United States v. Trenton Potteries Co. - 273 U.S. 392, 47 S. Ct. 377 (1927)

Rule:

Only those restraints upon interstate commerce which are unreasonable are prohibited by the Sherman Anti-Trust Law, Act of July 2, 1890, c. 647, 26 Stat. 209. But it does not follow that agreements to fix or maintain prices are reasonable restraints and therefore permitted by the statute, merely because the prices themselves are reasonable. Reasonableness is not a concept of definite and unchanging content. Its meaning necessarily varies in the different fields of the law, because it is used as a convenient summary of the dominant considerations which control in the application of legal doctrines. A court's view of what is a reasonable restraint of commerce is controlled by the recognized purpose of the Sherman Anti-Trust Law itself. Whether this type of restraint is reasonable or not must be judged in part at least in the light of its effect on competition.

Facts:

Respondents Trenton Potteries Company et al., were individuals and corporations engaged in the manufacture or distribution of 82 percent of the vitreous pottery fixtures produced in the United States for use in bathrooms and lavatories. Respondents were also members of a trade organization known as the Sanitary Potters' Association. They were convicted in the district court for violating the Sherman Anti-Trust Law, Act of July 2, 1890, c. 647, 26 Stat. 209. The indictment was in two counts. The first charged a combination to fix and maintain uniform prices for the sale of sanitary pottery, in restraint of interstate commerce; the second, charged a combination to restrain interstate commerce by limiting sales of pottery to a special group known to respondents as legitimate jobbers. On appeal, the appellate court reversed the judgment of conviction on both counts on the ground that there were errors in the conduct of the trial. Petitioner, the United States, sought a writ of certiorari.

Issue:

Did the appellate court err in reversing the judgment of conviction violating the Sherman Anti-Trust Law?

Answer:

Yes.

Conclusion:

The Supreme Court of United States reinstated the decision of the district court below convicting respondents of violating the Sherman Anti-Trust Law. The Court held that it was faced with the issue of deciding whether the trial judge correctly withdrew from the jury the consideration of the reasonableness of particular restraints charged. And since respondents made no request to charge with respect to venue or the jurisdictional necessity of overt acts within the district, they were not permitted to reap the benefit of their own omission. The Court further held that the testimony of respondents' witness on cross-examination did not prejudice the respondents in any substantial way so as to require a reversal. Additionally, the Court ruled that it could not say that the discretion of the district court was improperly exercised in excluding the conclusions of the witnesses as to competitive conditions when full opportunity was given to prove by relevant data the conditions of the industry within the period in question. Hence, the Court concluded that the district court acted within its permissible discretion at trial, as such, its decision was reinstated.