*2 HAND, MANTON, L. Before SWAN, Judges. Circuit MANTON, Judge. Complaint Federal was issued Commission, charging Trade Clay- provisions of the violating 2(c) of by section ton Act as amended Discrimination Robinson-Patman Price the Act, 13(c). 15 U.S.C.A. Petitioner brokerage Purchasing in the herein described. Some business as others are petitioners are while bought and sold commodities sellers of through the commerce interstate sellers were Company as brokers. The unlawfully paying charged with for the use fees to the interstate buyers of 'the commodities in commerce. appealed provides officers, rep- Company, “its resentatives, agents employees, in con- com- or sale of nection with the in the commerce modities in interstate Columbia, cease do forthwith district accept- (1) Receiving or
and desist from:
commission,
ing any fee or
as
thereof,
allowance in lieu
or as an
commodities,
fee or
commodity.
commission is intended to
about 86
of these
commodities, or
purchaser
of such
transactions
received
back
applied for
the use
commissions no
is to be
more than the amount
Paying or
purchaser;
had
(2)
benefit of
*3
any purchaser
service,
of
market
granting
per
to
commodities
information
but in 14
accept-
any
received or
fee or commission
commissions exceeded that sum
Company,
Purchasing
paid
buyers.
ed
and this
said Biddle
excess was
to
Large
buyers
in lieu there-
or an allowance
numbers
as
of
subscribe to its
of, from
of such commodities.” service.
many
the seller
It has sold for
sellers.
The Biddle
is not controlled
those of
The Commission found that
or
affiliated with either
or sell-
violated
the"
who were sellers
ownership,
ers
stock
is an
Act
2(c) of the Robinson-Patman
section
independent corporation. This method of
by paying brokerage
petitioner
fees to
transacting business, with the remission of
Company,
knowledge of the
with
selling
buyers,
commissions to the
in
to be
the fees were intended
effect, gives
a discount on his
being paid
said Biddle
and were
purchase.
buyers;
to its
by receiving and
violating
were
statute
regulation
competition
of
results
paid by
accepting brokerage fees
the sell- in
competitive
a
etiquette, in standards of
of
ers in connection with
conduct,
plane
business
competi
a
of
through the
by said
commodities
tion. Trusts
were forbidden because
was
Company; and that
the latter
competition
stifled
and tended to create
by accepting such fees
violating
statute
,
monopoly.
prohibitions
of the Sher
buyers.
transmitting
them to
1-7,
man Anti-Trust
15 U.S.C.A. §§
note,
plane
monopolistic
set
of
con
Robinson-Patman
Section
of the
plane
competition.
duct rather
of
provides
shall
Act
“It
be unlawful
regulate monopolistic
Anti-trust
laws
prac
commerce,
any person engaged
repugnant
tices which are
to decent busi
commerce,
course of
or
such
morality,
ness
injurious
which are
to com
accept, anything
grant, or
receive or
'
petitors
consumers,
and to
which are eco
commission, brokerage,
or
value
nomically wasteful but
jeop
which do not
compensation,
any
or
or
other
allowance
appreciable
ardize
degree
to an
very
thereof, except
in lieu
for serv-
discount
competition.
existence
types
Both
ices rendered in
the sale
connection with
practice must be
legal plane
included in the
wares,
purchase:
goods,
or
or
dise,
merchan-
competition;
types
both are
regula
party
either
the other
to such
other;
tion which enforce each
both are
agent, representative,
an
transaction
objective
animated
a common
notwith
intermediary
or other
therein where such
standing the differences of
their
inter
intermediary
acting
in fact for or in
Monopolistic
mediate ends.
purpose
behalf,
or is
to the direct or in-
(Swift
States,
intent
& Co. v. United
control,
any party
to such trans-
person by
action other
than the
49 L.Ed. 518)
whom
compensation
granted
paid.”
is so
illustrated
decisions
inas
Oil
Standard
Case,
Standard Oil Co. v. United
Company’s
method
business
was
States,
to obtain subscribers
its
combined mar-
L.R.A.,N.S., 834, Ann.Cas.1912D,
ket
purchasing
information and
service
where the Oil
engaged
was
charging
therefor
$25
$50
price cutting
in local
espionage,
estab
provides
month.
