United States v. Women Sportswear Mfg Ass
| Decision Date | 28 March 1949 |
| Docket Number | No. 37,37 |
| Parties | UNITED STATES v. WOMEN'S SPORTSWEAR MFG. ASS'N et al |
| Court | U.S. Supreme Court |
Appeal from the United States District Court for the District of Massachusetts.
Mr. Robert L. Stern, of Washington, D.C., for the United States.
Mr. Harry Bergson, of Boston, Mass., for appellees.
The District Court, after trial, has denied the Government's plea for an injunction, and other relief, against appellees under the Sherman Act.1 75 F.Supp. 112. The cause is brought here by direct appeal, as Congress has authorized.2 Defendants below and appellees here are an unincorporated trade association, its officers and members. There is no serious controversy as to facts. Our review must determine whether or not they establish the Government's right to the relief which has been denied.
We first should be satisfied that the activities on which restraints are alleged to have been exerted constitute commerce among states. The industry involved is women's sportswear. It is carried on by jobbers who maintain sales offices in New York and engage in nationwide competition for orders, chiefly by means of traveling salesmen who solicit throughout the country. Upon receiving an order, the jobber buys the fabrics and cuts them to the customer's fancy. In most cases he then sends the cut material to a contractor who does the stitching, puts on such accessories as the buttons and the bows, and returns the completed garments to the jobber who promptly ships them to the customer.
That the jobbers maintain a c rrent of commerce, substantial in volume and interstate in character, seems clear. The Boston area ranks fifth in this country's production of women's sportswear. Its jobbers obtain about 80% of the cloth used from sources outside of Massachusetts. At least 80% of the finished sportswear is sold and shipped to customers outside of that State. Thus the industry in Massachusetts subsists on a constant influx of cloth and outgo of garments which pass through the hands of the stitching contractors for an essential operation.
Our next inquiry is whether the accused combination, which is made up of stitching contractors, has imposed upon this interstate trade restraints of a character and magnitude to violate the Sherman Act. The Association is made up of members who handle at least 50% of all sportswear produced in Boston. The cost of this contractor's operation is about 25% of the jobber's sale price, and its variations are reflected in wholesale and retail prices. The Association's executive director took steps to induce jobbers to enter into a written agreement, among other things, to employ only members of the Association, refrain from dealing with nonmembers, and accept no secret price rebates. When the jobbers hesitated, stoppage of production was threatened and when they refused because they were advised that it would violate antitrust laws, the Association ordered contractors to stop work for three jobbers, which was done, and work for them was not resumed until the jobbers obtained a state court injunction. The proposed agreement was then revised and ultimately was signed by twenty-one jobbers who handle a gross annual volume of about $8,800,000, that being a substantial portion of the Boston output.
The agreement in final form, together with the circumstances of its making, is alleged to constitute an illegal restraint of trade. Terms relevant to the issue require jobbers to give all of their work to available Association members who are in good standing with the International Ladies' Garment Workers Union, provided such contractors are 'comparable' as to price and quality of work with nonmember contractors having contracts with the same Union. The jobber is to furnish a written order speci- fying price and is forbidden to receive secret rebates. A jobber can give work to a nonmember only in continuance of an existing relationship. The jobber will give no new contract to any stitcher who ceases to be a member of the Association. The Association agrees to assist the jobber in getting sufficient contractors as the amount of his...
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