Swift & Co. v. United States

Last updated

Swift & Co. v. United States
Seal of the United States Supreme Court.svg
Argued January 6,9, 1905
Decided January 30, 1905
Full case name Swift & Co. v. United States
Citations196 U.S. 375 ( more )
25 S. Ct. 276; 49 L. Ed. 518; 1905 U.S. LEXIS 908
Holding
The Commerce Clause allows the federal government to regulate monopolies if it has a direct effect on commerce.
Court membership
Chief Justice
Melville Fuller
Associate Justices
John M. Harlan  · David J. Brewer
Henry B. Brown  · Edward D. White
Rufus W. Peckham  · Joseph McKenna
Oliver W. Holmes Jr.  · William R. Day
Case opinion
MajorityHolmes, joined by unanimous
Laws applied
Commerce Clause

Swift & Co. v. United States, 196 U.S. 375 (1905), was a case in which the United States Supreme Court ruled that the Commerce Clause allowed the federal government to regulate monopolies if it has a direct effect on commerce. It marked the success of the Presidency of Theodore Roosevelt in destroying the "Beef Trust". This case established a "stream of commerce" (or "current of commerce") argument that allows Congress to regulate things that fall into either category. In particular it allowed Congress to regulate the Chicago slaughterhouse industry. Even though the slaughterhouse supposedly dealt with only intrastate matters, the butchering of meat was merely a "station" along the way between cow and meat. Thus, as it was part of the greater meat industry that was between the several states, Congress can regulate it. The Court's decision halted price fixing by Swift & Company and its allies. [1]

Contents

Details

The case originated in 1902 when President Theodore Roosevelt directed his Attorney General Philander Knox to bring a lawsuit against the "Beef Trust" on antitrust grounds using the Sherman Antitrust Act of 1890. The evidence at trial demonstrated that the "Big Six" leading meatpackers were engaged in a conspiracy to fix prices and divide the market for livestock and meat in their quest for higher prices and higher profits. They blacklisted competitors who failed to go along, used false bids, and accepted rebates from the railroads. The six companies involved were Swift, Armour, Morris, Cudahy, Wilson and Schwartzchild. Together, they did $700 million a year in business and controlled half of the national market, and up to 75% in New York City.

When they were hit with federal injunctions in 1902, the Big Six agreed to merge into one National Packing Company in 1903 to continue to control the trade internally. The case was heard by the Supreme Court in 1905, shortly after it struck down a similar consolidation and the Northern Securities case of 1904. Speaking for the court, Oliver Wendell Holmes Jr. broadened the meaning of "interstate" commerce by including actions that were part of the chain where the chain was clearly interstate in character. In this case, the chain ran from farm to retail store and crossed many state lines.

The federal government's victory in the case encouraged it to pursue other antitrust actions. Public opinion, outraged by Upton Sinclair's novel The Jungle , which depicted horribly unsanitary conditions in Chicago's meatpacking plants, supported the decision. Congress followed by passing in 1906 both the Pure Food and Drug Act and the Meat Inspection Act. [2] [3]

See also

Related Research Articles

<span class="mw-page-title-main">Sherman Antitrust Act</span> 1890 U.S. anti-monopoly law

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.

<span class="mw-page-title-main">Federal Meat Inspection Act</span> 1906 U.S. law regulating the meat industry

The Federal Meat Inspection Act of 1906 (FMIA) is an American law that makes it illegal to adulterate or misbrand meat and meat products being sold as food, and ensures that meat and meat products are slaughtered and processed under strictly regulated sanitary conditions. These requirements also apply to imported meat products, which must be inspected under equivalent foreign standards. United States Department of Agriculture (USDA) inspection of poultry was added by the Poultry Products Inspection Act of 1957 (PPIA). The Food, Drug, and Cosmetic Act authorizes the Food and Drug Administration (FDA) to provide inspection services for all livestock and poultry species not listed in the FMIA or PPIA, including venison and buffalo. The Agricultural Marketing Act authorizes the USDA to offer voluntary, fee-for-service inspection services for these same species.

<span class="mw-page-title-main">United States antitrust law</span> American legal system intended to promote competition among businesses

In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. The three main U.S. antitrust 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 the US Congress could not regulate manufacturing and thus gave 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.

A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935), was a decision by the Supreme Court of the United States that invalidated regulations of the poultry industry according to the nondelegation doctrine and as an invalid use of Congress' power under the Commerce Clause. This was a unanimous decision that rendered parts of the National Industrial Recovery Act of 1933 (NIRA), a main component of President Franklin D. Roosevelt's New Deal, unconstitutional. The case from which the ruling stemmed was nicknamed the "Sick Chicken Case".

The Commerce Clause describes an enumerated power listed in the United States Constitution. The clause states that the United States Congress shall have power "to 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.

