Nashville Milk Company v. Carnation Company

PETITIONER:Nashville Milk Company
RESPONDENT:Carnation Company
LOCATION:Philadelphia Board of Public Education

DOCKET NO.: 67
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 355 US 373 (1958)
ARGUED: Nov 21, 1957
DECIDED: Jan 20, 1958

Facts of the case

Question

Audio Transcription for Oral Argument – November 21, 1957 in Nashville Milk Company v. Carnation Company

Earl Warren:

Number 67, Nashville Milk Company, Petitioner versus Carnation Company.

Mr. Dixon, you may proceed.

Jerome F. Dixon:

May it please the Court.

I represent the petitioner who was the plaintiff below in a suit to recover treble damages caused by injuries by violations of Section 3 of the Robison-Patman Act.

The question presented here today in this suit now is whether a party injured by a violation of Section 3 has the right to sue for damages and injunction under Sections 4 and 16 of the Clayton Act.

Underlying that issue is whether Section 3 of the Robinson-Patman Act became a part of the Clayton Act.

If it did, then it’s one of the antitrust laws for which remedy is given by Sections 4 and 16 of the Clayton Act.

Let me describe the Robinson-Patman Act in general now and I would be a little more particular of it later on.

It consists of four Sections.

Section 1 of the Act or Section 1 of the bill clearly amended Section 2 of the Clayton Act.

Section 2 of the bill and which is also in regard to Section 2 of the Act is a saving clause preserving rights of action under pending causes of action.

Section 3 is the Section in question here.

Section 4 is an exemption of cooperative associations from the provisions of the Act.

Our position briefly stated this time is that the internal or what might be called an internal evidence consisting of the Robinson-Patman Act itself.

And what I might call the external evidence consisting of the debates in the proceedings in Congress, all, I contend, clearly show that Congress intended that all Sections of the Robinson-Patman Act should amend and become a part of the Clayton Act.

Now, let’s get back to the Clayton Act for a moment.

Sections 4 and 16 of the Clayton Act, respectively, give the rights of action for treble damages and for injunction for injuries and violation of “the antitrust laws.”

Section 1 of the Clayton Act defines antitrust laws and it provides that the antitrust law shall include three named acts.

These acts are named by their titles.

One is the Sherman Act the title is given.

One is the Wilson Tariff Act and the third is the Clayton Act itself.

Therefore, whether a cause of action exist to the plaintiff here under Section 3 of the Robinson-Patman Act depends upon whether of not Section 3, became a part of the Clayton Act.

We contend it did by amendment.

Now the —

At the time that — at the time that Section 1 was passed defining antirust laws, were there other statutes on the books within colloquial parlance could be called antitrust (Voice Overlap) —

Jerome F. Dixon:

The Sherman Act?

No, I mean the Sherman Act the —

Jerome F. Dixon:

And the Wilson Tariff Act.

— Wilson Tariff Act and the Clayton Act.

Now beyond those were there other statutes (Voice Overlap) —

Jerome F. Dixon:

That I (Voice Overlap) — that I don’t know, Your Honor.

I can’t —

— antitrust laws — as part of the antitrust law?

Jerome F. Dixon:

I can’t say that.

I do not know.

You don’t know.

Jerome F. Dixon:

I don’t know.

Now the title and the enacting clause, the Act itself is setup in the appendix 1 of our brief, starting at page 25.

The title and the enacting clause refer only to Section 2 of the Clayton Act.

The enacting clause purports to amend only Section 2 of the Clayton Act.

The Court of Appeals also I should say that quotation marks appear before and after the various paragraphs of Section 1.

But they do not appear before any of the subsequent Sections, Section 2, 3 and 4.

The Court of Appeals took the position that because the enacting clause only referred to Section 2 and because of the presence of those quotation marks only before and after the very paragraphs of Section 2 that that showed that Congress did not intend that Section 3 should become a part of the Clayton Act by amendment.

It is our position that whether or not Section 3 amended and became a part of the Clayton Act, depends upon what Congress intended regardless of whether or not Section 3 was referred to in the enacting clause and regardless of whether or not there were quotation marks that it is a question of the intent of Congress and that the intention of Congress is not to be overwritten by the presence of the quotation marks only before and after Section 1 and because of the nature of this particular enacting clause.

It is our position that the entire Robinson-Patman Act was amendatory of the Clayton Act and that all four Sections of the Robinson-Patman Act are in an integrated part as a whole.

Now, I want to call your attention — the attention of the Court first of all to the fact that quotation marks are absent from Sections 2 and 4 as well as absent in Section 3.

Now, Section 2 as I’ve stated before, is this Section that preserve pending causes of action.

Clearly, Section 2 was amendatory of the Clayton Act itself because it goes to the very heart or it doesn’t go to the heart but it affects Section 1, equally absent with from quotation marks is Section 4.

Section 4 is the exemption of cooperatives.

