Federal Trade Commission v. Bunte Bros.
Federal Trade Commission v. Bunte Bros.
Opinion of the Court
delivered the opinion of the Court.
The Federal Trade Commission found that IBunte Brothers, candy manufacturers in Illinois, sold products there in what the trade calls “break and take” packages,
The scope of § 5 is in controversy.
While one may not end with the words of a disputed statute, one certainly begins there. “Unfair methods of competition in commerce” are the concern of § 5, and the Commission, is “directed to prevent persons . . . from using unfair methods of competition in com
That for a quarter century the Commission has made no such claim is a powerful indication that effective enforcement of the Trade Commission Act is not dependent
There is the widest difference in practical operation between the control over local traffic intimately connected with interstate traffic and the regulatory authority-here asserted. Unlike the relatively precise situation presented by rate discrimination, “unfair competition” was designed by Congress as a flexible concept with evolving content. Federal Trade Comm’n v. Keppel & Bro., supra, at 311-312. It touches the greatest variety of unrelated activities. The Trade Commission in its Report
Affirmed.
“Sec. 5. (a) Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful. '
“The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations . . . from using unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce.”
“Sec. 4. The words defined in this section shall have the following meaning when found in this Act, to wit:
“ ‘Commerce’ means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any state or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.”
The Commission makes no claim of a contrary administrative practice. The cases which it cites in no way mitigate what is stated in the text of the opinion. (1) Counsel for the Commission apparently argued for recognition of the power claimed here in Canfield Oil Co. v. Federal Trade Comm’n, 274 F. 571, but the Commission had made no findings of discrimination against commerce and had only found that the Oil Company was engaged in commerce. (2) The jurisdiction sustained in Chamber of Commerce of Minneapolis v. Federal Trade Comm’n, 13 F. 2d 673, was very different from that claimed here. It rested on the fact that the Chamber conducted a market for grain in the current of interstate commerce. See Chicago Board of Trade v. Olsen, 262 U. S. 1, and cases cited. (3) The order of the Commission reviewed in California Rice Industry v. Federal Trade Comm’n, 102 F. 2d 716, resulted from proceedings instituted more than a year after this proceeding against Bunte Brothers had begun.
Report, pp. 83, 88. And see these additional examples (pp. 83, 85, 89) :
“6. Making false and disparaging statements respecting competitors’ products and business, in some cases under the guise of ostensibly disinterested and specially informed sources or through purported scientific, but in fact misleading, demonstrations or tests; and making false and misleading representations with respect to competitors’ products, such as that seller’s product is competitor’s, and through use of such practices as deceptive simulation of competitor’s counter-display catalogs or trade names; and that competitor’s business has been discontinued, and that seller is successor thereto or purchaser and owner thereof.”
“10. Selling rebuilt, second-hand, renovated, or old products or articles made from used or second-hand materials as and for new.”
“19. Using containers ostensibly of the capacity customarily associated in the mind of the general purchasing public -with standard weights or quantities of the product therein contained, or using such standard containers only partially filled to capacity, so as to make it appear to the purchaser that he is receiving the standard weight or quantity.”
“30. Failing and refusing to deal justly and fairly with customers in consummating transactions undertaken, through such practices as refusing to correct mistakes in filling orders, or to make promised adjustments or refunds, and retaining, without refund, goods returned for exchange or adjustment, and enforcing, notwithstanding agents’ alterations, printed terms of purchase contracts, and exacting payments in excess of customers’ commitments.”
“31. Shipping products at market prices to its customers or prospective customers or to the customers or prospective customers of competitors without an, order and then inducing or attempting by various means to induce the consignees to accept and purchase such consignments.”
Dissenting Opinion
dissenting.
In my opinion the judgment should be reversed.
The Commission found that respondent’s “use of chance assortments in the sale and distribution of its candies in Illinois has a direct and powerful burdensome effect upon interstate commerce in candies from other states to the State of Illinois, and gives respondent an undue and unreasonable preference over competitors located in other states.” The validity of that finding and of the Commission’s conclusion that respondent’s practices constitute unfair methods of competition are not in issue. The only question presented by this petition for certiorari is whether respondent’s practices constitute unfair methods of competition “in commerce” within the meaning of § 5 (a) of the Federal Trade Commission Act.
