246 F.2d 231 (8th Cir. 1957), 14821, Chain Institute, Inc. v. Federal Trade Commission

Docket Nº:14821.
Citation:246 F.2d 231
Party Name:CHAIN INSTITUTE, Inc; American Chain & Cable Company, Inc.; The McKay Company; Hodell Chain Company; St. Pierre Chain Corporation; S . G. Taylor Chain Company; Columbus McKinnon Chain Corporation; Campbell chain Company; Nixdorff-Krein Manufacturing Company; Peerless Chain Company; The John M. Russell Manufacturing Company, Inc.; Turner & Seymour M
Case Date:July 03, 1957
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
FREE EXCERPT

Page 231

246 F.2d 231 (8th Cir. 1957)

CHAIN INSTITUTE, Inc; American Chain & Cable Company, Inc.; The McKay Company; Hodell Chain Company; St. Pierre Chain Corporation; S . G. Taylor Chain Company; Columbus McKinnon Chain Corporation; Campbell chain Company; Nixdorff-Krein Manufacturing Company; Peerless Chain Company; The John M. Russell Manufacturing Company, Inc.; Turner & Seymour Manufacturing Company; Western Chain Products Company; Dennis A. Merriman; William D. Kirkpatrick; and George J. Campbell, Jr., Petitioners,

v.

FEDERAL TRADE COMMISSION, Respondent.

No. 14821.

United States Court of Appeals, Eighth Circuit.

July, 3, 1957

Page 232

Sumner S. Kittelle, New York City (Cann, Lamb, Long & Kittelle, New York City, Frazer F. Hilder, Washington, D.C.,

Page 233

Stephen H. Beach, Wilkie, Owen, Farr, Gallagher & Walton, Beekman & Bogue, New York City, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., McAfee, Grossman, Taplin, Hanning, Newcomer & Hazlett, Cleveland, Ohio, Sidley, Austin, Burgess & Smith, Chicago, Ill., Marsh, Day & Calhoun, Bridgeport, Conn., Lawrence, Goldberg, Lawrence & Lewin, Chicago, Ill., Finck & Huber, Buffalo, N.Y., Halfpenny & Hahn, Chicago, Ill., Frederick B. Gerber, York, Pa., and Charles Fay, New York City, on the briefs), for petitioners.

J. B. Truly, Attorney, Federal Trade Commission, Washington, D.C. (Earl W. Kintner, General Counsel, and Robert B. Dawkins, Asst. General Counsel, Federal Trade Commission, Washington, D.C., on the briefs), for respondent.

Before SANBORN, JOHNSEN and VOGEL, Circuit Judges.

SANBORN, Circuit Judge.

This case comes to this Court upon petitions to review a cease and desist order of the Federal Trade Commission 1 which is based upon its determination that the petitioners had conspired to bring about uniformity in prices for chain and chain products, in violation of Section 5 of the Federal Trade Commission Act. 2

The petitioners are: the principal manufacturers of chain and chain products in the Unites States; the trade association of which they are members; and certain of the officers of the association. The Commission on December 22, 1942, issued a complaint charging them with having conspired to fix and maintain identical prices for such products. Delivered prices are those charged by a seller for his goods when and where delivered. On October 9, 1945, the Commission issued an amended complaint which contained two counts. The first count charged the petitioners with conspiring, in violation of § 5 of the Federal Trade Commission Act, to fix identical delivered prices for their respective products by the use of the same delivered pricing methods, which are referred to as (1) a basing point system, (2) a freight equalization system, and (3) a zone system; and thereby preventing the forces of competition from making and determining price quotations. The second count of the amended complaint charged the petitioners with price discrimination, in violation of § 2(a) of the Clayton Act, as amended. 3 That count was ultimately dismissed by the Commission. The petitioners denied all of the material allegations of the amended complaint. Evidence was heard by a Trial Examiner designated by the Commission. The hearings commenced in April of 1946 and continued through 1947 and into 1948. The record evidence was closed July 7, 1948. The Trial Examiner filed his recommended decision on September 23, 1948. It was later amended in some particulars. The case was argued before the Commission, on exceptions to the Trial Examiner's report, on April 7, 1949; was reargued September 22, 1950; and was finally decided by the Commission adversely to petitioners on the first count February 16, 1953, by a vote of 3 to 1, Commissioner Mason dissenting and Commissioner Carretta not participating. The cease and desist order under review was entered on the same date. In addition to the dismissal of the second count, the amended complaint was also dismissed as to several individuals who had been joined as parties. The record evidence necessarily reflects conditions in the chain industry as they existed prior to July 1948.

The petitioners on April 20, 1953, filed their 'Joint and Several Petition to Review' the order of the Commission. The John M. Russell Manufacturing Company, Inc., and Turner & Seymour Manufacturing Company, who were parties

Page 234

to the joint petition, filed a supplemental petition to review the order, asserting, in effect, that there was no adequate evidentiary basis for a finding that they had participated in a conspiracy to fix prices. They asked that the relief prayed for in the joint petition be granted. The petitioners originally all sought a complete review and reversal of the Commission's findings and order. On June 17, 1954, they (with the exception of the two petitioners who had filed the supplemental petition and the Columbus McKinnon Chain Corporation) moved this Court for leave to withdraw their challenge to the Commission's findings and order with respect to the price fixing conspiracy charge, except as such findings and order bore upon the use of the delivered pricing methods.

The cease and desist order of the Commission prohibited broadly a continuation of the price fixing conspiracy which the Commission had found to exist. Included in this part of the order was a subparagraph numbered (6) requiring the petitioners who make or deal in chain to cease and desist from entering into or continuing any common course of action, agreement or conspiracy to

'Quote or sell chain or chain products at prices calculated or determined pursuant to or in accordance with the single basing point delivered-price system, the freight equalization delivered-price system, or the zone delivered-price system; or quote or sell chain or chain products at prices calculated or determined pursuant to or in accordance with any other plan or system which results in identical price quotations or prices for chain or chain products at points of quotation or sale or to particular purchasers by any two or more sellers of chain or chain products using such plain or system or which prevents purchasers from finding any advantage in price in dealing with one or more as against another seller.'

In addition, the Commission included in the order a third ordering paragraph. That paragraph required each of the corporate petitioners to

'cease and desist from quoting or selling chain or chain products at prices calculated or determined pursuant to or in accordance with a single basing point delivered-price system, a freight equalization delivered-price system, or a zone delivered-price system, for the purpose or with the effect of systematically matching the delivered-price quotations or the delivered prices of other sellers of chain or chain products and thereby preventing purchasers from finding any advantage in price in dealing with one or more sellers as against another.'

The validity of both of these paragraphs of the order is challenged as being without adequate evidentiary support and exceeding the powers of the Commission.

The case was argued and...

To continue reading

FREE SIGN UP