UNITED STATES v. SWIFT & CO. ET AL.
No. 568
Supreme Court of the United States
May 2, 1932
286 U.S. 106
Tоgether with No. 569, American Wholesale Grocers Assn. et al. v. Swift & Co. et al.; and No. 570, National Wholesale Grocers Assn. v. Same. Argued March 17, 18, 1932.
The resolution of the Executive Committee was the voice of the party and took from appellant no right guaranteed by the Federal Constitution or laws. It was incumbent upon the judges of the primary to obey valid orders from the Executive Committee. They inflicted no wrong upon Nixon.
A judgment of affirmance should be entered.
I am authorized to say that MR. JUSTICE VAN DEVANTER, MR. JUSTICE SUTHERLAND and MR. JUSTICE BUTLER concur in this opinion.
UNITED STATES v. SWIFT & CO. ET AL.*
No. 568. Argued March 17, 18, 1932.—Decided May 2, 1932.
* Together with No. 569, American Wholesale Grocers Assn. et al. v. Swift & Co. et al.; and No. 570, National Wholesale Grocers Assn. v. Same.
Assistant to the Attorney General O‘Brian, with whom Solicitor General Thacher, and Messrs. Charles H. Weston
Mr. Edgar Watkins, with whom Messrs. Mac Asbill and Edgar Watkins, Jr., were on the brief, for the American Wholesale Grocers Assn. et al., appellants.
Mr. Wm. C. Breed, with whom Messrs. Danа T. Ackerly, Sumner Ford, and Edward A. Craighill, Jr., were on the brief, for the National Wholesale Grocers Assn., appellants.
Mr. Frank J. Hogan, with whom Messrs. Paul M. Godehn, Henry Veeder, Charles J. Faulkner, Jr., and Nelson T. Hartson were on the brief, for Swift & Co. et al., appellees.
MR. JUSTICE CARDOZO delivered the opinion of the Court.
A decree of the Supreme Court of the District of Columbia has modified an earlier decree of the same court which enjoined the continuance of a combination in restraint of trade and commerce.
Sepаrate appeals, one by the United States of America, and the others by associations of wholesale grocers intervening by leave of court, have brought the case here,
In February, 1920, a bill was filed by the Government under § 4 of the Act of July 2, 1890 (c. 647, 26 Stat. 209;
The defendants consented to dismemberment, though answering the bill and traversing its charges. With their answer there was filed a stipulation which provided for the entry of a decree upon the terms therein set forth and provided also that the decree “shall not constitute or be considered as an adjudication that the defendants, or any of them, have in faсt violated any law of the United States.” The decree entered on February 27, 1920, enjoined the defendants from maintaining a monopoly and from entering into or continuing any combination in restraint of trade and commerce. In addition they were enjoined both severally and jointly from (1) holding any interest in public stockyard companies, stockyard terminal railroads or market newspapers, (2) engaging in, or holding any interest in, the business of manufacturing, selling or transporting any of 114 enumerated food products, (principally fish, vegetables, fruit and groceries), and thirty other аrticles unrelated to the meat packing industry; (3) using or permitting others to use their distributive facilities for the handling of any of these enumerated articles, (4) selling meat at retail, (5) holding any interest in any public cold storage plant, and (6) selling fresh milk or cream. No injunction was granted in respect of the sale or distribution of poultry, butter, cheese and eggs, though these had been included in the bill among the substitute foods which the defendants were seeking to engross. The decree closed with a provision whereby jurisdiction of the cause was retained for the purpose оf taking such other action or adding at the foot such other relief “as may become necessary or appropriate for the carrying out and enforcement” thereof, “and for the purpose of entertaining at
The expectation would have been reasonable that a decree entered upon consent would be accepted by the defendants and by those allied with them as a definitive adjudication setting cоntroversy at rest. The events that were to follow recount a different tale. In April, 1922, the California Co-operative Canneries Corporation filed an intervening petition alleging that the effect of the injunction was to interfere with the performance by Armour & Company of a contract by which Armour had agreed to buy large quantities of California canned fruit, and praying that the decree be vacated for lack of jurisdiction. Leave to intervene was granted by the Court of Appeals of the District, which ordered “that such further proceedings thеreupon be had as are necessary to determine the issue raised.” In November, 1924, motions for like relief were made by Swift and by Armour, their subsidiaries and officers. The motions were denied by the Supreme Court of the District, and thereafter were considered by this court, which upheld the consent decree in the face of a vigorous assault. Swift & Co. v. United States, 276 U. S. 311. In the meantime, however, an order had been made on May 1, 1925, by the Supreme Court of the District at the instance of the California Canneries whereby the operation of the decree as a whole was suspended “until further order of the court to be made, if at all, after a full hearing on the merits according to the usual course of chancery proceedings” (see United States v. California Canneries, 279 U. S. 553, 555). This order of suspension remained in force till May, 1929, when a decision of this court swept the obstacle aside. United States v. California Canneries, supra.
The defendants and their allies had thus been thwarted in the attempt to invalidate the decree as of the date of its entry, and again the expectation would have been reasonable that there would be acquiescence in its restraints.
We are not doubtful of the power of a court of equity to modify an injunction in adaptation to changed conditions though it was entered by consent. The power is conceded by the Government, and is challenged by the interveners only. We do not go into the question whether the intervention was so limited in scope and purpose as to withdraw this ground of challenge, if otherwise available. Standing to make the objection may be assumed, and the result will not be changed. Power to modify the decree was reserved by its very terms, and so from the beginning went hand in hand with its restraints. If the reservation had been omitted, power there still would be by force of principles inherent in the jurisdiction of the chancery. A continuing decree of injunction directed to events to come is subject always to adaptation as events may shape the need. Ladner v. Siegel, 298 Pa. St. 487, 494, 495; 148 Atl. 699; Emergency Hospital v. Stevens, 146 Md. 159; 126 Atl. 101; Larson v. Minn. N. Electric Ry. Co., 136 Minn. 423; 162 N. W. 523; Lowe v. Prospect Hill Cemetery Assn., 75 Neb. 85; 106 N. W. 429; 108 N. W. 978. The distinction is between restraints that give protection to rights fully accrued upon facts so nearly permanent as to be substantially impervious to change, and those that involve the supervision of changing conduct or conditions and are thus provisional and tentative. Ladner v. Siegel, supra. The result is all one whether the decree has been entered after litigation or by consent. American Press Assn. v. United States, 245 Fed. 91. In either event, a court does not abdicate its power to revoke or modify its mandate if satisfied that what it has been
Power to modify existing, we are brought to the question whether enough has been shown to justify its exercise.
The defendants, controlled by experienced business men, renounced the privilege of trading in groceries, whether in concert or independently, and did this with their eyes open. Two reasons, and only two, for exacting the surrender of this adjunct of the business were stated in the bill of complaint. Whatever persuasiveness the reasons then had, is theirs with undiminished force today.
The first was that through the ownership of refrigerator cars and branch houses as well as other facilities, the defendants were in a position to distribute substitute foods and other unrelated commodities with substantially no increase of overhead. There is no doubt that they are equally in that position now. Their capacity to make such distribution cheaply by reason of their existing facilities is one of the chief reasons why the sale of groceries has been permitted by the modified decree, and this in the face of the fact that it is also one of the chief reasons why the decree as originally entered took the privilege away.
Whether the defendants would resume that practice if they were to deal in groceries again, we do not know. They would certainly have the temptation to resume it. Their low overhead and their gigantic size, even when they are viewed as separate units, would still put them in a position to starve out weaker rivals. Mere size, according to the holding of this court, is not an offense against the Sherman Act unless magnified to the point at which it amounts to a monopoly (United States v. United States Steel Corp., 251 U. S. 417; United States v. International Harvester Co., 274 U. S. 693, 708), but size carries with it an opportunity for abuse that is not to be ignored when the opportunity is proved to have been utilized in the past. The original decree at all events was framed upon that theory. It was framed upon the theory that even after the combination among the packers had been broken up and the monopoly dissolved, the individual units would be so huge that the capacity to engage in other forms of business as adjuncts to the sale of meats should be taken from them altogether. It did not say that the privilegе to deal in groceries should be withdrawn for a limited time, or until the combination in respect of meats had been effectually broken up. It said that the privilege should be renounced forever, and this whether the units within the combination were acting collectively or singly. The combination was to be disintegrated, but relief was not to stop with that. To curb the aggressions of the huge units that would remain, there was to be a check upon their power, even though acting independently, to wage a war of extermination against dealers weaker than themselves. We do not turn aside to inquire whether some of these restraints upon separate as distinguished from joint action could have been opposed with success if the de-
We have said that the defendants are still in a position, even when acting separately, to starve out weaker rivals, or at least that the fear of such abuses, if rational in 1920, is still rational today. The meat monopoly has been broken, for the members now compete with one another. The size of the component units is substantially unchanged. In 1929, the latest year for which any figures are furnished by the record, the sales made by Swift and Armour, each, amounted to over a billion dollars; those made by all the defendants together to over $2,500,000,000; and those made by their thirteen chief competitors to only $407,000,000. Size and past aggressions induced the fear in 1920 that the defendants, if permitted to deal in groceries, would drive their rivals to the wall. Size and past aggressions leave the fear unmoved today. Changes there have been that reduce the likelihood of a monopoly in the business of the sale of meats, but none that bear significantly upon the old-time abuses in the sale of other foods. The question is not whether a modification as to groceries can be made without prejudice to the interests of producers of cattle on the hoof. The question is whether it can be made without prejudice
Sporadic instances of unfair practices even in the meat business are stated in the findings to have occurred since the monopoly was broken, practices as to which the defendants’ officers disclaim responsibility or knowledge. It is easy to make such excuses with plausibility when a business is so huge. They become less plausible when the size of the business is moderate. Responsibility is then centered in a few. If the grocery business is added to the meat business, there may be many instances of unfair pressure upon retailers and others with the design of forcing them to buy from the defendants and not from rival grocers. Such at any rate was the rationale of the decree of 1920. Its restraints, whether just or excessive,
There is need to keep in mind steadily the limits of inquiry proper to the case before us. We are not framing a decree. We are asking ourselves whether anything has happened that will justify us now in changing a decree. The injunction, whether right or wrong, is not subject to impeachment in its application to the conditions that existed at its making. We are not at liberty to reverse under the guise of readjusting. Life is never static, and the passing of a decade has brought changes to the grocery business as it has to every other. The inquiry for us is whether thе changes are so important that dangers, once substantial, have become attenuated to a shadow. No doubt the defendants will be better off if the injunction is relaxed, but they are not suffering hardship so extreme and unexpected as to justify us in saying that they are the victims of oppression. Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned.
The case comes down to this: the defendants had abused their powers so grossly and persistently as to lead to the belief that even when they were acting separately, their conduct should be subjected to extraordinary restraints. There was the fear that even when so acting they would still be ready and able to crush their feebler rivals in the sale of groceries and kindred products by forms of competition too ruthless and oppressive to be accepted as fair and just. Wisely or unwisely, they submitted to these restraints upon the exercise of powers that would normally be theirs. They chose to renounce what they might otherwise have claimed, and the decree of a court confirmed the renunciation and placed it beyond recall.
The decree should be reversed and the petitions dismissed.
Reversed.
The CHIEF JUSTICE, MR. JUSTICE SUTHERLAND and MR. JUSTICE STONE took no part in the consideration and decision of this case.
MR. JUSTICE BUTLER, dissenting.
The facts on which the District Supreme Court allowed modification of parts of the 1920 consent injunction are set forth in its findings prepared in accordance with Equity Rule No. 70 1/2. They are discussed and amplified in a painstaking opinion contained in the record. I think they are sustained by the evidence and are sufficient to support the decree.
Conditions affecting competition in the lines of business carried on by defendants have changed since 1920. Indeed, the Government, after the introduction of evidence by appellees, formally stipulated that they “are in active competition with each other” etc.1 The facts nega-
Since 1920 the manufacture and distribution of food have grown greatly and to a large extent have come to
| 1920 | 1929 | |
| Swift | 13.2% | 15.2% |
| Armour (including Morris) | 15.8% | 14.1% |
| Wilson | 5.2% | 4.3% |
| Cudahy | 4.0% | 4.7% |
The wholesale grocers, represented here by objecting interveners, are not entitled to the court‘s protection against the competition of non-members or of defendants carrying on separately and competing actively. They may not avoid the burden of sustaining themselves in a free and open market by protestation of fear that, if allowed to engage in the grocery business at all, defendants will unfairly compete in violation of the federal antitrust laws. If and whenever shown necessary for the protection of the commerce safeguarded by the original decree, the Government may have the modified provisions restored or new ones added.
There is nothing in the original complaint that makes for reversal here. The Government‘s allegations were denied by answer. The decree was entered without evi-
The fact that defendants thereafter applied to have the decree vacated upon grounds directed only to the power of the court to enter it ought not to be regarded as militating against them or their good faith—particularly when it is recalled that this court, when reviewing that proceeding, deemed the questions presented of sufficient importance to call for their argument a second time. 276 U. S. 311.
I am of opinion that the facts found, taken with those cоnceded or established by uncontradicted evidence, justly entitle appellees to the measure of relief given below, and that the modifying decree should be affirmed.
I am authorized to say that MR. JUSTICE VAN DEVANTER concurs in this opinion.
Notes
| Value of production per year: | 1921 | 1927 |
| $5,000 to $20,000 | 142 | 64 |
| $20,000 to $100,000 | 304 | 267 |
| $100,000 to $500,000 | 360 | 429 |
| $500,000 to $1,000,000 | 112 | 163 |
| $1,000,000 and over | 266 | 327 |
| Total | 1,184 | 1,250 |
| Year | Percent-age of defend-ants’ earnings on sales | Percent-age of competi-tors’ earnings on sales | Percent-age of defend-ants’ earnings on net worth | Percent-age of competi-tors’ earnings on net worth |
| 1920 | 0.18 | 0.76 | 0.88 | 2.48 |
| 1921 | * 3.05 | * 1.17 | * 10.27 | * 5.80 |
| 1922 | .10 | 2.72 | .35 | 10.87 |
| 1923 | 1.58 | 3.40 | 5.65 | 12.00 |
| 1924 | 1.77 | 3.39 | 6.46 | 13.28 |
| 1925 | 1.44 | 2.03 | 5.82 | 8.11 |
| 1926 | 1.35 | 2.65 | 5.03 | 12.24 |
| 1927 | .63 | 2.07 | 2.49 | 9.83 |
| 1928 | 1.24 | 3.17 | 5.13 | 14.10 |
| 1929 | 1.06 | 2.68 | 4.35 | 14.02 |