Law School Case Brief
E. States Retail Lumber Dealers’ Ass’n. v. United States - 234 U.S. 600, 34 S. Ct. 951 (1914)
The Sherman Act (Act), July 2, 1890, 26 Stat. 209, broadly condemns all combinations and conspiracies which restrain the free and natural flow of trade in the channels of interstate commerce. In its proper construction the Act was not intended to reach normal and usual contracts incident to lawful purposes and intended to further legitimate trade.
The United States sued defendant lumber associations under the Sherman Antitrust Act, July 2, 1890, 26 Stat. 209, to obtain an injunction against alleged combinations of retail lumber dealers, which had entered into a conspiracy to prevent wholesale dealers from selling directly to consumers of lumber. The evidence showed that an official report was circulated preventing members of an association of retail dealers from dealing with the other dealers listed in the report. The district court granted the injunction, and the defendants appealed.
Could the defendants lumber associations be held liable under the Sherman Antitrust Act?
The United States Supreme Court affirmed the judgment of the district court, holding that defendants had conspired to impair the business of certain wholesalers and that the conspiracy could be inferred from the things actually done. The Court found that the trade of the listed wholesalers was hindered or impeded; competition was suppressed and the natural flow of commerce interfered with as the direct result of the circulation of official reports by defendants. The names of wholesalers who were reported as having made sales to consumers were periodically reported to the other members of the associations, and the Court found that the conspiracy could be inferred from that action.
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