Legal Document

372 U.S. 253 83 Supreme Court Reporter 696 9 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 738 The WHITE MOTOR COMPANY, Appellant,v.UNITED STATES. Number 54. Argued Jan. 14 and 15, 1963. Decided March 4, Gerhard Atlantic Gesell, Washington, D.C., for appellant. Solicitor General Archibald Cox, appellee. Mr. Justice DOUGLAS delivered the opinion of Court. 1 This is a civil suit under antitrust laws that was decided below on motion summary judgment. Rule 56 Rules Civil Procedure at time hearing permitted judgment to be entered 'if pleadings, depositions, admissions file, together with affidavits, if any, show there no genuine issue as any material fact moving party entitled matter law.' Since time, an amendment 56, which included in proposed changes submitted Congress pursuant 28 Code KF62 § 2072, would add following requirement: 2 'When made supported provided this rule, adverse may not rest upon mere allegations or denials his pleading, but response, by affidavits otherwise must set forth specific facts showing trial. If he does so respond, judgment, appropriate, shall against him.' 3 But such requirement present when case decided; appellant, though strenuously opposing demanding trial, affidavits. It did, however, its brief opposition make concerning factual matters District thought were properly raised we think relevant decision merits. 4 Appellant manufactures trucks sells them (and parts) distributors,1 dealers, various large users. Both distributors dealers sell Moreover, some resell selected appellant's consent. All only principal practices charged violations §§ Sherman Act, 26 Statutes-at-Large 209, 15 1, 3, concern limitations restrictions territories within persons classes whom they sell. Typical territorial clause following: 5 'Distributor hereby granted exclusive right, except hereinafter provided, during life agreement, territory described below, White Autocar purchased from Company hereunder. 6 'STATE OF CALIFORNIA: Territory consist all Sonoma County, south line starting western boundary, Pacific Coast, passing through City Bodega, extending due east boundary exception sale fire truck chassis State California political subdivisions thereof. 7 agrees develop aforementioned satisfaction Company, hereunder accordance individuals, firms, corporations having place business and/or purchasing headquarters said territory.' 8 customer further nor authorize Federal government department subdivision thereof, unless right do specifically writing.' 10 These provisions, applicable alike, are claimed appellee per se Act.2 adopted view accordingly. 194 F.Supp. 562. We noted probable jurisdiction. 369 858, 82 946, 17. See 29. 11 Appellant, arguing trial merits, representations Court: clauses necessary order appellant compete those who other competitory kinds trucks; could theoretically have own retail outlets throughout country users directly; method, feasible it entails costly extensive sales organization; method distributor dealer system; system effective existing competition larger companies, vigorous intensive efforts restricted territory, held responsible energetic performance, fair, reasonable, protect him invasions appellant; obtain maximum given area insist concentrate trying take away competing manufacturers rather than each other. went say: 12 'The plain is, expect able outlawing distributorships dealerships specified reduce motor foster competition.' 13 As clauses, represented one their purposes assure 'that 'national accounts,' 'fleet accounts' governments departments customers respect defendant especially severe makes likely continuing volume orders place, deprived appropriate discounts purchases repair parts accessories dealer, result becoming discontented Motor treatment receive reference prices trucks.' agreements fixing these customers3 were, according adjunct restriction amounted merely agreement give proper discounts. 