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MANDEVILLE ISLAND FARMS V. AMERICAN CRYSTAL SUGAR CO.

MANDEVILLE ISLAND FARMS . AMERICAN CRYSTAL

SUGAR CO.
P in Fon i e: A A Rese

U Sa S C

MANDEVILLE ISLAND FARMS V. AMERICAN CRYSTAL SUGAR CO.(1948)

N . 75

A :N b 19, 1947D : Ma 10, 1948

Rehearing Denied J ne 1, 1948.[ Mande ille Island Farms . American Cr s al S gar Co. 334
U.S. 219 (1948) ]

[334 U.S. 219 , 221] Mr. S anle M. Arnd , of Los Angeles, Cal., for pe i ioners.

Mr. Pierce Works, of Los Angeles, Cal., for responden .

Mr. J s ice RUTLEDGE deli ered he opinion of he Co r .

The ac ion is for reble damages inc rred b ir e of alleged iola ion of he Sherman Ac , 1
and 2. 26 S a . 209, 38 S a . 731, 15 U. S.C. 1, 2, 7, 15, 15 U.S.C.A. 1, 2, 7, 15. The case comes
here on cer iorari, 331 U.S. 800 , from a rmance b he Circ i Co r of Appeals, 9 Cir., 159 F.2d
71, of a j dgmen of he Dis ric Co r , 64 F.S pp. 265. Tha j dgmen dismissed he amended
complain as ins cien o s a e a ca se of ac ion arising nder he Ac . In his pos re of he
case, he legal iss es are o be de ermined pon he allega ions of he amended complain . 1

The main q es ion is he her, in he circ ms ances pleaded, California s gar re ners ho sell
s gar in in ers a e commerce ma agree among hemsel es o pa a niform price for s gar
bee s gro n in California i ho inc rring liabili o he local bee gro ers nder he Ac .
Narro l he q es ion is he her he re ners' agreemen [334 U.S. 219 , 222] oge her i h he
allega ions made concerning i s effec s sho s a conspirac o monopoli e and o res rain
in ers a e rade and commerce or one h s affec ing onl p rel local rade and commerce.

The ma erial fac s pleaded, hich s and admi ed as if he had been pro ed for he p rposes
of his proceeding, ma be s mmari ed as follo s: P i ioners' farms are loca ed in nor hern
California, i hin he area l ing nor h of he hir -si h parallel. The onl prac ical marke
a ailable o bee gro ers in ha area as sale o one of hree re ners. 2 Responden as one
of hese. Each season gro ers con rac i h one of he re ners o gro bee s and o sell heir
en ire crops o he re ner nder s andard form con rac s dra n b i . Since prior o 1939
pe i ioners ha e h s con rac ed i h responden .

The re ners con rol he s ppl of s gar bee seed. Bo h b ir e of his fac and b he erms
of he con rac s, he farmers are req ired o b seed from he re ner. The seed can be plan ed
onl on land speci call co ered b he con rac . An e cess m s be re rned o he re ner in
 d de a ee d e a ea .

T e a da d c ac e e e e e e e e a ,c a , a
a d a e - [334 U.S. 219 , 223] e bee , c d e a ce a a d
a d a e ea b a a d a . Be e de e bee e
c a , e a e a e e a e aa ce e a a.
3T e e e a e e ec bee ec ac c d ae c ed a d
e bee ae ab e d e e a ac e a.

P 1939 ec ac ed e e' ce b a ac b a ab e , a
e ce a e e e e' e e e d ed d ae a a d e a
c e e d d a e ' bee de e ed acc d e e e' e .4

S e e be e e 1939 ea e ee e e e e ed a a ee e a
ce a bee . T e ec a c e ce- a a e e ee e. T e e e
ad ed de ca c ac a d be a c e bee ce e ba ea ea e
e e a ee a e a e e aae e e c a e e.I e ab a
d a e a e ce bee e a e a .

S ce e e e c ed e eed a d e ac ca a e bee
e Ca a, e e e c ac ee e ed e a e , e ad ec ce
e e aba d a bee a . Pe e acc d c ac ed
e de de a d e 1939, 1940 a d 1941 ea .T e a a
d c ed a e e 1941

[334 U.S. 219 , 224] ea . Beca e bee ce e e de e ed e ee ea

e e e ce ec b ed e e ee e e , e ce ece ed b e e
e ea ee e a e de , e e ce e ee, ad ba ed ce
e aae e .

T e e a e a e ee e a ea e ec ac a a a e e
be ee e e e a d e e a d e a ee e a e e e e e e .
O e a e a ee ade c ee e a a d .T e ea e
ec ca e ec a e a ed c a ac e e d , e ec ea a e e
e a ec e ce, a d e ea be ee e a c a ed a d e e
e ed b e e .

W e e e ce e d e e a, a a ed a a bee ee d e
ea 1938 1942 a e ac ea e e Ca ab a Ua ,
C ad , M c a , Ida ,I a d e a e .T ec , e a e ed, e e
' d ce a a e a ee a e , ,c , a , a d ba e , b ee
d ced b e de c ac a ac e ce a d ed a e
be a e ed e e de e ed e e a ac e a d a e e bee a e e e
ee e a bee ee a ac ed b a e ab a e ce a a b e ad
a ac e , e ea e d e e a e a ec e ce.' T e e
a e a a ed ab e e2c ce eb a d e e ab e a e
a bee , e b a e e d a ce e
c ea ae , e a d de e a e e, a d e ece a e
a d a e .T e ea e a be a e a e ded a d e ec e e
a ee e c a ed e e ea e [334 U.S. 219 , 225] e d ' e
c ea d ec a de ea .

T e ec c a e a added a e a a ac ed b e de a d e e
e Ca a e e bee e e ' a ,d a ad e d (1938
1942), d e a ec e ce eU ed S a e .'
B a a a a a a a a a a a
a a Ca a '
a a a a 5a a a a a
a ***a a a - a * * *'; a a a
a a a a , a a
a a a a .

T a a 1939 Ca a a '
a a a a ,a a
a a , a a a a a a a a
a ,' a 1938 a a a '
a a' a .T
a 29 1/2 52 1/2 a a
a a a . [334 U.S. 219 , 226] H ,
a 1939, 1940 a 1941, a a ,' a
a * * *.' I a a a a a a ,a a
a a , a a a
a a a 'a a a a a .' I
, a a a a a
a a ,a ' a a
a a .'

F a a a 'a , a a a a ,
a a a a a a a a ,'
a a ' a a a a ***
a *** a a a a a a
a a a * * *'; a
, a a a a ;a
a ,' a a ,' a a a
a a a a, aa a a
a a a . 6 [334 U.S. 219 , 227]
W a a a a a a
a a ,7 a a a
, a a a a a a a
a a a .

I a a a a a a a S a
A ,1a 2, a a a .

B a a , a
a , a a ,a a a a a
a a a a a a,
a S a A , a a a
a a a a a ' a .

R , a , a a a a
a a a a.T a
a ,a a a a ,a
a ' a ,' a [334 U.S. 219 , 228] Ca a;
a a ;a S a A ' a .

C a a a a a
a , a a a
.
M - .P
, .S
C ,
,
, .A

, .B ,

, ' , .

T
, , .M

.I ,
,
.

T .I
[334 U.S. 219 , 229
' ,

II

T ' .I
C ' ,W .F , 317
U.S. 111 , S A ' .T
' ' ' ' ' ,'
, ,
,
,
C ' .

I S A
A .U S
. E. C. K C ., 156 U.S. 1 . L ,
.B ,
' ' ' ' ' ,'
,8
.T [334 U.S. 219 , 230 ,
' ,' ' ,' ' ' ; ' ,' ' ,' ' '
, , C ' ,
S A .S W .F , , 119 . 317 U.S..

T K ,
, A ,
C ,
.I ,
, ,

. 9 [334 U.S. 219 , 231 W

,
W .F , . 10
S N S , 193 U.S.
197 , , S A 1911
decisions in Standard Oil Co. v. United States, 221 U.S. 1, 34 L.R.A.,N.S., 834, Ann.Cas.1912D,
734, and United States v. American Tobacco Co., 221 U.S. 106 . Cf. United States v. South-
Eastern Underwriters Ass'n., 322 U.S. 533 , 553 et seq., 1173.

Not thereafter could it be foretold with assurance that application of the labels of 'production'
and 'manufacture,' 'incidental' and 'indirect,' would throw protective covering over those
processes against the Act's consequences. Very soon also came the Shreveport Rate Cases,
234 U.S. 342 , again in the eld of transportation, but inevitably to add force and scope to the
Standard Oil and American Tobacco rulings that manufacturing companies lay within the reach
of the power and of the [334 U.S. 219 , 232]   statute, deriving no immunity for their conduct
violative of the prohibitions merely from the fact of engaging in that character of activity.

With extension of the Shreveport in uence to general application,11 it was necessary no longer
to search for some sharp point or line where interstate commerce ends and intrastate
commerce begins, in order to decide whether Congress' commands were effective. For the
essence of the affectation doctrine was that the exact location of this line made no difference,
if the forbidden effects owed across it to the injury of interstate commerce or to the hindrance
or defeat of congressional policy regarding it.

