Tampa Electric Company v. Nashville Coal Company

PETITIONER: Tampa Electric Company
RESPONDENT: Nashville Coal Company
LOCATION: Trailways Bus Terminal

DOCKET NO.: 87
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 365 US 320 (1961)
ARGUED: Dec 15, 1960
DECIDED: Feb 27, 1961

Facts of the case

Question

Media for Tampa Electric Company v. Nashville Coal Company

Audio Transcription for Oral Argument - December 15, 1960 (Part 2) in Tampa Electric Company v. Nashville Coal Company

Audio Transcription for Oral Argument - December 15, 1960 (Part 1) in Tampa Electric Company v. Nashville Coal Company

Earl Warren:

Number 87, Tampa Electric Company, Petitioner, versus Nashville Coal Company Et Al.

William C. Chanler:

Mr. Chief Justice --

Earl Warren:

Mr. Chanler.

William C. Chanler:

-- may it please the Court.

This case is here on writ of certiorari from the Sixth Circuit which divided Court affirmed decision of the District Court and the Middle District of Tennessee holding that a certain contract supply part of the requirements coal of Electric Utility Company for a period of 20 years violated the Clayton Act, Section 3 of the Clayton Act and was therefore void.

The case arose on an action for a declaratory judgment.

The respondent moved for summary judgment and there was no dispute as to the facts, the present petition of the plaintiff although of course moved for summary judgement.

The Section 3 of the Clayton Act set forth in full at page 2 of my brief, so far as pertinent here, if Your Honors are about pretty vague, provisions are that it shall be unlawful for any person engaged in commerce to make a sale or contract of sale or to fix the price of goods, or to fix the price charged therefore or a rebate of such price on the condition agreement or understanding that the lessee office thereof shall not deal in the goods of a competitor or competitors of this lessor or so.

Then follows the qualifying clause where the effect of such lease, sale or contract to sale may be to substantially lesser competition or tend to create a monopoly in any line of commerce.

Now it's our contention that this contract it has to bring out, it doesn't come within that act in any manner at all.

The petitioner, Tampa Electric Company is a regulated electric utility operating in the area around Tampa, Florida serving 3% of the land area and 11% of the population of the State of Florida.

The respondents mine and sell coal in the Ohio River coal areas of the Western Kentucky.

The National Coal Company, the operating company which is assumed this contract is a subsidiary of Nashville Coal Inc. which it's entirely a subsidiary of West Kentucky Coal Company.

The background of contract is this.

Well 1955, well, probably 1957, Tampa produced all its electricity in oil burning plants.

It had two plants on Tampa Bay, focus point, (Inaudible) the name when use five together six boilers all burning coal.

It is a fact of a recent meeting (Inaudible)

Potter Stewart:

They're burning oil.

William C. Chanler:

Burning oil, thank you sir.

It is a fact as the reason to brought out where the Federal Power Commission that Florida as a fuel have not state and until very recently, would monopolize entirely by oil which it could most conveniently brought -- be brought by Tampa across the Gulf of Mexico.

In 1955, the management of Tampa got in touch with some coal merchants finding a coal producer named Justin Potter, Potter Tolling Company to consider the possibility of introducing coal as boiler fuel, in Florida and as a result, this contract was entered into on May 23, 1955.

Tampa, the petitioner was to build a new plant, the Gannon Station initially with two coal burning units ultimately possibly with six units which might or might not burn coal.

Potter was to supply the requirements coal for the first two units a minimum of 225,000 tons a year for a period of 20 years at a price fixed in the contract, and in addition, he was to supply the coal for any additional units added to Gannon Plant during the first 10 years of the contract which was built as coal burning units.

Tampa was free after the first two units to construct 50 units as oil burning or gas burning or any other fuel but if they burnt coal, they came within the contract.

So that this contract covers as I said a part of the fuel requirements of this electric utility company.

In 1956, Potter's contract was taken over by National Coal and its parent West Kentucky.

The deliveries were to commence in the Spring of 1957 after some discussion as to whether the price would be reduced.

Finally in April 1957, the respondents announced that they would not perform the contract because they contended they have been advised by counsel that it violated Section 3 of the Clayton Act.

We then brought this proceeding for declaratory judgment.

None of these -- none of the facts I think are in anyway in dispute.