agreeing with others not to sell to a particular person, 50 agreeing on a division of territory or of customers, engaging in predatory acts or practices, 52 participating in a boycott,53 or carrying out a “merger”54 are a few of the ways such laws may be violated; and it is immaterial whether a cooperative qualifies under section 6 of the Clayton Act or the Capper-Volstead Act.

Officers, directors, or agents of a cooperative, like those of any other business corporation that violates the penal provisions of the antitrust laws, may be prosecuted if they are in any way responsible for the violation. 55

If an officer or director of a cooperative or other corporation had no connection with a violation of the antitrust laws, he is not personally liable. 56

Generally speaking a cooperative-like any other sellermay sell to some and refuse to sell to others. 57 Those interested should ascertain what changes, if any, have been made in this and like principles by State or Federal civil rights laws.

It has been held that in the absence of monopolistic power, a seller may refuse to deal with anyone. 58 The Supreme Court of the United States has stated that a "manufacturer of a product other equivalent brands of which are readily available may select his

181 (1939); but see United States v. Maryland Cooperative Milk Producers, Inc., 145 F. Supp. 151 (D.D.C. 1956).

50 See Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 82 S. Ct. 1130, 8 L. Ed. 2d 305 (1962).

51 United States v. Arnold Schwinn and Co., 388 U.S. 365, 87 S. Ct. 1856, 18 L. Ed. 2d 1249.

52 Maryland and Virginia Milk Producers' Association, Inc. v. United States, 362 U.S. 458, 80 S. Ct. 847, 4 L. Ed. 2d 880 (1960).

53 Knuth v. Erie-Crawford Dairy Co-op Ass'n, 395 F. 2d 420 (3rd Cir. 1968); Boise Cascade International, Inc. v. Northern Minnesota Pulpwood Producers Association, 294 F. Supp. 1015 (D. Minn. 1968). But see Knuth v. Erie-Crawford Dairy Cooperative Ass'n, 326 F. Supp. 48 (N.D. Pa. 1971), affirmed in part and reversed in part and remanded, 463 F. 2d 470 (3rd Cir. 1972).

54

4 Maryland and Virginia Milk Producers' Association, Inc., v. United States, 362 U.S. 458, 80 S. Ct. 847, 4 L. Ed. 2d 880 (1960).

55 United States v. Milk Distributors Association, Inc., 200 F. Supp. 792. 56 Cape Cod Food Products v. National Cranberry Ass'n, 119 F. Supp. 900 (D. Mass 1954).

57 United States v. Colgate & Co., 250 U.S. 300, 39 S. Ct. 465, 63 L. Ed 992. 58 U.S. v. Arnold Schwinn and Co., 388 U.S. 365, 87 S. Ct. 1856, 18 L. Ed. 2d 1249; Englebrecht v. Dairy Queen Company of Mexico, Missouri, 203 F. Supp. 714.

customers and for this purpose he may franchise' certain dealers to whom he will sell his goods."59

Cooperatives as well as other sellers should keep in mind that the terms and conditions of a sale contract may violate the antitrust laws.

It has been held that if there is no conspiracy or monopolization involved, a seller "may normally refuse to deal with a buyer for any reason or with no reason whatever."60

Refusal of a cooperative to sell milk to a would-be buyer unless it terminated its discounting policy was not a violation of the antitrust laws of Ohio.61

It is a violation of the antitrust laws for a seller, cooperative or otherwise, to enter into a contract with a purchaser under which the purchaser agrees not to use or deal in the goods of a competitor if this should substantially lessen competition or tend to create a monopoly.62

A cooperative, like any other seller, may violate the antitrust laws by the terms of its selling contract. If it attempts to control the price at which the products may be resold, such a violation may occur.63 If the contract of a seller operates to restrict the buyer as to the territory in which, or persons to whom, he may resell the product-"whether by explicit agreement or by silent combination or understanding with his vendee”—there is a per se violation of section 1 of the Sherman Act.64

A competitor of a milk marketing cooperative unsuccessfully charged that the cooperative violated the antitrust laws when it loaned money to some retail stores that agreed to buy all the milk that they needed from the cooperative as long as such loans were outstanding.65

59 Atalanta Trading Corp. v. Federal Trade Commission, 258 F. 2d 365; see also Isaly Dairy Company of Pittsburgh v. United Dairy Farmers, 250 F. Supp. 99; Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F. 2d 283.

