LOEWE v. LAWLOR.
208
MR. CHIEF JUSTICE FULLER delivered the opinion of the
court.
This was an action brought in the
Circuit Court for the District of Connecticut under § 7 of the Anti-Trust Act of July 2,
1890, c. 647, 26 Stat. 209, claiming threefold damages for injuries inflicted
on plaintiffs by a combination [***17]
or conspiracy declared to be unlawful by the act.
Defendants filed a demurrer to the
complaint, assigning general and special grounds. The demurrer was sustained as to the first
six paragraphs, which rested on the ground that the combination stated was not
within the Sherman Act, and this rendered it unnecessary to pass upon any other
questions in the case; and upon plaintiffs declining to amend their complaint
the court dismissed it with costs. 148 Fed. Rep. 924; and see 142 Fed. Rep.
216; 130 Fed. Rep. 633.
[*284]
The case was then carried by writ of error to the Circuit Court of
Appeals for the Second Circuit, and that court, desiring the instruction of
this court upon a question arising on the writ of error, certified that
question to this court. The certificate
consisted of a brief statement of facts, and put the question thus: "Upon
this state of facts can plaintiffs maintain an action against defendants under
section 7 of the Anti-Trust Act of July 2, 1890?"
After the case on certificate had
been docketed here plaintiffs in error applied, and defendants in error joined
in the application, to this court to require the whole record and cause to be
sent up for its [***18]
consideration. The application
was granted and the whole record and cause being thus brought before this court
it devolved upon the court, under § 6 of
the Judiciary Act of 1891, to "decide the whole matter in controversy in
the same manner as if it had been brought there for review by writ of error or
appeal."
The case comes up, then, on
complaint and demurrer, and we give the complaint in the margin. n1
n1 The complaint alleged that the defendants were
residents of the District of Connecticut and that complainants resided in
Danbury, in that district, were copartners and located and doing business as
manufacturers and sellers of hats there; that they had "a factory for the
making of hats, for sale by them in the various States of the Union, and have
for many years employed, at said factory, a large number of men in the
manufacture and sale of said hats, and have invested in that branch of their
business a large amount of capital, and in their business of selling the
product of their factory and filling orders for said hats, have built up and
established a large interstate trade, employing more than two hundred and
thirty (230) persons in making and annually selling hats of a value exceeding
four hundred thousand ($400,000) dollars.
"4. The
plaintiffs, deeming it their right to manage and conduct their business without
interference from individuals or associations not connected therewith, have for
many years maintained the policy of refusing to suffer or permit any person or
organization to direct or control their said business, and in consequence of
said policy, have conducted their said business upon the broad and patriotic
principle of not discriminating against any person seeking employment because
of his being or not being connected with any labor or other organization, and
have refused to enter into agreement with any person or organization whereby
the rights and privileges, either of themselves or any employe, would be
jeopardized, surrendered to or controlled by said person or organization, and
have believed said policy, which was and is well known to the defendants, to be
absolutely necessary to the successful conduct of their said business and the
welfare of their employes.
"5. The
plaintiffs, for many years, have been and now are engaged in trade and commerce
among the several States of the Union, in selling and shipping almost the whole
of the product of their said factory by common carriers, from said Danbury to
wholesale dealers residing and doing business in each of the States of Maine,
Massachusetts, Rhode Island, New York, New Jersey, Pennsylvania, Maryland,
Virginia, Ohio, Illinois, Michigan, Wisconsin, Missouri, Nebraska, Arkansas,
California and other States, to the amount of many hundreds of thousands of
dollars, and in sending agents with samples from said Danbury into and through
each of said States to visit said wholesale dealers at their places of business
in said several States, and solicit and procure from them orders for said hats,
to be filled by hats to be shipped from their said factory at said Danbury, by
common carriers to said wholesale dealers, to be by them paid for after the
delivery thereof at their several places of business.
"6. On July 25, 1902, the amount of
capital invested by the plaintiffs in said business of making and selling hats,
approximated one hundred and thirty thousand dollars, and the value of the hats
annually sold and shipped by them in previous years, to said dealers in States
other than Connecticut, exceeded four hundred thousand dollars, while the value
of hats sold by them in the State of Connecticut did not exceed ten thousand
dollars.
"7. On
July 25, 1902, the plaintiffs had made preparations to do a large and
profitable business with said wholesale dealers in other States, and the
condition of their business was such as to warrant the full belief that the
ensuing year would be the most successful in their experience. Their factory was then running to its full
capacity in filling a large number of orders from such wholesale dealers in
other States. They were then employing
about one hundred and sixty men in the making and finishing departments, a
large number in the trimming and other departments, whose work was dependent
upon the previous work of the markers and finishers, and they then had about
one hundred and fifty dozens of hats in process of manufacture, and in such
condition as to be perishable and ruined if work was stopped upon them.
"8. The
plaintiffs then were and now are almost wholly dependent upon the sale and
shipments of hats as aforesaid, to said dealers in States other than
Connecticut, to keep their said factory running and to dispose of its product
and their capital in said business profitably employed, and the restraint,
curtailment and destruction of their said trade and commerce with their said
customers in said States other than Connecticut, by the combination, conspiracy
and acts of the defendants, as hereinafter set forth, have been and now are of
serious damage to the property and business of the plaintiffs, as hereinafter
set forth.
"9. The
individual defendants, named in this writ, are all members of a combination or
association of persons, styling themselves The United Hatters of North America,
and said combination includes more than nine thousand persons, residing in the
several States of Massachusetts, Connecticut, New York, New Jersey,
Pennsylvania, Indiana, Illinois, Missouri, California, and the Province of
Ontario in the Dominion of Canada.The said combination is subdivided into
twenty subcombinations, each of which is by themselves styled a local union of
The United Hatters of North America. Six
of said subcombinations are in the State of
"10. Said
combination of persons, collectively known as The United Hatters of North
America, owns, controls, edits, publishes, and issues a paper styled The
Journal of the United Hatters of North America, in which are published reports
of many of the acts of its agents, hereinafter mentioned, which circulates
widely among its members and the public, and which affords a ready, convenient,
powerful and effective vehicle for the dissemination of information to its
members and the public as to boycotts declared and pushed by them, and of the
acts and measures of its members and agents for carrying such boycotts into
effect, and was so used by them in connection with the acts of the defendants
hereinafter set forth.
