United States v. Aluminum Co. of America

• Decision Date: 30 September 1941
• Docket Number: Eq. No. 85-73.
• Citation: 44 F. Supp. 97
• Parties: UNITED STATES v. ALUMINUM CO. OF AMERICA et al.
• Court: U.S. District Court — Southern District of New York

44 F. Supp. 97

UNITED STATES v. ALUMINUM CO. OF AMERICA et al.

Eq. No. 85-73.

District Court, S. D. New York.

September 30 1941.

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John C. Herberg, of Washington, D. C., Norman A. Adler, of New York City, and F. Gwyn Harper, Jr., of Washington, D. C., Sp. Assts. to the Atty. Gen., and James S. Kempner, Jr., Gareth M. Neville, and Ralph Andresen, all of Washington, D. C., Sp. Attys., for the Government.

Smith, Buchanan & Ingersoll, and William Watson Smith, Frank B. Ingersoll, and Leon E. Hickman, all of Pittsburgh, Pa., and Hughes, Richards, Hubbard & Ewing, and Charles E. Hughes, Jr., Leighton H. Surbeck, and William T. Gossett, all of New York City, for Aluminum Company of America et al.

Milbank, Tweed & Hope, of New York City (Morris Hadley, Timothy N. Pfeiffer, Edgar P. Baker, and William Shields, Jr., all of New York City, of counsel), for Aluminium Limited et al.

Hughes, Richards, Hubbard & Ewing, of New York City, (Charles E. Hughes, Jr., Leighton H. Surbeck, and William T. Gossett, all of New York City, of counsel), for Aluminum Manufactures, Inc.

Baldwin, Todd & Young, of New York City, and Nash & Nash, of Manitowoc, Wis., (Roger S. Baldwin and Hiram C. Todd, both of New York City, of counsel), for Aluminum Goods Manufacturing Co.

CAFFEY, District Judge.

I approach the rendition of a decision with great diffidence. There are several reasons for this. Some of them I think should be explained.

For me there are four chief difficulties. The first is the size of the record. The second is a condition of the law applicable, — to which I shall refer. The third is the outcome, including especially the divergencies in the outcome, of sundry previous litigations. The fourth is certain features of the testimony, particularly conflicts, imposing the responsibility of passing on relative credibility of witnesses.

According to my estimate, the record consists of upwards of 58,000 pages. That number is made up of 41,722 pages of minutes, what counsel on both sides have referred to as 15,000 pages of exhibits and what, according to my own estimate, exceeds 1,500 pages of answers to interrogatories.

The size of the record is not surprising in view of the proceedings which continued for two years and two months, actually consumed in the trial, regardless of certain proceedings that occurred preceding the commencement of the trial on June 1, 1938, and certain proceedings which have followed the closing of the taking of testimony on August 14, 1940.^*

During the time of the actual trial there were 155 witnesses. There were introduced or offered, and mostly introduced, 1,803 exhibits. The interrogatories and answers, nearly all printed but partly typewritten, are about nine inches thick. Many of the pages in the exhibits and in the answers to the interrogatories would consume as much as four pages of the ordinary size for minutes, others three pages, others two.

So that in giving you my estimate of 58,000 pages I think not improbably it is considerably under the actual number if we were to translate the exhibits and the interrogatories into pages of the ordinary court minutes size.

The second trouble is with the law. There are three branches that are brought into the case and as to which there must be rulings. These are the Sherman Act, the patent law and the tariff law — including the Anti-Dumping Act, 19 U.S.C.A. § § 160 to 173.

At the moment I shall not discuss the provisions of the patent law or the tariff law, but shall take up those later when I reach a branch of the case to which they chiefly relate. For the present I shall discuss only the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note, and that to the limited extent of trying to make clear to you what, as I conceive, is the difficulty that arises from the law itself in reaching a correct decision in the case at bar.

In a lay sense every sale of every article, of any kind, that is the subject of interstate or international transaction, restrains trade. A shopkeeper who sells an apple restrains the trade of his next-door neighbor who also sells apples. Plainly, and as matter of common sense, that is not the meaning of restraint of trade as the phrase is used in the Sherman Act. That the Sherman Act does not employ "restraint of trade" in any such sense has been decided, and attention called to its real significance, by the Supreme Court over and over again. So also the Supreme Court has specifically directed attention to the fact that every sale restrains some other sale.

