Court Opinion

ID: 9419108
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:46:07.191592+00
Date Added: 2024-06-11T16:41:50.408375
License: Public Domain

*514Mr. Chief Justice Hughes,
dissenting:
The undisputed facts will bear a brief repetition, for upon an appreciation of their true import hinges the application of the Sherman Act.
As the Circuit Court of Appeals said, the evidence disclosed a “sit-down strike in its most aggravated and illegal form.” When the Union demanded a closed shop agreement and, on its refusal, declared the strike, only eight of the Company’s twenty-five hundred employees were members of the Union. The Company’s plant was seized and held for several weeks. Its machinery and equipment were “wantonly demolished' or damaged to the extent of many thousands of dollars.”
There was not merely a stoppage of production, but there was also a deliberate prevention of the shipment of finished goods to customers outside the State. This was not simply the result of the occupation of the plant but was due to the repeated and (explicit refusals of the Union to permit the shipment. These goods amounted to 134,000 dozens of finished hosiery, of the value of about $800,000, of which 80 per cent, as respondents well know, were ready for shipment in interstate commerce. The evidence is that the Company’s representative thus besought the Union’s president: “We have orders on hand from customers all over the country which we can fill with merchandise which we have on hand at the plant. Will you permit us to go into the plant for the sole purpose of removing that finished merchandise so that we can ship it against orders?” The Union’s president emphatically answered: “No, not until this strike is settled.”
There was thus a direct and intentional prevention of interstate commerce in the furtherance of an illegal conspiracy. This, I take it, the opinion of the Court concedes. Whatever vistas of new uncertainties in the application of the Sherman Act the present decision may open, *515it seems to be definitely determined that a conspiracy of-workers, or for that matter of others, to obstruct or prevent the shipment or delivery of goods in interstate commerce to fill orders of the customers of a manufacturer or dealer is not a violation of the Sherman Act. With that conclusion I cannot agree.
The argument has been pressed in this case, and in other recent cases, that the Sherman Act does not apply to labor unions. The Court finds that argument untenable, referring to our decisions to the contrary and to the failure of repeated attempts to persuade Congress to exclude labor organizations from the operation of the Act. Respondents’ argument for immunity under the terms of §§ 6 and 20 of the Clayton Act1 has also been found unavailing. Section 6 declares that “the labor of a human being is not a commodity or article of commerce” and that nothing in the anti-trust laws shall be construed to forbid the existence and operation of labor organizations instituted for the purpose of mutual help, “or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the anti-trust laws.” The reference in the last clause- to “such organizations” has manifest reference to what precedes, and the immunity conferred is only with respect to the “lawfully carrying out” of their “legitimate objects.” Section 20 forbids the granting of injunctions prohibiting persons “singly or in concert” from “terminating any relation of employment,” or from engaging in described activities of persuasion, etc., when these are “peaceful and lawful”; or “from peaceably assembling in a lawful manner, and *516for lawful purposes.” The inapplicability of these provisions is apparent.
But while the Clayton Act does not give the immunity desired by respondents, and labor unions are found by the Court to be within the purview of the Sherman Act “to some extent and in some circumstances,” the Act is construed as not embracing the direct and deliberate interference with interstate commerce that is here disclosed. I think that this construction of the statute is too narrow.
Section one of the Sherman Act2 condemns as illegal every “combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” “Conspiracy” is a familiar term of art and means a combination of two or more persons by concerted action to accomplish an unlawful purpose, or some purpose not in itself unlawful by unlawful means. There was plainly a conspiracy here. To “restrain” is to hold back, repress, obstruct, — to hinder from liberty of action. Manifestly there was restraint in this case. What then is the significance of the term “commerce” as used in the Act? Adopting the language of the Constitution, Congress evidently used the term in its constitutional sense. “Commerce” is intercourse; in its most limited meaning it embraces trafile. Gibbons v. Ogden, 9 Wheat. 1, 189. “Commerce” manifestly covers the shipment and transportation of commodities across state lines to execute contracts of sale. The term “commerce,” we said in Second Employers’ Liability Cases, 223 U. S. 1, 46, “embraces commercial intercourse in all its branches, including transportation of passengers and property by common carriers whether carried on by water or by land.”