"11. Said combination owns and absolutely controls
the use of a certain label or distinguishing mark, which it styles the Union
Label of the United Hatters of North America, which mark, when so used by them,
affords to them a ready, convenient and effective instrument and means of
boycotting the hats of any manufacturer against whom they may desire to use it
for that purpose.
"12. The defendants in this suit are also
all members of a combination or association of persons calling themselves and
known as The American Federation of Labor, which includes more than a million
amd four hundred thousand members residing in the several States and
Territories of the Union, and in the Dominion of Canada, and in all the places
in the several States, where the wholesale dealers in hats, hereinbefore
mentioned, and their customers reside, and do business. Said combination is subdivided in subordinate
groups, or combinations, comprising one hundred and ten national and
international unions and combinations, of which the said combinations of
persons styling themselves The United Hatters of North America is one, composed
of twelve thousand local unions, twenty-eight State federations or
combinations, more than five hundred central labor unions or combinations, and
more than two thousand local unions or combinations, which are not included in
the above-mentioned national and international combinations.
"13. Said
combination of persons collectively known as The American Federation of Labor
owns, controls, edits, publishes, and issues a paper or magazine called The American
Federationist, which it declares to be its official organ and mouthpiece, which
has a very wide circulation among its members and others, and which affords a
ready, convenient, powerful and effective vehicle and instrument for the
dissemination of information, as to persons, their products and manufactures,
boycotted or to be boycotted, by its members, and as to measures adopted and
statements to be published, detrimental to such persons and to the sale of
their manufactures and for boycotting such persons, their manufactures, and
said paper has been and now is constantly used, printed and distributed for
said purposes among its members and the public and was so used by the
defendants and their confederates in boycotting the products of the firm of F. Berg
& Co., of Orange, New Jersey, and H.H. Roelofs & Co., of Philadelphia,
Pa., hat manufacturers, to their very great injury and until the said firms
successively yielded to their demands in pursuance of the general scheme of the
defendants hereinafter set forth.
"14. The
persons united in said combination, known as The American Federation of Labor,
including the persons in said subcombination known as The United Hatters of
North America, constantly employ more than one thousand agents in the States
and Territories of the United States, to push, enforce and carry into effect
all boycotts declared by the said members, including those in aid of the
combined scheme, purpose and effort hereinafter stated, to force all the
manufacturers of fur hats in the United States, including the plaintiffs, to
unionize their factories by restraining and destroying their interstate trade
and commerce, as hereinafter stated, all of which said agents act under the
immediate supervision and personal direction of one Samuel Gompers, who is
chief agent of the said combination of persons for said purpose, and of each of
the said combinations, and the said agents make monthly reports of their doings
in pushing and enforcing and causing to be pushed and enforced said boycotts,
and publish the same monthly in said paper known as The American Federationist,
of which he is the editor, appointed by the said members, which said paper in
connection with said statement or summary, is declared to be the authorized and
official mouthpiece of each of said subcombinations, including the said United
Hatters of North America. Said statement
is declared by the defendants to be a faithful record of the doings of said
agents, and each of said statements, made during the period covered by the acts
of the defendants against the plaintiffs herein stated, contains the
announcement to the members of said combination and the public, that all
boycotts declared by them are being by them and their agents pushed, enforced
and observed.
"15. Said
combination of persons collectively known as The American Federation of Labor,
of which the defendants are members, was by the defendants and their other
members formed for the purpose among others, of facilitating the declaration
and successful maintenance of boycotts, by and for said combination of persons
known as The United Hatters of North America, acting through the said
Federation of Labor and its other component parts or members, and it and its
component parts have frequently declared boycotts, at the request of the
defendants, against the business and product of various hat manufacturers, and
have vigorously prosecuted the same by and through the powerful machinery at
their command as aforesaid, in carrying out their general scheme herein stated,
to the great damage and loss of business of said manufacturers, and
particularly during the years of 1901 and 1902, they declared, prosecuted and
waged, at the request of the defendants and their agents, a boycott against the
hats made by and the business of H.H. Roelofs & Co., of Philadelphia, Pa.,
until, by causing them great damage and loss of business, they coerced them
into yielding to the demand of the defendants and their agents, that the said
factory of said Roelofs & Co. be unionized, as termed by the defendants,
and into agreeing to employ, and employing exclusively, members of their said
combination in the making and finishing departments of said factory, and in
large measure surrendering to the defendants and their agents the control of
said factory and business, all of which was well known to the plaintiffs, their
customers, wholesale dealers and the public, and was, by the defendants and
their agents, widely proclaimed through all their agencies above mentioned, in
connection with their acts against the plaintiffs, as hereinafter set forth,
for the purpose of intimidating and coercing said wholesale dealers and their
customers from buying the hats of the plaintiffs, by creating in their minds
the fear that the defendants would invoke and put into operation against them,
all said powerful means, measures and machinery, if they should handle the hats
of the plaintiffs.
"16. The
defendants, together with the other persons united with them in said
combination, known as The United Hatters of North America, have been for many
years, and now are, engaged in a combined scheme and effort to force all
manufacturers of fur hats in the United States, including the plaintiffs,
against their will and their previous policy of carrying on their business, to
organize their workmen in the departments of making and finishing, in each of
their factories, into an organization, to be part and parcel of the said
combination known as The United Hatters of North America, or as the defendants
and their confederates term it, to unionize their shops, with the intent
thereby to control the employment of labor in and the operation of said
factories, and to subject the same to the direction and control of persons,
other than the owners of the same, in a manner extremely onerous and distasteful
to such owners, and to carry out such scheme, effort and purpose, by
restraining and destroying the interstate trade and commerce of such
manufacturers, by means of intimidation of and threats made to such
manufacturers and their customers in the several States, of boycotting them,
their product and their customers, using therefor all the powerful means at
their command as aforesaid, until such time as from the damage and loss of
business resulting therefrom, the said manufacturers should yield to the said demand
to unionize their factories.
