Court Opinion

ID: 9421306
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:57:48.109404+00
Date Added: 2024-06-11T17:22:29.610250
License: Public Domain

Mr. Justice Harlan,
whom Mr. Justice Frankfurter and Mr. Justice Burton join,
dissenting.
Lack of sympathy with an Act of Congress does not justify giving to it a construction that cannot be rationalized in terms of any policy reasonably attributable to Congress. Rather our duty, as always, is to seek out the policy underlying the Act and, if possible, give effect *317to it. In this instance, I think the Court has departed from that rule by giving the Miller-Tydings and McGuire Acts an artificial construction which produces results that could hardly have been intended by Congress.
The purpose of the state fair-trade laws is to allow the manufacturer of a brand-named product to protect the goodwill his name enjoys by controlling the prices at which his branded products are resold. Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183, 193-194. The necessary result — indeed, the very object — is to permit the elimination of price competition in the branded product among those who sell it. Congress has sanctioned those laws in the Miller-Tydings and McGuire Acts, considering them not to be offensive to federal antitrust policy.1 Sufficient protection to the public interest was deemed to be afforded by the competition among different brands, a safeguard made express by the provision of the Miller-Tydings and McGuire Acts denying fair-trade contracts exemption from the antitrust laws unless the fair-traded product is “in free and open competition with commodities of the same general class.” In short, the very purpose of the Acts is to permit a manufacturer to set the resale price for his own products while preserving competition between brands — that is, between the fair-traded item and similar items produced by other manufacturers.
If we accept the legislative judgment implicit in the Acts that resale price maintenance is necessary and desirable to protect the goodwill attached to a brand name, *318there is no meaningful distinction between the fair-trade contracts of integrated and non-integrated manufacturers. Certainly the integrated manufacturer has as strong a claim to protection of his goodwill as a non-integrated manufacturer, and the economic effect of the contracts is the same. In both cases price competition in the resale of the branded product is eliminated, and in neither case does the price fixing extend beyond the manufacturer’s own product. While the Government concedes the right of a non-integrated manufacturer to eliminate price competition in his products between wholesalers, it finds a vice not contemplated by the Acts when one of the “wholesalers” is also the manufacturer, for then the contracts eliminate competition between the very parties to the contracts. But, in either case, all price competition is eliminated, and I am unable to see what difference it makes between whom the eliminated competition would have existed had it not been eliminated. The other bases of distinction suggested by the Government are equally tenuous and reflect a subtlety of analysis for which there is no support in either the Acts or their history.
So unsatisfactory, indeed, are the Government’s attempts to rationalize the result contended for, that the Court chooses not to rely upon them, finding the language of the provisos so clear as to make it unnecessary even to hypothesize a consistent rationale attributable to Congress that might justify the discrimination against integrated producers. Indeed, not even the fact that the only legislative history directly in point is squarely opposed to the Court’s reading, of the statute (see note 17 of the Court’s opinion, pp. 313-315) prompts enough doubt in the Court to require an inquiry into the purpose of the Acts. The Court’s reasoning is this: the provisos except from the Acts contracts “between wholesalers” or “between persons, firms, or corporations in competition with each other”; McKesson is a “wholesaler” *319as well as a manufacturer and is also “in competition with” independent wholesalers; its contracts with independent wholesalers are therefore forbidden contracts “between wholesalers” and between “corporations in competition with each other.” This verbalistic argument can be answered by the equally verbalistic one that the fair-trade contracts, being made in connection with the sale of its own branded products, were made by McKesson in its capacity as a “manufacturer” rather than as a competing “wholesaler.” Neither argument being more conclusive than the other, the answer to the problem can be found only by looking to the purpose of the provisos and its relation to the basic policy of permitting resale price maintenance of branded goods.
As noted above, the Acts necessarily contemplate the elimination of price competition in the resale of a particular branded product and rely for protection of the public interest upon competition between brands. Viewed in the light of this purpose, the provisos become readily understandable. The vice of price-fixing agreements between those in competition with each other, whether at the manufacturing, wholesaling, or retailing level, is that they can be utilized to eliminate competition between brands. Thus manufacturers might agree to fix the resale prices of their competing brands in relation to each other '; the same result, on an even broader scale, could be achieved by agreements between wholesalers or retailers. Further, agreements initiated by anyone other than the owner of the brand name are unnecessary to the protection of goodwill, the very justification for permitting fair-trade contracts. Thus an agreement between wholesalers to fix the price of a product bearing the trade name of neither would serve no purpose other than the elimination of competition. Interpreting the provisos in the light of these considerations, I conclude that an integrated manufacturer selling *320its products under fair-trade contracts to independent wholesalers should be deemed to be acting as a “manufacturer” rather than as a “wholesaler.” This interpretation of the provisos fits with their terms and produces, rather than an arbitrary discrimination hardly intended by Congress, a result fully in harmony with the policy of the Acts to permit manufacturers to maintain the resale prices of their branded products while preserving competition between brands.2
For these reasons, therefore, I would hold McKesson’s contracts to be within the Miller-Tydings and McGuire Acts and would affirm the judgment below.

 The Court refers to the Miller-Tydings Act as having been “passed as a rider to a District of Columbia revenue bill.” It is pertinent to note that, in passing the later McGuire Act, Congress not only reaffirmed the policy of the Miller-Tydings Act but also eliminated the restrictive effect of this Court’s decision in Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384, as regards “non-signers” of fair-trade contracts.

 The Federal Trade Commission, the administrative agency specially charged with administering the McGuire Act, has reached like conclusions. See Eastman Kodak Co., 3 CCH Trade Reg. Rep. (10th ed.), par. 25, 291.