Fair Trade Revisited

The typical nonsigner clause reads: “… whether the person so advertising, offering for sale, or selling is or is not a party to such a contract.”

See United States v. McKesson & Robbins, Inc., 351 U.S. 305, 315–316 (1956).

Old Dearborn Distributing Co. v. Seagram Distillers Corp., 299 U.S. 183 (1936).

Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384 (1951).

The constitutionality of the McGuire Act has been upheld in the courts. Eli Lilly & Co. v. Schwegmann Bros., 205 F. 2d 788 (1953); cert. denied, 346 U.S. 856 (1953).

The Idaho decision was that of an Idaho district court, but that decision was not reviewed by the Idaho Supreme Court. Bulova Watch Co. v. Albertson's Inc., dba Bosko Super Stores, Trade Reg. Rep. (1962 Trade Cases), Para. 70,596.

The United States Time Corp. v. Ann & Hope Factory Outlet, Inc., 205 A. 2d 125 (1964).

Standard Drug Co., Inc., v. General Electric Co., 202 Va. 367, 117 S.E. 2d 289 (1960); cert. denied, 368 U.S. 4 (1961).

Hudson Distributors, Inc., v. The Upjohn Co. and Hudson Distributors, Inc., v. Eli Lilly Co., 174 Ohio 487, 190 N.E. 2d 460 (1963). According to the Ohio Constitution, except in the case of the affirmance of a judgment of the court of appeals declaring a law unconstitutional, no law shall be held unconstitutional by the State Supreme Court unless all but one of the judges so vote. In the 1963 decision of the Ohio Supreme Court, which upheld the act's constitutionality, three judges favored it and four judges were against it.

Bulova Watch Co. v. Zale Jewelry Co. of Cheyenne, et al. , 371 P. 2d 409, 415 (1962).

Weston Glen E. , “Fair Trade, Alias ‘Quality Stabilization’: Status, Problems and Prospects,” 22 A.B.A. Antitrust Section, 76, 92–94 (1963).

Bulova Watch Co. v. Zale Jewelry Co. of Cheyenne, et al., 371 P. 2d 409, 416 (1962).

Zale-Las Vegas, Inc., et al., v. Bulova Watch Company, 80 Nev. 483, 396 P. 2d 683 (1964).

See Conant Michael , “Resale Price Maintenance: Constitutionality of Nonsigner Clauses,” 109 U. Pa. L. Rev. 539 (1961), for a detailed legal discussion of these questions.

Olin Mathieson Chemical Corporation v. White Cross Stores, Inc., Nos. 6–9, 14, 18, 19, 414 Pa. 95, 98; 199 A. 2d 266 (1964).

Justice Sutherland, in upholding the principle of fair trade when it came before the Supreme Court in 1963, argued that “There is a great body of fact and opinion tending to show that price cutting by retail dealers is not only injurious to the good will and business of the producer and distributor of identified goods, but injurious to the general public as well” (Old Dearborn Distributing Co. v. Seagram Distillers Corp., 229 U.S. 183, 196 [1963]).

Olin Mathieson Chemical Corporation v. White Cross Stores, Inc., Nos. 6–9, 14, 18, 19, Trade Reg. Rep. (1963 Trade Cases), Para. 70,901, pp. 78,622 and 78,624 (Pa. Ct. Common Pleas).

Skaggs Drug Center, Inc., v. Union Carbide & Carbon Corp., 139 Mont. 15, 24; 359 P. 2d 644 (1961).

Eli Lilly and Company v. Sav-on-Drugs, Inc., et al., 366 U.S. 276 (1961). This was a 5–4 decision. The dissenting opinion held that the detail men were simply “drumming up” interstate business.

G.E.M., Inc., v. Plough, Inc., 228 Md. 484, 180 A. 2d 478 (1962).

Eli Lilly and Company v. Sav-on-Drugs, Inc., et al., 57 N.J. Super. 291, 299 (1959), referring to that state's Supreme Court approval of the idea in A & M Trading Corp. v. Pennsylvania RR. Co., 13 N.J. 516 (1953).