Clearly, Section 4 amended the Clayton Act because the exemption affects Section 2 of the Clayton Act as amended by Section 1.

Now, if these two Sections clearly amended the Clayton Act in the absence of quotation marks, surely, the absence of quotation marks would not prevent Section 3 from amending the Clayton Act.

There is another matter of conserve or importance in connection with Section 2.

It appears to 28 — page 28 —

Earl Warren:

Of what?

Jerome F. Dixon:

Of the — of my brief.

Pardon me, Your Honor.

That nothing contained herein shall affect rights of action arising or litigation pending —

William O. Douglas:

What part is that sentence?

Jerome F. Dixon:

What’s that?

William O. Douglas:

(Inaudible)

Jerome F. Dixon:

Pending or orders the Federal Trade Commission issued on the effect or pending on review based on Section 2 of the said Act of October 15th, prior to the effective date of this amendatory act.

Now, the adjective “amendatory” with the noun “act” is not only used in an isolated instance there but it’s again used in the next line, Your Honor, amendatory act and then about the six lines down amendatory act.

And then about five or six lines from the bottom, again, amendatory act so that Congress by its own words clearly characterized the entire act as being an amendatory act.

We — It’s a familiar principle of statutory construction that every word used in a statute is suppose to have been used deliberately and upon a purpose unless it can be said clearly to the contrary that it’s a desperate unnecessary word.

And I say that when Congress in Section 2 used the word amendatory act four times, Congress clearly characterized the entire Act as being an amendatory act.

Then another element that indicates clearly that Congress intended the entire Act to be amendatory.

The cooperative exemption.

The cooperative exemption in Section 4, nothing in this Act shall prevent a cooperative association and so on.

Now, that applied — that exemption applies indifferently not only to Section 3 but to Section 1.

So that Section 4 is, as I’ve stated before, clearly a part of the — had become a part of the Clayton Act and if having referred indifferently to both Sections to — for the exemption to having applied differently to both.

There is additional strong evidence that all four Sections were intended to become a part of the Clayton Act.

Now, it is our further position that the — what the Act itself did, that is the Robinson-Patman Act, was to simply raise the horizon of old Section 2 of the Clayton Act and continue it in an extended matter beyond what Section 2 had originally applied but it’s simply raised the horizon of that Act and that all Sections of the Robinson-Patman Act are integrated parts of the whole.

Let me call Your Honors’ attention and it might take me the time here as to the nature in that respect of Section 3 and a comparison of Section 3 with Section 2 or Section 1 of the Act and Section 2 of the — Section 1 of the bill but Section 2 of the Clayton Act as amended.

Now Section 1 of the — or Section 2 of the Clayton Act before its amendment had dealt primarily and above all with matter of price discrimination.

In the Morton Salt case, this Court commented that the original Section 2 had been construed to permit quantity discounts and the purpose of the Robinson-Patman Act was to limit this practice.

Now, Section 2 in its amendment, takes former Section 2 and makes some changes on it but retains the provision as to price discrimination which is at primary — was its primary provision before and still remained it primary provision.

Then it divides the entire Section up into paragraphs (a), (b), (c), (d), (e), and (f).

At paragraph (b) places the burden of rebutting a prima facie case before the Federal Trade Commission about a person charged with this violation.

Now, (c), (d), (e) — (c), (d) and (e) are parts — the forbidding parts in addition to paragraph (a).

I’ll come back to them in just a moment if you’ll permit me.

Now, let me go to Section 3 before I make this comparison with the other Section.

It consists, why it was not paragraphed, it consists in essence of three parts.

One part forbids discrimination by selling goods in any part of the United States that price is lower than those who have acted elsewhere for the purpose of destroying competition.

Another, to sell goods that are unreasonably low prices for the purpose of destroying competition.

Then the third, to discriminate against competitors of the purchaser in granting any discount, rebate, allowance or advertising service to a purchaser over and above a similar grants available competitors to respective goods of like grade, quality and quantity.

Now Section 1 is similar in many respects or that the number one, the one I just put ahead, I marked here one, excuse me.

What I last read to discriminate against competitors of purchasers and grantingany discount is similar in many respects to paragraph (c) of Section 2.

It shall be unlawful for any person engaged in commerce in the course to such commerce to pay or grant or to receive or accept adding of value as a commission, brokerage or other compensations or any allowance or discount in lieu thereof of getting back to the language or Section 3 to discriminate against competitors of the purchaser and granting any discount, rebate, allowance or advertising service.

Now, paragraph (d) shows another similarity.

I’m trying to show that — what I’m trying to show here is that Section 3 is in the same area, general area as these parts forbidden in Section 2.

Jerome F. Dixon:

I don’t contend they’re identical.

I say they are in the same area and they are striking at monopolistic practices in — principally in the field of the sale of merchandise, goods, wares and merchandise, all of them strike at that monopolistic practice in those fields.

