George Van Camp Sons Company v. American Can Company/Opinion of the Court

This suit was brought in the federal District Court for the District of Indiana to enjoin violations of section 2 of the Clayton Act. 38 Stat. 730, c. 323; U.S.C.ode, tit. 15, § 13 (15 USCA § 13). From a decree dismissing the bill for want of equity, an appeal was taken to the court below. Under section 239 of the Judicial Code as amended (U.S.C.ode, tit. 28, § 346), that court has certified the following questions concerning which instructions are desired for the proper disposition of the cause:

'Question 1. Does section 2 of the 'Clayton Act' (United     States Code, title 15, section 13) have application to cases      of price discrimination, the effect of which may be to      substantially lessen competition, or tend to create a      monopoly, not in the line of commerce wherein the discriminator is engaged, but in the line of commerce in      which the vendee of the discriminator is engaged?

'Question 2. Where one who makes an article and sells it,     interstate, to persons engaged, interstate, in a line of      commerce different from that of the maker, discriminates in      price between such buyers (said discrimination not being made      on account of differences in the grade, quality or quantity      of the commodity sold, nor being made as only due allowance      for the differences in the cost of selling or transportation,      nor being made in good faith to meet competition) and the      effect of such discrimination may to be substantially lessen      competition or tend to create a monopoly in the line of      commerce wherein the buyers are engaged, does the maker and      seller of the article, making such price discrimination,      transgress section 2 of the 'Clayton Act' (United States      Code, title 15, section 13)?'

The relevant facts upon which the questions are based are set forth as follows:

'The bill charges that appellant, George Van Camp & Sons     Company, is engaged, interstate, in the business of packing      and selling food products in tin cans, and that appellee Van      Camp Packing Company is engaged in the same business, and is      a competitor of appellant, and that appellee American Can      Company manufactures, in very great quantities, and sells,      interstate, to food packers, tin cans used in the food      packing industry, and owns the monopoly for certain machines      which are necessary for sealing the cans of its manufacture,      and that it sells such cans in large quantities to appellant      and to appellee Van Camp Packing Company, and leases to them      its machines for sealing these cans.

'That the American Can Company is unlawfully discriminating     between different purchasers of its commodities, in that the      price at which it offered and offers and sold and sells its said cans to appellee Van Camp Packing Company      is 20 per cent. below its publicly announced standard prices     and the prices at which it contracted to sell and did and      does sell its cans of the same kind to appellant, George Van      Camp & Sons Company; that the American Can Company furnishes      food packers, including appellant, its machines necessary for      sealing its said cans at a fixed rental, and furnishes the      same machines to the Van Camp Packing Company free of charge;      that the American Can Company paid and pays the Van Camp      Packing Company large sums of money by way of bonus,      discounts, and reductions from the price of cans fixed in      contracts between them, none of such bonus, discounts, or      reductions being allowed or paid to appellant; and that these      discriminations were and are not made on account of      differences in grade, quality, or quantity of the commodity      sold, nor of the machines leased, nor on account of any      difference in the cost of selling or transportation, nor made      in good faith to meet competition.

'That the effect of such discrimination is to substantially     lessen competition, and tends to create a monopoly in the      line of interstate commerce, in which the appellant, George      Van Camp & Sons Company, and the appellee Van Camp Packing      Company are both engaged, namely, the packing and selling of      food products in tin cans.

'There is no allegation in the bill that the discriminations     complained of tended to create a monopoly or substantially      lessen competition in the line of commerce in which the      appellee American Can Company is engaged.

'On separate motions of the several appellees on the ground     that said section 2 of the Clayton Act is addressed only to      discriminations in price the effect of which may be to      substantially lessen competition, or tend to create a      monopoly in the business in which the discriminator is      engaged, the District Court dismissed the bill for want of equity, and the appeal is from the decree of      dismissal.'

