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Salt Producers Ass'n v. Federal Trade Commission.

March 8, 1943

SALT PRODUCERS ASS'N ET AL.
v.
FEDERAL TRADE COMMISSION.



Petition for Review of Order of the Federal Trade Commission.

Author: Evans

Before EVANS, SPARKS, and KERNER, Circuit Judges.

EVANS, Circuit Judge.

This petition, to review a Federal Trade Commission cease and desist order, challenges simply the phraseology of the order and not the issuance of the order.

The petitioners are eighteen salt companies and the Salt Producers Association.

A complaint filed against petitioners and others (some since dissolved), in September, 1940, charged a combination, formed in October, 1935, to monopolize, and to suppress competition in, the sale of salt, to fix uniform prices, to establish zones to aid in fixing of prices, to curtail production of salt, to exchange price lists through the Association in order to establish the prices at which salt is sold, and to exchange information relative to conditions of sales.

The petitioners, after filing individual answers wherein each denied the allegations of the complaint, withdrew them and filed similar and very brief, individual substitute answers.*fn1 Therein "they admit (ted) all of the material allegations of fact set forth in said complaint and waive (d) all intervening procedure and further hearing as to the said facts."

Thereupon the Federal Trade Commission made detailed findings of fact and a conclusion, and entered the cease and desist order, the form and substance of which are here assailed. The provisions of said order are here stated, in excerpt form, and the italicized portions are the parts contested:

" * * * (petitioners) * * * in connection with the offering for sale, sale, and distribution of salt in commerce, * * * do forthwith cease and desist from entering into, continuing, or carrying out, or directing, instigating, or cooperating in, any common course of action, mutual agreement, combination, or conspiracy, to fix or maintain the prices of salt or curtail, restrict, or regulate the production or sale thereof, and from doing any of the following acts or things pursuant thereto:

"(3) Establishing or maintaining delivered price zones, or making quotations and sales of salt upon a delivered price basis under a zone system whereby the cost of salt delivered to buyers within each respective zone is made identical at all destinations within such zone;

"(4) Exchanging, directly or through the Salt Producers Association, or any other agency or clearing house, price lists, invoices, and other records of sale showing the quantity, current prices and terms and conditions of sale allowed by respondent corporations to dealers and distributors; provided, however, that nothing herein shall prevent the respondent association from collecting and disseminating to the respective respondent manufacturers figures showing the total volume of sales of salt without disclosing the sales volume of individual producers;

"(5) Exchanging, directly or through the medium of the Salt Producers Association, or any other agency, the names of distributors or dealers who receive special discounts;

"(6) Curtailing, restricting, or regulating the quantity of salt to be produced and sold by any respondent cororation by any method or means during any given period of time; * * * ."

I. "Common Course of Action." The first complaint is as to the phrase "common course of action," appearing in the preamble, directing that petitioners desist from "any common course of action, mutual agreement, combination, or conspiracy, to fix or maintain the prices of salt or curtail, restrict, or regulate the production or sale thereof, * * * " Petitioners assert a common course of action is thus prohibited whether or not it be connected with a conspiracy. And the facts of the complaint, of the Federal Trade Commission, admitted by the petitioners, only covered conspiracies per se, and so would not support an order such as this, which could prohibit action to foster fair competition, and which might cover accidental and coincidental identical action by all.

They urge that "Where a common course of action occurs as the natural result of competition and is not connected with or related to a 'mutual agreement, combination or conspiracy,' the continuance of ...


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