Document: 377 U.S. 13 84 S.Ct. 1051 12 L.Ed.2d 98 Richard S. SIMPSON, Petitioner,v.UNITED OIL COMPANY OF CALIFORNIA. No. 87. Argued Jan. 15 and 16, 1964. Decided April 20, Rehearing Denied May 25, See 949, 1349. Maxwell Keith, San Francisco, Cal., for petitioner. Moses Lasky, respondent. Mr. Justice DOUGLAS delivered the opinion of Court. 1 This is a suit damages under § 4 Clayton Act, 38 Stat. 731, U.S.C. 15, violation §§ 2 Sherman 26 209, as amended, 50 693, 1, 2. The complaint grows out so-called retail dealer 'consignment' agreement which, it alleged, Union Oil requires lessees its outlets to sign, which Simpson was one. one year thereafter until canceled, terminable by either party at end any and, terms, ceases upon termination lease. lease also year; alleged that used police prices charged consignees, renewals not being made if conditions prescribed company are met. company, pursuant agreement, sets retailer sells gasoline. While 'title' consigned gasoline 'shall remain in Consignor sold Consignee,' while pays all property taxes on possession Simpson, he must carry personal liability damage insurance reason 'consigned' responsible losses his possession, save specified acts God. compensated minimum commission costs operation familiar manner. price fixed during period question 29.9 cents per gallon; despite company's demand adhere authorized price, 27.9 cents, allegedly meet competitive price. Solely because below refused renew lease; ensued; this filed. terms dispute nor method their application case. interstate character Oil's business conceded, extensive use lease-consignment eight western States.1 3 After two pretrial hearings, moved summary judgment. partial judgment—that consignment program Act. District Court, concluding 'all factual disputes' had been eliminated from case, entertained motions. Court granted motion denied Simpson's, holding latter established Act even assuming such violation, suffered actionable damage. Appeals affirmed. assumed there were triable issues law, concluded no wrong or damage, 9 Cir., 311 F.2d 764. case here writ certiorari. 373 901, 83 1290, 10 197. We disagree with assumed. If achieves resale maintenance injure commerce depriving independent dealers exercise free judgment whether become consignees all, event, sell prices. fact can refuse deal does give supplier immunity arrangement those schemes condemned antitrust laws. 5 There whenever restraint trade monopolistic practice has an impact market; matters complainant may be only merchant. Klor's Inc. v. Broadway-Hale Stores, Inc., 359 207, 213, 79 705, 741; Radiant Burners, Peoples Gas Co., 364 656, 660, 81 365, 358. As we stated Radovich National Football League, 352 445, 453—454, 77 390, 395, 456: 6 'Congress has, legislative fiat, determined prohibited activities injurious public provided sanctions allowing private enforcement laws aggrieved party. These protect victims forbidden practices well public.' that, failure lease, another takes Simpson's place renders same service more answer than Poller Columbia Broadcasting System, 368 464, 473, 82 486, 7 458. For Congress, oil distributor, arbiter interest; Congress closely patrolled fixing effected through agreements otherwise.2 exclusive requirements contracts struck down Standard Co. California Stations United States, 337 293, 69 1051, 93 L.Ed. 1371, saved need have agreed them, but could gone elsewhere. defense, regiment thousands otherwise programs merely fear nonrenewal short-term leases. clear States Parke, Davis & 362 29, 80 503, 505, coercion achieve maintenance. reiterate view, adding what coercive device is. Colgate, 250 300, 39 465, 63 992, explained Davis, U.S., 37, where maintain Here agreement; coercively, promises equally effective maintaining avis techniques monopoly drugs. 8 Consignments perform important function commerce, integrity recognized many courts, including Ludvigh American Woolen 231 522, 34 161, 58 345. Yet consignments, though useful allocating risks between parties determining rights inter se, do necessarily control others, they creditors sovereigns. Thus extensively regulated States. 22 Am.Jur., Factors, 8; Hartford Indemnity Illinois, 298 155, 56 685, 1099. too, entered parts field, establishing June 10, 1930, 46 531, 499a et seq., pervasive system over merchants dealing perishable agricultural commodities. One who sends rug painting other work art merchant gallery sale can, course, hold consignee bargain. A may, indeed, inventory consignment, bind se. consignor always prevail bankruptcy, recording statute 'traders act' 'sign statute' effect. Collier, Bankruptcy (14th ed.), pp. 1090—1097, 1484—1486. interests Government frequently override make. policy expressed Acts Congress. Accordingly, matter how lawful might contract way before federal policy. allowed cloak avoid Fashion Magrane-Houston 258 346, 353—356, 42 360, 66 653; cf. Straus Victor Talking Mach. 243 490, 500—501, 37 412, 61 866. Nor Tolerate Socony-Vacuum 310 150, 221—222, 60 811, 1129; supra. enlightened present-day marketing methods recent congressional investigations. In automobile field 'the manufacturer's suggested price,'3 coercively exacted; automobiles go consignment; sold.4 Resale increasing.5 theory vogue exposed official testimony House Committee Small Business mechanism: 11 'Mr. ROOSEVELT. Who your station, station? RATH. do. You do? 14 Yes. basis: see, paid co mission these products us. Now, into market area find major is, level set our house-brand that.'6 Dealers, like businessmen; most indicia entrepreneurs, except fixing. risk loss apart Their return affected rise fall commissions declining drop.7 Practically power wholly businessmen, whose depends own initiative enterprise, taken them proviso Oil. By laced able impose noncompetitive persons competitive. evil program, held illegal supra, inexorable potentiality certainty destroying competition sales nominal 'consignees' reality small struggling competitors seeking gas customers. 