United States v. E. I. du Pont de Nemours & Company

PETITIONER: United States
RESPONDENT: E. I. du Pont de Nemours & Company
LOCATION:

DOCKET NO.: 5
DECIDED BY: Warren Court (1955-1956)
LOWER COURT:

ARGUED: Oct 11, 1955
DECIDED: Jun 11, 1956

Facts of the case

Question

Media for United States v. E. I. du Pont de Nemours & Company

Audio Transcription for Oral Argument - October 11, 1955 (Part 1) in United States v. E. I. du Pont de Nemours & Company

Audio Transcription for Oral Argument - October 11, 1955 (Part 2) in United States v. E. I. du Pont de Nemours & Company

Gerhard A. Gesell:

Up to the recess, I had tried in a few brief minutes to tell the Court what 30 witnesses said what over 600 exhibits say, that's of course necessarily only a summary.

We had most detailed proof on this phase of the case.

And if you will look at our brief at the appendix page 9A, you will find summarized there a number of the key findings which the District Court made concerning the inter product competition.

I direct the Court's attention particularly to the finding 838 on page 9A and to the findings which come immediately at the sequence after that.

Now, as to price, the -- the Court said this.

“Competitive influences in the flexible packaging markets place limitation upon du Pont's pricing policies and procedures.”

They force reduction of du Pont's prices and deny it power to raise prices in the manner of a monopolist.

From what record --

Gerhard A. Gesell:

From record 302.

If you will turn to page 19A of our appendix again, you will see set forth there many of the key findings concerning prices.

Thus, the Court said that under market conditions which prevail, du Pont doesn't posses power to raise prices without regard to competitive pressures, and that the market would penalize any attempt to do so with lower sales and smaller profits.

The detailed quotations from record 301 at the bottom of that page are illustrative of the price competition and there are other findings on the pages immediately follow.

The Court refers to the fact that cellophane prices have not been arbitrary and noncompetitive and found specifically that we did not have the power to price in that fashion.

Now, what is the Government's answer to this?

It is I think an answer that can only be made by someone who has not a detailed knowledge of the record.

The Government says there's a price gap.

It says that here are some -- the prices of glassine and wax paper low in level and here is the price of cellophane and higher than that is the price of film such as Pliofilm and polyethylene.

And it says that accordingly as a matter of theory, it's obvious that du Pont is in a price market by itself.

The findings of the Court are all for the contrary.

The lower price goods which were the big volume sellers, the dominant goods on the packages, the pack -- the goods that were the major items that each of these end users were lower priced and the whole history of du Pont's price at the time it got into this business in 1923 has been the reduce price, to reduce price, to reduce price, to reduce price, to get down to where it is able better to compete with the lower priced waxings and glass papers.

And the Court found that with every one of those price reductions, du Pont was able to increase the sales of its cellophane and did found also that there was a high degree of cross elasticity of demand between the ratio of these prices and that as the cellophane price is reduced, its sales were improved.

The Government tends very much to over emphasize the importance of this price gap.

It makes a difference of two and a half meals on a local bread.

It makes the difference between the higher and the lower prices, the range is in about one cent per 1000 square inches.

The prices are close and close in degree, and they're made closer --

Earl Warren:

In proportion --

Gerhard A. Gesell:

Well, you see, the Government --

Earl Warren:

Percentages.

(Inaudible)

Gerhard A. Gesell:

I can't give it to you in percentages because the -- the figures that are relied on are -- are pound figures and of course the figure that's important for the packager is per 1000 square inch.