United States v. Employing Lathers Ass'n

• Decision Date: 11 May 1954
• Docket Number: 10971.,No. 10970,10970
• Citation: 212 F.2d 726
• Parties: UNITED STATES v. EMPLOYING LATHERS ASS'N OF CHICAGO AND VICINITY et al. UNITED STATES v. EMPLOYING PLASTERERS ASS'N OF CHICAGO AND VICINITY et al.
• Court: U.S. Court of Appeals — Seventh Circuit

212 F.2d 726 (1954)

UNITED STATES v. EMPLOYING LATHERS ASS'N OF CHICAGO AND VICINITY et al.

UNITED STATES v. EMPLOYING PLASTERERS ASS'N OF CHICAGO AND VICINITY et al.

Nos. 10970, 10971.

United States Court of Appeals Seventh Circuit.

May 11, 1954.

Charles H. Weston, Department of Justice, Antitrust Division, Washington, D. C., Earl A. Jinkinson, Antitrust Division, Chicago, Ill., for appellant.

Leo F. Tierney, Charles L. Stewart, Lester Asher, Joseph Gubbins, Leo Segall, Holland F. FlaHavhan, Nathan M. Cohen, Daniel D. Carmell, Howard Ellis, Thomas M. Thomas, Don H. Reuben, Chicago, Ill., for appellee.

Before MAJOR, Chief Judge, and DUFFY and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

In these appeals the United States filed motions asking us to dispose of each by summary order remanding the same to the District Court, on the ground that, by intervening decisions since the appeals were taken, the Supreme Court, in the cases of United States v. Employing Lathers Ass'n, etc., 1954, 347 U.S. 198, 74 S.Ct. 452, and United States v. Plasterers' Ass'n, etc., 1954, 347 U.S. 186, 74 S.Ct. 452, has determined the law finally and adversely to the contentions of appellees on these appeals.

The procedural facts and issues in both appeals are substantially identical and all statements herein are applicable to each unless otherwise noted. These are two of five related cases, arising under the antitrust laws, 15 U.S. C.A. § 1 et seq., filed in the District Court for the Northern District of Illinois, all of which were dismissed on motions on July 20, 1953, 118 F.Supp. 387. With one of the five, we are not now concerned, — Howard v. Local 74, Wood, Wire and Metal Lathers Int. Union, etc., No. 53 C. 125 below, appeal dismissed on motion, 7 Cir., 208 F.2d 930, a private suit for damages under Section 4 of the Clayton Act, 15 U.S.C.A. § 15.

A brief history of the four remaining cases and of the inter-relationship between them follows. They were all antitrust actions filed by the United States, each based on essentially similar factual averments. The United States v. Employing Lathers Ass'n, etc., No. 52 C 1639, was a civil action alleging a conspiracy between the named defendant and others to violate those laws by practices designed to, and tending to restrain commerce unduly and to monopolize the lathing trade in the Chicago area. An indictment in a companion case, United States v. Employing Lathers Ass'n, etc., No. 52 CR 331, No. 10970 here on appeal, alleged substantially the same facts as did the complaint in 52 C 1639 and charged the defendants with criminal offenses in violation of the antitrust laws. United States v. Employing Plasterers Ass'n, etc., No. 52 C 1640, and United States v. Employing Plasterers Ass'n, etc., No. 52 CR 332, No. 10971 here on appeal, by civil complaint and indictment respectively, charged like monopolistic practices by the defendants in the plastering trade in the Chicago area as violative of the Act.

In the District Court the respective defendants moved to dismiss the complaints in Nos. 52 C 1639 and 52 C 1640, and the indictments in 52 CR 331 and 52 CR 332, on the ground that the respective pleadings failed to state a cause of action or an offense under the laws. Specifically, all defendants in each cause moved to dismiss on the ground that the monopoly charged was local in character, not in or affecting interstate commerce. In No. 52 CR 331 (10970), defendant, Local 74, etc., urged the additional ground that the activity charged was labor union activity expressly exempted from the operation of the antitrust laws by Section 6 of the Clayton Act, 15 U.S.C.A. § 17. In No. 52 CR 332 (10971), defendants, Journeymen Plasterers, etc., Local 5 and William Dalton, based their motion on the additional ground that the monopolistic practices charged were labor activities sanctioned by the laws of the United States, specifically by Section 20 of the Clayton Act, 29 U.S.C.A. § 52, as exempt from the antitrust laws. The respective motions against the complaints in Nos. 52 C 1639 and 52 C 1640 raised substantially the same grounds.

