United States v. W. T. Grant Co.

345 U.S. 629, 73 S. Ct. 894, 97 L. Ed. 2d 1303, 97 L. Ed. 1303, 1953 U.S. LEXIS 2597, 1953 Trade Cas. (CCH) 67,493
CourtSupreme Court of the United States
DecidedMay 25, 1953
Docket532
StatusPublished
Cited by2,494 cases

This text of 345 U.S. 629 (United States v. W. T. Grant Co.) 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
United States v. W. T. Grant Co., 345 U.S. 629, 73 S. Ct. 894, 97 L. Ed. 2d 1303, 97 L. Ed. 1303, 1953 U.S. LEXIS 2597, 1953 Trade Cas. (CCH) 67,493 (1953).

Opinions

Mr. Justice Clark delivered

the opinion of the Court.

For the first time since the enactment of the Clayton Act in 1914 the Court is called upon to consider § 8’s prohibitions against interlocking corporate directorates.1 The Government appeals from judgments dismissing civil actions brought against Hancock and three pairs of corporations which he served as a director, W. T. Grant Co. and S. H. Kress & Co., Sears Roebuck & Co. and Bond Stores, Inc., and Kroger Co. and Jewel Tea Co., Inc. Alleging that the size and competitive relationship of each set of companies brought the interlocks within the reach of § 8, the complaints asked the court to order the particular interlocks terminated and to enjoin future violations of § 8 by the individual and corporate defendants. Soon after the complaints were filed, Hancock resigned from the boards of Kress, Kroger and Bond. Disclosing the resignations by affidavit, all of the defendants then moved to dismiss the actions as moot. Treated as motions for summary judgment,2 they were granted by the District Judge. He concluded that there is not “the [631]*631slightest threat that the defendants will attempt any future activity in violation of Section 8 [if they have violated it already] . . . .” 112 F. Supp. 336, 338. The Government brought this direct appeal under § 2 of the Expediting Act, 32 Stat. 823, as amended, 62 Stat. 989, 15 U. S. C. (Supp. V) § 29, contending that the cases were not rendered moot by Hancock’s resignations and that it was an abuse of discretion for the trial court to refuse any injunctive relief.

Appellees suggest, without arguing the point in extenso, that the judgment should be affirmed because § 11 of the Clayton Act vests exclusive § 8 enforcement powers in the Federal Trade Commission.3 Section 11 does authorize the Commission to enforce § 8. But any inference that administrative jurisdiction was intended to be exclusive falls before the plain words of § 15: “The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this [632]*632Act . . . 38 Stat. 736, 15 U. S. C. § 25. And the cases have spoken of Congress’ design to provide a scheme of dual enforcement for the Clayton Act. United States Alkali Export Assn. v. United States, 325 U. S. 196, 208 (1945); Standard Oil Co. v. United States, 337 U. S. 293, 310, note 13 (1949). Appellees’ failure to press the point denotes its merits. The District Court properly entertained the suits.

Both sides agree to the abstract proposition that voluntary cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and determine the case, i. e., does not make the case moot. United States v. Trans-Missouri Freight Assn., 166 U. S. 290 (1897); Walling v. Helmerich & Payne, Inc., 323 U. S. 37 (1944); Hecht Co. v. Bowles, 321 U. S. 321 (1944). A controversy may remain to be settled in such circumstances, United States v. Aluminum Co. of America, 148 F. 2d 416, 448 (1945), e. g., a dispute over the legality of the challenged practices. Walling v. Helmerich & Payne, Inc., supra; Carpenters Union v. Labor Board, 341 U. S. 707, 715 (1951). The defendant is free to return to his old ways.4 This, together with a public interest in having the legality of the practices settled, militates against a mootness conclusion. United States v. Trans-Missouri Freight Assn., supra, at 309, 310. For to say that the case has become moot means that the defendant is entitled to a dismissal as a matter of right, Labor Board v. General Motors Corp., 179 F. 2d 221 (1950). The courts have rightly refused to grant defendants such a powerful weapon against public law enforcement.5

[633]*633The case may nevertheless be moot if the defendant can demonstrate that “there is no reasonable expectation that the wrong will be repeated.” 6 The burden is a heavy oné. Here the defendants told the court that the interlocks no longer existed and disclaimed any intention to revive them. Such a profession does not suffice to make a case moot although it is one of the factors to be considered in determining the appropriateness of granting an injunction against the now-discontinued acts.

Along with its power to hear the case, the court’s power to grant injunctive relief survives discontinuance of the illegal conduct. Hecht Co. v. Bowles, supra; Goshen Mfg. Co. v. Myers Mfg. Co., 242 U. S. 202 (1916). The purpose of an injunction is to prevent future violations, Swift & Co. v. United States, 276 U. S. 311, 326 (1928), and, of course, it can be utilized even without a showing of past wrongs. But the moving party must satisfy the court that relief is needed. The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive. The chancellor’s decision is based on all the circumstances; his discretion is necessarily broad and a strong showing of abuse must be made to reverse it. To be considered are the bona fides of the expressed intent to comply, the effectiveness of the discontinuance and, in some cases, the character of the past violations.

The facts relied on by the Government to show an abuse of discretion in this case are these: Hancock’s three interlocking directorates viewed as three distinct violations, his failure to terminate them until after suit was [634]*634filed despite five years of administrative attempts to persuade him of their illegality, his express refusal to concede that the interlocks in question were illegal under the statute and his failure to promise not to commit similar violations in the future.

Were we sitting as a trial court, this showing might be persuasive. But the Government must demonstrate that there was no reasonable basis for the District Judge’s decision.7 In this we think it fails. An individual proclivity to violate the statute need not be inferred from the fact that three violations were charged, particularly since it is only recently that the Government has attempted systematic enforcement of § 8.8 The District Court was not dealing with a defendant who follows one adjudicated violation with others.

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Bluebook (online)
345 U.S. 629, 73 S. Ct. 894, 97 L. Ed. 2d 1303, 97 L. Ed. 1303, 1953 U.S. LEXIS 2597, 1953 Trade Cas. (CCH) 67,493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-w-t-grant-co-scotus-1953.