YANKWICH, District Judge.
Pending before the court are several actions instituted by individuals and corporations against the same defendants, whidh seek equitable relief and treble damages under the federal anti-trust laws and double damages under the California state anti-trust act. In each of these cases, there is one cause of action for treble damages under Section 3 of the Act of the Congress of June 19, 1936,
— commonly referred to as the “Robinson-Patman Act”. The section reads: “It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably 'low prices for the purpose of destroying competition or eliminating a competitor.”
In the enacting statute, the section was in identical form. The enacting clause of Section 1 of the statute read: “That section 2 of the Act entitled ‘An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes’, approved October 15, 1914, as amended (U.S.C., title 15, sec. 13), is amended to read as follows:” Section 3, however, contains no such reference. The title of the entire Act reads: “An Act To amend section 2 of the Act entitled ‘An Act to supplement existing laws against unlawful restraints and monopolies,
and for other purposes’,
approved October 15, 1914, as amended (U.S.C., title 15, sec. 13),
and for other
purposes.”
(Emphasis added.)
The particular count recites that the defendants on or about November 21, 1949, at Los Angeles, California, initiated a drastic reduction in the wholesale prices charged
by
Arden Farms Co., a corporation engaged in producing and marketing dairy products, and its subsidiary corporations in the Los Angeles area and extending throughout the State of California for its and their bulk and package ice cream and kindred products. The wholesale base price of “flavor fresh” ice cream was reduced in the Los Angeles area from $1.44 per gallon to $1.06 per gallon, and the defendants, in concert, sold and sell ice cream and kindred products in the area at prices lower than those exacted by them for these products elsewhere in the United States, and especially in the States of Arizona, Oregon, Washington, Idaho and Montana.
The object of the action taken by the defendants, — it ?s charged, — was to destroy competition and to eliminate the plaintiffs and other competitors in the area. The prices are stated to be “unreasonably low”, and detrimental to the plaintiffs. For, while the defendants can offset and recoup their losses through (a) income derived from the sale of ice cream and other dairy products in other areas of the United States at high prices, and (b) income derived from the sale of fluid milk and other milk products in California and elsewhere, the plaintiffs,
being engaged solely in the production of ice cream,
cannot do so.
Damages are claimed in various amounts, which, in the case in which this opinion is filed, are stated to be $72,934.75. Injunction is sought enjoining the continuance of the price and three fold damages.
The defendants have filed motions to dismiss upon the ground that the particular cause of action does not state a claim.
I. The Relation of the RobinsonPatman Act to Other Legislation.
The question raised by the motions is whether a civil action for violation of Section 13a of Title 15
is an action under the “anti-trust laws” of the United States, as provided for in Section 15, which reads: “Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.”
Section 12 defines the anti-trust laws in this manner: “ ‘Antitrust laws,’ as used in sections 12, 13, 14-21, 22-27 of this title, includes sections 1-27, inclusive, of this title.”
It is the contention of the defendants that the inclusion of section 13a was not warranted by the source from which it was derived, — section 1 of the Clayton Act.
Obviously the original Clayton Act referred to acts then in existence. Enacted in 1914, it aimed to extend to cases arising under it the right of private persons to sue for treble damages which had been conferred in 1890 on persons injured by the monopolistic acts denounced by the Sherman Act
. And so it defined antitrust laws by reference to the Sherman Act, the act then being enacted, and certain tax statutes which had anti-trust features.
The Robinson-Patman Act did not come into existence until 1936. Consequently, when the codifiers consolidated the various anti-trust acts and provisions relating to monopolies and combinations, they reworded the section so as to cover
all
the anti-trust laws then in existence. Impliedly, amendments are included.
Whether an act is amendatory of existing law is determined not by title
alone, or by declarations in the new act that
it purports to amend
existing law. On the contrary, it is determined by an examination and comparison of its provisions with existing law. If its aim is to clarify or correct uncertainties which arose from the enforcement of the existing law, or to reach situations which were not covered by the original statute, the act is amendatory,
even though in its wording
it does not purport to amend the language of the prior act.
Whatever supplements existing legislation, in order to achieve more successfully the societal object sought to be obtained
may be said to amend it.
