United States v. Yellow Cab Co.

United States v. Yellow Cab Co.

Opinion

 [*220]  [**1562]  [***2014]    MR. JUSTICE MURPHY delivered the opinion of the Court.

The United States filed a complaint in the federal district court below pursuant to § 4 of the Sherman  [***2015]  Anti-Trust Act, 26 Stat. 209, as amended, to prevent and restrain the appellees from [****5]  violating §§ 1 and 2 of the Act. The complaint alleged that the appellees have been and are engaged in a combination and conspiracy to restrain and to monopolize interstate trade and commerce (1) in the sale of motor vehicles for use as taxicabs to the principal cab operating companies in Chicago, Pittsburgh, New York City and Minneapolis, and (2) in the business of furnishing cab services for hire in Chicago and vicinity. The appellees moved to dismiss the complaint for failure to state a claim upon which relief might be granted. That motion was sustained. 69 F.Supp. 170. The case is now here on direct appeal by the United States.

The alleged facts, as set forth in the complaint, may be summarized briefly. In January, 1929, one Morris Markin and others commenced negotiations to merge the  [*221]  more important cab operating companies in Chicago, New York and other cities. Markin was then president and general manager, as well as the controlling stockholder, of the Checker Cab Manufacturing Corporation (CCM). That company was engaged in the business of manufacturing taxicabs at its factory in Kalamazoo, Michigan, and shipping them to purchasers in various [****6]  states.

Parmelee Transportation Company (Parmelee) was organized in April, 1929, with 62% of its stock being owned by CCM. It promptly took over the business of operating special unlicensed cabs to transport passengers and their luggage between railroad stations in Chicago, pursuant to contracts with railroads and railroad terminal associations. It then acquired a controlling interest in the Chicago Yellow Cab Company, Inc. (Chicago Yellow). This latter company holds all the capital stock of Yellow Cab Company (Yellow), the owner and operator of "Yellow" cabs in Chicago and vicinity. Yellow presently holds 53% of the taxicab licenses outstanding in Chicago. In addition, Parmelee acquired or organized subsidiary companies which now hold 100% of the taxicab licenses outstanding in Pittsburgh, 58% of those in Minneapolis, and 15% of those in New York City. ¹

 [****7]  In January, 1930, Cab Sales and Parts Corporation (Cab Sales) was incorporated. At all times, Markin has been the active manager of this company; since 1934, he  [*222]  has been the sole stockholder. It now owns and operates the "Checker" cabs in Chicago and vicinity, using licenses held in the name of Checker Taxi Company (Checker). ² [****8]   [**1563]  Checker presently has no employees and no property  [***2016]  other than 1,000 Chicago taxicab licenses, or one-third of the total outstanding, which it leases to Cab Sales; nearly all of its stock is owned by associates of Markin. ³

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