Atlantic Co. v. Citizens Ice & Cold Storage Co.

• Decision Date: 28 December 1949
• Docket Number: No. 12713.,12713.
• Citation: 178 F.2d 453
• Parties: ATLANTIC CO. v. CITIZENS ICE & COLD STORAGE CO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

178 F.2d 453 (1949)

ATLANTIC CO. v. CITIZENS ICE & COLD STORAGE CO. et al.

No. 12713.

United States Court of Appeals Fifth Circuit.

December 28, 1949.

Robert B. Troutman, Atlanta, Ga., William K. Meadow, Atlanta, Ga., Vance Custer, Bainbridge, Ga., for appellant.

J. Willis Conger, Bainbridge, Ga., A. B. Conger, Bainbridge, Ga., for appellee.

Before HUTCHESON, McCORD and SIBLEY, Circuit Judges.

HUTCHESON, Circuit Judge.

As originally brought under the Robinson-Patman Act, 15 U.S.C.A. § 13a, the suit was for an injunction restraining defendant from cutting prices in the sale of ice, and in the operation of its meat curing and cold storage properties in Bainbridge and Colquitt, Georgia, in violation of the act and for the damages caused thereby.

The claim was: that defendant is, and for some time has been, engaged in interstate commerce in the manufacturing, sale, and distribution of ice, and the curing of meats and cold storage in a great many cities and towns in Georgia, including Colquitt and Bainbridge, and in other states; that in 1947, Crystal Ice Co., in Colquitt, and Citizens Ice and Cold Storage Company and Flint River Mills, at Bainbridge, commenced the manufacture and sale of ice; that at that time in practically every city where defendant had no competition its price of ice was 50 cents per 100 pounds; that after plaintiffs began their operations, defendant successively cut its prices while plaintiffs' prices were unchanged; and that all of this price cutting was done for the purpose of destroying competition and eliminating plaintiffs as competitors.

The defendant answered, insisting that all of the matters complained of were in intrastate commerce and local in character, and that none of the matters complained of were in violation of the invoked act.

In addition, denying that it had cut prices to destroy competition, it alleged that, on the contrary, it had done so to meet and preserve competition.

Plaintiffs thereupon amended their complaint to allege also that "the defendant has attempted to monopolize part of the trade and commerce among the several states in violation of Sec. 2 of the Sherman Antitrust Act 15 U.S.C.A. § 2 ", and that "in violation of the Robinson-Patman Act, and in the course of interstate commerce and for the purpose of destroying competition and eliminating competitors in the course of said commerce, the defendant has sold ice in Bainbridge and Colquitt, Georgia, at prices lower than those exacted by said defendant elsewhere in the United States".

Defendant, on the ground that none of the sales complained of here were in, or in the course of, interstate commerce, but all were local and intrastate, and that defendant had not attempted to monopolize any part of the trade or commerce among the several states, moved for summary judgment, and in due course there came on for hearing, on affidavits,¹ before the district judge, defendant's motion for summary judgment and plaintiffs' application for interlocutory injunction.

The district judge denied defendant's motion for summary judgment and also denied plaintiffs all the relief they sought with respect to cold storage and the curing and storage of meats, and defendant appealed from the order denying summary judgment.

Of the opinion, however: that the proof showed that the price cutting was entered upon for the purpose of destroying competition and eliminating plaintiffs as competitors; and "further that the sale of ice to truckers and railroads to transport perishable goods into other states constitutes a part of interstate commerce"; and that, though the total of such sales was less than one-percent of the total business involved in the local price war, the sale of ice as disclosed to the court was an integral part of interstate commerce, and imposed a substantial burden upon such commerce, entitling plaintiffs to the injunction prayed; the judge granted an interlocutory injunction;² and defendant has appealed from that order.

With the appeal from the order denying the motion for summary judgment, we need not concern ourselves. The order is interlocutory and not appealable. The only matter for our consideration, therefore, is whether the order granting the interlocutory injunction should be affirmed.

Appellant, insisting that it should not be affirmed, challenges not only the correctness of the findings, that the price war was one to stifle competition and gain control of the market, and that some of the sales complained of were in interstate commerce, but also the conclusion that plaintiffs should have an injunction, not only with respect to the interstate sales but also with respect to those which were admittedly intrastate. It points to the undisputed facts: that the price war was a local one, that is, that all but an insignificant part of the sales were undisputedly made to local customers and intrastate; and that if any of the sales to the truckers and the railroads could, though made locally, be said to be in, or in the course of, interstate commerce, they were completely insignificant when compared to the total business done in the two towns.

So pointing, it insists that, conceding that the evidence supported the finding of the district judge, that the price war was for the purpose of eliminating plaintiffs as competitors, it could not, in fact or in law, have been reasonably found that it was begun and carried on by appellant with the intent or effect of monopolizing interstate commerce, in violation of the Sherman Act, or of destroying competition and eliminating competitors in the course of interstate commerce, in violation of the Robinson-Patman Act.

Appellees, on their part, pointing to the conflicting affidavits as to whether the purpose and effect of the price cutting was malign or benign, insist that for the purpose of this appeal the court must accept the finding of the district judge, that the purpose and effect was malign, and unless his conclusions, that an injunction should issue, are unsupported in law, the order appealed from must be affirmed.

We agree with appellees that this is so. We accept the finding that the purpose of the price war was to suppress competition by injuriously affecting plaintiffs as competitors.

We turn to the determination of whether the legal conclusions on which the issuance of the injunction was based: (1) that the sales to truckers and railroads constituted, or were in the course of, interstate commerce; (2) that not merely the sales found to be in interstate commerce but the local sales as well are an integral part thereof; and (3) that an injunction should, therefore, issue to restrain the price cutting not only as to the few sales found to have been in interstate commerce but also as to all the intrastate sales.

Upon these points appellant and appellees wage furious verbal war.

Appellees, citing many cases, urge³ upon us that the sales to truckers and railroads, though local, were in interstate commerce, and since restraints upon the price war could not be effective if limited to the sales in interstate commerce, it was competent for the court, in relieving from the effects of the price cutting, to find that, for the purposes of this case, the intrastate sales were an integral part of interstate commerce and to enjoin price cutting not only in respect of the few sales found to be interstate commerce but in respect to the intrastate sales as well.

Appellant does not at all disagree with the holdings of the authorities cited. But, citing cases in support of its views, it urges that to apply appellees' cases here is to misapply them because, first the so-called interstate sales are not interstate but local,⁴ and, second, assuming without admitting that these few sales can be said to have been in the course of interstate commerce, it would be running a good principle into the ground, Wolff Packing Co. v. Court of Industrial Relations, 262 U.S. 522, at 539, 43 S.Ct. 630, 67 L.Ed. 1103, 27 A.L.R. 1280, to hold that the purpose and effect of defendant's actions in this small and local price war was to monopolize commerce under the Sherman Act or to cut prices in the course of such commerce under the Robinson-Patman Act.⁵

It may not any longer be doubted that the power of Congress and the scope of the Sherman Act's coverage "extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective...