Federal Trade Commission v. Pacific States Paper Trade Ass

Citation47 S.Ct. 255,273 U.S. 52,71 L.Ed. 534
Decision Date03 January 1927
Docket NumberNo. 71,71
PartiesFEDERAL TRADE COMMISSION v. PACIFIC STATES PAPER TRADE ASS'N et al
CourtUnited States Supreme Court

Mr. Adrien F. Busick, of Washington, D. C., for petitioner.

[Argument of Counsel from pages 53-55 intentionally omitted] Messrs. Warren Olney, Jr., Edward J. McCutchen, and Allan P. Matthew, all of San Francisco, Cal., for respondents.

[Argument of Counsel from pages 56-58 intentionally omitted] Mr. Justice BUTLER delivered the opinion of the Court.

The Federal Trade Commission made an order requiring respondents to cease and desist from certain methods of competition in interstate commerce found to be in violation of section 5 of the Federal Trade Commission Act of September 26, 1914, c. 311, 38 Stat. 717 (Comp. St. § 8836e). 7 Federal Trade Commission Decisions, 155. The order contains eight paragraphs, designated by letters (a) to (h), inclusive. The respondents brought (b), (c), (e), (g), and (h) under review in the Circuit Court of Appeals. The first two were set aside, paragraph (e) was modified, and the last two were allowed to stand. Pacific States Paper Trade Ass'n v. Federal Trade Com'n, 4 F.(2d) 457. This court granted certiorari (268 U. S. 684, 45 S. Ct. 636, 69 L. Ed. 1156) on petition of the commission, which asks reversal of the decree as to paragraphs (b) and (c). No petition has been filed by respondents.

The facts were stipulated; and those here material are: Dealers in paper in each of the five principal jobbing centers in the states on the Pacific Coast have a local association. These centers are Seattle and Tacoma taken as one, Spokane, Portland, San Francisco, and Los Angeles. And there is a general association known as the Pacific States Paper Trade Association, whose members are the paper dealers in these centers, including most, but not all, of the members of the local associations, and some who do not belong to a local association. The respondents in this case are the five local associations, the general association, and their members.

The territory served by the members of each local association, while loosely defined, is that naturally tributary to the center where the members are located. The territory of Seattle and Tacoma is the northwestern part of Washington and Alaska; that of Spokane is eastern Washington, northern Idaho, and western Montana; that of Portland is Oregon, southerly Washington, and part of southern and western Idaho; that of San Francisco is the north half of California, a small portion of southern Oregon, and part of Nevada; and that of Los Angeles is the south half of California and part of Nevada and Arizona. A majority of the dealers in the Pacific Coast States are members of the associations, and they have 75 per cent. of the business in paper and paper products, exclusive of roll newspaper, which for the most part is not handled by them.

Each local association distributes uniform price lists to its members to be observed in its territory within the state. The secretary of each is authorized to investigate complaints against members to determine whether they sell below the established prices, and three of the associations authorize the imposition of heavy fines on members for making such sales.

The Spokane Association, in its list of prices established for Washington, printed 'suggested prices' for sales to purchasers in Idaho and western Montana, and there was a tacit or implied understanding that the prices suggested would be observed.

And these association lists are habitually carried and used by the salesmen of members in quoting prices and making sales outside the state. No association has any requirement that such price lists be observed outside the state; and the quoting of, or the making of sales at, lower or different prices in such territory is not deemed an infraction of rules or trade regulations by reason of which any jobber or wholesaler may complain.

Among the prices fixed by each local association for sales by its members within the state where they are located are prices on what are called 'mill shipments.' These are sales or orders not requiring immediate delivery and capable of being filled by shipment from the place of manufacture. They include less than carload lots and also carload lots. The former are combined with other paper to make a carload, which is shipped to the wholesaler as a single consignment. At destination the delivery is taken by the wholesaler and the portion intended for the purchaser is turned over to him. The carload shipments are made on directions specifying as the point of destination the place where delivery is to be made from the wholesaler to the purchaser. In some cases the wholesaler, in other cases the purchaser, is named as consignee. When so named, the wholesaler either takes delivery and turns over the shipment to the purchaser, or indorses the bill of lading to the purchaser, who then receives the paper directly from the carrier. Where named as consignee, the purchaser takes delivery. In all cases the wholesaler orders the paper from the mill and pays for it. There is no contractual relation between the manufacturer and the purchaser from the wholesaler. These shipments are made from mills within and also from those without the state covered by the agreement fixing prices.

