328 U.S. 781 (1946), 18, American Tobacco Co. v. United States

Docket Nº:No. 18
Citation:328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575
Party Name:American Tobacco Co. v. United States
Case Date:June 10, 1946
Court:United States Supreme Court
 
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Page 781

328 U.S. 781 (1946)

66 S.Ct. 1125, 90 L.Ed. 1575

American Tobacco Co.

v.

United States

No. 18

United States Supreme Court

June 10, 1946

Argued November 7, 8, 1945

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

1. When there is a combination or conspiracy to control and dominate interstate trade and commerce in a commodity, coupled with the power and intent to exclude competitors to a substantial extent, the crime of monopolization under § 2 of the Sherman Anti-Trust Act is complete, and the actual exclusion of competitors is not necessary to the crime. Pp. 784-787, 798, 808-815.

2. To support a conviction for conspiring to monopolize certain trade in violation of the Sherman Act, it is not necessary to show power and intent to exclude all competitors, nor to show a conspiracy to exclude all competitors. P. 789.

3. Under § 2 of the Sherman Act, it is the crime of monopolizing for parties to combine or conspire to acquire or maintain the power to exclude competitors from any part of the trade or commerce among the several States or with foreign nations, provided (a) they also have such a power that they are able, as a group, to exclude actual or potential competition from the field and (b) they have the intent and purpose to exercise that power. P. 809.

4. It is not the form of the combination or the particular means used but the result to be achieved that the statute condemns. P. 809.

5. It is not important whether the means used to accomplish the unlawful objective are in themselves lawful or unlawful. P. 809.

6. No formal agreement is necessary to constitute an unlawful conspiracy. P. 809.

7. The essential combination or conspiracy in violation of the Sherman Act may be found in a course of dealing or other circumstances as well as in an exchange of words. Pp. 809-810.

8. Neither proof of exertion of the power to exclude nor proof of actual exclusion of existing or potential competitors is essential to sustain a charge of monopolization under the Sherman Act. P. 810.

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9. A combination may be one in restraint of interstate trade or commerce or to monopolize a part of such trade or commerce in violation of the Sherman Act, although such restraint or monopoly may not have been actually attained to any harmful extent. P. 811.

10. The material consideration in determining whether a monopoly exists is not that prices are raised and that competition actually is excluded, but that power exists to raise prices or to exclude competition when it is desired to do so. P. 811.

11. United States v. Aluminum Co. of America, 148 F.2d 416, approved. Pp. 811-814.

12. Separate convictions for a conspiracy to restrain trade and for a conspiracy to monopolize trade do not amount to double jeopardy or to a multiplicity of punishment in a single proceeding contrary to the Fifth Amendment, since they are separate statutory offenses, one being made criminal by § 1 and the other by § 2 of the Sherman Act. Braverman v. United States, 317 U.S. 49, distinguished. Pp. 787-788.

13. Separate convictions for monopolization and for conspiring to monopolize in violation of the Sherman Act do not result in multiple punishment contrary to the Fifth Amendment, since they are separate offenses. United States v. Rabinowich, 238 U.S. 78; Pinkerton v. United States, 328 U.S. 640. Pp. 788-789.

147 F.2d 93, affirmed.

Petitioners were convicted of violating §§ 1 and 2 of the Sherman Anti-Trust Act. The Circuit Court of Appeals affirmed. 147 F.2d 93. This Court granted certiorari "limited to the question whether actual exclusion of competitors is necessary to the crime of monopolization under § 2 of the Sherman Act." 324 U.S. 836. A petition for rehearing and enlargement of the scope of review in No. 20 was denied. 324 U.S. 891. Affirmed, p. 815.

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BURTON, J., lead opinion

MR. JUSTICE BURTON delivered the opinion of the Court.

The petitioners are The American Tobacco Company, Liggett & Myers Tobacco Company, R. J. Reynolds Tobacco Company,1 American Suppliers, Inc., a subsidiary of American, and certain officials of the respective companies who were convicted by a jury, in the District Court of the United States for the Eastern District of Kentucky, of violating §§ 1 and 2 of the Sherman Anti-Trust Act pursuant to an information filed July 24, 1940, and modified October 31, 1940.