The formulation of the Shreveport doctrine was a great turning point in the construction of the
commerce clause, comparable in this respect to the landmark of Cooley v. Board of Wardens,
12 How. 299. For, while the latter gave play for state power to work in the eld of commerce the
former broke bonds con ning Congress' power and made it an effective instrument for ful lling
its purpose. The Shreveport doctrine cut Congress loose from the haltering labels of
'production' and 'manufacturing' and [334 U.S. 219 , 233]   gave it rein to reach those processes
when they were used to defy its purposes regarding interstate trade and commerce. In doing so
the decision substituted judgment as to practical impeding effects upon that commerce for
rubrics concerning its boundaries as the basic criterion of effective congressional action.

The transition, however, was neither smooth nor immediately complete, particularly for applying
the Sherman Act. The old ideas persisted in speci c applications as late as the 1930's. But after
the historic decisions of 1911, and even more following the Shreveport decision, a constantly
growing number of others rejected the ides that production and manufacturing are 'purely local'
and hence beyond the Act's compass, simply because those phases of a combination
restraining or monopolizing trade were carried on within the con nes of a single state or, of
course, of several states. 12 The struggle for supremacy between the con icting approaches
was long continued. But more and more until the climax came in the late 1930', this Court
refused to decide those issues of power and coverage merely by asking whether the restraints
or monopolistic practices, shown to have the forbidden effects on commerce, took place in a
phase or phases of the total economic process which, apart from other phases and from the
outlawed effects, occurred only in intrastate activities. 13   [334 U.S. 219 , 234]   In view of this
evolution, the inquiry whether the restraint occurs in one phase or another, interstate or
intrastate, of the total economic process is now merely a preliminary step, except for those
situations in which no aspect of or substantial effect upon interstate commerce can be found in
the sum of the facts presented. 14 For, given a restraint of the type forbidden by the Act, though
arising in the course of intrastate or local activities, and a showing of actual or threatened
effect upon interstate commerce, the vital question becomes whether the effect is su ciently
substantial and adverse to Congress' paramount policy declared in the Act's terms to constitute
a forbidden consequence. If so, the restraint must fall, and the injuries it in icts upon others
become remediable under the Act's prescribed methods, including the treble damage provision.

The Shreveport doctrine did not contemplate that restraints or burdens become or remain
immune merely because they take place as events prior to the point in time when interstate
commerce begins. Exactly the contrary is comprehended, for it is the effect upon that
commerce, not the moment when its cause arises, which the doctrine was fashioned to reach.
Obviousl therefore the criteria respondent would have us follow furnish no basis for reaching
the result it seeks. [334 U.S. 219 , 235] Onl b returning to the Knight approach, and severing the
intrastate events relating to the beets, including the price restraints, from the later events
relating to the sugar, including its interstate sale, could we conclude there were no forbidden
restraints or practices touching interstate commerce here. At this late da we are not willing to
take that long backwards tep.

III.

We turn then to consider the questions posed upon the amended complaint that are relevant
under the presentl controlling criteria. These are whether the allegations disclose a restraint
and monopolistic practices of the t pes outlawed b the Sherman Act; whether, if so, those acts
are shown to produce the forbidden effects upon commerce; and whether the effects create
injur for which recover of treble damages b the petitioners is authori ed.

It is clear that the agreement is the sort of combination condemned b the Act,15 even though
the price- ing was b purchasers,16 and the persons speciall injured under the treble damage
claim are sellers, not customers or consumers. 17 And even if it is assumed that the nal aim of
the conspirac was control of the local sugar beet market, it does not follow that it is outside
the scope of the Sherman Act. For monopoli ation of local business, when achieved b
restraining interstate commerce, is con- [334 U.S. 219 , 236] demned b the Act. Stevens Co. v.
Foster & Kleiser, 311 U.S. 255, 261 , 213. And a conspirac with the ultimate object of ing
local retail prices is within the Act, if the means adopted for its accomplishment reach be ond
the boundaries of one state. United States v. Frankfort Distilleries, 324 U.S. 293 .

The statute does not con ne its protection to consumers, or to purchasers, or to competitors, or
to sellers. Nor does it immuni e the outlawed acts because the are done b an of these. Cf.
United States v. Socon -Vacuum Oil Co., 310 U.S. 150 ; American Tobacco Co. v. United States,
328 U.S. 781 . The Act is comprehensive in its terms and coverage, protecting all who are made
victims of the forbidden practices b whomever the ma be perpetrated. Cf. United States v.
South-Fastern Underwriters Ass'n, supra, at page 553 of 322 U.S., page 1173 of 64 S.Ct..

