State v. Allied Chemical Dye Corp.

Full title: STATE, Appellant, v. ALLIED CHEMICAL DYE CORPORATION and others…

Court: Supreme Court of Wisconsin

Date published: Feb 2, 1960

9 Wis. 2d 290 (Wis. 1960)

101 N.W.2d 133

Opinion

January 5, 1960 —

February 2, 1960.

APPEAL from three judgments of the circuit court for Milwaukee county: ELMER W. ROLLER, Circuit Judge. Reversed.

For the appellant the cause was argued by George F. Sieker, assistant attorney general, and John R. Devitt, assistant corporation counsel of Milwaukee county, with whom on the briefs were John W. Reynolds, attorney general, and Robert J. Vergeront and Albert O. Harriman, assistant attorneys general, attorneys, and William J. McCauley, district attorney of Milwaukee county, and C. Stanley Perry, corporation counsel, of counsel.

For the respondents there was a brief by Fairchild, Foley Sammond of Milwaukee, for the Columbia-Southern Chemical Corporation; by Michael, Spohn, Best Friedrich of Milwaukee, for the Dow Chemical Company; and by, Wood, Brady, Tyrrell Bruce of Milwaukee, for the Wyandotte Chemicals Corporation; and oral argument by Steven E. Keane, David E. Beckwith, T. L. Tolan, Jr., and Kenneth K. Luce, all of Milwaukee.

This is an action to enforce the provisions of sec. 133.01, Stats. The action is brought by the attorney general in the name of the state. The defendants are corporations, both foreign and domestic, and individuals engaged in the manufacture and sale, or in the sale only, of a chemical product known as calcium chloride.

The complaint alleges a combination and conspiracy in restraint of trade and in establishing uniform prices at which the product is sold to Milwaukee county and other users thereof in Wisconsin, and that some of the acts by the defendants in furthering said combination and conspiracy were performed by them in the state of Wisconsin. The state seeks an injunction to prohibit the monopolistic practices and the enforcement of certain penalties provided by the Wisconsin statutes.

At this stage of the proceeding we are concerned only with three defendants: Columbia-Southern Chemical Corporation, the Dow Chemical Company, and Wyandotte Chemicals Corporation, all foreign corporations. These defendants, each by separate answer, denied the allegations of combination, conspiracy, and price fixing. Each also alleged that all sales of calcium chloride made by it in Wisconsin are made in interstate commerce and that all of its business referred to in the complaint is subject to the laws of the United States relating to monopoly and restraint of trade commonly referred to as the Sherman, Clayton, Robinson-Patman, and Federal Trade Commission Acts, which acts and the enforcement thereof by the federal government preempted the field of regulation of interstate commerce respecting monopoly and restraint of trade.

The three corporate defendants moved separately for summary judgment dismissing the complaint as to them. Affidavits in support of the motions and counteraffidavits in opposition to them were filed. In their affidavits the three moving defendants stated that none of them owns, operates, or maintains any manufacturing plant, sales or other office, warehouse, or stock of calcium chloride in the state of Wisconsin; that all calcium chloride sold by any of them is produced in Michigan and Ohio; that each of the three individual defendants sells calcium chloride on a nation-wide basis at the same price per ton to all of its customers with an adjustment for freight charges; that all calcium chloride sold by any of the three to customers in Wisconsin is shipped f.o.b. factory in truckload or carload lots direct to the Wisconsin destination selected by the customer, and that after the calcium chloride leaves the factory no employee or agent of any of the three defendants handles or has any contact with it; that on July 30, 1938, the federal trade commission filed a complaint against Dow, Michigan Alkali Company (now Wyandotte), Columbia Alkali Corporation (whose successor is Columbia-Southern Chemical Corporation), and others, charging that they were restraining trade, suppressing and eliminating competition in the sale of calcium chloride in trade and commerce among the several states and charging them with conspiracy and other practices by which they allegedly accomplished a restraint of trade and fixing uniform prices in the sale of calcium chloride; that on December 13, 1938, the federal trade commission made and entered findings that each of the three moving defendants herein and certain others had violated the Federal Trade Commission Act as charged in the complaint, and an order commanding said defendants to cease and desist from fixing or maintaining uniform prices in the sale of calcium chloride in any form in the United States; and that since 1938 several compliance investigations have been conducted by the federal trade commission to determine whether the defendants have been and are obeying its 1938 order.

