Federal Trade Commission v. Pacific States Paper Trade Ass'n

273 U.S. 52, 47 S. Ct. 255, 71 L. Ed. 534, 1927 U.S. LEXIS 967
CourtSupreme Court of the United States
DecidedJanuary 3, 1927
Docket71
StatusPublished
Cited by173 cases

This text of 273 U.S. 52 (Federal Trade Commission v. Pacific States Paper Trade Ass'n) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Trade Commission v. Pacific States Paper Trade Ass'n, 273 U.S. 52, 47 S. Ct. 255, 71 L. Ed. 534, 1927 U.S. LEXIS 967 (1927).

Opinion

*58 Mr. Justice Butler

delivered the opinion of the Court.

The Federal Trade Commission made an order requiring respondents to cease and desist from certain methods of competition in interstate commerce found to be in violation of § 5, of the Federal Trade Commission Act of September 26/1914, c. 311, 38 Stat. 717. 7 Federal Trade Commission Decisions 155. The order contains eight paragraphs designated by letters (a) to (h) inclusive. The respondents brought (b), (c), (e), (g) and (h) under review in the Circuit Court of Appeals-. The first two were set aside, paragraph (e) was modified/ and the last two were allowed to stand. 4 F. (2d) 457. This court granted certiorari (268.U. S. 684) on petition of the commission, which asks reversal of the decree as to paragraphs (b) and (c). No petition has been filed by respondents.

The facts were stipulated; and those here material are: Dealers in paper in each of the five principal' jobbing centers in the States on the Pacific Coast have a local association. These centers are Seattle and Tacoma taken as one, Spokane, Portland, San Francisco and Los Angeles. *59 And there is á general association known as the Pacific States Paper Trade Association whose members are the paper dealers in these centers including most but not all of the members of the local associations, and some who do not belong to a local association. The respondents in this case-are the five local associations, the general association, and their members.

The territory served by the members of each local association, while loosely defined, is that naturally tributary to the center where the members are located. The territory of Seattle and Tacoma is the northwestern part’ of •Washington and Alaska; that of Spokane is eastern Washington, northern Idaho and western Montana; that of Portland is Oregon, southerly Washington and part of southern and western Idaho; that of San Francisco is the north half of California, a small portion of southern Oregon, and part of. Nevada; and that of Los Angeles is the south half of California and part of Nevada and Arizona. A-majority of the dealers in the Pacific Coast States are members of the associations, and- they have 75 per cent, of the business in paper and paper products, exclusive of roll news paper, which for the most part is not handled by them.

Each local association distributes uniform price lists to its members to be observed in its territory within the State. The secretary of each is authorized to investigate complaints- against members to determine whether they sell below the established prices; and three of the associations authorize the imposition of heavy'fines on members for making such sales.

The Spokane Association in its list of prices established for Washington printed “ suggested prices ” for sales to purchasers in Idaho and western Montana, and there was a tacit or implied understanding that the prices suggested would be observed.

And these association lists are habitually carried and used'by the salesmen of members in quoting prices and *60 making sales outside the State. No association, has any requirement that such price lists be observed outside the State; and the quoting of, or the making of sales at, lower or different prices in such territory is not d emed an infraction of rules or trade regulations by reason of which any jobber or wholesaler may complain.

Among the prices fixed by each local association for sales by its members within the State where they are located are prices on what are called mill shipments.” These are sales or orders not requiring immediate delivery and capable of being filled by shipment from the place of manufacture. They include less than carload lots and also carload lots. The former are combined with other paper to make a carload which is shipped to the whole' saler as a single consignment. At destination the delivery is taken by the wholesaler and the portion intended-for the purchaser is turned over to him. The carload shipments are made on directions specifying as the point of destination the place where delivery is to be made from the wholesaler to the purchaser. In some cases the wholesaler, in other cases the purchaser, is named as consignee. When so named the wholesaler either takes delivery- and turns over the shipment to the purchaser or endorsés the bill of lading to the purchaser who then receives the paper directly from the carrier. Where, named as consignee, the purchaser takes delivery. In all cases the wholesaler orders the paper from the mill and pays for it. There is no contractual re;ation between the manufacturer and the purchaser from the wholesaler. These shipments are made from mills within and also from those without the State covered by the agreement fixing prices.

The commission in its findings substantially follows the stipulated facts, and, from them it draws certain inferences or conclusions.- Referring to the prices fixed by the local associations, the commission said the-habitual carrying and use of such price lists by me,mber jobbers m *61 quoting prices and making sales outside the State, have a natural tendency to and do limit and lessen competition therein, and the result of such practice is fixed and uniform prices for such products'within such territories. As to mill shipments, the commission finds the facts in accordance with the stipulation, and concludes that mill shipments from points outside the State to' or for purchasers within the State are in interstate commerce until delivered to the purchaser, and that the inclusion of fixed and uniform prices for such- sales in the price lists of the associations eliminates price competition.

Paragraph' (b) of the commission’s order is to prevent the local associations, their officers and members, separately or in combination, from using,any price list fixed by agreement between wholesalers.in soliciting or selling in interstate commerce, and from making and distributing any such price list intended for'’use in making such sales. Paragraph (c) prohibits making or acting under agreements fixing prices on mill shipments when the paper sold is shipped from outside the State where the wholesaler is located, and the making or distributing of price lists to be used for making such sales!

The Circuit Court of Appeals held that the stipulated •facts do not sustain the commission’s finding that the use of association prices xby members outside the State where they-are located has a tendency to lessen competition and to fix uniform prices in such territories.- The validity of-the inference or conclusion drawn by the commission and of this part of the order depends upon the proper estimation of the facts stipulated. The language specifically relating to such use of the agreed prices if considered alone might possibly be deemed insufficient. But the commission is not confined to so narrow a view of the case. That part of the stipulation properly may be taken with all the admitted facts and. the inferences legitimately to be drawn from them.

*62 The members of the associations dominate the paper trade in question. They are organized to further common . purposes.

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Bluebook (online)
273 U.S. 52, 47 S. Ct. 255, 71 L. Ed. 534, 1927 U.S. LEXIS 967, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-trade-commission-v-pacific-states-paper-trade-assn-scotus-1927.