85 F. 252 | U.S. Circuit Court for the District of Northern California | 1898
This is a bill in equity, brought by the United States attorney, upon the authority of the attorney general, in
Constitution.
“Article 1. Title and Object, (a) The title of this organization shall be the ‘Coal Dealers’ Association of California,’ with principal place of business in San Francisco, (b) It shall have for its object the furnishing'of information to its members as to sales of coal made by wholesale dealers to the retail dealers, and by retail dealers to consumers, and also the names of any dealers who have been guilty of violating any of the rates or rules made from time to time by this organization, and the furnishing of as complete a list as possible of delinquent consumers, and such other matters as may be decided upon.
“Art. 2. What Constitutes a Dealer, (a) Any person who engages in the .sale of coal as regular business, buying to sell again, who shall own and operate a yard, keeping an office, and displaying a sign, shall be regarded as a retail dealer, (b) All miners and shippers shall be eligible to membership in this association, provided such miner and shipper shall not make a practice of selling • coal, at retail, at less price than the-retail dealers.”
“Art. 4. Fees — Dues—Assessments, (a) The admittance fee for membership shall be two hundred (200) dollars, and must invariably accompany the application. (b) The amount of dues shall be fifty 'cents per month, payable quarterly in advance, and to date from the first day of the month following the month in which the member.was admitted, (c) Assessments may be levied by a two-thirds vote of the members present at a regular meeting, hut only in such cases when the interests of this association as a business society require it. (d) No assessment shall be levied unless it is expressed in the notice of meeting that ‘a resolution to levy an assessment will be introduced.’ ”
“Art. 6. Failure to Pay Dues, Assessments, or Fines — Charges—Bight of Appeal, (a) If any member shall neglect or refuse to pay the monthly dues and assessments as provided in the constitution and by-laws of this association within three days after the same have become due, he or they shall no longer be considered members of this association, or participant in its benefits, and shall surrender certificate of membership; but a written or printed notice must be sent, at the expiration of said time, to all those members who are delinquent, and may be reinstated within ten days thereafter by paying in full all dues.”
By-Laws.
“Sec. 3. Officers and Their Duties. * * * (c) The secretary, prior to taking his office, shall be required to give a bond, for the faithful performance of his duties, in the sum of one thousand (1,000) dollars, with two sureties qualifying for the sum of five hundred (500) dollars each, and satisfactory to the board of directors. He shall collect all dues, issue all communications, notices, and other correspondence not provided for. He shall keep a register of all members of the association, together with a regular set of books for the proper ■conduct of business; receive all moneys due the association, and pay the same over to the treasurer; sign all orders on the treasurer for the payment of such*255 bills as may be approved by a majority of the finance and certificate purchasing committees. He shall keep a record, in a hook provided for the purpose, of all transfers of certificates of membership; be the custodian of all properties of the association; receive all charges made of violation of the card rates and rules, and refer the same to the grievance committee for action, after using due diligence in securing sncli facts in the case as possible. He shall devote his entire time to the association, and under no circumstances is he allowed to be associated in any manner with any other business. He shall, on receipt of findings of the grievance cominiitee, notify the wholesale dealers of such report, and request, in writing, that they impose the penalty for such violation. His compensation shall bo fixed by the board of directors. * * *
“Sec. 4. Standing Committees, (a) A grievance committee consisting of three persons shall be appointed by the president, from the board of directors, on the first Monday of every month, to serve without compensation until the first Monday of the following month, or until their successors are appointed. They1 shall assemble whenever requested to do so by the secretary, and receive and investigate all charges of violation of card rules or rates preferred against any coal dealer or agent in the city and county of San Francisco, and report their findings to the secretary. They shall have the power to fix the time limit for tl\e payment of any fines imposed by them. * * ®”
“See. 9. Advertising, Circulars, etc. (a) Dealers in advertising coal are not permitted to state prices without adding the names of coal to be had for the prices named; both names and prices to correspond exactly with those on rate card, (b) Any circulars, posters, dodgers, cards, or signs conflicting with the card rates or rules displayed, found on the streets or circulated in any manner whatsoever, shall subject the dealer or agent, who caused their distribution, to the penalties, as are provided in section 13 of these by-laws for selling coal in violation of card rates or rules.
“Sec. 10. Two or More Yards. A member having two or more yards cannot dispose of his certificate of membership in the sale of one yard, and retain his membership in the association.
“Sec. 11. New Yards. Any member opening a new yard or yards after June 14th, 1895, in addition to the one that secured his admission in the association, shall be liable for an additional two hundred (200) dollars admittance fee and monthly dues for each yard so opened, in order for such yard or yards to participate in the benefits of the association.
“Sec. 12. Standard Hules and Weights, (a) No dealer shall give more or less Than 100 pounds to 1 sack; 500 pounds to 5 sacks, or %. ton (short);- 1,000 pounds to 10 sacks, or % ton (short); 2,000 pounds to 20 sacks, or 1 ton (short); 2,240 pounds to 1 ton (long), (b) All long tons must, be delivered in bulk. Names of coal must appear on bill exactly as they read on rate card. A load of coal delivered in bulk shall he per ton of 2,240 pounds. If handled after arrival at customer’s place, an additional charge of fifty cents per ton must be made. A ton of coal delivered in twenty sacks, and put in bin, shall be 2,000 pounds. No premiums or presents are permitted to be offered as inducements for purchasers to buy coal, (c.) Dealers shall be permitted to sell and deliver fifty pounds of coal at one-half card rates for one hundred pounds, but in no case shall they be allowed to sell coal in quantities ranging between fifty pounds and one hundred pounds.
“Sec. 13. Violations — Penalties, (a) If a dealer or agent, member or nonmember, be found guilty of selling coal in violation of the card rates or rules, he shall be subject to a fine of not less than ten (10) dollars nor more than one hundred (100) dollars for first offense, not loss than twenty-live (25) dollars nor more than two hundred (200) dollars for second offense; if a member of the association, be suspended and compelled to pay retail prices for third offense until restored to membership in good standing by the board of directors. * * *
“See. 14. Agreement. The following agreement between the wholesale coal dealers of the city and county of San Francisco, Cal., and this association, is hereby embodied in this section, and made a part and parcel of the by-laws of this association:
“ ‘This agreement, made this first day of June, A. D. 189G, by and between the Coal Dealers’ Association of California, an association, and the undersigned wholesale coal dealers, witnesseth: (1) That the purposes of this agreement are:*256 First, protection to consumers in receiving full amount and kind of coal purchased; second, protection to dealers in obtaining sufficient margin to carry on a safe business with justice to consumers. (2) That said wholesale dealers will not, nor will any or either of them, during the continuance of this agreement, sell coal at trade rates to any one not having an established yard; nor will any or either of them sell coal at less than card rates to consumers, except in such cases as may be provided for by agreement among said wholesale dealers themselves. (3) That said wholesale coal dealers hereby acknowledge the request of the Coal Dealers’ Association of California, made to them on the sixth day of May, 1896, to charge one dollar ($1.00) per ton additional over present trade rates for all coal sold by said wholesale dealers, or any or either of them, to the retail dealers in the city and county of San Francisco, who are not members of said association, and hereby agree to comply with said request, and will during the continuance of this agreement charge one dollar ($1.00) per ton additional •over trade rates for all coal sold to dealers carrying on business in said city and county who are not members of said association. (4) That upon receiving proof from the Coal Dealers’ Association of the violation by any retail coal dealer of any of the rules of business printed on the rate card issued by said association, and being satisfied that the charge is established, said wholesale coal dealers agree, and each of them agrees, to, and will, charge the dealer so violating said rules or rule consumers’ rates thereafter for coal, until said retail dealer, if a member of said association, shall have been reinstated to membership in the Coal Dealers’ Association of California by the vote of the board of directors of said association, or, if not a member, until he shall have paid such reasonable penalty as may be imposed upon him by said association. (5) That the following rules and rates shall be enforced during the continuance of this agreement: That rates at which coal shall be sold to consumers shall be as shown on the rate card issued from time to time by the Coal Dealers’ Association of California. A ton of coal delivered in twenty (20) sacks, and deposited in bin, will be 2,000 "pounds; and no more nor less than twenty sacks shall constitute a ton so delivered. A ton of coal delivered in bulk shall be 2,240 pounds. For coal in bulk handled after arrival at place of delivery, an additional charge of fifty cents per ton shall be made, provided, however, if the handling after arrival at place of delivery consists only of shoveling or dumping coal in place of deposit, no additional charge shall be made. All long tons must be delivered in bulk. (6) That any member of the Coal Dealers’ Association furnishing coal to another dealer who has been duly adjudged by the Coal Dealers’ Association of California guilty of violation of the rules or any rule of said association printed on said rate card will himself suffer the penalty imposed by said association for violation of said rules. (7) That no member of the Coal Dealers’ Association shall have the right to transfer his certificate of membership in said association until all indebtedness due to said wholesale coal dealers, or any of them, by the member of the said Coal Dealers’ Association holding said certificate, shall have been paid, or until an adjustment between the debtor and creditors shall have been satisfactorily made by siich debtor and creditors. (8) That in the event of the discontinuance of business by any member of said Coal Dealers’ Association, and his failure to promptly settle his indebtedness due to said wholesale coal dealers, or any of them, then said Coal Dealers’ Association shall have the right to declare such delinquent member’s certificate forfeited to said wholesale coal dealers parties hereto, who are his creditors. That the said wholesale coal dealers for whose benefit said forfeiture takes place shall have the right to sell said membership certificate, and, upon the sale thereof, shall apply the proceeds of sale to the payment of the claims of the wholesale coal dealers parties hereto, holding claims against such delinquent member. That, after the application of the proceeds of such sale to the payment of the claims of said wholesalers, any surplus remaining shall be paid to the delinquent member. (9) And, in the event of a sale of his business, wholesale dealers shall decline to furnish coal to his successor, at the discretion of the association’s directors, until the seller has paid all bills due by him to the wholesale dealers, who are parties hereto. (10) That this agreement does not apply to steam, hotel, restaurant, or church trade, nor to such trade as must be, necessarily, reserved by wholesale dealers as a means of protection to steam trade, and referred to in section 2 of this agreément. (11) That this agreement shall continue in full force and effect for the period of two years from date hereof, and shall apply only to sáid wholesale coal dealers and*257 retail coal dealers carrying on business within the city and county of San Francisco.
“ ‘In witness whereof, the parties hereunto set iheir hands, the day and year first aboye written, said Goal Dealers’ Association signing- by its president and secretary, thereunto authorized by resolution of said association duly passed, and said wholesale coal dealers signing their respective names.
“ ‘[Signed] Goal Dealers’ Ass’n of California,
“ ‘By P. Lynch, President,
“ ‘By E. 1C Carson, Secretary.
“ ‘Charles II. Allen.
“ ‘Central Coal Co.,
“ ‘By ,T. ,T. McNamara.
“ ‘R. D. Chandler.
“ ‘Geo. Friteh,
“ ‘Per ,T. Homer Friteh.
“ ‘0. Wilson & Co.
“ ‘Oregon Improvement Co..
“ ‘John L. Howard, Manager.
“ ‘Oregon Coal & Navigation Co.,
“ ‘By C. M. Goodall, Vice Pres.
“ ‘W. G. Stafford & Co.
“ ‘11. Dunsmuir & Sons,
“ ‘By C. H. Jouett.’
“Sec. 15. Agencies or Offices. (a) Any member having agencies or offices other than those located ac his yard, for the sale of coal, shall be compelle.d to have a certificate of membership for each of said agencies or offices, (b) In the event of the failure of vany member to secure a certificate of membership for each agency or office, as referred to in paragraph (a) of this section, within five days after a written notice shall have been sent, him by the secretary, he shall immediately cause tito same Id be closed, or subject himself to a fine of not less than ten (10) dollars nor more than one hundred (100) dollars for each agency or office that is known to be operated by him of for his benefit.
“Sec. 16. Rales to Nonmomber Dealers or Agents, (a) No member of this association shall be permitted.to sell dealers or agents, who are nonmemhers, coal for less than consumers’ prices. * * *”
The bill further alleges that the constiiution and by-laws, since their adoption, have been, and now are, in full force and effect, save as amended by making- the fee of membership $500 instead of $200, as is provided in article 4 of the constitution, and by amending subdivision 3 of the agreement, set out in section 11 of the by-laws, by changing the words “one dollar ($])” to “two dollars ($2),” where the same appears in said paragraph, and by changing the schedule of rates from lime to time’, so that the schedule of rates and rate card are as set forth in the bill. The terms of the agreement between the Coal Dealers’ Association and the importers and wholesale dealers in coal, as set forth in the-by-laws of the Coal Dealers’ Association, are made the subject of still further allegations of combination, conspiracy, and confederation between the coal dealers in the establishment and maintenance of arbitrary rates for coal in San Francisco, and in depriving the residents of Ran Francisco of the benefits of free competition between owners, importers, and dealers, in coal from British Columbia, Washington, and Oregon, whereby the trade, traffic, and commerce in this article has been monopolized and restrained, and dealers in coal who have been refused or were unable to become members of the Coal Dealers’ Association have been compelled to desist from said business, and have been restrained from carrying on their trade, business, and dealing in coal in the city of
Two affidavits supporting the material allegations of the bill were filed with the bill on December 16, 1897. One of these, made by a retail coal dealer in San Francisco, who is not a member of the Coal Dealers’ Association, alleged, among other things, that, by reason of the fact that the constitution and by-laws of the Coal Dealers’ Association and the agreement between the wholesale dealers and said association prohibited the sale to him of coal brought from Washington, Oregon, and British Columbia except at advanced prices, he had been greatly restrained and hindered in his dealings. Upon this showing, the court issued an order requiring the defendants to show cause, on the first Monday in January, 1898, why an injunction should not be issued, as prayed for in the bill, pending the litigation, and in the meantime the defendants were restrained and prohibited from charging or collecting from persons engaged in the retail coal trade in the city of San Francisco a price in excess of the same charged and collected from.members of the Coal Dealers’ Association for like purchases, in quantity and quality, of coal imported or brought from British Columbia, and from the states of Washington and Oregon. On December 18, 1897, the defendants appeared specially, and moved to set aside the preliminary restraining order, upon the grounds that the order was made without notice
Section á of the act of July 2, 1890, provides as follows:
“The several circuit courts oí the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the attorney general, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition, the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in tlie premises.”
Under section 718 of the Eevised Statutes, the court or judge is authorized, whenever notice is given of a motion for an injunction, to grant an order restraining the act sought to be enjoined until the decision upon the motion, where there appears to be danger of irreparable injui-y from delay. In so far as the language of the antitrust act differs from the provisions of the Eevised Statutes, it appears to have been the intention of congress to provide a more direct and summary proceeding in reaching the mischief which it was the purpose of the statute to remedy than had prevailed before under the general rules of equity practice. I am therefore clearly of the opinion that, under section á of the anti-trust act, a restraining order may be issued by the court or judge without notice, under the circumstances sanctioned by the established usages of equity practice. That practice requires, as a general rule, that notice of an application for a temporary restraining order, as well as for an injunction, shall be given to the person against whom it is desired; but in very pressing cases, where the mischief sought to he prevented is serious, imminent, and irremediable, the courts will grant a restraining order without notice, and they will do so where the mere act of giving notice to the defendant of the intention to make the application might of itself be productive of the mischief apprehended, by inducing him to accelerate the act in order that it might he completed before the time for making the application has arrived. Post. Fed. Prac. § 231. In the present case there is no allegation in the hill that the retail coal dealers or coal consumers of San Francisco, for whose benefit it may be assumed the action is brought, will suffer irreparable injury by delay; hut the anti-trust act does not, in terms, require such a showing to justify the court in issuing a restraining order, and it may well be doubted whether such a showing would be
It is contended that, as the Coal Dealers’ Association is an unincorporated company, it cannot be brought into court by making it a party ■ defendant by that name. In equity, the action must be against the individuals comprising such an association; but there is this exception: Where the parties are numerous, some of them may be brought in as representing the whole association. The title of this case is against “The Coal Dealers’ Association of California, and All the Members of Said Association,” and also against 17 individuals, who are designated as “Members and Officers of said Association.” The return of the marshal shows that all these individuals have been served; that the president of the association has been served as an individual, and as president of the association; and he has appeared in the capacity of president in the affidavit filed by him, as has also the secretary of the association. This, I think, is sufficient, under the rule requiring sufficient parties, to represent all the adverse interests in the suit.
In response to the order to show cause, affidavits have been interposed by the defendants for the purpose of disproving the equity upon which the motion is founded; also a demurrer to the bill and parol exceptions to its legal sufficiency. The affidavits tend to show that the' statement in the bill, that 800,000 tons of coal are used annually as fuel for domestic purposes by the inhabitants of San Francisco, is not true; that the number of tons so used does not probably exceed 400,000 tons, and the amount imported and brought into San Francisco annually from British Columbia, Washington, and Oregon, and used for domestic purposes, is not in excess of 300,000 tons; that the defendants named in the bill as wholesale dealers and importers of coal are not all the wholesale dealers who handle, buy, and import, and sell coal used in San Francisco for domestic purposes; that the Black Diamond Coal Company is a corporation which handles, brings, and imports and sells coal used as fuel for domestic purposes, and that this corporation is not associated with any of the defendants, nor a party to the agreement with the Coal Dealers’ Association of California; that the price and cost of mining and transporting coal from British Columbia, Washington, and Oregon have not been materially cheapened within the past few years, but have lately been increased, owing; to the -mine owners’ inability to procure a sufficient number of miners since the exodus to the Alaska gold fields, and also by reason of the high rate for transporting coal from the above-mentioned places, due to the great demand for vessels in Alaska trade; that before the organization of the .Coal Dealers’ Association, and before the agreement mentioned
The title of the anti-trust act indicates the comprehensive scope and purpose of the statute. It is "An act to protect trade and commerce against unlawful restraints and monopolies.” It is not limited to contracts and agreements that were unlawful at common law, nor to restraints and monopolies in violation of state statutes. '
In U. S. v. Trans-Missouri Freight Ass’n, 166 U. S. 290-327, 17 Sup. Ct. 510, the supreme court, referring to this title, said:
“The title refers to, and includes, and was intended to include, those restraints and monopolies which are made unlawful in the body of the statute. It is to the statute itself that resort must be had to learn the meaning thereof, though a resort to the title here creates no doubt about the meaning of and does not alter tile plain language contained in the text.”
The first and second sections of the act are as follows:
“Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal. Every person who shall malre any such contract or engage in any .such combination or conspiracy, shall be*262 Seemed- guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court
“See. 2. Every person who shall monopolize, or- attempt to monopolize,- or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction, thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.”
In the. Freight Ass’n Case, supra, it was contended that this statute, in declaring illegal every combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce, did not mean what its language imports, but that it only meant to declare illegal any such contract which is in unreasonable restraint of trade, while leaving all others unaffected by the provisions of the act. The court discusses this question, and arrives at the conclusion that:
“When, therefore, the body of an act pronounces as illegal every contract or combination in restraint of trade or commerce among the several states, etc., the plain .and ordinary meaning of such language is not limited to that kind of contract alone which is in unreasonable restraint of trade, but all contracts are included in such language, and no exception or limitation can be added without placing in the act that which has been omitted by congress.”
It is therefore no defense of a contract or combination, alleged to be in violation of the act, to say that, in view of all the circumstances and conditions, the contract or combination -imposes only a fair and reasonable restraint upon trade and commerce. The question is, does it impose any restraint whatever? If it does, no matter how little or reasonable it may be, it is within the prohibition. This interpretation is in harmony with the other provisions of the statute^ which make it unlawful to monopolize, or attempt to monopolize, any part of the trade or commerce among the several states or with foreign nations. The contract under consideration' in the Freight Ass’n Case related to traffic rates for the transportation of persons and property by competing common carriers by railroad; but the doctrine of the case applies as well to articles of commerce— the subject of transportation — as it does to the business of transportation itself; and the clear and positive purpose of the statute must be understood to be that trade and commerce within the jurisdiction of the federal government shall be absolutely free, and no contract or combination will be tolerated that impedes or restricts their natural flow and volume.
' Under the law as thus interpreted, two questions arise upon the facts in the present case. First. Do the constitution and by-laws of the Coal Dealers’ Association and the agreement of the association with the importers and wholesale dealers operate in restraint of trade and. commerce, or .monopolize any part of the trade or commerce of San Francisco? And, if so, second, does this restraint or monopoly extend to any part of the trade and commerce carried op between this state and Oregon, Washington, or British Columbia ?
There is no difficulty in arriving at a conclusion with respect to the first question. The constitution of the Coal Dealers’ Association provides, among other things, that its object is to furnish information
In Nester v. Brewing Co., 161 Pa. St. 473, 29 Atl. 102, the supreme court affirmed the judgment of the court of common pleas of Philadelphia, holding that a combination among a number of brewers of that city to control the price of beer within the city was illegal, being in restraint of trade. The agreement under which that combination was formed is of the same character as the one now under consideration, and this is what the trial court had to say about it:
“Where a price is fixed arbitrarily for which a manufactured article may be sold, it necessarily limits the production of that article to the amount that can bo sold for that price. An increased price put upon an article restricts its sale, and the restricted sale necessarily reduces the production. It is no answer io say: ‘We do not restrict your production. You may produce any amount you like. We only restrain your sale of it.’ Is this not practically a limit to production? Where a pool or combination reserves the right to regulate, prices, they can, by the manipulation of prices, drive their competitors out.of business, create a monopoly, and enhance at their pleasure the prices to consumers.”
This is precisely the attitude of the Coal Dealers’ Association, and it is no answer to the charge of arbitrary power, which it can and does exercise under its organization, that it has not increased the price of coal in San Francisco, or wholly monopolized the source of supply. ' The terms of the organization and the agreement between the association and the wholesale dealers clearly constitute a restraint of trade, which is injurious to the public interests, against public policy, and therefore unlawful. Arnot v. Coal Co.; 68 N. Y. 558; Salt Co. v. Guthrie, 35 Ohio St. 666; Carbon Co. v. McMillin, 119 N. Y. 46, 23 N. E. 530; Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173; Craft v. McConoughy, 79 Ill. 346; Lumber Co. v. Hayes, 76 Cal. 387, 18 Pac. 391; Distilling & Cattle Feeding Co. v. People (Ill. Sup.) 41 N. E. 188; Harrow Co. v. Hench, 83 Fed. 36.
The next question is as to whether this restraint or monopoly extends to the tráde or commerce among- the several states or with foreign nations. In other words, do the facts in the case bring it within the jurisdiction of the national government, under the provisions of the anti-trust act? The retail prices for coal at San Francisco established by the Coal Dealers’ Association, and agreed to by the wholesale dealers, are for different quantities of the following named coals, used as fuel for domestic purposes, namely: Wellington (Dunsmuir), Wellington (Southfield), Roslyn, Seattle, Bryant, and Coos Bay. The Wellington coal is imported from British Co
What, then, is trade and commerce among the several states and with foreign nations? “Trade,"’ in a business sense, has been defined as “i:he exchange of commodities for other commodities or for money; the business of buying and selling; dealing by way of sale or exchange.” The word “Oommerce,” as used in the statute and under the terms of the constitution, has, however, a broader meaning than fhe word “trade.” Oommerce among the states consists of intercourse and traffic between their citizens, and includes the transportation of persons and properly, and fhe navigation of public wafers for that purpose, as well as the purchase, sale, and exchange of commodities. County of Mobile v. Kimball, 102 U. S. 702; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 5 Sup. Ct. 825. Commerce among the stall's cannot stop at the external boundary line of each state, but may be introduced into the interior. Gibbons v. Ogden, 9 Wheat. 1, 194.
In Leisy v. Hardin, 155 U. S. 100, 10 Sup. Ct. 681, the supreme court held that a state statute, prohibiting the sale of intoxicating liquors, except for certain purposes and under license from a county court, was unconstitutional, and void when applied to a sale by an importer of liquors brought from another state in the original pack-, ages, because the operation of the law was repugnant to the power of congress to regulate commerce among the several states. The court, in passing upon the question, said:
"The power vested in congress ‘to regulate commerce with foreign nations ami among the several states and with the Indian tribes’ is the power to prescribí, the rule by which that commerce is to be governed, and is a power complete in itself, acknowledging no limitations other than those prescribed in the constitution. It Is co-extensive with the subject on which it acts, and cannot be stopped at the external boundary of a state, but must enter its interior, and must be capable of authorizing the disposition of those articles which it introduces, so that they may become mingled with the common mass of property within the territory entered.”
Again, 1o make this limitation on state authority over interstate commerce more dear, the court said: •
“It is only after the importarion is completed, and the property imported has mingled with and become a parr of the general property of the state, that ite*266 regulations can act upon it, except so far as may be necessary to insure safety in the disposition of the import until thus mingled.”
If a law of a state, regulating the sale of intoxicating liquors, so as to prohibit their sale except, for certain purposes and under license from a county court, is unconstitutional and void when applied to a sale by an importer of liquors brought from another state in the original packages, because the law ip that relation is in restraint of trade and commerce “among the several states,” what shall be said of the constitution and by-laws of the Coal Dealers’ Association, and the agreement of that association with the wholesale dealers respecting the sale of imported coal in San Francisco under the anti-trust act? If one is in restraint of commerce, is not the other? The claim that the coal is not sold until imported, delivered, and bulk broken is not sufficient. The principle of the original package does not apply to the sale of coal. It must be manifest that the arbitrary rules under which the combination of wholesale and retail dealers conduct their business affects the sale and disposition of coal immediately upon its arrival at San Francisco, and that, as an article of Commerce, its freedom is restrained and hampered at the point of delivery into the state, and before it has become distributed by sale, and mingled in the common mass of property in the state. But the agreement of the importers and wholesale dealers, which alone gives life and force to the combination, is directed specifically to the maintenance of card rates for certain imported coals by name; and it is this agreement, and what may be accomplished under it by the combination, that is to be considered, and not what the parties to ■it may be doing at any particular time.
In Robbins v. Taxing Dist., 120 U. S. 489, 7 Sup. Ct. 592, it was held by the supreme court that a law of Tennessee, requiring that all drummers and all persons not having a regular licensed house of business in the taxing district of Shelby county, offering for sale or selling goods, wares, or merchandise therein by sample, should pay to the county trustee the sum of $10 per week, or $25 per month, for such privilege, was, so far as it applied to persons soliciting the sale of goods on behalf of individuals or firms doing business in another state, a regulation of commerce among the several states. This case also arose before the passage of the anti-trust act, and was considered as coming within the established doctrine that congress had the exclusive power to regulate commerce under the constitution of the United States. Bow, if this doctrine is applied to the facts of the present case, how can it be said that the rules and regulations imposed by the Coal Dealers’ Association upon retail coal dealers of San Francisco, selling imported coal, is less an obstruction to commerce than the law of Tennessee, imposing a license tax upon drummers soliciting the sale of goods from another state? Manifestly, a court could not consistently condemn the latter, and excuse the first.Suppose the state of California were to provide, by statute,- a fixed price for the sale, at retail in San Francisco, of Wellington, Boslyn, Seattle, Bryant, and Coos Bay coal, and require that all retail dealers in such coals should pay a license to the state of $500 for the privilege of dealing in such coals at the established rates, and, to secure the
In the Sugar Trust Case, 156 U. S. 1, 15 Sup. Ct. 249, it was held, substantially, that contracts relating to commodities, to come within the range of federal jurisdiction, must he subsequent to production, but it was also said that contracts to buy, sell, or exchange goods to be transported among the several states form part of interstate trade or commerce. A case entirely in point is that of U. S. v. Jellico Mountain Coal & Coke Co., 46 Fed. 432. brought under the anti-trust act, in 1891, against the members of the Nashville Coal Exchange. The purpose of the agreement in that case was to establish the price of coal at Nashville, and to change the same from time to time. Members found guilty of selling coal at a less price than the price fixed by the exchange, either directly or indirectly, were fined 2 cents per bushel and §10 for the first offense, and 4 cents per bushel and §20 for the second offense. Owners or operators of mines were not to sell or ship coal to any person, firm, or corporation in Nashville who were not members of the exchange, and dealers were not to buy coal from any one not a member of the exchange. It appeared that several mining companies in Kentucky engaged in raising coal and most of the coal dealers of Nashville had entered into this agreement. The- court held the agreement was in restraint of trade and commerce, and that the defendants, by the organization of the Nashville Coal Exchange, aud in their operations under it, had violated the law; and they were accordingly enjoined from further violations of the law. In U. S. v. Hopkins, 82 Fed. 529, the Kansas Oity Livestock Exchange, a voluntary unincorporated association, adopted articles of association and rules and by laws whereby they agreed that they would faithfully observe and he hound by the same. Among the rules for the government of the exchange were fixed rates of commissions for the transaction of business, and limitations and prohibitions upon its members in dealing with nonmemhers and with persons violating the rules and regulations of the exchange; these rule's and regulations being enforced by means of fines, penalties, and assessments. Substantially all'of the business transacted in the matter of receiving, buying, selling, and handling live stock at Kansas Oity stockyards was carried oh by the members of the exchange as commission merchants. A large proportion of this live stock was shipped from the states of Kansas, Nebraska, Colorado, Texas, Missouri, Iowa, and Arkansas, and the territories of Oklahoma, Arizona, and New Mexico, and was sold by the members of the exchange to the packing houses in Kansas City. It was held that the association
It is not, however, necessary to multiply authorities dealing with this question. They are numerous, and they all clearly establish the doctrine that commerce among the several states and with foreign nation's must be absolutely free and untrammeled, except as it may be regulated by congress; that no state law, with certain exceptions not necessary to be here stated, will be allowéd to interfere with it, and no contract or agreement on the part of individuals, associations, or corporations will be permitted, directly or indirectly, to hinder or restrain its natural current or volume. In the light of the authorities and the principles they establish, it appears to me that the constitution and by-laws of the Goal Dealers’ Association and the agreement of the wholesale dealers with that association come within the prohibitions of the act of July 2, 1890, and they aré therefore unlawful. A temporary injunction will be prepared in accordance with this opinion.