"17. The
defendants and other members of said United Hatters of North America, acting
with them and in pursuance of said general combined scheme and purpose, and in
carrying the same into effect against said manufacturers, including the
plaintiffs, and by use of the means above stated, and the fear thereof, have
within a very few years, forced the following named manufacturers of hats in
the United States to yield to their demand, and unionize their factories, viz.:
[Here follow 70 names of corporations and individuals.] and until there
remained, according to the statements of the defendants, only twelve hat
factories in the United States which had not submitted to their said demands,
and the defendants, in pursuing their warfare against the plaintiffs, as
hereinafter set forth, and in connection with their said acts against them,
have made public announcement of that fact and of the firms so coerced by them,
in order thereby to increase the effectiveness of their acts in intimidating
said wholesale dealers and their customers in States other than Connecticut,
from buying hats from plaintiffs, as hereinafter set forth.
"18. To
carry out said scheme and purpose, the defendants have appointed and employed
and do steadily employ, certain special agents to act in their behalf, with
full and express authority from them and the other members of said combination,
and under explicit instructions from them, to use every means in their power,
to compel all such manufacturers of hats to so unionize their factories, and
each and all of the defendants in this suit did the several acts hereinafter
stated, either by themselves or their agents, by them thereto fully authorized.
"19. On or
about March 1, 1901, in pursuance of said general scheme and purpose, the
defendants and the other members of said combination, The United Hatters of
North America, through their agents, the said John A. Moffit, Martin Lawlor,
John Phillips, James P. Maher and Charles J. Barrett, who acted for themselves
and the other defendants, demanded of the plaintiffs that they should unionize
their said factory, in the amking and finishing departments, and also thereby
acquire the right to use and use the said union label, subject to the right of
the defendants to recall the same at pleasure, in all hats made by them, and
then notified the plaintiffs that if they failed to yield to said demand, the
defendants and all the other members of the said combination known as The
United Hatters of North America, would resort to their said usual and
well-known methods to compel them so to do.
After several conferences, and in April, 1901, the plaintiffs replied to
the said demand of the defendants as follows:
"'Firmly believing that we are acting for the
best interests of our firm, for the best interests of those whom we employ, and
for the best interests of Danbury, by operating an independent or open factory,
we hereby notify you that we decline to have our shop unionized, and if
attacked, shall use all lawful means to protect our business interests.'
"The plaintiffs were then employing many union
and non-union men, and their said factory was running smoothly and
satisfactorily both to the plaintiffs and their employes.The defendants, their
confederates and agents, deferred the execution of their said threat against
the plaintiffs until the conclusion of their attack made in pursuance of the
same general scheme and purpose against H.H. Roelofs & Co., which resulted
in the surrender of Roelofs & Co., on July 15, 1902, except that the
defendants, their confederates and agents, in November, 1901, caused the said
American Federation of Labor to declare a boycott against any dealer or dealers
who should handle the products of the plaintiffs.
"20. On or
about July 25, 1902, the defendants individually and collectively, and as
members of said combinations and associations, and with other persons whose
names are unknown to the plaintiffs, associated with them, in pursuance of the
general scheme and purpose aforesaid, to force all manufacturers of fur hats,
and particularly the plaintiffs, to so unionize their factories, wantonly,
wrongfully, maliciously, unlawfully and in violation of the provisions of the
'Act of Congress, approved July 2, 1890,' and entitled 'An Act to Protect Trade
and Commerce Against Unlawful Restraints and Monopolies,' and with intent to
injure the property and business of the plaintiffs by means of acts done which
are forbidden and declared to be unlawful, by said act of Congress, entered
into a combination and conspiracy to restrain the plaintiffs and their
customers in States other than Connecticut, in carrying on said trade and
commerce among the several States and to wholly prevent them from engaging in
and carrying on said trade and commerce between them and to prevent the
plaintiffs from selling their hats to wholesale dealers and purchasers is said
States other than Connecticut, and to prevent said dealers and customers in
said other States from buying the same, and to prevent the plaintiffs from
obtaining orders for their hats from such customers, and filling the same, and
shipping said hats to said customers in said States as aforesaid, and thereby
injure the plaintiffs in their property and business and to render unsalable
the product and output of their said factory, so the subject of interstate
commerce, in whosoever's hands the same might be or come, through said
interstate trade and commerce, and to employ as means to carry out said
combination and conspiracy and the purposes thereof, and accomplish the same,
the following measures and acts, viz:
"To cause, by means of threats and coercion, and
without warning or information to the plaintiffs, the concerted and
simultaneous withdrawal of all the makers and finishers of hats then working
for them, who were not members of their said combination, The United Hatters of
North America, as well as those who were such members, and thereby cripple the
operation of the plaintiffs' factory, and prevent the plaintiffs from filling a
large number of orders then on hand, from such wholesale dealers in States
other than Connecticut, which they had engaged to fill and were then in the act
of filling, as was well known to the defendants; in connection therewith to
declare a boycott against all hats made for sale and sold and delivered, or to
be sold or delivered, by the plaintiffs to said wholesale dealers in States
other than Connecticut, and to actively boycott the same and the business of
those who should deal in them, and thereby prevent the sale of the same by
those in whose hands they might be or come through said interstate trade in
said several States; to procure and cause others of said combinations united
with them in said American Federation of Labor, in like manner to declare a
boycott against and to actively boycott the same and the business of such
wholesale dealers as should buy or sell them, and of those who should purchase
them from such wholesale dealers; to intimidate such wholesale dealers from
purchasing or dealing in the hats of the plaintiff by informing them that the
American Federation of Labor had declared a boycott against the product of the
plaintiffs and against any dealer who should handle it, and that the same was
to be actively pressed against them, and by distributing circulars containing
notices that such dealers and their customers were to be boycotted; to threaten
with a boycott those customers who should buy any goods whatever, even though
union made, of such boycotted dealers, and at the same time to notify such
wholesale dealers that they were at liberty to deal in the hats of any other
non-union manufacturer of similar quality to those made by the plaintiffs, but
must not deal in the hats made by the plaintiffs under threats of such
boycotting; to falsely represent to said wholesale dealers and their customers,
that the plaintiffs had discriminated against the union men in their employ,
had thrown them out of employment because they refused to give up their union
cards and teach boys, who were intended to take their places after seven
months' instruction, and had driven their employes to extreme measures 'by
their persistent, unfair and un-American policy of antagonizing union labor,
forcing wages to a starvation scale, and given boys and cheap, unskilled
foreign labor preference over experienced and capable union workmen,' in order
to intimidate said dealers from purchasing said hats by reason of the prejudice
thereby created against the plaintiffs and the hats made by them among those
who might otherwise purchase them; to use the said union label of said The
United Hatters of North America as an instrument to aid them in carrying out
said conspiracy and combination against the plaintiffs' and their customers'
interstate trade aforesaid, and in connection with the boycotting above
mentioned, for the purpose of describing and identifying the hats of the
plaintiffs, and singling them out to be so boycotted; to employ a large number
of agents to visit said wholesale dealers and their customers, at their several
places of business, and threaten them with loss of business if they should buy
or handle the hats of the plaintiffs, and thereby prevent them from buying said
hats, and in connection therewith to cause said dealers to be waited upon by
committees representing large combinations of persons in their several
localities to make similar threats to them; to use the daily press in the
localities where such wholesale dealers reside, and do business, to announce
and advertise the said boycotts against the hats of the plaintiffs and said
wholesale dealers, and thereby make the same more effective and impressive, and
to use the columns of their said paper, The Journal of the United Hatters of
North America, for that purpose, and to describe the acts of their said agents
in prosecuting the same.