*517As the instant case falls directly within the language of the Sherman Act in its natural import, the question is whether that language has been, or should be, so narrowed by judicial construction as to exclude from its application the conspiracy and restraint here found. The scope of this question is not only limited by the conclusion of the Court that labor unions are not excepted from the Act but also by the Court’s rejection of the bases of the decision of the court below. Thus the immediacy of the effect of'respondents’ action upon interstate commerce is admitted, and the argument that the interdicted shipments constituted but a small part of the “total national output in the industry” is dismissed as irrelevant. This ruling necessarily follows from the reasoning of our decisions under the National Labor Relations Act. In Labor Board v. Fainblatt, 306 U. S. 601, 606, we said that “The exercise of Congressional power under the Sherman Act . . . has never been thought to be constitutionally restricted because in any particular case the volume of the commerce affected may be small.” Here, the volume affected was very substantial although it was but a small proportion of the entire traffic in similar commodities. Again, the Court rejects the conclusion of the court below that the evidence did not sustain a finding that respondents intended to prevent the shipment of the goods. The contrary, as we have seen, was clearly shown.
Nor does the “rule of reason” aid respondents.3 The test of reasonableness under that rule is the effect of the agreement or combination, not the motives which inspire it. Leaders of industry have been taught in striking fashion that when the Court finds that they have combined to impose a direct restraint upon interstate com*518merce, their benevolent purposes to promote the interest of the industry, or to rescue it from a distressful condition, will not save them even from criminal prosecution for violation of the Sherman Act. See United States v. Socony-Vacuum Oil Co., ante, p. 150. If labor unions are not excepted from the Act, and they have acted outside the legitimate field contemplated by the' Clayton Act, the impartial enforcement of the law would seem to require that the same doctrine be applied to them. In that view, the purpose of respondents to promote the interests of labor organization cannot be deemed to justify the direct and intentional restraint they imposed upon interstate commerce. The opinion of the Court does not appear to hold otherwise. From no point of view, as it seems to me, can the restraint be regarded as reasonable.
Why then should the Sherman Act be construed to be inapplicable? It is said that the Act was not aimed at “policing” interstate transportation. But this would seem to be a statement of result rather than a justification for reaching it. If “policing” means the protection of interstate transportation from unlawful conspiracies to restrain it, it would seem that the Sherman Act provides that protection. The fact that various statutes have been passed by Congress to prevent the transportation of articles deemed to be injurious does not indicate the contrary, for these are statutes restricting the right of transportation in order to protect the public, while the Sherman Act is aimed at securing the freedom of transportation in lawful commerce.
The question whether a conspiracy to prevent transportation in interstate commerce was within the Sherman Act came before the circuit courts not long after the Act was passed. In United States v. Workingmen’s Amalgamated Council, 54 F. 994, it appeared that in consequence of a difference between the warehousemen in New Orleans and their employees and the principal draymen and *519their subordinates, a strike was called by labor associations which enforced “a discontinuance of labor in all kinds of business, including the business of transportation of goods and merchandise which were in transit through the City of New Orleans, from state to state, and to and from foreign countries.” By the intended effect of the defendants’ actions, “not a bale of goods constituting the commerce of the country could be moved.” District Judge Billings, sitting in the Circuit Court, concluded that there was no question “but that the combination of the defendants was in restraint of commerce” and hence a violation of the Sherman Act. Id., pp. 999, 1000. An injunction was granted and the order was affirmed by the Circuit Court of Appeals. 57 F. 85.
A similar view was apparently entertained by Circuit Judge Taft and Circuit Judge Lurton. See Thomas v. Cincinnati, N. O. & T. P. Ry. Co., 62 F. 803, 821. It was noted in that case that a conspiracy to prevent transportation might result in the paralysis of interstate commerce. Id., p. 822.