In Board of Trade v. United States, 246 U.S. 231, at page 238, 38 S.Ct. 242, at page 244, 62 L.Ed. 683, Ann.Cas.1918D, 1207 the Court said:

"The case was rested upon the bald proposition, that a rule or agreement by which men occupying positions of strength in any branch of trade, fixed prices at which they would buy or sell during an important part of the business day, is an illegal restraint of trade under the Anti-Trust Law. But the legality of an agreement or regulation cannot be determined by so simple a test, as whether it restrains competition. Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition."

So the Court, as I have indicated, has frequently drawn attention to the sources from which we are to derive the meaning of "restraint of trade" as that term is employed in the Sherman Act.

The Sherman Act was adopted in 1890. As is manifest from reading the proceedings in Congress during its consideration, and indeed from considering only what appears on its face, the terms employed in the Sherman Act were derived directly from the common law. The consequence is that those words have the meaning which they had at common law.

During the pendency of the trial of this case, on May 27, 1940, an opinion was handed down by the Supreme Court in Apex Hosiery Company v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044. There, after referring to the statute as having been adopted by Congress in 1890, at pages 497, 498 of 310 U.S., at page 994 of 60 S.Ct., 84 L.Ed. 1311, 128 A.L.R. 1044, the Court said this:

"In seeking more effective protection of the public from the growing evils of restraints on the competitive system effected by the concentrated commercial power of `trusts' and `combinations' at the close of the nineteenth century, the legislators found ready at their hand the common law concept of illegal restraints of trade or commerce. In enacting the Sherman law they took over that concept by condemning such restraints wherever they occur in or affect commerce between the states."

I refer to the Apex Hosiery case, however, for a more important purpose than that of reading the extract I have just quoted. At page 489 of 310 U.S., at page 989 of 60 S.Ct., 84 L.Ed. 1311, 128 A.L.R. 1044, there occurs a statement which really focuses attention on the exceeding responsibility and on the difficulty of a judge who has to decide a Sherman Act case. No longer than last year the Court said this:

"The prohibitions of the Sherman Act were not stated in terms of precision or of crystal clarity and the Act itself did not define them. In consequence of the vagueness of its language, perhaps not uncalculated, the courts have been left to give content to the statute, and in the performance of that function it is appropriate that courts should interpret its word in the light of its legislative history and of the particular evils at which the legislation was aimed."

The Court has gone further and a number of times has issued admonitions addressed to the judges, perhaps also intended for members of the bar. Three extracts from those opinions will illustrate these.

In Maple Flooring Association v. United States, 268 U.S. 563, at page 579, 45 S.Ct. 578, at page 583, 69 L.Ed. 1093, in 1925 the Court said:

"* * * it should be remembered that this court has often announced that each case arising under the Sherman Act must be determined upon the particular facts disclosed by the record, * * *."

Again, in Sugar Institute v. United States, 297 U.S. 553, at page 600, 56 S.Ct. 629, at page 642, 80 L.Ed. 859 in 1936 the Court said:

"* * * the Sherman Act, * * * does not go into detailed definitions. * * * in applying its broad prohibitions, each case demands a close scrutiny of its own facts."

So also in United States v. Hutcheson, 312 U.S. 219, at page 230, 61 S.Ct. 463, at page 465, 85 L.Ed. 788, in which the opinion was handed down this year, the Court, when speaking as of the date of the adoption of the Clayton Act, said:

"By the generality of its terms the Sherman Law had necessarily compelled the courts to work out its meaning from case to case."

Both on the facts and the law, if there were no other features, I think, therefore, we should realize that decision of a case of the kind now on trial imposes on the judge who must make it a responsibility which is grave and a burden which is heavy.

The third feature contributing to my difficulties arises out of the volume of antitrust proceedings against Alcoa which have been heretofore terminated, including an account of what happened in those proceedings.

The first of these was a suit by the Government, brought in the United States District Court for the Western District of Pennsylvania, the proceedings in which are in evidence in the present case as Exhibits 1009 and 1010. The decree in the case was rendered on June 7, 1912. There will be occasion several times later to refer to that case and I shall call it, as it has frequently been called at the trial, the Pittsburgh case.

The decree contained sweeping injunction provisions. Sections 1, 6 ...