Section 2, copied in the margin, provides that it shall be unlawful for any person engaged in commerce, in the course of such commerce, to discriminate in price between different purchasers * *  * where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in any line of commerce. As applied to the present case, the word 'commerce' as there used means interstate commerce. Clayton Act, § 1 (15 USCA § 12).

The pertinent facts, shortly stated, are: That George Van Camp & Sons Company, the complainant, and the Van Camp Packing Company are both engaged in the business of packing and selling food products in tin cans in interstate commerce. The American Can Company manufactures tin cans used in the food-packing industry and sells such cans to the other two companies and leases to them machines for sealing the cans. It sells to the packing company at a discount of 20 per cent. below the announced standard prices at which it sells cans of the same kind to the complainant; it charges complainant a fixed rental for the sealing machines, but furnishes them to the packing company free of charge; and it discriminates in other respects. The effect of the discrimination is to substantially lessen competition, and its tendency is to create a monopoly, in the line of interstate commerce in which complainant and the packing company are competitively engaged.

These facts bring the case within the terms of the statute, unless the words 'in any line of commerce' are to be given a narrower meaning than a literal reading of them conveys. The phrase is comprehensive and means that if the forbidden effect or tendency is produced in one out of all the various lines of commerce, the words 'in any line of commerce' literally are satisfied. The contention is that the words must be confined to the particular line of commerce in which the discriminator is engaged, and that they do not include a different line of commerce in which purchasers from the discriminator are engaged in competition with one another. In support of this contention, we are asked to consider reports of congressional committees and other familiar aids to statutory construction. But the general rule that 'the province of construction lies wholly within the domain of ambiguity,' Hamilton v. Rathbone, 175 U.S. 414, 419, 421, 20 S.C.t. 155, 158 (44 L. Ed. 219), is too firmly established by the numerous decisions of this court either to require or permit us to do so. The words being clear, they are decisive. There is nothing to construe. To search elsewhere for a meaning either beyond or short of that which they disclose is to invite the danger, in the one case, of converting what was meant to be open and precise, into a concealed trap for the unsuspecting, or, in the other, of relieving from the grasp of the statute some whom the Legislature definitely meant to include. Decisions of this court, where the letter of the statute was not deemed controlling and the legislative intent was determined by a consideration of circumstances apart from the plain language used, are of rare occurrence and exceptional character, and deal with provisions which, literally applied, offend the moral sense, involve injustice, oppression or absurdity, United States v. Goldenberg, 168 U.S. 95, 103, 18 S.C.t. 3, 42 L. Ed. 394; or lead to an unreasonable resuit, plainly at variance with the policy of the statute as a whole, Ozawa v. United States, 260 U.S. 178, 194, 43 S.C.t. 65, 67 L. Ed. 199. Nothing of this kind is to be found in the present case. The fundamental policy of the legislation is that, in respect of persons engaged in the same line of interstate commerce, competition is desirable and that whatever substantially lessens it or tends to create a monopoly in such line of commerce is an evil. Offense against this policy, by a discrimination in prices exacted by the seller from different purchasers of similar goods, is no less clear when it produces the evil in respect of the line of commerce in which they are engaged than when it produces the evil in respect of the line of commerce in which the seller is engaged. In either case, a restraint is put upon 'the freedom of competition in the channels of interstate trade which it has been the purpose of all the anti-trust acts to maintain.' Federal Trade Comm v. Beech-Nut Co., 257 U.S. 441, 454, 42 S.C.t. 150, 155 (66 L. Ed. 307, 19 A. L. R. 882).

We have not failed carefully to consider Mennen Co. v. Federal Trade Commission (C. C. A.) 288 F. 774 (followed in National Biscuit Co. v. Federal Trade Commission (C. C. A.) 299 F. 733), cited as contrary to the conclusion we have reached. The decision in that case was based upon the premise that the statute was ambiguous and required the aid of committee reports, etc., to determine its meaning, a premise which we have rejected as unsound.

Both questions submitted are answered in the affirmative.

Question No. 1, Yes.

Question No. 2, Yes.