208 U.S. 274 (1908), 388, Loewe v. Lawlor

Docket Nº:No. 388
Citation:208 U.S. 274, 28 S.Ct. 301, 52 L.Ed. 488
Party Name:Loewe v. Lawlor
Case Date:February 03, 1908
Court:United States Supreme Court
 
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Page 274

208 U.S. 274 (1908)

28 S.Ct. 301, 52 L.Ed. 488

Loewe

v.

Lawlor

No. 388

United States Supreme Court

February 3, 1908

Argued December 4, 5, 1907

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

After the Circuit Court of Appeals has certified questions to this court and this court has issued its writ of certiorari requiring the whole record to be sent up, it devolves upon this court under § 6 of the Judiciary Act of 1891, to decide the whole matter in controversy in the same manner as if it had been brought here for review by writ of error or appeal.

The Anti-Trust Act of July 2, 1890, 26 Stat. 209, has a broader application that the prohibition of restraints of trade unlawful at common law.

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It prohibits any combination which essentially obstructs the free flow of commerce between the States, or restricts, in that regard, the liberty of a trader to engage in business, and this includes restraints of trade aimed at compelling third parties and strangers involuntarily not to engage in the course of interstate trade except on conditions that the combination imposes.

A combination may be in restraint of interstate trade and within the meaning of the Anti-Trust Act although the persons exercising the restraint may not themselves be engaged in interstate trade, and some of the means employed may be acts within a State and individually beyond the scope of Federal authority, and operate to destroy intrastate trade as interstate trade, but the acts must be considered as a whole, and if the purposes are to prevent interstate transportation, the plan is open to condemnation under the Anti-Trust Act of July 2, 1890. Swift v. United States, 196 U.S. 375.

The Anti-Trust Act of July 2, 1890, makes no distinction between classes. Organizations of farmers and laborers were not exempted from its operation, notwithstanding the efforts which the records of Congress show were made in that direction.

A combination of labor organizations and the members thereof, to compel a manufacturer whose goods are almost entirely sold in other States to unionize his shops and, on his refusal so to do to, boycott his goods and prevent their sale in States other than his own until such time as the resulting damage forces him to comply with their demands is, under the conditions of this case, a combination in restraint of interstate trade or commerce within the meaning of the Anti-Trust Act of July 2, 1890, and the manufacturer may maintain an action for threefold damages under 7 of that act.

The facts are stated in the opinion.

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FULLER, J., lead opinion

MR. CHIEF JUSTICE FULLER delivered the opinion of the court.

This was an action brought in the Circuit Court for the District of Connecticut under § 7 of the Anti-Trust Act of July 2, 1890, c. 647, 26 Stat. 209, claiming threefold damages for injuries inflicted on plaintiffs by a combination or conspiracy declared to be unlawful by the act.

Defendants filed a demurrer to the complaint, assigning general and special grounds. The demurrer was sustained as to the first six paragraphs, which rested on the ground that the combination stated was not within the Sherman Act, and this rendered it unnecessary to pass upon any other questions in the case, and, upon plaintiffs declining to amend their complaint, the court dismissed it with costs. 148 F. 924, and see 142 F. 216; 130 F. 633.

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The case was then carried by writ of error to the Circuit Court of Appeals for the Second Circuit, and that court, desiring the instruction of this court upon a question arising on the writ of error, certified that question to this court. The certificate consisted of a brief statement of facts, and put the question thus: "Upon this state of facts, can plaintiffs maintain an action against defendants under section 7 of the Anti-Trust Act of July 2, 1890?"

After the case on certificate had been docketed here, plaintiffs in error applied, and defendants in error joined in the application, to this court to require the whole record and cause to be sent up for its consideration. The application was granted, and the whole record and cause being thus brought before this court, it devolved upon the court, under § 6 of the Judiciary Act of 1891, to "decide the whole matter in controversy in the same manner as if it had been brought there for review by writ of error or appeal."

The case comes up, then, on complaint and demurrer, and we give the complaint in the margin. *

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[28 S.Ct. 302] The question is whether, upon the facts therein averred and admitted by the demurrer, this action can be maintained under the Anti-Trust Act.

The first, second and seventh sections of that act are as follows:

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1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such

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contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

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2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty

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of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

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7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act may sue therefor in any Circuit Court of the United States in the district in

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which the defendant resides or is found, [28 S.Ct. 303] without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit; including a reasonable attorney's fee.

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In our opinion, the combination described in the declaration is a combination "in restraint of trade or commerce among the several States," in the sense in which those words are used in the act, and the action can be maintained accordingly.

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And that conclusion rests on many judgments of this court, to the effect that the act prohibits any combination whatever to secure action which essentially obstructs the free flow of commerce between the States, or restricts, in that regard, the liberty of a trader to engage in business.

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The combination charged falls within the class of restraints of trade aimed at compelling third parties and strangers involuntarily not to engage in the course of trade except on conditions that the combination imposes, and there is no doubt

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that (to quote from the well known work of Chief Justice Erle on Trade Unions),

at common law, every person has individually, and the public also, has collectively, a right to require that the course of trade should be kept free from unreasonable

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obstruction.

But the objection here is to the jurisdiction, because, even conceding that the declaration states a case good at common law, it is contended that it does not state one within the statute. Thus, it is said that the restraint alleged would operate to entirely destroy plaintiffs' business, and thereby include intrastate trade as well; that physical obstruction

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is not alleged [28 S.Ct. 304] as contemplated, and that defendants are not themselves engaged in interstate trade.

We think none of these objections is tenable, and that they are disposed of by previous decisions of this court.

United States v. Trans-Missouri Freight Association, 166 U.S. 290; United States v. Joint Traffic Association, 171 U.S. 505, and Northern Securities Company v. United States, 193 U.S. 197, hold, in effect, that the Anti-Trust law has a broader application than the prohibition of restraints of trade unlawful at common law. Thus, in the Trans-Missouri Case, 166 U.S. 290, it was said that,

assuming that agreements of this nature are not void at common law, and that the various cases cited by the learned courts below show it, the answer to the statement of their validity is to be found in the terms of the statute under consideration;

and, in the Northern Securities Case, 193 U.S. 331, that

the act declares illegal every contract, combination or conspiracy, in whatever form, of whatever nature, and whoever may be the parties to it, which directly or necessarily operates in restraint of trade or commerce among the several States.

We do not pause to comment on cases, such as United States v. Knight, 156 U.S. 1; Hopkins v. United States, 171 U.S. 578, and Anderson v. United States, 171 U.S. 60; in which the undisputed facts showed that the [28 S.Ct. 305] purpose of the agreement was not to obstruct or restrain interstate commerce. The object and intention of the combination determined its legality.

In Swift v. United States, 196 U.S. 375, a bill was brought against a number of corporations, firms and individuals of different States alleging that they were engaged in interstate commerce in the purchase, sale, transportation and delivery, and subsequent resale at the point of delivery of meats, and that they combined to refrain from bidding against each other in the purchase of cattle; to maintain a uniform price at which the meat should...

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