"21.
Afterwards, to wit, on July 25, 1902, and on divers days since hitherto,
the defendants, in pursuance of said combination and conspiracy, and to carry
the same into effect, did cause the concerted and simultaneous withdrawal, by
means of threats and coercion made by them, and without previous warning or
information thereof to the plaintiffs, of all but ten of the non-union makers
and finishers of hats then working for them, as well as all of their union
makers and finishers, leaving large numbers of hats in an unfinished and
perishable condition, with intent to cripple and did thereby cripple the
operation of the plaintiffs' factory until the latter part of October, 1902,
and thereby prevented the plaintiffs from filling a large number of orders then
on hand from such wholesale dealers in States other than Connecticut, which
they had engaged to fill and were then in the act of filling, as well known to
the defendants, and thereby caused the loss to the plaintiffs of many orders
from said wholesale dealers in other States, and greatly hindered and delayed
them in filling such orders, and falsely representing to said wholesale
dealers, their customers, and the public generally in States other than
Connecticut, that the plaintiffs had discriminated against the union men in
their employ, and had discharged or thrown out of employment their union men in
August, 1902; that they had driven their employes to extreme measures by their
persistent, unfair and un-American policy of antagonizing union labor, forcing
wages down to a starvation scale and giving boys and cheap, unskilled foreign
labor preference over experienced and capable workmen; that skilled hatters had
been discharged from said factory for no other cause than their devotion and
adherence to the principles of organized labor in refusing to give up their
union cards, and to teach the trade to boys who were intended to take the place
of union workmen after seven months' instruction, and that unable to submit
longer to a system of petty tyrannies that might be tolerated in Siberia but
could not be borne by independent Americans, the workmen in the factory
inaugurated the strike to compel the firm to recognize their rights, in order
to prejudice, and did thereby prejudice the public, against the plaintiffs and
their product, and in order to intimidate, and did thereby intimidate said
wholesale dealers and their customers, in States other than Connecticut, from
purchasing hats from the plaintiffs by reason of the fear of the prejudice
created against said hats; and in connection therewith declared a boycott
against all hats made for and so sold and delivered, and to be so sold and
delivered to said wholesale dealers, in States other than Connecticut, and
actively boycotted the same and the business of those who dealt in them in such
other States, and thereby restrained and prevented the purchase of the same
from the plaintiffs, and the sale of the same by those in whose hands they
were, or might thereafter be, in the course of such interstate trade, and
caused and procured others of said combinations united with them in the said
American Federation of Labor to declare a boycott against the plaintiffs, their
product and against the business of such wholesale dealers in States other than
Connecticut, as should buy or sell them, and of those who should purchase from
such wholesale dealers any goods whatever, and further intimidated said
wholesale dealers from purchasing or dealing in hats made by the plaintiffs, as
aforesaid, by informing them that the American Federation of Labor had declared
a boycott against the hats of the plaintiffs and against any dealer who should
handle them, and that said boycott was to be actively pressed against them, and
by sending agents and committees from various of said labor organizations, to threaten
said wholesale dealers and their customers with a boycott from them if they
purchased or handled the goods of plaintiffs, and by distributing in San
Francisco, California, and other places, circulars containing notices that such
dealers, and their customers were to be boycotted, and threatened with a
boycott, and did actively boycott the customers who did or should buy any goods
whatever, even though union made, of such wholesale dealers so boycotted, and
used the daily press to advertise and announce said boycott and the measures
taken in pursuance thereof by said labor organizations, particularly The San
Francisco Bulletin, in its issues of July 2 and July 4, 1903, and a daily paper
published in Richmond, Virginia, on December 10, 1902, and notified such
wholesale dealers in States other than Connecticut, that they were at liberty
to deal in the hats of any other non-union hat manufacturer of similar quality
to those of the plaintiffs, but they must not deal in hats made by the
plaintiffs, under threats of being boycotted for so doing, and used the said
union label of the United Hatters of North America as an instrument to aid them
in carrying out said combination and conspiracy against the plaintiffs' and
their customers' interstate trade, as aforesaid, and in connection with such
boycotting by using the same and its absence from the hats of the plaintiffs,
as an insignia or device to indicate to the purchaser that the hats of the
plaintiffs were to be boycotted, and to point them out for that purpose, and
employed a large number of agents to visit said wholesale dealers and their
customers at their several places of business in each of said States,
particularly Philadelphia and other places in the State of Pennsylvania, in
Baltimore in the State of Maryland, in Richmond and other places in the State
of Virginia, and in San Francisco and other places in the State of California,
to intimidate and threaten them, if they should continue to deal in or handle
the hats of the plaintiffs, and among many other instances of like kind, the
said William C. Hennelly and Daniel P. Kelly in behalf of all said defendants,
and acting for them, demanded the firm of Triest & Co., wholesale dealers
in hats, doing business in said San Francisco, that they should agree not to
buy or deal in the hats made by the plaintiffs, under threats made by them to
said firm of boycotting their business and that of their customers, and upon
their refusing to comply with such demand and yield to such threats, the
defendants by their said agents caused announcement to be made in the
newspapers of said city that said Triest & Co. were to be boycotted
therefor, and that the labor council of San Francisco would be addressed by
them for that purpose, and that they had procured a boycott to be declared by
said labor council, and thereupon the defendants, through their said agents,
Hennelly and Kelly, printed, published, issued and distributed to the retail
dealers in hats, in several States upon the Pacific coast, the following
circular, to wit:
"'San Francisco Labor Council,
"'Affiliated with the American Federation of
Labor,
"'Secretary's Office,
"'Rooms 405, 406, 407 Emma Spreckel's Building,
"'Meets every Friday, at
"'Telephone South 447.
