Sinclair Refining Co. v. F.T.C.
| Decision Date | 08 September 1921 |
| Docket Number | 2838. |
| Citation | 276 F. 686 |
| Parties | SINCLAIR REFINING CO. v. FEDERAL TRADE COMMISSION. [1] |
| Court | U.S. Court of Appeals — Seventh Circuit |
Ray T Osborn, of Chicago, Ill., for petitioner.
Eugene W. Burr, of Washington, D.C., for respondent.
Before BAKER, EVAN A. EVANS, and PAGE, Circuit Judges.
This is an original petition against Federal Trade Commission hereafter called respondent, to review an order made in a proceeding wherein it had filed its complaint against Sinclair Refining Company, hereinafter called petitioner, the substance of which complaint was that petitioner, being engaged in the business of purchasing and selling oil and gasoline and the leasing and loaning of oil pumps, storage tanks, or containers and their equipment, leased, for a nominal consideration, said oil pumps, storage tanks, or containers and their equipment to persons who purchased oil from petitioner, with the understanding that the same should not be used by the lessees of the pumps and other equipment to hold or pump the oil of any competitor. It was also charged that the leases were made on consideration that lessees should not purchase or deal in the products of a competitor.
In answer to that complaint, petitioner set out the contract which was found by the Federal Trade Commission to be the uniform contract by which such equipment was leased, the portions of which material here are:
After the findings of fact were made, the order to cease and desist, here complained of, was entered.
The question, plainly stated, is: Does the leasing, under the terms of the contract in evidence, at a nominal charge, of containers and pumps by petitioner to purchasers of its gasoline constitute an 'unfair method of competition,' as those words are used in section 5 of the Federal Trade Commission Act of September 26, 1914 (Comp. St. Sec. 8836), or may the effect of such leasing be to substantially lessen competition and tend to create for the respondent a monopoly in the business of selling petroleum products in violation of section 3 of the Clayton Act (Comp. St. Sec. 8835b)?
This identical matter was recently decided by the Court of Appeals in the Second Circuit in Texas Co. v. Federal Trade Commission, and Standard Oil Co. of New York v. Federal Trade Commission, 273 F. 478, adversely to the respondent's contention here.
1. 'Unfair methods of competition' have been discussed by this court in the opinion in Kinney-Rome Co. v. Federal Trade Commission, 275 F. 665, just filed.
Neither section relied upon gives the Federal Trade Commission power to regulate trade generally. The jurisdiction under section 5 exists only where there are practices that amount to a fraud in regard to some public or private right; otherwise they do not, in our opinion, as we said in the Kinney-Rome Case, supra, amount to an unfair method of competition.
In addition to the reasons upon which the decision was based in the Texas Company Case, supra, we are of opinion that petitioner had the undoubted right to furnish any and every purchaser such containers and conveniences to aid him in delivering the gasoline into the possession of the consumer as it might see fit, and at such cost as it might see fit. The right to fix prices is not given to the Federal Trade Commission. The only cases where the question of price has come into consideration have been those wherein the making of a price-- in some cases high, in others low-- has been used as an element in some fraudulent scheme of oppression. The price which one may put upon that which he has to sell or lease is a matter wholly his own. United States v. Freight Ass'n, 166 U.S. 290, 320, 17 Sup.Ct. 540, 41 L.Ed. 1007; Sears, Roebuck & Co. v. Federal Trade Com., 258 F. 307, 312, 169 C.C.A. 323, 6 A.L.R. 358.
Competition is not an unmixed good. It is a battle for something that only one can get; one competitor must necessarily lose. The weapons in competition are various. Superior energy, more extensive advertising, better articles, better terms as to time of delivery, place of delivery, time of credit, interest or no interest, freights, methods of packing, lower prices, more attractive and more convenient packages, superior service, and many others, are and always have been considered proper weapons. Expense attending the use of any weapon, the foolishness of it, the fact that a method is uneconomical, or that the competitor cannot meet any method or scheme of competition because it will be ruinous to him to do so, have not, nor has either of them, ever been held unfair. Such things are a part of the strife inherent in competition. Some merchants sell and deliver goods at the counter and you must take them away; others deliver them at your house, or in any town, state or country--that is merely a part of the bargain. Some people deliver a hat in a bag at the store; others deliver it at your house in a fancy box that is used by many purchasers as a container. Petitioner said:
'Here is a container and a pump; you may take and use them for the storage and pumping of gasoline bought from us; if you wish to use them otherwise, you may and must buy them.'
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