60 Amplex of Maryland, Inc. v. Outboard Marine Corporation, 380 F. 2d 112.

61 Superior Dairy v. Stark County Milk Producers Ass'n, 89 Ohio App. 26, 100 N.E. 2d 695.

62 Columbia River Packers Ass'n v. Hinton, 34 F. Supp. 970, reversed, 117 F. 2d 310, reversed, 315 U.S. 143, 62 S. Ct. 520, 86 L. Ed. 750.

63 Bergjans Farm Dairy Co. v. Sanitary Milk Products, 241 F. Supp. 476; United States v. Milk Drivers and Dairy Employees Union, 153 F. Supp. 803. 64 United States v. Arnold Schwinn & Co., 388 U.S. 365, 87 S. Ct. 1856, 18 L. Ed. 2d 1249.

65 Curlys Dairy, Inc. v. Dairy Cooperative Association, 202 F. Supp. 481.

The Supreme Court of the United States has said if "a manufacturer sells products to his distributor subject to territorial restrictions upon resale, a per se violation of the Sherman Act results. And, as we have held, the same principle applies to restrictions of outlets with which the distributors may deal and to restraints upon retailers to whom the goods are sold."66

On the other hand, our highest court held in that case that a "manufacturer" who delivered goods to a handler on a consignment or agency basis could impose restrictions respecting their sale unless they "unreasonably" restricted competition which the court held did not occur. In another case in which the handlers received the commodities on a consignment or agency basis, our highest court held that the restrictions on their sale unreasonably restricted competition and hence violated the antitrust laws.67

In some instances, it should be legally possible for a cooperative to deliver goods on a consignment or agency basis and thus obtain the right to impose various restrictions, such as the price at which the goods might be sold without violating the antitrust laws. But in such instances, the absolute title to the goods must be in the cooperative and all of the risks and responsibilities relative thereto must be in the cooperative.

How about refusal to sell?

One court has stated that “a manufacturer's or a distributor's discretion as to whom it will sell is not unlimited. If the refusal to deal is a device used to acquire a monopoly, United States v. General Motors Corporation, 121 F. 2d 376 (7th Cir. 1941); or to fix prices, FTC v. Beech-Nut Packing Co., 257 U.S. 441, 42 S. Ct. 150, 66 L. Ed. 307 (1922); or to establish market dominance and drive out competitors, Lorain Journal Co. v. U. S., 342 U. S. 143, 72 S. Ct. 181, 96 L. Ed. 162 (1951), or as part of a boycott, Klors, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207, 79 S. Ct. 705, 3 L. Ed. 2d 741 (1959); it would be illegal. These are per se violations-restraints which are inherently bad, and any contract, combination or conspiracy used to accomplish such a result is unreasonable and is therefore prohibited."68

66 United States v. Arnold Schwinn & Co., 388 U.S. 365, 87 S. Ct. 1856, 18 L. Ed. 2d 1249.

67 7Simpson v. Union Oil Co., 377 U.S. 13, 84 S. Ct. 1051, 12 L. Ed. 2d 98. 68 L.S. Good & Company v. H. Daroff & Sons, Inc., 263 F. Supp. 635. See also Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F. 2d 283; Six Twenty-Nine Productions, Inc. v. Rollins Telecasting, Inc., 365 F. 2d 478.

