Court Opinion

ID: 9638053
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:31:36.285344+00
Date Added: 2024-06-11T18:10:03.367896
License: Public Domain

EVANS, Circuit Judge (dissenting).
I am unable to agree with the conclusion reached in the majority opinion.
The instant appeal well illustrates the limitations of an intermediate court like ours. We receive directions from Congress in the form of legislation, as to the wisdom of which we are to make no inquiry. Its field of activity is restricted and limited by the pronouncements of the Supreme Court, whose decisions we must follow. Our duty is thus to ascertain the facts and proceed with the application of those facts to th» statutes enacted, in the light of the rulings and directions of the Supreme Court.
This limitation of our judicial functions would seemingly simplify and lessen our task but it apparently has not accomplished the seemingly obvious. This may be due to the size of the record, to the numerous counsel, or to the great number of questions which counsel have raised.
Lack of merit in any of said questions has not prevented their presentation — both at length and with zeal. This is shown by a reading of my associates’ opinion, which, though I do not approve of' the conclusion reached, does impress me favorably with its earnestness, and the thoroughness of the writer’s efforts as well as the frankness and candor he has displayed.
As to the law governing the disposition of the appeal we are fortunate in a wealth of decisions and elaborate discussions which have dealt with the subjects. If I go astray it is not because of lack of light or the absence of precedent.
The following decisions must be our guide:
Cement Manufacturers Ass’n v. United States, 268 U.S. 588, 45 S.Ct. 586, 69 L.Ed. 1104; Maple Flooring Ass’n v. United States, 268 U.S. 563, 45 S.Ct. 578, 69 L.Ed. 1093; Corn Products Co. v. Federal Trade Comm., 324 U.S. 726, 65 S.Ct. 961, 89 L.Ed. 1320; Federal Trade Comm. v. Staley Mfg. Co., 324 U.S. 746, 65 S.Ct. 971, 89 L. Ed. 1338; Sugar Institute v. United States, 297 U.S. 553, 56 S.Ct. 629, 80 L.Ed. 859; also, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; United States v. Masonite Corporation, 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461; Federal Trade Comm. v. Pacific States Paper Trade Ass’n, 273 U.S. 52, 47 S.Ct. 255, 71 L.Ed. 534.
Decisions of this court, though not reviewed by the Supreme Court, also call at least for study. Even though lacking the weight of Supreme Court decisions, they are better understood by us for we heard them. Their facts and holdings are like old and familiar faces, once seemingly rather tired and monotonous, but more pleasing and agreeable as we look into them anew, after the lapse of some years:
Corn Products Refining Co. v. Federal Trade Comm., 7 Cir., 144 F.2d 211; Federal Trade Comm. v. Staley Co., 7 Cir., 144 F.2d 221; Milk & Ice Cream Can Institute v. Federal Trade Comm., 7 Cir., 152 F.2d 478; United States Maltsters Ass’n v. Federal Trade Comm., 7 Cir., 152 F.2d 161; Eugene Dietzgen Co. v. Federal Trade Comm., 7 Cir., 142 F.2d 321; Fort Howard Paper Co. v. Federal Trade Comm., 156 F.2d 899; Salt Producers Ass’n v. Federal Trade Comm., 7 Cir., 134 F.2d 354.
*575In the absence of review by the Supreme Court, the opinions in the Milk Can Institute, the Maltsters Association, and the Fort Howard Paper cases, carry a strong presumption of soundness and validity on the facts there stated as well as the full approval which we are prone to attach to our own holdings unless reversed. Even when reversed, they do not always lose their appeal.
Several questions here presented make the opinion in Eugene Dietzgen v. Federal Trade Comm., supra, particularly apropos. The effect of the invalid N. R. A., the deductions which arise from similarity of prices, and the contention that respondents cannot be prosecuted for violation of the Anti-Trust Act and also subjected to Federal Trade Commission proceedings are there considered and our views thereon expressed.
Without extended discussion, I state the issues involved and my position on them.
1. I agree there has been no deprivation of due process because of the alleged bias of the Commission. Marquette Cement Co. v. Federal Trade Comm., 147 F. 2d 589.