Unfair competition involves not only an offender but also a victim. Here some of the victims of the unfair methods of competition are engaged in interstate commerce. The fact that the acts of the offender are intrastate is immaterial. The purpose of the Act is to protect interstate commerce against specified types of injury. So far as the jurisdiction of the Commission is concerned, it is the existence of that injury to interstate commerce not the interstate or intrastate character of the conduct causing the injury which is important. An unfair method of competition is “in” interstate commerce not only when it has an interstate origin but also when it has a direct interstate impact. Respondent is “using” unfair methods of competition “in” interstate commerce when the direct effect of its conduct is to burden, stifle, or impair that commerce.
Under the Sherman Act (26 Stat. 209) a contract or conspiracy may be “in restraint of trade or commerce among the several States” even though the acts or conduct are intrastate. Swift & Co. v. United States, 196 U. S. 375, 397; United States v. Patten, 226 U. S. 525, 541-543; Standard Oil Co. v. United States, 283 U. S. 163, 168-169. Sec. 5 of the Federal Trade Commission Act is “supplementary” to the Sherman Act. Federal Trade Comm’n v. Raladam Co., 283 U. S. 643, 647. Like the Sherman Act it seeks “to protect the public from abuses arising in the course of competitive interstate and foreign trade. . . . The paramount aim of the act is the protection of the public from the evils likely to result from the destruction of competition or the restriction of it in a substantial degree.” Federal Trade Comm’n v. Raladam Co., supra, pp. 647-648. And as this Court said in Federal Trade Comm’n v. Beech-Nut Packing Co., 257 U. S. 441, 453, the declaration of public policy contained in the Sherman Act is “to be considered in determining what are unfair methods of competition, which
That history, of course, does not give us license to disregard plain and unambiguous limitations on the power of the Commission. But it does admonish us to construe one of a series of legislative acts dealing with a common or related problem in light of the integrated statutory scheme. See United States v. Hutcheson, ante, p. 219. It warns us not to whittle away administrative power by resolving an ambiguity against the existence of that power where the full arsenal of that power is necessary to cope with the evil at hand. The evil here is direct, injurious discrimination against interstate commerce. The Commission has issued orders against some 120 of respondent’s competitors prohibiting them from selling chance assortments of candy in interstate commerce. Under this decision respondent may continue to use this same unfair method of competition to increase its business at the expense of those who sell in interstate commerce and who are not free to employ the same methods in self-defense. I think the Act, an exercise by Congress of its commerce power, should be interpreted to protect interstate commerce not to permit discrimination against it.
Such an approach was used in the Shreveport case (234 U. S. 342) to give the Interstate Commerce Commission control over intrastate rates which injuriously affected, through an unreasonable discrimination, traffic that was interstate. That result was reached though the Act expressly denied the Commission any jurisdiction where the “transportation” was “wholly within one State.” This Court said (234 U. S. at p. 358) that those
The fact that a clarifying amendment to the Act was sought which would have removed the doubts as to the meaning of “in commerce” is not material except to the extent that it shows that doubts existed. It does not aid in resolving those doubts. To be sure, recent statutes dealing with other fields have removed such doubts by explicit provisions. But they are of little aid in interpreting an earlier act in its own legislative setting. See United States v. Stewart, 311 U. S. 60, 69. And as to the charge that for . a quarter of a century the Commission made no claim to such a power, two answers may be made. In the first place, as early as 1921, the Commission urged that the doctrine of the Shreveport case permitted an interpretation of the Act which would give it control over certain intrastate activities. Canfield Oil Co. v. Federal Trade Comm’n, 274 F. 571; Hankin Jurisdiction of the Federal Trade Commission, 12 Calif.
Reference
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- Federal Trade Commission v. Bunte Brothers, Inc.
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