United States of America v. American Tobacco Company No 118 American Tobacco Company v. United States of America No 119 16, 1910
| Decision Date | 11 April 1910 |
| Docket Number | Nos. 118 and 119,s. 118 and 119 |
| Parties | UNITED STATES OF AMERICA, Appt., v. AMERICAN TOBACCO COMPANY and Others. NO 118. AMERICAN TOBACCO COMPANY and Others, Appts., v. UNITED STATES OF AMERICA. NO 119. Argued January 3, 4, 5, and 16, 1910. Ordered for reargument |
| Court | U.S. Supreme Court |
[Syllabus from pages 106-108 intentionally omitted] Mr. J. C. McReynolds and Attorney General Wickersham for the United States on original argument.
[Argument of Counsel from pages 108-124 intentionally omitted]
Messrs. DeLancey Nicoll, John G. Johnson, William J. Wallace, W. W. Fuller, Junius Parker, and Mr. W. Bourke Cockran (by special leave) for the American Tobacco Company.
[Argument of Counsel from pages 124-133 intentionally omitted]
Messrs. William B. Hornblower, John Pickrell, William W. Miller, and Morgan M. Mann for the Imperial Tobacco Company.
[Argument of Counsel from pages 133-141 intentionally omitted]
Messrs. Sol. M. Stroock, and Stroock & Stroock for the United Cigar Stores Company.
Messrs. Charles R. Carruth, Charles J. McDermott, C. B. Watson, James T. Morehead, and A. J. Burton for R. P. Richardson, Jr., & Company.
Messrs. J. Parker Kirlin and Thomas Thacher (by special leave) for defendants in Thomsen v. Union Castle S. S. Company.
Mr. J. C. McReynolds and Attorney General Wickersham for the United States on reargument.
Messrs. DeLancey Nicoll, John G. Johnson, Junius Parker, William J. Wallace, W. W. Fuller, and William M. Ivins for the American Tobacco Company.
Messrs. William B. Hornblower, John Pickrell, William W. Miller, and Morgan M. Mann for the Imperial Tobacco Company.
Mr. Sol. M. Stroock for the United Cigar Stores Company.
This suit was commenced on July 19, 1907, by the United States, to prevent the continuance of alleged violations of the 1st and 2d sections of the anti-trust act of July 2, 1890. [26 Stat. at L. 209, chap. 647, U. S. Comp. Stat. 1901, p. 3200.] The defendants were twenty-nine individuals, name in the margin,1 sixty-five American
corporations, most of them created in the state of New Jersey, and two English corporations. For convenience of statement we classify the corporate defendants, exclusive of the two foreign ones, which we shall hereafter separately refer to, as follows: The American Tobacco Company, a New Jersey corporation, because of its dominant relation to the subject-matter of the controversy, as the primary defendant; five other New Jersey corporations (viz., American Snuff Company, American Cigar Company, American Stogie Company, MacAndrews & Forbes Company, and Conley Foil Company), because of their relation to the controversy as the accessory, and the fifty-nine other American corporations as the subsidiary defendants.
The ground of complaint against the American Tobacco Company rested not alone upon the nature and character of that corporation and the power which it exerted directly over the five accessory corporations and some of the subsidiary corporations by stock ownership in such corporations, but also upon the control which it exercised over the subsidiary companies by virtue of stock held in said companies by the accessory companies by stock ownership in which the American Tobacco Company exerted its power of control. The accessory companies were impleaded either because of their nature and character, or because of the power exerted over them through stock ownership by the American Tobacco Company, and also because of the power which they in turn exerted by stock ownership over the subsidiary corporations; and finally the subsidiary corporations were impleaded either because of their nature, or because of the control to which they were subjected in and by virtue of the stock ownership above stated. We append in the margin a statement showing
the stock control exercised by the principal defendant, the American Tobacco Company, over the five accessory corporations, and also the authority which it directly exercised over certain of the subsidiary corporations, and a list showing the control exercised over the subsidiary corporations as a result of the stock ownership in the accessory corporations, they being in turn controlled, as we have said, by the principal defendant, the American Tobacco Company.2
The two foreign corporations were impleaded either because of their nature and character and the operation and effect of contracts or agreements with the American
Tobacco Company, or the power which it exerted over their affairs by stock ownership.
