Safeway Stores, Inc., v. Vance

PETITIONER:Safeway Stores, Inc.,
RESPONDENT:Vance
LOCATION:Philadelphia Board of Public Education

DOCKET NO.: 69
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 355 US 389 (1958)
ARGUED: Nov 21, 1957
DECIDED: Jan 20, 1958

Facts of the case

Question

  • Oral Argument – November 21, 1957 (Part 1)
  • Audio Transcription for Oral Argument – November 21, 1957 (Part 1) in Safeway Stores, Inc., v. Vance

    Audio Transcription for Oral Argument – November 21, 1957 (Part 2) in Safeway Stores, Inc., v. Vance

    Earl Warren:

    Mr. Tittmann, you may proceed.

    John B. Tittmann:

    — Court.

    I only have two very brief comments.

    I would like to further elaborate briefly on Congress’ use of the word “amendatory” in Section 2 and point out that the title of the Act is an act to amend Section 2 of the Act entitled, “An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes” that appears in the record at page 18 where the entire Robinson-Patman Act is quoted.

    For Congress to use in Section 2 the words amendatory act is perfectly descriptive.

    It was an amendatory act.

    It amended that Section 2.

    To describe the act in that fashion is nothing as we see a statement by Congress that everything in the Act is necessarily amendatory or within the definitions of Section 1.

    Now, in the — in the Court of Appeals opinion in the Tenth Circuit, they relied primarily on the Balian case, but they also cited the same District Court decisions that Balian had cited.

    There are number of them.

    I think they are fully treated in the briefs.

    I would just like to make this comment that on analysis, none of them hold in answer to this question.

    In other words, they are not decisions and whenever the case is entitled Federal Trade Commission against, it must of necessity referred to violations of Section 2.

    The only square decisions on the subject of authorities that I’m aware of are the two District Court cases, the District Court in this case and the Balian case and the two Circuit Court cases, our Circuit Court and the Court of the Seventh Circuit.

    Thank you.

    Earl Warren:

    Mr. Nordhaus.

    Robert J. Nordhaus:

    Mr. Chief Justice and Honorable Justices.

    This case of Vance, who was a trustee in bankruptcy of Frank Melvin Thompson rose in the district of New Mexico and it might help in determining the type of case which Congress attempted to reach under Section 3 of the Robinson-Patman Act to just outline very briefly the allegations of the complaint which complaint was dismissed by the District Court.

    The complaint stated that Safeway is a fully integrated chain of grocery stores, the second largest in the United States operating over 2000 stores with sales of a $1,600,000,000 in the year prior to the complaint — filing of the complaint, 49,000 employees that it operated all kinds of facilities for the processing and distribution of food including 33 grocery warehouses, 24 produced warehouses, 11 meat warehouses, jam, jelly, candy, fluid milk processing plants.

    It — the complaint further alleged that Safeway is the dominant food retailer in West Texas and New Mexico operates some 41 stores in that district with 26 in New Mexico, that by reason of its financial strength, it is capable of destroying competitors at the will of its management.

    The complaint further alleged that for — that Safeway, over a period of six months engaged in a practice of selling merchandise in the City of Albuquerque at prices substantially lower than those exacted for the same goods elsewhere in New Mexico in the United States for the purpose of destroying competition in the grocery business in Albuquerque under section — in violation of Section 3 of the Robinson-Patman Act and Section 4 of the Clayton Act.

    It further alleged that over a period of about a year, Safeway sold goods at unreasonably low prices in the City of Albuquerque for the purpose of destroying competition in violation of these Acts.

    It further alleged that Safeway sold certain staple articles of food which were important in every housewife’s budget and the sale of which unreasonably low prices was calculated to make it particularly difficult for competitors and designed to attract housewives to Safeway to the destruction of its competitors.

    The complaint finally alleged that as a result of these activities, many of Safeway’s smaller competitors were destroyed including this plaintiff.

    (Inaudible) and bring it under the Moore case.

    Robert J. Nordhaus:

    Yes, Your Honor under the Moore case.

    It is — the question was asked as to why this action was not brought under Section 2 (a).

    It appears to us that the only discriminations as between purchasers which would fall under the said Sections are discriminations between a purchaser and Santa Fe, New Mexico and one in Albuquerque, New Mexico who were not in competition.

    Safeway is a completely integrated chain.

    It has no sales other than retail sales.

    Robert J. Nordhaus:

    In order to conduct its price wars, it is not obliged to obtain discriminatory discounts or to — or to make sales to purchasers at discriminatory prices that is purchasers who are competing against each other.