16 said, owner article send turn undertake owner. nothing about arrangement. When, however, cover vast distribution system, outlets, prevent calling agency,8 then result SoconyVacuum would avoided clever manipulation words, differences substance. present, device, successful against challenge laws, furnishes wooden formula administering scale.9 17 Reliance placed General Electric 272 476, 47 192, 71 362, utilized patented articles. correctly argues somewhat parallels instant case.10 did restrict ruling articles; it, said available owners articles 'patented otherwise.' Id., 488, 362. But whatever special facts, involving patents, apposite facts here. 18 particularly relied patent long included licenses 'to make, vend' 'for royalty, condition performance reasonably within reward patentee grant entitled secure.' 489, 196, 35 154, provides part: 'Every shall contain short title invention patentee, heirs assigns, term seventeen years, right exclude others making, using, selling throughout referring specification particulars thereof.' (Italics added.) 19 'The manufacture, sell, each substantive rights, conferred separately patentee.' Adams Burke, Wall. 453, 456, 21 700. Long prior condoned (Bement Sons Harrow 186 70, 747, 1058), extend purchasers supra; Ethyl Gasoline Corp. 309 436, 618, 852. 20 17-year 'making, invention' pari materia modify pro tanto. That ratio decidendi 485, decline invitation it. To allow make legality antirust purposes draftsmanship. let so vital competitve rest easy maipulation. Cf. Masonite Corp., 316 265, 280, 62 1070, 86 1461. Hence issue left try, maintenance, employed. 23 remanded hearing raised McGuire 631, 45, damages, any, suffered. intimate views issue; type petitioner reserve when known, equities warrant prospective suits rule governing announce today. 24 Reversed remanded. 25 HARLAN took part disposition Memorandum BRENNAN GOLDBERG. 27 o 'resale damage.' think, should decide law record entered. Since decision expected affect businesses, outstanding reliance Electric, ought pronounce without benefit trial 'coercive agreement,' affording interested parties, Antitrust Division Department Justice, opportunity express views. therefore agree MR. JUSTICE STEWART vacate remand plenary issues. 28 STEWART, dissenting. 29 favor respondent, finding respondent violated damages. affirmed 'any occurring deliberate choice deliberately knowingly enter contractual obligations contend injured results acts.' 764, 769. 30 I think reasoning proceeded untenable. gravamen petitioner's coerced conditioned acceptance respondent's unlawful selling. If, assumed, inconsistent assume subject root error seems me, Court's terminate controversy aside merits. full litigation, completely bona fide consignor, employing numerous agents, sold, agency,' transform sale. present posture determination, overruling doctrine stood unquestioned almost 40 unwarranted, unnecessary premature. 31 kind violate today concedes case.' far now us discloses, virtually indistinguishable.1 Instead expressly seeks distinguish specious ground underpinnings law. 32 It true gasoline, lamp bulbs manufactured patent. ever considered revelant 'however comprehensive mass whole effect * *.' addition unambiguous statement Chief Taft's unanimous '(t)he violating common Anti-Trust dispose directly consumer agents transfer him consumer,' portion validity Electric's agreements, gave intemation whatsoever conclusion differed respect unpatented. Quite contrary, assessing addressed itself question: whether, view arrangements ordinarily usually buying manufacturer public, treated lamps contracts.' 483—484, 194, 33 question, examined operative provisions determine created valid agency fact, effectively passed consignee. 483—488, price-fixing requirement resale-price-maintenance scheme, Dr. Miles Medical John D. Park 220 373, 376, 55 502, regardless patented. Similarly, agency, again Possession legal significance inquiry directed ascertaining burdens, risks, ownership actually principal agent. fix augmented goods consigned. virtue sells; flows simple goods, remains owner, will them.2 clear, therefore, overrules Electric. so, challenged briefs oral argument thought magnitude properly reached after careful consideration relevant considerations preferably Court.3 Today's upsetting carries severe consequences large sector economy. cannot blind commercial economy shaped decisions elaborating reach Everyone knows widely country. outlawing includes limitation, inject uncertainty relationships explicitly validating distribution. create, well, distinct possibility untold number sellers subjected treble rely decisions. 