It is evident that the codifiers so considered the particular change. And the annotators of the Code appended to Section 15
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YANKWICH, District Judge.
Pending before the court are several actions instituted by individuals and corporations against the same defendants, whidh seek equitable relief and treble damages under the federal anti-trust laws and double damages under the California state anti-trust act. In each of these cases, there is one cause of action for treble damages under Section 3 of the Act of the Congress of June 19, 1936,
— commonly referred to as the “Robinson-Patman Act”. The section reads: “It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably 'low prices for the purpose of destroying competition or eliminating a competitor.”
In the enacting statute, the section was in identical form. The enacting clause of Section 1 of the statute read: “That section 2 of the Act entitled ‘An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes’, approved October 15, 1914, as amended (U.S.C., title 15, sec. 13), is amended to read as follows:” Section 3, however, contains no such reference. The title of the entire Act reads: “An Act To amend section 2 of the Act entitled ‘An Act to supplement existing laws against unlawful restraints and monopolies,
and for other purposes’,
approved October 15, 1914, as amended (U.S.C., title 15, sec. 13),
and for other
purposes.”
(Emphasis added.)
The particular count recites that the defendants on or about November 21, 1949, at Los Angeles, California, initiated a drastic reduction in the wholesale prices charged
by
Arden Farms Co., a corporation engaged in producing and marketing dairy products, and its subsidiary corporations in the Los Angeles area and extending throughout the State of California for its and their bulk and package ice cream and kindred products. The wholesale base price of “flavor fresh” ice cream was reduced in the Los Angeles area from $1.44 per gallon to $1.06 per gallon, and the defendants, in concert, sold and sell ice cream and kindred products in the area at prices lower than those exacted by them for these products elsewhere in the United States, and especially in the States of Arizona, Oregon, Washington, Idaho and Montana.
The object of the action taken by the defendants, — it ?s charged, — was to destroy competition and to eliminate the plaintiffs and other competitors in the area. The prices are stated to be “unreasonably low”, and detrimental to the plaintiffs. For, while the defendants can offset and recoup their losses through (a) income derived from the sale of ice cream and other dairy products in other areas of the United States at high prices, and (b) income derived from the sale of fluid milk and other milk products in California and elsewhere, the plaintiffs,
being engaged solely in the production of ice cream,
cannot do so.
Damages are claimed in various amounts, which, in the case in which this opinion is filed, are stated to be $72,934.75. Injunction is sought enjoining the continuance of the price and three fold damages.
The defendants have filed motions to dismiss upon the ground that the particular cause of action does not state a claim.
I. The Relation of the RobinsonPatman Act to Other Legislation.
The question raised by the motions is whether a civil action for violation of Section 13a of Title 15
is an action under the “anti-trust laws” of the United States, as provided for in Section 15, which reads: “Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.”
Section 12 defines the anti-trust laws in this manner: “ ‘Antitrust laws,’ as used in sections 12, 13, 14-21, 22-27 of this title, includes sections 1-27, inclusive, of this title.”
It is the contention of the defendants that the inclusion of section 13a was not warranted by the source from which it was derived, — section 1 of the Clayton Act.
Obviously the original Clayton Act referred to acts then in existence. Enacted in 1914, it aimed to extend to cases arising under it the right of private persons to sue for treble damages which had been conferred in 1890 on persons injured by the monopolistic acts denounced by the Sherman Act
. And so it defined antitrust laws by reference to the Sherman Act, the act then being enacted, and certain tax statutes which had anti-trust features.
The Robinson-Patman Act did not come into existence until 1936. Consequently, when the codifiers consolidated the various anti-trust acts and provisions relating to monopolies and combinations, they reworded the section so as to cover
all
the anti-trust laws then in existence. Impliedly, amendments are included.
Whether an act is amendatory of existing law is determined not by title
alone, or by declarations in the new act that
it purports to amend
existing law. On the contrary, it is determined by an examination and comparison of its provisions with existing law. If its aim is to clarify or correct uncertainties which arose from the enforcement of the existing law, or to reach situations which were not covered by the original statute, the act is amendatory,
even though in its wording
it does not purport to amend the language of the prior act.
Whatever supplements existing legislation, in order to achieve more successfully the societal object sought to be obtained
may be said to amend it.
