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Law School Case Brief

FTC v. Cement Inst. - 333 U.S. 683, 68 S. Ct. 793 (1948)

Rule:

Although all conduct violative of the Sherman Act, 15 U.S.C.S. §§ 12, may come within the unfair trade practice prohibitions of the Federal Trade Commission Act, 15 U.S.C.S. § 45, the converse is not necessarily true. There are many unfair methods of competition that do not assume the proportions of Sherman Act violations.

Facts:

An order of the Federal Trade Commission (“FTC”) required Cement Institute et al. to cease and desist from acting in concert in pricing their goods on a multiple basing point system by which, irrespective of the location of the mill, the price is always the mill price at the basing point plus freight from such point to the place of delivery. The Court of Appeals set aside cease-and-desist orders against Cement Institute for violations of the Federal Trade Commission Act, 15 U.S.C.S. § 45, and the Robinson-Patman Act, 15 U.S.C.S. § 13. The FTC appealed the decision and alleged that Cement Institute used a basing point system for determining prices in violation of antitrust laws.

Issue:

Did the appellate court err in vacating and setting aside the cease-and-desist orders against Cement Institute?

Answer:

Yes

Conclusion:

The Court held that the cease-and-desist orders issued against Cement Institute by the FTC were enforceable. The FTC had jurisdiction to make the orders and the FTC had sufficient evidence to establish that Cement Institute violated the Federal Trade Commission Act, 15 U.S.C.S. § 45, and the Robinson-Patman Act, 15 U.S.C.S. § 13. The United States Supreme Court reviewed Cement Institute’s attacks against the validity of the authority of the FTC to make the cease-and-desist orders. The Court concluded that the FTC was not biased and that the FTC had properly allowed the introduction of evidence. The findings of the FTC were supported in the evidence. The basing point delivered price system was an unfair method of competition that was prohibited by antitrust laws. Further, the cease-and-desist orders were valid.

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