36 required re-examination serious mentioned reargument invite views.4 broad decided. inadequate support realistic assessment actual nature lease-and-consignment involved. pointed out, read. No written stipulation formal order made. create unsatisfactory *. stands, impossible pretrial.' F.2d, 767. merits scheme involved, although face maintenance.5 Or existed some violative determined. Only issues, perhaps resolved presented continuing doctrine. Consequently, certainly await day. December 31, 1957, supplied 4,133 stations California, Washington, Oregon, Nevada, Arizona, Montana, Utah Idaho. Of figure, 2,003 owned leased turn, subleased retailer; company-operated training stations; remaining 2,116 third persons. date 1,978 (99%) lessee-retailers 1,327 (63%) nonlessee-retailers. 45; Miller-Tydings 1; 1129. H.R.Rep.No.1958, 85th Cong., 2d Sess., S.Rep.No.1555, Sess. note 3, 1. H.R.Rep.No.1157, 1st 6—7. Assistant Attorney charge Division, testified: 'Another relating concerns certain companies preserve tank wagon structure; example, placing basis, narrows normal margin profit fixes price.' 7. report said: 'One effects expansion station operators lose status businessmen. gross gallon commission-type supplier.' Ibid. Hearings, Select Business, H.R.Res. 56, Pt. III, 79—80. justification program—a similar traditionally advanced maintenance: 'Consignment protecting dealers' margins disturbed conditions, time positions people handling premium quality product. means unfair competition, station. instead relationship competitors. 'We proud accomplished ends outlined above. accomplishments taking away independence dealers. Through maintained guaranteed best industry. brought substantial also—and point strongly—they uses investment inventories. amounts average $2,500 dealer. 'If suspicion resentment groups, appears Co.'s greatly misunderstood remove aspect dealer's giving name disturb situations contributed materially economic welfare withdraw up, know action bitterly opposed Any problems laid doorstep—and new program—have corrected survey reveal great majority heartily consignment. offer names hundreds program.' 86—87. basic force 1/2¢ amount 'authorized' exceeded posted 'tank wagon' applicable gallons. However, 'a thorized' fell 'minimum retail' reduced 50% difference retail. event less 5.95¢ regular 5.75¢ ethyl. Shortly ceased changed. absorbed 20% retail.' retail,' increased 80% excess, compared 100% thereof former plan. Klaus, Sale, Agency Price Maintenance, Col.L.Rey. 312, 441, 443—454 (1928). A. Berle recently described critical importance money making oligarchies business, 'behemoths' calls them: 'Are behemoths good goods—or money? Do come better manufacture efficiently—or 'control market' collect unduly high long-suffering consumer? 'Again, quite knows. pretty partly administration. Economists just beginning wrestle problem 'administered' three four 'bigs' particular line happy stay gets too high, smart vice president see chance take fat slice 'But bigs reduce start knows, associates soon drop that. ensuing war, nobody while. 'So, uneasy balance struck, everyone's same. Shop around you works. call 'imperfect competition'—a tacitly accepted stiff create. big swing sort effectively. really efficient because, size, 'adminster' prices.' Bigness: Curse Opportunity? New York Times Magazine, Feb. 18, 1962, 55, 58. lost, damaged missing items stock assu ed fire, flood obsolescence, 'responsible gasolines him, thereto cause earthquake, lightning, flood, fire explosion caused negligence pay lost damaged.' were, wholesale merchandise previously handled consignor's lamps, merchants, exclusively 'all' assessed whereas taxes. carried 'whatever carried' apparently obligated insurance. Without commenting significance, purport discover regarding tax burdens consignors. On closer examination, purported disappe r. From records cases, both burden—payment goods. And since bore insurable consigned, 'carried insurance' distinction all. implies providing insurance; incurred ordinary course events; operation, agreement. agreements. They illustrate well-recognized businessmen agents. commonly defined 'in pursuit calling,' engaged agent property. See, e.g., Calif.Civil Code 2026. surprising provide bear expenses conducting business. found unobjectionable, 484—485, further observed provision burden 'is reasonable secure (the consignee's) entrusted him.' 484, 195, significance. Such serves purpose responsibility (which imputed relationship) liabilities arising connection makes consignee's declines drop. very geared prices, thus typical bears declines. compensation 10% list Company correct say one, declined dropped. Moreover, Union's received extent declines, thereby substantially restricting exposure quotations relate separate second involved case—the license Westinghouse, patents former, patentee-licensor—and relevance source patentee-consignor patent, cases cited singularly irrelevant suppose J STICE disqualified future involve rule. Department's sought. Indeed, sought, light recognition tacit validation 1959 consent decree West Coast companies, Trade Cases 69,399, p. 75,522 position undisturbed. California's Fair Cal.Bus. Prof.Code 16900, considered. 45 (McGuire Act).

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