences, perform preparing Black summarized his unanimous Maryland & Virginia Milk Producers Assn. States, 362 458, 464-468, 80 847, 852-854, 47 880 (1960), further discussed Case-Swayne, U.S., 391, S.Ct., 532.15 Farmers perceived particularly harsh position. They subject vagaries conditions plague agriculture generally, means individually responding conditions. farmer little choice about buyer he sell. large portion entire year's labor devoted crop lost forced harvest unfavorable time. Few long individually, power wait out situation. seen being caught hands distributors who, because position relative strength, able take good share profits available production.16 By allowing cooperatives, hoped bolster strength improve ability weather adverse eriods deal distributors. 16 argues demonstrates meant protect bear costs market,17 exposed decisions affected thereby, eligible organize associations.18 indicates, does clearly, simply exposure risks, inability individual respond effectively, led passage congressional debates demonstrate aid full spectrum sector but, instead, rendered comparitively helpless. very definitely, special-interest legislation. Indeed, several attempts made amend include according preplanting contracts, paid amounts based price processed goods; roundly rejected.19 Clearly, benefits processor packer risk. suggests changed 1922, passed, decision here "might accelerate existing trend toward absorption integrator," induce integrators rewrite contracts designate latter lessor-employees rather contractors." 13; see id., 24, 26, Tr. Oral Arg. 17. accept proposition intervening 55 years, second Harlan said, speaking another "is empty vessel into free pour vintage think better suits present-day tastes." Sisson, 399 267, 297, 90 2117, 2133, 608 (1970). Considerations kind Congress, courts. IV 18 We, therefore, owns maintains holds raised, intended C pper-Volstead role indistinguishable enters supplier, assists supplier financing crops.20 Their participation investment protect.21 hold term them—or them—as judgment affirmed, case remanded proceedings. 20 ordered. 21 BRENNAN, concurring. 22 I Court's opinion. agree (1967), compels challenged cannot asserts. Since disposition settles aspect between parties, unnecessary consider, reserves, question "the status fully flock, facility, runs plant." Ante, 828 n.21. write separately suggest considerations question. rationale dissent carries over 23 et seq. ed.), like modifies, populist legis ation reacted increasing concentrations followed heels industrial revolution. first legislation problems small units economy increasingly dominated titans. Next enacted 730, provides: 24 "The human commodity article commerce. Nothing contained shall construed forbid existence labor, agricultural, horticultural organizations, instituted mutual help, having stock conducted profit, restrain lawfully carrying legitimate objects thereof; thereof, illegal combinations conspiracies restraint trade, anti-trust laws." 25 linked individuals thought permit cooperation—cartelization parlance survive economically dominant manufacturing, interests interrelate. failure expressly authorize activities, coverage it, prompted enactment remedy omissions. Section provides, inter alia : "Persons associations, corporate otherwise, stock, collectively processing, interstate foreign commerce, engaged. ." 27 At enacted, farming vertically industry. model relatively small, individual, actually tilled soil husbanded animals, hand, resold wholesale retail distribution. disparity respective levels spurred action. See, e. g., 62 Cong.Rec. 2257 (1922) (remarks Sen. Norris). concerned farmer, mercy natural forces other, driven land migrate ever-increasing numbers cities. 28 "Senator Capper stated point view found almost every page debate bill, 'Middlemen farm stockholders corporations owning business through representatives continue sell aggregations men avenues agencies reach consuming market, remain buyers.' 2058 (1922)." Post, 841 (footnote omitted). 29 makes regime created ameliorate situation voluntary cooperation. allow 'combine [their] neighbors cooperate corporation, following product near consumer [they] can, doing away meantime machinery middle men.' That bill do." As notes, c]learly, risk." p. 826-827. fact demonstrated exchanges clarifying intent behind abortive Phipps amendment. colloquy Senators Kellogg Cummins, quoted extenso, ante, 823-824, n.13, clear: 30 "Mr. CUMMINS Take flouring mills Minneapolis: engaged, broad sense, product. Senator confer upon privileges grants, assume? 31 KELLOGG: Certainly Cong. Rec. 2052 (1922). 32 Debate surrounding proposed amendment, 827 19, effect exempt, example, sugar refiners yields similar understanding. Norris, leading successful rejection explained: amendment offered purpose giving manufacturers right immune prosecution Antitrust cooperators ; producers; composed incorporate handle products; it." 2275 statements show regarded both "manufacturers finished products" "processors" ineligible. Whether there distinction terms "manufacturers" refine beets, mill wheat flour, beyond 1—"They cooperators." Thus working level1 "collectively engaged." focus collectives replace middlemen key application policies modern 33 correct, course, "[t]he nature profoundly early 1920's debated adopted. reality agribusiness admittedly antiquates characterizations farming." 