In the case of United States v. Debs, 64 F. 724, the United States brought suit to enjoin those engaged in a conspiracy to interfere with transportation upon several railroads, and an injunction having been issued and disobeyed, contempt proceedings were instituted. The question was whether the federal court had jurisdiction to issue the injunction. Circuit Judge Woods found that it had and.based his decision upon the Sherman Act. After stating that the original design of the Act to suppress trusts and monopolies created by contract or combination in the form of trust, which would be of a contractual character, was adhered to, the court thought it equally clear that “a further and more comprehensive purpose” came to be entertained and was embodied in the final form of the enactment. The Act extended to conspiracies in the sense of the law and, citing the decisions showing the *520constitutional scope of the term “commerce” and its application to transportation, the court found no reason for thinking that the term as used in the Sherman Act was “less comprehensive.” Id., pp. 747-751.
It is true that when the Debs case came to this Court on a petition for habeas corpus, the decision sustaining the jurisdiction of the federal court to entertain the suit by the United States was placed upon the ground that the United States, having the full attributes of sovereignty within the limits of its granted powers, had among those the power over interstate commerce and over the transmission of the mails and was entitled to remove everything put upon highways, natural or artificial, to obstruct the passage of interstate commerce or the carrying of the mails. 158 U. S. 564. But while the Court chose that broad ground for sustaining jurisdiction, it was careful not to intimate disagreement with the basis of the decision in the Circuit Court as to the application of the Sherman Act. Referring to that decision, and to the Sherman Act, the Court said: “We enter into no examination of the act of July 2, 1890, c. 647, 26 Stat. 209, upon which the Circuit Court relied mainly to sustain its jurisdiction. It must not be understood from this that we dissent from the conclusions of that court in reference to the scope of the act, but simply that we prefer to rest our judgment on the broader ground which has been discussed in this opinion, believing it of importance that the principles underlying it should be fully stated and affirmed.” Id., p. 600.
In Loewe v. Lawlor, 208 U. S. 274, in holding that the Sherman Act applied to labor unions, the Court cited in support of its reasoning the case of United States v. Workingmen’s Amalgamated Council, supra, quoting the statement of District Judge Billings in describing the New Orleans conspiracy: “One of the intended results of their combined action was the forced stagnation of *521all the commerce which flowed through New Orleans. This intent and combined action are none the less unlawful because they included in their scope the paralysis of all other business within the city as well.” That “forced stagnation” was the obstruction of interstate transportation. The Court in the Loewe case also quoted in full the observation in the Debs case that the Court should not be understood as dissenting from the conclusions of the circuit court as to the scope of the Sherman Act. And this Court, still considering the application of that Act to labor unions, then quoted what had been said by Mr. Justice Brewer in the Debs case (supra, p. 581) with respect to obstructions to interstate commerce, as follows: “It is curious to note the fact that in a large proportion of the cases in respect to interstate commerce brought to this court the question presented was of the validity of state legislation in its bearings upon interstate commerce, and the uniform course of decision has been to declare that it is not within the competency of a State to legislate in such a manner as to obstruct interstate commerce. If a State), with its recognized powers of sovereignty, is impotent to obstruct interstate commerce, can it be that any mere voluntary association of individuals within the limits of that State has a power which the State itself does not possess?” Loewe v. Lawlor, supra, pp. 303, 304.
In the light of these decisions of the circuit courts and of the significant and unanimous expressions by this Court, the argument seems to be untenable that the Sherman Act has been regarded as not extending to conspiracies to obstruct or prevent transportation in interstate or foreign commerce. On the contrary, I think that hitherto it has not been supposed that such conspiracies lay outside the Act.