<span class="mw-page-title-main">Meat-packing industry</span> Industrial production of food and by-products from animals

The meat-packing industry handles the slaughtering, processing, packaging, and distribution of meat from animals such as cattle, pigs, sheep and other livestock. Poultry is generally not included. This greater part of the entire meat industry is primarily focused on producing meat for human consumption, but it also yields a variety of by-products including hides, dried blood, protein meals such as meat & bone meal, and, through the process of rendering, fats.

United States v. Trans-Missouri Freight Association, 166 U.S. 290 (1897), was a United States Supreme Court case holding that the Sherman Act applied to the railroad industry, even though the U.S. Congress had enacted a comprehensive regime of regulations for that industry.

Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1910), 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.

<span class="mw-page-title-main">Interstate Commerce Act of 1887</span> United States federal law

The Interstate Commerce Act of 1887 is a United States federal law that was designed to regulate the railroad industry, particularly its monopolistic practices. The Act required that railroad rates be "reasonable and just," but did not empower the government to fix specific rates. It also required that railroads publicize shipping rates and prohibited short haul or long haul fare discrimination, a form of price discrimination against smaller markets, particularly farmers in Western or Southern Territory compared to the Official Eastern states. The Act created a federal regulatory agency, the Interstate Commerce Commission (ICC), which it charged with monitoring railroads to ensure that they complied with the new regulations.

<span class="mw-page-title-main">JBS USA</span> American meat processor

JBS USA Holdings, Inc. is a meat processing company and a wholly owned subsidiary of the Brazilian multinational JBS S.A. The subsidiary was created when JBS entered the U.S. market in 2007 with its purchase of Swift & Company.

<span class="mw-page-title-main">Presidency of Theodore Roosevelt</span> U.S. presidential administration from 1901 to 1909

The presidency of Theodore Roosevelt started on September 14, 1901, when Theodore Roosevelt became the 26th president of the United States upon the assassination of President William McKinley, and ended on March 4, 1909. Roosevelt had been the vice president for only 194 days when he succeeded to the presidency. A Republican, he ran for and won by a landslide a four-year term in 1904. He was succeeded by his protégé and chosen successor, William Howard Taft.

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 79th Congress passed the McCarran–Ferguson Act 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.

<span class="mw-page-title-main">Packers and Stockyards Act</span> U.S. federal law

The Packers and Stockyards Act of 1921 regulates meatpacking, livestock dealers, market agencies, live poultry dealers, and swine contractors to prohibit unfair or deceptive practices, giving undue preferences, apportioning supply, manipulating prices, or creating a monopoly. It was enacted following the release in 1919 of the Report of the Federal Trade Commission on the meatpacking industry.

National Beef is a beef processor headquartered in Kansas City, Missouri, United States, that produces fresh, chilled and further processed beef and beef by-products for customers worldwide. The company is owned by Brazilian multinational Marfrig. Its main focuses include branded box beef, consumer ready beef, portion control beef and wet blue leather. The company is considered one of the modern "big four" beef packers in the United States.

<span class="mw-page-title-main">History of United States antitrust law</span>

The history of United States antitrust law is generally taken to begin with the Sherman Antitrust Act 1890, although some form of policy to regulate competition in the market economy has existed throughout the common law's history. Although "trust" had a technical legal meaning, the word was commonly used to denote big business, especially a large, growing manufacturing conglomerate of the sort that suddenly emerged in great numbers in the 1880s and 1890s. The Interstate Commerce Act of 1887 began a shift towards federal rather than state regulation of big business. It was followed by the Sherman Antitrust Act of 1890, the Clayton Antitrust Act and the Federal Trade Commission Act of 1914, the Robinson-Patman Act of 1936, and the Celler-Kefauver Act of 1950.

Labor rights in the American meatpacking industry are largely regulated by the National Labor Relations Board (NLRB), which regulates union organization. The Occupational Safety and Health Administration regulates the safety and health conditions applicable to workers in the American meat packing industry. According to scholars of the American meat packing industry, despite federal regulation through OSHA and industry oversight, workers in meat production plants have little agency and inadequate protections. Workers in the industry perform difficult jobs in dangerous conditions, and are at significant risk for physical and psychological harm. In addition to high rates of injury, workers are at risk of losing their jobs when they are injured or for attempting to organize and bargain collectively. Several of studies of the industry have found immigrant workers—"an increasing percentage of the workforce in the industry."

<span class="mw-page-title-main">Fuller Court</span> Period of the US Supreme Court from 1888 to 1910

The Fuller Court refers to the Supreme Court of the United States from 1888 to 1910, when Melville Fuller served as the eighth Chief Justice of the United States. Fuller succeeded Morrison R. Waite as Chief Justice after the latter's death, and Fuller served as Chief Justice until his death, at which point Associate Justice Edward Douglass White was nominated and confirmed as Fuller's replacement.

References

  1. Gordon (1984)
  2. "The Supreme Court upholds Prosecution of the Beef Trust," in Frank N. Magill, ed., Great Events from History II: Business and Commerce Series Volume 1 1897–1923 (1994) pp 107–111
  3. Walker (1906)

Further reading