It is evident that the codifiers so considered the particular change. And the annotators of the Code appended to Section 15 of Title 15 the following note: “This section applies to the provisions of this chapter generally and supersedes two former similar sections enacted by act July 2, 1890, c. 647, § 7, 26 Stat. 210 and act Aug. 27,1894, c. 349, § 77, 28 Stat. 570, each of which were restricted in operation to the particular act cited.” In this they gave effect to the congressional policy which,
so far as the Clayton Act is concerned,
was expressed very recently by the Supreme Court in these words: “Congress’ concern * * * was to provide broader and more effective relief, both substantively and procedurally,
for persons injured by violations of its antitrust policy”.
The legislative history of the RobinsonPatman Act is revealing although not entirely conclusive, on the point under discussion. The House Report stressed the penal feature of Section IS.
So did the statement of one of the conferees in submitting the Conference Report to the House.
At the same time, the proceedings in the Senate, when the Bill was accepted in its final form, indicate that the understanding was that Section 13a
— Section 3 of the Bill — in addition to creating a new criminal remedy, gave a civil remedy of treble damages also.
A study of the three main statutes dealing with “monopolies and combinations”, — the Sherman, Clayton and Robinson-Patman Acts — shows that they are closely interrelated. Starting with the Sherman Act
, which merely condemned certain practices and their results, the Clayton Act
condemned the same practices in their inception.
Then came the Robinson-Patman Act, which brought under interdiction discriminatory practices, including discrimination through rebates, discounts and the like, denounced in Section 3 of the Act. They all aim to “suppress combinations to restrain competition and attempts to monopolize by individuals and corporations”
and maintain the freedom of commerce between the States.
The goal is to protect “the interstate market”. The Court of Appeals for the
Eighth Circuit has stated the object of such protection: “The competitive freedom of such a market, in both buying and selling, is one of the principal things which the Sherman Act was intended to protect. Where that freedom is interfered with, by a contract, combination, or conspiracy, that from a public viewpoint harmfully restrains competition, or by an attempt, combination or conspiracy to monopolize, that has a direct wrongful purpose or other probable prejudicial consequences to the public interest, the force of the Sherman Act may be called into operation against it, on the basis of the public wrong in- ' volved, through the public or private remedies which the Sherman and Clayton Acts provide.”
In the attainment of this object, the private action for three-fold recovery of damages, while ancillary to the broad social object of the statute
, is an integral part of the legislative scheme “intended in the most comprehensive way to provide against combinations or conspiracies in restraint of trade or commerce, the monopolization of trade or commerce, or attempts to monopolize the same. * * * In other words, founded upon broad conceptions of public policy, the prohibitions of the statute were enacted to prevent not the mere injury to an individual which would arise from the doing of the prohibited acts, but the harm to the general public which would be occasioned by the evils which it was contemplated would be prevented, and hence not only the prohibitions of the statute, but the remedies which it provided were coextensive with such conceptions.”
In itself, this provision helps attain the object of the statute by supplying, as one writer has put it, “an ancillary force of private investigators to supplement the Department of Justice in law enforcement.”
And, because the private remedy for treble damages is co-existent with the governmental remedies, the Supreme Court has given it a broad scope by permitting first municipalities
, and then States
, to institute such action as “persons” under the anti-trust acts.
II. Civil Action Lies for Violation of Section 3 of the Robinson-Patman Act.
In view of the continuity of the policy evidenced by the history of antitrust legislation to use the triple damage
action as an adjunct of governmental enforcement, we should not,
absent a specifically expressed contrary legislative intent,
hold that the suits under Section 15 of Title 15 cannot he instituted for violation of Section 3 of the Robinson-Pat-man Act. It is, doubtless, true that the codifiers “were not empowered by Congress to amend existing law, and doubtless .had no thought of doing so.”
The Act of authorization declared that “nothing in this Act shall be construed as repealing or amending any such law, or as enacting as new law any matter contained in the Code.”
And “as to that the command of Congress is too clear to be misread.”