Section 3 or section (d), it should be unlawful for any person engaged in commerce to pay your contract with a payment of granting the value to or with the benefit of a customer of such person in the course of such commerce as compensation for or in consideration of any services or facilities, facilities furnished by such customer in connection with the processing, handling or offering for sale of such product.

Now compare that with Section 3 which forbids to discriminate against competitors for the purchase and granting any discount, rebate, allowance or advertising service.

Clearly, that any service furnished in connection to the sale of products, would include and might include the furnishing of advertising services.

Then (e), it shall be unlawful for any person to discriminate in favor of one purchaser against another or purchasers of commonality, bought for resale with or without processing by contracting to furnish or furnishing of any services or facilities connected with the processing, handling, sale or offer sales as commodity.

That deals with goods or resale but it’s substantially similar to (d) which I have just read.

Now, the Court of Appeals considered also that the proceedings in Congress indicated that Congress did not intend that Section 3 should become a part of the Clayton Act.

My position is that it is just the reverse that a fair reading of what was said shows that it was the clear intention of the members that Section 3 should become a part of the Clayton Act.

It is just the reverse of the position the Court took.

If the Court will permit me this — what the Court of Appeals did was to take out of context some of the things that were said there.

They not only took some of the things that were said out of context but the Court, in quoting from something said by Representative Miller, forgot to complete the sentence to represent what Miller used within the period so that — what the Court of Appeals said — I’ll come back to this in a minute but I just want to point this out.

It’s significant —

Where is that?

Jerome F. Dixon:

— as we go on.

Page 18 of the record, Your Honor.

Now, we’re at the end of the first paragraph where it says emphasis apply.

It is said that of course it is but it is not a part of the Clayton Act.

Now, what — turning to page 38 in my brief, what represented Miller did say down at just about halfway down on my brief where Representative Miller start saying, “Of course it is” at page 38, halfway down just before the star.

I represent him, of course it is but a denial as part of the Clayton Act is amended by Section 2.

Now, the Court of Appeals left out by its stars there is amended by Section 2 and they have taken that out of context.

Now, they committed two errors, first they took Representative Miller’s statement out of the context and secondly they didn’t complete the sentence.

Now, in order to — in order to fully understand what was said from the floor of the House.

That is taken from the floor of the House when the House was considering that the bill was final before a final passage.

In order to fully understand what Representative Miller was talking about and to fully understand what I’m about to say here that the record clearly shows that it was intended that the Robinson-Patman Act should have amended the Clayton Act.

You have to read a number of things here and I don’t want to read and I know most courts ground upon reading but it is so important to read it fully so you get the full context.

If the Court will permit me to do a small amount of reading here.

Representative Celler was a member of the conference committee and Representative Celler incidentally it doesn’t appear.

While he’s a member of the conference committee, he didn’t like the bill as written by the conference committee.

He started out at top of the page 36.

Jerome F. Dixon:

He said I shall not consume the five minutes, I simply want to get the record clear because — and then he said rather prophetically in view of what here he said, endeavoring you interpret properly the language of statutes, the courts must first look to the statements that appear in the record in debate.

Now, he goes on, he discussed the features of the bill.

He then yielded if for questions.

The first question came from Representative (Inaudible)

I understand that Borah-Van Nuys is a separate and distinct Section from the whole provisions at some of the contraries on the part of the House state in me.

There is no inconsistency and the House provisions for bail but that the Borah-Van Nuys amended was simply an additional remedy.

Mr. Celler, I ask the this gentleman to read Section 3, the Borah-Van Nuys provision and then read Section 2 and Section 1 and see whether that is so.

And let me point out that this bill is an amendment of the Clayton Act which provides that anyone agrees to find discrimination price or discount or allowance consumed or cover treble damages from the person guilty of discrimination.

In addition to same act of discrimination as treble damages, the businessman can by Section 3 of the bill be held the Court and fine $5000 or imprisonment.

Now skipping along, Mr. Celler, then he goes out, if a vendor is found guilty of discrimination as provided earlier (Inaudible) agree so far as treble damages.

Mr. Celler, if he violates provisions of Borah-Van Nuys provisions of the bill will be in subject to penalties or a criminal nature and you committed the offense.

Mr. Hancock, would he also be liable for triple damages?

Mr. Celler, “He would also have to respond in treble damages under the provisions of the Clayton Act anyone can agree and can sue”.

Then Representative Miller took up.

Representative Miller then began explaining.

Representative Miller also had been a member of the conference committee.

He then began explaining the various features of the bill then this colloquy we occurred on page 37.

Section 3 is the Borah-Van Nuys amendment.

We accepted this amendment for the reason and this reason only.

The first Section that bill is reported back here, amends Section 2 of the Clayton Act.

I see my time is — does the bill agreed to by the contraries carry the penalty of triple damages and also upon the earnings of criminal law.He said the penalty of treble damages is the old law.

In other words, we made no change in that particular provision of the Clayton Act.

Section 3 which the gentleman from New York talks about is the Borah-Van Nuys amendment and is that is a criminal section.