With this background we come to the question whether the application of the Sherman Act in the instant case, *522which would otherwise appear to be required by its comprehensive terms, has been precluded by our decisions in labor cases. The view is announced that the Sherman Act was not directed at those restraints which fall short of any form of market control of a commodity, such as to monopolize the supply, control its price, or discriminate between its would-be purchasers. That is, in short, that it does not apply to the direct and intentional obstruction or prevention of the shipment or transportation of goods to fill the orders of customers in interstate commerce such as we have here. I do not read our decisions as either requiring or justifying such a judicial limitation of the provisions of the Act. Rather, I believe, they point to a contrary conclusion.
While Loewe v. Lawlor, supra, was the case of a boycott, the principle applied was not limited to that sort of restraint but was as broad as the terms of the Act. The Court not only did not exclude obstruction of interstate shipments from being regarded as a violation of the statute but drew upon the decisions which had involved such obstruction to support its general conclusion. The Court considered the means employed in the Loewe case as constituting a direct restraint, but plainly those means were not deemed to be exclusive of other means including those which had been employed in the cases which the Court cited. The same may be said of other boycott cases. See Duplex Printing Co. v. Deering, 254 U. S. 443; Bedford Cut Stone Co. v. Journeymen Stone Cutters Assn., 274 U. S. 37.
In Gompers v. Bucks Stove & Range Co., 221 U. S. 418, 438, the Court, referring to Loewe v. Lawlor, emphasized the comprehensiveness of the Sherman Act, saying:
“In Loewe v. Lawlor, 208 U. S. 274, the statute was held to apply to any unlawful combination resulting in restraint of interstate commerce. In that case the damages sued for were occasioned by acts which, among other *523things, did include the circulation of advertisements. But the principle announced by the court was general. It covered any illegal means by which interstate commerce is restrained, whether by unlawful combinations of capital, or unlawful combinations of labor; and we think also whether the restraint be occasioned by unlawful contracts, trusts, pooling arrangements, blacklists, boycotts, coercion, threats, intimidation, and whether these be made effective, in whole or in part, by acts, words or printed matter.”
Moreover, of what avail is it to interdict boycotts or to assure a free market, that is, to secure freedom in obtaining customers, and yet to leave unprotected the right to ship goods to the customers who are thus obtained? Of what advantage is it to solicit orders freely in interstate commerce if they cannot be filled? The freedom of interstate movement — immunity from conspiracies directly to restrain shipment and delivery — lies at the very base of a free market and the untrammeled making of sales.
The First Coronado Company case (259 U. S. 344), chiefly relied upon, does not seem to afford an adequate basis for the broader ruling now made. That decision was centered upon the point that production, as such,— in that case, coal mining, — was not interstate commerce, and that obstruction to coal mining through a strike was not in itself a direct obstruction to interstate commerce. Id., pp. 407, 408. And it was deemed to be necessary to gó further and find an “intent to injure, obstruct or restrain interstate commerce” in order to bring the case within the Sherman Act. The evidence was found insufficient to show such an intent. Thus, the Court did not decide that a direct and intentional 'obstruction of interstate commerce was not a violation of the Act. In the Second Coronado Company case (268 U. S. 295), evidence of that intent was supplied and the Court ac*524cordingly set aside a judgment in favor of the local union. It is true that the Court, in dealing with the purpose of the local union, found that it was to stop the production of non-union coal and prevent its shipment to markets of other States, where by competition it would tend to reduce the price of the commodity and affect injuriously the maintenance of wages for union labor in competing mines. But the interstate commerce that was thus found to be directly and intentionally obstructed was the shipment of the coal, and whether the purpose was to maintain unionization in other States, or within the same State, would not seem to be material, so^ long as the interstate commerce in either case is directly and intentionally prevented.
The Court in the Second Coronado Company case not only decided the particular case but laid down the general principle as follows: “But when the intent of those unlawfully preventing the manufacture or production is shown to be to restrain or control the supply entering and moving in interstate commerce, or the price of it in interstate markets, their action is a direct violation of the Anti-Trust Act.” Id., p. 310. The use of the disjunctive is significant.
