California Co-op. Canneries v. United States

• Decision Date: 02 June 1924
• Docket Number: 4071.
• Citation: 299 F. 908
• Parties: CALIFORNIA CO-OP. CANNERIES v. UNITED STATES et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

299 F. 908

CALIFORNIA CO-OP. CANNERIES v. UNITED STATES et al.

No. 4071.

United States Court of Appeals, District of Columbia.

June 2, 1924

Submitted April 22, 1924.

Appeal from the Supreme Court of the District of Columbia.

Frank J. Hogan, of Washington, D.C., for appellant.

Peyton Gordon, Herman J. Galloway, Harry W. Van Dyke, Charles A Douglas, and Conrad H. Syme, all of Washington, D.C., Mac Asbill, of Atlanta, Ga., and William C. Breed, of New York City, for appellees.

Edgar Watkins, of Atlanta, Ga., for American Wholesale Grocers' Assn'n.

Before VAN ORSDEL, Associate Justice, and SMITH and BARBER, Judges of the United States Court of Customs Appeals.

VAN ORSDEL, Associate Justice.

On February 27, 1920, the Attorney General of the United States filed a bill of complaint in the Supreme Court of the District of Columbia against what is commonly known as the 'Big Five Meat Packers,' designated in the following groups: The Swift group, the Armour group, the Morris group the Cudahy group, and the Wilson group. On the same day the defendants filed their respective answers; also there was filed a stipulation for a consent decree which was entered in accordance with the stipulation.

The bill of complaint alleged violations of the Anti-Trust Laws (Comp. St. Sec. 8820 et seq.) by the defendants. The answers denied such violations. The decree contained the following statement:

'The several defendants having accepted service of process and having appeared and filed answers to the petition, which answers are on file in the office of the clerk of this court, and the parties having this day entered into a stipulation in this action, which stipulation is on file in the office of the clerk of this court, and from which it appears, among other things, that, while the defendants and each of them maintain the truth of their answers and assert their innocence of any violation of law in fact or intent they nevertheless, desiring to avoid every appearance of placing themselves in a position of antagonism to the government, have consented and do consent to the making and entry of the decree now about to be entered, without any findings of fact, upon condition that their consents to the entry of said decree shall not constitute or be considered an admission, and the rendition or entry of said decree, or the decree itself, shall not constitute or be considered an adjudication, that the defendants or any of them have in fact violated any law of the United States.'

The decree enjoins the defendants from conspiring or combining to restrain trade or commerce, or monopolizing, or attempting, through combination or conspiracy, to monopolize, trade or commerce. Defendants are enjoined from using their distributive facilities, including branch houses, route cars, auto trucks, etc., in the handling, dealing in, jobbing, or distribution of certain products unrelated to the meatpacking industry, and generally included in the wholesale grocery lines. These articles are classified in the decree as fresh canned, dried, or salted fish, fresh dried or canned vegetables, except in combination with meats, fresh crushed, dried, evaporated, or canned fruits, confectioneries, syrups, soda fountain supplies, molasses, honey, jams, jellies, and preserves, spices, sauces, condiments, relishes, coffee, tea, chocolate, cocoa, nuts, flour, sugar, rice, bread, wafers, crackers, biscuits, cereals, grain, grape juices, and 25 classes of manufactured products enumerated under the head of miscellaneous articles.

The defendants are further enjoined from manufacturing, dealing in, transporting, or distributing, either in domestic or export trade, or owning any stock or interest in any corporation or firm engaged in manufacturing, dealing in, or distributing these unrelated commodities, from operating retail meat markets, except at their packing plants, and those maintained for the accommodation of their own employees, and from owning any capital stock or interest in public cold storage warehouses, except cold storage plants at the stockyards where packing plants are conducted. Defendants are required to divest themselves of all ownership or interest in any public stockyard, market company, stockyard terminal railroad, market newspaper, cold storage warehouses, or retail meat markets, and to cease manufacturing or transporting the unrelated commodities, except as common carriers, to discover to the government fully, respecting the conduct of their affairs, as required under the decree, and to submit to the inspection of the Attorney General their books, records, correspondence, or other documents, in so far as the same refers to any alleged violation of any of the terms of the decree. The decree further provides that all sales, transfers, or disposition, respecting any of the matters enjoined by the decree, made by any of the defendants for a period of five months prior to the entry thereof, 'shall be submitted by the defendants to the court for its investigation and determination as to whether the same were made in accordance with the spirit and purpose of this decree,' in the same manner as if such transactions had occurred subsequently to the entry of the decree. It then provides:

'That jurisdiction of this cause be, and is hereby, retained by this court for the purpose of taking such other action, or adding at the foot of this decree such other relief, if any, as may become necessary or appropriate for the carrying out and enforcement of this decree, and for the purpose of entertaining at any time hereafter any application which the parties may make with respect to this decree.'

It appears that subsequently the National Wholesale Grocers' Association and the Southern Wholesale Grocers' Association applied for leave to intervene for the protection of their respective interests, and especially to be heard upon all hearings of any motions or proceedings seeking to change, weaken, or otherwise modify the consent decree. Leave to intervene was granted, without prejudice to prior proceedings, on the same date their intervening petitions were filed.

On April 19, 1922, appellant, California Co-operative Canneries, filed its petition for leave to intervene, and also to be heard as amicus curiae. The petition is based upon a contract between appellant, under its former name of Producers' Warehouse Company, and Armour & Co., whereby Armour & Co. contracted to purchase all of the California canned fruit required in its business, except what it purchased from the California Growers' Association under a separate contract with that association. The contract provided the place of delivery of the fruits, that the price to be paid should be based upon the prices used by the California Packing Corporation in confirming its sales to the trade generally, thus throwing itself in competition with the California Packing Corporation, as to its selling prices. The contract in detail sets out the manner of payment, discounts, labeling of goods, adjustment of controversies as to quantity and condition of products, quality and grade of goods, and then provides that:

'In case governmental action materially interferes with the performance of this contract by second party (Armour & Co.), then and in that case it shall have the right to cancel and terminate this agreement by giving 60 days' written notice to first party (appellant company) of its intention so to do, and shall not be held liable for any loss resulting therefrom.' It is averred in the petition that after the entry of the decree Armour & Co. notified appellant that it could not further keep the contract by reason of the decree, and declined to proceed further with the performance thereof. The petition sets out that under this contract, prior to the entry of the decree, Armour & Co. purchased approximately 52 per cent. of appellant's entire output of canned fruit, amounting to $4,000,000 per annum. It is alleged that through this method of dealing there was greater profit to the producer and smaller cost to the consumer, due to the superior system of distribution of fruit products possessed by Armour & Co. It is averred that the decree was passed without any notice whatever to appellant,

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