Court Opinion

ID: 8799330
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:25:15.607166+00
Date Added: 2024-06-11T17:03:48.956505
License: Public Domain

MACK, Circuit Judge.
I feel it my duty under the circumstances of the division of opinion of the court to express my personal views in concurrence with Judge BAKER, possibly in some slight respects differing from the reasons which led him to the conclusion to which both of us agree.
I would-say in the first place that the bill, of course, is very much broader and may well justify the enormous expenditure of time and *501money that has occurred in this case — very much broader than the claim made on the final hearing, by the government. If the bill had charged only what the government now charges, and had sought only the relief that the government now seeks, I take it that the case would have been ready for hearing in a comparatively short time, and with very much less expenditure. I say this, of course, not in any way as a criticism of the bill or the methods pursued, but as one of the reasons which it seems to me relieves the court of what otherwise might be its duty of a thorough and careful examination of the enormous record that has been presented here.
Then, in the second place, I believe the eminent representative of the government, Mr. Fitts, was under some misapprehension as to the reason for calling on him after his associate had made a statement of facts. This is a hearing in the court of original jurisdiction, and I personally felt it the duty of the representatives of the government, the plaintiff in the case, to present in the opening statement, not merely theif version of the evidence, but also their view of the law itself, both for the enlightenment of the court and in accordance with the practice that prevails in this state, in order to give opposing counsel the opportunity to answer, and thereby avoid a response after the government’s counsel had answered defendant’s counsel. It was for. that reason, for the purpose of having the government’s views both as to the law and the facts fully presented, that I desired to hear from Mr. Fitts before hearing from the defense.
I agree, however, with Judge BAKER, that after the government had fully presented its case it seemed to me that neither by the facts nor under the law were the contentions of the government established. While the views expressed by Judge BAKER as to the meaning of the word “combination” are supported both by the collocation, the phrase being “contract, combination or conspiracy,” and by the usage of the word at the time the act was passed, certainly it may well be —and it is unnecessary now for me to’ express my personal opinion on the question — it may well be that the word “combination” is much broader and more significant, and I shall assume that the contention of the government is entirely sound. I do not mean to express any personal dissent from this contention that there may be, within section 1, a combination, not of persons, but a combination of' the instrumen-talities of commerce, and that when one man combines within his ownership competing instrumentalities of commerce with the intent or with the effect thereby unduly to restrain trade, and that ownership continues and the combination continues, that such combination may be enjoined. If that be the correct definition of “combination,” then of course the purchase by one dealer in rolled oats of any part of the business or any of the instrumentalities of the business of the other dealer in rolled oats, is a combination, and beyond all question all combinations restrain trade.
But the question is whether it is an undue restraint of trade, and that depends upon the entire situation, the nature of the business, the competing elements throughout the region of interstate commerce —the possibilities of further competition. Furthermore, and without *502expressing1 an opinion now as between the majority and the dissenting judge in the Harvester Case ([D. C.] 214 Fed. 987), inasmuch as that case is pending in the Supreme Court, and assuming, and ¿gain without intimating any personal dissent — assuming that the majority in the Harvester Case is absolutely and entirely right, and assuming, further, that both an undue restraint of competition and a monopolization in business may arise, where the situation is such that, without any wrongful acts of any kind, one man or one company has it within his power, by reason of the combination, or by reason of the transactions which lead to the existence of that power, unduly to restrain competition 'or to monopolize the interstate commerce, I fail entirely to find on the facts as presented by the government, supplemented by the presentation of the defense, either an actual monopoly, or that power which, in view of the entire situation of the rolled oats business, tends to show the existence of the possibility of monopolizing or unduly restraining the trade in rolled oats. It seems to me that the subject-matter is not Quaker Oats and Mother’s Oats, but rolled oats.