The ruling of the First Coronado Company case as to a mere stoppage of production, in the absence of proof of a direct and intentional obstruction of interstate commerce, was repeated in the case of United Leather Workers v. Herkert Co., 265 U. S. 457. But the dictum from the opinion in that case, which the Court quotes in its present opinion, must be read in connection with what immediately follows where the Court pointed out that there was no direct interference by the defendants in the Herbert case “with the interstate transportation” of the goods of the plaintiff company. Any doubt as to the true import of the Coronado and Herbert cases is set at rest by this Court’s construction of these decisions in the *525case of Bedford Cut Stone Co. v. Journeymen Stone-Cutters Assn., supra. There the Court emphasized the point as to the absence of direct interference with interstate transportation in the earlier cases, saying (274 U. S. pp. 47, 48):
• “The case, therefore, is controlled, not by United Mine Workers v. Coronado Co., supra, [259 U. S. 344] and United Leather Workers v. Herkert, 265 U. S. 457, as respondents contend, but by others presently to be discussed. In the United Leather Workers case, it appeared that the strikes were leveled only against production, and that the strikers (p. 471) ‘did nothing which in any way directly interfered with the interstate transportation or sales of the complainants’ product’; and the decision rests upon the ground that there was an entire absence of evidence or circumstances to show that the defendants, in this conspiracy to coerce complainants, were directing their scheme against interstate commerce. United Mine Workers v. Coronado Co., supra, pp. 408-409, is to the same effect.”
And the general principle set forth in the Second Coronado Company case, as above quoted, was reiterated.
In Levering & Garrigues Co. v. Morrin, 289 U. S. 103, 107, there was no showing of a direct or intentional restraint of interstate commerce. But in Local 167 v. United States, 291 U. S. 293, the evidence showed a conspiracy “to burden the free movement of live poultry into the metropolitan area” in New York. The Court said: “The interference by appellants and others with the unr loading, the transportation, the sales by marketmen to retailers, the prices charged and the amount of profits exacted operates. substantially and directly to restrain and burden the untrammeled shipment and movement of the poultry while unquestionably it is in interstate commerce.” Id., p. 297. Thus it was “the untrammeled shipment and movement” which, when found to be di*526rectly and intentionally restrained, was held to constitute violation of the Sherman Act.
Suppose, for example, there should be a conspiracy among the teamsters and truck drivers in New York City to prevent the hauling of goods and their transportation in interstate commerce, can it be doubted that the Sherman Act would apply? Would it not be essentially the same sort of obstruction of interstate commerce as was found to have been effected in United States v. Workingmen’s Amalgamated Council, supra, where the transportation of goods in New Orleans in interstate commerce was tied up? There the defendants paralyzed local business and their object was to benefit themselves in their dealings with their employers, but to attain that end they directly and intentionally obstructed the movement of goods in interstate commerce and thus came within the interdiction of the Act. The fact that the defendants in the instant case are not teamsters can make no difference as it is the direct and intentional prevention of interstate commerce that turns the scales.
Our decisions have said much of the “free flow” of interstate commerce. What is this metaphor of an interstate stream protected in its flow by the Sherman Act but a striking way of describing the movement of goods by untrammeled shipments in pursuance of freely negotiated sales?
It was to protect this free movement from being obstructed by industrial strife through the denial of collective bargaining that Congress passed the National Labor Relations Act. In sustaining the validity of that Act we referred to our decisions with respect to the conduct of employees engaged in production, summing up the matter in this way: “And in the second Coronado case the Court ruled that while the mere reduction in the supply of an article to be shipped in interstate commerce by the illegal or tortious prevention of its manufacture or production *527is ordinarily an indirect and remote obstruction to that commerce, nevertheless when the 'intent of those unlawfully preventing the manufacture or production is shown to be to restrain or control the supply entering and moving in interstate commerce, or the price of it in interstate markets, their action is a direct violation of the [Sherman] Anti-Trust Act.’ ” National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U. S. 1, 40. It is true that in that case we were considering the power of Congress over interstate commerce, but we were pointing to the exercise of that power in the Sherman Act, with respect to which we had previously said “that Congress meant to deal comprehensively and effectively with the evils resulting from contracts, combinations and conspiracies in restraint of trade, and to that end to exercise all the power it possessed.” Atlantic Cleaners & Dyers v. United States, 286 U. S. 427, 435. That power, and its exercise, should not be deemed to fall short of the protection of the interstate shipment of goods from conspiracies to impose a direct restraint upon it.