The first part of this bill has nothing to do with criminal offenses.

It deals primarily in my opinion with the authority of the Federal Trade Commission to regulate and enforce provisions in Section 2 of the Clayton Act is amended.

Section 3 of the bill is placed in effort to make the criminal effects apply only to that particular Section and I believe it is a reasonable construction.

There is not criminal offense involved or anything outside or within that Section.

In Section 3, Mr. Hancock of New York, it is not perfectly clear that any vendor who discriminates in price between purchasers is guilty of a crime and is also subject to triple damages to anyone who claims to be aggrieved.

Mr. Miller: “That is true but the criminal part is included in Section 3 and Section 3 only.”

Mr. Hancock of New York: “But it is part — is part of the same act.”

Jerome F. Dixon:

Then here is the part that the court quoted, the Court of Appeals: “Of course it is but it is not — the Clayton Act is amended by Section 4 of the Clayton Act is amended by Section 2.”

All he was calling attention to was the fact that the other — Section 3 did not amend Section 2 and that the criminal — the criminal provision of the Act applied to Section 3 and Section 3 only.”

Now, Mr. Celler “Is it possible for a man to violate Section 3,” may I finish this sentence?

Earl Warren:

Finish the sentence.

Jerome F. Dixon:

Section 3 and by the same act guilty of violating the other Sections of the bill.

That would be entirely possible.

Mr. Celler: “So he would be subject to triple damages as well as a criminal prosecution?”

Mr. Miller: “That would be possible.”

And Mr. Miller concludes member of the conference committee.

Mr. Speaker “I want to say that Congress — that Congress really wants a bill to amend the Clayton Act and desires amending the Clayton Act and — and desires to retain the three objectives of the House bill.”

This is the bill.

In other words he ends up that way.

Pardon my shortness, Your Honor.

Earl Warren:

All right.

Mr. Williams.

Melville C. Williams:

May it please the Court.

Nashville’s entire case is based upon the contention to Section 3 of the Robinson-Patman Act as an implied amendment of the Clayton Act.

It does not claim that it was an express amendment that it became part of the Clayton Act.

It relies solely by implication.

Now, at the outset, Nashville is met with the burden of overcoming the rule of statutory construction of the presumption against implied amendment.

Our first position is that it has not overcome this presumption.

In order to do that, it must show more than there is a mere possibility that Congress might have thought or indented that Section 3 will become part of the Clayton Act.

It must show that was a necessary intent of Congress.

Now, let’s examine three aspects of Nashville’s contention.

First is Section 3 of the Robinson-Patman Act and amendment of the Clayton Act at all.

Secondly, assuming arguendo there is an implied amendment of the Clayton Act is that the kind of amendment that becomes a part of the Clayton Act and does one of the antitrust laws as defined in Section 1 of the Clayton Act.

And then thirdly, what do we find in the legislative history with respect to the intent of Congress as to whether Section 3 of the Robinson-Patman Act was or was not to become part of the Clayton Act.

Now, as to the first point, a definition of an amendment of an act is set forth in Nashville’s brief.

It’s one sentence that appears on pages 17 and 18.

It states that a law is amended when it is permitted to remain and something is added or taken from it or it is in some way altered to better accomplish its purpose.

Melville C. Williams:

In this case, the Clayton Act was allowed to remain insofar as Section 3 is concerned.

Section 3 certainly takes nothing from the Clayton Act and it does not alter the Clayton Act in anyway.

The question then is whether it adds something to it.

We submit that Nashville has confused the addition of something to the antitrust laws with the addition of something to the Clayton Act.

Section 3 adds something to the antitrust laws but adds nothing to the Clayton Act.

If Section 3 has been written to say, an act in violation of Section 2 of the Clayton Act as amended by Section 1 of the Robinson-Patman Act shall be subject to criminal penalties then in that case the Section would have added something to the Clayton Act but it did not do that.

It set up its own separate standards of what constitutes prohibited acts.

So our position is that this Section 3 stands as a separate piece of legislation.

This is illustrated by a consideration of what would — what effect a repeal of Section 3 would have on the Clayton Act.

If were repealed as the Clayton Act would be completely ineffective, it would stand just as it is.

Similarly, you could repeal the Clayton Act in Section 3 which stands completely in its own feet.

It sets forth its own standards of conduct.

It sets forth its own penalty.

So we submit that Section 3 is not an amendment of the Clayton Act.

Next quest — and it’s no more in amendment for example than other laws.

The antidumping provisions of the Revenue Act of 1916 prohibited persons from bringing — importing articles into the United States and selling them at substantially less than or actual value with the intent to injure industry and the United States.

Under the theory advanced here if Section 3 is an amendment of the Clayton Act, similarly this antidumping provision of the Act of 19 — Revenue Act of 1916 is an amendment of the Sherman Act and one of the antitrust laws referred to in Section 1 of the Clayton Act.