"'Address all communications to
"'
"'To whom it may concern:
"'At a special meeting of the San Francisco Labor
Council held on the above date, the hat jobbing concern known as Triest &
Co., 116 Sansome St., San Francisco, was declared unfair for persistently
patronizing the unfair hat manufacturing concern of D.E. Loewe & Co.,
Danbury, Connecticut, where the union hatters have been on strike, for union
conditions, since August 20, 1902.
Triest & Co. will be retained on the unfair list as long as they
handle the product of this unfair hat manufacturing concern. Union men do not usually patronize retail
stores who buy from unfair jobbing houses or manufacturers. Under these
circumstances, all friends of organized labor, and those desiring the patronage
of organized workers, will not buy goods from Triest & Co.,
"'Yours respectfully,
G. B. BENHAM,
"'President S. F. Labor
Council.
"'T. E. ZANT,
"'Secretary S. F. Labor
Council. [L.S.]
"'W. C. HENNELLY,
"'D. F. KELLY,
"'Representing United Hatters of
"Also the following, to wit:
"'San Francisco Labor Council,
"'Affiliated with American Federation of Labor,
"'Secretary's Office,
"'Rooms 405, 406, 407 Emma Spreckel's Building,
"'Meets every Friday, at
"'Telephone South 447.
"'Address all communications to
"'
"'Messrs. .
"'Gentlemen: We beg leave to call your attention
to the following products which are on the unfair list of the American
Federation of Labor.
"'We do this in order that you refrain from
handling these goods, as the patronage of the firms named below is taken by the
organized workers as an evidence of a desire to patronize those who are opposed
to the interests of organized labor. The
declaration of unfairness regarding the firms mentioned is fully sanctioned and
will be supported to the fullest degree by the San Francisco Labor Council.
"'Trusting that you will be able to avoid the handling
of these goods in the future, we are,
"'Your respectfully,
G. B. BENHAM, President.
"'T. E. ZANT, Secretary. [L.S.]
"'Unfair List.
"'Loewe & Co.,
"'Cluett, Peabody & Co., Shirts and Collars,
"'United Shirt and Collar Co.,
"'Van Zandt, Jacobs & Co., Troy, New York;
Greenbaum, Well & Michaels, Selling Agents, 27 Sansome St., San Francisco,
Cal.'
and caused said circulars to be mailed to and
personally delivered to the retail dealers in hats, and the other customers of
said Triest & Co., upon the Pacific coast, and to many others, thereby
causing the loss of many orders and customers to said Triest & Co., and to
the plaintiffs, for the purpose of intimidating and coercing said Triest &
Co. not to deal with the plaintiffs, and thereby cause the loss of many orders
and customers to said Triest & Co., and to the plaintiffs.
"22. By
means of each and all of said acts done by the defendants in pursuance of said
combination and conspiracy, they have greatly restrained, diminished, and, in
many places, destroyed the trade and commerce of the plaintiffs with said
wholesale dealers, in said States other than Connecticut, by the loss of many
orders and customers directly resulting therefrom, and the plaintiffs have been
injured in their business and property by reason of said combination and
conspiracy, and the acts of the defendants done in pursuance thereof, and to
carry the same into effect, which are declared to be unlawful by said act of
Congress, to the amount of eighty thousand ($80,000) dollars, to recover
threefold which damages, under section 7 of said act this suit is
brought." [***19]
[*285]
[**302] The question is whether
upon the facts therein averred and admitted by the demurrer this action can be
maintained under the Anti-Trust Act.
The first, second and seventh
sections of that act are as follows:
[*286]
1. "Every contract,
combination in the form of trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several States, or with foreign nations, is hereby
declared to be illegal. Every person who
shall make any such [*287] contract or engage in any such combination or
conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction
thereof, shall be punished by fine not exceeding five thousand dollars, or by
imprisonment not exceeding one year, or by both said punishments, in the
discretion of the court.
[*288]
2. "Every person who shall
monopolize, or attempt to monopolize, or combine or conspire with any other
person or persons, to monopolize any part of the trade or commerce among the
several States, or with foreign nations, shall be deemed guilty [*289]
of a misdemeanor, and, on conviction thereof, shall be punished by fine
not exceeding five thousand dollars, or by imprisonment not exceeding
[***20] one year, or by both said
punishments, in the discretion of the court."
[*290]
7. "Any person who shall be
injured in his business or property by any other person or corporation by
reason of anything forbidden or declared to be unlawful by this act, may sue
therefor in any Circuit Court of the United States in the district in [*291] which the defendant resides or is found,
without [**303] respect to the amount in controversy, and
shall recover three fold the damages by him sustained, and the costs of suit,
including a reasonable attorney's fee."
[*292]
In our opinion, the combination described in the declaration is a
combination "in restraint of trade or commerce among the several
States," in the sense in which those words are used in the act, and the
action can be maintained accordingly.
[*293]
And that conclusion rests on many judgments of this court, to the effect
that the act prohibits any combination whatever to secure action which
essentially obstructs the free flow of commerce between the States, or
restricts, in that regard, the liberty of a trader to engage in business.
