FTC V. NATIONAL LEAD CO., 352 U. S. 419 (1957)

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U.S. Supreme Court

FTC v. National Lead Co., 352 U.S. 419 (1957)

Federal Trade Commission v. National Lead Co.

No. 63

Argued December 12, 1956

Decided February 25, 1957

352 U.S. 419


In a proceeding under § 5 of the Federal Trade Commission Act, the Federal Trade Commission found that respondents had unlawfully conspired to adopt and use a zone delivered pricing system in their sale of lead pigments. In its general cease and desist order prohibiting concert of action among respondents in the further use of such system, the Commission inserted a provision directing each respondent individually to cease and desist from adopting the same or a similar system of pricing for the purpose or with the effect of "matching" the prices of competitors.

Held: the inclusion of this provision, as here interpreted, was within the statutory authority of the Commission. Pp. 352 U. S. 420-431.

1. The findings of the Commission are supported by substantial evidence, and are binding on respondents. Pp. 352 U. S. 421-423.

2. The contested portion of the order must be viewed as limited in these respects: (1) it is temporary; (2) the order is directed solely at the use of a zone delivered pricing system; and (3) zone delivered pricing per se is not banned. Pp. 352 U. S. 425-426.

3. Delivered zone pricing violates the order only when two conditions are present: ( 1 ) identical prices with competitors (2) resulting from zone delivered prices. P. 352 U. S. 426.

4. Section 2(b) of the Clayton Act, relating to the right of a seller in good faith to meet the lower price of a competitor, must be read into every Commission order, and respondents therefore are afforded all the benefits of that section. P. 352 U. S. 426.

5. The record shows that the respondents were afforded all the safeguards of a fair hearing. Pp. 352 U. S. 426-428.

6. The remedy adopted by the Commission has a reasonable relation to the unlawful practices which were found to exist. Pp. 352 U. S. 428-429.

7. Under the circumstances here, the Commission was justified in its determination that it was necessary to include some restraint in its order against the individual corporations in order to prevent a continuance of the unfair competitive practices found to exist. Pp. 352 U. S. 429-430.

Page 352 U. S. 420

8. The order does not prohibit or interfere with independent delivered zone pricing per se, nor does it prohibit the practice of the absorption of actual freight as such in order to foster competition. Pp. 352 U. S. 430-431.

9. Hypothetical situations do not warrant striking down the contested provision of the order. P. 352 U. S. 431.

227 F.2d 825 reversed.

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