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Kiefer-Stewart Co. v. Seagram Sons

U.S.
Jan 2, 1951
340 U.S. 211 (1951)

Summary

holding distillers' agreement on maximum resale price of liquor sold by distributors per se violation of § 1

Summary of this case from Pennsylvania Dental Ass'n v. Medical Service Ass'n of Pennsylvania

Opinion

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

No. 297.

Argued December 8, 1950. Decided January 2, 1951.

1. An agreement among competitors in interstate commerce to fix maximum resale prices of their products violates the Sherman Act. P. 213.

2. Under the Sherman Act, a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se. P. 213.

3. The evidence in this case was sufficient to support a finding by the jury that respondents had conspired to fix maximum resale prices. Pp. 213-214.

4. In an action under the Sherman Act for treble damages, brought by a complainant injured by a conspiracy of sellers of liquor in interstate commerce to fix maximum resale prices, it is no defense that the complainant had conspired with others to fix minimum prices for liquor in violation of the antitrust laws. P. 214.

5. The fact that corporations are under common ownership and control does not relieve them from liability under the antitrust laws, especially where they hold themselves out as competitors. P. 215.

6. Since the District Court's instructions to the jury submitted to them only the cause of action under the Sherman Act, it did not err in refusing a more formal withdrawal of an issue concerning a violation of the Clayton Act, which had been charged in the complaint but which was not proved. P. 215.

182 F.2d 228, reversed.

In an action under the Sherman Act for treble damages, the jury returned a verdict for petitioner and damages were awarded. The Court of Appeals reversed. 182 F.2d 228. This Court granted certiorari. 340 U.S. 863. Reversed, p. 215.

Joseph J. Daniels and Paul A. Porter argued the cause and filed a brief for petitioner.

Paul Y. Davis argued the cause for respondents. With him on the brief were Joseph M. Hartfield and Thomas Kiernan.

Solicitor General Perlman, Acting Assistant Attorney General Underhill and Charles H. Weston filed a brief for the United States, as amicus curiae, supporting petitioner.


The petitioner, Kiefer-Stewart Company, is an Indiana drug concern which does a wholesale liquor business. Respondents, Seagram and Calvert corporations, are affiliated companies that sell liquor in interstate commerce to Indiana wholesalers. Petitioner brought this action in a federal district court for treble damages under the Sherman Act. 15 U.S.C. § 1, 15. The complaint charged that respondents had agreed or conspired to sell liquor only to those Indiana wholesalers who would resell at prices fixed by Seagram and Calvert, and that this agreement deprived petitioner of a continuing supply of liquor to its great damages. On the trial, evidence was introduced tending to show that respondents had fixed maximum prices above which the wholesalers could not resell. The jury returned a verdict for petitioner and damages were awarded. The Court of Appeals for the Seventh Circuit reversed. 182 F.2d 228. It held that an agreement among respondents to fix maximum resale prices did not violate the Sherman Act because such prices promoted rather than restrained competition. It also held the evidence insufficient to show that respondents had acted in concert. Doubt as to the correctness of the decision on questions important in antitrust litigation prompted us to grant certiorari. 340 U.S. 863.

Petitioner also charged a violation of the Clayton Act, 15 U.S.C. § 18, but this theory has been abandoned and is not important here. See p. 215, infra.

The Court of Appeals erred in holding that an agreement among competitors to fix maximum resale prices of their products does not violate the Sherman Act. For such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment. We reaffirm what we said in United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223: "Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se."

The Court of Appeals also erred in holding the evidence insufficient to support a finding by the jury that respondents had conspired to fix maximum resale prices. The jury was authorized by the evidence to accept the following as facts: Seagram refused to sell to petitioner and others unless the purchasers agreed to the maximum resale price fixed by Seagram. Calvert was at first willing to sell without this restrictive condition and arrangements were made for petitioner to buy large quantities of Calvert liquor. Petitioner subsequently was informed by Calvert, however, that the arrangements would not be carried out because Calvert had "to go along with Seagram." Moreover, about this time conferences were held by officials of the respondents concerning sales of liquor to petitioner. Thereafter, on identical terms as to the fixing of retail prices, both Seagram and Calvert resumed sales to other Indiana wholesalers who agreed to abide by such conditions, but no shipments have been made to petitioner.

The foregoing is sufficient to justify the challenged jury finding that respondents had a unity of purpose or a common design and understanding when they forbade their purchasers to exceed the fixed ceilings. Thus, there is support for the conclusion that a conspiracy existed, American Tobacco Co. v. United States, 328 U.S. 781, 809-810, even though, as respondents point out, there is other testimony in the record indicating that the price policies of Seagram and Calvert were arrived at independently.

Respondents also seek to support the judgment of reversal on other grounds not passed on by the Court of Appeals but which have been argued here both orally and in the briefs. These grounds raise only issues of law not calling for examination or appraisal of evidence and we will consider them. Respondents introduced evidence in the District Court designed to show that petitioner had agreed with other Indiana wholesalers to set minimum prices for the sale of liquor in violation of the antitrust laws. It is now contended that the trial court erred in charging the jury that petitioner's part in such a conspiracy, even if proved, was no defense to the present cause of action. We hold that the instruction was correct. Seagram and Calvert acting individually perhaps might have refused to deal with petitioner or with any or all of the Indiana wholesalers. But the Sherman Act makes it an offense for respondents to agree among themselves to stop selling to particular customers. If petitioner and others were guilty of infractions of the antitrust laws, they could be held responsible in appropriate proceedings brought against them by the Government or by injured private persons. The alleged illegal conduct of petitioner, however, could not legalize the unlawful combination by respondents nor immunize them against liability to those they injured. Cf. Fashion Originators' Guild v. Trade Comm'n, 312 U.S. 457; Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219, 242-243.

