Federal Trade Commission v. Goodyear Tire Rubber Co
| Decision Date | 16 May 1938 |
| Docket Number | No. 756,756 |
| Citation | 304 U.S. 257,82 L.Ed. 1326,58 S.Ct. 863 |
| Parties | FEDERAL TRADE COMMISSION v. GOODYEAR TIRE & RUBBER CO |
| Court | U.S. Supreme Court |
Messrs. Homer S. Cummings, Atty. Gen., and Hugh B. Cox, of Washington, D.C., for petitioner.
In September, 1933, the Federal Trade Commission charged respondent, the Goodyear Tire & Rubber Company, with the violation of section 2 of the Clayton Act, 15 U.S.C. § 13, 15 U.S.C.A. § 13, in selling tires, tubes, etc., to Sears, Roebuck & Company at discriminatory prices. Respondent, invok- ing the first proviso in section 2,1 contended that its contracts with Sears, Roebuck & Company for sales involving lower net prices than those charged to independent dealers were made because of the great difference in the quantities sold. After hearing, the Commission ruled that it did not consider a difference in price to be on account of quantity unless it was based on a difference in cost and was reasonably related to and approximately no more than that difference. In March, 1936, the Commission issued an order requiring respondent to desist from discriminations in prices as described.
Pending the hearing in the Circuit Court of Appeals of respondent's petition for review, the Congress amended section 2 of the Clayton Act. Act of June 19, 1936, c. 592, 49 Stat. 1526, 15 U.S.C.A. § 13. The first proviso was amended to read as follows: 'Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered.'
Thereupon, respondent informed the Circuit Court of Appeals that in view of this provision respondent had ceased to manufacture tires for Sears, Roebuck & Company under the terms of its existing contract; that, to dispose of the stock on hand, the parties had made a new price arrangement designed to conform to the new law; and that within the year all transactions between re- spondent and Sears, Roebuck & Company ceased and obligations were terminated by mutual releases. 6 Cir., 92 F.2d 677, 679.
Considering that there was no controversy between the parties as to the illegal character of respondent's practices under the amended Act, the Circuit Court of Appeals concluded that the case had become moot. In that view the court set aside the order of the Commission and remanded the case 'but without direction to the Commission to dismiss the complaint and without prejudice to its filing a supplemental complaint in the original proceeding if under section 2 of the amendatory act this may now be done' as to which the court expressed no opinion. 92 F.2d 677, at page 681.
Both the Commission and the respondent contended below, and contend here, that the case has not become moot. While they disagree in their reasoning, they come to the same conclusion upon this point, and both ask that the case be remanded to the Circuit Court of Appeals with directions to determine it upon the merits. We think that their conclusion is correct and that the remand should be made.
Section 11 of the Clayton Act, 15 U.S.C. § 21, 15 U.S.C.A. § 21 provides that whenever the Commission has reason to believe that any person is violating or has violated the provisions of the Act, and upon hearing so finds, the Commission shall issue an order requiring such person to cease and desist from such violations. In case of failure to obey its order, the Commission may apply to the Circuit Court of Appeals for enforcement. And anyone required to cease and desist from a violation charged may seek review in the Circuit Court of Appeals, praying that the order be set aside. The provisions of the Act of June 19, 1936, show clearly that the orders of the Commission entered before its passage are to remain in effect. Section 2 of that Act, 15 U.S.C.A. § 21a, provides that nothing therein contained shall 'affect rights of action arising, or litigation pending, or orders of the Federal Trade Commission issued and in effect or pending on review, based on section 2 of said Act of October 15,...
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