United States v. Hartford-Empire Co., 4426.

• Decision Date: 25 August 1942
• Docket Number: No. 4426.,4426.
• Parties: UNITED STATES v. HARTFORD-EMPIRE CO. et al.
• Court: U.S. District Court — Northern District of Ohio

46 F. Supp. 541

UNITED STATES v. HARTFORD-EMPIRE CO. et al.

No. 4426.

District Court, N. D. Ohio, W. D.

August 25, 1942.

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Thurman Arnold, Asst. Atty. Gen., Samuel S. Isseks and Lawrence S. Apsey, Sp. Assts. to the Atty. Gen., and Victor H. Kramer, and Seymour D. Lewis, Sp. Attys., all of Washington, D. C., and Frank Shields, Sp. Atty., of New York City, for plaintiff.

E. J. Marshall, S. S. Wall, Richard S. Cole, and Marshall, Melhorn, Davies, Wall & Bloch, all of Toledo, Ohio, Thomas G. Haight, of Jersey City, N. J., Edgar J. Goodrich, of Washington, D. C., and Sidney F. Parham and James M. Carlisle, both of Hartford, Conn., for defendant Hartford Empire Co.

John B. McMahon, Franklin F. Hayward, and McMahon, Webber & Hayward, all of Toledo, Ohio, Halsey Sayles, of Elmira, N. Y., William P. Stewart, of Buffalo, N. Y., and Sayles, Flannery, Collin & Evans, of Elmira, N. Y., for defendant Corning Glass Works and another.

Lloyd T. Williams, Henry A. Middleton, Robert L. Peters, and Williams, Eversman & Morgan, all of Toledo, Ohio, and Edmund P. Wood, of Cincinnati, Ohio, for defendant Owens-Illinois Glass Co.

Joseph D. Stecher and Yager, Bebout & Stecher, all of Toledo, Ohio, and Stephen H. Philbin, of New York City, for defendant Hazel Atlas Glass Co.

Ralph Emery, of Toledo, Ohio, and Mandeville, Waxman, Buck, Teeter & Harpending, of Elmira, N. Y., for defendant Thatcher Mfg. Co.

Lehr Fess and Doyle & Lewis, all of Toledo, Ohio, and Albert Diven and Pence, O'Neill & Diven, all of Anderson, Ind., for defendant Lynch Corporation.

Wilber Owen, Carl F. Schaffer, and Owen & Owen, all of Toledo, Ohio, Everett Warner, of Muncie, Ind., and E. W. McCallister, of Pittsburg, Pa., for defendant Ball Bros. Co.

Luther Day, Rufus S. Day, Chapman Rose, and Jones, Day, Cockley & Reavis, all of Cleveland, Ohio, for Glass Container Ass'n of America, Inc.

George D. Welles, Fred E. Fuller, Leslie Henry, Fred A. Smith, and Welles, Kelsey, Cobourn & Harrington, all of Toledo, Ohio, H. C. Laughlin, of Lancaster, Ohio, and Corbett & Mahoney, of Columbus, Ohio, for Anchor Hocking Glass Corporation.

Stanley J. Hiett, of Toledo, Ohio, and Earl Foster, of Oklahoma City, Okl., for Liberty Glass Co.

KLOEB, District Judge.

This is a civil action initiated by the Government of the United States under the antitrust laws — sections 1, 2 and 4 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, 4, and section 3 of the Clayton Act, 15 U.S.C.A. § 14. The complaint was filed on December 11, 1939.

Sections 1 and 2 of the Act of July 2, 1890, 26 Stat. 209, 15 U.S.C.A. §§ 1, 2, commonly referred to as the Sherman Anti-Trust Act, as amended by the Act of August 17, 1937, 50 Stat. 693, provide in part, as follows:

Sec. 1. "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal * * *."

Sec. 2. "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor * * *."

Section 3 of the Clayton Act, 15 U.S.C.A. § 14, reads in part as follows: "It shall be unlawful * * * to lease or make a sale or contract for sale of * * * machinery, * * * whether patented or unpatented, * * * on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the * * * machinery * * * of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce."

Section 4 of the Sherman Act reads in part as follows: "The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of this act sections 1-7 and 15 of this title; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited."