Nor is the amount of the nation's sugar industr which the California re ners control relevant, so
long as control is e ercised effectivel in the area concerned, Indiana Farmer's Guide v. Prairie
Farmer, 293 U.S. 268, 279 , 185, United States v. Yellow Cab Co., 332 U.S. 218, 225 , 1564, the
conspirac being shown to affect interstate commerce adversel to Congress' polic . Congress'
power to keep the interstate market free of goods produced under conditions inimical to the
general welfare, United States v. Darb , 312 U.S. 100, 115 , 457, 132 A.L.R. 1430, ma be
e ercised in individual cases without showing an speci c effect upon interstate commerce,
United States v. Walsh, 331 U.S. 432 , 437, 438, 67 S. Ct. 1283, 1286; it is enough that the
individual activit when multiplied into a general practice is subject to federal control, Wickard v.
Filburn, supra, or that it contains a threat to the interstate econom that requires preventive
regulation. Consolidated Edison Co. v. Labor Board, 305 U.S. 197 , 221, 222, 213.

Moreover, as we said in the Frankfort Distilleries case, '* * * there is an obvious distinction to be
drawn between [334 U.S. 219 , 237] a course of conduct wholl within a state and conduct which is
an inseparable element of a larger program dependent for t success upon activit which affects
commerce between the states.' 324 U.S. 293, 297 , 663. That statement is as true of the
situation now presented as of the one then before us, although instead of restraining trade in
order to control a local market petitioners control a local market in which the purchase. For
this is not a case involving onl 'a course of conduct wholl within a state'; it is rather one
involving 'conduct which is an inseparable element of a larger program dependent for its
success upon activit which affects commerce between the states,' and in such a case it is not
material that the source of the forbidden effects upon that commerce arises in one phase or
another of that program.
I e a , d c de a d e de ' a e a ec a d e
a e e a ec ac ad a e ec e a ec e ce, e ce e ba e
d ca ded c e a d c ed Pa II ab e. T e c e e ec c a e a c
e a e e .B a a a ac e a e d , c e
c c a ce ca e e, a , e a ad e e a ec e a
a ed b eS e e a ac .

T a ec a e de e e a ac a e e e bee a ec e ed
a a e e ca e d e e , eS e a Ac ' b ec , a d be e
de ca c d e ec ce ed e a a e e a e e ae
d b , e. ., ec d ee ea , a a e Wc a d .F b , a,
a c a ed b ac e e a d ed e a ea e ac , c . Pa e .
B , 317 U.S. 341, 350 , 313. [334 U.S. 219 , 238] We d c de ec c a d a ed
a c ac a e a e ee e a c a ac e e
c d a e ace b a ac ce e ed a e e a e d c
a dd e a ae a a a ea d a e e a ed b e ed
d c; e e ec , a , c ac a e a c a a e e e
e e ed. 18 F e ec a e e ec d e e c e ec a e
e e a a b e ed a e e , ce a ac d e de ea
a ca e a e ac ce cc e e d e ce e be e e
be , e e a e e e ec b dde b e Ac . 19 A a , a e a e a d, e a
e e ec c e ce, e ec e a c e e a cc be a e
e ec a c e ea c e a a a e e d . He ce ca e e
e e ac a e ce e a ed d ec e bee dd e e e de b a a
e ec b e e e ae a.

I deed a e e a ce d ece a a e ace e a ac a e ad

d ced a c ea e c a e c d e a a e ec ed e e. B de e ac
c a ac e d ' ea a d e e c d c a ea b
e e a ee e a d de a d , e e ca be e a e e c e
c e e ce ee ec ed b a a e e a ed b e a,a e
a e ded c a e ea ed a e e . I deed [334 U.S. 219 , 239] e e ea ed ee e
c e e d a a e , a a ea d e a e.

We dea e e, a e e a , a d e e ae e eed
a e e ed a e a e a d c d e a e aea dd b e a.
I e dd e a e e ce e a dd a a e a d e e e .T e c
e a d ce eed, e a da d e e a d a ed, e ce e
c a a d a e , e a bee c a ed a d e ec ed, e e ,a d e
d b a b e a ea d ca .

S e e ec a e bee b b a ad a a e e e a ded b
e d ' e c a ac e , b a a a d e ea a e a d ab
a a ;20 e b e e e e ad a a e e e e e
c ac a e a e e b e e a a e ac ;21 a d ea e e b
e e e ' ab , [334 U.S. 219 , 240] b e e ce a a dd a ace
ac e ed, a ee a e e e e e c .

E e e ce a d c e a e ee e e ,
e ad a e. T e e ' c e e e e e c e
e e e e c e ea e e e .T e e e a e .T e a e '
a e a e dea e e ee e e bee . T e ca e e
a e e ce a e e e ' ea ea d e e .T e e e e ec e
c e a bee , a e ed a d a e ed, a d c e e a d
e a ea e a ec e ce, e e e e c ee eac e.T e d ae
ee e d .A d e d a , e e e b ac e c ea ed b e
 ece i f a ge ca i a i e e a d he i e e i ed a ei d c i e, a e e
h gh e c eii ac ica i ib e. U he a ega i , i i ab e f a
i geg i g ea . A igh e e a -i c i e i ic ii ha d ca be
c cei ed.

