Kellogg Toasted Corn Flake Co. v. Buck
KELLOGG TOASTED CORN FLAKE CO. v. BUCK
- Proceeding
- district
- Area
- civil
- Panel
- Werrborn (author)
Analysis
The court considered a motion to enforce price restrictions on the sale of corn flakes. The court granted the motion, ruling that the restrictions were invalid under common law and the Sherman Act.
| What the court decided | The model |
|---|---|
Motion to enforce price restrictions granted (restrictions held invalid)“Said motion will be allowed,” | agree with court The court correctly applied the Supreme Court's holding in Dr. Miles Medical Co. v. Park & Sons Co. that agreements to fix resale prices are void as against public policy and in violation of the Sherman Act. The court also correctly noted that Bauer & Cie v. O'Donnell did not create an exception for patented goods in this context, reaffirming the Dr. Miles principle. The reasoning is sound and follows directly from the cited binding authority. |
The order itself: sound — The order is concise but legally sound. It correctly identifies the controlling Supreme Court precedent (Dr. Miles) and addresses the potential counter-argument regarding patents (Bauer) by noting that Bauer reaffirmed Dr. Miles rather than creating an exception. The conclusion that the price restrictions are invalid follows directly from these authorities.
Opinion — Werrborn
WERRBORN, District Judge.
I am of opinion that the restrictions here sought to be enforced are invalid, both at common law and under Act Cong. July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200). The case made by the hill falls within Dr. Miles Medical *384Co. v. Park & Sons Co., 220 U. S. 373, 408, 31 Sup. Ct. 376, 385 (55 L. Ed. 502), wherein the court declares broadly, underscoring mine:
“The complainant’s plan falls within the principle which condemns contracts of this class. It, in effect, creates a combination for the prohibited purposes. * * * And where commodities have passed into the channels of trade and are owned by dealers, the validity of agreements to prevent competition and to maintain prices is not to be determined by the circumstance whether they were produced by several manufacturers or by one, or whether they were previously owned by one or by many. The complainant having sold its product at prices satisfactory to itself, the public is entitled to whatever advantage may be derived from competition in the subsequent traffic.”
The recent case of Bauer & Cie v. O’Donnell, 229 U. S. 1, 33 Sup. Ct. 616, 57 L. Ed. 1041, decided May 26, 1913, which is the latest one called to my attention, construes the former case thus:
“The question, therefore, now before this court for judicial determination, is; May a patentee by notice limit the price at which future retail sales of the patented article may be made, such article being in the hands of a retailer by purchase from a jobber, who has paid to the agent of the patentee the full price ashed for the article sold? The object of the notice is said to be to effectually maintain prices and to prevent ruinous competition by the cutting of prices in sales of the patented article. That such purpose could not be accomplished by agreements concerning articles not protected by the patent monopoly was settled by this court in the case of Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 [31 Sup. Ct. 376, 65 L. Ed. 502], in which it was held that an attempt to thus fix the price of an article of general use would be against public policy and void.”
Since both of these decisions are by the Supreme Court of the United States, and, of course, authoritative here, it is unnecessary to review the large number of other cases, both state and federal, bearing upon the question.
Said motion will be allowed,