[*294]
The combination charged falls within the class of restraints
[***21] of trade aimed at compelling
third parties and strangers involuntarily not to engage in the course of trade
except on conditions that the combination imposes; and there is no doubt [*295]
that (to quote from the well-known work of Chief Justice Erle on Trade
Unions) "at common law every person has individually, and the public also
has collectively, a right to require that the course of trade should be kept
free from unreasonable [*296] obstruction." But the objection here is
to the jurisdiction, because, even conceding that the declaration states a case
good at common law, it is contended that it does not state one within the
statute. Thus, it is said, that the
restraint alleged would operate to entirely destroy plaintiffs' business and
thereby include intrastate trade as well; that physical obstruction [*297]
is not alleged [**304] as contemplated; and that defendants are not
themselves engaged in interstate trade.
We think none of these objections
are tenable, and that they are disposed of by previous decisions of this court.
United States v. Trans-Missouri Freight Association,
166 U.S. 290; United States v. Joint Traffic Association, 171 U.S. 505; and
Northern [***22] Securities Company v.
United States, 193 U.S. 197, hold in effect that the Anti-Trust law has a
broader application than the prohibition of restrainst of trade unlawful at
common law. Thus in the Trans-Missouri
Case, 166 U.S. 290, it was said that, "assuming that agreements of this
nature are not void at common law, and that the various cases cited by the learned
courts below show it, the answer to the statement of their validity is to be
found in the terms of the statute under consideration;" and in the
Northern Securities Case, 193 U.S. 331, that, "the act declares illegal
every contract, combination or conspiracy, in whatever form, of whatever nature,
and whoever may be the parties to it, which directly or necessarily operates in
restraint of trade or commerce among the several States."
We do not pause to comment on
cases such as United States v. Knight, 156 U.S. 1; Hopkins v. United States,
171 U.S. 578; and Arderson v. United States, 171 U.S. 604; [**305]
in which the undisputed facts showed that the purpose of the agreement
was not to obstruct or restrain interstate commerce. The object and intention
of the combination determined its legality.
In Swift v. United States, [***23]
196 U.S. 375, a bill was brought against a number of corporations, firms
and individuals of different States, alleging that they were engaged in
interstate commerce in the purchase, sale, transportation and delivery, and subsequent
resale at the point of delivery, of meats; and that they combined to refrain
from bidding against each other in the purchase of cattle; to maintain a
uniform price at which the meat should be sold; and to maintain uniform charges
in delivering meats thus sold through the channels of interstate trade to the
various dealers and consumers in other States.
[*298] And that thus they
artificially restrained commerce in fresh meats from the purchase and shipment
of live stock from the plains to the final distribution of the meats to the
consumers in the markets of the country.
Mr. Justice Holmes, speaking for
the court, said (pp. 395, 396, 398):
"Commerce among the States is
not a technical legal conception, but a practical one, drawn from the course of
business. When cattle are sent for sale
from a place in one State, with the expectation that they will end their
transit, after purchase, in another, and when in effect they do so, with [**306] only [***24]
the interruption necessary to find a purchaser at the stock yards, and
when this is a typical, constantly recurring course, the current thus existing
is a current of commerce among the States, and the purchase of the cattle is a
part and incident of such commerce.
* * *
"The general objection is urged
that the bill does not set forth sufficient, definite or specific facts. This objection is serious, but it seems to us
inherent in the nature of the case. The
scheme alleged is so vast that it presents a new problem in pleading. If, as we must assume, the scheme is
entertained, it is, of course, contrary to the very words of the statute. Its size makes the violation of the law more
conspicuous, and yet the same thing makes it impossible to fasten the principal
fact to a certain time and place. The elements,
too, are so numerous and shifting, even the constituent parts alleged are and
from their nature must be so extensive in time and space, that something of the
same impossibility applies to them.
* * *
"The scheme as a whole seems
to us to be within reach of the law. The
constituent elements, as we have stated them, are enough to give to the scheme
a body and, for all that [***25] we can say, to accomplish it. Moreover, whatever we may think of them
separately, when we take them up as distinct charges, they are alleged
sufficiently as elements of the scheme.
It is [*299] suggested that the several acts charged are
lawful and that intent can make no difference.
But they are [**307] bound together as parts of a single
plan. The plan may make the parts
unlawful."
And the same principle was
expressed in Aikens v. Wisconsin, 195 U.S. 194, 205, involving a statute of
Wisconsin prohibiting combinations "for the purpose of wilfully or
maliciously injuring another in his reputation, trade, business or profession
by any means whatever," etc., in which Mr. Justice Holmes said:
"The statute is directed
against a series of acts, and acts of several, the acts of combining, with
intent to do other acts, 'The very plot is an act in itself.' Mulcahy v. The Queen, L.R. 3 H.L. 306, 317.But an act, which
in itself is merely a voluntary muscular contraction, derives all its character
from the consequences which will follow it under the circumstances in which it
was done. When the acts consist of
making a combination calculated to cause temporal damage, the power
[***26] to punish such acts, when done
maliciously, cannot be denied because they are to be followed and worked out by
conduct which might have been lawful if not preceded by the acts. No conduct has such an absolute privilege as
to justify all possible schemes of which it may be a part. The most innocent and constitutionally
protected of acts or omissions may be made a step in a criminal plot, and if it
is a step in a plot neither its innocence nor the Constitution is sufficient to
prevent the punishment of the plot by law."
In Addyston Pipe and Steel Company
v. United States, 175 U.S. 211, [**308] the petition alleged that the defendants were
practically the only manufacturers of cast iron within thirty-six States and
Territories, that they had entered into a combination by which they agreed not
to compete with each other in the sale of pipe, and the territory through which
the constituent companies could make sales was allotted between them. This court held that the agreement which,
prior to any act of transportation, limited the prices at which the pipe could be [*300] sold after transportation, was within the
law. Mr. Justice Peckham, delivering the
opinion, said (p. 242): [***27] "And when Congress has enacted a statute
such as the one in question, any agreement or combination which directly
operates not along upon the manufacture but upon the sale, transportation and
delivery of an article of interstate commerce, by preventing or restricting its
sale, etc., thereby regulates interstate commerce."
In Montague & Company v.
