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UNITED STATES v. NATIONAL DAIRY PRODUCTS CORP. ET AL.

decided: February 18, 1963.

UNITED STATES
v.
NATIONAL DAIRY PRODUCTS CORP. ET AL.



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI.

Warren, Black, Douglas, Clark, Harlan, Brennan, Stewart, White, Goldberg

Author: Clark

[ 372 U.S. Page 29]

 MR. JUSTICE CLARK delivered the opinion of the Court.

This case involves the question whether § 3 of the Robinson-Patman Act, 15 U. S. C. § 13a, making it a crime to sell goods at "unreasonably low prices for the purpose of destroying competition or eliminating a competitor," is unconstitutionally vague and indefinite as applied to sales made below cost with such purpose. National Dairy and Raymond J. Wise, a vice-president and director, upon being charged, inter alia, with violating § 3 by making sales below cost for the purpose of destroying competition, moved for dismissal of the Robinson-Patman

[ 372 U.S. Page 30]

     Act counts of the indictment on the ground that the statute is unconstitutionally vague and indefinite. The District Court granted the motion and ordered dismissal. On direct appeal under the Criminal Appeals Act, 18 U. S. C. § 3731, we noted probable jurisdiction, 368 U.S. 808, because of the importance of the issue in the administration of the Robinson-Patman Act. We have concluded that the order of dismissal was error and therefore remand the case for trial.

I.

National Dairy is engaged in the business of purchasing, processing, distributing and selling milk and other dairy products throughout the United States. Through its processing plant in Kansas City, Missouri, National Dairy has for the past several years been in competition with national concerns and various local dairies in the Greater Kansas City area and the surrounding areas of Kansas and Missouri. In the Greater Kansas City market National Dairy distributes its products directly, but cities and towns in the surrounding Kansas and Missouri areas outside this market are served by independent distributors who purchase milk from National Dairy and resell on their own account.

The indictment charged violations of both the Sherman Act, 15 U. S. C. § 1, and the Robinson-Patman Act in Kansas City and in six local markets in the adjacent area.*fn1 The Robinson-Patman counts charged National

[ 372 U.S. Page 31]

     Dairy and Wise with selling milk in those markets "at unreasonably low prices for the purpose of destroying competition." Further specifying the acts complained of, the indictment charged National Dairy with having "utilized the advantages it possesses by reason of the fact that it operates in a great many different geographical localities in order to finance and subsidize a price war against the small dairies selling milk in competition with it . . . by intentionally selling milk [directly or to a distributor] at prices below National's cost." In five of the markets National Dairy's pricing practice was alleged to have resulted in "severe financial losses to small dairies," and in two others the effect was claimed to have been to "eliminate competition" and "drive small dairies from" the market.

National Dairy and Wise moved to dismiss all of the Robinson-Patman counts on the grounds that the statutory provision, "unreasonably low prices," is so vague and indefinite as to violate the due process requirement of the Fifth Amendment and an indictment based on this provision is violative of the Sixth Amendment in that it does not adequately apprise them of the charges. The District Court, after rendering an oral opinion holding that § 3 of the Robinson-Patman Act is unconstitutionally vague and indefinite, granted the motion and ordered dismissal of the § 3 counts. The case came here on direct appeal from the order of dismissal.

II.

National Dairy and Wise urge that § 3 is to be tested solely "on its face" rather than as applied to the conduct charged in the indictment, i. e., sales below cost for the purpose of destroying competition. The Government, on the other hand, places greater emphasis on the latter, contending that whether or not there ...


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