2. I do not believe the practice of “absorption” of freight, in order to meet competition, is necessarily, in all instances, illegal, nor does the Commission so contend.
3. The practice of charging “phantom” freight, at least where substantial, is illegal.
4. The Commission’s challenge here lays stress on the agreement to utilize a multiple basing point system rather than stressing illegality of the multiple basing point system per se and its order is correspondingly limited to such asserted illegal agreement.
5. I am strongly impressed with the persuasiveness of the inference of an agreement or a combination or conspiracy to be drawn from consistently identical delivered prices, notwithstanding the product is a standard one. Such inference is strengthened by other facts and circumstances, such as phantom freight, basing points, refusal to abandon the practice of quoting delivery prices only, etc.
6. The “old” Cement case cannot be ignored. The Supreme Court has not expressly overruled it, in the more recent, and somewhat related cases. Neither can I ignore the opinions of the Supreme Court in these later cases. They are the latest expressions of the court and are controlling when it comes to reconciling them with the earlier Cement case. I have endeavored to reconcile the earlier Cement case holding with the later cases, with the result that I accept as the law of the case the holding of the Cement case but only as controlled by the later decisions.
Comparative study of the later decisions with the earlier Cement case opinion indicates a changing trend, but I have attempted to reconcile and accept them all. I can not and do not accept the earlier Cement Opinion unqualifiedly, but only as affected by the later oases.
The instant case is clearly distinguishable from the earlier Cement Opinion, if for no other reason than that no conspiracy was charged in the earlier case.
The instant proceeding is under different statutes. The Clayton Act, here charged to be violated, was amended by the Robinson-Patman Act, after the decision in the Old Cement Case.
The instant proceedings involve different facts. An agreement is the heart of the instant case and was absent in the former case.
7. I do not see any inconsistency in the finding that all mills may choose whether they will be a base or a non-base mill, and the charge of agreement to adhere to a multiple basing point system, nor in the freedom, if a base mill, to set the mill net for the base. As I comprehend the charge, it is that all producers, when selling in any particular territory, adopt that territory’s base mill net and add the freight book, rate, with the inevitable result of identical or uniform delivered prices by all producers to all purchasers in any particular territory. Competition is thus eliminated. Prices are fixed. Prices are actually determined by the territory’s base mill net. The Institute, instead of being an alleged teacher in ethics, is an instrumentality which contributes to the result of a monopoly, — a predeter*576mined, fixed price — by supplying all mills serving that territory, with the freight rates per barrel, which are added to the base mill net. This contribution by the Institute would be harmless in itself, but its innocent character is lost when the use, knowingly made, of its information, is disclosed. It differs in no respect from the criminal conspiracy where one actor (a bank robber) plays an apparently innocent role, but one upon which the whole criminal enterprise depends. Murphy v. United States, 7 Cir., 285 F. 801.
The avowed purpose and the express coverage of the Sherman Act, the Federal Trade Commission Act, the Clayton Act, and the Robinson-Patman Act are thus violated. The concern of these statutes is with the result.
The F. T. C.’s finding of a conspiracy to restrain trade, in my opinion, has substantial support in the record. The following chart of identical bids is a sample of this evidentiary support:
Price Discount
No. of Bid Name of Bidder per Barrel [days)
1 Monarch .......... 15
2 Ash Grove ........ ............ 3.28654 15
3 Lehigh............ ............ 3.28654 15
4 Southwestern...... ............ 3.28654 15
5 Oklahoma ......... ............ 3.28654 15
6 U. S. Portland C. Co. ........... 3.28654 15
7 Consolidated ...... ............ 3.28654 15
8 Trinity ........... ............ 3.28654 15
9 Lone Star......... 15
10 Universal ......... ............ 3.28654 15
11 Colorado .......... 15
bids were made by the eleven dif-companies in response to a request for bids for 6,000 barrels of cement. The eleven bidders made bids which were identical to the ten-thousandth of a cent. Could that be a coincidence? It happened times without number. Could it have happened without agreement or understanding?
