Balian Ice Cream Co. v. Arden Farms Co.

Decision Date26 December 1950
Docket NumberNo. 12434-Y.,12434-Y.
CourtU.S. District Court — Southern District of California
PartiesBALIAN ICE CREAM CO., Inc. v. ARDEN FARMS CO. et al.

Sheppard, Mullin, Richter & Balthis, by James C. Sheppard and Gordon F. Hampton, Los Angeles, Cal., for the plaintiff.

Gibson, Dunn & Crutcher, Henry F. Prince, Frederic H. Sturdy, Julian O. Von Kalinowski, Cosgrove, Cramer, Diether & Rindge, T. B. Cosgrove, Los Angeles, Cal., for the defendants.

YANKWICH, District Judge.

Pending before the court are several actions instituted by individuals and corporations against the same defendants, which seek equitable relief and treble damages under the federal anti-trust laws and double damages under the California state anti-trust act. In each of these cases, there is one cause of action for treble damages under Section 3 of the Act of the Congress of June 19, 1936,1 — commonly referred to as the "Robinson-Patman Act". The section reads: "It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor."

In the enacting statute, the section was in identical form. The enacting clause of Section 1 of the statute read: "That section 2 of the Act entitled `An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes', approved October 15, 1914, as amended (U.S.C., title 15, sec. 13), is amended to read as follows:" Section 3, however, contains no such reference. The title of the entire Act reads: "An Act To amend section 2 of the Act entitled `An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes', approved October 15, 1914, as amended (U.S.C., title 15, sec. 13), and for other purposes."2 (Emphasis added.)

The particular count recites that the defendants on or about November 21, 1949, at Los Angeles, California, initiated a drastic reduction in the wholesale prices charged by Arden Farms Co., a corporation engaged in producing and marketing dairy products, and its subsidiary corporations in the Los Angeles area and extending throughout the State of California for its and their bulk and package ice cream and kindred products. The wholesale base price of "flavor fresh" ice cream was reduced in the Los Angeles area from $1.44 per gallon to $1.06 per gallon, and the defendants, in concert, sold and sell ice cream and kindred products in the area at prices lower than those exacted by them for these products elsewhere in the United States, and especially in the States of Arizona, Oregon, Washington, Idaho and Montana.

The object of the action taken by the defendants, — it is charged, — was to destroy competition and to eliminate the plaintiffs and other competitors in the area. The prices are stated to be "unreasonably low", and detrimental to the plaintiffs. For, while the defendants can offset and recoup their losses through (a) income derived from the sale of ice cream and other dairy products in other areas of the United States at high prices, and (b) income derived from the sale of fluid milk and other milk products in California and elsewhere, the plaintiffs, being engaged solely in the production of ice cream, cannot do so.

Damages are claimed in various amounts, which, in the case in which this opinion is filed, are stated to be $72,934.75. Injunction is sought enjoining the continuance of the price and three fold damages.

The defendants have filed motions to dismiss upon the ground that the particular cause of action does not state a claim.

I. The Relation of the Robinson-Patman Act to Other Legislation.

The question raised by the motions is whether a civil action for violation of Section 13a of Title 153 is an action under the "anti-trust laws" of the United States, as provided for in Section 15, which reads: "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."4

Section 12 defines the anti-trust laws in this manner: "`Antitrust laws,' as used in sections 12, 13, 14-21, 22-27 of this title, includes sections 1-27, inclusive, of this title."5

It is the contention of the defendants that the inclusion of section 13a was not warranted by the source from which it was derived, — section 1 of the Clayton Act.6

Obviously the original Clayton Act referred to acts then in existence. Enacted in 1914, it aimed to extend to cases arising under it the right of private persons to sue for treble damages which had been conferred in 1890 on persons injured by the monopolistic acts denounced by the Sherman Act7. And so it defined antitrust laws by reference to the Sherman Act, the act then being enacted, and certain tax statutes which had anti-trust features.

The Robinson-Patman Act did not come into existence until 1936. Consequently, when the codifiers consolidated the various anti-trust acts and provisions relating to monopolies and combinations, they reworded the section so as to cover all the anti-trust laws then in existence. Impliedly, amendments are included.