Respondents next suggest that their status as "mere instrumentalities of a single manufacturing-merchandizing unit" makes it impossible for them to have conspired in a manner forbidden by the Sherman Act. But this suggestion runs counter to our past decisions that common ownership and control does not liberate corporations from the impact of the antitrust laws. E. g. United States v. Yellow Cab Co., 332 U.S. 218. The rule is especially applicable where, as here, respondents hold themselves out as competitors.

It is also claimed that the District Court improperly refused to withdraw from the jury an issue as to respondents' violation of the Clayton Act which had been charged in the complaint but which was not proved. A fair reading of the instructions to the jury, however, reveals that the trial court submitted to them only the cause of action under the Sherman Act. We are convinced from this record that a more formal withdrawal of the Clayton Act issue would have served solely to confuse.

Other contentions of error in the admission of evidence and in the charge to the jury are so devoid of merit that it is unnecessary to discuss them.

The judgment of the Court of Appeals is reversed and that of the District Court is affirmed.

It is so ordered.


Summaries of

Kiefer-Stewart Co. v. Seagram Sons

U.S.
Jan 2, 1951
340 U.S. 211 (1951)

holding distillers' agreement on maximum resale price of liquor sold by distributors per se violation of § 1

Summary of this case from Pennsylvania Dental Ass'n v. Medical Service Ass'n of Pennsylvania

rejecting unclean-hands defense based on plaintiff's involvement in unrelated conduct

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, 340 U.S. 211, 213 (1951), the Court held that an agreement to fix resale prices was per se illegal under § 1 because "such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment."

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 340 U.S. 211 (1951), where plaintiff was said to have participated in an illegal scheme other than the one charged in his complaint, the Court made it clear that a plaintiff's own delinquency under the antitrust laws would not always bar his treble-damage suit.

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In Kiefer-Stewart Co. v. Seagram Sons, 340 U.S. 211, 214, we said, "If petitioner and others were guilty of infractions of the antitrust laws, they could be held responsible in appropriate proceedings brought against them by the Government or by injured private persons.

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 340 U.S. 211, 214, 71 S.Ct. 259, 261, 95 L.Ed. 219 (1951), the Supreme Court rejected the defense offered by defendant that the plaintiff was guilty of separate antitrust offenses not involving defendant.

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In Kiefer-Stewart Co. v. Seagram Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), the Court held that the per se rule applied to agreements fixing maximum as well as minimum prices, stating that "such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment."

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 1951, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219, there was an agreement between sellers to refuse to sell to wholesalers who would not agree to abide by maximum resale prices fixed by the sellers.

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc. (1951) 340 U.S. 211, 215, 71 S.Ct. 259, 95 L.Ed. 219, the Supreme Court held that two separately incorporated subsidiaries within the same corporate family can conspire: "common ownership and control does not liberate [them] from the impact of the antitrust laws... especially... where [the corporations] hold themselves out as competitors."

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), the Court held an agreement among competitors to fix maximum resale prices to be illegal because "such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment."

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 1951, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219, there was an agreement between sellers to refuse to sell to wholesalers who would not agree to abide by maximum resale prices fixed by the sellers.

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In Kiefer, there was no route system necessary, no timely home delivery required, and no natural monopoly involved whether done by the producer or distributor.

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In Kiefer-Stewart Co. v. Seagram Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), an antitrust action brought by liquor wholesalers against suppliers who conspired to force the wholesalers to agree to maximum resale prices, defendants argued that the wholesalers had themselves conspired to set minimum resale prices and thus, by their unclean hands, forfeited their right to recovery from the defendants.

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), the plaintiff, a liquor wholesaler, alleged that the defendants, two liquor distillers, had conspired to fix maximum resale prices and had agreed not to sell liquor to wholesalers who sold liquor for prices above the maximum.

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, Inc., 340 U.S. 211, 215, 71 S.Ct. 259, 261, 95 L.Ed. 219 (1951), the Supreme Court held that "common ownership and control does not liberate corporations from the impact of the antitrust laws.

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In Kiefer-Stewart Co. v. Joseph E. Seagram Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), two related but competing liquor manufacturers were convicted of conspiring to sell only to wholesalers who would abide by a maximum resale price schedule.

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In Kiefer-Stewart, supra, where it was clear that the antitrust violation raised in defense to a suit for damages were completely independent of those upon which suit was brought, the defense was not permitted.

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Case details for

Kiefer-Stewart Co. v. Seagram Sons

Case Details

Full title:KIEFER-STEWART CO. v . JOSEPH E. SEAGRAM SONS, INC. ET AL

Court:U.S.

Date published: Jan 2, 1951

Citations

340 U.S. 211 (1951)
71 S. Ct. 259

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