Standard Oil Co. of New York v. Federal Trade Commission
| Decision Date | 11 May 1921 |
| Docket Number | 204.,111 |
| Citation | 273 F. 478 |
| Parties | STANDARD OIL CO. OF NEW YORK v. FEDERAL TRADE COMMISSION. TEXAS CO. v. SAME. |
| Court | U.S. Court of Appeals — Second Circuit |
[Copyrighted Material Omitted]
Martin Carey and Peter M. Speer, both of New York City, for Standard Oil Co. of New York.
Edwin B. Parker and James L. Nesbitt, both of New York City, for Texas Co.
Adrian F. Busick and Eugene W. Burr, both of Washington, D.C., for Trade Commission.
Before ROGERS, HOUGH, and MANTON, Circuit Judges.
HOUGH Circuit Judge (after stating the facts as above).
As the matter has not been argued, we have not referred to and will not dwell upon the pleadings put forth by the Commission, and assume, but not hold, that they comply with the rules suggested, if not prescribed, by Federal Trade Commission v. Gratz, 253 U.S. 427, 40 Sup.Ct. 572, 64 L.Ed. 993. In the language of the statute, we think the 'findings of the Commission as to the facts are supported by testimony,' so far as they go. But there are other facts thoroughly proven, admitted at bar, and aiding discussion.
Every pumping station is an advertisement; each bears the name of the oil producer whose gasoline is supplied therefrom, if the retailer honestly observes his bargain. The system is a great convenience to the public; it has increased enormously the ease with which motor drivers may obtain 'gas' even in remote and thinly settled districts. It is the only method known or suggested, of keeping before the consuming public the oil manufacturers' trade-mark, and it has largely succeeded the system of distributing oil in barrels, which barrels bore the maker's trade-mark and were practically loaned to the vendees, to be returned empty.
The choice between owning and leasing pumps depends upon the extent of the retailer's business and the amount of his capital. The majority of small dealers have small capital and therefore lease rather than buy. It is perfectly possible to buy from the same manufacturers who supply to the oil dealers the pumps leased by the latter. The competition between the various oil-selling persons and corporations is and has been very keen; each is desirous of extending the sale of his own brand, and the system of leased pumps, each bearing the trade-mark or trade-name of its lessor, is regarded by many, though not all, wholesalers as a profitable form of advertisement. There is no agreement, combination, or arrangement between the various wholesale lessors as to parceling out territory or abstaining from supplying pumps to a community already supplied by another wholesaler.
By these facts three questions of law are presented:
(1) Is the system outlined an 'unfair method of competition in commerce,' the prevention of which would be 'to the interest of the public. ' Section 5, Trade Commission Act, 38 Stat. 719 (Comp. St. Sec. 8836e).
(2) Is the above-stated method of leasing unlawful under section 3 of the Clayton Act (Comp. St. Sec. 8835c), whereof the language here important is noted in the margin. [1]
(3) Does the business here involved amount to interstate commerce?
Whatever may be the exact meaning or extreme scope of the still novel phrase 'unfair method of competition,' it is settled that it is for the courts and not the Commission to determine as matter of law what is and what is not included in the phrase. Federal, etc., Commission v. Gratz, supra. And this rule is not avoided by stating as a finding of fact what is a mere conclusion of law. New Jersey, etc., Co. v. Trade Commission (C.C.A.) 264 F. 509.
The Commission justifies the order complained of by looking to the future rather than at the present-- a position summed up in argument as follows:
The Commission,...
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