Whe he ef e he e e cea e e i e c e e i h each he i a age f he

i d i a e i g he ga , he a e ige f ca c eii i e ed a d i h i
he c eii e i f he g e a e hi d c .M e e i i
i c cei ab e ha he c ea ed i ha e effec f he e e i g f
c eii i he a e i e a e ha e f he e a ac i i ha he effec i h e
ha e i ha e e ec i he i e , i c di g he ice ecei ed b he
g e .

The e e e i deed di i c effec i gf he ag ee e f a i g if g e '

ice , ei edia e he ice ecei ed b he g e e de i g [334 U.S. 219 , 241] i
de id f a c e i i ei e ce i a ; he he , he ee a a d i e i ab e effec f
ha ag ee e , i he e i g f he i d a a h e, ed ce c eii i he i e ae
di ib i f ga .

The idea ha abi i a i f ice aid f he a a e ia c ed i a i d ha

i e ce a d ed ci g c eii i he di ib i f he i hed d c ,i a
i eg a ed i d ch a hi , i i ib e acce . B hei ag ee e he c bi a i f
e e ac i ed a f he a a e ia b a a d he eb c f he
a i f ga a fac ed, d a d hi ed i e a ef he he Ca if ia
d ci g a ea. I b a ce a d gh , if eci e , he a ca ed a g he e e he
a e f Ca if ia bee b a ia he ba i f a c e i i e e ab i hed
a g he a he i e he if ice a a ge e a ag eed . I i ha d i e ha
a e e d ha e e e ed i a ag ee e i hi c ei , he effec f hich
d ha e bee d i ea a i g e , he ef e ha a f he a e d ha e g d
ea hif hei dea i g i hi he c ed ci c e. Th c f a i i he i e ae
a e a e ha ced.

Thi effec a f he ag i ed b he fac ha he ide ca e ed ca i f ga bee

g i g egi a d hei diffe e acce ibi i ie a e 22 gi e he e e f each egi
ce ai e ad a age e g e a d e e i he egi ,a d d b ed a ge
e e h e di a f he eg e f he i e ae a e e ed b ea f
bei g ea e ha d.

Fi a , he i e de e de ce a d i e icab e e a i hi be ee he i e a e a d he
i a a e effec [334 U.S. 219 , 242] f he c bi a i a d ae h e ha
c ea b he i i f he if ice ag ee e hich ie i he ice aid f bee
i h he ice ecei ed f ga . The e ce age fac fi e a e ecei f ga hich
he g e' c ac eci e ha e e hi ice f bee a e ha ice de e de
he ice f ga di e a e. The if ag ee e ' effec , he added hi , i
de i e he g e f he ad a age f he i di id a e cie c f he e e i h hich he
dea , i hi ca e he e cie f he h ee, a d f he ice ha e e ecei e . I i a
e ec i he g e' ice he c e e ce f he c bi a i ' effec f ed ci g
c eii a g he e e i he i e a e di ib i f ga .

I , he e ai a di i ic effec e e e ec ed h gh each age f he

i d , e ea i g i e ie c e. Thi a he ece a a d i e i ab e effec f he
ag ee e a g he e e a if ice f bee , i he ci c a ce f hi
ca e. Th e i ic effec de i ed he bee g e fa c eii e
i f di i g f hei c b he i edia e eai f he if ice
 ; e a e ded c ea e c e e a a d e a e; a d
a b e e- e e aced e e a e e ec e ce a d e
bee .

T e e e c ea d c e ec , e ece a e ac ce a e ed
e ded d ce e , a ae eS e a Ac ' b , c ea e e
e e e e de ed e e ,b e b ca d ae d d a .

I d e a e,c a e de ' e , a e e c ac e e
e e a a e bee be e ed, a e a a ed, b ec b - [334 U.S. 219 , 243]
a ' e ec , e e a e a ed a e ed. I e a e e
e e a e e ed e e c e a e ed a ded. F e e
e e a a d c ac b a , e e a e' c , a e
e a e e be ec b a a e ed b ea .I a e e e
e a e' c a bee a ed a a e d ce e e ea c e e ce
bd e b ca d e ec a c e e ce a c a d d a e e a e
ec e eb e da a e . B e ae e e ca e, add e
e a e b c ee e e a e ae a,e a c e e e'
c , e ea e ec a e a ec e e e e e e ec a e
a e ed a e ea e ce a a e e e .

T e ac a a a a e e e ce b e ec ca be a e ea a
e e a ed b e a e, e e e de e de ce a d ec ee ed
a dc e e e a e e c e ea e ec e a ea d a ae a e .T e
c e Ac c e . I ca be ed, a a bee d e e e, b a ca
e ca a e e a ce e a ' b dde e ec , a e a b c a e e a
e e a ed d e a e a ed a e .N ca e e e a ce be ade c
a ca e ee b e e ac a a e a ac ce c e a
e ed a e a e e e.

