Legal Document

393 U.S. 333 89 Supreme Court Reporter 510 21 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 526 UNITED STATES, Appellant,v.CONTAINER CORPORATION OF AMERICA et al. Number 27. Arg ed Nov. 18, 1968. Decided Jan. 14, 1969. Edwin M. Zimmerman, Washington, D.C., for appellant. Whitney North Seymour, New York City, appellees. Mr. Justice DOUGLAS delivered the opinion of Court. 1 This is a civil antitrust action charging price-fixing agreement in violation § Sherman Act.1 26 Statutes-at-Large 209, as amended, 15 Code KF62 1. The District dismissed complaint. 273 F.Supp. 18. case here on appeal, 29; and we noted probable jurisdiction. 390 1022, 88 1408, 20 280. 2 proved unlike any other price decisions have rendered. There was an exchange information but no to adhere schedule Sugar Institute versus States, 297 553, 56 629, 80 L.Ed. 859, or Socony-Vacuum Oil Co., 310 150, 60 811, 84 1129. concerning specific sales identified customers, not statistical report average cost all members, without identifying parties transactions, Maple Flooring Mfrs. Assn. 268 563, 45 578, 69 1093. While there present here, Cement Protective 588, 586, 1104, prices absent controlling circumstance, viz., that cement manufacturers, protect themselves from delivering contractors more than needed job thus receiving lower price, exchanged means protecting their legal rights fraudulent inducements deliver job. 3 Here request by each defendant its competitor most recent charged quoted, whenever it such available another source. Each usually furnished data with expectation would be reciprocal when wanted it.2 That concerted course sufficient establish combination conspiracy, initial ingredient Act. 4 freedom withdraw agreement. But fact remains requested received information, affirming willingness furnish return. 5 sure infrequency irregularity exchanges between defendants; often were records defendants customers themselves. Yet essence requested. 6 Moreover, although quoted sometimes fragmentary, had manuals which could compute order customer. 7 Further, current customer need pay obtain products furnishing data. 8 account about 90% shipment corrugated containers plants Southeastern States. vary dimensions, weight, color, so on, they are substantially identical, matter who produces them, made particular specifications. paid depend alternatives. Suppliers see ing new additional business keeping old do exceed competitor's price. It common purchasers buy two suppliers concurrently. A supplying quote same orders, unless costs changed. where normally even 9 seemed effect within fairly narrow ambit. Capacity has exceeded demand 1955 1963, period covered complaint, trend container been downward. despite this excess capacity downward prices, industry expanded Southeast 30 manufacturers 49 51 98 plants. An abundance raw materials machinery makes entry into easy investment $50,000 $75,000. 10 result stabilize though at level. Knowledge meant matching continuation some competition fatal Government's case. limitation reduction brings ban, held supra, 224, n. 59, 844, interference setting free market forces unlawful per se. Price markets may truly competitive dominated relatively few sellers. product fungible inelastic, buyers place orders only immediate, short-run needs. tends toward uniformity. For does mean larger share sharing existing Stabilizing well raising them ban As said 223, 'in terms operations stabilization one form manipulation.' inferences irresistible anticompetitive industry, chilling vigor competition. case, somewhat casual, analogous those American Column & Lumber company 257 377, 42 114, 66 284, Linseed 262 371, 43 607, 67 1035.3 11 too critical, sensitive control allow used informal manner restrain competition.4 12 Reversed. 13 FORTAS, concurring. 14 N Dec. Immigration Nationality Decisions join judgment understand Court's hold among sellers individual pursuant mutual arrangement, se Absent violation, proof essential practice resulted unreasonable restraint trade. single test determine record adequately shows 'unreasonable trade'; involved, adopted purpose arriving determination inevitably suggests probability materially interfered operation mechanism marketplace bring condemnation decisions. Cf. 859 (1936); 284 (1921). 16 Theoretical probability, however, enough regard mere akin conspiracy deserve classification. am prepared this, nor necessary here. In led upon buttressed evidence record. evidence, overwhelming, special circumstances show actual pricing compel us court below erred dismissing 17 summary, sought obtained competitors part arrangement competitors' customers. '(I)n majority instances,' found, 27, once he competitor, higher 'occasionally' quoted. Thus possible confidently name equal asking. obvious 'stabilize' joint arrangement—at least limit cuts minimum meet addition, that, instances, during periods various ceased exchanging exceptionally sharp vigorous reductions resul ed. 18 On record, taking specially function term equation, cannot justified reaching conclusion defendants' tacit did amount industry. being so, consider possibility violation. 