As we shall have occasion hereafter in referring to mat-
ters beyond dispute to set forth the main facts relied upon by the United States as giving rise to the cause of action alleged against all of the defendants, it suffices at this
moment to say that the bill averred the origin and nature of the American Tobacco Company and the origin and nature of all the other defendant corporations, whether accessory or subsidiary, and the connection of the individual defendants with such corporations. In effect the bill charged that the individual defendants and the defendant corporations were engaged in a conspiracy in restraint of interstate and foreign trade in tobacco and the products of tobacco, and constituted a combination in restraint of such trade, in violation of the 1st section of the act, and also were attempting to monopolize and were actually a monopolization of such trade, in violation of the 2d section. In support of these charges, general averments were made in the bill as to the wrongful purpose and intent with which acts were committed which it was alleged brought about the alleged wrongful result.
The prayer of the bill was as follows:
Wherefore petitioner prays:
'1. That the contracts, combinations, and conspiracies in restraint of trade and commerce among the states and with foreign nations, together with the attempts to monopolize and the monopolies of the same hereinbefore described, be declared illegal and in violation of the act of Congress passed July 2, 1890, and subsequent acts, and that they be prevented and restrained by proper orders of the court.
'2. That the agreements, contracts, combinations, and conspiracies entered into by the defendants on or about September 27, 1902, and thereafter, and evidenced among other things by the two written agreements of that date, Exhibits 1 and 2 hereto, be declared illegal, and that injunctions issue restraining and prohibiting defendants from doing anything in pursuance of or in furtherance of the same within the jurisdiction of the United States.
'3. That the lmperial Tobacco Company, its officers, agents, and servants, be enjoined from engaging in interstate or foreign trade and commerce within the jurisdiction of the United States until it shall cease to observe or act in pursuance of said agreements, contracts, combinations, and conspiracies entered into by it and other defendants on or about September 27, 1902, and thereafter, and evidenced, among other things, by the contracts of that date, Exhibits 1 and 2 hereto.
'4. That the British-American Tobacco Company be adjudged an unlawful instrumentality, created solely for carrying into effect the objects and purposes of said contract, combination, and conspiracy entered into on or about September 27, 1902, and thereafter, and that it be enjoined from engaging in interstate or foreign trade and commerce within the jurisdiction of the United States.
'5. That the court adjudge the American Tobacco Company, the American Snuff Company, the American Cigar Company, the American Stogie Company, the MacAndrews & Forbes Company, and the Conley Foil Company is each a combination in restraint of interstate and
foreign trade and commerce; and that each has attempted and is attempting to monopolize, is in combination and conspiracy with other persons and corporations to monopolize, and has monopolized, part of the trade and commerce among the several states and with foreign nations; and order and decree that each one of them be restrained from engaging in interstate or foreign commerce, or, if the court should be of opinion that the public interests will be better subserved thereby, that receivers be appointed to take possession of all property, assets, business, and affairs of said defendants and wind up the same, and otherwise take such course in regard thereto as will bring about conditions in trade and commerce among the states and with foreign nations in harmony with law.
'6. That the holding of stock by one of the defendant corporations in another, under the circumstances shown, be declared illegal, and that each of them be enjoined from continuing to hold or own such shares in another, and from exercising any right in connection therewith.
'7. That defendants, each and all, be enjoined from continuing to carry out the purposes of the above-described contracts, combinations, conspiracies, and attempts to monopolize by the means herein described, or by any other, and be required to desist and withdraw from all connection with the same.
'8. That each of the defendants be enjoined from purchasing leaf tobacco or from selling and distributing its manufactured output as a part of interstate and foreign trade and commerce in conjunction or combination with any other defendant, and from taking part or being interested in any agreement or combination intended to destroy competition among them in reference to such purchases or sales.
As to the answers, it suffices to say that all the individual
and corporate defendants other than the foreign corporations denied the charges of wrongdoing and illegal combination, and the corporate defendants in...
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