word "wholesaler" is not found in the definition of "packer" contained in the statute.
When the Act was enacted the large chains of grocery stores were not in existence to the same extent as they are today and it may well be that for this reason the Congress concentrated its attention principally on slaughterers and meat packing establishments. In many industries the developments of recent years have led to a situation where the wholesaler or the jobber is entirely or partially eliminated and the retailer, owning numerous outlets, also performs functions that previously were fulfilled by wholesalers.
The question, as the Court sees it, is not whether the plaintiffs are wholesalers, but whether they perform functions that are elsewhere carried out by wholesalers. There would seem to be little doubt that if the meat involved in these cases were purchased by a wholesale concern from a slaughterhouse, that the operations which concern us here were performed at the plant or warehouse of the wholesaler and then the meats so prepared were resold to the chain stores, the wholesale concern would be within the terms of the Act. Here the functions that are elsewhere carried on by a wholesaler are performed by the owner of the retail stores. The operations are not conducted at the stores, but at central points which serve to eliminate the middleman or the wholesaler.
The Court is of the opinion that a reasonable construction of the Act must include the activities performed by the plaintiffs at their warehouses and plants in respect to preparation of meats. It is clear, however, as is conceded by the Government, and as was held by the Court of Appeals for the Fourth Circuit in Crosse and Blackwell v. Federal Trade Commission, 262 F.2d 600, that the plaintiffs are subject to the Act only in respect to those activities that comprise the operations performed in respect to meat at their warehouses and plants and not any of their other activities or the sales of food products of other types.
The plaintiffs' counsel rely, in support of their contention that their clients are not subject to the Act, on the case of Giant Food, Inc. v. Federal Trade Commission, decided by the Court of Appeals for the District of Columbia Circuit, 307 F.2d 184, 113 U.S.App.D.C. 227. In that case the Federal Trade Commission sought to direct Giant Food, Inc., to cease and desist from engaging in certain practices which the Commission held violated the Federal Trade Commission Act. It was argued in behalf of the company, however, that it was a packer and, therefore, subject to the Packers and Stockyards Act and not within the provisions of the Federal Trade Commission Act. In other words, the situation was exactly the reverse of that presented here. This point was very briefly discussed in the opinion of the Court of Appeals, since that opinion was devoted principally to other issues. The Court of Appeals held that the assertion that the plaintiff was a packer within the meaning of the Packers and Stockyards Act was without merit. In order to discern the basis of that decision it is necessary to revert to the opinions of the Federal Trade Commission, which are reported in 54 Federal Trade Commission Decisions 1881, and 55 Federal Trade Commission Decisions 2058.
The facts as shown in those opinions were that the various operations performed by Giant Food, Inc., were conducted at the individual retail stores and not at any central warehouse or plant that served essentially as a wholesaler. Naturally, it is undisputed that the Act of Congress is not intended to touch individual retail stores. This Court is of the opinion that any activities performed by the plaintiffs at their individual stores are not subject to regulation under this statute. The distinction between the cases is that the plaintiffs own plants or warehouses at which they perform operations that come within the definition of meat packing, because they constitute preparation of meats or meat food products for sale or shipment in commerce. The plaintiffs distribute the meat products so prepared among their retail stores. In other words, the chains in addition to operating retail stores, are their own wholesaler and their own distributor.
In the light of these considerations, the Court holds and rules that the two plaintiffs are to be considered "packers" within the definition of the Packers and Stock-yards Act, in respect only to those operations as to meat and meat products that are performed at their warehouses, plants, and other central points. As to those activities they are subject to the obligations of the Act and the regulations of the Department of Agriculture promulgated in accordance with that statute.
The Court wishes to say that it is greatly indebted to all counsel for their very able and enlightening arguments in this matter.
Counsel may submit an order in accordance with the Court's ruling.
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