Swift & Company v. United States
Decision Date | 01 April 1968 |
Docket Number | 15790.,No. 15787,15787 |
Citation | 393 F.2d 247 |
Parties | SWIFT & COMPANY, Petitioner, v. UNITED STATES of America and Orville Freeman, Secretary of Agriculture, Respondents. AMERICAN STORES COMPANY, now known as Acme Markets, Inc., Petitioner, v. UNITED STATES of America and Orville Freeman, Secretary of Agriculture, Respondents. |
Court | U.S. Court of Appeals — Seventh Circuit |
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Arthur C. O'Meara, Arthur R. Curtis, Charles R. Kerr, Chicago, Ill., for petitioner Swift & Co.
William I. Aitken, Richard W. Smith, Lincoln, Neb., A. E. Gilfillan, Philadelphia, Pa., for petitioner American Stores Co., whose correct name is now Acme Markets, Inc.
Neil Brooks, Asst. General Counsel, Robert E. Duncan, Harold M. Carter, U. S. Department of Agriculture, Washington, D. C., Edwin L. Weisl, Jr., Asst. Atty. Gen., Morton Hollander, Chief Appellate Section, Civil Division, Department of Justice, Washington, D. C., for respondent.
Before SCHNACKENBERG, CASTLE and CUMMINGS, Circuit Judges.
In these two cases, Swift & Company and American Stores Company (now Acme Markets, Inc.) have petitioned to obtain review of a cease and desist order of the Judicial Officer of the United States Department of Agriculture representing the Secretary of Agriculture.1 The order was issued in an administrative proceeding under the Packers and Stockyards Act (7 U.S.C. § 181 et seq.). Both petitioners are concededly packers engaged in interstate commerce and within the purview of that Act. The Judicial Officer found that during 1958-1960 they engaged in an unlawful business practice, prohibited by Section 202 (a)2 of the Act and Section 201.70 of the Regulations,3 by having qualified buyers in the Western Slope lamb marketing area near Craig and Montrose, Colorado, but refraining from bidding on fat lambs against that area's principal dealer, Harry Heath & Son, and purchasing them in substantial quantities from that dealer-competitor instead of from the producers.
In the Swift case, the Judicial Officer also concluded that Swift had an agreement with Perry Holley Company, a competitor and registered dealer, as to the highest prices to be paid to lamb producers in the Craig, Colorado, marketing area during the 1959 marketing season, in contravention of Section 202(f) of the Packers and Stockyards Act.4
At the hearings conducted by a Hearing Examiner appointed under the Administrative Procedure Act (5 U.S.C. § 500 et seq.), 28 lamb producers, about one-fourth of those in the Western Slope lamb marketing area, testified about marketing conditions there from 1958 to 1960. After hearing their testimony and the testimony of other witnesses, and after receiving voluminous exhibits, the Hearing Examiner rendered his report, concluding, inter alia, that Swift and American Stores had violated the Act and Regulations as previously specified. He recommended that a cease and desist order should be issued to prohibit the illegal practices of Swift and American Stores.
A year after the Hearing Examiner's report was rendered, the Judicial Officer, representing the Secretary of Agriculture, in turn entered findings and conclusions approving the pertinent part of the Hearing Examiner's report. He found that the Western Slope of Colorado, near Craig and Montrose, is one of the western states' lamb production areas. Fat lambs are those that have acquired sufficient fat for meat production; those that require further feeding are the feeders. The annual Western Slope marketing season for lambs, both fats and feeders, is from mid-August to mid-October.
Both petitioners purchased for slaughter fat lambs in the Craig and Montrose areas and employed salaried lamb buyers there. However, during 1958-1960, these petitioners refrained from bidding against Harry Heath & Son, a competitor and registered dealer, for fat lambs offered by producers in those areas. Heath, the principal dealer in the area, bought the fat lambs from the producers, it was found, without competition from Swift and American Stores. They then satisfied their Western Slope requirements for lambs by purchasing from Heath.
During 1959 and 1960, Swift purchased 55,619 fat lambs in the Western Slope area, with 83.1% coming from Harry Heath & Son. During 1958-1960, American Stores purchased 62,927 Western Slope fat lambs, 82.8% coming from Harry Heath & Son.
