The case was an appeal from a decree of a district court of three judges enjoining the enforcement, against the appellee, of a marketing program adopted pursuant to the California Agricultural Prorate Act.
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The Supreme Court held there was a general principle that actions taken by state governments were exempt from the Sherman Act. It held, first, A suit in a federal court to enjoin enforcement of a state agricultural proration program, in which the validity of the program is challenged as in conflict with federal antitrust laws, is a suit "arising under" a "law regulating commerce" and is maintainable without regard to the amount in controversy.[1]
A majority of the Court took the view that suit to enjoin enforcement of a marketing plan adopted under the California Agricultural Prorate Act is within the equity jurisdiction of the district court, since the complaint alleges and the evidence shows threatened irreparable injury to the complainant's business and threatened prosecutions by reason of his having marketed his crop under the protection of the district court's injunction.[2]
A prorate marketing program under the California Agricultural Prorate Act, adopted by the State for regulating the handling, disposition, and prices of raisins produced in California, a large part of which go into interstate and foreign commerce, held not within the intended scope of, and not a violation of, the Sherman Act. P. 350.
A program pursuant to the California Agricultural Prorate Act for marketing the 1940 raisin crop, adopted with the collaboration of officials of the U.S. Department of Agriculture and aided by loans from the Commodity Credit Corporation recommended by the Secretary of Agriculture, held not in conflict with the federal Agricultural Marketing Agreement Act of 1937, where the Secretary had not proposed or promulgated any order under that Act applicable to the marketing of raisins. Pp.352, 358.
The marketing program for the 1940 raisin crop, adopted pursuant to the California Agricultural Prorate Act, the declared purpose of which is to "conserve the agricultural wealth of the State" and to "prevent economic waste in the marketing of agricultural products" of the State, and which operates to eliminate competition among producers in respect of the terms of sale (including the price) of the crop and to impose restrictions on the sale and distribution to buyers who subsequently sell and ship in interstate commerce, held a regulation of state industry of local concern which, in the circumstances detailed in the opinion, is not prohibited by the commerce clause in the absence of Congressional legislation prohibiting or regulating transactions affected by the state program. Pp.359, 368.
The Court noted that the Sherman Act "makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state." The Act is applicable to "persons," including corporations (§7), and it authorizes suits under it by persons and corporations (§15). A state may maintain a suit for damages under it, Georgia v. Evans, 316 U. S. 159, but the United States may not, United States v. Cooper Corp., 312 U. S. 600 -- "conclusions derived not from the literal meaning of the words "person" and "corporation," but from the purpose, the subject matter, the context and the legislative history of the statute."
The Court added that "there is no suggestion of a purpose to restrain state action in the Act's legislative history." The sponsor of the bill which was ultimately enacted as the Sherman Act declared that it prevented only "business combinations."[3] Thus, the conclusion that its purpose was to suppress combinations to restrain competition and attempts to monopolize by individuals and corporations "abundantly appears from its legislative history."[4]
The restrictions which the state program imposes upon the intrastate sale of a commodity by its producer to a processor who contemplates doing, and in fact does, work upon the commodity before packing it and shipping it in interstate commerce, do not violate the Commerce Clause. P. 359.
When Congress has not exerted its power under the Commerce Clause, and state regulation of matters of local concern is so related to interstate commerce that it also operates as a regulation of that commerce, the reconciliation of such power of Congress with that reserved to the State is to be attained by the accommodation of the competing demands of the state and national interests involved. P. 362.
State regulations affecting interstate commerce are to be sustained, not because they are "indirect" rather than "direct," not because they affect rather than command the operations of interstate commerce, but because, upon a consideration of all the relevant facts and circumstances, the matter appears an appropriate one for local regulations, for which there may be wide scope without materially obstructing the free flow of commerce. P. 362.
Examination of the evidence in this case and of available data of the raisin industry in California, of which the Court may take judicial notice, leaves no doubt that the evils attending the production and marketing of raisins in that State present a problem local in character and urgently demanding state action for the economic protection of those engaged in one of its important industries. P. 363.
Where the Secretary of Agriculture, who could have adopted a marketing program for raisins under the federal Agricultural Marketing Agreement Act, has instead, as that Act authorizes, cooperated in promoting the state marketing program, the court cannot say that the effect of the state program on interstate commerce is one which the Commerce Clause forbids. And particularly should state regulation of local matters be sustained where its effect on commerce is one which it has been the policy of Congress, by its legislation, to encourage. P. 368.
The Sherman Antitrust Act of 1890 is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author.
The Clayton Antitrust Act of 1914, is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices that were harmful to consumers. The Clayton Act specified particular prohibited conduct, the three-level enforcement scheme, the exemptions, and the remedial measures.
In the United States, antitrust law is a collection of federal and state government laws that regulate the conduct and organization of business corporations and are generally intended to promote competition and prevent monopolies. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization.
United States v. E. C. Knight Co., 156 U.S. 1 (1895), also known as the "Sugar Trust Case," was a United States Supreme Court antitrust case that severely limited the federal government's power to pursue antitrust actions under the Sherman Antitrust Act. In Chief Justice Melville Fuller's majority opinion, the Court held that Congress could not regulate manufacturing, thus giving state governments the sole power to take legal action against manufacturing monopolies. The case has never been overruled, but in Swift & Co. v. United States and subsequent cases the Court has held that Congress can regulate manufacturing when it affects interstate commerce.
The Commerce Clause describes an enumerated power listed in the United States Constitution. The clause states that the United States Congress shall have power "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to discuss each of these three areas of commerce as a separate power granted to Congress. It is common to see the individual components of the Commerce Clause referred to under specific terms: the Foreign Commerce Clause, the Interstate Commerce Clause, and the Indian Commerce Clause.
