It has been held that "the individuals through whom a corporation acts and who shape its intentions can be held liable on a charge of attempted monopolization."79

The Supreme Court of the United States said, "The California Agricultural Prorate Act authorizes the establishment, through state officials of programs for the marketing of agricultural commodities produced in the state so as to restrict competition among the growers and maintain prices in the distribution of their commodities to packers." A program for the marketing of raisins was established by such officials and it was then attacked on the ground that it violated the Federal antitrust laws. But the Supreme Court held that this program, which was the result of State action, was not covered by such laws.80 State action for helping farmers is a means that should not be overlooked.

No action may be maintained under sections 4 and 16 of the Clayton Act for a violation of section 3 of the Robinson-Patman Act because it is not a part of the antitrust laws.81

A treble damage suit against a cooperative charged with engaging in predatory activities to obtain a monopoly was upheld and the Capper-Volstead Act was held to be no defense.82 In a situation arising out of an illegal merger, the services of a magazine sales supervisor were terminated and he then sued for treble damages. The court held that his complaint stated a cause of action.83 Apparently any employee who is damaged by a violation of the antitrust laws may maintain a suit for treble damages.84

A treble damage suit was brought against Sunkist Growers, Inc., because it was claimed that it had conspired with others to refuse to sell oranges to the plaintiff, but the suit failed.85 In another like suit against the same cooperative it was alleged that

19 Tillamook Cheese & Dairy Assʼn v. Tillamook County Cream Ass'n, 358 F. 2d 115, 118.

80 Parker v. Brown, 317 U.S. 341, 63 S. Ct. 307, 87 L. Ed. 315; see also E. W. Wiggins Airways, Inc. v. Massachusetts, 362 F. 2d 52, certiorari denied, 385 U.S. 947, 87 S. Ct. 320, 17 L. Ed. 2d 226; Alabama Power Co. v. Alabama Electric Cooperative, Inc., 394 F. 2d 672.

81 Nashville Milk Co. v. Carnation Co., 355 U.S. 373, 78 S. Ct. 352, 2 L. Ed. 2d 340.

82 April v. National Cranberry Ass'n 168 F. Supp. 919 (D. Mass. 1958). 83 Dailey v. Quality School Plan, Inc., 380 F. 2d 484.

84 Nichols v. Spencer International Press, Inc., 371 F. 2d 332; Radovich v. National Football League, 352 U.S. 445, 77 S. Ct. 390, 1 L. Ed. 2d 456.

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

the cooperative was a monopoly and that it did not qualify for exemption under the Capper-Volstead Act, and the court found that it did not so qualify.86 After Sunkist was reorganized, it was held to meet the conditions of the Capper-Volstead Act in a decision of the Federal District Court of California in Case-Swayne Co., Inc. v. Sunkist Growers, Inc., 355 F. Supp. 408 (C. D. Calif. 1971).

Not all suits of this character are successful. One failed because it was found that the sales made by a competitor allegedly below cost to put the plaintiff out of business "were entirely of a local nature."87

Another suit brought by a cooperative failed because it was not established that the price paid by the defendant for milk was a fictitious price not determined by competition.88

It was held that a treble damage suit is not limited to plaintiffs in a direct contractual or competitive status with the defendant.89 The weight of authority supports the right of a cooperative to maintain a treble damage suit.90

Six small dairy processors successfully brought a treble damage suit against a large milk cooperative, its general manager, president, treasurer, and one of its directors. It was alleged and established that the defendants had conspired with various retail stores to fix the resale price of milk and that the defendants had engaged in unlawful price discrimination. The conspiracy with the

86 Case-Swayne Co. v. Sunkist Growers, Inc., 389 U.S. 384, 88 S. Ct. 528, 19 L. Ed. 2d 621 (1967), rehearing denied, 390 U.S. 930 (1968).