843. Most except stage out. Rather single-function forming jointly handle, multifunction stand astride envisioned collectivized. Performing themselves allegations suggest, seek collectivized shield fixing. performing manufacturing hence associate common nevertheless "engaged [a] farme[r]" 1's traditional activity. frankly recognizes neatly fit limitation signified "as farmers," reads give what perceives Congress' desire generally uncertainty caused combination weather, fluctuations demand, perishability Elison sacrificed end, extended encompass agriculture. drastic restructuring inconsistent specific regarding limitation, continuing purposes. intended, discussion Part I, supra, demonstrates, withhold exempting notwithstanding "price takers" respect chains grocery stores. fails explain how extending fashion can reconciled fundamental farmers' 34 dissent's construction, seems me behemoths engage fixing, territorial division, concerns hard believe enacting provision horizontal eliminate middlemen, authorized firms downstream level utilized combine horizontally cartel license carve up national Such construction turn head manifest exploitation extinction "these market," Capper), thereby fomenting great trusts, corporations, moneyed institutions" took aim. 2562 (1890) Teller). nothing much contrary, indicate remake image cartels. B 35 Definition "farmer" reference "When technological change literal ambiguous, light [its] basic purpose." Twentieth Century Music Corp. Aiken, 422 151, 156, 95 2040, 2044, 45 84 (1975). seriously validity definition limit use processing—the created. along path integration, function lost, doubt person considered itself functional insufficiently benefit marketing. my view, association's degree integration historically relevant deciding exempt. us evidence considerations, basis appraising entitlement operations phase. 36 If, achieved, warrant judicially exemption, fall desuetude. construing specific, narrow articulating comprehensive policy, must, established. frustrated circumstances, courts should undertake rebalance conflicting effect. Cf. Teleprompter Columbia Broadcasting System, 415 394, 414, 94 1129, 1141, 39 (1974); Fortnightly Artists, 392 390, 401-402, 2084, 2090-2091, 1176 (1968). Specific exemptions rough political accommodations responsive current If "antiquated" premise compromise struck, reincarnated derogation enduring policy embodied 37 reconstruction doubly flawed, frustrate segment vitality. American Farm Bureau Federation, filed brief amicus curiae case, general representing 2.5 million families State (except Alaska) Puerto Rico." Amicus Curiae 2. Speaking growers—those husband until just slaughter—the Federation head; grown cou d dictate will latter's disadvantage. Moreover, persuasive concern protecting vis-a-vis handlers abated. 1968, Agricultural Fair Practices 1967, 82 93, 2301 designed "bargaining position" "individual prohibiting "handlers" interfering "producers' "to voluntarily law." 2301. so, legislated specifically producers. 4(b) prohibits "handler" discriminating "producers" "of purchase, acquisition, producers." 2303(b) ed.) "producer" identical Capper-Volstead, 2302(b) acted prevent preying growers. Senate Report clear:2 "As introduced, [§ 4(b)] prohibited discrimination 'purchase acquisition' products. committee ineffective manifestly prohibit. furnish bailment remained canning company seeds tomato plants arrangement. involved. 'other handling' covering examples given greatly broadening scope provision." S.Rep.No.474, 90th Cong., 1st Sess., 5-6 U.S.Code Admin.News pp. 1867, 1871. (Emphasis added.) anomaly uniquely disadvantage today conception points danger unforeseen 1922.3 powerful weapon interest group another. However desirable system be, however needful exemption,4 judges readjust integrators; address problem readjusting balance them. Corp., 1141; 2090-2091. 40 WHITE, STEWART joins, dissenting. 41 majority sense alternatively told sector, instead comparatively helpless," 826, big 827. rule evidently ownership somehow requisite farmer. attempt link motivating factors Historically, harvest. factor, underlay recognition survival "It folly carload cattle 'take home' 'haul back load wheat' commodity." 59 7856 (1920) (Cong. Evans).1 43 Even reasonably competitive physical wi hhold face theme running persistently farmer's vulnerability organized, capable driving down below cost production.2 bill: "Middlemen buyers." (1922).3 44 variety. supports surplus purchases. assistance way violate laws. chosen purpose. Government support program lift surely operate, lifting objective. goal permitting combat, supplant, purchasers' facing Economics teaches circumstances "bilateral monopoly" potentially beneficial impact eventual sharing suppliers buyers.4 House reason lead lowering consumers,5 middleman eliminated altogether. Norris elaborated 'to 46 thus comports consistent takers stored, dealt well-organized middlemen. farming. interpreted statutory changing economy,6 errs failing apply wording industry's changed. 