Wickard v. Filburn, 317 U.S. 111 (1942), is a United States Supreme Court decision that dramatically increased the regulatory power of the federal government. It remains as one of the most important and far-reaching cases concerning the New Deal, and it set a precedent for an expansive reading of the U.S. Constitution's Commerce Clause for decades to come. The goal of the legal challenge was to end the entire federal crop support program by declaring it unconstitutional.
Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911), was a case in which the Supreme Court of the United States found Standard Oil Co. of New Jersey guilty of monopolizing the petroleum industry through a series of abusive and anticompetitive actions. The Court's remedy was to divide Standard Oil into several geographically separate and eventually competing firms.
Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963), was a 1963 decision of the United States Supreme Court in which the Court declined to invalidate a California law that imposed minimum fat content standards on avocados sold in the state, including those imported from other states. The law prohibited the sale of avocados that did not contain at least 8% oil by weight. Florida, a major avocado producer, employed, for wholesale marketing purposes, a federal standard unrelated to oil content. Most Florida avocados that were marketable at home failed to meet the California standard, because they were a different variety from those sold in California, with a lower fat content. Accordingly, Florida avocado growers brought this suit, arguing (unsuccessfully) that the California law (1) was preempted by federal law, (2) violated equal protection, and (3) unduly burdened and interfered with their right to engage in interstate commerce. The case is widely used in law school casebooks on constitutional law and federal jurisdiction as illustrative of preemption issues.
Addyston Pipe and Steel Co. v. United States, 175 U.S. 211 (1899), was a United States Supreme Court case in which the Court held that for a restraint of trade to be lawful, it must be ancillary to the main purpose of a lawful contract. A naked restraint on trade is unlawful; it is not a defense that the restraint is reasonable.
The McCarran–Ferguson Act, 15 U.S.C. §§ 1011-1015, is a United States federal law that exempts the business of insurance from most federal regulation, including federal antitrust laws to a limited extent. The McCarran–Ferguson Act was passed by the 79th Congress in 1945 after the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the Commerce Clause in the U.S. Constitution and that the federal antitrust laws applied to the insurance industry.
In re Debs, 158 U.S. 564 (1895), was a US labor law case of the United States Supreme Court decision handed down concerning Eugene V. Debs and labor unions.
The Packers and Stockyards Act of 1921 was enacted following the release in 1919 of the Report of the Federal Trade Commission on the meatpacking industry.
Toolson v. New York Yankees, 346 U.S. 356 (1953), is a United States Supreme Court case in which the Court upheld, 7–2, the antitrust exemption first granted to Major League Baseball (MLB) three decades earlier in Federal Baseball Club v. National League. It was also the first challenge to the reserve clause which prevented free agency, and one of the first cases heard and decided by the Warren Court.
Chicago Board of Trade v. United States, 246 U.S. 231 (1918), was a case in which the Supreme Court of the United States applied the "rule of reason" to the internal trading rules of a commodity market. Section 1 of the Sherman Act flatly states: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." However, in evaluating the U.S. government's allegations that the Chicago Board of Trade's rules on grain prices violated the Act, the Supreme Court rejected a strict interpretation of its language: "The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition."
United States v. South-Eastern Underwriters Association, 322 U.S. 533 (1944), is a United States Supreme Court case in which the Court held that the Sherman Act, the federal antitrust statute, applied to insurance. To reach this decision, the Court held that insurance could be regulated by the United States Congress under the Commerce Clause, overturning Paul v. Virginia. Congress responded by enacting the McCarran-Ferguson Act of 1945 which limited antitrust laws' applicability to the business and assured state authority would continue over insurance.
Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), was a U.S. Supreme Court decision. It stated that lawyers engage in "trade or commerce" and hence ended the legal profession's exemption from antitrust laws.
California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97 (1980), was a United States Supreme Court case in which the Court created a two-part test for the application of the state action immunity doctrine that it had previously developed in Parker v. Brown.
Pfizer Inc. v. Government of India, 434 U.S. 308 (1978), decision of the Supreme Court of the United States in which the Court held that foreign states are entitled to sue for treble damages in U.S. courts, and should be recognized as "persons" under the Clayton Act.
Lorain Journal Co. v. United States, 342 U.S. 143 (1951), is a decision of the United States Supreme Court often cited as an example of a monopolization violation being based on unilateral denial of access to an essential facility, although it in fact involved concerted action. When the Lorain Journal's monopoly over advertising in the Lorain, Ohio area was threatened by the establishment of a competing radio station, the Journal's publisher refused to accept advertising from those who advertised over the radio station and required them to advertise only in the Journal. The purpose of the publisher was to eliminate the competition of the radio station. The Supreme Court held that the publisher had attempted to monopolize trade and commerce, in violation of § 2 of the Sherman Antitrust Act, and was properly enjoined from continuing the conduct.
United States v. United States Gypsum Co. was a patent–antitrust case in which the United States Supreme Court decided, first, in 1948, that a patent licensing program that fixed prices of many licensees and regimented an entire industry violated the antitrust laws, and then, decided in 1950, after a remand, that appropriate relief in such cases did not extend so far as to permit licensees enjoying a compulsory, reasonable–royalty license to challenge the validity of the licensed patents. The Court also ruled, in obiter dicta, that the United States had standing to challenge the validity of patents when a patentee relied on the patents to justify its fixing prices. It held in this case, however, that the defendants violated the antitrust laws irrespective of whether the patents were valid, which made the validity issue irrelevant.
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