341 U.S. 593 (1951), 352, Timken Roller Bearing Co. v. United States

Docket Nº:No. 352
Citation:341 U.S. 593, 71 S.Ct. 971, 95 L.Ed. 1199
Party Name:Timken Roller Bearing Co. v. United States
Case Date:June 04, 1951
Court:United States Supreme Court
 
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Page 593

341 U.S. 593 (1951)

71 S.Ct. 971, 95 L.Ed. 1199

Timken Roller Bearing Co.

v.

United States

No. 352

United States Supreme Court

June 4, 1951

Argued April 24, 1951

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OHIO

Syllabus

In a civil action brought by the United States against appellant, a domestic corporation, to enjoin alleged violations of the Sherman Act, the complaint charged that appellant had combined and conspired with a British corporation and a French corporation, in each of which it had a financial interest, to restrain interstate and foreign commerce in the manufacture and sale of antifriction bearings. The District Court found that, under agreements between them the corporations had allocated trade territories among themselves; fixed prices on products of one sold in the territory of the others; cooperated to protect each other's markets and to eliminate outside competition, and participated in cartels to restrict imports to, and exports from, the United States. The court concluded that appellant had violated the Sherman Act as charged, and entered a comprehensive decree designed to bar future violations.

Held:

1. The District Court's material findings of fact are not "clearly erroneous," and are accepted here. Fed.Rules Civ.Proc., 52(a). Pp. 596-597.

2. The opinion of the District Court sufficiently complies with the requirements of Rule 52(a) relative to findings of fact and conclusions of law. P. 597, n. 7.

3. Agreements between legally separate persons and companies to suppress competition among themselves cannot be justified by characterizing the project as a "joint venture." Pp. 597-598.

(a) Agreements providing for an aggregation of trade restraints such as those existing in this case are prohibited by the Act, whether or not incidental to a "joint venture." P. 598.

(b) Common ownership or control of the contracting corporations does not liberate them from the impact of the antitrust laws. P. 598.

4. Nor can the restraints be justified as reasonable steps taken to implement a valid trademark licensing system, since the trademark provisions of the agreements were secondary to the central purpose of allocating trade territory, and since the agreements provided

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for control of the manufacture and sale of antifriction bearings, whether carrying the trademark or not. Pp. 598-599.

(a) A trademark cannot lawfully be used as a device for violating the Sherman Act, and its use therefor is penalized by the Trade Mark Act of 1946. P. 599.

5. The suggestion that what appellant has done is reasonable in view of current foreign trade conditions, and that therefore the Sherman Act should not he enforced in this case, is rejected. P. 599.

6. The decree of the District Court properly enjoined continuation or repetition of the conduct which it found to be illegal. P. 600.

7. The relief which a district court may grant in a Sherman Act ease need not be confined to the narrow limits of the proven violation. P. 600.

8. The District Court should not have ordered appellant to divest itself of its stockholdings and all other financial interests in the British and French corporations, and the decree is modified so as to eliminate provisions directed to that end. Pp. 600-601.

83 F.Supp. 284 modified and affirmed.

In a civil action brought by the United States against appellant, to restrain alleged violations of the Sherman Act, the District Court found that appellant had violated the Act, and a decree of injunction was entered. 83 F.Supp. 284. On direct appeal to this Court, the decree is modified and, as modified, affirmed, p. 601.

BLACK, J., lead opinion

MR. JUSTICE BLACK delivered the opinion of the Court.

The United States brought this civil action to prevent and restrain violations of the Sherman Act1 by appellant,

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Timken Roller Bearing Co., an Ohio corporation. The complaint charged that appellant, in violation of §§ 1 and 3 of the Act,2 combined, conspired and acted with British Timken, Ltd. (British Timken) and Societe Anonyme Francaise Timken (French Timken) to restrain interstate and foreign commerce by eliminating competition in the manufacture and sale of antifriction bearings in the markets of the world. After a trial of more than a month, the District Court made detailed findings of fact which may be summarized as follows:

As early as 1909, appellant and British Timken's predecessor had made comprehensive agreements providing for a territorial division of the world markets for antifriction bearings. These arrangements were somewhat modified and extended in 1920, 1924, and 1925. Again in 1927, the agreements were substantially renewed in connection with a transaction by which appellant and one Dewar, an English businessman, cooperated in purchasing all the stock of British Timken. Later, some British Timken stock was sold to the public, with the result that appellant now holds about 30% of the outstanding shares, while Dewar owns about 24%.3 In 1928, appellant and Dewar organized French Timken, and, since that date, have together owned all the stock in the French company. Beginning in that year, appellant, British Timken and French Timken have continuously kept operative "business agreements" regulating the manufacture and sale of antifriction bearings by the three companies and providing for the use by the British and French corporations of the trademark "Timken."4 Under these agreements,

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the contracting parties have(1) allocated trade territories among themselves; (2) fixed prices on products of one sold in the territory of the others; (3) cooperated to protect each other's markets and to eliminate outside competition, and (4) participated in cartels to restrict imports to, and exports from, the United States.

On these findings, the District Court concluded that appellant had violated the Sherman Act as charged, and entered a comprehensive decree designed to bar future violations. 83 F.Supp. 284. The case is before us on appellant's direct appeal under 15 U.S.C. § 29.

Although appellant has indiscriminately challenged the District Court's judgment and decree in over 200 separate assignments of error, the real grounds relied on for reversal are only a few in number.5 In the first place, appellant contends [71 S.Ct. 974] that most of the District Court's material findings of fact are without evidential support, that they "ignore or fail properly to evaluate" evidence supporting appellant's position, and that it was error for the court to refuse to make additional findings. For the most part, this shotgun approach is actually only a dispute as to the proper inferences to be drawn from the evidence in the record;6 in effect, it is an invitation for

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us to try the case de novo. This Court must decline such an invitation, just as it does when the Government makes the same request. United States v. Yellow Cab Co., 338 U.S. 338. In the present case, the trial judge, after a patient hearing, carefully analyzed the evidence in an opinion prepared with obvious care.7 Appellant's lengthy brief has failed to establish that there was error in making any crucial, or even important, ultimate or subsidiary finding. Since we cannot say the findings are "clearly erroneous," we accept them. Fed.Rules Civ.Proc., 52(a).

Appellant next contends that the restraints of trade so clearly revealed by the District Court's findings can be justified as "reasonable," and therefore not in violation of the Sherman Act, because they are "ancillary" to allegedly "legal main transactions," namely, (1) a "joint venture" between appellant and Dewar, and (2) an exercise of appellant's right to license the trademark "Timken."

We cannot accept the "joint venture" contention. That the trade restraints were merely incidental to an otherwise legitimate "joint venture" is, to say the least, doubtful. The District Court found that the dominant purpose of the restrictive agreements into which appellant, British Timken and French Timken entered was to avoid all competition either among themselves or with

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others. Regardless of this, however, appellant's argument must be rejected. Our prior decisions plainly establish that agreements providing for an aggregation of trade restraints such as those existing in this case are illegal under the Act. Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 213; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223-224 and note 59; United States v. National Lead Co., 63 F.Supp. 513, aff'd, 332 U.S. 319; United States v. American Tobacco, 221 U.S. 106, 180-184; Associated Press v. United States, 326 U.S. 1, 15. See also United States v. Aluminum Co. of America, 148 F.2d 416, 439-445. The fact that there is common ownership or control of the contracting corporations does not liberate them from the impact of the antitrust laws. E.g., Kiefer-Stewart Co. v. Seagram & Sons, supra, at 215. Nor do we find any support in reason or authority [71 S.Ct. 975] for the proposition that agreements between legally separate persons and companies to suppress competition among themselves and others can be justified by labeling the project a "joint venture." Perhaps every agreement and combination to restrain trade could be so labeled.

Nor can the restraints of trade be justified as reasonable steps taken to implement a valid trademark licensing system, even if we assume with appellant that it is the owner of the trademark "Timken" in the trade areas allocated to the British and French corporations. Appellant's premise that the trade restraints are only incidental to the trademark contracts is refuted by the District Court's finding that the "trade mark provisions [in the agreements] were subsidiary and secondary to the central purpose of allocating trade territories." Furthermore, while a trademark merely affords protection to a name, the agreements in...

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