The Judicial Officer determined that petitioners did not compete with Harry Heath & Son in the purchase of fat lambs from Western Slope producers and that the natural effect was lower producer prices. The practice of petitioners in having their on-the-scene buyers refrain from bidding against Heath while afterwards acquiring fat lambs from Heath was concluded to be an unfair practice within the meaning of Section 202(a) of the Act, and in violation of Section 201.70 of the Regulations (notes 2 and 3, supra).
Based on a conversation between Swift's buyer Forrest Taylor and Perry Holley, the Judicial Officer also found that Swift and Perry Holley Company, a competitor and registered dealer, had agreed on maximum prices to be paid producers for lambs in the Craig area in the 1959 marketing season. This agreement was concluded to violate Section 202(f) of the Act (note 4, supra).
Petitioners first argue that they were denied due process of law because they were not charged with an unfair buying practice but only with agreements not to compete with Heath as to purchasing Western Slope fat lambs. As petitioners knew, the Department of Agriculture explained to Harry Heath & Son long before these hearings closed that it would be an unlawful practice for a dealer to maintain a non-competitive relationship with other buyers whereby the dealer would be "purchasing substantial numbers of sheep or lambs `on order' for any packer or dealer in any lamb producing or feeding area where such packer or dealer is competitive * * through its own buyer." Also, the answers filed in the administrative proceedings and the briefs here indicate that they knew they were charged with such an unlawful buying practice. This was also shown by the testimony at the hearings and by petitioners' own proposed findings. Accordingly, they were "reasonably apprised of the issues in controversy." Cella v. United States, 208 F.2d 783, 789 (7th Cir. 1953), certiorari denied, 347 U.S. 1016, 74 S.Ct. 864, 98 L. Ed. 1138. Since this issue was tried by the Hearing Examiner, the complaint can be deemed pro tanto amended. Associated Home Builders of Greater East Bay, Inc. v. National Labor Relations Board, 352 F.2d 745, 753-754 (9th Cir. 1965). As the case unfolded, there was "a reasonable opportunity to know the claims of the opposing party and to meet them," so that the fundamental requirements of due process were met. Morgan v. United States, 304 U.S. 1, 18, 58 S.Ct. 773, 776, 82 L.Ed. 1129; J. B. Williams Company v. Federal Trade Commission, 381 F.2d 884, 888 (6th Cir. 1967).
Petitioners' argument resembles that advanced in Armand Company v. Federal Trade Commission, 84 F.2d 973 (2d Cir. 1936), certiorari denied, 299 U.S. 597, 57 S.Ct. 189, 81 L.Ed. 440. There the Armand Company and others were charged in an administrative complaint with a conspiracy, but there was no finding by the Federal Trade Commission that the conspiracy existed. Nevertheless, the Commission ordered the manufacturing company to stop certain practices. Despite the claim of variance between the complaint and the cease and desist order, the court held (84 F.2d at p. 975):
Similarly, since there has been no showing that these petitioners were prejudiced, any variance between this complaint and order is not fatal. National Labor Relations Board v. Fant Milling Company, 360 U.S. 301, 308-309, 79 S.Ct. 1179, 3 L.Ed.2d 1243; Cella v. United States, 208 F.2d 783, 789 (7th Cir. 1953), certiorari denied, 347 U.S. 1016, 74 S.Ct. 864, 98 L.Ed. 1138.
Swift also asserts that the complaint fails to charge that it had a price agreement with the Perry Holley Company. Paragraph II(b) of the complaint charged Swift with agreeing with Wilson & Company, Inc. concerning prices to be paid for lambs in the Craig, Colorado, area during the 1958-1960 lamb seasons. As to lamb-buying operations, Holley was described in Paragraph II(h) of the complaint as under the direction of Wilson. It is the Government's theory that, taken together, these two paragraphs sufficiently apprised Swift that it was charged with an unlawful price agreement with the Perry Holley Company.
During the hearings, Swift questioned its Craig area buyer as to whether he had any price-fixing agreement with Perry Holley for fat lambs...
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