The Tariff Act from 1930 prohibited —

Earl Warren:

I suppose — I supposed if that Act you’ve just spoken have those incorporated in the Act the fact that it was an amendatory acts of the original act, it would have some bearing wasn’t it?

Melville C. Williams:

No, Your Honor not if it just said amendatory.

Now, the next — that’s the next point I’m coming to.

We draw distinction between the use of the word amendatory and part of.

Now, counsel for Nashville in his argument stated correctly we think at the beginning that the question was whether or not Section 3 of the Robinson-Patman Act became part of the Clayton Act.

And then he used the word it’s amendatory to Clayton Act with the assumption that any act that was amendatory became part of it.

Now, to us the word amendment could have many meanings.

It could mean something becomes part of.

For example, Section 1 of the Robinson-Patman Act said, the text — or the Section 2 of the Clayton Act shall be amended to read as follows.

Now, clearly, a substitution of text to that kind becomes a part of the Clayton Act.

And any lawyer looking to find out what’s in the Clayton Act would find that that act was a part of the Clayton Act by the text revision.

Earl Warren:

Well does that lead you — lead you to the conclusion that when Congress says this is an amendatory act of another act that it is up to the court to pick and choose what part is amendatory and what part of the new act becomes a part of the old act?

Melville C. Williams:

We think it is up to the court if we think that the guide to the court to determine what becomes part of the act and what is merely amendatory and not part of it is found in Section 1 of the Clayton Act.

That Section provides antitrust laws as used herein includes then at least by title, the Sherman Act, the Wilson Tariff Act as amended and this Act, meaning the Clayton Act.

Now, it’s shown in our brief Section 1 of the Clayton Act was intended to be exclusionary, and to answer the first question asked by Mr. Harlan, at the time the Clayton Act was passed by Congress, it had only a few weeks before passed the Federal Trade Commission Act which was also an antitrust act in the broad sense.

And we think the — one of the — that was one of the reasons why that definition of antitrust laws was put in the Clayton Act was to exclude the Federal Trade Commission Act.

Furthermore, if Congress had not intended Section 1 to be exclusionary in character, it did not have to define antitrust laws at all.

All it had to do is use the word antitrust laws in the body of the Clayton Act.

And any subsequently enacted antitrust law would automatically be subject to treble damages than the injunctive rights in private parties provided by Sections 4 and 16 of the Clayton Act.

So we say that the test is whether or not Congress clearly intended that the statute become part of the Clayton Act.

Now another I mentioned the expressed amendment by revising the text.

Another means Congress has used to indicate it wanted a section to become part of the Clayton Act is found in the 1955 statute by which Congress gave the government a private right to sue or right to sue for single damages when it was injured by reasonable violation and the Section 5 which they provided for uniform statute of limitation in private treble damage suits.

In that bill, Congress said, the following Sections, number 4 (a) and 4 (b) shall be added to the Clayton Act immediately following Section 4.

In those two instances, you had a clear intention of Congress that the two instance the Robinson — Section 1 of the Robinson-Patman Act, the revision of this text and this 1955 Act.

You had a clear indication of the intent of Congress that those Sections were to become part of the Clayton Act.

We do not have anything like that with respect to Section 3 of the Robinson-Patman Act.

Earl Warren:

Does any part of this Act become a part of the Clayton Act?

Melville C. Williams:

Yes, Section 1 of the Robinson-Patman Act clearly becomes a part of the Clayton Act.

Earl Warren:

What are the guide posts for us to determine — what are the guide posts for us to follow —

Melville C. Williams:

Well the guide — the guide post as I see it — I’m trying to think of what other means Congress could use to indicate it wanted a new law to become part of the Clayton Act.

There is only two ways I’ve been able to think of, the first is that used in the same Robinson-Patman Act in Section 1 of that Act when it said Section 2 of the Clayton Act is hereby amended to read as follows and then encloses the new text of Section 2 of the Clayton Act in quotation marks.

That’s one means.

And the second one is the other one I’ve mentioned that was used in 1955, specially stating a new Section shall be added to the Clayton Act to be numbered so and so and inserted in the Clayton Act following a particular Section.

I’ve unable to think of any other means which Congress could clearly indicate it intended amendment to become part of the Clayton Act.

Earl Warren:

Then where does that lead you here?

What — what Sections of this Act, this Robinson-Patman Act to become a part of the Clayton Act?

Melville C. Williams:

Only Section 1.

That’s the only Section that expressly revises the text of the Clayton Act and it writes a new Section 2 of the Clayton Act.

Earl Warren:

Neither 2 nor 4?

Melville C. Williams:

2 nor 4 and not become part of the Act.

Now, in the broad sense of course, Section 4 is amendatory of the Act because it says that the Act shall not be construed to prevent a proper case from dividends to the members.

But we draw that line between part of and amendatory.

Harold Burton:

As a matter of fact, Section 1 doesn’t become a part of the Clayton Act anymore than 2, 3, and 4 but Section 1 provides Section 2 of the Clayton Act probably amended so and so.

