FTC V. DEAN FOODS CO., 384 U. S. 597 (1966)

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U.S. Supreme Court

FTC v. Dean Foods Co., 384 U.S. 597 (1966)

Federal Trade Commission v. Dean Foods Co.

No. 970

Argued March 28, 1966

Decided June 13, 1966

384 U.S. 597


Respondents, two substantial competitors in the sale of packaged milk in the Chicago area, signed a merger agreement following meetings with representatives of the Federal Trade Commission (FTC) who indicated that the merger would raise serious questions under the antitrust laws. At the time of the merger, one of the respondents was the third or fourth largest packaged milk distributor in the area, the other at least the second largest, and together they accounted for 23% of area sales of packaged milk. The FTC filed a complaint charging that the agreement violated § 7 of the Clayton Act and § 5 of the Federal Trade Commission Act. Thereafter, the FTC, under the All Writs Act, 28 U.S.C. § 1651(a), petitioned the Court of Appeals for a temporary restraining order and a preliminary injunction to maintain the status quo until the FTC determined the merger's legality. The FTC alleged the probability of its finding an antitrust violation, and that the need for injunctive relief was "compelling," since, under the merger, one of the respondents would no longer exist, its milk routes and certain of its plants and equipment would be sold and its remaining assets would be consolidated, precluding its restoration as a viable independent company if the merger were subsequently ruled illegal. The petition alleged that the Court of Appeals would consequently be deprived of its appellate jurisdiction over final FTC orders and the opportunity to enter a meaningful order of its own. The Court of Appeals, on the hearing for a preliminary injunction, dismissed the petition on the ground that the FTC had not entered a cease and desist order, and had no authority to institute the proceeding, Congress having failed to enact bills introduced for such a purpose. The contract was then closed. MR. JUSTICE CLARK, on application, issued a preliminary injunction against material corporate changes in the acquired company and subsequently this Court granted certiorari.


1. The Court of Appeals has jurisdiction to issue a preliminary injunction to prevent consummation of the merger agreement upon

Page 384 U. S. 598

a showing that all effective remedial order would otherwise be virtually impossible once the merger had been implemented, thus rendering a final divestiture decree futile. Pp. 384 U. S. 603-605.

(a) The All Writs Act extends to the potential jurisdiction of an appellate court where an appeal is not then pending, but may later be perfected. Pp. 384 U. S. 603-604.

(b) The grant in § 11(c) of the Clayton Act to courts of appeals of jurisdiction to review final orders of the FTC against illegal mergers on application of any person required thereby to cease and desist such violations includes the traditional power to preserve the status quo while administrative proceedings are in progress to prevent impairment of the effective exercise of appellate jurisdiction. Cf. Whitney Nat. Bank v. New Orleans Bank, 379 U. S. 411. Pp. 384 U. S. 604-605.

2. The FTC, under the circumstances alleged in this case, has standing to seek preliminary relief under the All Writs Act. Pp. 384 U. S. 605-612.

(a) It would stultify Congress' purpose in entrusting the FTC with enforcement of the Clayton Act and granting it the power to order divestiture if the FTC did not have the incidental power to ask the courts of appeals to exercise their authority under the All Writs Act. Pp. 384 U. S. 606-612.

(b) The power of the courts of appeals to grant preliminary relief here derives from the All Writs Act, not the Clayton Act. P. 384 U. S. 608.

(c) Congress' failure to enact proposals that the FTC be empowered itself to issue preliminary relief or to proceed in district courts for that purpose reflects no intent to circumscribe traditional judicial remedies. Pp. 384 U. S. 608-611.

356 F.2d 481, reversed and remanded.

Page 384 U. S. 599

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