137 F.2d 490 (3rd Cir. 1943), 7927, J.B. Lippincott Co. v. Federal Trade Commission

Docket Nº:7927.
Citation:137 F.2d 490
Case Date:June 30, 1943
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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137 F.2d 490 (3rd Cir. 1943)




No. 7927.

United States Court of Appeals, Third Circuit.

June 30, 1943

Argued Nov. 17, 1942.

Petition for Review of Order of Federal Trade Commission.

Benjamin O. Frick, of Philadelphia, Pa., for petitioner.

Joseph J. Smith, Jr., of Washington, D.C. (W. T. Kelley, Chief Counsel, Federal Trade Commission, and J. B. Truly, Fletcher G. Cohn and James W. Nichol, Sp. Attys., all of Washington, D.C., on the brief), for respondent.

Before BIGGS, MARIS, and JONES, Circuit Judges.

JONES, Circuit Judge.

This is a petition to review a cease and desist order entered by the Federal Trade Commission in a proceeding under Sec. 5(b) of the Federal Trade Commission Act, as amended, 15 U.S.C.A. § 45(b). In addition to the J. B. Lippincott Company, the present petitioner, the order also runs against Chicago Medical Book Company, W. B. Saunders Company, C. v. Mosby Company and Van Antwerp Lea and Christian Febiger, partners trading and doing business as Lea & Febiger.

The Chicago Medical Book Company, of Chicago, Illinois, is a distributor of medical books, while the Saunders Company, the Mosby Company and Lea & Febiger are publishers of medical books exclusively and sell only their respective publications. The Lippincott Company, whose principal office and place of business is in Philadelphia, also publishes some medical books but the principal part of its business is the publication and sale of books other than medical. Lippincott, too, sells only books of its own publication. The offenses charged by the complaint do not involve the sale of books other than medical.

The complaint alleges that the Chicago Medical Book Company and the publishers above named, including the Lippincott Company, agreed and conspired among themselves not to sell medical books to the Wilcox & Follett Company, a book distributor of Chicago, and that, in pursuance of such agreement and understanding, they refused so to sell to Wilcox & Follett. The complaint also charges a like agreement and conspiracy between the Chicago Medical Book Company, the Lippincott Company and the Mosby Company with respect to

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Login Brothers, another book distributor of Chicago.

The Lippincott Company filed a separate answer denying its participation in any agreement or conspiracy not to sell medical books either to Wilcox & Follett or to Login Brothers and further denying that it ever refused to sell books to either of the concerns named. Each of the other respondents to the Commission's complaint filed a separate answer denying the material allegations of the complaint, but, with that, we need not be concerned as the Lippincott Company alone has petitioned for a review of the Commission's order.

After hearing, the Commission found an unlawful agreement or conspiracy among the respondents not to sell medical books and a refusal thereafter to sell, substantially as charged by the complaint. The order now complained of was thereupon entered. The order directs all the respondents named in the complaint to cease and desist, in connection with the sale of medical books, or any other scientific, educational or other books, from 'Entering into or carrying out any agreement, understanding, arrangement, combination or conspiracy, among themselves or between and among any two or more of them or between any one or more of them and any competitor, for the purpose or with the effect of restraining, restricting, hindering, obstructing or eliminating competition in the sale of any such book or books, and * * * from doing any of the * * * acts or things' more particularly set forth in the order.

It is the contention of the Lippincott Company (1) that so far as it is concerned, the findings whereon the Commission's cease and desist order is based are not supported by evidence and (2) that the order exceeds the scope and allegations of the complaint.

The right to court review of a Commission order exists by virtue of Sec. 5(c) of the Federal Trade Commission Act, 15 U.S.C.A. § 45(c), which also provides that 'The findings of the Commission as to the facts, if supported by evidence, shall be conclusive. ' This provision has been treated as requiring substantial evidence as the basis for findings in order to render them conclusive. See Kidder Oil Co. v, Federal Trade Commission, 7 Cir., 117 F.2d 892, 895. The same view was taken with respect to the requirement, 'if supported by testimony', as the particular provision originally read in the Federal Trade Commission Act, 38 Stat. 719, 720, c. 311, Sec. 5, before amendment. See Federal Trade Commission v. Curtis Publishing Company, 260 U.S. 568, 580, 43 S.Ct. 210, 67 L.Ed. 408. In Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126, where a similar provision of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., with respect to the findings of the Labor Board was under consideration, the Supreme Court said that the requirement of evidence as support for findings means substantial evidence. Compare also National Labor Relations Board v. Columbian Enameling & Stamping Co., 306 U.S. 292, 299, 59 S.Ct. 501, 83 L.Ed. 660, where the necessity for substantial evidence was spoken of as being applicable in general to findings by administrative bodies. We entertain no doubt that the provision of the Federal Trade Commission Act as to the conclusiveness of the Commission's findings requires that the findings be supported by substantial evidence.

In the Columbian Enameling & Stamping Co. case, supra, at pages 299, 300, of 306 U.S.at page 505 of 59 S.Ct. 83 L.Ed. 660, it was said that ' * * * evidence which is substantial * * * (affords) a substantial basis of fact from which the fact in issue can be reasonably inferred. (Citing cases.) Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established. ' It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, ' Consolidated Edison Co. v. National Labor Relations Board, supra (305 U.S.page 229, 59 S.Ct. 206, 83 L.Ed. 126), and it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury: (citing cases). We have then to consider whether the Commission's findings in the instant case, so far as they relate to the Lippincott Company, are supported by substantial evidence as thus defined.

Although the order has become final as to all respondents named in the complaint, save for the present petitioner, and a large portion of the evidence taken by the Commission relates to others than the Lippincott Company, it is necessary to our present inquiry that we also review the evidence relating to the other respondents, as it is

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upon that background and certain additional facts pertaining to the Lippincott Company that the Commission bases its conclusion of fact that the Lippincott Company acted in concert with some or all of the other respondents to the end that Wilcox & Follett were refused the right to purchase medical books published by Lippincott and the other impleaded publishers.

Basic to the Commission's ultimate conclusion against Lippincott is its primary finding that in May, 1936, a representative of the Saunders Company met in Kansas City, Missouri, with the president of the Chicago Medical Book Company, a representative of the Mosby Company, a representative of Lea & Febiger, and representatives of three other dealers in medical books, not made parties to the proceeding, and that as a result of that meeting an agreement or understanding was arrived at not to sell medical books to Wilcox & Follett, the means for effecting such agreement having been left to the president of the...

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