It
information
bogus independents,
granted
lished
purchasing
re
service for
wholesalers
preferred
bates to
jobbers throughout
country.
customers and
It also
exacted
engaged
selling
products
preferences
rebates and
railroads,
of nu-
all
manufacturers, canners,
merous
pack-
purpose
of suppressing
competi
ers to the
supplies
concerns
whom
tion. And the American Tobacco Com
market
information
pany
serv-
v. United
see ice. Biddle
has
written con-
employed
fight
tracts with the
ing
With
sellers
purpose.
brands for the same
oral
dispose
contracts to
products
United States v. International Harvester
were made under
D.C.,
which the
Company,
commissions
appeal
F.
dis
were
to Biddle which in turn
missed 248 U.S.
Id.,
them over to the buyer
particular
2(a),
The amendment
of trade
section
the channel
closed
purpose
up
13(a),
main U.S.C.A.
all the
has
tying
competitors
making
dealing
prices
discrimination in
unlawful
exclusive
retail outlets with
most “where the effect of such discrimination
reasonably clear that
tracts.
substantially
competi-
Sherman
to lessen
violated
methods
these
part
monopoly
tion or tend
were
to create a
Act
Anti-Trust
commerce,
injure, destroy,
line
competition and to
or to
to stifle
scheme
prevent
any person
industry.
with
control of an
obtain
who
grants
knowingly
either
receives
has received
price maintenance
Resale
discrimination,
benefit of such
consideration than
fuller
customers of either of them.”
challenged under the anti
selling devices
maintaining re
Agreements
trust
laws.
*4
15
argued
2(c),
It
is
section
that
as' a
prices have been condemned
sale
pro
13(a),
U.S.C.A.
under which this
Co.
Miles Medical
of
Dr.
restraint
trade.
ceeding
brought,
is
is to be construed in
Co., 220 U.S.
Park & Sons
v.
D.
John
that,
light
2(a),
the
of
so con-
section
502;
L.Ed.
Straus
31
55
S.Ct.
strued,
payment
receipt
the
the
Co., 243
Talking Machine
U.S.
v. Victor
illegal
has such
is
when it
L.R.A.
upon competition
provided
as is
effect.
Ann.Cas.1918A,
And as
1917E,
955.
2(a).
argument
the
section
is that
competition under
an unfair method of.
receipt
il
here would be
Act, 15
Trade Commission
the Federal
legal only
competition or
if it restricts
see,
seq.,
41
Federal Trade
U.S.C.A. §
injures
competitor.
restrains
trade or
Co.,
Packing.
257
Beech-Nut
v.
Comm.
complaint
against
But no
is made
66
19
L.Ed.
U.S.
Company
or the other
for this
Kobi Co. v. Federal
W.
A.L.R.
J.
complaint
reason. The
here is under the
Cir.,
Comm.,
F.2d 41. The
Trade
provisions
2(c)
of section
and not section
price
any, resulting from
main
injury, if
validity
2(a) of the
statute.
tenance,
competi
the
suffered not
is
dependent entirely upon
order entered is
producer but
the retailer
tors of the
legality
2(c)
2(c).
the
section
Section
consumer. The courts
and the ultimate
provision
is
contains no classification
nor
distinction between
main
draw the
anything
justify
there
it which would
by agreement
main
tenance
the
conclusion that
it would not
uni
United States
refusing
tenance
deal.
n formly
way supports
applied.
in no
It
Co., 250
&
U.S.
Colgate
theory
the
that
the relative size of busi
A.L.R. 443. Cf.
coming
purview
nesses
within its
or other
Cudahy
Son,
Packing
Frey
Inc. v.
plans
differing
organization
determine
Co.,
208, 41
question
the
as to whether or not viola
tions
occur.
governing
the rules
the main-
Thus
say that,
is
2(c)
Petitioners
if section
prices must
tenance of
be included in
prohibit
payment
construed to
or re-1
competition, although
discussion of unfair
ceipt
brokerage irrespective
of a find-
problem
somewhat different
from-
injurious
competition,
ing of
effect on
then
practices.