87 Ewing-Von Allman Dairy Co. and C. Icecream Co. v. C and C Icecream Co., 109 F. 2d 898.

88 Marion County Cooperative Ass'n v. Carnation Co., 214 F.2d 557; see also Louisiana Farmers' P. U. v. Great Atlantic and Pacific T. Co., 40 F. Supp. 897, reversed and remanded, 131 F. 2d 419.

89 South Carolina Council of Milk Producers, Inc. v. Newton, 360 F. 2d 414, certiorari denied, 385 U.S. 934, 87 S. Ct. 295, 17 L. Ed. 2d 215. See also Peelers Company v. Wendt, 260 F. Supp. 193; Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F. 2d 679.

90 American Cooperative Serum Ass'n v. Anchor Serum Co., 153 F. 2d 907, certiorari denied, 329 U.S. 721, 67 S. Ct. 57, 91 L. Ed. 625; Tillamook Cheese and Dairy Ass'n v. Tillamook County Cream Ass'n, 358 F. 2d 115; South Carolina Council of Milk Producers, Inc. v. Newton, 360 F. 2d 414, certiorari denied, 385 U.S. 934, 87 S. Ct. 295, 17 L. Ed. 2d 215; Peelers Company v. Wendt, 260 F. Supp. 193, Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F.2d 679. But see Farmers Coop. Oil Co. v. Socony-Vacuum Oil Co., Inc., 133 F. 2d 101; Louisiana Farmers' Protective Union, Inc. v. Great Atlantic and Pacific Tea Company of America, Inc., 131 F. 2d 419.

retail stores involved a secret cash rebate of 5 cents for each half gallon of milk in a paper carton. Damages were recovered by the plaintiffs and the defendants were enjoined.91

In a treble damage suit against a milk cooperative, it was charged that the cooperative conspired with milk processors to fix the price of milk shipped into Pennsylvania by using rebates. The court held that this sufficiently alleged violations of the Sherman Act to withstand a motion to dismiss.92

The picketing of retail stores to get them to stop handling the milk of a certain distributor and to handle the milk of a cooperative at which picketing was at least partially successful was permanently enjoined as in violation of sections 1 and 2 of the Sherman Antitrust Act.93

In a criminal case in which a milk cooperative was charged with conspiring with milk distributors to fix the price of milk, the defendants unsuccessfully contended that only intrastate commerce was involved, and that the order of the Secretary of Agriculture relating to the price to be paid farmers barred the action.94

It is settled that on a sale of commodities under which title passes to the buyer, a contract under which the buyer is bound to resell only at prices fixed by the seller is an unlawful restraint of trade, except where permitted by section 1 of title 15 of the U.S. Code (fair trade practice acts).95

Mergers and Consolidations

Mergers and consolidations may result in violations of the antitrust laws. Section 7 of the Clayton Act (15 U.S.C. 18) for

91 Bergjans Farm Dairy Co. v. Sanitary Milk Producers, 241 F. Supp. 476, affirmed, 368 F. 2d 679; see also Tillamook Cheese & Dairy Association v. Tillamook County Creamery Ass'n, 358 F. 2d 115.

92 Knuth v. Erie-Crawford Dairy Co-op Association, 395 F. 2d 420. 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 (3d Cir. 1972).

93 Otto Milk Co. v. United Dairy Cooperative Ass'n, 261 F. Supp. 381. The judgment of the lower court was affirmed in an elaborate opinion in 388 F.2d 789. See also Boise Cascade International, Inc. v. Northern Minnesota Pulpwood Producers Association, 294 F. Supp. 1015 (D. Minn. 1968).

94 United States v. Universal Milk Bottling Service, 85 F. Supp. 622.

95 United States v. Paramount Pictures, 334 U.S. 131, 68 S. Ct. 915, 92 L. Ed. 1260; Gannon v. Federated Milk Producers Ass'n, Inc., 11 Utah 2d 421, 360 P. 2d 1018.

bids any corporation in commerce to acquire the stock or any part thereof of another corporation and forbids any corporation subject to the jurisdiction of the Federal Trade Commission to acquire the whole or any part of the assets of another corporation if the effect of such acquisition "may be substantially to lessen competition or tend to create a monopoly.”