Assuming even that it is not rolled oats, but package oats, rolled oats as sold by the trade throughout the country in packages for retail consumption, that being the largely prevailing method of conducting the business, there is, on the facts, to my mind, no undue restriction of competition, and not in the slightest degree a monopolization of the product of the business, and that because of this, that while the Quaker Oats Company and the Great Western were the two largest factors in the business, there were numerous competitors, and there was the fullest possibility of the most extended competition, and the size and the power of neither of these companies, either single or combined, that is, the power of the Quaker Oats, after securing the Mother’s Oats, were not such as could prevent the most unlimited competition in package rolled oats. The strength of both of these 'companies was due to the tremendous advertising of their brands. By virtue of that advertising the public had come to demand, not merely rolled oats, not package rolled oats, but Quaker rolled oats, or Mother’s rolled oats, and yet the instrumentalities of satisfying the demands of the public, the wholesale business throughout the country, the retail business throughout the country, was all in most strenuous opposition to and competition with these two companies. The very elements that they necessarily utilized in the distribution of their product were their own chief competitors.
I do not speak now of the fact that the businéss concededly was in all respects legitimately conducted. That is not determinative. I agree with the government that a potential monopoly that has failed to.exercise its tremendous power, and has become and has been a very good trust, is none the less subject to the law; but we must first find the undue restraint of competition, or the probability or possibility thereof. The very fact that the subject-matter of the competition in rolled oats was a product manufactured without the slightest difficulty, without the slightest hindrance, by reason of any patents, either in the product or machinery for manufacture, from *503a raw material of which the supply for all practical purposes was absolutely unlimited, and to be had in all parts of the country — a supply of which the rolled oats represents maybe 1 or 2 per cent.— that with very small capital, as testified to here, $25,000 to start a small mill, and $65,000 to start a 500-barrel capacity, anybody could go into that business, negatives undue restraint. Now, it is true that anybody that went into the business and attempted to sell to the public package rolled oats would run up against the tremendous advertising power, against the tremendous advertising value of Quaker Oats and Mother’s Oats; but competition could be established, and it has been established, and that which has existed all along is none the less real. The fact that one of the competitors, or two of the competitors, or one competitor combining the two competitors, has acquired a preponderance in the business of the package rolled oats, due to a tremendous expenditure for advertising, to my mind does not show that thereby there has been any undue restriction of competition. In no sense has the competition been restricted, so far as I have been able to comprehend, by the union of Mother’s Oats and Quaker Oats as against the rest of the world.
It is true that by the combination of ownership there may be a restriction of the competition between'the two brands of rolled oats, Quaker Oats and Mother’s Oats; but there is no restriction — no country-wide restriction — of the competition, and no possibility thereby of creating a country-wide restriction of competition in rolled oats, or in package oats. Every wholesaler in the country is competing, and competing hard, and, so far as the evidence as presented to us shows, is competing successfully, in the package trade. It is true the Quaker Oats Company is prospering, and prospering tremendously, notwithstanding this competition. That is due to its past, present, and continuing advertising. If that advertising is causing a misapprehension on the part of the public, there are other remedies to correct that misapprehension. If the Quaker Oats Company is falsely asserting its claims, there are other methods of correcting their false statements. I do not for a moment say that it is; I merely assume that possibility.
Now, the government has urged that the real wrong is in the combination of these advertised brands in one hand, and that the contract which effectuated that condition is illegal. While on the facts presented it seems clear that the Quaker Oats did not go out with any intent to destroy the Great Western, to buy it off, and while it seems clear that the Great Western was anxious to sell out because of its actual insolvent condition, I do not think that that affects the question, either under section 1, or under the monopolization clause of section 2. The intent with which the Quaker Oats purchased Mother’s Oats would be important only in the consideration of a violation of the prohibition against attempting to monopolize. So that for the purposes of this case, for the purposes of the consideration of the violation of section 1, and of the first part of section 2, the creation of an actual monopoly, it seems to me immaterial whether the Great Westerii came to the Quaker Oats, or whether the Quaker Oats went to the Great *504Western. I should reach the same conclusion, even if the Quaker Oats had gone to the Great Western, for the very purpose of acquiring Mother’s Oats and thereby lessening the competition. Every purchase between two people in the same business, one buying out the other, is necessarily a lessening of the competition; 'but as long as the property is such that the fullest opportunity for country-wide competition exists, the field being open to everybody with but small capital, there being no patent rights, there being no other hindrance to the freest development of individual enterprise, I fail to see anything undue, anything unreasonable, in the restriction of competition that results, although it be the largest of the several competing firms that buys out the second largest.
For that reason, I concur in the order dismissing the bill.