Melville C. Williams:

Yes, you’re right.

I stand corrected.

The Section as a whole includes the cause, the initial phrase that Section 2 is hereby amended and so the Section as a whole does not become part of the Clayton Act, only the — that portion of Section 1 within quotation marks.

Earl Warren:

2 and 4 were not in quotation marks, were they?

Melville C. Williams:

No and neither was 3.

The text of the statute —

Earl Warren:

How do you — how do you differentiate between 2 and 4 and — from one end and 3 on the other?

Melville C. Williams:

We don’t — we say that none — neither 2 or 3 nor 4 became part of the Clayton Act.

Earl Warren:

Are they all amendatory of it?

Melville C. Williams:

Section 3 is not amendatory of the Clayton Act.

That was my first point.

Earl Warren:

All right.

Now make the distinction between 3 on the one hand and 2 and 4 on the other hand for me please.

Melville C. Williams:

The Section — Section 2 is merely a temporary legislation.

It provided a saving clause that a pending litigation under the old Section 2 of the Clayton Act before amendment should not be affected.

It also provided that in case in prior litigation under old Section 2 where the respondent in the Federal Trade Commission proceeding had subsequent to enactment of the Clayton Act, committed a violation of the revised text of Section 2.

That in that case, the Federal Trade Commission could reopen the case and proceed to prosecute the violation of the revised Section 2 of the Clayton Act.

But clearly, that violation of the revised Section had to occur after passage of the Clayton Act.

Now, we think that that is not amendatory of the Clayton Act.

It’s merely temporary legislation dealing with particular situations but it does not affect — it does not limit or control the operation of the Clayton Act.

Clayton Act too is in full effect.

Earl Warren:

Well you said it was amendatory but not a part of it.

Melville C. Williams:

I don’t think that Section 2 is even amendatory, Your Honor.

But we — our position is such that we concede that if it might be amendatory, assuming its amendatory, still is not part of the Act.

Now Section 4 is clearly amendatory of the Clayton Act because it states that nothing in this Act as referring to Robinson-Patman Act shall prevent cooperatives from paying dividends to their members.

Incidentally, may we — the text of that that is at page 29 of the Nashville brief.

No one says nothing in this Act, the words this act refer to the Robinson-Patman Act.

And it refers to Section 1 of Robinson-Patman Act which contains the amendments of Section 2 of the Clayton Act.

So that it states that nothing in Section 2 of the Clayton Act as amended shall prevent cooperatives from returning these dividends.

Melville C. Williams:

Now in that sense, it is amendatory because it limits the operation of the Act but it is not a part of the Act.

If I’ve made my distinction clear —

Earl Warren:

I think you’ve stated your position.

Melville C. Williams:

Thank you.

Where is this in Section 4 — there’s nothing in this Act and so there’s nothing in the Clayton Act or nothing in the Robinson-Patman Act.

Melville C. Williams:

It’s nothing in this Act — nothing in the Robinson-Patman Act.

I thought (Inaudible)

Melville C. Williams:

Well, it — it — because it says nothing in Robinson-Patman Act, it refers to — nothing in Section 1 of the Robinson-Patman Act.

That being a member of Section 2 of the Clayton Act in effect that says nothing in Section 2 of the Clayton Act shall prevent cooperatives in returning.

(Inaudible)

Melville C. Williams:

Yes.

Now, Section 4 does not affect any Section of the Clayton Act except — excuse me, except Section 2 is limited only to Section 2.

Although practically that makes no difference because there is no other Section of the Clayton Act to which you could apply anyway.

Now, if our test by distinction between a —

Felix Frankfurter:

May I ask a question Mr. Williams —

Melville C. Williams:

Yes.

Felix Frankfurter:

— in Section 4 I find your — the Chief Justice indicated you’ve meant to be what you’ve said but I find it as little artificial.

Take Section 4, all that means if I read here, that if anybody for any reason or for anything of appearing anywhere on statute books of United States or some court decision, I don’t know how the diversity case (Inaudible) if anybody objects to the payment of returning — part of that earning et cetera, brings forth some — some patterns of law whether by Congress or by a court against cooperative doing these things, Section 4 is announced.

Is that right?

Melville C. Williams:

No, Mr. Justice.

I understand that Section 4 is an answer only if someone proceeds against a cooperative under Section 3 of the Robinson-Patman Act or under Section 2 of the Clayton Act as amended by Section 1 of the Robinson-Patman Act.

Felix Frankfurter:

Well, suppose somebody or some astute lawyer discovered some sleeping section which was barred, which would bring such an action, that is in Section 4 isn’t restrict.

It says nothing in this Act shall prevent a cooperative from returning to its members.

This is an answer to any claim that there is such a restriction upon cooperative, isn’t that right?

Melville C. Williams:

In any other statute?

Felix Frankfurter:

I don’t know really anything.