The motions came on to be heard at a combined hearing on July 13, 1953, together with a like motion in the Howard case, 53 C 125. Each motion was granted, for the reason, as the court found, that the actions charged were local in character, did not constitute activity in interstate commerce and did not affect such commerce. The court did not consider the averments raised by the unions in the respective causes that the activity complained of was within the pale of concerted union activity permitted and sanctioned by the laws of the United States and expressly exempted from the operation of the antitrust laws by 29 U.S.C.A. § 52 and, more specifically by 15 U.S.C.A. § 17.

The trial court dismissed the indictments involved here and likewise dismissed the complaints in the companion civil actions, solely on the ground that the conspiracy or monopolistic combination charged was local in nature, did not affect interstate commerce and was not, therefore, actionable under the antitrust laws. The court did not, in any of the cases, rule on the sufficiency of the allegations made to support the charge made, assuming applicability of the antitrust laws. The United States filed an appeal in each cause, to this court in the criminal causes, and, as provided by the expediting statutes, 15 U.S.C.A. § 29, to the Supreme Court of the United States in the civil causes. On stipulations of the parties that the cases before us "present the same issues as are presented in an appeal to the Supreme Court taken by the United States" from the judgments dismissing the respective civil actions against defendants, we stayed further proceedings here until the Supreme Court had decided the appeals taken to that court. On March 8, 1954 the Supreme Court rendered decisions reversing the respective judgments. United States v. Employing Lathers Ass'n, etc., 347 U.S. 198, 74 S.Ct. 452; United States v. Employing Plasterers' Ass'n, etc., 347 U.S. 186, 74 S.Ct. 452. These motions followed. The first issue before us on each appeal, as it was before the Supreme Court in the civil appeals, is whether the trial court erred in holding the illegal combination, if any, to be local in character.

Thus the Supreme Court summarized the trial court's conclusions: "The District Court did not question that the foregoing allegations in the complaint and other factual allegations showed a combination to restrain competition among Chicago plastering contractors. But the court considered these allegations to be `wholly a charge of local restraint and monopoly,' not reached by the Sherman Act. And the court held that there was no allegation of fact which showed that these powerful local restraints had a sufficiently adverse effect on the flow of plastering materials into Illinois." The court then ruled that the District Court had erred in this determination. United States v. Employing Plasterers' Ass'n, etc., 347 U.S. 186 at pages 188, 189, 74 S.Ct. 452, at page 453.

That the quotation fairly summarizes the lower court's conclusions is borne out by that court's memorandum opinion in each case and by the remarks of the trial judge transcribed during the course of the proceedings on July 13, 1953, when all four causes were decided. In its memorandum, the court said of the averments of the indictments: "This is wholly a charge of local restraint and monopoly by local labor and a local lathers association, all confined to three counties in the State of Illinois. * * * Whatever restraint there is occurs after all the buying and selling is completed. The flow of commerce is not unlike the flow of water and the statute is designed to prevent a break in the pipes through which interstate commerce flows across state lines and to the consumer. The statute is not designed to apply to the use the consumer makes of the articles of commerce after the consumer has completed his purchase * * *. The Sherman Act was not intended by Congress to interfere with local affairs, even though they might be unfair and malicious and economically unsound. * * * In the light of the authorities, it is the view of this court, indictments and complaints do not state an offense or cause of action under the antitrust laws."

The same view is variously expressed by the court in the transcript of the July 13 proceedings. For example: "The indictment alleges that customarily lathing materials installed by lathing contractors in the Chicago...