United States v. Aluminum Company of America

153 F. Supp. 132, 1957 U.S. Dist. LEXIS 3221, 1957 Trade Cas. (CCH) 68,755
CourtDistrict Court, S.D. New York
DecidedJune 28, 1957
StatusPublished
Cited by5 cases

This text of 153 F. Supp. 132 (United States v. Aluminum Company of America) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Aluminum Company of America, 153 F. Supp. 132, 1957 U.S. Dist. LEXIS 3221, 1957 Trade Cas. (CCH) 68,755 (S.D.N.Y. 1957).

Opinion

CASHIN, District Judge.

This is an application by the United States under Section X of the final judgment of July 6, 1950 for an order modifying Section VIII of that final judgment so as to extend the jurisdiction of this Court an additional five years within which period, if conditions so warrant, the United States may petition this Court for further remedial relief.

Section X of the final judgment of July 6, 1950 entered by Judge Knox of this Court, provides:

“Jurisdiction of this cause is retained for the purpose of enabling the plaintiff or Alcoa to apply to the Court at any time for such further orders and directions as may be necessary or appropriate for the construction or complete execution of this judgment, for the modification or termination of any of the provisions thereof, for the enforcement of compliance therewith and for the punishment of any violations thereof”.

Section VIII of the final judgment of July 6, 1950 provides:

“The divestiture of plants and properties of Alcoa, for which the plaintiff has petitioned, is presently denied; however, jurisdiction of this cause is retained for five years from the date of adoption by the Court of a plan, pursuant to paragraph V of this judgment, for the disposal of stock interests, within which period, if conditions so warrant, plaintiff may petition this Court for further and more complete relief.”

Brief History of Case

This anti-trust action has been actively litigated for over twenty years. Numerous ancillary proceedings have been held and determined. Fortunately, the purposes of this opinion will be served by a brief summary of the main course of events in its litigated history.

This case was commenced by the United States against the Aluminum Company of America (hereafter called “Alcoa”) and numerous other defendants, on April 23, 1937. The United States charged Alcoa with numerous violations of Sections 1 and 2 of the Sherman Act, 15 U.S.CA. §§ 1, 2, and after twenty-six months of trial this Court, through Judge Caffey, dismissed the Government’s case on July 23, 1942.

The Government appealed and, in the absence of a qualified quorum of the Supreme Court, the appeal by Special Act of Congress, 58 Stat. 272, Act June 9, 1944, 15 U.S.C.A. § 29, was heard and determined by the United States Circuit *134 Court, of Appeals for the Second Circuit sitting as the court of final appellate jurisdiction. On November 12, 1945 the Circuit Court of Appeals, 148 F.2d 416, through Judge Learned Hand, affirmed in ,part and reversed in part the trial court’s determination.

¡Insofar as is material here, the basis of- the Circuit Court’s reversal was that it: found that Alcoa had unlawfully-monopolized the aluminum ingot (primary aluminum) market in violation of Section 2 of the Sherman Act. The Circuit Court found that Alcoa’s market control in aluminum ingots exceeded 90%. However, the Circuit Court directed that determination of what remedial relief was to be afforded the Government was to be held in abeyance pending the results and effects on competition of the Government’s disposal of the huge aluminum manufacturing facilities constructed by it during World War II.

In 1947 Alcoa applied to this Court for a determination that it no longer had a monopoly and that competitive conditions had been restored in the aluminum industry. In 1948 the Government filed a petition for divestiture and other relief, contending that competitive conditions in the aluminum industry had-not been established. Issue having been so joined Judge Knox of this Court, after extensive hearings and in an exhaustive and learned opinion granted the Government’s application for relief — insofar as is material here — only to the extent of requiring that certain stockholders of Alcoa divest.themselves of either their Alcoa stock or Aluminum Limited stock. The Government’s application for divestiture was denied, as was Alcoa’s petition for a determination 'that it no longer had a monopoly and that competitive conditions had been restored in the aluminum industry.

In denying the Government’s application for divestiture Judge Knox stated (91 F.Supp. 333, 419):

“Nevertheless, the Government, for a period of five years, if conditions so warrant, may petition the Court for further and more complete relief”.

No appeal was taken by either party from Judge Knox’ decision. The Government on this application, made within the five-year period, seeks no further or more complete relief other than an extension of the five-year period to make such an application.

Judge Knox in his opinion made an exhaustive study and comprehensive analysis of the entire aluminum industry as it then existed. He correlated that analysis of the aluminum industry with a most learned exposition of the anti-trust law especially with respect to the function of a court in relief proceedings.

For the purposes of this motion the parties have stipulated and agreed to certain facts and tables substantially within the framework of those factors considered by Judge Knox and which for the most part merely bring up to date those factors considered in 1950. The Tables so stipulated to are included in the Appendix of this opinion. [153 F.Supp. 172] The facts are as follows:

“1.. Korean Conflict.

;• “The Korean conflict, began on June 24, 1950. Truce negotiations started on July 10,1951. An armistice was formally concluded on July 27, 1953. With this exception, the United States has not been involved in war or armed conflict since September 30, 1949.

“2. Government Control of Production, Distribution and Prices of Aluminum since September 30, 1949.

“(a) The Defense Production Act of 1950 was enacted by Congress on September 8, 1950, 50 U.S.C.A.Appendix, § 2061 et seq., and subsequently amended from time to time. Pursuant to general authority in that Act to control production, distribution and prices, the Government first provided a priority system and control of inventories in order to channel aluminum into defense needs, essential civilian purposes, and less essential civilian purposes, in that order. The first of the regulations issued by the *135 National Production Authority providing for these controls became eifective on September 18,1950. Under these regulations, aluminum remaining after allowing for requirements of National Defense was distributed on an historical basis, purchasers being permitted to use stated percentages of average monthly use during the base period of January 1, 1950-June 30, 1950.

“(b) Subsequently, the Controlled Materials Plan supplemented the system of priorities, effective with respect to deliveries in the third calendar quarter of 1951 and subsequent calendar quarters. Under the Controlled Materials Plan, production schedules were promulgated for the producers of aluminum by Government authority, and production and fabrication of forms of aluminum were permitted as to form and amount only in accordance with such schedules, which were issued upon a determination by Government authority of the requirements of consumers for aluminum.

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153 F. Supp. 132, 1957 U.S. Dist. LEXIS 3221, 1957 Trade Cas. (CCH) 68,755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-aluminum-company-of-america-nysd-1957.