176 F.2d 974 (4th Cir. 1949), 5813, Bond Crown & Cork Co. v. Federal Trade Commission

Docket Nº:5813, 5814, 5817.
Citation:176 F.2d 974, 82 U.S.P.Q. 394
Party Name:BOND CROWN & CORK CO. v. FEDERAL TRADE COMMISSION. CROWN MFRS. ASS'N OF AMERICA et al. v. FEDERAL TRADE COMMISSION. ARMSTRONG CORK CO. et al. v. FEDERAL TRADE COMMISSION.
Case Date:August 22, 1949
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 974

176 F.2d 974 (4th Cir. 1949)

82 U.S.P.Q. 394

BOND CROWN & CORK CO.

v.

FEDERAL TRADE COMMISSION.

CROWN MFRS. ASS'N OF AMERICA et al.

v.

FEDERAL TRADE COMMISSION.

ARMSTRONG CORK CO. et al.

v.

FEDERAL TRADE COMMISSION.

Nos. 5813, 5814, 5817.

United States Court of Appeals, Fourth Circuit.

August 22, 1949

         Argued June 14, 1949.

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Page 976

         Roger A. Clapp, Baltimore, Md. (Albert E. Donaldson and Hershey, Donaldson, Williams & Stanley, Baltimore, Md., on the brief), for petitioners in No. 5814.

         H. Bartow Farr, New York City (Willkie, Owen, Farr, Gallagher & Walton, New York City, Helmer R. Johnson, New York City, and Semmes, Bowen & Semmes, Baltimore, Md., on the brief), for petitioner in No. 5813.

         Frank B. Ingersoll, Pittsburgh, Pa. (Rex Rowland, New Castle, Pa., and Smith, Buchanan & Ingersoll, Pittsburgh, Pa., on the brief), for petitioners in No. 5817.

         Donovan R. Divet, Special Attorney, Federal Trade Commission, Washington, D.C. (W. T. Kelley, General Counsel, Walter B. Wooden, Associate General Counsel, and James W. Cassedy, Associate General Counsel, Federal Trade Commission, Washington, D.C., on the brief), for respondent.

         Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

         PARKER, Chief Judge.

         These are petitions to review and set aside an order of the Federal Trade Commission finding that the petitioners have been parties to a conspiracy and combination in restraint of trade constituting an unfair method of competition in violation of section 5 of the Federal Trade Commission Act, 38 Stat. 719, 15 U.S.C.A. § 45, and commanding them to cease and desist from carrying them to cease and desist from carrying out any 'planned common course of action' with respect to certain acts and practices found to be involved in the conspiracy. The petitioners are corporations engaged in manufacturing crown bottle caps, a trade association of these manufacturers and certain individuals holding office either in the corporations or the association. The Commission in its brief filled in this court consents that its order be vacated as to the individual petitioners, and no further attention need be given to them. The manufacturing corporations and the association ask that the order be vacated because not based on sufficient findings and because the findings are not supported by substantial evidence.

         The case was heard before a trial examiner, who filed a report recommending that the commission find that there had been no conspiracy in restraint of trade or unfair trade practice in violation of the Trade Commission Act and that it dismiss the petition. Exceptions were filed to this report, and the commission made a complete finding of facts covering every aspect of the case and reached the conclusion that a combination and conspiracy in restraint of trade did exist and that a cease and desist order should issue. The findings of the commission are that the manufacturing petitioners control 85% of the business in question, that there is no price competition of any sort among them, but that absolute uniformity of prices and discounts has prevailed since 1938; that, through their association they considered uniform pricing techniques and a uniform contract in the year 1928, and that, although this uniform contract was not adopted, its provisions have been followed by petitioners; that through the association petitioners have worked out a standardization of product so that even in the matter of decoration the product of all petitioners is precisely the same; that in connection with patent licensing agreements the petitioner Crown Cork & Seal Company, which was the largest manufacturer of crown bottle caps, furnished lists of its prices to all the other petitioners for a period of many years and ceased only a short while before the institution of this proceeding; that such license agreements provided that the licensees should not sell at prices lower than those of Crown Cork & Seal; and that all of the manufacturing petitioners follow the uniform practice of equalizing the freight on shipments, with the result that the cost of goods plus freight is the same at any given point any where in the United States, no matter from which of petitioners the purchase is made. Upon these facts the commission found the existence of the conspiracy charged in the following language (13th finding): 'The commission is of the opinion that in the circumstances shown to exist an understanding or agreement under which the respondents acted and still act in concert may be inferred. The intention

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of the parties participating in the meeting of respondent association, held on July 24, 1928, for all members of the association to sell their products at one and the same price and under identical terms and conditions is clearly evident from the minutes of that meeting. The subsequent use by all such parties of the general pricing plan then formulated, including the schedules of deductions, additions, and differentials, and the adoption of such plan by all of the other respondent manufacturers, with the resulting uniformity in prices, terms and conditions of sale as among all such manufacturers, indicates just as clearly an intention of all of the parties to continue in effect the original understanding. In the opinion of the commission, there is a direct connection between this understanding and the admitted efforts of the respondents to standardize their products to such an extent that a prospective purchaser would have no choice in the realm of coloring, lettering, and decorations as between the products of any two manufacturers; and the concurrent use by all of the respondent manufacturers of the freight-equalization plan serving to maintain identical delivered prices for all purchasers at any given destination, adds materially to the combination of circumstances showing a deliberate and concerted effort on the part of the respondents to completely remove effective competition as among the sellers of crown bottle caps and discs used in connection therewith. Considering, in addition, the price-fixing provisions of the various license agreements, all of which exceeded the legitimate rights of the licensors to protect themselves in the enjoyment of the fruits of their inventions, the sum of all the other incidents referred to in the foregoing paragraphs, the commission has no difficulty in concluding, and therefore finds, that the respondents have in fact entered into and have engaged in and carried out an understanding, agreement, combination or conspiracy among...

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