United States v. Swift Co American Wholesale Grocers Ass v. Same National Wholesale Grocers Ass v. Same 570

Decision Date02 May 1932
Docket NumberNos. 568,569,s. 568
Citation76 L.Ed. 999,52 S.Ct. 460,286 U.S. 106
CourtU.S. Supreme Court

The Attorney General and Mr. John LordO'Brian,

Asst. to Atty. Gen for the United States.

Mr. Edgar Watkins, of Atlanta, Ga., for American Wholesale Grocers' Ass'n.

Mr. Wm. C. Breed, of New York City, for National Wholesale Grocers' Ass'n.

Messrs. Frank J. Hogan, of Washington, D. C., and Henry Veeder, of Chicago, Ill., for Swift & Co. et al.

Messrs. Dayton Moses, of Fort Worth, Tex., and George G. Clough and R. C. Fulbright, both of Houston, Tex., amici curiae.

Mr. Justice CARDOZO delivered the opinion of the Court.

A decree of the Supreme Court of the District of Columbia has modified an earlier decree of the same court which enjoined the continuance of a combination in restraint of trade and commerce.

Separate appeals, one by the United States of America, and the others by associations of wholesale grocers intervening by leave of court, have brought the case here. Judicial Code, § 238, U. S. Code, title 28, § 345 (28 USCA § 345).

In February, 1920, a bill was filed by the government under section 4 of the Act of July 2, 1890 (c. 647, 26 Stat. 209 U. S. Code, title 15, § 4 (15 USCA § 4)), known as the Sherman Anti-Trust Act, against the five leading meat packers in the United States to dissolve a monopoly. The packers joined as defendants were Swift & Co., Armour & Co., Wilson & Co., the Morris Packing Company, and the Cudahy Packing Company, together with their subsidiaries and also their chief officers. The charge was that by concert of action the defendants had succeeded in suppressing competition both in the purchase of live stock and in the sale of dressed meats, and were even spreading their monopoly into other fields of trade. They had attained this evil eminence through agreements apportioning the percentages of live stock to which the members of the combinations were severally entitled; through the acquisition and control of stockyards and stockyard terminal railroads; through the purchase of trade papers and journals whereby cattle raisers were deprived of accurate and unbiased reports of the demand for live stock; and through other devices directed to unified control. 'Having eliminated competition in the meat products, the defendants next took cognizance of the competition which might be expected' from what was characterized as 'substitute foods.' To that end, so it was charged, they had set about controlling the supply of 'fish, vegetables, either fresh or canned, fruits, cereals, milk, poultry, butter, eggs, cheese and other substitute foods ordinarily handled by wholesale grocers or produce dealers.' Through their ownership of refrigerator cars and branch houses as well as other facilities, they were in a position to distribute 'substitute foods and other unrelated commodities' with substantially no increase of overhead. Whenever these advantages were inadequate, they had recourse to the expedient of fixing prices so low over temporary periods of time as to eliminate competition by rivals less favorably situated. Through these and other devices there came about in the view of the government an unlawful monopoly of a large part of the food supply of the nation. The prayer was for an injunction appropriate to the case exhibited by the bill.

The defendants consented to dismemberment, though answering the bill and traversing its charges. With their answer there was filed a stipulation which provided for the entry of a decree upon the terms therein set forth, and provided also that the decree 'shall not constitute or be considered as an adjudication that the defendants, or any of them, have in fact violated any law of the United States.' The decree entered on February 27, 1920, enjoined the defendants from maintaining a monopoly and from entering into or continuing any combination is restraint of trade and commerce. In addition, they were enjoined both severally and jointly from (1) holding any interest in public stockyard companies, stockyard terminal railroads, or market newspapers, (2) engaging in, or holding any interest in, the business of manufacturing, selling or transporting any of 114 enumerated food products (principally fish, vegetables, fruit, and groceries), and 30 other articles unrelated to the meat packing industry; (3) using or permitting others to use their distributive facilities for the handling of any of these enumerated articles, (4) selling meat at retail, (5) holding any interest in any public cold storage plant, and (6) selling fresh milk or cream. No injunction was granted in respect of the sale or distribution of poultry, butter, cheese, and eggs, though these had been included in the bill among the substitute foods which the defendants were seeking to engross. The decree closed with a provision whereby jurisdiction of the cause was retained for the purpose of taking such other action or adding at the foot such other relief 'as may become necessary or appropriate for the carrying out and enforcement' thereof, 'and for the purpose of entertaining at any time hereafter any application which the parties may make' with reference thereto.