'In way affects pay accessories, affects, practical matter, spare particular customers. provisions defendant's future 'National Accounts,' 'Fleet Accounts' manufacturers, seriously jeopardized.' also argued below: 'On principle, reason whatsoever why manufacturer should limited selling class another reserve There many circumstances possible objection limiting goods, reasons reasonable public interest reselling certain 16 instant case, both (except approved dealers) direct public, compelled full potential respective territories, fair honest, end increasing perpetuating itself thereof perfect do. 17 'Therefore, based decisions Courts illegal se, plaintiff prove succeed effects violative being unreasonable restraint trade commerce.' 18 In defends ground 'the sure something really important done oneself. size orders, technicalities bidding delivery, factors play part decision.' 19 Summary judgments field, elsewhere, though, warned Poller versus Columbia Broadcasting System, 368 464, 473, 486, 491, 458, 'where motive intent leading roles.' Some law well developed where, here, gist turns documentary evidence, rule times can divined without 20 Where unpatented product tied patented article, violation since bald effort enlarge monopoly patent beyond terms. Mercoid Corporation Minneapolis Honeywell Regulator Co., 320 680, 684, 64 278, 280, 88 L.Ed. 396; International Salt company States, 332 392, 395—396, 68 12, 14—15, 92 20. And see Ethyl Gasoline 309 436. 60 618, 84 852. competitors agree divide markets, run afoul laws. Timken Roller Bearing 341 593, 71 971, 95 1199. Group boycotts example violation. Fashion Originators' Guild America Trade Comm., 312 457, 61 703, 85 949; Klor's, Incorporated Broadway-Hale Stores, Inc., 359 207, 79 705, 741. Price-fixing arrangements, vertical (United Parke, Davis & 362 29, 80 503, 505; Dr. Miles Medical John D. Park Sons 220 373, 31 376, 55 502) horizontal Socony-Vacuum Oil 310 150, 811, 1129; Kiefer-Stewart Joseph E. Seagram Sons, 340 211, 259, 219), been laws; nature, extent, degree longer necessary. 21 already stated, price here injunction issued now challenged. price-fixing restrictive ancillary scheme quite restrained. Such Bausch Lomb Optical 321 707, 805, 1024, where 'an integral whole distribution system' (Id., 720, 812) including restrictions. No finding case; whether permit stop inquire. 22 apparently maintained two types agreements. Under first, allowed appoint him, had charge same dealers. affected five percent sold pertaining ultimate purchasers. arrangement required governmental agencies discount gave them. figures given, assumed amount commerce involved relatively small. Without more detailed findings therefore cannot say governed supra. 23 asked extend holding supra (which banned arrangements among territory), restricting intimate legality arrangement, believe designed after 24 first involving arrangement; know too little actual impact respecting reach conclusion bare bones evidence before us. 25 Standard New Jersey 221 62, 502, 516, 619, read into Act 'rule reason.' That reason' normally requires ascertainment peculiar business. stated Chicago Board 246 231, 238, 38 242, 244, 62 683: 'Every trade, every regulation restrains. To bind, restrain, very essence. true test imposed regulates perhaps thereby promotes suppress even destroy competition. determine question court ordinarily consider applied; condition imposed; nature effect, probable. history restraint, evil believed exist, adopting remedy, purpose sought attained, facts. because good intention will save objectionable reverse; knowledge help interpret predict consequences.' 27 recently reviewed Northern Pac. R. 356 78 514, 545. category up 'agreements pernicious effect lack redeeming virtue conclusively presumed elaborate inquiry precise harm caused excuse use.' Id., Page 5, S.Ct., 518. Tying 'to buyer different (or tied) product, least purchase supplier' Pages 5—6, 518) fall category, necessarily so. 'They themselves whenever has sufficient economic power tying appreciably restrain free market 'not insubstantial' interstate affected. * Of course seller control dominance over represent effectual weapon pressure buyers taking item attributable obviously insignificant most. simple example, dozen food stores community refuse flour took sugar hardly tend ready itself.' 