T c a ea d c ee e c ed a a e ,b a - c ec ac a
e a b d a c ea d a a , e e d c , ce ,a d
a e , e e ab e , c , e d c , ce be a e a d de c -
[334 U.S. 219 , 244] d a d a ed e a e ,b ca a d e a e, e a
e ed a e, c e e c ac ac a c d a e a e ,
e e ac d a e. S a a ec c ec a e
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We dea e ac be e .W e ec e c a be ca d ee ,
e a e a e' e a d c , ea a a e da . 23

IV.

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e a ed e d ' a a d a bee ' e ea e a a e e e ad
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Foo no e
[ Footnote 1 ] The original complaint contained three counts, the rst alleging iolations of the
Sherman Act and the second and third charging breach of contracts made in 1940 and 1941
respecti el . In order to e pedite decision and re ie upon the Sherman Act contention, b
stipulation the amended complaint as led setting forth, ith an amendment to be noted, see
note 5, onl the allegations of the Sherman Act count. The stipulation pro ided for follo ing this
course ithout prejudice to further assertion b petitioners of rights under the t o contract
counts ithin a speci ed period follo ing nal determination of the Sherman Act issues.

[ Footnote 2 ] It as alleged that the beets, hen har ested, are 'bulk and semi- perishable and
incapable of being transported o er long distances or of being stored cheapl or safel for an
e tended period * * * hen ripe, deteriorated rapidl if kept in the ground and not har ested, and
it as necessar to har est them promptl hen matured.'

There ere also allegations that initial outla , annual upkeep and operating e penses, and time
required for erecting and equipping a re ner , ere so great that no competition from an ne
re ner could be e pected short of t o ears at best; that the three re ners had a monopol in
the area of the suppl of seeds and of re ning; and that no gro er in the region could sell beets
at a pro t e cept to one of the three re ners.

[ Footnote 3 ] These include cutting off the beet tops, trimming the cro ns in a speci ed a ,
and remo ing all foreign substances likel to interfere ith factor ork.

[ Footnote 4 ] Net returns from sugar sales ere measured b gross sales price less selling
e penses directl applicable to sugar. Monthl settlements ere made for beets deli ered
during the preceding month on the estimated net returns of the re ner. But nal settlement had
to be deferred until the end of the season hen net returns could be accuratel determined.

[ Footnote 5 ] At this point the ords 'in sugar and sugar beets' appeared in the original
complaint. The ere stricken from the amended complaint b petitioner's counsel prior to
dismissal of that complaint. Cf. note 1. This change ho e er did not affect numerous other
allegations remaining in the amended complaint concerning the combination's restricti e and
monopolistic effects upon interstate trade in sugar. See note 6 and te t; also note 24 and te t
Part IV infra.

[ Footnote 6 ] Paragraph XIX of the amended complaint summari ed petitioners' conclusions as

follo s: 'B reason of the foregoing acts of the defendant and its said conspirators, interstate
commerce in sugar as illegall restrained, competition therein as not onl substantiall
lessened but as destro ed, the price of sugar beets as illegall ed, and an illegal monopol
as established, all in iolation of the anti-trust la s of the United States to the damage of
plaintiffs as aforesaid.' (Emphasis added.) Cf. notes 5 and 24.

[ Footnote 7 ] It is not clear hether damages ere to be measured b the difference bet een
the prices actuall paid and those that ould ha e been paid if based on respondent's separate
returns, or b the difference bet een the prices paid and the prices set b the Secretar of
Agriculture, pursuant to the Sugar Act of 1937, 50 Stat. 910, 7 U.S.C. 1131(d), 7 U.S. C.A.
1131(d); see 5 Fed.Reg. 5231. But that is an issue that need not concern us no . Petitioner
Mande ille Island Farms pra ed judgment for $ 315,043.80; petitioner Zuckerman for
$112,192.14.

[ Footnote 8 ] It has been pre iousl noted here that the Court applied these labels as a heritage
from prior decisions under the commerce clause, dealing not as the Knight case ith an act or
acts of Congress, but ith the alidit of state statutes, Wickard . Filburn, 317 U.S. 111, 121 ,
87; United States . South-Eastern Under riters Ass'n, 322 U.S. 533 , 543 545, 1168, 1169, an
approach re ecting Marshall's idea of the mutual e clusi eness of state and national po er in
this area and ignoring the later e olution of different conceptions in Coole . Board of Wardens,
12 Ho . 299. See Prudential Ins. Co. . Benjamin, 328 U.S. 408 , 412 427, 1145, 1153, 164
A.L.R. 476.
[ Footnote 9 ] Compare, e.g., United States v. E.C. Knight Co., 156 U.S. 1, 15 S. Ct. 249, ith
Standard Oil Co. v. United States, 221 U.S. 1, 34 L.R.A.,N.S., 834, Ann.Cas.1912D, 734, and
United States v. American Tobacco Co., 221 U.S. 106 ; Hammer v. Dagenhart, 247 U.S. 251, 3
A.L. R. 649, Ann.Cas.1918E, 724, ith United States v. Darb , 312 U.S. 100 , 657, 132 A.L.R.
1430; Carter v. Carter Coal Co., 298 U.S. 238 , ith Sunshine Coal Co. v. Adkins, 310 U.S. 381 ;
United States v. Chicago, etc., R. Co., 282 U.S. 311 , and Railroad Retirement Board v. Alton R.
Co., 295 U.S. 330 , ith United States v. Lo den, 308 U.S. 225 ; Hopkins v. United States, 171
U.S. 578 , ith Stafford v. Wallace, 258 U.S. 495, 23 A.L. R. 229; Emplo ers' Liabilit Cases, 207
U.S. 463, 498 , 145, ith Virginian R. Co. v. Federation, 300 U.S. 515, 557 , 57 S. Ct. 592, 604, and
Weiss v. United States, 308 U.S. 321 , 60 S. Ct. 269; Ne York Life Insurance Co. v. Deer Lodge
Count , 231 U.S. 495 , and authorities cited, ith United States v. South-Eastern Under riters
Ass'n, 322 U.S. 533 , and Prudential Insurance Co. v. Benjamin, 328 U.S. 408 , 164 A.L.R. 476.

[ Footnote 10 ] See particularl the discussion in 317 U.S. at pages 119, 120, 63 S.Ct. at page
86. See also Prudential Ins. Co. v. Benjamin, 328 U.S. 408 , 164 A.L.R. 476; United States v.
South-Eastern Under riters Ass'n, 322 U.S. 533 ; Labor Board v. Jones & Laughlin, 301 U.S. 1 ,
108 A.L.R. 1352; United States v. Darb , 312 U.S. 100 , 132 A.L.R. 1430; United States v.
Wright ood Dair Co., 315 U.S. 110 ; Stern, The Commerce Clause and the National Econom ,
1933 1946, 59 Harv.L.Rev. 645, 883.

The Filburn case dealt ith the second Agricultural Adjustment Act and the po er of Congress
to enact it. But, referring to the rst Interstate Commerce Act, 49 U.S.C.A. 1 et seq., and the
Sherman Act, the Court in the Filburn case pages 121, 122 of 317 U.S., page 87 of 63 S.Ct., said
that those statutes 'ushered in ne phases of adjudication' requiring a different approach to
interpretation of the commercec lause, although ' hen it rst dealt ith this ne legislation, the
Court adhered to its earlier pronouncements, and allo ed but little scope to the po er of
Congress.' For the latter statement the Knight case as cited as the principal e ample.

[ Footnote 11 ] The doctrine encompassed fundamentall not merel an e panding factor in

federal po er over transportation. It as rather an integer in the sum of po er over commerce,
of hich authorit over transportation as but a part. The 'affectation' approach as actuall a
revival of Marshall's 'necessar and proper' doctrine, cf. Wickard v. Filburn, 317 U.S. 111, 120 ,
122, 86, 87, but unquali ed b his idea of mutual e clusiveness, see note 8. Once applied to
transportation and the Interstate Commerce Acts, it as inevitable that the approach ould be
e tended to the productive and industrial phases of the national econom and the statutes
regulating them, including the Sherman Act. Time and events ere disclosing ever more clearl
the impact of their effects upon interstate trade and commerce. And this as posing the same
necessit for regulation as in the eld of transportation, in order to protect and preserve the
national commerce and carr out Congress' polic regarding it.

[ Footnote 12 ] United States v. Reading Co., 253 U.S. 26 ; United States v. Ke stone Watch Case
Co., D.C., 218 F. 502; Penns lvania Sugar Re ning Co. v. American Sugar Re ning Co., 2 Cir., 166
F. 254; United States v. E. I. Du Pont de Nemours & Co., C.C., 188 F. 127. See Mr. Justice Holmes
dissenting in Hammer v. Dagenhart, 247 U.S. 251, 279 , 3 A.L.R. 649, Ann.Cas.1918E, 724.

[ Footnote 13 ] Montague & Co. v. Lo r , 193 U.S. 38 ; S ift & Co. v. United States, 196 U.S. 375 ;
United States v. Patten, 226 U.S. 525, 44 L.R. A.,N.S., 325; Binderup v. Pathe E change, 263 U.S.
291 ; Federal Trade Commission v. Paci c Paper Ass'n, 273 U.S. 52 ; Stevens Co. v. Foster &
Kleiser Co., 311 U.S. 255 ; Bigelo v. RKO Radio Pictures, 327 U.S. 251 .