Clayton
But
deprives petitioners
section
their
730, singled
prac-
out
38 Stat.
two
make
right
ordinary
usual and
special treatment, price
discrimi-
tices
disposition
property
tracts for the
dealing
nation and exclusive
and other
process
services without due
of law con-
tying agreements. Section 2 forbids dis-
trary to
Fifth Amendment
of the Con-
upon
criminations
not based
dif-
stitution U.S.C.A. Const.Amend 5. While
grade, quality, quantity,
ferences
was
disassociated
transportation
substantially
cost of
ownership
management
from either
competition
lessen
tend to create a
sellers,
buyers
indirect con-
direct and
monopoly in
line of
commerce.
or sell-
trol can be exercised
section outlaws unfair
discriminations
a broker
ers over
transactions
substantially
lessens
par-
sale
other than
means
monopoly.
compel
does
lead to
ownership
in the broker’s
ticipation-
one-price
policy.
sales
It does not for-
management.
In the
trans-
bid sales
cost
in the
below
absence of
which the Biddle
ex-
Porto. Rican
actions
discrimination.
American
buyers,
is,
Co.,
American
ecutes
Tobacco Co. v.
Tobacco
Cir.,
representative
F.2d 234.
to arrangement.
extent
We need not decide that
therefore to that
buyers question,
since
the evidence shows that
The fact
control.
their
stock
compensa-
all of
receives its
some or
do not own
solely
the tion
negative
from
does not
What
the Biddle
is under
receives from
is not retained
sellers
merely
employed.
passed
it but
on
so
control when
or credited to their account.
testi-
president
Company’s vice
Congress must
have intended
derived
income is
that its entire
fied
payments by sellers should not made to
“Everything
monthly
charges.
service
buyers through any
acting
one
oür
back to
buying
turn
get in
we
we
buyer.
Significance and effect
dependent on sales.
clients. We are not
n must,
possible,
if
every
be accorded to
dependent
getting orders
on
We
part of the
Lexing
act. United
us,
States v.
important
be-
people. They are
ton
& Elevator
Mill
placing of their
cause it
658, L.R.A.1915B,
mar-
touch of the
get
that we
orders
phrase
In the last
of the section “either
necessary,
have
but we
is so
ket
no immediate interest as
.party” etc.,
description
to the other
imme-
regards
persons
to whom it is unlawful to
source.”
diate income from that
*5
pay brokerage
separable
fees is not
.into
contract,
buy
By
terms of
the
the
the
parts,
constituent
and hence this clause
Purchasing Company
“employs
er
entirety
stands in its
or
altogether.
falls
purchase
matérial
York to
such
New
may
payments
not be said
buy
to
may
from time to time
ers are in
category
different
than
agrees
within
credit limits and
reasonable
agents
those to
or those who act for or
to
Biddle Purchasing
Co.
such under the
buyers.
control of the
buy
If
services $ — :-
agents
ers’
or
except
intermediaries are
employment
Such is the contract of
rendered,
ed for services
so
too
the
makes the Biddle
pur-
themselves.
intent of Con
chasing agent
buyers.
for the.
gress
recognized
must be
applied
and
and
may
this
given
by
best be
effect
a con
prohibits
It is
clear
phrase
struction of the
“except for serv
payment
brokerage by.
the seller to the
ices rendered” that will harmonize with
buyer
agent
or his
representative
or
or
the remainder of the section. As the'
intermediary
controlled
except for serv
House and
said,
Senate Committees
the
Congress
ices rendered.
pro
intended to
intermediary is entitled
nothing
to
more
payments
hibit such
practice.
as an unfair
“appropriate
compensation by the
House,
report
and one in
serves,”
interest he so
those.
Committee,
Senate Conference
submitted
one who acts in
capacity
may not
referring
present form,
the bill in its
receive fees from the, seller when he is
interprets the section as having this meani
under contract and does in fact
turn
ng1.
It manifest
that the words “ex
buyer.
such fees to the
Lehigh
Cf.
Val
cept for services rendered in connection ley R. Co.
v. United.
243 U.S.
purchase
with the sale or
goods” pro
444,
434,
839;
37 S.Ct.
R.
Union
payments
hibit
which were made here to
Co., Updike
Pac.
v.