Lowry, 193 U.S. 38, which was an action brought by a private citizen under § 7 against a
combination engaged in the manufacture of tiles, defendants were wholesale
dealers in tiles in California and combined with manufacturers in other States
to restrain the interstate traffic in tiles by refusing to sell any tiles to
any wholesale dealer in California who was not a member of the association
except at a prohibitive rate. The case
was a commercial boycott against such dealers in
The averments here are that there
was an existing interstate traffic between plaintiffs and citizens of other States,
and that for the direct purpose of destroying such interstate traffic
defendants combined not merely to prevent plaintiffs from manufacturing
articles then and there intended for transportation beyond the State, but also
to prevent the vendees from reselling the hats which they had imported from
Connecticut, or from [*301] further negotiating with plaintiffs for the
purchase and intertransportation of such hats from Connecticut to the various
places of destination. So that, although
some of the means whereby the interstate traffic was to be destroyed were acts
within a State, and some [***29] of them were in themselves as a part
of their obvious purpose and effect beyond the scope of Federal authority,
still, as we have seen, the acts must be considered as a whole, and the plan in
open to condemnation, notwithstanding a negligible amount of intrastate
business might be affected in carrying it out.
If the purposes of the combination were, as alleged, to prevent any
interstate transportation at all, the fact that the means operated at one end
before physical transportation commenced and at the other end after the
physical transportation ended was immaterial.
Nor can the act in question be
held inapplicable because defendants were not themselves engaged in interstate
commerce. The act made no distinction between classes. It provided that "every" contract,
combination or conspiracy in restraint of trade was illegal. [**310]
The records of Congress show that several efforts were made to exempt,
by legislation, organizations of farmers and laborers from the operation of the
act and that all these efforts failed, so that the act remained as we have it
before us.
In an early case,
"I think the Congressional
debates show that the statute had its origin in the evils of massed capital;
but, when the Congress came to formulating the prohibition, which is the
yardstick for measuring the complainant's right to the injunction, [*302] it expressed it in these words: "Every
contract or combination in the form of trust, or otherwise in restraint of
trade or commerce among the several States or with foreign nations, is hereby
declared to be illegal.' The subject had so broadened in the minds of the
legislators that the source of the evil was not regarded as material, and the
evil in its entirety is dealt with. They
made the interdiction include combinations of labor, as well as of capital; in
fact, all combinations in restraint [***31] of commerce, without reference to the
character of the persons who entered into them.
It is true this statute has not been much expounded by judges, but, as
it seems to me, its meaning, as far as relates to the sort of combinations to
which it is to apply, is manifest, and that it includes combinations which are
composed of laborers acting in the interest of laborers.
* * *
"It is the successful effort
of the combination of the defendants to intimidate and overawe others who were
at work in conducting or carrying on the commerce of the country, in which the
court finds their error and their violation of the statute. One of the intended results of their combined
action was the forced stagnation of all the commerce which flowed through New
Orleans.This intent and combined action are none the less unlawful because they
included in their scope the paralysis of all other business within the city as
well."
The case was affirmed on appeal by
the Circuit Court of Appeals for the Fifth Circuit. 57 Fed. Rep. 85.
Subsequently came
the litigation over the
The Circuit Court proceeded
principally [***33]
upon the Sherman Anti-Trust law, and granted an injunction. In this court the case was rested upon the broader
ground that the Federal Government had full power over interstate commerce and
over the transmission of the mails, and in the exercise of those powers could
remove everything put upon highways, natural or artificial, to obstruct the
passage of interstate commerce, or the carrying of the mails. But in reference to the Anti-Trust Act the
court expressly stated (158
"We enter into no examination
of the act of July 2, 1890, c. 647, 26 Stat. 209, upon which the Circuit Court
relied mainly to sustain its jurisdiction.
It must not be understood from this that we dissent from the conclusions
of that court in reference to the scope of the act, but simply that we prefer
to rest our judgment on the broader ground which has been discussed in this opinion,
believing it of importance that the principles underlying it should be fully
stated and affirmed."
And in the opinion, Mr. Justice
Brewer, among other things, said (p. 581):
"It is curious to note the
fact that in a large proportion of the cases in respect to interstate commerce
brought to this court the question [***34] presented was of the validity of state
legislation in its bearings upon interstate commerce, and the uniform course of
decision has been to declare that it is not within [*304]
the competency of a State to legislate in such a manner as to obstruct
interstate commerce. If a State, with its recognized powers of sovereignty, is
impotent to obstruct interstate commerce, can it be that any mere voluntary
association of individuals within the limits of that State has a power which
the State itself does not possess?"
The question answers itself, and
in the light of the authorities the only inquiry is as to the sufficiency of
the averments of fact. We have given the
declaration in full in the margin, and it appears therefrom that it is charged
that defendants formed a combination to directly restrain plaintiffs' trade;
that the trade to be restrained was interstate; that certain means to attain
such restraint were contrived to be used and employed to that end; that those
means were so used and employed by defendants, and that thereby they injured
plaintiffs' property and business.
At the risk of tediousness, we
repeat that the complaint averred that plaintiffs were manufacturers
[***35] of hats in Danbury, Connecticut,
having a factory there, and were then and there engaged in an interstate trade
in some twenty States other than the State of Connecticut; that they were
practically dependent upon such interstate trade to consume the product of
their factory, only a small percentage of their entire output being consumed in
the State of Connecticut; that at the time the alleged combination was formed
they were in the process of manufacturing a large number of hats for the
purpose of fulfilling engagements then actually made with consignees and
wholesale dealers in States other than Connecticut, and that if prevented from
carrying on the work of manufacturing these hats they would be unable to
complete their engagements.
That defendants were members of a
vast combination called The United Hatters of North America, comprising about
9,000 members and including a large number of subordinate unions, and that they
were combined with some 1,400,000 others into another association known as The
American Federation of [*305] Labor, of which they were members, whose
members resided in all the places in the several States were the wholesale
dealers in hats and their customers [***36]
resided and did business; that defendants were "engaged in a
combined scheme and effort to force all manufacturers of fur hats in the United
States, including the plaintiffs, against their will and their previous policy
of carrying on their business, to organize their workmen in the departments of
making and finishing, in each of their factories, into an organization, to be
part and parcel of the said combination known as The United Hatters of North
America, or as the defendants and their confederates term it, to unionize their
shops, with the intent thereby to control the employment of labor in and the
operation of said factories, and to subject the same to the direction and
control of persons, other than the owners of the same, in a manner extremely
onerous and distasteful to such owners, [**312] and to carry out such scheme, effort and
purpose, by restraining and destroying the interstate trade and commerce of
such manufacturers, by means of intimidation of and threats made to such
manufacturers and their customers in the several States, of boycotting them,
their product and their customers, using therefor all the powerful means at
their command, as aforesaid, until such time [***37] as, from the damage and loss of business
resulting therefrom, the said manufacturers should yield to the said demand to
unionize their factories."