[ Footnote 14 ] In United States v. Frankfort Distilleries, 324 U.S. 293, 297 , 663, e said: 'It is
true that this Court has on occasion determined that local conduct could be insulated from the
operation of the Anti-Trust la s on the basis of the purel local aims of a combination, insofar
as those aims ere not motivated b the purpose of restraining commerce, and here the
means used to achieve the purpose did not directl touch upon interstate commerce.' The
decisions cited ere Industrial Association of San Francisco v. United States, 268 U.S. 64 ;
Levering & Garrigues Co. v. Morrin, 289 U.S. 103 ; United Leather Workers v. Herkert & Meisel
Trunk Co., 265 U.S. 457, 33 A.L.R. 566; cf. Local 167 of International Brotherhood of Teamsters
v. United States, 291 U.S. 293, 297 , 398, and United States v. Hutcheson, 312 U.S. 219 .

[ Footnote 15 ] United States v. Frankfort Distilleries, 324 U.S. 293 , and authorities cited.

[ Footnote 16 ] Cf. United States v. Socon -Vacuum Oil Co., 310 U.S. 150 ; American Tobacco
Co. v. United States, 328 U.S. 781 ; United States v. Patten, 226 U.S. 525, 33 S. Ct. 141, 44
L.R.A.,N.S., 325; Swift & Co. v. United States, 196 U.S. 375 . Each case involved outlawed
practices b persons who were both purchasers and sellers, and forbidden effects upon sellers
as well as purchasers and consumers.

[ Footnote 17 ] See note 16.

[ Footnote 18 ] Compare Arkadelphia Milling Co. v. St. Louis Southwestern R. Co., 249 U.S. 134 ,
with Cloverleaf Butter Co. v. Patterson, 315 U.S. 148 .

[ Footnote 19 ] Swift & Co. v. United States, 196 U.S. 375 ; American Tobacco Co. v. United
States, 328 U.S. 781 ; United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416.

[ Footnote 20 ] The natural factors include the peculiar nature of the corp in its limitation to a
single primar and commerciall pro table use, the necessit for immediate and nearb
marketing to follow directl upon harvesting, and the well-known fact that sugar beets are
grown onl in widel scattered regions speciall adapted to the crop in soil, climate and
availabilit of water in large quantities during the growing season.

[ Footnote 21 ] Resulting in large part from the natural limitations stated in note 20 and the fact
that e tracting the sugar content from the beets is an elaborate and technical process, is the
further important fact that the processing cannot be done b the growers individuall or even in
small cooperative groups, but requires speciali ed and large scale business organi ation,
equipment and investment. All these factors and perhaps others combine to make the re ning
stage of the industr a speciali ed manufacturing one to be carried on separatel from growing,
to establish the re ners' ke place in the entire industr , and thus to leave the growers
completel at the re ners' merc for the pro table production of beets e cept as the latter ma
compete among themselves.

[ Footnote 22 ] See note 20.

[ Footnote 23 ] It is suggested that Parker v. Brown, 317 U.S. 341 , is inconsistent with our
conclusion here. The Court there held rst that the Sherman Act did not appl because the
program was sponsored b the State of California. Contrar to the present suggestion, the
opinion assumes that the relation between the intrastate and the interstate commerce in raisins
was su cient to justif federal regulation, if the state-sponsored program of prorating had been
'organi ed and made effective solel b virtue of a contract, combination or conspirac of
private persons, individual or corporate.' 317 U.S. at page 350, 63 S.Ct. at page 313. The case
therefore contains no suggestion, on the facts or on the law, contrar to the result now reached.

[ Footnote 24 ] See note 5. B wa of e plaining the deletion, the record contains onl the
statement of the stipulation, cf. note 1 that the amended complaint eliminated 'what the Court
considered an ambiguit in the ( original) complaint.' With no further support from the record, it
has been assumed that the ambiguit so elided was the reference to restraint of interstate trade
in sugar and hence the petitioners in making it stated themselves out of court.

Apart from the fact that the elision did not affect numerous other like allegations, see note 6
and te t, the deletion included the speci cations of both 'sugar and sugar beets.' From this the
literal inference, if an of the sort could be made, would be that the elision was intended to
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 third counts ere continuousl included herein as second and third counts from the date
of the commencement of this action.
'5. The ai er of the statute of limitations and of the defense of laches herein set forth, n
d the stipulation permitting the amendment of the amended complaint or the ling of a
separate action or actions hereinabo e set forth, shall continue until si months after the
determination on appeal as to the su cienc of the rst count has become nal.'

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