The Commission in its findings substantially follows the stipulated facts, and from them it draws certain inferences or conclusions. Referring to the prices fixed by the local associations, the Commission said the habitual carrying and use of such price lists by member jobbers in quoting prices and making sales outside the state have a natural tendency to and do limit and lessen competition therein, and the result of such practice is fixed and uniform prices for such products within such territories. As to mill shipments, the Commission finds the facts in accordance with the stipulation, and concludes that mill shipments from points outside the state to or for purchasers within the state are in interstate commerce until delivered to the purchaser, and that the inclusion of fixed and uniform prices for such sales in the price lists of the associations eliminates price competition.

Paragraph (b) of the Commission's order is to prevent the local associations, their officers and members, separately or in combination, from using any price list fixed by agreement between wholesalers in soliciting or selling in interstate commerce, and from making and distributing any such price list intended for use in making such sales. Paragraph (c) prohibits making or acting under agreements fixing prices on mill shipments when the paper sold is shipped from outside the state where the wholesaler is located, and the making or distributing of price lists to be used for making such sales.

The Circuit Court of Appeals held that the stipulated facts do not sustain the Commission's finding that the use of association prices by members outside the state where they are located has a tendency to lessen competition and to fix uniform prices in such territories. The validity of the inference or conclusion drawn by the Commission and of this part of the order depends upon the proper estimation of the facts stipulated. The language specifically relating to such use of the agreed prices if considered alone might possibly be deemed insufficient. But the Commission is not confined to so narrow a view of the case. That part of the stipulation properly may be taken with all the admitted facts and the inferences legitimately to be drawn from them. The members of the associations dominate the paper trade in question. They are organized to further common purposes. They limit competition in intrastate trade by adherence to uniform prices fixed by agreements through combination. The facts admitted show a strong purpose and much diligence to that end. And some of their activities are for like purpose and have the same effect in the field of interstate commerce. Suggested prices for Idaho and Montana were sent out with the Spokane lists. There was an understanding that such prices would be followed. Mill shipments, whether shipped from within or from without the state, are subject to the agreed prices. From the standpoint of respondents, restraint upon price competition in their interstate commerce is as desirable as in their business local to the states. In both classes of business, they are stimulated by the same motive to lessen competition....

To continue reading

Request your trial
152 cases
  • Stephenson v. New Orleans & N. E. R. Co.
    • United States
    • Mississippi Supreme Court
    • December 6, 1937
    ... ... the fact that the Congress of the United States has seen ... fit to enjoin upon the carriers and ... & O. R. R., 62 F.2d 20, there is no Federal question ... involved in this suit. The real ... Blumberg, 325 Ill. 387; ... Southern Pacific Co. v. City of Willow Glen, 49 F.2d 1005 ... R. Co., 215 U.S. 452; Federal Radio Commission ... v. Nelson Bros. Co., 289 U.S. 266; ... Packing Co., 249 U.S. 479; Federal Trade Commission v ... Pac. States Paper Trade Assn., ... ...
  • Carter v. Carter Coal Co Helvering v. Carter Tway Coal Co v. Glenn Tway Coal Co v. Clark
    • United States
    • U.S. Supreme Court
    • May 18, 1936
    ...v. Attleboro Steam & Electric Co., 273 U.S. 83, 90, 47 S.Ct. 294, 71 L.Ed. 549; Federal Trade Commission v. Pacific States Paper Trade Association, 273 U.S. 52, 64, 47 S.Ct. 255, 71 L.Ed. 534. To regulate the price for such transactions is to regulate commerce itself, and not alone it antec......
  • United Rys Electric Co of Baltimore v. West West v. United Rys Electric Co of Baltimore
    • United States
    • U.S. Supreme Court
    • January 6, 1930
    ...commerce, Foster-Fountain Packing Co. v. Haydel, 278 U. S. 1, 10, 49 S. Ct. 1, 73 L. Ed. 147; Federal Trade Comm. v. Pacfic Paper Ass'n, 273 U. S. 52, 64, 47 S. Ct. 255, 71 L. Ed. 534; and taxation, Mountain Timber Co. v. Washington, 243 U. S. 219, 237, 37 S. Ct. 260, 61 L. Ed. 685, Ann. Ca......
  • Federal Trade Commission v. Cement Institute
    • United States
    • U.S. Supreme Court
    • April 26, 1948
    ...who had engaged in a price-fixing combination, a plain violation of § 1 of the Sherman Act. Federal Trade Commission v. Pacific States Paper Trade Ass'n, 273 U.S. 52, 47 S.Ct. 255, 71 L.Ed. 534. In 1941 we reiterated that certain conduct of a combination found to conflict with the policy of......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT