UNITED STATES v. UNITED STATES GYPSUM CO. et al.
340 U.S. 76 (71 S.Ct. 160, 95 L.Ed. 89)
UNITED STATES v. UNITED STATES GYPSUM CO. et al.
Argued: and Submitted Oct. 19, 1950.
Decided: Nov. 27, 1950.
- opinion, REED [HTML]
Where summary decree was an adjudication of violation of the Sherman Anti-Trust Act by concerted action of defendants through fixed-price patent licenses, accepting as true the underlying facts in defendants' proof by proffer, the government was entitled only to relief based on that finding and the proffered facts. Sherman Anti-Trust Act, §§ 14, 15 U.S.C.A. §§ 14; Fed.Rules Civ.Proc. rule 56, 28 U.S.C.A.
Syllabus from Pages 77-79 intentionally omitted
Mr. Charles H. Weston, Washington, D.C., for appellant.
Mr. Bruce Bromley, New York City, for appellees United States Gypsum Co. et al.
Mr. Norman A. Miller, Chicago, Ill., for appellee Certain-Teed Products Corp.
Messrs. Andrew J. Dallstream, Chicago, Ill., Walter G. Moyle, Ralph P. Wanlass, Washington, D.C., Albert E. Hallett, Chicago, Ill., for appellee Celotex Corp.
Elmer E. Finck, Buffalo, N.Y., Joseph S. Rippey, Rochester, N.Y., David I. Johnston, Oklahoma City, Okl., for appellees National Gypsum Co. et al.
Mr. Justice REED delivered the opinion of the Court.
This proceeding was filed in 1940 in the District Court of the United States for the District of Columbia by the United States under the authority of the Attorney General. 15 U.S.C. 4, 15 U.S.C.A. § 4. The complaint charged, 44, a long-continued conspiracy by defendants in restraint of trade in gypsum products among the several states and in the District of Columbia, and a similar monopoly, all in violation of §§ 1, 2 and 3 of the Sherman Anti-Trust Act, 26 Stat. 209, as amended, 15 U.S.C. 1, 2, 3, 15 U.S.C.A. §§ 13. The defendants, appellees here, were United States Gypsum Co., patentee, and various other gypsum board manufacturers, its licensees, and certain of their officers. It was alleged that the combination carried out its unlawful purposes as indicated in the excerpt from the complaint quoted below. 1 Civil relief, through prohibitory and mandatory orders, was prayed in various appropriate forms. After the United States concluded its evidence in chief at the trial, a three-judge District Court, 15 U.S.C. 28, 15 U.S.C.A. § 28, granted appellees' motion to dismiss under Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., on the ground that no right to relief had been shown. 67 F.Supp. 397. On direct appeal, 15 U.S.C. 29, 15 U.S.C.A. § 29, we reversed the judgment of dismissal March 8, 1948, United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746, and remanded the case to the District Court for further proceedings in conformity with our opinion.
On remand a conference took place at the Government's suggestion. The Court acted under procedure similar to pretrial, Rule 16, and its inherent power to direct a case so as to aid in its disposition. As a result of that conference, without objection from any party, the Government filed a motion for a summary judgment under Rule 56 on the ground that there was no genuine issue as to any material fact, and the appellees filed an offer of proof, directed at matters as to which appellees were of the opinion a genuine issue existed. A summary judgment, without other findings than those contained in the decree, was entered November 7, 1949, on appellant's motion. 2 Both plaintiff and defendants took direct appeals from the decree to this Court. 15 U.S.C. 29, 15 U.S.C.A. § 29. Defendants' appeal objected to summary judgment on the ground of their right to introduce material evidence. That appeal was dismissed by this Court. 339 U.S. 959, 70 S.Ct. 995. The reasons for our action lay in the fact that our holding in our first opinion, 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746, justified a summary judgment for plaintiff on the issue of the violation of the Sherman Act when the record was considered in the light of our opinion and defendants' offer of proof on the remand. This point is discussed later in this opinion under subdivision I.
Probable jurisdiction was noted on the appeal of the United States. This is the case we are now discussing. For the same reasons that we dismissed defendants' appeal, this Court affirmed Article III of the District Court decree. Our order also carried the sanction of an injunction against violation of the decree, 'pending further order of this Court.' 339 U.S. 960, 70 S.Ct. 996.
The issues left for determination in this appeal are those raised by the United States in its effort to have the provisions of the District Court decree enlarged. It seeks to extend the injunctions against violations of the Sherman Act to cover gypsum products instead of being limited to gypsum board as defined in the decree; and to include clude interstate commerce generally instead of limiting the territorial scope of the decree to the eastern portion of the United States. It also seeks changes that forbid specific practices, in addition to price fixing, such as standardizing products, classifying customers, or adopting delivered price systems, all pursuant to the principal conspiracy. It seeks to compel licensing of all patents by United States Gypsum; to empower the Department of Justice to inspect certain records; to extend the decree's terms to cover individual defendants; and to require the defendants to pay all costs.
Procedure on remand.In determining the present issues, it is necessary to consider the trial court's solution of the procedural problems presented by our remand. Our decree was a reversal of the trial court's dismissal of the complaint on the merits at the completion of plaintiff's, the United States', presentation of its evidence. In our opinion, 333 U.S. 364, 389, 68 S.Ct. 525, 539, 92 L.Ed. 746, we said that 'the industry-wide license agreements, entered into with knowledge on the part of licensor and licensees of the adherence of others, with the control over prices and methods of distribution through the agreements and the bulletins, were sufficient to establish a prima facie case of conspiracy.'
We said that the intention of United States Gypsum and its licensees to act in concert to attain the purpose of the conspiracy, restraint of trade and monopoly, was apparent from the face of the license agreements. 333 U.S. at pages 389, 400, 68 S.Ct. at pages 539, 544, 92 L.Ed. 746, 'The licensor was to fix minimum prices binding both on itself and its licensees; the royalty was to be measured by a percentage of the value of all gypsum products, patented or unpatented; the license could not be transferred without the licensor's consent; the licensee opened its books of accounts to the licensor; the licensee was protected against competition with more favorable licenses and there was a cancellation clause for failure to live up to the arrangements.'
We stressed the acting in concert as differentiating the case from United States v. General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362, discussed on pages 400 and 401 of 333 U.S., pages 544 and 545 of 68 S.Ct., 92 L.Ed. 746, the concert of action being established by the favored licensee clause of the standard license agreement. 333 U.S. at 410, 68 S.Ct. 548, 92 L.Ed. 746. 3 In United States v. Line Material Co., 333 U.S. 287, 68 S.Ct. 550, 92 L.Ed. 701, decided the same day as the Gypsum case, the opinion of the Court discussed the then standing of the General Eelctric rule as follows: 'We are thus called upon to make an adjustment between the lawful restraint on trade of the patent monopoly and the illegal restraint prohibited broadly by the Sherman Act. That adjustment has already reached the point, as the precedents now stand, that a patentee may validly license a competitor to make and vend with a price limitation under the General Electric case and that the grant of patent rights is the limit of freedom from competition * * *.' 333 U.S. at page 310, 68 S.Ct. at page 562, 92 L.Ed. 701.
We added, 333 U.S. at pages 311 and 312, 68 S.Ct. at pages 562 and 563, 92 L.Ed. 746, that while the General Electric rule permitted a patentee to fix the price the licensee of patents may charge for the device, separate patent owners could not combine the patents and thus reach an agreement to fix the price for themselves and their licensees. There was no holding in our first opinion in Gypsum that mere multiple licensing violated the Sherman Act. 4 The facts and the language placed our judgment squarely on the basis that 'it would be sufficient to show that the defendants, constituting all former competitors in an entire industry, had acted in concert to restrain commerce in an entire industry under patent licenses in order to organize the industry and stabilize prices.' 333 U.S. at page 401, 68 S.Ct. at page 545, 92 L.Ed. 746. 5
As appears from the preliminary statement of its decree, the trial court acted on that understanding of our holding. See Appendix, 340 U.S. 96, 71 S.Ct. 173. It was not necessary to reach the issue as to whether a mere plurality of licenses, each containing a price-fixing provision, violates the Sherman Act. It is not necessary now.
The reference, 333 U.S. at page 389, 68 S.Ct. at page 539, 92 L.Ed. 746, to the establishment of a prima facie case of conspiracy by conscious industry concert in price fixing was directed at the basis for the admission of the separate declarations of alleged conspirators. 333 U.S. Section V, at pages 399402, 68 S.Ct. at pages 543545, 92 L.Ed. 746, of the opinion, however, contains our determination that an industry's concerted price fixing by license violates the Sherman Act per se. United States v. Paramount Pictures, 334 U.S. 131, 143, 68 S.Ct. 915, 922, 92 L.Ed. 1260.
Of course, when we remanded the case of the District Court the defendants had the right to introduce any evidence that they might have as to why all or any one of them should be found not to have violated the Sherman Act. Our reference at 333 U.S. 402, footnote 20, 68 S.Ct. 545, 92 L.Ed. 746, to Gulbenkian v. Gulbenkian, 2 Cir., 147 F.2d 173, shows that. See Federal Deposit Ins. Corp. v. Mason, 3 Cir., 115 F.2d 548, 552; Bowles v. Biberman Bros., 3 Cir., 152 F.2d 700, 705. Furthermore, even though defendants had no substantial evidence to overcome the prima facie conclusion of Sherman Act violation, they had the right to lay facts before the court that were pertinent to the court's decision on the terms of the decree; for example, the purpose of the concerted action, or the reason for making new patents available to the licensees, or willingness to license all applicants for the patent privilege. Such rights, however, did not require the trial court to admit evidence that would not affect the outcome of the proceedings. They did not affect the power of the trial court to direct the progress of the case in such a way as to avoid a waste of time.
A summary judgment, under Rule 56, was a permissible on remand. It was allowed, as the last paragraph of the preliminary statement of the decree shows, on the court's understanding that our opinion 'held that the defendants acted in concert to restrain trade and commerce in the gypsum board industry and monopolized said trade and commerce among the several states in that section hereinafter referred to as the eastern territory of the United States * * *.' As heretofore explained, that conclusion followed from our decision, if no evidence that controverted our ruling was offered. It is therefore necessary to examine briefly the offer of evidence.
The offer contained sixty-two paragraphs of proposed evidence. A full exposition is impracticable. Stress was laid on the available evidence to rebut our finding of an industry plan to stabilize prices. 6 Evidence was offered to show the licenses were for settlement of alleged infringements, and individual in character and were not used as a subterfuge to gain price control. Such evidence would not affect our determination, set out above, that price-fixing licenses made in knowing concert by standardized price requirements violated the Sherman Act by their very existence.
Defendants offered to prove that royalties based on unpatented gypsum board were compensation for patent licenses and installment payment for prior infringement damages. Such proof would not affect the fact that such a royalty added to the cost of producing unpatented board.
Proof was offered that covenants against transfer of licenses, for price maintenance and for equality of license terms, and bulletin orders against rebates by selling other products at a cheaper price when patented articles were sold, were to protect the licensor's monopoly under its letters patent. It was offered to prove that the activities of the Board Survey Company, considered in our former opinion, 333 U.S. 364, 400, 68 S.Ct. 525, 544, 92 L.Ed. 746, were to secure compliance with the licenses; that there was no agreement to eliminate jobbers but only a purpose to maintain patent prices by discontinuing the jobber's discount. Such proof, in view of our holding as to the Sherman Act, would not make legal concerted action under patents to stabilize prices. We pass over other offers of proof as clearly immaterial on the issue of liability for Sherman Act violation. Good intentions, proceeding under plans designed solely for the purpose of exploiting patents, are no defense against a charge of violation by admitted concerted action to fix prices for a producer's products, whether or not those products are validly patented devices. We do not think that, accepting the offers of fact as true, there is enough in the proffered evidence to change the actions of the defendants from the illegal to the permissible. A finding that the manufacturers did not violate the Sherman Act under the evidence introduced by the Government and that proffered by the defendants below would be clearly erroneous in view of the concert of action to fix industry prices by the terms of the licenses. 7
We agree with a statement made by counsel for the Government in argument below that as a 'matter of formulating the decree' many facts offered to be proven would have effect upon the conclusion of a court as to the decree's terms. However, we read the preliminary statement of the District Court to the decree and the summary decree itself as an adjudication of violation of the Sherman Act by the action in concert of the defendants through the fixed-price licenses, accepting as true the underlying facts in defendants' proof by proffer. The trial judges understood the summary judgment to be, as Judge Stephens said, 'limited to that one undisputed question.' Judge Garrett and Judge Jackson agreed. 8 That conclusion entitled the Government only to relief based on that finding and the proffered facts. On that basis we dismissed United States Gypsum's appeal from the decree, and on that basis we examine the Government's objection to the decree.
The Government's proposed amendments to the decree.A trial court upon a finding of a conspiracy in restraint of trade and a monopoly has the duty to compel action by the conspirators that will, so far as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance. Such action is not limited to prohibition of the proven means by which the evil was accomplished, but may range broadly through practices connected with acts actually found to be illegal. 9 Acts entirely proper when viewed alone may be prohibited. 10 The conspirators should, so far as practicable, be denied future benefits from their forbidden conduct.
The determination of the scope of the decree to accomplish its purpose is peculiarly the responsibility of the trial court. Its opportunity to know the record and to appraise the need for prohibitions or affirmative actions normally exceeds that of any reviewing court. This has been repeatedly recognized by us. 11 Notwithstanding our adherence to trial court responsibility in the molding of a decree as the wisest practice and the most productive of good results, we have never treated that power as one of dsicretion, subject only to reversal for gross abuse. Rather we have felt an obligation to intervene in this most significant phase of the case when we concluded there were inappropriate provisions in the decree. 12 In resolving doubts as to the desirability of including provisions designed to restore future freedom of trade, courts should give weight to the fact of conviction as well as the circumstances under which the illegal acts occur. 13 Acts in disregard of law call for repression by sterner measures than where the steps could reasonably have been thought permissible. We turn then to the Government's proposals for modification of the decree on the assumption that only a violation through concerted industry license agreements has been proven, but recognizing, as is conceded by defendants, that relief, to be effective, must go beyond the narrow limits of the proven violation.
(a) There is one change acceptable to the Government and United States Gypsum and which we think desirable. Article II, § 3, of the decree defines gypsum board as 'made from gypsum and embodying any of the inventions or improvements set forth and claimed in any of the Patents.' This is too restrictive, and the words 'and embodying any of the inventions or improvements set forth and claimed in any of the Patents' should be stricken, if the definition is used.
(b) The Government accepts the finding of Article III of the decree but objects to Article V (2) and (3) because, read together, they allow agreements through price fixing by license between United States Gypsum and Pacific Coast licensees. The complaint of Sherman Act violation was restricted to the eastern territory of the United States. The evidence applied only to that area. However, the close similarity between interstate commerce violations of the Sherman Act in eastern territory and western territory seems sufficient to justify the enlargement of the geographical scope of the decree to include all interstate commerce. Article V of the Government's proposed decree indicates one way in which this extension could be accomplished.
(c) The Government asks an extension of the decree to include all gypsum products instead of patented gypsum board alone. Compare Appendix, Art. V. The license agreements, as indicated above, required royalties on unpatented open edge gypsum board. Board Survey, the organization created to enforce the license agreements, found possibilities of price evasion to exist by a licensee's cutting prevailing prices on other commodities, sold in conjunction with patented gypsum board. Bulletins, issued to standarize sale practices, criticized rebates as violative of the license agreements. 333 U.S. 364, 386, 68 S.Ct. 525, 537, 92 L.Ed. 746. Defendants' offer of proof did not deny such effort to systematize sales. Their explanation was that the efforts were to enforce legitimate license agreements and were not calculated steps in conspiracy or monopoly. We think the Government's request that the decree's injunctions reach gypsum products, as defined in its proposed decree, is reasonable and should be allowed. See U.S. proposed decree, Article II, § 4, and Article V.
(d) The Government asks that the decree forbid standardization of trade practices through concerted agreement. Our former Gypsum opinion, 333 U.S. at pages 382383, 68 S.Ct. at pages 535, 536, 92 L.Ed. 746, gives a summary of the methods adopted. Another method of regulating sales was by special provision for certain classes of customers, jobbers and manufacturing distributors. See 333 U.S. at pages 397 and 399, n. 18, 68 S.Ct. at pages 543 and 544, 92 L.Ed. 746. We think this would justify the Government's requests. Article V, §§ 3, 4 and 6.
(e) The Government asks the insertion of Article V, § 5, directed at an agreement for concerted action in selling or quoting products at prices calculated according to a delivered price system. It points out that such a system was said by this Court, 333 U.S. at page 382, 68 S.Ct. at page 535, 92 L.Ed. 746, to have been employed, and no proffer of contrary proof has been made.
Defendants argue as follows: 'The price for the patented product was 'the lowest combination of mill price and rail freight from mill to destination.' Defendants urge that 'The only witness at the trial who was interrogated about it said that the pricing system in the gypsum board industry was the very opposite of the basing point system; that the mill base prices were extended to all mills; and that it was really only a freight equalization method of pricing which resulted in the customer always getting the lowest possible price no matter from whom he bought.'
And they say 'It was not established by the license bulletins, but licensor, in stating the minimum price, merely used the method of pricing as it then existed.'
Further, defendants point out 'If appellee companies are to be questioned as to their method of pricing, they should be afforded a full hearing for the presentation of all pertinent matters bearing upon their pricing practices and should not be called upon to defend themselves in a summary hearing for an alleged contempt of court.'
We think the defendants are unduly apprehensive. The Government's proposed prohibition of delivered price arrangements is directed at concerted action, by agreement or understanding among the manufacturers, not at any system of pricing the individual manufacturer may adopt or any price that he may make. 14 Since the conspiracy for restraint of trade was furthered by this arrangement, use of such a method should be banned for the future. To avoid any possibility that an individual's meeting of competitors' prices would be construed as a contempt of the decree, we think proposed Article V, § 5 should read as follows: '5. Agreeing upon any plan of selling or quoting gypsum products at prices calculated or determined pursuant to a delivered price plan which results in identical prices or price quotations at given points of sales or quotation by defendants using such plan;' (f) The Government objects to Article VI of the decree which provides, § 1, for compulsory licensing for 90 days to any applicant of all then-owned patents relating to gypsum board at not to exceed the standardized royalties as theretofore charged to defendant licensees. The objection is that the limited time makes the requirement futile except for present licensees. There is a corollary objection to Article VIII because of provisions in the approved license agreements. Particular reference is made by the Government to an approved provision requiring the licensee to report its monthly sales and price with right to Gypsum to have an inspection by a certified public accountant approved by the parties. The Government fears the competitive advantage to Gypsum of knowing its competitors' sales and prices, and the depressive effect of such information on a strenuous sales program by the licensee.
The Government suggests expanding the requirement of licensing to include all United States Gypsum patents, old and new, with a provision by which new patents may be excluded after five years. See proposed decree, Art. VI, § 6. Other proposed changes require all licensees to receive equal treatment as to royalties, put the burden of establishing royalty values on United States Gypsum and allow a licensee to attack the validity of patents.
In United States v. National Lead Co., 332 U.S. 319, 335351, 67 S.Ct. 1634, 16411649, 91 L.Ed. 2077, we recently dealt with problems of licenses and royalties after a finding of Sherman Act violation. The arrangements on account of which the companies manufacturing titanium pigments in that combination were adjudged violators were as offensive to the prohibitions of the Sherman Act as those proven in the present case. Depending largely upon the discretion of the trial court, we refused to modify the decree. It ordered the accused patent owners to license all patents controlled by them concerning titanium and titanium manufactures during the succeeding five years at a reasonable royalty to be fixed by the Court. Paragraphs 4 and 7 of that decree, 332 U.S. at 335337, 67 S.Ct. 16411642, 91 L.Ed. 2077.
The terms of the National Lead decree are somewhat like those the Government asks here. In the present case there should be no requirement of reciprocal grants. 332 U.S. 336, 67 S.Ct. 1642, 91 L.Ed. 2077.
We think that the United States Gypsum Company should be required to license all its patents in the gypsum products field to all applicants on equal terms. Whether the term for compulsory licensing of new patents is to be five years, or for a longer period with the privilege to the appellees to move for a limitation for such new patents, as provided in the suggested decree, Art. VI, § 6, we leave to the District Court. That court should provide for its determination of a reasonable royalty either in each instance of failure to agree or by an approved form or by any other plan in its discretion.
We disapprove the Government's suggestion that the burden of establishing the reasonableness of the requested royalty should be placed upon Gypsum by the decree. We do not decide where the burden of proof of value lies or who has the duty to go forward with the evidence in any particular instance.
We disapprove the Government's suggestion, contained in Article VI, § 5, that the decree shall not be taken as preventing an 'applicant' (we construe this as meaning licensee) attacking the patent or as importing value to it. We see no occasion for this unusual provision and think it should be entirely omitted. 15
We direct that Article VI of the decree be so modified as generally to conform to the above suggestions.
We approve the Government's suggested provisions for inspection of licensees' books and reports to licensor, substantially as set out in proposed Article VI, § 2(c).
(g) The Government seeks access to the records and personnel of the defendants for the purpose of advising itself as to the defendants' compliance with the judgment. See proposed Article VIII. Construing the article as we did in United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 725, n. 6, 64 S.Ct. 805, 814, 88 L.Ed. 1024, we think the request reasonable. This article, or one of similar import, should be included in the decree.
(h) We have noted in Government's contentions in regard to the individual defendants, Avery, Knode, Baker, Ebsary and Tomkins, and its suggestion that Article III be modified so as to read 'defendants' in the first line, instead of 'defendant companies.' It is true that these individuals signed the questioned agreements, but they were acting as officials and we think the provisions of Article V bar them from engaging in similar conspiracies.
(i) The Government asks that all costs be taxed against the defendant companies. Article IX, proposed decree; Article X, decree entered. We see no reason to interfere with the discretion of the trial court in this matter.
'With these general suggestions, the details and form of the injunction can be more satisfactorily determined by the District Court.' 16 Its procedure for the settlement of a decree is more flexible than ours. The decree is reversed and the cause remanded to the District Court for further proceedings in conformity with this opinion.
Mr. Justice BLACK believes that all the amendments proposed by the Government to Article VI of the decree are necessary to protect the public from a continuation of monopolistic practices by United States Gypsum.
Mr. Justice JACKSON and Mr. Justice CLARK took no part in the consideration or decision of this case.
District Court Decree of November 7, 1949.
This cause came on for trial before this Court on November 15, 1943. At the conclusion of plaintiff's presentation of the case, defendants moved, pursuant to Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., for judgment dismissing the complaint on its merits. The motion of defendants was granted August 6, 1946. The judgment so rendered by this Court was reversed by the Supreme Court of the United States, and the case was remanded to this Court for further proceedings in conformity with the opinion of the Supreme Court, 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746.
Following the remand, the plaintiff, pursuant to Rule 56 of the Federal Rules of Civil Procedure, moved for summary judgment in its favor upon the pleadings and all of the proceedings which theretofore had been had in the case, or, in the alternative, for such further proceedings as this Court might direct, and defendants, by direction of the Court, filed proffers of proof.
Argument by counsel for the respective parties upon the motion of plaintiff was heard by the Court, and after due consideration of such argument and of defendants' proffers of proof, Garrett, J. and Jackson, J., constituting a majority of the Court, announced a ruling to the effect that plaintiff's motion for summary judgment would be granted, and Stephens, J., who presided during the trial, announced his dissent from such ruling.
Thereafter counsel for plaintiff and counsel for certain of the defendants submitted forms of final decrees for the consideration of the Court and also suggested findings of fact, the latter to be considered in the event the Court should deem it necessary to make any findings of fact additional to those originally found by it and to those stated in the opinion of the Supreme Court.
In due course, the Court heard arguments respecting the proposed decrees and the suggested findings of fact, and full consideration has been given thereto and to all prior proceedings all being considered in the light of the decision of the Supreme Court which, as understood by the majority of this Court, held that the defendants acted in concert to restrain trade and commerce in the gypsum board industry and monopolized said trade and commerce among the several states in that section hereinafter referred to as the eastern territory of the United States, which section embraces all the states of the United States westward from the eastern coast thereof to the Rocky Mountains and including New Mexico, Colorado, Wyoming, and the eastern half of Montana.
CC∅ | Transformed by Public.Resource.Org
'45. Said combination has been formed, has been carried out, and is being carried out by each of the defendant companies (acting, in part, through those of their officers and directors made defendants herein) and by other companies hereinafter referred to engaged in the manufacture of said gypsum products. Said companies have entered into, have carried out, and are carrying out said combination for the purpose, and with the effect, of restraining, dominating, and controlling the manufacture and distribution of said gypsum products in the Eastern area by:
'(a) Concertedly raising and fixing at arbitrary and noncompetitive levels the prices of gypsum board manufactured and sold by said companies in the Eastern area;
'(b) concertedly standardizing gypsum board and its method of production by limiting the manufacture of board to uniform methods, and by producing only uniform kinds of board, for the purpose, and with the effect, of eliminating competition arising from variations in methods of production and in kinds of board manufactured and distributed in the Eastern area;
'(c) concertedly raising, maintaining, and stabilizing the general level of prices for plaster and miscellaneous gypsum products manufactured and sold by said companies in the Eastern area;
'(d) concertedly refraining from distributing gypsum board, plaster, and miscellaneous gypsum products manufactured by said companies through jobbers in the Eastern area, and concertedly refusing to sell said products to jobbers at prices below said companies' prices to dealers, for the purpose, and with the effect, of eliminating substantially all jobbers from the distribution of said gypsum products in the Eastern area;
'(e) concertedly inducing and coercing manufacturing distributors to resell, at the prices raised and fixed by said companies as aforesaid, gypsum board purchased from said companies.'
The pertinent portions of the decree as entered below are set out in an appendix to this opinion, 340 U.S. 96, 71 S.Ct. 173, in parallel columns with portions of the decree proposed by the Government in its brief here. This proposal is more limited than the Government's proposed decree offered in the District Court.
Exhibit A and paragraph 4 referred to on 333 U.S. at page 410, 68 S.Ct. at page 548, 92 L.Ed. 746, contain the licenses involved in this litigation.
The dissenters in Line (333 U.S. 287, 68 S.Ct. 583) joined in the United States Gypsum opinion, since the concerted action in the United States Gypsum case was thought to violate the Sherman Act, despite their view that the mere multiplication of licenses, as in Line, 'produces a repetition of the same issue (as in General Electric) rather than a different issue.' 333 U.S. 354, 68 S.Ct. 583.
Gypsum's petition for rehearing sought a modification of this position. It argued that 'separate but similar lawful agreements must still be lawful if the result is lawful and no preliminary agreements or understanding to make them could be unlawful.' We denied rehearing. 333 U.S. 869, 68 S.Ct. 788, 92 L.Ed. 1147.
E.g., '1. There was no agreement or understanding between the United States Gypsum Company (USG), patentee, and the other defendants or any of them that they would associate themselves in a plan to blanket the industry under patent licenses and stabilize prices or issue or cause to be issued substantially identical licenses to all of the defendants or any number of them.'
One of the defendants, Celotex Corporation, made a separate proffer of proof, indicating that it was the purchaser of a license from a licensee, American Gypsum Company. In the transfer, Celotex assumed the licensee's obligations to maintain the licensor's price. As Celotex took no other part in the conspiracy, it contends that the decree should not impose upon it any further restriction than a prohibition against price maintenance. Since Celotex entered into the conspiracy by its purchase of the license with an agreement to operate in accordance with its terms, we think it should be treated in the decree like the other licensees.
At the hearing on proper terms for the decree Judge Garrett said, 'Judge Jackson and I thought that, within the limits of the decision of the Supreme Court, that decree should of course be granted and that nothing that was given us in the proffer of proof would change the attitude of the Supreme Court within the scope of those matters upon which it had specifically passed.
'Now, that was the summary judgment.'
Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 461, 60 S.Ct. 618, 627, 84 L.Ed. 852; Hartford-Empire Co. v. United States, 323 U.S. 386, 409, 65 S.Ct. 373, 385, 89 L.Ed. 322; International Salt Co. v. United States, 332 U.S. 392, 401, 68 S.Ct. 12, 17, 92 L.Ed. 20.
United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 724, 64 S.Ct. 805, 814, 88 L.Ed. 1024.
Associated Press v. United States, 326 U.S. 1, 22, 65 S.Ct. 1416, 1425, 89 L.Ed. 2013; cf. International Salt Co. v. United States, 332 U.S. 392, 399401, 68 S.Ct. Ct. 12, 1617, 92 L.Ed. 20. And see United States v. Crescent Amusement Co., 323 U.S. 173, 185, 65 S.Ct. 254, 260, 89 L.Ed. 160.
Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 7882, 31 S.Ct. 502, 523524, 55 L.Ed. 619; United States v. American Tobacco Co., 221 U.S. 106, 184188, 31 S.Ct. 632, 650 651, 55 L.Ed. 663; United States v. Crescent Amusement Co., 323 U.S. 173, 185187, 65 S.Ct. 254, 260, 261, 89 L.Ed. 160; note especially Hartford-Empire Co. v. United States, 323 U.S. 386, 409 435, 65 S.Ct. 373, 385389, 89 L.Ed. 322.
Local 167, I.B.T. v. United States, 291 U.S. 293, 299, 54 S.Ct. 396, 399, 78 L.Ed. 804; Hartford-Empire Co. v. United States, 323 U.S. 386, 409, 65 S.Ct. 373, 385, 89 L.Ed. 322.
See our discussion in Federal Trade Comm'n v. Cement Institute, 333 U.S. 683, 727728, 68 S.Ct. 793, 816, 92 L.Ed. 1009.
Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165; Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416, 91 L.Ed. 374; MacGregor v. Westinghouse Electric & Mfg. Co., 329 U.S. 402, 67 S.Ct. 421, 424, 91 L.Ed. 380; and cf. Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 66 S.Ct. 101, 90 L.Ed. 47.
Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 533, 44 S.Ct. 615, 618, 68 L.Ed. 1161.