Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Company

PETITIONER: Sunkist Growers, Inc.
RESPONDENT: Winckler & Smith Citrus Products Company
LOCATION: Louisiana Dept. of Revenue

DOCKET NO.: 241
DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 370 US 19 (1962)
ARGUED: Mar 21, 1962 / Mar 22, 1962
DECIDED: May 28, 1962

Facts of the case

Question

Media for Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Company

Audio Transcription for Oral Argument - March 22, 1962 in Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Company

Audio Transcription for Oral Argument - March 21, 1962 in Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Company

Earl Warren:

Number 241, Sunkist Growers, Incorporated, et al., Petitioners, versus Winckler and Smith Citrus Products.

Mr. Selvin.

Herman F. Selvin:

Mr. Chief Justice, may it please the Court.

This case is here on certiorari to the United States Court of Appeals for the Ninth Circuit to review a judgement of that court affirming on the issue of liability, a judgement in the District Court in favor of the respondents in a treble damage antitrust suit.

Certiorari was limited to one of the four questions that were presented in the petition.

The fact that will perhaps become significant if the respondents make the argument here today that I expect they will make.

That question stated very generally is whether the exemption from the antitrust laws given to agricultural cooperatives by the Capper-Volstead Act is applicable to a cooperative organized as is the Sunkist system that is to say, organized into three cooperative entities among whom are divided the functions of processing and marketing rather than is usually the case simply one cooperative entity.

To put that question in its appropriate setting and to show that the question in respect to which certiorari was granted does in fact arise on this record, something that the respondents deny a brief statement of the relevant facts, I think becomes necessary.

Some 12,000 growers of citrus fruits in the States of California and Arizona are organized into an agricultural cooperative association referred to in the trial court as the Sunkist system.

Those grower members, I might say, have on the average a productive holding of only 16 acres.

They organ -- they are organized in the first instance into local associations.

Those local associations in turn are organized into 22 district exchanges and those 22 district exchanges are the members of a nonprofit California corporation -- cooperative corporation, which is Sunkist Growers, Inc.

Sunkist Growers is the marketing agency for the fruit and the fruit products of the Sunkist Grower members.

Exchange Orange is a California corporation wholly owned by Sunkist Growers.

Its function in the Sunkist system is to process the oranges produced by the grower members of the Sunkist Cooperative; processed them into various by-products such as juice, pharmaceuticals, cattle feed.

Exchange Lemon, another California corporation, the stock in which is owned by the local associations to which I have referred and by the Grower members, performs for the lemons produced by the Sunkist Grower members, the same processing function as Exchange Orange performs in respect of the oranges.

All three of those cooperative corporations are owned, managed, controlled by Sunkist Grower members, their boards and officers consist of Sunkist Grower members only, they handle only the fruit and the products processed from the fruit produced by Sunkist Grower members.

By virtue of the corporate bylaws and by certain agreements that have been entered into between or among these three cooperatives.

The marketing and processing functions have been allocated within the organization.

As I have said, Sunkist Growers is the marketing agency.

Exchange Orange, the orange processing agency.

Exchange Lemon, the lemon processing agency.

In 1951 which is the critical year here because it is only in respect of that year that any antitrust violation was claimed in this case.

In 1951, the Sunkist Cooperatives performed what came to be called throughout the trial the six acts; the significance of which I think will become apparent at the moment when I state what the charge was against the defendants.

Those six acts consisted of these.

That during that year, Exchange Lemon processed with its facilities some oranges into some by-product presumably juice for Exchange Orange.

And similarly during that year at one time, Exchange Orange did the same thing with respect to some lemons for Exchange Lemon.

Those are two of the six acts.

In that year, Sunkist or one of the Sunkist Cooperatives entered into two processing contracts.

One with the concern called TreeSweet and later charged to be a co-conspirator by which Sunkist or Exchange Orange agreed to supply TreeSweet with a certain amount of oranges, not TreeSweet's requirements but certain amount of oranges, which TreeSweet agreed to process into single strength juice.