Hansen Packing Co. v. Swift & Co.

• Decision Date: 20 April 1939
• Parties: HANSEN PACKING CO. v. SWIFT & CO. et al.
• Court: U.S. District Court — Southern District of New York

27 F. Supp. 364

HANSEN PACKING CO. v. SWIFT & CO. et al.

District Court, S. D. New York.

April 20, 1939.

COPYRIGHT MATERIAL OMITTED

George L. Schein and Joseph M. Cohen, both of New York City, for plaintiff.

White & Case, of New York City (Lowell Wadmond, Thomas Kiernan, and Vernon Munroe, Jr., all of New York City, and Albert H. Veeder, of Chicago, Ill., of counsel), for defendants.

GALSTON, District Judge.

This is an action at law to recover treble damages for injuries suffered by the plaintiff as the result of the defendants' alleged violation of the anti-trust laws of the United States.

The plaintiff was engaged in the business of purchasing and selling cattle, sheep, lambs, calves and hogs, collectively designated as live stock, and of processing, dressing and otherwise preparing and marketing live stock and live stock products, and in the operation of a slaughter house and meat packing plant and other allied equipment and facilities near Butte, in the State of Montana. The plaintiff owned the capital stock of several subsidiaries, namely, the Hansen Market Co., the Skyland & Stock Co., Montana Horse Products Co. and Metropolitan Meat and Dairy Co., and like the defendants, was engaged in interstate commerce, though most of its products were sold in Montana, and mainly to retail stores, restaurants and hotels.

The defendant Swift & Co., the Illinois corporation, was likewise engaged in the business of dealing in live stock and live stock products, and in processing such live stock and live stock products. From time to time it acquired by purchase or otherwise the capital stock of various corporations engaged in the same line of business. The other defendant Swift & Co., the West Virginia corporation, was a subsidiary of the Illinois corporation which substantially owned or controlled all of its capital stock. The West Virginia corporation operated mainly as a sales company, selling the products processed by the Illinois corporation.

Until about April 1935 only the West Virginia corporation had obtained authority to do business in the State of Montana. On or about that date Swift of West Virginia withdrew from Montana and Swift of Illinois qualified to do business there. The various branch houses in Montana operated under the name "Swift & Co." prior to April 1935, and though in charge of a branch manager, were under the jurisdiction and supervision of division superintendents of the Illinois corporation. The defendants employed two methods for the sale and distribution of their products in Montana. The Illinois corporation employed salesmen who, operating Swift & Co.'s automobiles, traveled "car routes" in the territory assigned to them. They were furnished with price lists sent from the Illinois plant from which they quoted prices to retailers. The salesmen solicited orders from customers, executed the contracts of purchase and made collections for sales, the proceeds of which they forwarded to the plant under whose jurisdiction they were employed. These car routes ran through the eastern and southern parts of Montana, and the salesmen on these routes worked from the South St. Paul, Minnesota, and Sioux City, Iowa, plants of the Illinois corporation as their headquarters. During the period from 1928 to 1934 there were approximately half a dozen such car route salesmen in Montana. Their salaries were paid by the Illinois corporation.

In 1931 Swift & Co., the West Virginia corporation, maintained Montana branches in Butte, Helena, Missoula, Billings and Great Falls, and the properties thus occupied were until some time in 1935 owned by the West Virginia corporation. In that year they were taken over by the Illinois corporation. Sales to retailers were made at the branch house and through salesmen who traveled through the territory served by the branch houses. It appears that from 1928 to 1934 the managers of these branch houses were under the supervision of district managers employed by the Illinois corporation.

During the period in question, the companies which competed with one another in the business of selling live stock products in Montana in addition to the plaintiff and the defendants, were Armour & Co., Morrell & Co., the American Packing Co. and several smaller packing houses.

Some time in March 1931 a vexed situation developed in the Butte produce market. A former manager of defendants' Butte branch testified that in March 1931 a committee from the Amalgamated Meat Cutters Union of North America, which at that time had a local branch in Montana, notified him that the union had voted to boycott the products of Swift, Armour and Morrell that were not processed or manufactured in plants organized with union labor. This action of the union was followed by a price cutting campaign. Hams were sold to the retail trade in Butte as low as 14¢, lard around 6¢ or 7¢, bacon about 17¢ and beef for about 6¢. Those prices were markedly below the normal range.

