purpose of the Clayton Act was to liberate combinations of farmers and their cooperative organizations from the prohibitions of the antitrust laws as long as they do not combine with others who are outside of this category. It seems immaterial whether a large group of farmers organizes a single organization or divides itself into several organizations. Their joint activity, whether in the form of a single association or two or more associations, is not an illegal combination in restraint of trade in the light of the provisions of the Clayton Act. Surely, the legality of the actions of a group of farmers should not depend on such a nebulous consideration as the question whether they found it convenient to organize a single large cooperative or two smaller groups. The effect of the joint action is the same in either event and should be tested by the same yardstick. The exemption should be construed as applicable to a group of farmers irrespective of whether they are joined into a single cooperative or into several cooperative associations acting jointly. Any other construction would result in partially defeating the intent of the Congress and frustrating the meaning of the Act.
We were admonished centuries ago that, 'The letter killeth but the spirit giveth light'.
Even a strict literal construction of the statute, however, leads to the same conclusion. It provides, in part, that:
'Nor shall such organizations or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade'.
It will be observed that the plural, as well as the singular, are included.
This discussion might reasonably end at this point were it not for the fact that later statutes affirmatively support the construction of the Clayton Act which this Court has just reached.
In 1922, eight years after the passage of the Clayton Act, the so-called Capper-Volstead Act became law, 7 U.S.C.A. § 291. The pertinent provisions of that statute read as follows:
'Persons engaged in the production of agricultural products as farmers, planters, ranchmen, dairymen, nut or fruit growers may act together in associations, corporate or otherwise, with or without capital stock, in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce, such products of persons so engaged. Such associations may have marketing agencies in common; and such associations and their members may make the necessary contracts and agreements to effect such purposes: Provided, however, That such associations are operated for the mutual benefit of the members thereof, as such producers, and conform to one or both of the following requirements:
'First. That no member of the association is allowed more than one vote because of the amount of stock or membership capital he may own therein, or,
'Second. That the association does not pay dividends on stock or membership capital in excess of 8 percentum per annum.
'And in any case to the following:
'Third. That the association shall not deal in the products of non-members to an amount greater in value than such as are handled by it for members.'
The stipulation of facts in this case shows that these defendants comply with the proviso of the Capper-Volstead Act. It will be noted that the Act permits agricultural cooperatives to have marketing agencies in common. Obviously, it must have been contemplated that a common marketing agency would fix the same prices for the products of all of its principals and would not discriminate among them. Consequently, it must have been foreseen that this provision would, in some cases, lead to the fixing of prices of agricultural commodities.
The conclusion is inescapable that Congress had no intention to prohibit agreements between two or more cooperatives fixing prices for their products. It should be noted, in passing, that to prevent possible abuses the Secretary of Agriculture was empowered to issue cease and desist orders if he found that such an association monopolizes or restrains trade in interstate or foreign commerce to such an extent that the price of any agricultural product is unduly enhanced thereby. Such an order is subject to judicial review, 7 U.S.C.A. § 292.
In 1926, these provisions were further fortified by the Co-operative Marketing Act, 7 U.S.C.A. § 455, which provides as follows:
'Persons engaged, as original producers of agricultural products, nut or fruit growers, ranchmen, dairymen, such as farmers, planters, acting together in associations, corporate or otherwise, in collectively processing, preparing for market, handling, and marketing in interstate and/or foreign commerce such products of such persons so engaged, may acquire, exchange, interpret, and disseminate past, present, and prospective crop, market, statistical, economic, and other similar information by direct exchange between such persons, and/or such associations or federations thereof, and/or by and through a common agent created or selected by them.'
It will be observed that again the use of a common agent is expressly permitted although, of necessity, the use of a common agent may inevitably lead to a fixing of prices. It will also be noted that this statute applies expressly to federations of cooperatives as well as to cooperatives.
The Court concludes that a combination between two or more agricultural cooperatives to fix prices of their products is exempt from the antitrust laws provided that no other person that is not such an organization or a member of such a group is a part of the combination.
Accordingly, the motion of defendants for judgment of acquittal is granted and an order will be entered accordingly.
© 1992-2004 VersusLaw Inc.