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

PETITIONER: United States
RESPONDENT: E.I. du Pont de Nemours & Company
LOCATION: John H. Kerr Dam and Reservoir

DOCKET NO.: 55
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 366 US 316 (1961)
ARGUED: Feb 20, 1961 / Feb 21, 1961
DECIDED: May 22, 1961

Facts of the case

Question

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

Audio Transcription for Oral Argument - February 20, 1961 in United States v. E.I. du Pont de Nemours & Company

Audio Transcription for Oral Argument - February 21, 1961 in United States v. E.I. du Pont de Nemours & Company

Earl Warren:

-- Appellant, versus E.I.du Pont, et al.

Mr. Cox, you may continue your argument.

Hugh B. Cox:

May it please the Court.

This morning, I should like to discuss the appellant's legal argument that Section -- in Section 7 cases, divestiture is a mandatory remedy as a matter of law.

Before I do so, however, there are two very brief comments that I should like to make in concluding the argument that I made yesterday about the effectiveness of the judgment.

I had been discussing when the Court wrote as my proposition that the mere existence of a financial interest in the attenuated form in which it continues to exist in du Pont under this judgment, did not carry with it any potential or capability or create any probability of a restraint trade.

Now, of course, I can conceive of circumstances in which a mortgagor or a large creditor, even a general creditor of a corporation, might, in certain conditions, have some capacity to influence or control a conduct of that corporation.

The point I was making yesterday and make now is, that when that happens, it is not because of the existence of the financial interest itself, but because of the potential rights or privileges or powers that in herein or go with financial interest.

Under this judgment, du Pont has none of the rights of a mortgagor or of a creditor.

It doesn't even have the rights of a preferred stockholder.

And before I leave this subject, I should like to remind the Court that Section 7 itself does not ream on financial interest per se.

The Section does not prohibit the acquisition of stocks or bonds or other evidences of indebtedness.

It does not indeed prohibit the acquisitions of stock done purely for investment purposes and if not used by voting or otherwise, to achieve a restraint of trade.

This is not a legal argument.

I am now making respect to that aspect of the statute.

I am merely suggesting to the Court that when Congress formed its legislative judgment as to the kinds of relationships it was going to cover in Section 7, apparently, it did not believe that a mere financial interest accompanied -- unaccompanied by any right to vote was the kind of interest that created the economic probabilities that the Section was designed to prevent.

Felix Frankfurter:

The suggestion of the Government, as I get it, is largely that there's a momentum to the old relationship --

Hugh B. Cox:

Yes.

Felix Frankfurter:

-- which continues.

Hugh B. Cox:

That -- and I think yesterday, what I said about that, I would say again Mr. Justice Frankfurter, that the extent that that momentum and I think in the terms of the appellant's argument, I can regard it this way that the terms -- that the extent of that momentum exists, it does not exist because of the stock relationship which should be left under --

Felix Frankfurter:

That -- that -- I have an extra -- extra push to the momentum as it were.

Hugh B. Cox:

That, I suppose, is a contention.

But my answer to that is that their proposal for a complete divestiture does not take away that extra push.

The other brief comment I should like to make is an address to an argument which appellant makes, which seems to me, in large part, semantic, but I think it deserves a word of comment.

In their briefs and yesterday, the theme recurs that the trouble with this judgment is that it does not suppress the evil or the disease itself.

It only suppresses the effects or the symptoms.

I think that argument is an argument in which (Inaudible) tries to do the work of analysis, because what appellant describes as the symptoms or the effects, in my judgment, is the evil or the illegality itself.

The statute does not prohibit the acquisition of stock per se.

It prohibits the acquisition of stock when certain economic consequences or the probability of those consequences follows.

With the Court's permission with some diffidence, I should like to refer to the mandate of this Court in this case because I think that mandate properly construed the statute.