Morton Salt Co. v. United States

Morton Salt Co. v. United States

Opinion

 [*574]  These consolidated appeals are from a judgment of the United States District Court for the District of Utah Finding appellants guilty of violating Section 1 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1. The grand jury indictment charged that appellants Morton Salt Company, Royal Crystal Salt Company, Deseret Livestock Company and Deseret Salt Company, together with the Stansbury Salt Company and Council  [**2]  M. McDaniel, not named defendants, were members of a conspiracy in restraint of trade: (a) to stabilize and control the prices and terms for the sale of salt; (b) to adopt and maintain uniform and noncompetitive prices and terms for the sale of salt; (c) to restrict and eliminate price competition between themselves and with others in the sale and distribution of salt; (d) to adopt and use uniform price scales and price keys; and (e) to eliminate distributors who sell at less than agreed upon prices.

The right to a jury was waived and the case was tried to the court. After a trial that consumed 10 days and in which more than 1,000 exhibits were introduced, the court found all appellants guilty as charged. At the time of rendering decision the trial judge explained the considerations and reasons for his judgment in concise, summary comments, which he later adopted as the special and general findings of fact. The only question presented on appeal is whether the evidence justified the guilty verdicts.

The essential facts on the market area and the competitive background here involved are not controverted. All these companies obtain, or obtained, their salt from the  [**3]  Great Salt Lake and have their processing plants in Utah. The salt is sold in the intermountain area between Colorado on the east and Nevada, Oregon and Washington on the west, comprising several states. Prior to 1952 Morton Salt Company and its wholly owned subsidiary Royal Crystal Salt Company, maintaining separate sales offices and operating under different brand names, enjoyed a virtual monopoly of the sale of salt in this area. No other company was selling more than a negligible quantity of salt from the Great Salt Lake and these two appellants' only competition was on the western and eastern fringes of the intermountain area where freight costs enabled the California and Kansas salt producers to compete.

In 1949 the Deseret Livestock Company began the preparation of facilities for the production of salt from the Great Salt Lake. In 1951 it harvested its first crop and made a few small sales, and by 1952 it was in a position to begin substantial competition with Morton and Royal Crystal. Late that year or in early 1953 the ownership of the Deseret Livestock Company came into the hands of David Freed and David Robinson. Knowing little about the salt business  [**4]  these two went to Freed's long time friend, I. A. Clayton, Vice President and Manager of Royal Crystal, to see if that part of Deseret Livestock's business could be sold to Morton. Clayton stated that Morton was not interested because of the possibility, if this potentially important competitor was bought out, of monopoly charges under the Sherman Act.

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