There is no exemption of cooperatives and they appear to be technically subject to said section to the same extent as other corporations. In reading the statutory prohibition, emphasis should be placed on the words "may be."

Donald F. Turner, then Assistant Attorney General in Charge of the Antitrust Division, gave a talk in 1966 entitled "Agricultural Cooperatives and the Anti-Trust Laws." In speaking of one cooperative merging with another cooperative on the same level, he said: “In particular as a cooperative appears to be entitled to acquire some degree of market power simply by enrolling new members in its organization, it should have the right to acquire this same power through horizontal merger when the merger is identical for all practical purposes to an increase in the size of one of the cooperatives through the voluntary accession of new members. Thus, if at the time a merger between two cooperatives is to take place each member of the cooperative is free to withdraw and to be reimbursed the value of his share in the organization, the merger seems equivalent to the voluntary enrollment of new members into the organization and as such no more subject to attack under the antitrust laws than that organization would be if it had enlisted the same members originally."97

The Supreme Court has said: "Possible economies cannot be used as a defense to illegality. Congress was aware that some mergers which lessen competition may also result in economies but it struck the balance in favor of protecting competition."98

The Supreme Court of the United States held that the Proctor and Gamble Company must divest itself of all the assets it acquired from the Clorox Chemical Company; and that in the case of any merger, whether it is horizontal, vertical, conglomerate, or a

96 See speeches by William J. Boyd, Jr., Chief, Division of Mergers, Federal Trade Commission, entitled "Merger Enforcement and Cooperatives” (1968) and "Mergers and Cooperatives" (1969).

97See The Cooperative Accountant, Vol. XIX, No. 2, p. 22.

98 Federal Trade Commission v. Proctor and Gamble Co., 386 U.S. 568, 87 S. Ct. 1224, 18 L. Ed. 2d 303.

product extension merger, that its legality must be tested by whether it may substantially lessen competition.99

In a Los Angeles case, an acquisition was found to be an illegal merger where a grocery chain with retail sales that ranked third in the area acquired another grocery chain having retail sales ranking sixth, although the combined sales of both in 1960 were only 7.5 percent of the total retail sales of all groceries sold in the Los Angeles market area each year. 100

Another merger case involved a milk bargaining cooperative in the District of Columbia. After the merger, the cooperative furnished about 86 percent of the milk used in the District of Columbia and its metropolitan area.

In this case, it was held that the purchase by the cooperative of all of the assets of an independent milk dealer, the principal competitor of the dealers who purchased milk from the cooperative, was a violation of section 7; and because of this violation, the cooperative was required to sell as a going concern all of the assets that it had purchased.

It was specifically held that neither section 6 of the Clayton Act nor the Capper-Volstead Act in any way authorized the merger; and that the evidence clearly showed that competition had been lessened. The argument that the Capper-Volstead Act, in providing that cooperatives that meet its conditions may make "the necessary contracts and agreements" to effect its purposes, authorized the purchase of the assets was completely rejected.101

It is possible for those contemplating a merger to submit the facts involved to either the Department of Justice or the Federal Trade Commission for a conditional ruling on the question of whether the proposed merger if consummated would violate the antitrust laws. But even if a favorable ruling is received, this would not prevent the bringing of a treble damage suit by someone who claimed he was damaged by the merger.

If a corporation is failing and the termination of the enterprise seems inevitable, it may be merged with another corporation without violating the law; 102 and if a firm is closing out its business

99 Federal Trade Commission v. Proctor and Gamble Co., 386 U.S. 568, 87 S. Ct. 1224, 18 L. Ed. 2d 303.

100 United States v. Von's Grocery Co., 384 U.S. 270, 86 S. Ct. 1478, 16 L. Ed. 2d 555.

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

102 International Shoe Co. v. Federal Trade Commission, 280 U.S. 291, 50 S.