Court Opinion

ID: 9452335
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:37:35.332242+00
Date Added: 2024-06-11T17:33:10.445529
License: Public Domain

ELY, Circuit Judge
(dissenting in part):
I agree with the result reached by the majority, and I concur in its opinion except for that portion in which it is held that Sunkist falls within the exemption of section 1 of the Capper-Volstead Act, 7 U.S.C. § 291.
The principal reason offered by the majority in support of the view which I question is its asserted belief that the question was settled in Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 82 S.Ct. 1130, 8 L.*463Ed.2d 305 (1962). I do not so interpret that decision. The particular issue was not presented to the Supreme Court, and it was not adjudicated. It was apparently conceded by the parties in Winckler, of which the appellant here was not one, that Sunkist was covered by the CapperVolstead exemption. In the prior opinion of the Court of Appeals, reported at 284 F.2d 1 (9th Cir. 1960), the only discussion of the exemption pertained to its extent, not to whether or not it was applicable. Furthermore, the Supreme Court, in granting certiorari, 368 U.S. 813, 82 S.Ct. 56, 7 L.Ed.2d 22.(1961), expressly limited its consideration to a single question, namely,
“Where a group of citrus fruit growers form a co-operative organization for the purpose of collectively processing and marketing their fruit, and carry out those functions through the agency of three co-operative agricultural associations, each of which is basically ivholly owned and governed by those groiuers, and each of which is admittedly entitled to the exemption from the antitrust laws accorded to agricultural cooperatives by the Cap-per-Volstead Act (7 U.S.C.A., see. 291) — is an unlawful conspiracy, combination or agreement established under Sections 1 and 2 of the Sherman Act [15 U.S.C.A. §§ 1, 2] upon proof only that these growers, through the agency of these three co-operatives, agreed among only themselves with respect to the extent of the division of the function of processing between them or with respect to the price they would charge in the open market for the fruit and the by-products thereof processed and marketed by them?” (Emphasis supplied.)
Even if the issue had been determined by the Supreme Court in Winckler, the admitted nature of Sunkist’s present organizational make-up is such that the exemption should no longer be held properly to apply. The privilege to act together in “exempt” associations is conferred only upon “persons engaged in the production of agricultural products. * * 7 U.S.C. § 291. The plain import of the statutory language is that such an association must be composed solely of agricultural producers. Regardless of whether Sunkist was thus composed at the time of the Winckler decision in 1962, as the Supreme Court’s order granting certiorari, supra, indicates, it is clear that the composition is no longer the same. In our case, it is conceded that the so-called “agency associations,” which comprise almost 15% of the membership of the Sunkist organization, are not growers or producers.1 The majority, in disregarding the significance of this factor, may have been influenced by the absence of decisions squarely holding that an association must be composed entirely of growers in order to qualify for the exemption. I point out that, while there are no decisions to that effect, there are none to the contrary. The opinions in a number of cases contain language which suggests the conclusion which I see to be plainly required by the statute’s terms. Some of this language is as follows:
“The persons to whom the Capper-Volstead Act applies are defined in § 1 as producers of agricultural products * * *. They are authorized to act together ‘in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce’ their products. * * *
*464“The right of these agricultural producers thus to unite * * * cannot be deemed to authorize any combination or conspiracy with other persons in restraint of trade that these producers may see fit to devise.” United States v. Borden Co., 308 U.S. 188, 204-205, 60 S.Ct. 182, 84 L.Ed. 181, 191 (1939) (Emphasis supplied.).
“The chief defense set up by the Association was that, because of its being a cooperative composed exclusively of dairy farmers, § 6 of the Clayton Act and §§ 1 and 2 of the Capper-Volstead Act completely exempted and immunized it * * *. Accordingly the court dismissed the Sherman Act § 2 monopolization charge, where the Association was not alleged to have acted in combination with others, but upheld the right of the Government to go to trial on the Sherman Act § 3 and Clayton Act § 7 charges because they involved alleged activities with the owners of Embassy and other persons who were not agricultural producers.” Maryland & Virginia Milk Producers Assn., Inc. v. United States, 362 U.S. 458, 461-462, 80 S.Ct. 847, 851, 4 L.Ed.2d 880 (1960) (Emphasis supplied.).
“Thus, the full effect of § 6 is that a group of farmers acting together * * * cannot be restrained * * *.
“The Capper-Volstead Act * * * extended § 6 of the Clayton Act exemption to capital stock agricultural cooperatives * * *. The general philosophy of both was simply that individual farmers should be given * * * the same unified competitive advantage * * * available to businessmen * * * ” Id., 362 U.S. at 465-466, 80 S.Ct. at 853 (Emphasis supplied.).
“[0]ur decision in no way detracts from earlier cases holding agricultural cooperatives liable for conspiracies with outside groups, United States v. Borden Co., 308 U.S. 188, [60 S.Ct. 182, 84 L.Ed. 181] * * * ” Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 30, 82 S.Ct. 1130, 1136, 8 L.Ed.2d 305 (1962).
“The Court concludes that a combination between two or more agricultural cooperatives to fix prices of their products is exempt from the antitrust laws provided that no other person that is not such an organization or a member of such a group is a part of the combination.” United States v. Maryland Cooperative Milk Pro., 145 F.Supp. 151, 155 (D.D.C.1956) (Emphasis supplied.).
“Although the Capper-Volstead Act * * * and the Clayton Act * * * give some privileges to combinations of agricultural producers, a combination of producers and distributors to eliminate competition and fix prices at successive stages in the marketing of an agricultural product is not privileged.” United States v. Maryland & Virginia Milk Pro. Ass’n, 85 U.S.App.D.C. 180, 179 F.2d 426, 428 (1949) (Emphasis supplied.).
“The exemptions are accorded and immunities are conferred on agricultural cooperatives and their activities. When they step outside of their field and conspire with persons who are not producers of agricultural commodities, they are beyond the scope of the exemptions." United States v. Maryland & Virginia Milk Pro. Ass’n, 167 F.Supp. 45, 51-52 (D.D.C.1958), modified, 362 U.S. 458, 80 S.Ct. 847, 4 L.Ed.2d 880 (1960) (Emphasis supplied.).
The persistent theme of the foregoing excerpts is that a cooperative, even though it otherwise qualifies for exemption under the Capper-Volstead Act, forfeits its exemption when it combines with non-producers. If that is so, then it is logically inconsistent to hold that a cooperative, while composed in part of non-producers, may yet qualify for the exemption.

. In its footnote 18, the majority refers to a portion of a stipulation wherein the parties agreed that the agency associations furnished to Sunkist their “facilities and services on an independent contract basis * * The stipulation does not say that the associations were independent contractors. It recites that they were “members” of the Sunkist system. If the association were truly separate and independent, then that determination should be made, in the first instance, by the District Court. If they were not “members” of the Sunkist system, then, as I see it, the exemption of the Capper-Yolstead Act is irrelevant to the issue of the propriety of Sunkist’s dealings with them. United States v. Borden Co., supra.