Nonetheless, unless we give to the word “amendment” a narrow meaning, which would exclude from the act every section which does not
in so many words say that it is amendatory of the Clayton Act, it is
sufficiently clear from the historical analysis which precedes that the RobinsonPatman Act, in its entirety, was amendatory of existing laws and that the codifiers, in replacing the enumeration of anti-trust laws in the Clayton Act by the more general provision now found in the Code
,
which includes Sections 1-27 of Title 15,
had a sound understanding of the relation of the Robinson-Patman Act to preceding legislation and considered
all its provisions,
including Section 3,
as amendatory of the preceding Act.
The Court of Appeals for the Fourth Circuit has so stated:
“The Robinson-Patman Act of Tune 19, 1936, 49 Stat. 1526, was an amendment of the Clayton Anti-Trust Adt of Ocotber 15, 1914, 38 Stat. 730’’.
(Emphasis added.)
Decisions from other Courts of Appeals which have had occasion to consider the various provisions of the Robinson-Pat-man Act and their relation to the prior legislation are in accord.
And several District Courts have held that the right to triple damages applies to violations of Section 3 of the Robinson-Patman Act.
Judge Miller has expressed the interrelation between the various anti-trust statutes in this manner: “Those opinions discuss the history of anti-trust legislation ;
they show that certain loopholes in the Sherman Anti-Trust Law were corrected by passage of the Clayton Act in 1914; and that certain difficulties which were found to still exist after the passage of that act were attempted to be remedied by the passage of the Robinson-Patman Act in 1936.
The scope of such legislation has accordingly been greatly enlarged over the period of years. It would be contrary to this evident purpose of Congress to take at the present time a narrow technical restricted view of the language used.”
(Emphasis added.) As to the all-inclusiveness of the civil remedy, he writes: “If the act complained of is illegal the plaintiff is entitled to the civil remedy given by Section 4 of the Clayton Act, Title 15 U.S.C.A. § 15.”
Judge Daw
kins in Atlanta Brick Co. v. O’Neal
,
referring specifically to Section 3 of the Robinson-Patman Act,
'says: “It does not provide in express terms that persons injured by things forbidden shall have a cause of action but by declaring them unlawful, the person so injured, I think, is entitled to invoke its provisions, if he can allege and prove injury proximately caused by such violations.”
As specific is the language used by Judge Ford of the District of Massachusetts:
“However, Sec. 13a also makes it unlawful ‘to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.’ Plaintiff claims that the price of $1.75 at which defendant sold to the state was unreasonably low, for the purpose of eliminating plaintiff as a competitor. The complaint sets forth sufficient facts to show that plaintiff and defendant were competitors, since they were rivals for the business of selling lacquer to the State of New Hampshire. It describes the basic facts of an alleged course of conduct by defendant which might on further proof justify a finding that defendant acted for the purpose of eliminating plaintiff as a competitor. Nor can I hold, in the absence of further evidence, that the iprice of $1.75 was not unreasonably low. Consequently, I hold that on this point, the complaint properly alleges a violation of Sec. 13a”.
Full recognition is thus given to the right to bring a civil action under Section 13a of Title 15 for practices which it declares illegal. Incidentally, in the case just referred to, the practices which formed the basis of the suit consisted of
underpricing
of the type for which recovery is sought in the cause of action under discussion here.
In sum, a comprehensive consideration of the history of the anti-trust monopoly legislation of the United States shows a consistent attempt to achieve maintenance of competition in our economy through the use of the power of the Congress to regulate commerce between the States. In the effort to attain this result, the Sherman, Clayton and Robinson-Patman Acts are successive steps. Following the initial act, — the Sherman Act, — -the succeeding Acts were attempts, in the light of experience gained, to condemn practices which the preceding Act had not succeeded in reaching. The Clayton Act supplemented the Sherman Act (as its very title implied), and was directed “against competitive practices which did not assure fair play and therefore encouraged restraints of trade.”
The Robinson-Patman Act represented “a further development of this emphasis upon business ethics as the essence of the monopoly problem”.
The aim was the same and the various Acts but different steps in the direction of its attainment, — when experience showed the inadequacy of the original Act.
These considerations and the specific rulings of the Courts which have dealt with the problem are compelling reasons for holding that a right of action exists under Section 15 of Title 15 U.S.C.A., for violation of Section 13a as one of the “anti-trust laws” referred to in Section 12. The motion to dismiss will be denied.