The trial court determined that if it had jurisdiction there were disputed statements of fact contained in the various affidavits that would prevent the entry of a summary judgment. However, the trial court felt that, since the federal trade commission has taken jurisdiction over practices which the state by this action seeks to deal with, the state is precluded from enforcing the state statutes and the motions for summary judgment had to be granted on that ground alone.

Judgments dismissing the action against the Dow Chemical Company and Wyandotte were entered on February 13, 1959. A similar judgment dismissing the complaint as to the Columbia-Southern Chemical Corporation was entered on February 17, 1959. The state appealed from said judgments.

BROADFOOT, J.

Each side cites and relies upon several cases decided by both federal and state courts. The state relies in particular upon certain language in Leader Theatre Corp. v. Randforce Amusement Corp., 186 Misc. 280, 58 N. Y. Supp.2d 304, and Commonwealth v. McHugh, 326 Mass. 249, 93 N.E.2d 751. It further relies heavily on certain decisions of the United States supreme court in the Standard Oil Cases.

The defendants rely heavily upon the case of Paramount Public Corp. v. Hill, 11 F. Supp. 478, particularly in view of the comment thereon in the case of Ritholz v. Ammon, 240 Wis. 578, 4 N.W.2d 173. The Paramount Public Case was a decision of the district court of the United States for the Western district of Wisconsin. The defendants further rely upon language in decisions of the United States supreme court in the employment-relations field where the supreme court found language in the acts of congress that precludes the states from acting in the same field.

None of the cases cited are comparable to the facts here, and a review of the many cases would be of little value. Our determination is being made from a reading of the various legislative enactments both state and federal, dealing with conspiracies and monopolies. From such reading and examination we conclude:

1. There is no language in the federal enactments that pre-empts the field of regulation and enforcement in the federal government or that precludes the states from enacting effective legislation dealing with such unlawful practices.

2. There is no conflict between the federal and state statutes.

3. The Wisconsin statutes make no attempt to regulate or burden interstate commerce.

4. The federal trade commission was not established to enforce the federal antimonopoly statutes. It has been given broad powers to regulate certain trade practices, many of them similar to those delegated by Wisconsin to its state department of agriculture.

5. The Wisconsin statutes were enacted in the exercise of the police powers of the state. The public interest and welfare of the people of Wisconsin are substantially affected if prices of a product are fixed or supplies thereof are restricted as the result of an illegal combination or conspiracy. The people of Wisconsin are entitled to the advantages that flow from free competition in the purchase of calcium chloride and other products, and if the state is able to prove the allegations made in its complaint it is apparent that the acts of the defendants deny to them those advantages.

6. There are letters in the record from individuals in the federal trade commission and in the department of justice which indicate that the attitude of the federal government is to co-operate with the state in its efforts to enforce the state statutes dealing with conspiracies and monopolies. It is contended that these letters are merely the expressions of the individuals and not binding upon the federal government, but the letters are an indication that there is no conflict between the federal and state laws and that the federal government has not preempted the field because of the language of its enactments or because the federal trade commission has exercised jurisdiction dealing in part with acts alleged to be a violation of the Wisconsin statutes. We conclude, therefore, that the action by the federal trade commission does not amount to a pre-emption and does not preclude the state from acting under its police powers in the making and enforcement of the state statutes.

As the trial court indicated, there are issues of fact that were not resolved by the affidavits filed by the three defendants. The case should therefore be tried and a record made upon which proper judgments can be based.

By the Court. — Judgments reversed. Cause remanded for further proceedings consistent with this opinion.