The campaign engineered by Swift & Co. and Armour & Co., as described by Bretherton, consisted in part of getting some of the big users of ham, bacon, lard and beef to take the product of Swift and Armour at the reduced prices. It is significant as bearing upon the defense of the statute of limitations, to which reference will hereafter be made, that this period of low prices, or of the campaign, as it has been designated, lasted, as Bretherton said, "sixty days from start to finish — about sixty days."

At the conclusion of the plaintiff's case the defendants moved to strike from the record a number of plaintiff's exhibits which had been admitted subject to connection; and moved to dismiss the complaint on the ground that the plaintiff had failed to make out a prima facie case under either the Sherman Act (15 U.S.C.A. § 1 et seq.) or the Clayton Act (38 Stat. 730), and for the reason that the cause of action, if any, was barred by the statute of limitations.

It is clear that in the anti-trust acts themselves there is no limitation of action provided and accordingly, as was held in Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241, the matter of limitation is left to the local law. The plaintiff contends that the applicable local law is that of the State of New York and that in consequence its six year statute of limitation controls. But Sec. 13 of the New York Civil Practice Act must be read in that connection for it provides: "Limitation in action arising outside of the state. Where a cause of action arises outside of this state, an action cannot be brought in a court of this state to enforce such cause of action after the expiration of the time limited by the laws of a state or country where the cause of action arose, for bringing an action upon such cause of action, except where the cause of action originally accrued in favor of a resident of this state."

See National Surety Co. v. Ruffin, 242 N.Y. 413, 152 N.E. 246; Jacobus v. Colgate, 217 N.Y. 235, 111 N.E. 837, Ann.Cas. 1917E, 369; and Shipman v. Treadwell, 208 N.Y. 404, 102 N.E. 634. Since the plaintiff is not a resident of the State of New York it follows that Sec. 13 of the Civil Practice Act must apply to the circumstances of this case. It is idle for the plaintiff to contend that when the Supreme Court, in Chattanooga Foundry & Pipe Works v. City of Atlanta, supra, said that the local law applied, it meant that only part of the local law on limitations is to be considered. Since the acts complained of arose in the State of Montana it must follow that by the law of the forum the statute of limitations of the State of Monana will be the test.

Then the plaintiff contends that if the statute of limitations of the State of Montana is to be applied, the five year period rather than the two year period of the Montana Code shall determine. Sec. 9033 of the Montana Code provides:

"Two-year limitation. Within two years:

"1. An action upon a liability created by statute other than a penalty or forfeiture."

Of course, it is conceded that the action for recovery under the Clayton Act, § 4, for treble damages, 15 U.S.Code, § 15, 15 U.S.C.A. § 15, is not for a penalty or forfeiture, but the plaintiff urges such action is not based on a liability "created" by statute. It is asserted that the anti-trust laws are held to be a mere codification of the common law. Shelton Electric Co. v. Victor Talking Machine Co., D.C., 277 F. 433; Matter of Davies, 168 N.Y. 89, 61 N.E. 118, 56 L.R.A. 855; Standard Oil v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas. 1912D, 734; H. J. Jaeger Research Laboratories v. R. C. A., 3 Cir., 90 F.2d 826.

None of these cases supports the proposition that the statutory liability pursuant to which this case is brought is a codification of a common law right. Of course, the common law, as in the law of libel, does permit of punitive as well as actual damages. But the treble damages of the Clayton Act define a new liability. Hocking Valley R. Co. v. New York Coal Co., 6 Cir., 217 F. 727. Moreover, in the light of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, it is difficult to understand how there can be any codification of any applicable federal general law existent prior to the enactment of the anti-trust statutes. Similar state statutes imposing limitations in actions upon a liability created by statute were considered in Seaboard Terminals Corporation v. Standard Oil Co. of New Jersey, D.C., 24 F.Supp. 1018; Foster & Kleiser Co....