The attempt in the court below to distinguish between the use of the word “affect” in the National Labor Relations Act and the word “restraint” in the Sherman Act is ineffectual as it fails to take note of the fact that the word “affect” was construed as purporting “to reach only what may be deemed to burden or obstruct” interstate or foreign commerce, and hence under the familiar principle “that acts which directly burden or obstruct interstate or foreign commerce, or its free flow, are within the reach of the congressional power,” the statute was upheld. National Labor Relations Board v. Jones & Laughlin Steel Corp., supra, pp. 31, 32.
The evil sought to be remedied by the National Labor Relations Act was the interruption of interstate commerce primarily by the prevention of the free shipment and delivery of goods in that commerce, and hence it has *528been applied to those cases where industries are of such a character that the prohibited unfair labor practices would naturally have the effect of interrupting the movement of commodities between the States. See, e. g., National Labor Relations Board v. Fruehauf, 301 U. S. 49, 53, 54; National Labor Relations Board v. Friedman-Harry Marks Co., 301 U. S. 58, 72, 73; Santa Cruz Fruit Packing Co. v. National Labor Relations Board, 303 U. S. 453, 468; Consolidated Edison Co. v. National Labor Relations Board, 305 U. S. 197, 221. In National Labor Relations Board v. Fainblatt, supra, pp. 605, 606, we found that “interstate commerce was involved in the transportation of the materials to be processed across state lines to the factory of respondents and in the transportation of the finished product to points outside the state for distribution to purchasers and ultimate consumers,” and that “transportation alone across state lines is commerce within the constitutional control of the National Government”; and, having said that, we pointed to the protective exercise of congressional power under the Sherman Act as not in any way restricted because thé volume of the commerce involved in such transportation was small. Id.
It would indeed be anomalous if, while employers are • bound by the Labor Act because their unfair labor practices may lead to conduct which would prevent the shipment of their goods in interstate commerce, at the same time the direct and intentional obstruction or prevention of such shipments by the employees were not deemed to be a restraint of interstate commerce under the broad terms of the Sherman Act.
This Court has never heretofore decided that a direct and intentional obstruction or prevention of the shipment of goods in interstate commerce was not a violation of the Sherman Act. In my opinion, it should not so *529decide now. It finds no warrant for such a decision in the terms of the statute. I am unable to find' any compulsion of judicial decision requiring the Court so to limit those terms. Restraints may be of various sorts. Some may be imposed by employers, others by employees. But when they are found to be unreasonable and directly imposed upon interstate commerce, both employers and employees are subject to the sanctions of the Act.
It is said that such a view would bring practically every strike in modern industry within the application of the statute. I do not agree. The right to quit work, the right peaceably to persuade others to quit work, the right to proceed by lawful measures within the contemplation of the Clayton Act to attain the legitimate objects of labor organization, is to my mind quite a different matter from a conspiracy directly and intentionally to prevent the shipment of goods in interstate commerce either by their illegal seizure for that purpose, or by the direct and intentional obstruction of their transportation or by blocking the highways of interstate intercourse.
.Once it is decided, as this Court does decide, that the Sherman Act does not except labor unions from its purview, — once it is decided, as this Court does decide, that the conduct here shown is not within the immunity conferred by the Clayton Act, — the Court, as it seems to me, has no option but to apply the Sherman Act in accordance with its express provisions.
Me. Justice McReynolds and Mr. Justice Roberts join in this opinion.

 15 U. S. C. 17; 29 U. S. C. 52.

 15 U. S. C. 1.

 Standard Oil Co. v. United States, 221 U S. 1; United States v. American Tobacco Co., 221 U. S. 106.