6—7, 29 importance setting: 30 'Thus, device employed small attempt break market, cf. Harley-Davidson 50 F.T.C. 1047, 1066, use rarely harmonized strictures laws, intended primarily preserve stimulate Brown Shoe 370 294, 330, 1502, 1526, 510. Horizontal limitations, like '(g)roup boycotts, concerted refusals traders deal traders' (Klor's, supra, 212 U.S., 709 S.Ct.), naked restraints stifling A limitation effect. enough stuff out emerge certain. They dangerous sanction allowable protections aggressive practicable means breaking staying (cf. Shoe, 330 1527; Jerrold Electronics Corp., 187 545, 560—561, aff'd, 365 567, 81 755, 806) need about decide thay 'pernicious virtue' (Northern classified Act. 32 analogy merger field leads us conclude had. offend substantial lessening immunity acquired failing one. Commission, 280 291, 302—303, 89, 92—93, 74 431. cases 'substantially lessen competition' (Brown 328—329 1525—1526), Diebold, 654, 993, 176. 33 apart phase improperly suit. Apart fixing, hold determined 34 Reversed. 35 consideration case. 36 BRENNAN, concurring. 37 While N Dec. Immigration Nationality Decisions join Court, novelty questions prompts me few words. fully premature declare either 'we (of form restraint) us.' seems distinct problems wish distinction mind I. discuss limitations. insulation neighboring involves alienation, historically inherently suspect laws.1 404—408, 383—384, 502. proposition not, tell utterly justification deemed unlawful se. 518, Specifically, prohibition applied agreements, group divisions markets. practices, experience analysis established utter inherent threat competition.2 gauge appropriateness forms then, warrants, stage, similarly irrelevant.3 With type bar, courts yet shown warrant conclusion. 39 Government urges, found, closely resemble traditionally outlawed restraint—horizontal division resale maintenance—that ought absolute legal test. analogies surely instructive, bar sui generis; are, misleading. similarities thus far obscured equally differences, serve my distinguish practice others clearly appropriate. 40 Territorial bear superficial resemblance markets competitors, tantamount compete, hence inevitably Act,4 clear induced solely distributors, difference formally inter-dealer agreement.5 Cf. Interstate Circuit, 306 208, 59 467, 610; Masonite 316 265, 275—276, 1070, 1076, 86 1461. aught record discloses, plausible inference unwilling exclusively interests. gains credibility limitations—unlike, franchise agreements—bind harsh bargain while leaving unfettered. event, neither source pleadings supporting crucial whether, despite differences form, inhibitory answered trial.6 41 maintenance appealing, less deceptive. Resale to, almost invariably fact, sellers much between brands. 45—47, 512—513, 505. indirectly similar intra-brand competition, inter-brand maintenance.7 42 Indeed, offers might absent. Thus, lawfulness becomes assess merit extenuations offered Surely significant disposition if, claims, prerequisite independent trucks. Whatever relationship survival producers explored appraise resort practices. 43 situations, presented directly possibility cautions hasty unlawful. Arguments suggested conclusion, marketing new risky product; suggestion find essential, simply acquire retain outlets, guarantee franchises. reasonably appear subdivide ensure adequately advertised, promoted, serviced.8 think, inappropriateness irrelevance justifications condemned principally distinguishes maintenance. 44 Another particularly require pros cons assuming shown, operation related needs brought being. put way, problem justified necessary, excessively anticompetitive, viewed light extenuating interests.9 treated examining restraints, whatever form. what sanctions 'raid,' across boundaries If, cross-sale incurs obligation share 'pass over') profit whose invaded—as most often, case10—then harmful typical franchise—the dispute here. hand, cross-sells runs risk losing altogether, serious hazards deter compete. 45 pertinent explore availability alternatives. suggests, legitimate advances served, damage devices—for franchise,11 assignment areas primary responsibility distributor,12 revision levels pass-over minimize deterrence cross-selling feasible.13 alternatives meaningfully undertaken until ascertained suit, enforced. II. 46 turn next seem two, custom desirable accounts. At countervailing tendercies brands accompany short, difficulty supposing justified. 