United States v. National Lead Co National Lead Co v. United States Du Pont De Nemours Co v. Same

Decision Date23 June 1947
Docket Number90,91,Nos. 89,s. 89
Citation91 L.Ed. 2077,332 U.S. 319,67 S.Ct. 1634
PartiesUNITED STATES v. NATIONAL LEAD CO. et al. NATIONAL LEAD CO. et al. v. UNITED STATES. E. I. DU PONT DE NEMOURS & CO. v. SAME
CourtU.S. Supreme Court

[Statement of Case from pages 319-323 intentionally omitted] Messrs. Wendell Berge, Asst. Atty. Gen., and William C. Dixon, of Cleveland, Ohio, for the United States.

Mr. William Dwight Whitney, of New York City, for the E. I. du Pont Co.

Mr. Bethuel M. Webster, of New York City, for National Lead Co. and Titan Co., Inc.

Mr. Justice BURTON delivered the opinion of the Court.

This action was brought by The United States of America, June 24, 1944, in the District Court of the United States for the Southern District of New York, against National Lead Company (a New Jersey corporation, here called National Lead or NL), its wholly owned subsidiary, Titan Company, Inc. (a Delaware corporation, here called Titan Inc. or Tinc) and E. I. du Pont de Nemours and Company (a Delaware corporation, here called due Pont or DP). It is a proceeding in equity instituted under § 4 of the Sherman Anti-Trust Act, 26 Stat. 209, 36 Stat. 1167, 15 U.S.C. § 4, 15 U.S.C.A. § 4, to prevent and restrain alleged violations of §§ 1 and 2 of that Act, 26 Stat. 209, 50 Stat. 693, 15 U.S.C. §§ 1 and 2, 15 U.S.C.A. §§ 1, 2. The trial was conducted by Judge Simon H. Rifkind of that court. It began December 4, 1944, and ended March 14, 1945. His opinion was filed July 5, 1945. His 96 findings of fact and two conclusions of law were entered October 2, 1945. After extended consideration of its terms, by the court and by counsel for all parties, the decree was entered October 11, 1945. The opinion and decree are reported in 63 F.Supp. 513—535. The findings of fact, conclusions of law and much of the detailed discussion of the decree are in the record. Separate appeals were filed in this Court, in case No. 89 by the United States, in case No. 90 by National Lead and Titan Inc. and in case No. 91 by du Pont. The three companies are sometimes referred to as 'the appellant companies.' We noted probable jurisdiction in each appeal, May 20, 1946, and the three appeals were argued together February 3—5, 1947. A partial stay of the decree had been granted by Mr. Justice REED, on January 2, 1946, pending determination of the appeals. Reference is made to the opinion of the District Court for a recital of the complex facts which it had to consider in order to reach its conclusion that National Lead, Titan Inc. and du Pont each violated § 1 of the Sherman Act, 1 although it found a marked difference between the conduct of National Lead and of its subsidiary, Titan Inc., on the one hand, and that of du Pont on the other. This Court affirms the judgment of the District Court, except as to the original effective dates of certain of its provisions, and our discussion will relate largely to the assignments of error as to the terms of the decree.

I. The first issue presented to the District Court was that of the participation of National Lead and Titan Inc. in a so-called 'INTERNATIONAL CARTEL' DATING BACK TO 1920, and constituting a combination or conspiracy in restraint of trade and commerce in titanium pigments and compounds, among the several states of the United States and with foreign nations, which combination, after 1933, was alleged to include de Pont. The District Court found such participation.2 In their brief on appeal in No. 90, National Lead and Titan Inc. said:

'The Government's case was based on a series of closely related agreements made between 1920 and 1944. The agreements have been cancelled and continuation or renewal has been enjoined. The appeals are greatly simplified by the fact that we accept the cancellation and the injunction against continuation or renewal. We submit, however, that the court went too far in forbidding normal and usual contractual arrangements.'

Accordingly, the finding of the District Court, as to the participation of National Lead and Titan Inc. in the violation of § 1 of the Sherman Act, is accepted here without further discussion.

II. The second issue was that of the participation of du Pont in such combination after 1933. The District Court found that du Pont 'joined the conspiracy found herein to exist between, NL and its foreign associates. DP's status rights and obligations were different from those of the other members of the combination. DP did not thereafter withdraw.' Finding of Fact 73. The District Court, in its opinion, also stated that—

'At least then as to territorial delimitations of the titanium pigment business, DP joined the combination.