Whether an act is amendatory of existing law is determined not by title alone, or by declarations in the new act that it purports to amend existing law. On the contrary, it is determined by an examination and comparison of its provisions with existing law. If its aim is to clarify or correct uncertainties which arose from the enforcement of the existing law, or to reach situations which were not covered by the original statute, the act is amendatory, even though in its wording it does not purport to amend the language of the prior act.8 Whatever supplements existing legislation, in order to achieve more successfully the societal object sought to be obtained may be said to amend it. It is evident that the codifiers so considered the particular change. And the annotators of the Code appended to Section 15 of Title 15 the following note: "This section applies to the provisions of this chapter generally and supersedes two former similar sections enacted by act July 2, 1890, c. 647, § 7, 26 Stat. 210 and act Aug. 27, 1894, c. 349, § 77, 28 Stat. 570, each of which were restricted in operation to the particular act cited." In this they gave effect to the congressional policy which, so far as the Clayton Act is concerned, was expressed very recently by the Supreme Court in these words: "Congress' concern * * * was to provide broader and more effective relief, both substantively and procedurally, for persons injured by violations of its antitrust policy".9

The legislative history of the Robinson-Patman Act is revealing although not entirely conclusive, on the point under discussion. The House Report stressed the penal feature of Section 15.10 So did the statement of one of the conferees in submitting the Conference Report to the House.11 At the same time, the proceedings in the Senate, when the Bill was accepted in its final form, indicate that the understanding was that Section 13a12Section 3 of the Bill — in addition to creating a new criminal remedy, gave a civil remedy of treble damages also.13

A study of the three main statutes dealing with "monopolies and combinations", — the Sherman, Clayton and Robinson-Patman Acts — shows that they are closely interrelated. Starting with the Sherman Act14, which merely condemned certain practices and their results, the Clayton Act15 condemned the same practices in their inception.16 Then came the Robinson-Patman Act, which brought under interdiction discriminatory practices, including discrimination through rebates, discounts and the like, denounced in Section 3 of the Act. They all aim to "suppress combinations to restrain competition and attempts to monopolize by individuals and corporations"17 and maintain the freedom of commerce between the States.18

The goal is to protect "the interstate market". The Court of Appeals for the Eighth Circuit has stated the object of such protection: "The competitive freedom of such a market, in both buying and selling, is one of the principal things which the Sherman Act was intended to protect. Where that freedom is interfered with, by a contract, combination, or conspiracy, that from a public viewpoint harmfully restrains competition, or by an attempt, combination or conspiracy to monopolize, that has a direct wrongful purpose or other probable prejudicial consequences to the public interest, the force of the Sherman Act may be called into operation against it, on the basis of the public wrong involved, through the public or private remedies which the Sherman and Clayton Acts provide."19

In the attainment of this object, the private action for three-fold recovery of damages, while ancillary to the broad social object of the statute20, is an integral part of the legislative scheme "intended in the most comprehensive way to provide against combinations or...

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    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 12 décembre 1957
    ...Acts, 15 U.S.C.A. § 1 et seq., comprising the antitrust laws, `is to protect "the interstate market"', Balian Ice Cream Co. v. Arden Farms Co., D.C.S.D.Cal. 1950, 94 F.Supp. 796, 800." (At page Judge Yankwich in Fanchon & Marco v. Paramount Pictures, Inc., D.C.S.D. Cal.1951, 100 F.Supp. 84,......
  • Sunbeam Corp. v. Payless Drug Stores, 31068.
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    ...goods and services. Apex Hosiery Co. v. Leader, 310 U.S. 469, 500-501, 60 S.Ct. 982, 84 L.Ed. 1311. See also Balian Ice Cream Co. v. Arden Farms Co., D.C.S.D.Cal., 94 F.Supp. 796; F & A Ice Cream Co. v. Arden Farms Co., D.C.S.D.Cal., 98 F.Supp. 180; United States v. Richfield Oil Corp., D.C......
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    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • 4 juin 1951
    ...on both state and federal constitutional grounds. The motions to dismiss are, therefore, denied. 1 Balian Ice Cream Co., Inc. v. Arden Farms Co., D.C.Calif., 1951, 94 F.Supp. 796. 2 15 U.S.C.A. §§ 13, 13a, 13b, 21a. 3 15 U.S.C.A. § 12. 4 15 U.S.C.A. § 15. 5 15 U.S.C.A. § 13a. 6 White v. Joh......
  • People v. Kelly, S164830.
    • United States
    • United States State Supreme Court (California)
    • 21 janvier 2010
    ...to change some prior or existing law by adding or taking from it some particular provision."' And in Balian Ice Cream Co. v. Arden Farms Co. (S.D.Cal. 1950) 94 F.Supp. 796, 798-799, the analysis necessary to determine whether a particular act is or is not an amendment to a prior statute is ......
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