Each petitioner was convicted on four counts: (1) conspiracy in restraint of trade, (2) monopolization, (3) attempt to monopolize, and (4) conspiracy to monopolize. Each count related to interstate and foreign trade and commerce in tobacco. No sentence was imposed under the third count, as the Court held that that count was merged in the second. Each petitioner was fined $5,000 on each of the other counts, making $15,000 for each petitioner and a total of $255,000. Seven other defendants were found not guilty, and a number of the original defendants were severed from the proceedings pursuant to stipulation.

The Circuit Court of Appeals for the Sixth Circuit, on December 8, 1944, affirmed each conviction. 147 F.2d

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93. All the grounds urged for review of those judgments were considered here on petitions for certiorari. On March 26, 1945, this Court granted the petitions, but each was "limited to the question whether actual exclusion of competitors is necessary to the crime of monopolization under Section 2 of the Sherman Act." 324 U.S. 836. On April 23, 1945, Reynolds, et al., filed a petition for rehearing and enlargement of the scope of review in their case, but it was denied. 3 24 U.S. 891. This opinion is limited to the convictions under [66 S.Ct. 1127] § 2 of the Sherman Act,2 and deals especially with those for monopolization under the second count of the information.

The issue thus emphasized in the order allowing certiorari and primarily argued by the parties has not been previously decided by this Court. It is raised by the following instructions which were especially applicable to the second count,3 but were related also to the other counts under § 2 of the Sherman Act:

Now the term "monopolize," as used in Section 2 of the Sherman Act, as well as in the last three counts

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of the Information, means the joint acquisition or maintenance by the members of a conspiracy formed for that purpose, of the power to control and dominate interstate trade and commerce in a commodity to such an extent that they are able, as a group, to exclude actual or potential competitors from the field, accompanied with the intention and purpose to exercise such power.

The phrase "attempt to monopolize" means the employment of methods, means, and practices which would, if successful, accomplish monopolization, and which, though falling short, nevertheless approach so close as to create a dangerous probability of it, which methods, means, and practices are so employed by the members of and pursuant to a combination or conspiracy formed for the purpose of such accomplishment.

It is in no respect a violation of the law that a number of individuals or corporations, each acting for himself or itself, may own or control a large part, or even all of a particular commodity, or all the business of a particular commodity.

An essential element of the illegal monopoly or monopolization charged in this case is the existence

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of a combination or conspiracy to acquire and maintain the power to exclude competitors to a substantial extent.

Thus, you will see that an indispensable ingredient of each of the offenses charged in the Information is a combination or conspiracy.

(Italics supplied.)

While the question before us, as briefly [66 S.Ct. 1128] stated in the Court's order, makes no express reference to the inclusion in the crime of "monopolization" of the element of "a combination or conspiracy to acquire and maintain the power to exclude competitors to a substantial extent," yet the trial court, in its above-quoted instructions to the jury, described such a combination or conspiracy as an "essential element" and an "indispensable ingredient" of that crime in the present cases. We therefore include that element in determining whether the foregoing instructions correctly stated the law as applied to these cases. In discussing the legal issue, we shall assume that such a combination or conspiracy to monopolize has been established. Because of the presence of that element, we do not have here the hypothetical case of parties who themselves have not "achieved" monopoly, but have had monopoly "thrust upon" them. See United States v. Aluminum Co. of America, 148 F.2d 416, 429.

The present cases are not comparable to cases where the parties, for example, merely have made a new discovery or an original entry into a new field and unexpectedly or unavoidably have found themselves enjoying a monopoly, coupled with power and intent to maintain it. In the Aluminum Co. case, discussed later, there was a use of various unlawful means to establish or maintain the monopoly. Here, we have the additional element of a combination or conspiracy to acquire or maintain the power to exclude competitors that is charged in the fourth count.

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The present opinion is not a finding by this Court one way or the other on the many closely contested issues of fact. The present opinion is an application of the law to the facts as they were found by the jury and which the Circuit Court of Appeals held should not be set aside.4 The trial court's instruction did not call for proof of an "actual exclusion" of competitors on the part of the petitioners. For the purposes of this opinion, we shall assume, therefore, that an actual exclusion of competitors by the...

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