'My general summary of the evidence on this issue is that DP was a member of the combination—true, a special member, with a status, rights and obligations, different from that of the other members, but a member nonetheless.' 63 F.Supp. at pages 530, 531, and see the preamble to the decree at page 532.3

This finding is contested vigorously by du Pont and is the principal subject matter of its appeal in No. 91. After careful consideration, we agree with the following conclusion of the District Court:

'In sharp contrast with NL, DP exhibited, from the very beginning of its interest in titanium, an alert consciousness of the anti-trust laws and moved cautiously and under the guidance of trained anit- trust lawyers. The question is whether it succeeded in avoiding not only the form but also the substance of transgression. I have concluded that it has not; * * *.' Id., 63 F.Supp. at page 527.

It would serve no beneficial purpose to review here the evidence upon which that court based its conclusion. Its opinion analyzes the facts (Id., 63 F.Supp. at pages 527—531) and, in the light of the record § a whole, we find in those facts the support necessary for the conclusion reached.

III. Related to these issues was a third. This was whether the contract between National Lead and du Pont was offensive to the antitrust laws apart from the relation of that contract, and of the parties thereto, to the foreign producers. The District Court found that it was and also related it to the international situation. It found that—

'The defendants NL, DP and Tinc have utilized their patents which relate to the manufacture and use of titanium pigments to control and regulate the manufacture and sale of titanium pigments and compounds in the United States; and NL and Tinc with the co-operation of DP have done so throughout the rest of the world.' Finding of Fact 95, subparagraph 9.

In its opinion the District Court emphasized also 'the great power they acquired' (Id., 63 F.Supp. at page 531) and indicated criticism of limitations originally inserted in certain important licenses, although later removed from them. Id., 63 F.Supp. at page 532. Added together, the control of the patents covered by this agreement gave to National Lead and du Pont 'domination and control over the titanium pigment business in the U.S.' Finding of Fact 79. The District Court referred to the 'proliferation of patents' as another 'inevitable consequence' of the agreement. Id., 63 F.Supp. at page 532. This was explained to mean the great multiplication of related patents, resulting in increasing the difficulty of an attack upon them. The validity of none of the hundreds of patents involved has been litigated.

'These patents, through the agreements in which they are enmeshed and the manner in which they have been used, have, in fact, been forged into instruments of domination of an entire industry. The net effect is that a business, originally founded upon patents which have long since expired, is today less accessible to free enterprise than when it was first launched.' Id., 63 F.Supp. at page 532.

Referring to the exchange of patents between National Lead and du Pont, the District Court added:

'. . . in the context of the present case, . . . this exchange between two corporations, who between them controlled the entire market, becomes an instrument of restraint, available for use and used, to continue the mastery of the market which NL and DP achieved by means of the illegal international agreement.' Id., 63 F.Supp. at page 532.

These facts are important not only in affirming, as we do, the finding that National Lead, Titan Inc. and du Pont each has violated § 1 of the Sherman Anti-Trust Act, but also in passing upon the terms of the decree entered in order to prevent future violations of that Act by them.

IV. The remaining issues relate to the terms of the decree. The entire decree, exclusive of its Appendix, is reported at 63 F.Supp. 532—535, and, for reference purposes, is here reprinted in the margin, as there reported.4 This decree represents a careful attempt to fit the remedy to the needs of this case. The record upon which it is based consists of two large volumes of testimony and four larger volumes of exhibits, representing a total of over 5,500 pages, reflecting more than three months f trial. I t demonstrates a commendable procedure. Proposed findings of fact and conclusions of law were submitted on behalf of the respective parties and a form of decree was submitted on behalf of the Government to the District Court immediately following the trial. The opinion of the District Court, when filed, formed the basis of further consultation and argument. After the District Court's findings of fact and conclusions of law were entered, further conferences were held with counsel and full opportunity was given to them to propose changes in the findings of fact and the decree. Much of this discussion was reported in the record and has been of benefit to this Court in reviewing the decree.

In our opinion, the provisions of this decree, to a large extent, are matters lying within the discretion of the District Court as a court of equity whose duty it was to make the remedy as effective as possible. The District Court was confronted with...

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