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Lake Valley Farm Products Inc. v. Milk Wagon Drivers' Union

November 29, 1939


Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Philip L. Sullivan, Judge.

Author: Sparks

Before EVANS, SPARKS, and TREANOR, Circuit Judges.

SPARKS, Circuit Judge.

This action in equity was instituted by appellants, and Josef Wagner, doing business as Wagner Dairy Products. It sought to restrain appellees from picketing, and from the commission of acts of violence and boycott alleged by appellants to be in restraint of interstate trade and in violation of the Sherman Anti-Trust Act, 15 U.S.C.A. ยงยง 1-7, 15 note, and the Clayton Act, 38 Stat. 730. Appellees filed a joint answer which in effect was a general denial and contained other affirmative matters. The issue of injunction was referred to a Master in Chancery, and his report recommended the dismissal of the complaint for lack of jurisdiction. A hearing was had upon appellants' exceptions to this report, and after making special findings of facts, and rendering its conclusions of law thereon, the District Court entered a decree confirming the report, and ordering dismissal for want of jurisdiction and for want of equity.

The findings are substantially as follows: The plaintiffs are the Lake Valley Farm Products, Inc., and Illinois corporation of Chicago, engaged in processing and distributing milk and dairy products in Chicago; Lake View Co-operative of Watertown, Wisconsin, an organization of Wisconsin farmers; Josef Wagner, doing business as Wagner Dairy Products in Cook County, Illinois; and Amalgamated Dairy Drivers, Local Industrial Union No. 819, a voluntary unincorporated association with its headquarters in Chicago. Before the findings were filed, Wagner, by leave of court, withdrew as party plaintiff.

The defendants are the Milk Wagon Drivers Union of Chicago, Local 753, a voluntary unincorporated association with headquarters in Chicago; Robert G. Fitchie, James Kennedy, Steve Sumner, F. Ray Bryant, Alvin F. Richards, Joseph L. Patterson and Fred C. Dahms, who are officers and trustees of the defendant union.

The Farm Products Company purchases its daily requirements of fluid milk from the plaintiff Co-operative, which receives its product from farmers in Wisconsin, who deliver their milk to the plant of the Co-operative where it is loaded on motor trucks and transported over the public highways to the Farm Products Company in Chicago, which pasteurizes and bottles the milk, after which it is sold by the Farm Products Company to various persons referred to as "vendors," who severally own and operate their own automobile truck equipment. They in turn, after purchasing the milk and cream from the pasteurizing plant, distribute it to various stores which in turn sell it to the general public on a cash and carry plan. These "vendors" are not members of the defendant union.

The plaintiff union was organized on March 1, 1938, and maintains executive offices in Chicago. Its members are residents and citizens of Illinois.

The defendant union was organized in 1902 and since that time has unionized the majority of drivers delivering milk and other dairy products, and its headquarters are in Chicago. All the individual defendants are residents and citizens of Illinois.

Over forty per cent of the milk and over seventy-five per cent of the cream sold in Chicago comes from points outside of Illinois. It is commingled, sold in competition with, and is indistinguishable from the milk and cream which is produced in Illinois. The pasteurization and bottling require a very short time. Nothing is added to or taken from the milk and cream by such process and only a few hours elapse from the time it leaves the point of origin in Wisconsin until it is lodged in the retail stores.

The Farm Products Company is a cut-rate dairy in that it distributes its milk through retail stores by cash and carry sale, and at prices substantially less than the generally prevailing price for milk delivered by the dairy to the home. Because of the relatively large amount of milk delivered to each retail store, the cost of such delivery is substantially less than the cost of delivering milk on a retail route to the doorstep of the ultimate consumer.

The growth of the cut-rate milk business in Chicago has been accompanied by violence to the distributing stores. They have had their windows broken, they have been bombed, set afire, they have been submitted to stench bombs and to other acts of violence. Cut-rate dairy plants have been bombed, have had machinery smashed, and their delivery trucks have been seized and destroyed, and they have been submitted to other acts of violence.

Picketing by the defendant union has all taken place at and in front of stores selling the products of the plaintiff dairy, and no picketing has taken place at the plaintiff dairy plant. In some instances deliveries of other necessary food products into stores selling plaintiffs' dairy products have ceased.

Fifteen to twenty stores distributing the products of plaintiff dairy were lost in the month preceding the filing of the bill of complaint; twenty-five to thirty stores were similarly lost since the commencement of the action; more than one hundred of such stores have been picketed, and there is no way to ascertain the number of consumer patrons lost by the acts of the defendant. No labor dispute exists between plaintiff dairy and its workers.

The court in its last finding says that it adopts by reference the various findings of fact made by the Master in his report. This report is rather voluminous and contains much that cannot be considered as findings of fact. We find nothing additional in this report which is material to the issues passed upon by the District Court, except perhaps that all of the employees of the plaintiff dairy are members of the plaintiff union and have designated that union as their sole representative in dealing with the dairy. The Master further found that the plaintiffs had not established the fact that they had no adequate remedy at law ...

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