United States v. Women's Sportswear Mfrs.'Ass'n, 4029.
| Decision Date | 10 December 1947 |
| Docket Number | No. 4029.,4029. |
| Parties | UNITED STATES v. WOMEN'S SPORTSWEAR MFRS.' ASS'N et al. |
| Court | U.S. District Court — District of Massachusetts |
William T. McCarthy, U. S. Atty., of Boston, Mass., Grant W. Kelleher, James M. Malloy, W. D. Kilgore and Paul T. O'Donoghue, Sp. Assts. to the Atty. Gen., for the U. S.
Harry Bergson, Abraham Wasserman and Maurice H. Finn, all of Boston, Mass., and Jacob Weinberg, of Brockton, Mass., for defendants.
This complaint was filed under Section 4 of the Sherman Anti-Trust Act, 15 U.S. C.A. § 4, against the defendants to prevent further alleged violations by them, jointly or severally, of Section 1 of the Act, 15 U.S.C.A. § 1.
The defendant, Women's Sportswear Manufacturers Association, hereinafter referred to as the "Association", is described as a voluntary unincorporated association composed of contractors in the Boston area who are engaged in the business of stitching women's sportswear apparel. The other defendants are firms, partnerships, corporations, associations or individuals, engaged as contractors in the business of stitching women's sportswear apparel, that are alleged to be members of the defendant Association, or officers or agents of the defendant Association.
It is alleged in the complaint that "acts done by defendant Association or defendant corporations were authorized, ordered and done by the officers, directors, agents and employees of such Association and corporations, including natural persons herein named as defendants."
After setting forth the nature of the trade and commerce involved, the complaint charges that the defendants have violated the Sherman Act as follows:
The alleged terms of the conspiracy and combination are set forth in paragraph 25 of the complaint, and the alleged effects thereof are set forth in paragraph 26.
The complaint concludes with prayers for injunctions as follows:
1. That upon final hearing of this cause, the court order, adjudge and decree that the contracts, combination and conspiracy hereinabove described, constitute violations of Section 1 of the Sherman Act;
2. That the defendant, Women's Sportswear Manufacturers Association, and each of its defendant contractor members, be required to cancel the several agreements now in effect with the several jobbers under which the latter are required to designate the Association and its members as exclusive stitchers for women's sportswear manufactured by such jobbers, as well as to distribute their available business equally among such stitchers on terms imposed by such stitchers, and that the Association and each of its contractor members, their successors, transferees or assignees, be perpetually enjoined from making any new exclusive agreements, similar in nature, with any jobbers of women's sportswear in the Boston area;
3. That the Women's Sportswear Manufacturers Association be dissolved and that no new or other association be formed having the same purposes or objects;
4. That the contractor defendants and the members of the Women's Sportswear Manufacturers Association, and each of them, their committees, officers, directors, agents, employees, representatives, and all persons, associations or corporations acting or claiming to act on behalf of them or any of them, be perpetually enjoined and restrained from engaging in any concerted plan or action calculated to secure to defendants, or any of them, their successors, transferees or assignees, the exclusive right to service the stitching requirements of any manufacturer or jobber in the Boston area engaged in the manufacture and sale in interstate commerce, of women's sportswear apparel or the materials thereof, or to impose any compulsory method of allocating among such stitchers the stitching requirements of such jobbers or manufacturers 5. That the plaintiff have such further and other relief as the nature of the case may require and as the court may deem necessary and proper in the premises and a prayer for costs.
Findings of Fact.
Women's sportswear consists generally of jackets, skirts, slacks, shorts, blouses and jumper dresses made from wool, rayon and cotton fabrics. It is produced by jobbers who employ contractors to do the stitching and put on the necessary ornaments. The jobbers maintain places of business in Boston and vicinity. They all maintain sales offices in New York City. Some of them also maintain sales offices in other cities, and practically all of them employ salesmen who travel throughout the United States soliciting orders for women's sportswear.
At their places of business in Boston and vicinity, the jobbers cut the cloth or piece goods according to patterns designed by them, in accordance with the orders of their customers. They make their purchases of cloth through New York sales offices of the cloth-producing mills. These mills are located in various places outside of Massachusetts, as well as in Massachusetts. About 80% of the cloth used by the jobbers in the production of women's sportswear is manufactured in mills located outside of Massachusetts. At times, the cloth purchased is sent to the jobber's place of business directly from the mill; at other times, it is sent to the jobber from the mill agent in New York. Although a jobber may at times maintain an inventory of cloth, very few did so during the period covered by this complaint. Most of the cloth was purchased as a result of specific orders taken by the jobbers for sportswear.
As a general rule, a jobber employed outside of his sales force, only a designer, a pattern maker, one or more cutters, shipping clerks and office help. The defendant contractors have shops or factories in the Boston area, where they have installed sewing machines. The contractors do at least 50% of all the stitching of women's sportswear produced in the Boston area.
It is the custom in the trade for the contractor to return the finished garments to the jobber, who immediately sends them to the purchaser. Since the jobbers manufacture sportswear only on orders, they do not stock finished garments.
Boston is the fifth largest manufacturing center of women's sportswear in the United States, figured on the basis of the number of persons employed in that industry, being surpassed by Los Angeles, New York, Chicago and Philadelphia respectively. Women's sportswear manufactured in the Boston area is sold throughout the country in competition with like goods manufactured in the other areas. At least 65% of all the women's sportswear produced in Boston is handled by the defendants, and at least 80% of all the finished garments produced here is sold to purchasers located outside of Massachusetts. The annual gross value of the garments sold by the jobbers who signed the agreement with the defendant Association is about $8,800,000. The cost of stitching women's sportswear garments amounts to approximately 25% of the sales price of the garments.
The defendant Women's Sportswear Manufacturers Association, was organized at some time prior to December 1, 1943. It is an unincorporated association with a place of business in Boston, Massachusetts, composed of contractors who contract to perform the stitching operations on women's sportswear. All of the defendant contractors named in the complaint as being members of the defendant Association, with the exception of Hyman Medoff, were members of the defendant Association at some time during the period from March 1, 1944, to the date of the filing of the complaint. The defendants named in the complaint as officers or members of the executive committee of the defendant Association held their alleged positions at some time during the period from March 1, 1944, to the date of the filing of this complaint. The Association held meetings at the call of its secretary, who kept the minutes of the meetings. The defendant Rosenberg was the Executive Director of the defendant Association throughout the entire period covered by this complaint.
Beginning about March 1, 1944, the defendant Rosenberg notified certain jobbers that, in order for the contractors to operate their shops for said jobbers in the future, it would be necessary to establish equitable and fair business dealings to remove abuses and evils which caused conflict and disputes between jobber and contractor, and that they must get in contact with him. This was done for the purpose of having the jobbers sign an agreement with the contractors concerning these matters.
A proposed written agreement, (plaintiff's Exhibit 3), required the jobber to employ only members of the defendant Association, to refrain from dealing with nonmember contractors, to distribute his work equitably among the Association contractors engaged by him, to furnish the contractor with written orders setting out the price for the work, to refrain from accepting secret rebates, and to pay to the contractor the amount of the unemployment compensation insurance, health and vacation fund and Labor Day pay attributable to the services of the contractors' employees.
Despite the urging of defendant Rosenberg and members of the Association, the jobbers had...
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