Melville C. Williams:

It’s an answer to the claim if there is a restriction upon cooperatives by reason of Section 3 of this Act and Section 2 of the Clayton Act as amended by Section 1 of this Act.

Felix Frankfurter:

Well, why do you limit that?

Melville C. Williams:

Because it says nothing in this Act shall prevent a cooperative association.

And this Act does not mean the Clayton Act it refers to the Robinson-Patman Act and all —

Felix Frankfurter:

I understand that.

Melville C. Williams:

And all that you find in this Act that might prevent a cooperative from returning dividends to its members are — is found in 1 and 3.

Felix Frankfurter:

Nothing in this Act shall prevent.

Melville C. Williams:

Yes.

Nothing in this Robinson-Patman Act shall prevent.

Felix Frankfurter:

And then you’ve got to look at — you’ve got to look at the provisions of this statute against it.

Melville C. Williams:

Yes, yes.

Felix Frankfurter:

You reclaim it.

Thank you very much.

Melville C. Williams:

Now, if our distinction —

Felix Frankfurter:

But — but —

Melville C. Williams:

Excuse me.

Felix Frankfurter:

You did say something about amending or not amending.

I think they’re awfully artificial category.

Melville C. Williams:

Well, our distinction is between something when the Congress makes a part of the statute and amendment.

Felix Frankfurter:

I follow the distinction but this to me, in elaborate way of getting at reading a statute to find out —

Melville C. Williams:

But here’s the —

Felix Frankfurter:

— what the effect of a statute is.

Melville C. Williams:

Here is the significance of that.

If for example that distinction is not sound.

Felix Frankfurter:

I’m not saying the result isn’t sound.

I’m objecting to the category — the instruments which you offer me for answering the problem.

Melville C. Williams:

Oh the instrument we offer is Section 1 of the Clayton Act which defines antitrust laws as used in the Clayton Act.

It says it includes the Sherman Act, the Wilson Tariff Act and this Act which is the Clayton Act itself.

Now, our point we say that that Section is exclusionary in purpose first because —

Felix Frankfurter:

I follow that but you need to spell it out.

Melville C. Williams:

Well, if it is exclusionary in purpose when it says that antitrust laws shall mean these three statutes.

It has to mean something as part of those three statutes that cannot extend to anything that might by any possible use of imagination amend those statutes in a vague sense.

Felix Frankfurter:

My difficulty is that — that’s where my mind goes.

I don’t have to go to a mechanical determination whether I can state — I can say it with words and say it’s amendatory in some sense and not — I don’t have to go and say if it’s amendatory then it’s shoved in there.

Felix Frankfurter:

If it’s part of it, it shoved in because then it becomes part of this act, is that right?

That’s your point.

Melville C. Williams:

Yes that’s our point.

Felix Frankfurter:

Yes.

And if it isn’t part of it then it isn’t — then it isn’t in the Clayton Act.

Melville C. Williams:

Then it’s not within the definition of the antitrust laws in Section 1 of the Clayton act.

Felix Frankfurter:

What I’m suggesting is that I can reach that conclusion without going through that mechanical part of the thing.

Is it amendatory or is it a part of it.

Never mind.

I thought —

Melville C. Williams:

Well then our last point is the legislative history of Section 3.

When — and the text of the Act itself we draw different conclusion from the text of the Act and has used quotation marks of that drawn by Nashville.

In this very — in this one Act, Congress was specifically amending Section 2 of the Clayton Act it had the process for a member of the Clayton Act in mind when it wrote it.

And therefore when it — Section 1 has specifically amended the Clayton Act and did not include Section 3 in part of that amendment.

We say that’s the evidence that Congress had in mind and intended that Section 3 was not to become a part of the Clayton Act or even to be an amendment of it.

The legislative history bears this out when the bill of —

Earl Warren:

Is it because of what did you say —

Melville C. Williams:

When Congress wrote the Robinson-Patman Act, it had in mind the very question of amending — of amending the Clayton Act and Section 1 of the Robinson-Patman Act expressly amend Section 2 of the Clayton Act by revising the text.

Now, if Congress had this amendment in mind and it wished Section 3 of the Robinson-Patman Act to become a part of the Clayton Act, it would have put it in quotation marks or else it would have used this device of saying it shall be added to the Clayton Act as a separate Section.

It did not do so.

And if it did not intend —

Earl Warren:

It was before it either did it.

Melville C. Williams:

No.

And our position of course is that 4 do not become part of the Clayton Act.

Earl Warren:

No.

What you said it was amendatory.

Melville C. Williams:

It — It’s amendatory but it’s not part of.

Earl Warren:

Well, in — in other words you say that Congress has been — if it intends to make it a part of it, will put it in quotation marks but if it only means to amend it, it will not put it in quotation marks.

Is that right?

Melville C. Williams:

That is correct.

Earl Warren:

Yes.

Melville C. Williams:

With a — with one addition that if it intends to be part of it, it might also state, it will be a separate Section added to the Clayton Act as 4 (a) or 4 (b) of that type.

