Moore v. New York Cotton Exchange, No. 200

• Court: United States Supreme Court
• Writing for the Court: SUTHERLAND
• Citation: 70 L.Ed. 750,46 S.Ct. 367,45 A. L. R. 1370,270 U.S. 593
• Docket Number: No. 200
• Decision Date: 12 April 1926
• Parties: MOORE v. NEW YORK COTTON EXCHANGE et al

270 U.S. 593 46 S.Ct. 367 70 L.Ed. 750 MOORE

v.

NEW YORK COTTON EXCHANGE et al.

No. 200. Argued March 9, 1926. Decided April 12, 1926.

Page 594

Mr. John M. Coleman, of New York City (Mr. Oscar B. Bergstrom, of New York City, of counsel), for appellant.

[Argument of Counsel from pages 594-596 intentionally omitted]

Page 597

Messrs. George W. Wickersham, Henry W. Taft, and Francis Raymond Stark, all of New York City (Mr. George Coggill, of New York City, of counsel), for appellees.

[Argument of Counsel from pages 597-601 intentionally omitted]

Page 601

Mr. Justice SUTHERLAND delivered the opinion of the Court.

The Odd-Lot Cotton Exchange is an organization whose members make contracts for themselves and for customers for the future delivery of cotton in lots of not more than 100 nor less than 10 bales. The members of the New Cotton Exchange, which is organized under a special act of the New York Legislature (chapter 365, p. 724, Laws 1871), also make contracts for the purchase and sale of cotton for further delivery, either for themselves or for customers; such contracts being made only upon open viva voce bidding, between certain hours of the day and in the rooms of the exchange in New York City. Quotations of prices thus established are collected by the New York exchange, and, under the terms of a written agreement with that exchange, the Western Union company pays $27,500 annually for the privilege of receiving and distributing them throughout the United States, to such persons as the exchange approves. Applicants for such quotations must sign an application and agree not to

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use them in connection with a bucket shop or to give them out to other persons. The Gold & Stock Telegraph Company, a New York corporation and a subsidiary of, and controlled by, the Western Union, is engaged in disseminating quotations of cotton prices by means of ticker service, owned and operated by it, tickers being located in exchanges, brokerage houses, and elsewhere in the several states. The Odd-Lot Exchange made application to the two telegraph companies for this service in the form required by the contract with the New York exchange. It was refused; the New York exchange having declined to give its consent to the installation on the ground, among others, that, after investigation, it had ascertained that the Odd-Lot had succeeded another exchange, which had been convicted of conducting a bucket shop, and that the Odd-Lot had in its membership many members of the convicted exchange, and was organized as a cover to enable its members to engage in the same unlawful business.

Federal jurisdiction is invoked under the anti-trust laws of the United States. The bill avers that the contracts between members of the Odd-Lot are chiefly for producers of cotton and others located, resident and in business in other states than New York, and are made and effectuated by communications through the Western Union by wire; that such contracts concern and include deliveries of cotton from cotton-growing states to and into the state of New York, involving actual interstate shipment and transportation; that the New York exchange has a monopoly upon the receipt and dissemination of cotton price quotations, through which quotations and prices of cotton, both spot and for future delivery, are influenced, guided, and fixed in the exchanges and markets throughout the United States; that the contract with the Western Union is in restraint of interstate trade and commerce in cotton, and was entered into for

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the purpose of monopolizing and restraining that commerce. There is an attempt to allege unfair methods of competition, which may be put aside at once, since relief in such cases under the Trade Commission Act (Comp. St. §§ 8836a-8836k) must be afforded in the first instance by the commission.

The prayer is for a decree canceling the Western Union contract, adjudging the New York Cotton Exchange to be a monopoly, restraining appellees from refusing to install a ticker and furnish the Odd-Lot and its members, as they do others, with continuous cotton quotations, and for other relief.

The answer, in addition to denials and affirmative defensive matter, sets up a counterclaim to the effect that the Odd-Lot, though it had been refused permission to use the quotations of the New York exchange, was purloining them, or receiving them from some person who was purloining them, and giving them out to its members, who were distributing them to bucket ships, with the consequent impairment of the value of appellees' property therein. An injunction against the continuance of this practice was asked.

Both parties moved for interlocutory injunctions. The district court denied appellant's motion and granted that of appellees. 291 F. 681. Upon appeal, both orders were affirmed by the Circuit Court of Appeals. 296 F. 61. By stipulation of the parties authorizing such action, the Circuit Court of Appeals remanded the cause, with directions to the District Court to enter a final decree dismissing the bill and making permanent the injunction granted appellees. Since this left to the District Court only the ministerial duty of complying with the mandate, the decree below, for purposes of appeal, is final. Gulf Refining Co. v. United States, 46 S. Ct. 52, 269 U. S. 125, 136, 70 L. Ed. 195.

First. We are of opinion that upon the allegations of the bill no case is made under the federal anti-trust laws.

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The only possible ground on which the suit can be maintained rests in the claim that there is a violation of sections 1 and 2 of the Sherman Anti-Trust Act, c. 647, 26 Stat. 209 (Comp. St. §§ 8820, 8821), for which appellant is entitled to sue under section 16 of the Clayton Act, c. 323, 38 Stat. 737 (Comp. St. § 8835o). And whether this claim is tenable turns alone upon the effect of the contract between the New York exchange and the Western Union. Independent of that contract, there is no averment of fact in the bill upon which a violation of the Anti-Trust Act can be predicated. The New York exchange is engaged in a local business. Transactions between its members are purely local in their inception and in their execution. They consist of agreements made on the spot for the purchase and sale of cotton for future delivery, with a provision that such cotton must be represented by a warehouse receipt issued by a licensed ware-house in the Port of New York and be deliverable from such warehouse. Such agreements do not provide for, nor does it appear that they contemplate, the shipment of cotton from one state to another. If interstate shipments are actually made, it is not because of any contractual obligation to that effect; but it is a chance happening which cannot have the effect of converting these purely local agreements or the transactions to which they relate into subjects of interstate commerce. Ware & Leland Co. v. Mobile County, 28 S. Ct. 526, 209 U. S. 405, 412, 413, 52 L. Ed. 855, 14 Ann. Cas. 1031. The most that can be said is that the agreements are likely to give rise to interstate shipments. This is not enough. Engel v. O'Malley, 31 S. Ct. 190, 219 U. S. 128, 139, 55 L. Ed. 128. See also Hopkins v. United States, 19 S. Ct. 40, 171 U. S....