Parker v. Brown

Parker v. Brown, 317 U.S. 341 (1943), was a United States Supreme Court case on the scope of US antitrust law. It held that actions taken by state governments were exempt from the scope of the Sherman Act.

Facts

The case was an appeal from a decree of a district court of three judges enjoining the enforcement, against the appellee, of a marketing program adopted pursuant to the California Agricultural Prorate Act.

Judgment

The Supreme Court held there was a general principle that actions taken by state governments were exempt from the Sherman Act. It held, first, A suit in a federal court to enjoin enforcement of a state agricultural proration program, in which the validity of the program is challenged as in conflict with federal antitrust laws, is a suit "arising under" a "law regulating commerce" and is maintainable without regard to the amount in controversy. 28 U. S. C. § 41 (1), (8). P. 349.

A majority of the Court took the view that suit to enjoin enforcement of a marketing plan adopted under the California Agricultural Prorate Act is within the equity jurisdiction of the district court, since the complaint alleges and the evidence shows threatened irreparable injury to the complainant's business and threatened prosecutions by reason of his having marketed his crop under the protection of the district court's injunction. P. 349.

1. A prorate marketing program under the California Agricultural Prorate Act, adopted by the State for regulating the handling, disposition, and prices of raisins produced in California, a large part of which go into interstate and foreign commerce, held not within the intended scope of, and not a violation of, the Sherman Act. P. 350.
2. A program pursuant to the California Agricultural Prorate Act for marketing the 1940 raisin crop, adopted with the collaboration of officials of the U.S. Department of Agriculture and aided by loans from the Commodity Credit Corporation recommended by the Secretary of Agriculture, held not in conflict with the federal Agricultural Marketing Agreement Act of 1937, where the Secretary had not proposed or promulgated any order under that Act applicable to the marketing of raisins. Pp. 352, 358.
3. The marketing program for the 1940 raisin crop, adopted pursuant to the California Agricultural Prorate Act, the declared purpose of which is to "conserve the agricultural wealth of the State" and to "prevent economic waste in the marketing of agricultural products" of the State, and which operates to eliminate competition among producers in respect of the terms of sale (including the price) of the crop and to impose restrictions on the sale and distribution to buyers who subsequently sell and ship in interstate commerce, held a regulation of state industry of local concern which, in the circumstances detailed in the opinion, is not prohibited by the commerce clause in the absence of Congressional legislation prohibiting or regulating transactions affected by the state program. Pp. 359, 368.

The Court noted that the Sherman Act "makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state." The Act is applicable to "persons," including corporations (§7), and it authorizes suits under it by persons and corporations (§15). A state may maintain a suit for damages under it, Georgia v. Evans, 316 U. S. 159, but the United States may not, United States v. Cooper Corp., 312 U. S. 600 -- "conclusions derived not from the literal meaning of the words "person" and "corporation," but from the purpose, the subject matter, the context and the legislative history of the statute."

The Court added that "there is no suggestion of a purpose to restrain state action in the Act's legislative history." The sponsor of the bill which was ultimately enacted as the Sherman Act declared that it prevented only "business combinations." ^[1] Thus, the conclusion that its purpose was to suppress combinations to restrain competition and attempts to monopolize by individuals and corporations "abundantly appears from its legislative history."^[2]

1. The restrictions which the state program imposes upon the intrastate sale of a commodity by its producer to a processor who contemplates doing, and in fact does, work upon the commodity before packing it and shipping it in interstate commerce, do not violate the Commerce Clause. P. 359.
2. Lemke v. Farmers Grain Co., 258 U.S. 50, and Shafer v. Farmers Grain Co., 268 U.S. 189, distinguished. P. 361.
3. When Congress has not exerted its power under the Commerce Clause, and state regulation of matters of local concern is so related to interstate commerce that it also operates as a regulation of that commerce, the reconciliation of such power of Congress with that reserved to the State is to be attained by the accommodation of the competing demands of the state and national interests involved. P. 362.
4. State regulations affecting interstate commerce are to be sustained, not because they are "indirect" rather than "direct," not because they affect rather than command the operations of interstate commerce, but because, upon a consideration of all the relevant facts and circumstances, the matter appears an appropriate one for local regulations, for which there may be wide scope without materially obstructing the free flow of commerce. P. 362.
5. Examination of the evidence in this case and of available data of the raisin industry in California, of which the Court may take judicial notice, leaves no doubt that the evils attending the production and marketing of raisins in that State present a problem local in character and urgently demanding state action for the economic protection of those engaged in one of its important industries. P. 363.
6. Where the Secretary of Agriculture, who could have adopted a marketing program for raisins under the federal Agricultural Marketing Agreement Act, has instead, as that Act authorizes, cooperated in promoting the state marketing program, the court cannot say that the effect of the state program on interstate commerce is one which the Commerce Clause forbids. And particularly should state regulation of local matters be sustained where its effect on commerce is one which it has been the policy of Congress, by its legislation, to encourage. P. 368.

Signficance

The Supreme Court in later judgments clarified its position.

See also

• US antitrust law

Notes

External links

Wikisource has original text related to this article: Parker v. Brown

• Text of Parker v. Brown, 317 U.S. 341 (1943) is available from:  Findlaw  Justia