Radiant Burners, Inc. v. Peoples Gas Light & Coke Company

PETITIONER: Radiant Burners, Inc.
RESPONDENT: Peoples Gas Light & Coke Company
LOCATION: Trailways Bus Terminal

DOCKET NO.: 73
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 364 US 656 (1961)
ARGUED: Dec 07, 1960
DECIDED: Jan 16, 1961

Facts of the case

Question

Media for Radiant Burners, Inc. v. Peoples Gas Light & Coke Company

Audio Transcription for Oral Argument - December 07, 1960 (Part 2) in Radiant Burners, Inc. v. Peoples Gas Light & Coke Company

Audio Transcription for Oral Argument - December 07, 1960 (Part 1) in Radiant Burners, Inc. v. Peoples Gas Light & Coke Company

Earl Warren:

-- Incorporated, Petitioner, versus Peoples Gas Light and Coke Company et al.

Mr. Levy, you may proceed with your argument.

Richard F. Levy:

Mr. Chief Justice, may it please the Court.

This case is here on the pleadings to review dismissal of petitioner's complaint by the District Court for failure to state a cause of action and the affirmance of that dismissal by the United States Court of Appeals for the Seventh Circuit.

Petitioner seeks in this action to recover treble damages and to obtain injunctive relief against respondents from respondents by virtue of their alleged violations of the Sherman Act.

The petitioner is a small manufacturer of ceramic gas burners which are used in the space heating of homes and industrial and commercial facilities.

The complaint charges that petitioner has been prevented from selling its product in interstate commerce by a horizontal and vertical conspiracy consisting of the respondent, American Gas Association or AGA and its members.

Now, the membership of this trade association, the AGA, includes hundreds of petitioner's direct competitors, that is, manufacturers of competing gas burners.

It includes gas pipeline companies and it includes all or practically all of the gas public utilities in the United States.

According to the complaint, petitioner has been excluded from the market by a device called the AGA approval plan and the AGA seal of approval.

It works like this.

A committee of the AGA which includes among its membership petitioner's competitors has established standards for the granting or denial of this AGA seal of approval.

All of the competitors who sit on this Committee make burners of metal.

The standards which they have established require that only metal burners may be approved.

The petitioner's burner has twice been submitted to the AGA, twice, the AGA has rejected it.

Now, the complaint alleges that the standards which this Committee establishes are not objective standards.

And this is, of course, admitted for the purposes of this argument by respondent's motion to dismiss and in any event, the respondent, AGA, argues in its brief before this Court that the standards need not be objective and as a matter of fact, they argue that the standards need not even be valid standards.

This denial of the seal of approval to petitioner's burner is only the horizontal aspect of this conspiracy which we have charged.

After the seal of approval was denied to petitioner, the vertical component was brought into play.

Potter Stewart:

Before you proceed, I'm --

Richard F. Levy:

Yes.

Potter Stewart:

-- not quite sure I understand what you mean by the -- what the -- what the complaint means by its allegation that the standards are not objective standards.

I understand the words but I don't --

Richard F. Levy:

Well --

Potter Stewart:

-- I don't know what the significance is.

Richard F. Levy:

It means that they --

Potter Stewart:

The -- the subjective standards?

Richard F. Levy:

I mean that they are subjective.

We mean that these competitors who sit on the Committee can impose and do impose any standards which suit their purpose that their seal is purportedly granted to a product which is fit to be marketed, that in fact, the standards they have established have no relation to this at all.

Potter Stewart:

That they're arbitrary standards?