48 important reasons granting immunity still, incapable withheld higher price. factor relevant. overwhelming demand fresh, frozen, 8-to-10-week-old chickens, four days slaughter.7 buyer's buyers few powerful: "[T]he oligopsonistic, P, Kroger Safeway institutional food outlets Kentucky Fried Chicken."8 recurrent pattern prices actual observed start decade.9 49 present poor depart farmers. products.10 Integrators Hence, "persons products." "crop" broilers.11 50 majority's insistence unless facilit sought explained role" .." 827-828. Phipps' rejected. 51 inaccurate equate commodities, contracts. equation ignores whereas mere producer. extends farmers." Opposition centered precisely commodities. 52 critic opposition: class cooperators; (Sen. proposal, statute's words conclusive activity exempted scrutiny.12 objection proposal protected. 53 hostility understandable, frequent references pernicious hatcheries facilities, commodities.13 hatched, withdraw throughout process. allowed "follo[w their] can." There dimension dichotomization processors. realities risk-bearing. raw "controlled dependent received manufacturer entered 2273. risk Phipps-type roducers fluctuation final borne exclusively producer, medicine (all supply facilities), damage transit, death growing identically suffered flocks, hatcheries, cost-plus unwarrantedly relies rejected shared parties elements denied cause applaud respects: importantly studious avoidance embracing States' view. urges that, determining subclass attention husbanding 'actual claim so. till raised." 14. 57 "Petitioner draws sustenance sharecroppers owners sharecropped 'farmers': work farmland it. neither." 28. 58 Tying legal validity. Under theory, integrator type unprotected today's achieve maintained (perhaps leasing "grower"). Or hiring employee, achieving surrogate himself husbander anomalous either steps attained expansion size operation—that entirely wrong direction, sentiment (with largely concur) nonintegrated Act.14 60 cites instances assertedly supporting proper test tilling soil. 13, nn. 21-27. Without exception, citations refer landowning merely shorthand way. customary observe Representatives filling pages Congressional observations agriculture's focal Republic, search vain why logical prerequisite response strains taking, joined association. 61 cumulative weight unable form, thrown inelastic supply, faced elastic demand. Perishability figured far realistically vulnerable oligopsonistic Put plainly, buy. partake seed or, broiler. produce, do. tie irrelevant criterion land, prove faithful, formulation not, underlying agriculture: purchaser taker. 63 respectfully dissent. See Bayside Enterprises, Inc. NLRB, 429 298, 97 576, 494 described manner: "We decide companies farms 'farmers' federal called gives measure laws" 1381 (CA5 1977). Nineteen assert litigants. re Chicken Litigation, 407 F.Supp. 1285 (ND Ga.). Brown, Association: Will Lickin' Stand?, N.C.L.Rev. (1978); Department Agriculture, Farmer Service, Legal Phases Cooperatives (1976); Note, Trust Busting Down Farm: Narrowing Scope Exemptions Cooperatives, Va.L.Rev. 341 pertinent part: agen ies common; agreements operated members; pay dividends 8% annually capital; "shall nonmembers amount greater value handled members." 292 regulation Secretary Agriculture. facilitate appeal, after decision, amended conspiracy NBMA. 94-95. done prejudice renewal abandoned 91. Noting dispute cooperative, provided complete defense complaint, restating dismissed prejudice. 105-108; 1976-1 60,801. Ga.Code 65-201 authorizes 65-205. When chartered stock. December filed, articles incorporation cancellation conversion 6. suggestion affects presented case. activities. ingredients research planning, conducting trade sales program. 137-139. range put remand. Broilers (or 10) weeks age sale supermarkets, restaurants, hotels institutions. 8, 98. conceded chicken Compare, Adjustment Administration, W. Termohlen, J. Kinghorne, E. Warren, An Economic Survey Commercial Industry (1936), V. Benson T. Witzig, Industry: Structure, Practices, Costs (Dept. Rep.No.381, Roy, Contract Farming Integration, ch. 4, "Broiler Chickens" (2d ed. 1972); Packers Stockyards Study Problems (1967); Ohio Research Development Center, B. Marion Arthur, Dynamic Factors Vertical Commodity Systems: Case System (1973). Table G-1, data Members 3, 20, attached affidavit I. R. Barnes, submitted accepted accuracy States. 