The defendants named in the complaint originally consisted of twelve corporations and one hundred and one individuals, the latter being officers, directors, or actors associated with the defendant companies in the activities complained of by the Government. Since the filing of the complaint, three of the corporations and forty of the individuals have been dismissed. A motion for summary judgment was made by the Stevenson Corporation and this was sustained before the commencement of the trial. The Anchor Hocking Corporation and the Liberty Glass Company each made motions to be dismissed upon completion of the plaintiff's testimony, and these were sustained by the court. Two of the remaining corporate defendants and the individuals associated therewith — Corning Glass Works and Thatcher Manufacturing Company — filed motions for dismissal at the close of the plaintiff's testimony, and argument upon these motions was heard by the court in the final argument of the case. These two motions, being as yet undisposed of, are hereby overruled. The forty individuals were dismissed in various ways — through the same motions for dismissal of the corporate defendants, by motion of the plaintiff at the conclusion of the case because of lack of evidence, and because of the death of some of them since the complaint was filed.

The complaint is brought against the leading concerns in the glass container industry. It charges, generally, a violation of the anti-trust laws, "by unlawfully conspiring, monopolizing, attempting to monopolize, and by unlawfully contracting, combining, and conspiring to restrain interstate and foreign trade and commerce, and more particularly by acquiring and maintaining monopolies of (a) patents covering the manufacture and licensing of glass-making machinery, (b) the manufacture and distribution of glass-making machinery, and (c) the manufacture, distribution, and sale of glass products, and by excluding others from the fair opportunity to engage freely and unrestrictedly in the interstate and foreign trade and commerce in said machinery and glass products." (Paragraph 34 of the complaint.)

More specifically, in paragraph 37 of the complaint, it is charged:

"Defendants herein have conspired, and are now conspiring, unlawfully to attempt to monopolize and to monopolize, and have unlawfully combined and now are combining to restrain trade, and such defendants have maintained and are now maintaining an unlawful monopoly or unlawful monopolies, and such defendants have, and now are, unlawfully restraining trade among and between the several States of the United States with respect to —

"(a) Patents on automatic machinery for the production of pressed and blown glassware and glass containers;

"(b) Machinery for the production of pressed and blown glassware and glass containers, and the distribution of such machinery;

"(c) The manufacture and distribution of pressed and blown glassware and particularly heat-resisting glassware;

"(d) The manufacture and distribution of all kinds of glass containers;

"(e) The manufacture and distribution of milk bottles;

"(f) The manufacture and distribution of fruit jars."

The relief prayed for requests generally that the court enjoin the illegal practices complained of, including the performance of the contracts between the various defendants, or the execution of similar agreements; that the court enjoin the holding of stock in another corporation in the industry by one corporate defendant, or an individual defendant connected with a corporate defendant; that the Hartford-Empire Company be dissolved and its patents and other properties be rearranged under several separate and independent corporations; and that such other relief be granted as may be necessary or the court deems proper.

The defendants have denied any violation of the anti-trust laws in the manner alleged in the complaint. The Hartford-Empire Company, answering generally, avers: "These defendants deny that they, or any one or more of them, individually or with one another, or with anyone else, have intended to establish or maintain, or have established or maintained, any conspiracy or monopoly in restraint of trade or commerce, or have entered into any combination or agreement in restraint of trade or commerce, or have committed, or threaten or intend to commit, any violation of the Sherman Anti-Trust Act or the Clayton Act."

The position of the Hartford-Empire Company which, broadly, is the position of the remainder of the defendants with the exception, perhaps, of the Glass Container Association, whose situation differs from that of the other defendant corporations, is concisely set forth in the closing argument of defense counsel as follows (Record, page 11,526), "I want to say in conclusion, again, our position is that Hartford started out to create, started out to protect by patents what it did create, and to exploit its creation by appropriate means pointed out by the law and business custom. We claim that such domination of any part of the industry, either glass machinery or glass, as Hartford ever had, was only that inherent in the patents to which we believe we were entitled. That is what we sought, and that is what we got. The situation today is that the dominating adjudicated patents are those of Hartford's own inventors."

Description of the Corporate Defendants.

The defendant Hartford-Empire Company, hereinafter sometimes referred to as Hartford, is primarily a patent holding and developing company. It...