19 MARSHALL, whom HARLAN STEWART join, dissenting. agree holding existed should condemned, either illegal se, having restricting Under laws, numerous practices precise harm. Northern Pacific R. 356 1, 5, 78 514, 518, 545 (1958), 'there certain agreements because pernicious lack redeeming virtue conclusively presumed therefore elaborate inquiry harm caused excuse use.' Among these pricefixing, 1129 (1940); division markets, Addyston Pipe Steel 85 Federal KF105 F3 271, 46 L.R.A. 122 (C.A.6th Cir. 1898), aff'd 175 211, 96, 44 136 (1899); group boycotts, Fashion Originators' Guild America FTC, 312 457, 61 703, 949 (1941); tying arrangements, International Salt 332 392, 68 12, 92 (1947). We recently added list sales-commission systems marketing tires, batteries, accessories service stations affiliated major oil companies. FTC Texaco Inc., 429, 394 (1968). refused apply rule past. See (1921); 1035 (1923); 1093 (1925); 1104 (1925). believe follow 22 Per rules always contain degree arbitrariness. They assumption gains imposition will far outweigh losses significant administrative advantages result. words, potential plus determining what situations harmful must benefits If aggregate outweighed degree, then simply worth cases. 23 devoid benefit inherently condemning entered restraining actually effect. supply, requested, supplied favor returned. nature varied cases, last sale customer; quotation inform beat sale. 24 Complete knowledge certainly evil perfectly markets. not, market, admittedly danger purposes, particularly maintenance high given situation, perhaps condemned. 25 think sufficiently Defendants producers Together, make up six largest 60% market. easy; $75,000 ordinarily necessary. fact, number increased eight-year size almost doubled containers. Nevertheless, present. produced undifferentiated. Industry changes point, affect total purchased. reallocate shares seller cut his increase ultimately level—i.e., cost, including reasonable return capital. Obviously, seller's avoid maintain level, corresponding profit. very sellers, detailed other's possible. However, can concluded oligopolistic, especially light entry, justify inference necessarily prices. Nor imposing proof. 27 presently substantial large competing remainder also quite substantial. And increasing. just logical assume smaller newer ones,1 desire capture cutting acquiesce oligopolistic behavior. likelihood met acts deterrent artifically level first place. Given uncertainty context, require Government prove of, 28 find 'irresistible' Like my Brother prefer finding supported 'evidence record.' 29 n deliberate attempt largely stipulation, support holding. points isolated statements found depositions witnesses, fragmentary references totally insufficient. weight indicates employed basis, set customer's expense competitor. explicit witnesses use minimize supports implicit. contrary, establishes pleased engaging active competition.2 brief before Court, relies economic theory. presented convincing argument theoretical terms. square And, unduly difficult demonstrate effects. 31 offered voluminous trends behavior Their exhibits indicate variations different great deal shifting accounts. specifically highly engaged ignore findings, dealing overcapacity yet continued entrants attracted profits. argues profits Yet, introduce levels. Not called, surely ample access admits down, asks accelerated less informed, hence vigorous, competition.3 absence whatsoever, assumption. likely furthered depressed. 32 Finally, focuses instances defendant, considered reliable charge price.4 Fortas focus o finding. Such approach ignores, findings. trial judge decisions, frequently order.5 parallelism uniformity undercut prices.6 33 forced fall back instable fallen faster information. earlier, basis findings effect; if rely worst neutral factor market.7 Flooring, 585, 585: 'We realize gathered disseminated members trade business, * raise beyond levels prevail ensued commerce left base initiative full elements business.' used. Rather while occasionally information—i.e., reach decision based lacking uniformity, effectively refute assertion tend Accordingly, affirm below. Section provides: 'Every contract, trust otherwise, several foreign nations, hereby declared illegal.' obviously parallel condoned Theatre Enterprises, Incorporated Paramount Film Distributing Corp., 346 537, 74 257, 273. sophisticated well-supervised plan idea reasonably stable putting end cutthroat sanctions except financial interest honor. Another involved Oil; 'modern co-operative methods.' 'necessary tendency' suppress U.S., 389, S.Ct., 611. Thorstein Veblen Theory Business Enterprise (1904) clear how overabundance commodity creates appetite regulate output both. Measures short monopoly 'a salutary effect,' example supervision over obtainable 'stood footing severalty.' relief apt 'only transient,' production decline growth 'catches gain economy,' further controls restraints increases. restless, never-ending search types restraint. 1129, forms violations 'The elimination so-called evils justification buying programs. conditions primarily structures. Fairer claimed, distress gasoline removed defense typical protestations Ruinous competition, disaster, like appear throughout our history ostensible justifications price-fixing. abuses appraised reasonableness become issue every event Act soon emasculated; philosophy supplanted wholly alien system competition; charter framers intended.' 220—221, 843. whether limited defendants. indication it. relevant note again introducing little allegedly practice. effort any, significantly did. stopped remained essentially same, and, increased. rather condemn. Immediately following sentence emphasized Government, appears '(i)n many depending circumstances, decision.' Other mentioned above, introduced minimal economically feasible. 3, supra.

Classification Label: 7