Co.,
Grain
222 U.S.
the
39,
32
Interstate
argued
It is
that the
Peavey
Commerce Comm.
v. F. H.
intermediary
is a true
statute it
that under
merce is .within practice Congress to define this If Congress commerce clause. under the unfair be declare it to be cannot doubted. danger, fact of it Congress decides the Bro., Keppel Federal Trade Comm. v. by legislation. Stafford meet S.Ct. Wallace, 23 A.L.R. Petition denied. liberty of right of freedom or SWAN, Judge (dissenting). by the Fifth Amend guaranteed contract may be‘briefly For reasons stat- which Federal does not to the Constitution ment ed, opinion I am unable concur in by Congress of its proscribe the exercise of the court. power deroga regulate commerce agreed monthly subscription For right. Tagg Bros. & Moor an of that Purchasing Company sup- Biddle head v. United plies purchas- informational L.Ed. 524. As said in Neb market York, 2,400 supra: “Legislation ing service some New subscribers bia v. distributers). concerning goods, The Biddle sales of ¡olesalers incidental^ ly keeps 5,000' ly prices, repeatedly in touch with affecting has about prices gets srs and fall laws and other mar- held valid. In this class ch. formation which it .transmits its bidding unfair tj locality prices in one When a subscriber desires to ing of lower fcers. purchase, another, by giving he informs Biddle tr' Com- those exacted need, ihis purchasers, and ot and the he wants inducements Company Biddle p sends the price discrimination. The forms [and to, producers, respect comp ships one of the policy free who lie with goods to the sub- engendered state and federal st: tion has pays monopolies, tThe seller Biddle which ha- prohibiting utes Tge sale, commission on upheld.” been re- placed on subscriber orders the sub- to the is credited this scriber, price agreed subscription monthly subscription price. duction Company’s service. This pay means that different subscribers Biddle to be cent, re- service, different subscribers per sums About sub- the less through after Biddle remittances cash ceive completely paid they pay the more for informa- scriptions have been service, tional purchasing crediting of commissions. but I see by the nothing forbidding in the statute that. Biddle has found The Commission Only Company pays Biddle over for the sellers Company does not act brokerage fees in excess the subscrib- my opinion only for its subscribers. subscription price buyer get er’s does the Biddle finding cannot sustained. a discriminatory gives him rebate which regular Company performs a advantage an competitor over who does receives sellers and service for not take the Biddle service. It seems to brokers same fee as me that the statute should be construed many The fact similar service. to forbid Company’s method of the sell- selects instances Biddle doing respect business to the er, frequently does since subscriber really customers who buy, shows designate from whom to get reduction on the clearly Company performs a the commissions performs Company by a fur- service for seller. the sellers. Such a construction pro- will save bringing ther service in the seller’s a legitimate and useful business prices attention of the ducts and has century, existed for half subscribers, though no sale imme- and one even I do Congress not believe diately per- results. Biddle also intended to outlaw question. buyer by supply- forms a service for the ing market information addition to the I think the order of the Commission plac- service when an order is except should vacated in so far as it it, ed. Unless the statute forbids there forbids the from paying objection be no could the Biddle Com- to a subscriber excess of com- pany getting customary brokerage from missions subscription above the price of buyer, the seller and also a fee the service. parties since the is to be know compensated by words, both. In other if *7 Company kept the commissions sellers, the statute would for- bid it. exception It would be within “for services rendered.” Section the Robinson-Patman Price Discrimina- 49 Stat. U.S.C.A. § 13(c) though ungrammatically phrased, ex- presses the intention TAYLOR to forbid et al. v. STANDARD GAS & ELECTRIC CO. et al. paying a brokerage buyer fee to a or his payee unless the renders some No. 1545. service to object pre- the seller. Its is to competitive vent unfair Appeals, conditions which Circuit Court of Tenth Circuit. buyer created gets lower April 27, 1938. competitors guise of a commission or to some Rehearing Denied June dummy. my opinion, In it was not intended to eliminate such a business as the Biddle Company does for 86 subscribers. Their cost them as much competitors as their would pay goods. the same addition, they pay something to Biddle for the service it renders them. In ef- fect, arrangement is that charge will for its informational service the difference be- tween what it collects from sellers as