    Therefore, the complaint was brought under Section 3 and we have gone into a little detail as to the allegations of the complaint because a study of the history of the Sherman Act, the Clayton Act and the Robinson-Patman Act make it clear at least to us that this is the exactly the type of predatory action that Congress was trying to reach under the Sherman Act and under the Clayton Act and finally under the Robinson-Patman Act.

    A study of the Clayton Act, Section 2 as it originally passed the House of Representatives and it is quoted on our brief — in our brief at page 10, shows that the original Section 2 was a criminal section quite similar to Section 3 of the Robinson-Patman Act.

    It provided that any person engaging in commerce who discriminated in price between different purchasers of commodities in the same or different sections or communities with the intent and purpose to destroy competition or injure the business of a competitor would upon conviction thereof be punished.

    As the — as Section 2 finally was passed, it was completely watered down by inserting the clause as shown on page 11 of our brief where the — where the discriminations would be punishable or would be unlawful only where the effect of such discrimination maybe this substantially less than competition or tend to create a monopoly in any line of commerce.

    And as Senator Norris and Senator Clapp remarked when they were opposing the passage of the bill in its final form, the conferees took all the teeth out of these section.

    Senator Clapp said, “The way that section was finally fixed by the conferees, there would have been no gum for the teeth to be — have been imbedded in.”

    He said that there was no lessening of competition if a large chain across one independent grocery in one community because the injured party could not show a general lessening of competition.

    And the predictions of Senators Norris and Clapp were born out during the enforcement of the Clayton Act over a period of years before the enactment of the Robinson-Patman Act.

    During the 30s, the chains grew so fast and their operations became so destructive to the local independent that Congress asked the Federal Trade Commission to investigate the chain store activity.

    And as a result of that request, the Federal Trade Commission produced its report on the chain store investigation.

    And that report bore out what Senators Norris and Clapp had predicted.

    In other words, it brought out these things that price discrimination particularly locality discrimination where a chain would come into one community and sell at low prices to destroy competitors making up the losses in another community had become so bad that 31 states had enacted price discrimination laws.

    They were not completely effective because some of the chains could sell at uniformed prices in one state and make up their losses selling in other states.

    The report further brought out that during the period of the most extensive growth of the chains the Mennen and other cases had prevented the Commission from making effective use of Section 2 of the Clayton Act because the Mennen case had held that it did not apply to discrimination injuring customers of the discriminating party.

    It was also doubtful whether substantial lessening of competition in intrastate retail distribution came within the Act.

    The chain store report also pointed out that the executives of the larger chains were completely unaware or expressed no concern about Section 2 of the Clayton Act.

    The report said and it’s quoted in the brief, “Although perhaps aware of their existence, chain store officials in discussing their price policies might be little or no mention of state or federal laws against price discrimination as influencing or limiting such policies.”

    Now, the Robinson and the — bill was introduced in the Senate and the Patman bill was introduced in the House with the specific and expressed purpose of correcting defects in the Clayton Act.

    And the — the — Mr. Patman, when he introduced the bill, pointed that out.

    The debates in Congress are replete with expressions by members of both houses to the effect that all the bills introduced and there were several in each house wherefore the purpose of improving the Clayton Act and reaching practices which the original act had not reached.

    For example, Senator Logan who was the Chairman of the Subcommittee on the judiciary to which the Robinson bill was referred said, “The Robinson bill is a proposed amendment to an existing law known as the Clayton Amendment to the Sherman Antitrust Act.

    The bill would close many dangerous loop holes that were found in the Clayton Act.

    Senator Borah offered his amendment as a new section of the Robinson bill and it was passed by the Senate as subsection (h) of the proposed amendment to Section 2.

    Now we don’t place the same significance to the removal of subsection (h) from Section 2 that our opponents do.

    We feel and I think it is fairly clear again from the debates which I won’t go into now that the Borah-Van Nuys provision which is now — now comprises Section 3 and 4 was removed as subsection (h) so that there would — the criminal provisions would be separated from Section 2.

    And Senator Borah in offering his amendment as a criminal section said there are certain practices which should be forbidden as a matter of law and to which criminal penalties should be attached.

    He agreed that there were practices that were made illegal in Section 2 which — on which there might be some questions, but he characterized these practices which were prescribed by Section 3 as fraudulent practices.

    So, Senator Borah attached his amendment to the Robinson bill.

    At the hearings in the Senate, many witnesses expressed a preference for the Borah-Van Nuys bill over the Robinson bill.

    Robert J. Nordhaus:

    Representative Healy of Massachusetts introduced the Borah-Van Nuys provision into the House as a substitute for the entire Patman bill.