Now, how about like prices? A court has declared: “But conscious parallelism is not, in and of itself, a violation of antitrust laws." If, for instance, all that a seller does is copy the price list of a competitor, there is no violation of the antitrust laws. 69

Another court has said: "We are clear that mere uniformity of prices in the sale of a standardized commodity such as milk is not in itself evidence of a violation of the Sherman Anti-Trust Act."70

In a case involving a milk bargaining cooperative the court declared that "full supply contracts are illegal when made for the purpose of eliminating and suppressing competition."71

It has been held that the use by a milk bargaining cooperative of the classified use pricing system was not a violation of the antitrust laws.72

It should be remembered that any contract, agreement, or arrangement that violates the antitrust laws is unenforceable by any of the parties thereto.73

If competitors agree not to employ each others' employees, this appears to be a violation of the antitrust laws.74

A group boycott by a big chainstore, several manufacturers, and their distributors of a single store was held illegal under section 1 of the Sherman Act, although there were other stores handling appliances of the same character nearby. The Court said, "Monopoly can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving them out in large groups."75

69 Lyons v. Westinghouse Corporation, 235 F. Supp. 526.

70 Pevely Dairy Co. v. United States, 178 F. 2d 363, 369. See also United States v. Maryland and Virginia Milk Producers' Ass'n, 90 F. Supp. 681, 686; Independent Iron Works, Inc. v. U.S. Steel Corp., 322 F. 2d 656, certiorari denied, 375 U.S. 922, 84 S. Ct. 267, 11 L. Ed. 2d 165; Theatre Enterprises v. Paramount, 346 U.S. 537, 74 S. Ct. 257, 95 L. Ed. 273.

71 Maryland and Virginia Milk Producers' Ass'n v. United States, 193 F.2d 907 (D.C. Cir. 1951).

12 Maryland and Virginia Milk Producers' Ass'n v. United States, 193 F.2d 907 (D.C. Cir. 1951).

73 E. Bennet and Sons v. National Harrow Co., 186 U.S. 70, 22 S. Ct. 747, 46 L. Ed. 1058; Associated Press v. Taft-Ingalls Corp., 340 F. 2d 753; Rathe v. Yakima Valley Grape Growers, 30 Wash. 2d 436, 192 P. 2d 349.

74 Nichols v. Spencer International Press, Inc., 371 F.2d 332.

75 Klors v. Broadway-Hale Stores, 359 U.S. 207, 79 S. Ct. 705, 3 L. Ed. 2d 741 (1959).

It has been held that exclusive dealing arrangements violate the antitrust laws only if a jury may find from all the circumstances that the effect may be to substantially lessen competition or tend to create a monopoly.76

Treble Damages

The Clayton Act (15 U.S.C. 15) provides that any person who is injured “in his business or property by reason of anything forbidden in the antitrust laws may sue" and "shall recover threefold the damages by him sustained and the cost of suit including a reasonable attorney's fee."

In order to maintain a suit under section 15, the plaintiff must establish that there has been a violation of the antitrust laws committed by the defendant that has injured the plaintiff “in his business or property." If the plaintiff establishes such a violation, he is entitled to recover three times the amount of his actual damages. Several cooperatives have been sued under section 15.

In a Texas case, under that section, the jury found that the cooperative had violated its agreement to sell milk to the plaintiff in gallon containers apparently because of arrangements with other distributors of milk who opposed selling milk in gallon containers. The jury found for the plaintiff in the amount of $100,000 which was trebled to $300,000, plus attorney fees.77

Section 5(a) of the Clayton Act "makes a final judgment or decree in any civil or criminal proceeding brought by or on behalf of the United States prima facie evidence in subsequent private suits 'as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto' and "Section 5(b) tolls the statute of limitations set out in Section 4B from the time suit is instituted by the United States regardless of whether a final judgment or decree is ultimately entered."78

76 Lessig v. Tidewater Oil Co., 327 F. 2d 459, certiorari denied, 377 U.S. 993, 84 S. Ct. 1920, 12 L. Ed. 2d 1046. See also American Infra-Red Radiant Co. v. Lambert Industries, 360 F. 2d 977, certiorari denied, 385 U.S. 920, 87 S. Ct. 233, 17 L. Ed. 2d 144; Isaly Dairy Company of Pittsburgh v. United Dairy Farmers, 250 F. Supp. 99.

"North Texas Producers Ass'n v. Young, 308 F. 2d 235 (5th Cir. 1962), certiorari denied, 372 U.S. 929, 83 S. Ct. 874, 9 L. Ed. 2d 733 (1963).

78 Minnesota Mining v. N.J. Wood Co., 381 U.S. 311,85 S. Ct. 1473, 14 L. Ed 2d 405.