# Goodyear Tire & Rubber Co. v. Federal Trade Commission > Court of Appeals for the Sixth Circuit · February 16, 1939 · 101 F.2d 620 URL: https://www.frixlaw.com/law-library/cases/9640112 ## Case - **Full name:** Goodyear Tire & Rubber Co. v. Federal Trade Commission - **Court:** Court of Appeals for the Sixth Circuit - **Decided:** February 16, 1939 - **Citations:** 101 F.2d 620; 1939 U.S. App. LEXIS 4422 - **Precedential status:** Published - **Opinion:** Dissent by Hamilton - **Judges:** Hamilton, Hicks, Simons - **Cited by:** 11 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9640112 ## Opinion text HAMILTON, Circuit Judge (dissenting). I am unable to concur in the majority opinion. With all due regard to, and respect for, the legal ability of my associates, I believe they have included in the proviso of the statute a case that lies beyond its direct expression and not within its letter or spirit. This statute should be construed in the light of attendant conditions and the state of the law at the time of its enactment and applied to carry out the intention and meaning of the legislature gleaned from its language. A proviso which operates to limit the application of the general provisions of a statute should be strictly construed to include no case not within its letter. The last rule is especially applicable to the case here under consideration. A proviso may be used as a guide in the selection of one or the other of two possible constructions of words or phrases found in a statute doubtful in scope, but to read into it a meaning not comprehended by the enactment itself and contrary to its terms, makes it an instrument of discrimination and defeats, rather than clarifies, legislative intent. Usually provisos find their way into statutes at the behest of persons who are unreasonably apprehensive as to their effect and by those who wish to obtain immunity from their terms. They are the favorite instrument of lobbyists and those who desire to escape the effect of general provisions of a statute applicable to a large class. Having put in a proviso which in many instances is needless, in order to^ satisfy the persistent and allay a particular class, courts are sometimes led to construe it as to relieve of liability those plainly within the scope of the statute and impose liability on those not so apprehensive of *626 its effect or so diligent to protect their interests. The problem of monopolies has engaged the attention of organized society for centuries. The first regulatory statute was passed in'England in 1624, making all illegal .except such as might be authorized by Parliament in. respect to new manufacturing enterprises - carried on by corporations or companies. The proviso in this statute was used as an excuse for subsequent transgressions of the act and so it is that provisos have since been an avenue of evasion. A private monopoly is indefensible and intolerable. To this principle all agree. The first Federal law on the subject was passed in 1890 ( 26 Stat. 209 ), 15 U.S.C.A. §§ 1-7 , 15 note. It was designated An Act to Protect Trade and Commerce Against Unlawful Restraints and Monopolies and was passed as the result of widespread and vehement popular insistence that something be done to curb the growing tendency toward concentration of industry to the disadvantage ot both the consumer and small producer. It declared illegal “eyery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations,” and that “every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States” violates the act. Sections 1, 2. Efforts to eliminate restraints or- attempted restraints of competition were carried on by the United States under this ■act for twenty-four years. Its success fluctuated with the courts’ interpretation of what the words and phrases of the act meant. There was difficulty in' applying such vague terms as “contracts in restraint of trade” and “attempts to monopolize” when the question arose as to the applicability of these terms to concrete situations. The tendency toward industrial concentration continued unabated which resulted in the disappearance of small units of production and brought forth two paradoxical types of economic restraint; one, no competition; the other, ruinous competition. President Wilson, in his message to ' the Sixty-third Congress, said: “We are sufficiently familiar with the actual processes and methods of monopoly and of the many hurtful restraints of trade to make definition possible, at any rate up to the limit of which experience has disclosed. These practices, being now abundantly disclosed, can. be explicitly and item by item forbidden by statute in such terms as will practically eliminate uncertainty, the law itself and the penalty being made equally plain.” Such was the historic background and the motives which moved the framers of the legislation which was passed as The Federal Trade Commission Act, 15 U.S.C. A. § 41 et seq., and the Clayton Anti-Trust Act of 1914, 38 Stat. 730 , which concerns us here. Johnson v. Southern Pacific Co., 196 U.S. 1, 22 , 25 S.Ct. 158 , 49 L.Ed. 363 . A study of the debates upon these measures in Congress clearly shows the intent to declare illegal all practices regarded as likely to promote monopolies thus forestalling an evil before its development. During the course of the debates, Senator Walsh, of Montana, in referring to the Clayton Act, said: “The purpose of the legislation of which the pending bill forms a part is to preserve competition where it exists, to restore it where it is destroyed and to permit it to spring up in new fields.” Congressional Record, Oct. 5, 1914, — Vol. 51, p. 16. While the Federal Trade Commission Act and the Clayton Act were passed separately they were considered by Congress concurrently, reference to the other being frequently made in the course of the debates on each, and they should be understood as complementary attempts to promote our government’s basic concept of economic equality. ■ In the Federal Trade Commission Act, the Congress attempted to set up a permanent body of trained personnel whose duty it was to safeguard and promote competition in industry. The companion Clayton law was entitled “An Act To supplement existing laws against unlawful restraints and monopolies, and for other purposes.” Section 2 of the Act, U.S.C.A. 15, § 