US SUPREME COURT DECISIONS

A company which was engaged in the manufacture of roofing materials was found by the Federal Trade Commission to have discriminated among customers in the prices charged for its products. The Commission held that the discriminations violated § 2(a) of the Clayton Act, as amended, and ordered the company to cease and desist from selling

"products of like grade and quality to any purchaser at prices lower than those granted other purchasers who in fact compete with the favored purchaser in the resale or distribution of such products."

Upon the company's petition for review, the Court of Appeals affirmed, but refused an order of enforcement.

Held:

1. Congress has vested in the Federal Trade Commission the primary responsibility for fashioning orders dealing with Clayton Act violations, and the courts will not interfere except where the remedy selected has no reasonable relation to the unlawful practices found to exist. P. 473.

2. Although, in the company's price discriminations between competing purchasers, the Commission found only differentials of 5% or more, the order was not too broad in prohibiting all price differentials between competing purchasers, in view of the Commission's finding that even very small differences in price were important factors in competition among the company's customers. Pp. 343 U. S. 473-474.

3. Although the price discriminations found were in sales to retailers and applicators, not in sales to wholesalers, the extension of the order to "purchasers who in fact compete" was not unreasonable, in view of the evidence that the company's classification of its customers -- as wholesalers, retailers, and applicators -- did not follow real functional differences. Pp. 343 U. S. 474-475. chanrobles.com-red

Page 343 U. S. 471

4. The order does not enjoin lawful acts by reason of the Commission's failure to except from its prohibitions differentials permitted by the terms of the Act (making allowance for differences in cost of manufacture, sale or delivery, or made in good faith to meet an equally low price of a competitor), since these exceptions are necessarily implicit in every order issued under authority of the Act. Pp. 343 U. S. 475-476.

(a) However, in contesting enforcement or contempt proceedings, the seller may plead only those facts constituting statutory justification which it has not previously had an opportunity to present. Pp. 343 U. S. 476-477.

5. The Commission is not entitled to a decree directing enforcement of an order issued under the Clayton Act in the absence of a showing that a violation of the order has occurred or is imminent. Pp. 343 U. S. 477-480.

(a) The provision of the Act authorizing the Commission to apply for enforcement "if such person fails or neglects to obey such order" prescribes a prerequisite to the court's granting enforcement. Pp. 343 U. S. 478-479.

(b) Disobedience or threatened disobedience of the order is a condition to the granting of enforcement, even where the order comes before the court upon petition for review by the affected party. Pp. 343 U. S. 479-480.

191 F.2d 294 affirmed.

Upon a petition for review of a cease and desist order of the Federal Trade Commission, 46 F.T.C. 379, the Court of Appeals affirmed and granted enforcement of the order. 189 F.2d 893. On rehearing, it struck from its decision that part granting enforcement. 191 F.2d 294. This Court granted certiorari. 342 U.S. 917. Affirmed, p. 343 U. S. 480. chanrobles.com-red

Page 343 U. S. 472