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OLIN MATHIESON CHEMICAL CORPORATION v. WHITE CROSS STORES (03/26/64)

March 26, 1964

OLIN MATHIESON CHEMICAL CORPORATION
v.
WHITE CROSS STORES, INC., APPELLANT.



Appeal, No. 24, March T., 1964, from decree of Court of Common Pleas of Allegheny County, July T., 1963, No. 3464, in case of Olin Mathieson Chemical Corporation v. White Cross Stores, Inc. Nos. 6, 7, 8, 9, 14, 18 and 19. Decree reversed; reargument refused April 24, 1964.

COUNSEL

James P. McArdle, with him Paul F. Laughlin, Edward I. Goldberg, and McArdle, Harrington & McLaughlin, for appellants.

Benjamin M. Quigg, Jr., with him Clyde P. Bailey, Angus M. Russell, Russell C. Dilks, and Weller, Wicks & Wallace, and Morgan, Lewis & Bockius, for appellee.

Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Roberts, JJ.

Author: Eagen

[ 414 Pa. Page 96]

OPINION BY MR. JUSTICE EAGEN

The single question presented for determination by this appeal is the constitutionality of the Pennsylvania Fair Trade Act of June 5, 1935, P.L. 266, as amended, 73 P.S. ยง 7 et seq., as applied to the nonsigners of "Fair Trade" price maintenance contracts.

[ 414 Pa. Page 97]

The corporate-plaintiff is the manufacturer of drugs, pharmaceuticals and other allied products, distributed under the trade-mark "Squibb." In this action, the court below enjoined the appellants-defendant from retailing these products at prices less than the stipulated minimum prices contained in fair trade contracts in existence throughout the State of Pennsylvania. The appellants were not parties to, nor did they sign, these agreements. However, it is undisputed that they knew plaintiff's products were "fair traded" and, with this knowledge, advertised and sold such commodities below the stipulated minimum prices.

Section 2 of the statute provides: "Wilfully and knowingly advertising, offering for sale, or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of section one of this act, whether the person so advertising, offering for sale, or selling is, or is not, a party to such contract, is unfair competition and is actionable at the suit of such vendor, buyer or purchaser of such commodity."

Fair trade legislation precludes the cutting of the established price of any commodity identified by the trade-mark or brand of the producer: Bristol-Myers Co. v. Lit Bros., Inc., 336 Pa. 81, 6 A.2d 843 (1939). Those who support such legislation strenuously urge that it protects the manufacturer, retailer and consumer from varied harmful consequences which allegedly would result from cutthroat competition. They submit that it is, therefore, a reasonable exercise of the police power and is designed to protect the convenience, prosperity, health, morals, safety and welfare of the public generally.

Whether or not such legislation does in fact protect the best interests of the buying public has long been the subject of serious dispute. Many recent statistical studies ...


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