The expectation would have been reasonable that a decree entered upon consent would be accepted by the defendants and by those allied with them as a definitive adjudication setting controversy at rest. The events that were to follow recount a different tale. In April, 1922, the California Co-operative Canneries Corporation filed an intervening petition alleging that the effect of the injunction was to interfere with the performance by Armour & Co. of a contract by which Armour had agreed to buy large quantities of California canned fruit, and praying that the decree be vacated for lack of jurisdiction. Leave to intervene was granted by the Court of Appeals of the District, which ordered 'that such further proceedings thereupon be had as are necessary to determine the issue raised.' In November, 1924, motions for like relief were made by Swift and by Armour, their subsidiaries and officers. The motions were denied by the Supreme Court of the District, and thereafter were considered by this Court, which upheld the consent decree in the face of a vigorous assault. Swift & Co. v. United States, 276 U. S. 311, 48 S. Ct. 311, 72 L. Ed. 587. In the meantime, however, an order had been made on May 1, 1925, by the Supreme Court of the District at the instance of the California Canneries whereby the operation of the decree as a whole was suspended 'until further order of the court to be made, if at all, after a full hearing on the merits according to the usual course of chancery proceedings' see United States v. California Canneries, 279 U. S. 553, 555, 49 S. Ct. 423, 424, 73 L. Ed. 838. This order of suspension remained in force till May, 1929, when a decision of this court swept the obstacle aside. United States v. California Canneries, supra.

The defendants and their allies had thus been thwarted in the attempt to invalidate the decree as of the date of its entry, and again the expectation would have been reasonable that there would be acquiescence in its restraints. Once more the expectation was belied by the event. The defendants, or some of them, discovered, as they thought, that, during the years that had intervened between the entry of the decree and its final confirmation, conditions in the packing industry and in the sale of groceries and other foods had been transformed so completely that the restraints of the injunction, however appropriate and just in February, 1920, were now useless and oppressive. The discovery or supposed discovery had its fruit in the proceeding now before us. On April 12, 1930, the defendants Swift & Co. and Armour & Co. and their subsidiaries, being no longer under the shelter of an order suspending the injunction, filed a petition to modify the consent decree and to adapt its restraints to the needs of a new day. The prayer was that the petitioners be permitted (1) to own and operate retail meat markets; (2) to own stock in stockyard companies and terminal railroads; (3) to manufacture, sell, and deal in the 144 articles specified in paragraph fourth of the decree, which for convenience will be spoken of as 'groceries'; (4) to use or permit others to use their distributive facilities in handling such commodities; and one of the defendants Swift & Co., asked, in addition, that the defendants be permitted to hold interests in public cold-storage warehouses and to sell fresh milk and cream. Of the five defendants named in the original suit, one Morris & Co., sold out to Armour & Co. in 1923, and discontinued business. The two other defendants, Wilson and Cudahy, did not join in the petition to modify the decree, but stated in open court that they would consent to such modification as the court might order, provided it be made applicable to the defendants equally. All the requests for modification were denied except Nos. 3 and 4, of which 4 is merely ancillary to 3 and calls for no separate consideration. The modification in respect of No. 3 gave permission to deal at wholesale in groceries and other enumerated commodities, but maintained the injunction against dealing in them at retail. In every other respect, the decree of February 27, 1920, was continued in force as originally entered. The modifying decree, which was entered January 31, 1931, is the subject of this appeal.

We are not doubtful of the power of a court of equity to modify an injunction in adaptation to changed conditions, though it was entered by consent. The power is conceded by the government, and is challenged by the interveners only. We do not go into the question whether the intervention was so limited in scope and purpose as to withdraw this ground of challenge, if otherwise available....

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