United States v. Armour Company

• Citation: 26 L.Ed.2d 226,398 U.S. 268,90 S.Ct. 1723
• Decision Date: 01 October 1969
• Docket Number: No. 103,103
• Parties: UNITED STATES, appellant, v. ARMOUR & COMPANY et al
• Court: U.S. Supreme Court

398 U.S. 268

90 S.Ct. 1723

26 L.Ed.2d 226

UNITED STATES, appellant,

v ARMOUR & COMPANY et al.

No. 103.

Supreme Court of the United States

October Term, 1969.

Argued March 5, 1970.

June 1, 1970

James van R. Springer, Washington, D. C., for appellant.

Herbert A. Bergson, Washington, D. C., for appellees.

PER CURIAM.

The judgment is vacated and the case is remanded to the United States District Court for the Northern District of Illinois with instructions to dismiss the case as moot.

Mr. Justice DOUGLAS, dissenting.

I dissent from dismissal of the case as moot.

In an historic consent decree the giant meatpackers were separated in a complete and continuing way from the general food business, the District Court retaining in the customary way the power to grant additional relief, at the foot of the decree. Some years later motions to vacate the decree were made, and a judgment overruling them was affirmed by this Court. Swift & Co. v. United States, 276 U.S. 311, 48 S.Ct. 311, 72 L.Ed. 587. Later Armour and other meatpacker defendants, claiming that conditions in the food business had changed, sought modifications of the decree to relieve them from the structural bars against engaging in various aspects of the general food and retail meat business. That effort was also unsuccessful. United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999. Later, another attempt was made to obtain similar relief and it too failed. United States v. Swift & Co., D. C., 189 F.Supp. 885, aff'd, 367 U.S. 909, 81 S.Ct. 1918, 6 L.Ed.2d 1249.

Mr. Justice BLACK took no part in the consideration or decision of this case.

Mr. Justice MARSHALL took no part in the decision of this case.

Armour is now the second largest meatpacker in the Nation. General Host is engaged in the food products business; it operates some 380 grocery stores, and some lodges, restaurants, and coffee shops. It is, in other words, engaged in lines of business from which Armour, as a party to the decree, would be barred, whether it did so directly or through stock ownership.

Against the resistance of Armour, General Host, which held about 16 1/2% of Armour's outstanding stock, undertook to acquire at least 51% of it. The United States asked the District Court having jurisdiction over the meatpackers consent decree to make General Host a party under § 5 of the Sherman Act, 26 Stat. 210, as amended, 15 U.S.C. § 5. The refusal of the District Court to do so was, I think, error. After the District Court's ruling, General Host acquired 57% of Armour's stock. As a result, a species of the monopoly at which the consent decree was aimed was achieved.

General Host, it appears, has now transferred, pursuant to authority of the Interstate Commerce Commission, its Armour stock to Greyhound Corporation. It is alleged that Greyhound, like General Host, is engaged in food business prohibited to Armour under the decree. The United States contends that Greyhound's control of Armour is as inconsistent with the decree as General Host's control. Greyhound, the United States states, owns other food interests that Armour could not own by virtue of the decree.

Neither General Host nor Greyhound could, of course, be held in contempt under the decree as it is written, for they were not parties. But they presumably knew of the decree and seemingly fashioned a procedure to circumvent it. The District Court had ample power under § 5 of the Sherman Act, to restrain General Host from frustrating the decree, for § 5 provides:

'Whenever it shall appear to the court before which any proceeding under section 4 of this title may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof.'

General Host and Greyhound would have, of course, the opportunity to litigate the question whether their acts do interfere with the decree before any citation for contempt.

Moreover, Rule 25(c) of the Federal Rules of Civil Procedure provides:

'In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. Service of the motion shall be made as provided in subdivision (a) of this rule.'

Unless the District Court proceeds against General Host and Greyhound to supplement the decree, there may be no remedy. Without the hearing I urge, they cannot be punished for contempt. Armour, though a party to the decree, was the victim of its violation, not a participant.

Under the decree Armour could not acquire either General Host or Greyhound. Yet the combination of meatpackers with food products arguably is realized whether Armour acquired them, or they, Armour. The misconception of the thrust of the decree by the District Court is evident in its statement that 'General Host is not a large meat packer extending its monopolistic grasp toward the rest of the food industry and through the use of its already established distributing facilities, superior financial resources and other means making a dominant position felt, resulting in a restraint of trade by squeezing out present or potential competitors. Rather, General Host, a wholly separate corporate entity, has acquired some shares of Armour stock and evinced an interest in acquiring additional shares.' The evil is in an interference with the decree through the combination of Armour's meatpacking power with the food lines of General Host—the precise type of evil at which the decree was aimed. And that evil is apparently present in Greyhound's acquisition.

Mr. Justice Cardozo speaking for the Court in the second Swift case said:

'Whether the defendants would resume [their predatory practices] if they were to deal in groceries again, we do not know. They would certainly have the temptation to resume it. Their low overhead and their gigantic size, even when they are viewed as separate units, would still put them in a position to starve out weaker rivals. Mere size, according to...