This chart is only.one of many instances showing identity of bids. Many other instances are set forth in paragraph 9 of the Commission’s findings. As we said in the Dietzgen case, supra, in discussing identical bids, “The evidence not only supports the fact findings of the Commission as to the suppression of competition, but it made any other finding impossible.” Or as we also said in the Milk & Ice Cream Can Institute et al. v. Federal Trade Comm., supra [152 F.2d 481], “Just how such an unnatural situation could be brought about by members of an industry without a plan or agreement is difficult, if not impossible, to visualize.”
There was other evidence of a conspiracy to restrain trade. Not only was there identity in the bids but there was received in evidence a letter from Mr. John Treanor to officers of respondents and members on the Institute’s board and associates on the Code Authority, which refutes respondents’ protestations of no conspiracy and no participation therein by the Institute or by the other respondents. Mr. Treanor was president of Riverside and a trustee of the Institute. His statement was an admission of a party to a conspiracy made during pendency of the conspiracy: He wrote:
“The worst that can be said is economic foundation for some discussions of price making is frail. With that opinion I am inclined to agree, believing that no sound defense of our methods of selling cement can be made without the admission that some limitation of competition is necessary in such an industry as cement. This is not a subject which can be presented to the public through advertising, or in any way. It is an argument that has to be made and can be made in special places where it may be calculated to do some good. * * *”
*577“Do you think any of the arguments for the basing point system, which we have thus far advanced, will arouse anything but derision in and out of the government ? I have read them all recently. Some of them are very clever and ingenious. They amount to this however: that we price this way in order to discourage monopolistic practices and to preserve free competition, etc. This is sheer bunk and hypocrisy. The truth is of course — and there can be no serious, respectable discussion of our case unless this is acknowledged— that ours is an industry above all others that cannot stand free competition, that must systematically restrain competition or be ruined.”
Further support for the Commission’s finding may also be found in the evidence which showed the respondents’ refusing to quote prices save at destination points. This standing alone could be accepted as innocent, but in connection with the other evidence it was clearly a part of a plan to eliminate competition. And what is probably more important,— it, with the adoption of the basing points, succeeded in complete and effective elimination of competition. Both unusual and significant is this complete elimination of competition, such as here disclosed.
Counsel may argue that Congress should amend the statutes, so that competition may be eliminated between those who engage in the manufacture and sale of standard articles. Congress has made no such distinction and even if we were agreeable to such a proposal, neither we nor the Federal Trade Commission could revise the anti-monopoly legislation which Congress has enacted. That is a legislative not a judicial task.
What constitutes sufficient evidence to sustain a verdict of a jury or a finding of a court or of the Federal Trade Commission that a conspiracy exists and defendants are parties to it, has been the subject of consideration by . appellate courts so frequently that we are not justified in citing the authorities. I will refer to only one where I attempted to state the rule, Allen v. United States, 7 Cir., 4 F.2d 688.
And I' will add that it is the Federal Trade Commission and not this court that Congress made the fact finder.
Conspiracies are usually established by circumstantial evidence. Seldom do the offenders make solemn written agreements. While circumstantial evidence may be less persuasive in some cases, it by no means follows that it is necessarily weak or lacking in conviction carrying-power. In the instant case there are facts which are not in dispute and which leave me free from doubt as to the doings of the respondents and of their understanding and purpose to eliminate price competition.
Some of the respondents have argued that the Anti-Trust Acts do not apply to the sale of standard goods. This position I cannot accept. The anti-monopoly legislation was for the purpose of maintaining competition and there may be competition in standard articles just as there is competition between manufacturers of articles not standardized.
Likewise, it is unnecessary to discuss the effect of the basing point system as the basic element in price fixation in the light of what was said in the Corn Products and the Staley cases, supra.
Discussion of the effect of the N. R. A. is unnecessary in view of what we said in the Dietzgen case, supra.
If the evidence fails to show that one or more of the defendants is a party to the conspiracy we should dismiss said defendant from the proceedings. We should not for that reason order the Commission to dismiss the proceeding.