That the conspiracy or combination
was so far progressed that our of eighty-two manufacturers of this country
engaged in the production of fur hats seventy had accepted the terms and
acceded to the demand that the shop should be conducted in accordance, so far
as conditions of employment were concerned, with the will of the American
Federation of Labor; that the local union demanded of plaintiffs that they
should unionize their shop under period of being boycotted by this combination,
which demand defendants declined to comply with; that thereupon the American
Federation of Labor, acting through its official organ and through its
organizers, declared a boycott.
[*306]
The complaint then thus continued:
"20. On or about July 25, 1902, the defendants
individually and collectively, and as members of said combinations and
associations, and with other persons whose names are unknown to the plaintiffs,
associated with them, in pursuance of the general scheme and purpose aforesaid,
to force all manufacturers of fur hats, and particularly [***38] the plaintiffs, to so unionize their
factories, wantonly, wrongfully, maliciously, unlawfully and in violation of
the provisions of the 'Act of Congress, approved July 2, 1890,' and entitled
'An Act to Protect Trade and Commerce Against Unlawful Restraints and
Monopolies,' and with intent to injure the property and business of the
plaintiffs by means of acts done which are forbidden and declared to be
unlawful, by said act of Congress, entered into a combination and conspiracy to
restrain the plaintiffs and their customers in States other than Connecticut,
in carrying on said trade and commerce among the several States, and to wholly
prevent them from engaging in and carrying on said trade and commerce between
them and to prevent the plaintiffs from selling their hats to wholesale dealers
and purchasers in said States other than Connecticut, and to prevent said
dealers and customers in said other States from buying the same, and to prevent
the plaintiffs from obtaining orders for their hats from such customers, and
filling the same, and shipping said hats to said customers in said States as
aforesaid, and thereby injure the plaintiffs in their property and business and
to render unsalable [***39] the product
and output of their said factory, so the subject of interstate commerce, in
whosoever's hands the same might be or come, through said interstate trade and
commerce, and to employ as means to carry out said combination and conspiracy
and the purposes thereof, and accomplish the same, the following measures and
acts, viz:
"To cause, by means of
threats and coercion, and without warning or information to the plaintiffs, the
concerted and simultaneous withdrawal of all the makers and finishes of hats
then working for them, who were not members of their said [*307]
combination, The United Hatters of North America, as well as those who
were such members, and thereby cripple the operation of the plaintiffs'
factory, and prevent the plaintiffs from filling a large number of orders then
on hand, from such wholesale dealers in States other than Connecticut, which
they had engaged to fill and were then in the act of filling, as was well known
to the defendants; in connection therewith to declare a boycott against all
hats made for sale and sold and delivered, or to be so sold or delivered, by
the plaintiffs to said wholesale dealers in States other than Connecticut, and
to [***40] actively boycott the same and
the business of those who should deal in them, and thereby prevent the sale of
the same by those in whose hands they might be or come through said interstate
trade in said several States; to procure and cause others of said combinations
united with them in said American Federation of Labor, in like manner to
declare a boycott against and to actively boycott the same and the business of
such wholesale dealers as should buy or sell them, and of those who should
purchase them from such wholesale dealers; to intimidate such wholesale dealers
from purchasing or dealing in the hats of the plaintiffs by informing them that
the American Federation of Labor had declared a boycott against the product of
the plaintiffs and against any dealer who should handle it, and that the same
was to be actively pressed against them, and by distributing circulars
containing notices that such dealers and their customers were to be boycotted;
to threaten with a boycott those customers who should buy any goods whatever,
even though union made, of such boycotted dealers, and at the same time to
notify such wholesale dealers that they were at liberty to deal in the hats of
any other [***41] non-union manufacturer
of similar quality to those made by the plaintiffs, but must not deal in the
hats [**313] made by the plaintiffs under threats of such
boycotting; to falsely represent to said wholesale dealers and their customers,
that the plaintiffs had discriminated against the union men in their employ,
had thrown them out of employment because they refused to give up their union
cards and [*308] teach boys, who were intended to take their
places after seven months' instruction, and had driven their employes to
extreme measures 'by their persistent, unfair and un-American policy of
antagonizing union labor, forcing wages to a starvation scale, and given boys and
cheap, unskilled foreign labor preference over experienced and capable union
workmen,' in order to intimidate said dealers from purchasing said hats by
reason of the prejudice thereby created against the plaintiffs and the hats
made by them among those who might otherwise purchase them; to use the said
union label of said The United Hatters of North America as an instrument to aid
them in carrying out said conspiracy and combination against the plaintiffs'
and their customers' interstate trade aforesaid, [***42]
and in connection with the boycotting above mentioned, for the purpose
of describing and identifying the hats of the plaintiffs and singling them out
to be so boycotted; to employ a large number of agents to visit said wholesale
dealers and their customers, at their several places of business, and threaten
them with loss of business if they should buy or handle the hats of the
plaintiffs, and thereby prevent them from buying said hats, and in connection
therewith to cause said dealers to be waited upon by committees representing
large combinations of persons in their several localities to make similar
threats to them; to use the daily press in the localities where such wholesale
dealers reside, and do business, to announce and advertise the said boycotts
against the hats of the plaintiffs and said wholesale dealers, and thereby make
the same more effective and oppressive, and to use the columns of their said
paper, The Journal of the United Hatters of North America, for that purpose,
and to describe the acts of their said agents in prosecuting the same."
And then followed the averments
that the defendants proceeded to carry out their combination to restrain and
destroy interstate [***43] trade and
commerce between plaintiffs and their customers in other States by employing
the identical means contrived for that purpose; and that by reason of those
acts [*309] plaintiffs were damaged in their business and
property in some $80,000.
We think a case within the statute
was set up and that the demurrer should have been overruled.
Judgment reversed and cause
remanded with a direction to proceed accordingly.