47 meaningful sense, could, restrictions, reserved outlets.14 prevented doing then absence record, invalidity apparent. McKesson Robbins, 351 305, 312, 76 937, 941, 100 1209; Klearflax Linen Looms, 63 32. fill service fleets fleet customers, codify economically obvious. originally foreclose soliciting accounts, become meaningless event unable 48 strike untenable found stifle three types. First, argues '(a) competent handle intricate process servicing accounts) months specialized training'; consequent danger 'unauthorized dealers' 'will unqualified work specifications meet customers' requirements.' extent fears founded, concerns legitimately distributors' ability effectively By terms, call cutting completely segment drastic measures as, improved supervision training, special manufacturer's warranty purchasers unsatisfactory servicing. 49 second oneself.' argument much, truly counted solicit accounts—not demanding—then suggests adequate solution integration, elimination franchised distribution. Instead, seeks best worlds—to general skimming off cream sales. That, me, permit, Eastman Kodak York Southern Photo Materials 273 359, 375, 400, 404, accounts third justification, jurisdictional statement, essential enable 'more directly' 'through interposition dealers.' invites vice position channels afford cost advantage distributors. things, buy whichever outlet lowest prices. always did grant grant, denying overcome access preferred Conversely, presence designed, part, noncompetitive pricing structure, 51 sum, proffered On it, prevail proof warrants that, economics 52 CLARK, THE CHIEF JUSTICE BLACK join, dissenting. 53 reluctant 'This 'bare bones' complaint answer, excerpts interrogatories, exhibits deposition secretary behalf Government, taken 1959, formal excerpt 'Argument' thereto. lay brazen experienced quarter century. 54 'argument,' convinced raises requiring points maintain room, station representative number return and, protected distributor's therein investment money Likewise, continues, 'similar contracts effects.' promoting Company's powerful competitors.' Emphasizing motor-truck manufacturing industry highly competitive industries country,' 'is small' 'by stretch imagination, dominate insists ways trucks: (1) stations, (2) distributor-dealer presently follows. discards 'feasible company.' second, spread 'too thinly vigorously intensively work.' says, confine financial facilities capabilities cultivate *.' 'it indeed allotted exploitation procure 'distributors trucks, (it) men representatives For allow come scalp therein.' Rather 'cutting other's throats' 'concentrate net allocation 'these (Italicized original.) contracts, abandoned appeal, 'argument' 5% followed public. Justification insured agents 'get equal pricewise,' step 'satisfied efficient organizations.' provision says After all, 'probably nothing owner vehicle peeved overcharged accessories.' situation finds summed words, i.e., bigger attempts necessity, long rejected defense cases. 407—408, 384, 502 (1911); Comm'n, 467—468, 707—708, 949 (1941), 545 (1958). Motor's 'powerful competitors' 'protect prevent throats.' grounds action disastrous enterprise permitted, effectiveness person wishing sole prices, terms customer. latter reject contract 'a headquarters' latter's territory. He brand truck, true, existence interbrand never explicit eliminate 1209 (1956). Likewise isolated One outside confined island. 57 diligently searched offer fail allegation fact. statements arguments necessities none bearing issue. appears 'all room retailers (dealers), supply impossible.' Hartman, 153 KF105 F3 24, (C.A.6th Cir.), Lurton, circuit judge, Hughes, later Chief Justice, 381 (1911). re-read dignity 'If leave point usual discoverable.' Ibid. 58 voluntarily commodity, agreed themselves, 1199 (1951). contend tendency themselves. halo around vertical. destructive than, counterparts. easily breached, continually policed forming combination, detected, practically self-enforcing. admitted numbering 300, identical contracts. to' get financially capable nowise denied enter Indeed contrary. motivations inextricably intertwined; acquainted readily complied requirements, hard draw basis initiates plan. 223, 610 (1939), unanimity 300 parties 'understanding join' certainly much. weaker held: 'It texes credulity several would, circumstances, accepted