Earl Warren:

Yes.

Felix Frankfurter:

The quotation I’m really getting.

To make this — needlessly elaborate when Congress said, we amend from prior statute to read as follows, “perhaps a displacement of the text which thereafter is out and the text to which any lawyer or any judge looks is that which is placed in quotation marks”?

Melville C. Williams:

Yes.

Felix Frankfurter:

Accurate — accurate statement of the situation?

Melville C. Williams:

Yes, it is.

Felix Frankfurter:

So why do I have to follow the old way if it’s amendatory or part of.

It seems evidently you’ve got to help out of it and all I’m suggesting is what I know.

Melville C. Williams:

Well, the next point is legislative history.

Section 3 originated as a language of Section 3 originated in the Senate the language of the Borah-Van Nuys bill which died in the Senate, now referred to as the Borah-Van Nuys language.

Now when the bill became the Robinson-Patman Act was under consideration in the House, a motion was made to substitute the Borah-Van Nuys language for the language of the House bill.

The language of the House bill at that time was substantially the same as it’s now found in Section 1 of the Robinson-Patman Act.

That motion was defeated so that when our present — the bill that became the Robinson-Patman Act left the House, it has the history of the House rejection of what is we now find in Section 3.

When the bill after enacted by the House, went to the Senate, the Senate rewrote its text and it added what is now — the language now found in Section 3.

And it did not add it as a separate Section outside of quotation marks so we find it today, it added it as a part of the amendment of Section 2 of the Clayton Act and made it subsection (h) within quotation marks.

If that Senate bill had become the final form of the statute, we wouldn’t be here today because Section 3 would purely be a part of the Clayton Act and one upon which treble damage actions could be founded.

So in this posture, the two forms of the bill went to the conference committee.

The conference committee compromised differences between the House and the Senate by accepting substantially the House version of the amendment of Section 2 of the Clayton Act which did not contain the Section 3 language.

And took the Borah-Van Nuys language out of where the Senate had placed it as an amendment of the Clayton Act and made it a separate statute with a separate number were it is not a part of the amendment of the of Clayton Act.

Our position is that that was the liberate action by Congress and shows that it intended that Section 3 was not to become a part of the Clayton Act.

William J. Brennan, Jr.:

One of these quotations from the record particularly the statement that Mr. Miller after that had all been done.

Melville C. Williams:

Those quotations to us are — confirmed our position and we think that those quotations mean this, they are somewhat they are not entirely clear as sometimes debates in Congress are.

But when it is remembered that many of the acts that violate Section 1 of the Robinson-Patman Act or Section 2 of the Clayton Act as amended, also violates Section 3 of the Robinson-Patman Act then we think that the meaning of the debates becomes clear.

What they were talking about there were the situations where the same Act would violate both Sections.

And of course —

William J. Brennan, Jr.:

What about when Mr. Celler answered that question, this was following the law that you’ve given us as I understand it.

It’s possible of course for a man to violate Section 3 and by the same act be guilty of violation of the other sections of the bill.

That would be entirely possible.

William J. Brennan, Jr.:

Mr. Celler: He would be subject to triple damages as well as criminal prosecution.

Mr. Miller: That would be entirely possible.

Melville C. Williams:

That would be entirely possible were the act of the violator was prohibited by the criteria of amended Section 2 of the Clayton Act so that he would be subject to treble damage suit.

And where that very same act also violated the different criteria set forth in Section 3 of the Robinson-Patman Act then the man would be subject to the criminal penalties, and that we think is what they were talking about.

There are many such instances because of the Section — the first part of amended Section 2 of the Clayton Act relates to price discrimination.

The first part of Section 3 of the Robinson-Patman Act relates to price discrimination.

So as you would have many instances where the same act would violate both statutes and was subjected to treble damages as well (Voice Overlap) —

William J. Brennan, Jr.:

Now what is Section 3, a violation of which would not also be a violation of amended Section 2?

Melville C. Williams:

You said what acts was (Voice Overlap)?

William J. Brennan, Jr.:

Yes.

What acts would be a violation of Section 3 that would not also be a violation of amended Section 2?

Melville C. Williams:

Well, amended Section 2 does not relate — does not affect foreign commerce.Section 3 does relate the foreign commerce.

Further, Section 3 has in the third clause, it consists the three basic clauses.

The third clause states that selling at unreasonably low prices would intend to injure competition or a competitor is unlawful.

That is not found in the precede — in the other Sections.

William J. Brennan, Jr.:

Your position is that in that instance the criminal penalty only would apply?

Melville C. Williams:

Only the criminal penalty would apply and that is the Section of the Act under which this present case arises.

Well, for the reasons stated, we submit that Section 3 is not an amendment of the Clayton Act but even if it were, it is not a part of the Clayton Act and therefore it is not one of the antitrust laws that you find in Section 1 for a violation of which private suits lie for treble damages and injunctions.