467; 187-188. dealings others. Borden Co., 308 188, 203-205, 182, 190, 191, L.Ed. 181 (1939). Malat Riddell, 383 569, 571, 86 1030, 1032, 102 (1966); Addison Holly Hill Fruit Products, 322 607, 618, 64 1215, 1221, 1488 (1944). report stressed limitations applies" "aimed exclude help H.R.Rep.No.24, 67th (1921). H.R.Rep.No.939, 66th 2nd (1920). Kellogg, supporter read restrictive meaning: CUMMINS. Are 'as growers' descriptive subject? KELLOGG. subject. covered all. exactly catch point. not; grants privileges. covers people kinds, precaution added. TOWNSEND. things. Yes; always understanding." reads: also, 7851-7852 Rep. Morgan); 8017 Volstead). Ballantine, Co-operative Associations, Minn.L.Rev. (1923); L. Hulbert, 43-47 (Department Agriculture Bull. 1106, 1922). acknowledged unions cooperatives: "These sections population—those labored worked soil—were matter relation occupied combinations. widely scattered inured habits individualism; fate contingencies control." Tigner Texas, 310 141, 145, 879, 881, 1124 (1940). Liberty Warehouse Tobacco 276 71, 92-93, 291, 295-296, 72 472 (1928); Frost Corporation Comm'n, 278 515, 538-543, 235, 243-245, 73 483 (1929) (Brandeis, J., dissenting). 8025 Hersman); 9154 (extended remarks Michener); 1040 (1921) Towner); 2048-2049 Kellogg); Capper). Essentially same argument 393-396, 533-535, orange packing houses grew fruit, asserts bears 90%, more, costs, compared grower's 10%, less. 16, 21. repeatedly introduced Phipps, inserted "nut growers" (see supra ): "and process, convert commodity, thereof manufacturers." 2227, 2273-2275, 2281 suggests, post, 849, "partake broiler." Although true associated risks. Growers dealing M2, M3, probably M20, receive payment due, cases, disease. G-2, 195. And, perhaps importantly, period Very M2 anything "informal assurances" return facilities. G-7, 219. entitle need consider whether, had, ineligible helplessly concerned. Neither less although maintaining facility. "too small" development, concentrated aspects 7855-7856 Evans: liberty man tills soil"); Volstead); 8022 Sumners); 8026 Towner: "[T]his privilege dealers speculators profit; themselves"); 8033 Fields); 1034 Walsh); 1037 Blanton); unit. He manage farm. home"); 1044 Hersey); 2048, 2050 noting "individualistic occupation" describing "a holder land"); 2051 observing encourage "in ownership, occupation farm, cultivation Sens. Townsend); 2156 Walsh, "an farm"); 58-2059 Freeman, recommending said: "Cooperative action increasing. need, (1) orderliness efficiency marketing, (2) bargaining relationships major taking system. increased large, diversified expanded contracting meet needs. Developments weaken Hearings S. 109 Subcommittee Committee Forestry, sess., 3-4 (1967) 1875. dissenting finds helpful refuting suggested two excerpts 848 Armour" operates liability, grow. conspire Swift" fix businesses. assertion, moreover, third proviso allows becoming acquire produces 50% erroneous. Both plain statement Walsh nonmember producers' retaining belongs association, indicates processing. object corporation selling agency personally really 2268 Kellogg). quoted, refers irrelevant. Stand? (1978). Congressman Evans commenting earlier version bill. widest field crop, apple potato crop. harvested You dump country once price." 2263 Hitchcock). Capper's speech, 2058, summing "growers [who were] compelled [their products] glutted production." "Agriculture sells highest bidder restricted sort fixed purchasers. compensatory advantage offset fixes plus profit." Sumners bill). "Operating [the farmer] helpless falls easy victim operators output." Hersman asking chance oppress public, insist fair opportunity exist—a condition unfair Whenever seeks meets vast Personally little, anything, say Fields "protection gamblers rob hand public other." "stands defenseless corporations. goes world represents 100,000 incorporators, unit incorporate." Towner "[I]t nearer consumers speculator, maintenance stable immediate 1041 "[Cooperatives] tended gambling foodstuffs useless producers, retailers, consumers." G. Stigler, Theory Price 207-208 (3d 1966); M. Friedman, 191-192 Becker, 94-95 (1971). H.R.Rep. 3. Connell Constr. Plumbers Steamfitters, 421 616, 1830, 418 (1975) (labor exemption); Meat Cutters Local 189 Jewel Tea 381 676, 85 1596, 640 (1965) SEC Securities, 393 453, 89 564, 668 (1969) (concerning McCarran-Ferguson insurance). 29, 820 For starts flock. explicitly cooperative's comprise total cooperative; producing still raise contributed cooperative. distinguishes "non-producer interests" grow citrus contrast, Some production, concurring insists interpretation "would agriculture." 834-835. fatal flaw, equally opinion, holds, purged too concluding possible extension contrary intent, overlooked explicit history. passages impliedly recognized dissent: evil sponsors, yet could, (and (third proviso) ed.)). passages, thrust opinion's blunted. [Mr. POMERENE] last session inquired perti ently instance, Swift Armour, Wilson, whom, say, raises hogs, farms, extensively accomplished Recognizing there, easily abused, get So gentlemen law, throw business, more." 2157 Walsh). "[W]e monopoly. applies monopoly create admit anyone qualified. Armour admitted; happen admitted."

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