    And again, throughout the discussion, the Senators and Representatives stated time and time again the objectives of all these bills are the same to correct and improve the Clayton Act and although they may differ as to detail, they are entirely uniformed as to purpose.

    Now, I think that the codifiers recognized this purpose when Section 3 was codified as one of the antitrust laws.

    Again, our opponents characterized this as an error.

    We — we feel that it was done on purpose because the codification in its terms was changed in the 1940 code to reflect the passage of the Robinson-Patman Act and it was deliberately — the Section 3 was deliberately retained as an anti-trust law as defined in Section 1 by the code.

    Now, we maintain that that constitutes an administrative interpretation of that Section as being an antitrust law.

    It has remained in the code for 17 years without change.

    It — it had been construed by practically all of the District Courts that had considered it as one of the antitrust laws.

    And this Court in the — in the — in Bruce’s Juices assumed that Section 3 was an antitrust law carrying the treble damage remedy and in the Moore against Mead — in the Mead case, Mr. Justice Douglas also stated that Section 3 seemed to cover the practices which were described in that case.

    In that case, the — one of the instances — the jury was instructed on Section 3.

    Felix Frankfurter:

    Are you stand — you’ve indicated that you’re standing on the Moore case.

    That was clearly explicitly the case that involved 2 (a) of the Clayton Act was relatively difficult.

    Robert J. Nordhaus:

    It involved both — both sections, Your Honor.

    The jury was instructed on both — we don’t — we don’t rely on it, Your Honor.

    Felix Frankfurter:

    Yes, but this 2 (a) hasn’t been in any sense in the course of this litigation at any time, has it?

    Robert J. Nordhaus:

    No, Your Honor, not in our case, no sir.

    Again, it appears to boil down to a question of what did Congress intend in enacting this section.

    We again maintained that it was intended as — that Section 3 was intended as of — was a part of an act which is — it was intended as a whole to amend the Clayton Act.

    Section 2 was expressly amendatory of the Clayton Act.

    I don’t see how an act can purport and state that it amends another act without becoming a part some way or another of the act which it states it amends.

    There are — there are numerous lower court decisions which we also cite in our brief to the effect that a law maybe amended without — by an Act which does not purport to amend if it adds something to the old act, if it changes the rights and duties under the old act, such is recognized.

    So, in conclusion, it is our position that the Sherman, Clayton and Robinson-Patman Acts are closely related.

    The later enactments supplement the earlier ones.

    The major purpose of all of them is to protect competition and to prevent monopoly.

    Secondly that the terrible damage remedy has always been considered by Congress as an adjunct to antitrust enforcement and a very important adjunct and the intent of Congress to apply this remedy to violations of all sections of the Robinson-Patman Act is evidenced from the debates preceding the passage of the Act.

    Then, lastly the codifiers in enlarging the definition of the antitrust laws, originally contained in Section 1 of the Clayton Act to include Section 3, carried out the clearly expressed intent of Congress and there is no inconsistency between the code and the provisions of Section 1 as originally enacted.

    Now, the question was asked whether the Federal Trade Commission Act was one of the antitrust laws.

    It will be recalled that the Clayton Act in Section 1 defines antitrust laws specifically as the Sherman Act, the Wilson Tariff Act and this Act.

    The Federal Trade Commission Act which was passed, I think less than a month earlier, refers to the same acts but it does not refer to the Federal Trade Commission Act, this Act as one of the antitrust laws.

    It was not included in the definition — in its own definition of antitrust law.

    Robert J. Nordhaus:

    And as a matter of fact, the Federal Trade Commission Act was not amended for some time to include as a definition of antitrust laws of Clayton Act.

    Earl Warren:

    Mr. Tittmann.

    John B. Tittmann:

    May it please the Court.

    I’d like to make these two comments.

    The position that the codifiers in codifying Section 3 as one of the antitrust laws has any significance as an the administrative interpretation we submitted without merit for the simple reason that the Act permitting codifications specifically provides that if there is any variance between the codification of a law and statutes at large — the statutes at large shall control and I think that negative is completely any intent of Congress to place in the hands of the codifiers, the ability to buy codification, modify or change in any way an act adopted by Congress.

    The only other comment posing counsel frankly states he does not rely on the Moore case and I think probably so the Moore case is not a decision — the issue is not presented — this issue was not presented there.

    As to the argument that Congress has always considered, the treble damage remedy and necessary adjunct to the enforcement in the antitrust field is a broad statement.

    It’s often made and assumed.

    We think it is not necessarily accurate.

    They didn’t use that method in the Federal Trade Commission Act.

    They did not use it in the Stockyards and Packers Act and there may be other acts in the antitrust field that have not — the Congress has not seen fit to use the treble damage remedy.

    Thank you.