methods understanding range probability chance.' counter withholding 941 (1956), resales approval 721, 812, 1024 (1944). Experience, our cases, reasonableness subject inquiry. inapplicable eliminating 1129 (1940) (price fixing); (group boycotts); (1947), National Lead 319, 67 1634, 91 2077 (1947) (tying arrangements); supra; Nationwide Trailer Rental System 355 10, 11, (1957), affirming 156 800 (D.C.D.Kan.1957), (division markets). applies contention contrary policy suppression injury. admit, petitioner, eliminated admit how beneficial, interdiction. thrust essence profitably covenants. note car manufacturers—including 'big three'—abandoned decade ago. these, American Motors, told Eighty-fourth Congress, legislation pending territory,1 favor legislation, permissive otherwise, restricts choose desires purchase.' Hearings Subcommittee House Committee Foreign Commerce Automobile Marketing Legislation, 84th Cong., 285. Motors survive prosper three' remains secure freedom sell.' 384. And, Hughes continued: 'As this, complainant fare better plan formed combination endeavored establish achieve result, immediate sustain asserted ulterior benefit regarded support system.' 408, milk coconut 'having satisfactory itself, derived subsequent traffic.' 409, 385. 65 Today futile act remanding plead successful predicated. Neither (I sixth year) analysts, statisticians, experts marketing, ingenuity lawyers, escape unalterable void. remand additional years enjoyment fruits action. Certainly precedential value2 substantive law. advised 'no uses separate tier system, instead.' appeal Court's ruling 2, common Levi, Davis-Colgate Doctrine: Ban Price Maintenance, Review (Kurland ed. 1960), 258, 270—278. principle alike arrangements: 'Whatever have, reasonableness. central nervous economy.' 224, n. 59, 226, 845, 1129. Outside categories unlawful, 'whether facts.' 683. urges adoption illegality, nonetheless recognizes considerations validity case: 'What opposed intrabrand competition? Will White's remain increases? issues 'reasonableness' Nor content single investigation. Business conditions change. today tomorrow.' Brief 31—32. Addyston Pipe Steel 175 240—245, 96, 107—109, 136; 513, 2077. Report Attorney General's Study Antitrust Laws (1955), 26. contrasting views question, compare Kessler Stern, Competition, Contract, Vertical Integration, 69 Yale L.J. 113 (1959), Robinson, Restraints Orderly Goods, Cornell L.Q. 254, 267—268 (1960). See, elaboration discussion inquiry, Snap-On Tools FTC Docket 7116, Clearing Reg. Rep. 15,546; Jordan, Exclusive Restricted Sales Areas Laws, U.C.L.A.L.Rev. 111, 125—129 (1962). kind, Turner, Definition Agreement Act: Conscious Parallelism Refusals Deal, 75 Harv.L.Rev. 655, 698—699 Note, Channels Distribution 795, 800—801 schedule challenge situations relevant, compare, e.g., Packard Car Webster U.S.App.D.C. 161, 243 Reporter, 2nd 418; Schwing Hudson 138 899 (D.C.D.Md.), 239 176 (C.A.4th Cir.). former observed, short manufacturer, advantageous largest Baltimore, agreeing drop Baltimore penalize fails promote defeats it.' U.S.App.D.C., 164, 421. doctrine scope; smaller automobile competed, declines shares. franchises accompanied 6, 135—139. Columbus Coated Fabrics 1500, 1503—1504. excessive needs, suspicion pressures interests about, real restrict 436, 457—459, 625—626, 852; 698 699, 704—705. complaint, another's injured sanctions, withdrawal cancellation franchise, ever invoked check cross-selling. contained (in governing 'adjustment deliveries') exclusive-territory generally employed. 814—816 suggested, 585—586, concede, violate although determination examination Reg.Rep. 15,546, 20,414. consent decrees recognized area-of-primary-responsibility covenants substitutes arrangements. Bostitch, 1958 Cases 69,207 (D.C.D.R.I.); Rudolph Wurlitzer 69,011 (D.C.W.D.N.Y.). assigned area, stay areas. Mich.L.Rev. 1008 exceed answered, major unnecessary promotion products. Before 160, 248, 285, 323. analogous Commission dismissed insufficient foreclosed Matter Roux Distributing 1386. non-contractual anticompetitive 32, seemingly virtual monopoly. 817—818 H.R. 6544, 1st Sess. bill reported Committee. Our recent certification procedure quoted opinion, posed sufficiency record.

Classification Label: 7