The jurisdiction for enforcement of fair trade may be the federal courts when the suit is between citizens of different states and where the matter in controversy exceeds the value of $10,000 (28 U.S.C. Sect. 1332[a][1] 1952).

Corning Glass Works v. Louis Perloff, Trade Reg. Rep. (1961 Trade Cases), Para. 69,945 (D.C. E. Pa.).

Schering Corp. v. Sun Ray Drug Co., et al., 320 F. 2d 72 (1963).

Morris Shuman, David Gever, Thomas Shuster, Maurice Asher and Stanley Komisar v. Bernie's Drug Concession, Inc., Trade Reg. Rep. (1961 Trade Cases), Para. 70,155 (Pa. Ct. Common Pleas).

Hudson Distributors, Inc., v. Eli Lilly & Company, 33 Ohio Op. 2d 104, 209 N.E. 2d 234 (1965).

Parke, Davis & Co. v. Jarvis' Drug Co., Inc., 208 F. Supp. 350, 353 (1962).

Ibid., at 352.

Eastman Kodak Co. v. Federal Trade Commission, 158 F. 2d 592 (1946); cert. denied, 330 U.S. 828 (1947).

The Gillette Company v. White Cross Discount Centers, Inc., 29 Pa. D. and C. 2d 759 (1962). It is of interest to note that another lower Pennsylvania court, less than a year later, found that there was fair and open competition in Gillette's markets, including that for razor blades. In this second decision, the only evidence referred to support the existence of this competition was Gillette's extensive advertising in various media, including television, radio, and the newspapers in the area (The Gillette Co. v. Warner Stores Co., Trade Reg. Rep. [1963 Trade Cases], Para. 70,859 [Pa. Ct. Common Pleas]).

United States v. McKesson and Robbins, Inc., 351 U.S. 305 (1956).

Esso Standard Oil Co. v. Secatore's, Inc., 246 F. 2d 17 (1957); cert. denied, 355 U.S. 834 (1957).

Johnson & Johnson v. Apollo Sales, Inc., 192 F. Supp. 779 (1961).

Johnson & Johnson v. Janel Sales Corp., 192 F. Supp. 780 (1961).

Parke, Davis & Co. v. Janel Sales Corp., 328 F. 2d 105, 106 (1954); cert. denied, 379 U.S. 835 (1964).

Johnson & Johnson v. Avenue Merchandise Corp., 193 F. Supp. 282, 289 (1961).

The Texas Co. v. Marco Di Gaetano, 39 N.J. 120, 132; 187 A. 2d 721 (1963).

Champion Spark Plug Company, a body corporate of the State of Delaware, v. T. G. Stores, Inc., a body corporate of the State of Maryland, 239 F. Supp. 941 (1965).

General Electric Co. v. Masters Mail Order Co. , 244 F. 2d 681 (1957); cert. denied, 355 U.S. 824 (1957).

Bissell Carpet Sweeper Co. v. Masters Mail Order Co. of Washington, D.C., Inc., 240 F. 2d 684 (1957).

Jantzen, Inc., v. E. J. Korvette, Inc., 219 F. Supp. 604 (1963).

Ibid.

The Gillette Company v. White Cross Discount Centers, Inc., et al., 29 Pa. D. and C. 2d 759 (1962).

Sunbeam Corporation v. Hess Brothers, 11 Pa. D. and C. 2d 643 (1957).

William A. Cooley, et al. v. White Cross Health and Beauty Aid Discount Centers, Inc., 229 Md. 343 (1962).

The Upjohn Company v. Vineland Discount Health & Vitamin Center, Inc., 235 F. Supp. 191 (1964).

The Gillette Company v. Two Guys from Harrison, Inc., 36 N.J. 342, 177 A. 2d 555 (1962).

Rubbermaid, Inc., v. Claber Distributing Co. of Cleveland, Ohio, Inc., 32 Ohio Op. 2d 289, 205 N.E. 2d 410 (1965).