United States v. Employing Lathers Association of Chicago and Vicinity/Opinion of the Court

This civil action was brought by the Government in a Federal District Court of Illinois against appellees, a trade association of Chicago lathing contractors, two of its member contractors, and a local labor union composed of lathers. The complaint charged a violation of § 1 of the Sherman Act which forbids combinations or conspiracies in restraint of trade or commerce among the states. 15 U.S.C. § 1, 15 U.S.C.A. § 1. The District Court dismissed the complaint on the ground that it failed to state a cause of action on which relief could be granted. At the same time and for the same reason it dismissed a similar complaint charging a Chicago plasterers' association and a local plasterers' union with violating § 1 of the Sherman Act. Both cases were brought here on direct appeal by the Government under authority of 15 U.S.C. § 29, 15 U.S.C.A. § 29. We have just reversed the District Court's dismissal of the complaint against the plastering group, United States v. Employing Plasterers' Ass'n of Chicago, 347 U.S. 186, 74 S.Ct. 452. Despite some differences in the two complaints, the reasons for reversing the plasterers' case are equally applicable here.

A substantial quantity of lathing material used in Chicago     jobs is produced in states other than Illinois, sold by the      producers to Chicago building material dealers, shipped      interstate either to the Chicago dealers or to their      plastering contractor customers, and finally delivered by the      plastering contractor to his lathing contractor for use on      local building jobs. The alleged conspiracy here is among     these lathing contractors and the union whose members do the      actual lathing. This combination, according to the complaint,     has achieved almost complete mastery over the lathing      business in the Chicago area. It limits the number of lathing     contractors, prescribes their qualifications, decides who      meets the standards prescribed, excludes persons from the business on varied      grounds, including arbitrary racial standards, and assigns      plastering contractors to each lathing contractor. All of     these allegations and more show a substantial suppression of      competition in the lathing business.

The complaint charges that an effect of the alleged combination and conspiracy has been that '(i)nterstate trade and commerce in lathing and related building materials has been unlawfully restrained.' Other allegations emphasize this charge by asserting that any restraint upon lathing work in Chicago 'necessarily and directly restrains and affects the interstate flow of lathing materials, and * *  * building materials *  *  * .'

The complaint does state a cause of action on which relief can be granted on proper proof.

Reversed.

Mr. Justice MINTON and Mr. Justice DOUGLAS dissenting, see 347 U.S. 186, 74 S.Ct. 456.