13, provides: “Sec. 2. [§ 13.] That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities, which commodities are sold for use, consumption, or resale * * * : Provided, That nothing herein contained shall prevent discrimination in price between purchasers of commodities on account of differences in the grade, quality, or quantity of the commodity sold, or that *627 makes only due allowance for difference in the cost of selling or transportation, or discrimination in price in the same or different communities made in good faith to meet competition: And provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade.” Respondent found, and the facts conclusively show, that petitioner has violated the above section unless exempt under the proviso. Bearing ill mind the rule of interpretation heretofore announced that the intention of the legislature is controlling, the single question in the case is what is meant by the expression “discrimination in price between purchasers of commodities on account of difference in grade, quality or quantity.” The Commission finds, and the undisputed evidence shows, there was no difference in grade or quality between the tires petitioner sold to its dealers generally and those sold to Sears-Roebuck & Company, so the single issue is the true construction of the phrase “on account of the difference in quantity.” It is a rule of universal application that words or phrases in a statute must be construed to carry out the manifest intent of the Congress and in all cases they should be construed in the sense which best harmonizes with the context and promotes to the fullest extent the desired objective. Every technical rule as to the construction or force of particular terms must yield to the clear expression of the paramount will of the legislature and the words and phrases of a statute will be construed in their ordinary sense, and with the meaning commonly attributed to them in the ordinary business affairs of life. Sproles v. Binford, 286 U.S. 374, 397 , 52 S.Ct. 581 , 76 L.Ed. 1167 . Excluding the proviso in the statute here, every discrimination in price between different purchasers is prohibited. It was ■not intended that the prohibition should be cancelled by the proviso. Such an interpretation would lead to an absurdity and if the rule of liberality applied in the majority opinion is applicable to the proviso, it sets up a method of evasion not intended by the Congress. For the reasons heretofore pointed out, a proviso must be strictly construed. The Congress intended to maintain competitive prices, which means those resulting from the activities of many buyers and sellers, each of whom can affect the outcome only by buying or selling large or small quantities according as the price is at one point or another. It intended to proscribe monopoly prices which are those fixed with a view to the advantage of the purchaser or seller by a single (exclusive) seller or buyer or by a combination of sellers or buyers acting as a unit. Monopolistic prices are always possible when a seller is able to deal differently with the same classes of buyers of the same product or to manage in some other way to sell his goods in virtually separate markets. Recognizing this practice and in order to suppress monopolies at their inception, the Congress penalized sales of the same article to different customers at different prices. If the contract between the petitioner and Sears-Roebuck falls within the definition of the term “monopolistic prices” above outlined, there is a violation of the act regardless of difference in quantity, because the transaction is what is commonly known in ordinary business affairs as fixing a discriminatory price and by a device having the monopolistic tendency denounced by the Clayton Act. The rule to be followed in the construction of statutes relating to commercial transactions is that the descriptive terms applied to articles of commerce shall be understood according to the acceptation given them by commercial men doing business in our country at the time of the passage of the act in which they are found. Under this rule the expression “discrimination in price between purchasers of commodities on account of difference in grade, quality or quantity of the commodity sold” must be construed in the light of business practices in this regard at the time of the passage of the act. The testimony in the record of those familiar with the industry shows that quantity discounts on account of tire purchases are relatively small and based upon certain definite and known volumes of purchases none of which have any resemblance to the transaction between petitioner and Sears-Roebuck & Company. This being true the acts of the petitioner bring it within the general provisions of the anti-trust laws and exclude it from the protection of the proviso there-, in. *628 The statutes here in question do not require the adventitious aid of subsequent kindred legislation for the purpose of elucidation. “In other words, where congress has expressly legislated in respect to a given matter, that express legislation must control, in the absence of subsequent legislation equally express, and is not overthrown by any mere inferences or implications to be found in such subsequent legislation.” Rosecrans v. United States, 165 U.S. 257, 264 , 17 S.Ct. 302, 304 , 41 L.Ed. 708 . It is the primary duty of courts to interpret the meaning of statutes and a resort to /Contemporaneous or executive construction is both unnecessary and improper where the language used is clear or its meaning can be ascertained by the use of intrinsic aids alone. Bates & Guild Co. v. Payne, 194 U.S. 106, 112 , 24 S.Ct. 595 , 48 L.Ed. 894 ; United States v. Missouri Pacific Railroad Co., 278 U.S. 269, 282 , 49 S.Ct. 133 , 73 L.Ed. 322 . The mere failure of public officers charged with the public duty to enforce statutes against odious monopolies or their acquiescence in the conditions that permit them to flourish should not be allowed to stand in the way of the administration of such laws or be construed to estop more diligent and efficient public officials when they attempt to terminate monopolistic practices and tendencies. I am of the opinion the order of the Commission should be upheld. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9640112. Public record. Not legal advice.