United States v. CHRYSLER CORPORATION, ETC.

• Decision Date: 01 March 1950
• Docket Number: No. 12236.,12236.
• Citation: 180 F.2d 557
• Parties: UNITED STATES v. CHRYSLER CORPORATION PARTS WHOLESALERS, NORTHWEST REGION et al.
• Court: U.S. Court of Appeals — Ninth Circuit

180 F.2d 557 (1950)

UNITED STATES v. CHRYSLER CORPORATION PARTS WHOLESALERS, NORTHWEST REGION et al.

No. 12236.

United States Court of Appeals Ninth Circuit.

March 1, 1950.

Herbert A. Bergson, Assistant Atty. Gen., J. Charles Dennis, U.S. Atty., Seattle, Wash., Charles L. Whittinghill, Sp. Asst. to Atty. Gen., Richard E. Guggenheim, Joe F. Nowlin, Aute L. Carr, John P. Kelly, Atty., Dept. of Justice, Washington, D. C., for appellant.

Bogle, Bogle & Cates, Robert W. Graham, J. Tyler Hull, Seattle, Wash., for appellees, Commercial Automotive Service, F. L. Hawkins and C. J. Brush.

Eggerman, Rosling & Williams, Edward L. Rosling and Robert G. Moch, Seattle, Wash., for appellees S. L. Savidge, Inc., W. G. Powell and John Munster.

Eisenhower, Hunter & Ramsdell, Tacoma, Wash., for appellees, Winthrop Motor Co., G. W. Miller and Stanley Peterson.

Ferguson, Burdell & Armstrong, Seattle, Wash., for appellees Chrysler Corp. Parts Wholesalers and MoPar Club.

Randall & Danskin, C. D. Randall, Spokane, Wash., for appellees Riegel Brothers, D. R. Riegel and T. H. Naismith.

Tracy Griffin and Kenneth Short, Seattle, Wash., for appellees, American Automobile Co., S. Sayres and R. W. Hanson.

Before DENMAN, Chief Judge, and BONE and ORR, Circuit Judges.

ORR, Circuit Judge.

An indictment was returned in the United States District Court for the Western District of Washington purporting to charge appellees with conspiring to violate the Sherman Act, 15 U.S.C.A. § 1. Appellees moved in the trial court to dismiss on the ground that no criminal offense was alleged in that the indictment failed to state a conspiracy in restraint of trade either "in" interstate commerce or "affecting" interstate commerce. The trial court granted the motion and dismissed the indictment. We have then for determination, as did the trial court, the question of whether there can be found within the four corners of the indictment sufficient allegations to establish that the goods in question moved in interstate commerce from the manufacturer outside the state of Washington to the consumers within the state of Washington without coming to "rest" in the sense that the flow of the commerce was stopped before the goods reached the consumer and, further, whether the impact of the alleged conspiracy on the sale and distribution of the goods was such as to impede the free and uninterrupted flow thereof in interstate commerce. In considering the sufficiency of the indictment we should keep in mind the rule that all allegations, well pleaded, must be taken as true.

In substance, the indictment alleges that two of the defendants are unincorporated trade associations comprising persons and concerns operating almost exclusively in the state of Washington, who are authorized by the Chrysler Corporation to sell Chrysler replacement parts and engines. The five corporate defendants, who are the authorized Chrysler parts wholesalers in the said state, are all members of one or both of those trade associations, and the ten individual defendants are each actively engaged in the management of one of the corporate defendants and of the associations of which it is a member. The Chrysler Corporation manufactures replacement parts in Michigan, Georgia, Kansas, Delaware and California. Some of these parts, known as Class A parts, are in competition with similar parts manufactured by other companies. Class B parts are manufactured only by Chrysler. Chrysler sells both classes of parts to the corporate defendants who, in turn, sell more than 90 per cent of the Chrysler replacement parts used in the state of Washington. The wholesalers are independent entrepreneurs who purchase the parts outright and resell them as their own property. The resales are made to authorized dealers in Chrysler automobiles, independent garages and repair shops, operators of taxicab or truck fleets and retail customers. At various specified times and places the defendants have successfully combined and conspired to raise and fix wholesale prices on parts by specified percentages, to decrease and fix wholesale discounts on parts by special percentages and to compel authorized dealers to adhere to the prices and discounts so fixed.

The allegations pertaining to the connection between the alleged conspiracy and interstate commerce are as follows:

"10. * * * In anticipation of, and in response to, orders and demands from customers in the state of Washington of the classes described in paragraph 8 hereof, the corporate defendants regularly order, purchase and procure the shipment of Chrysler replacement parts and engines from the Chrysler plants located in the states listed in paragraph 6 hereof, and resell said parts and engines to said customers in the state of Washington. Said corporate defendants, and authorized Chrysler dealers in the state of Washington to whom they sell, serve as a conduit through which said Chrysler replacement parts and engines move in a regular, continuous and uninterrupted flow to the ultimate users of said parts and engines in the state of Washington.

"11. * * * The purchase and resale of Chrysler replacement parts and engines by the corporate defendants as the authorized Chrysler wholesalers for the state of Washington, and by the authorized Chrysler dealers to whom they sell, is an integral part of and incidental to the uninterrupted movement of said substantial volume of Chrysler replacement parts and engines in interstate commerce from the Chrysler plants located in the states listed in paragraph 6 hereof, to the ultimate users of said replacement parts and engines in the state of Washington."

"21. The purpose, intent and necessary effect of the aforesaid combination and conspiracy has been and is:

(a) To eliminate all price competition among defendants and the authorized Chrysler dealers to whom they sell, in the sale of Chrysler replacement parts and engines shipped in interstate commerce into the state of Washington and sold and distributed therein, and to deny the consuming public in the state of Washington the benefits of such competition.

* * * * * *

(c) To directly, substantially, and unreasonably burden and restrain the flow in interstate trade and commerce of Chrysler replacement parts and engines from the states of Michigan, Georgia, Kansas, Delaware and California to the state of Washington, by means...