“175 U.S. 211 Addyston Pipe and Steel Company VS United States, (1899)”
The arrangement was begun in behalf of the United States under the alleged Anti-Trust act of Congress passed July 2, 1890. It was commenced for the resolve of obtaining an embargo perpetually ordering the six corporations that were made defendants and were involved in the sale, manufacture and shipping of iron pipe at their individual places. The companies were refrained from further acting under or resounding the combination supposed in the petition to have entered into amid them. This which was quantified as illegal and unlawful under the Anti-Trust act since it was in restriction of occupation and commerce between the states and the like.
The argument is created on the proclamation that the Congress bestowed the power to legalize commerce and could insure consistency of regulation against contradictory and astute state legislation. Furthermore, the assertion that the composition guarantees right of private agreement to citizens upon commercial subjects was also stated. The extent was till guarantee functions as a restraint on the influence of Congress to order commerce (Joseph J. Simmons, Moses Silverman, Paul, Weiss and Rifkind). There are even some remarks as quoted from the views of Chief Justice Marshall, in Gibbons v. Ogden and Brown v. Maryland and from the sentiments of other justices of the court in other relevant cases such as The State Freight Tax. The effect to which empowering the Congress to regulate the interstate commerce was a deniable directive against the conflicting state legislation. A further statement is quoted from Dubuque & S.C.. R. Co. v. Richmond that Congress’s power to control commerce was never envisioned to be implemented to interfere with private agreements which were not designed at the time to create impairments to commerce. It was also stated that the evidence available showed that contract in the case was not as intended.
Basis for Ruling
For the resolution of the dispute, the contract in query does straightaway and extensively operated as restraints and regulations on interstate commerce. It was still insisted by the plaintiffs that the enquiry be of true construction of the Constitution and the influence of Congress to control interstate commerce should be limited to defense from performances of interference by the state legislature. Alternatively, by the means of regulating the authority of the state by any political portion that included congressional power over public carriers, gas, elevator and water companies for some reasons. However, it did not include the overall power to impede with or forbid the private agreements between the citizens (Thomas E. Kauper). Although, the agreements are interstate commerce for the purpose but direct the substantial obstruction to regulate commerce.
Conduct in Question
The dispute was established on the assertion that the motive for empowering the Congress was to regulate commerce and to insure consistency of directive against conflicting and judicious state legislation. The extra proclamation which the Constitution laid freedom of private agreement to citizens’ lies on commercial matters and their extent guaranties a limitation on the control of Congress to normalize commerce. It is unquestionably a fact that one of the reasons for empowering the Congress to control interstate commerce was to state the extracts from the views of the court in the above cited cases (United States Vs. Topco Associates Inc).
The many reasons may have been the creators of the Constitution to rest the power to control interstate commerce in Congress. However, the impact or bounds of the extent of the rule could be the reason itself.
The defendants were in their grouping and were capable of depriving the people in a large area the advantages that were accumulating to them. These companies could keep their prices just minimal enough so to avoid rivalry by the eastern producers and compel the people to pay the increased prices over what was originally the price. The pricing strategy was almost equal to the benefit of freight prices liked by the defendants over their competitors. The defendants developed the power of voluntarily approving the sale prices permanent by the committee and would allowed the uppermost bidder an undisclosed sale pool to be the lowest bidder of all the public hire. The limit actually forced the companies but did not insure the United States and thus was not a comprehensive cartel. It was mitigated by the panic of competition and impacted only a portion of the price.
Effect of the Defendant’s Conduct
There was no specific agreement about the furnishing of pipe and the pricing at which it should be equipped to the observation of the parties. The grouping at the period of its creation was still the intention and was the drive behind the combination to directly combine the increase the price. The straight and instant result of the grouping was thus, unavoidably a limit on interstate commerce with regards to the articles produced by any of such companies. They were not allowed to transport them outside the state in which they were produced. The defendants because of this grouping and agreements would only transport their produce outside the state in which they were producing them and delivered to another state only upon the terms and provisions of such groupings.
Initial legal action taken against or in-favor of the Defendant
There is no doubt that the direct and instant impact of the contract or grouping amongst the particular dealers in a service is to extinguish competition between themselves and competitors. The companies because of their contract or grouping would get increased prices for them and such contracts amounted to a limit of trade in their commodity. If the contract was for the sale of the product then for its shipment to another state a question of interstate commerce would arise. Although, the seller would agree to produce it but enter into an agreement to fulfill the order under his contract. In such situations the grouping of the eccentric would properly be named a grouping in limit of interstate commerce and not just related to production (Armentano, Dominick T).
The model of Structure-Conduct-Performance
In respect of the defendants as may be located in and carry on their business in the same manner which the pipe providing for in a specific agreement was delivered. The delivery, transportation and sale of the pipe by these under their agreement would be a deal solely within the state. The decree would not be applied onto them in such a case. The companies may create any grouping they like with orientation to the planned contract but it must take place in some transient state thus eventually obtained (U.S. Supreme Court).
The fact that the proposal termed the supply of pipe in the same formal where some of the accused existed and carried on the business would be adequate. As far as the performance of Congress is concerned the permission of the defendants to cartel with respect to the planned contract for the supply of the pipe. The right would not be impacted by the fact that agreement may be then awarded to a company external to the state of the lowest bidder (Bensel, Richard Franklin). Precisely, the right to cartel in respect to an offer for pipe deliverable in the native state could not be touched by the Federal control resultant from the commerce article of the Constitution (McChesney, Fred).
The degree of the prevailing decree comprises of its scope and enjoys the defendants, thereby located from conjoining in respect to the agreements for selling pipe in the native states. It was altered and limited to that share of the grouping or agreement which was interstate in its appeal.
U.S. Supreme Court.“Addyston Pipe and Steel Co. v. United States 175 U.S. 211 (1899)”, 2015. Web. 19 June 2015.
Thomas E. Kauper. “The Sullivan Approach to Horizontal Restraints.” California Law Review, Vol 75(3), May 1987. Web. 19 June 2015.
Joseph J. Simmons, Moses Silverman, Paul, Weiss and Rifkind. “Brief Amici Curiae of Law Professors in Support of Petitioner”. Wayerhauser Company Petitioner V. Ross-Simmons Harwood Lumber Company, Inc. Respondent. 24 August 2006. Web. 19 June 2015.
United States Vs. Topco Associates Inc. Supreme Court of the United States. 1972. Division Of Territories etc. Web. 19 June 2015.
Bensel, Richard Franklin. The Political Economy of American Industrialization, 1877-1900. Cambridge University Press: 6 November 2000.
Armentano, Dominick T. Antitrust: The Case for Repeal. Ludwig Von Mises Institute.
McChesney, Fred. The Causes and Consequences of Antitrust: The Public-Choice Perspective. University of Chicago Press. 15 March 1995.