NORTH CAROLINA

I. TRUSTS, COMBINATIONS, AND MONOPOLIES

A. GENERAL ANTITRUST LAWS

CONSTITUTIONAL PROVISIONS

Const. art. I. Sec. 7. Exclusive emoluments.-No man or set of men are entitled to exclusive or separate emoluments or privileges from the community but in consideration of public services.

Const. art. I. Sec. 31. Perpetuities, etc.-Perpetuities and monopolies are contrary to the genius of a free state and ought not be allowed.

STATUTORY PROVISIONS

Code Ann. (Michie, 1939)

Sec. 2559. Combinations in restraint of trade illegal.-Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce in the State of North Carolina is hereby declared to be illegal. Every person or corporation who shall make any such contract expressly or shall knowingly be a party thereto by implication, or who shall engage in any such combination or conspiracy, shall be guilty of a misdemeanor, and upon conviction thereof such person shall be fined or imprisoned, or both, in the discretion of the court, whether such person entered into such contract individually or as an agent representing a corporation, and such corporation shall be fined in the discretion of the court not less than one thousand dollars. (1913, c. 41, sec. 1.)

Sec. 2560. Any restraint in violation of common law included.— Any act, contract, combination in the form of trust, or conspiracy in restraint of trade or commerce which violates the principles of the common law is hereby declared to be in violation of the preceding section of this chapter. (1913, c. 41, sec. 2.)

Sec. 2561. Burden of proof as to reasonableness on defendant. All contracts, combinations in the form of trust, and conspira

cies in restraint of trade or commerce prohibted in the two preceding sections of this chapter are hereby declared to be unreasonable and illegal, unless the persons entering into such contract, combination in the form of trust, or conspiracy in restraint of trade or commerce can show affirmatively upon an indictment or civil action for violation of the preceding sections of this chapter that such contract, combination in the form of trust, conspiracy in restraint of trade or commerce does not injure the business of any competitor, or prevent any one from becoming a competitor because his or its business will be unfairly injured by reason of such contract, combination in the form of trust, or conspiracy in restraint of trade or commerce. (c. 41, sec. 3.)

Sec. 2562. Contracts to be in writing.-No contract or agreement hereafter made, limiting the rights of any person to do business anywhere in the state of North Carolina shall be enforceable unless such agreement is in writing duly signed by the party who agrees not to enter into any such business within such territory: Provided, nothing herein shall be construed to legalize any contract or agreement not to enter into business in the state of North Carolina, or at any point in the state of North Carolina, which contract is now illegal or which contract is made illegal by any other section of this chapter. (1913, c. 41, sec. 4.)

NOTE. For further treatment of sec. 2562, see Contracts Not to Compete, infra. Sec. 2563. Particular acts defined. In addition to the matters and things hereinbefore declared to be illegal, the following acts are declared to be unlawful, that is, for any person, firm, corporation, or association directly or indirectly to do or to have any contract, expressly or knowingly implied, to do any of the acts or things specified in any of the subsections of this section.

1. To agree or conspire with any other person, firm, corporation, or association to put down or keep down the price of any article produced in this state by the labor of others, which article the person, firm, corporation or association intends, plans, or desires to buy.

2. To make a sale of any goods, wares, merchandise, articles, or things of value whatsoever in North Carolina, whether directly or indirectly, or through any agent or employee, upon the condition that the purchaser thereof shall not deal in goods, wares, merchandise, articles, or things of value of a competitor or rival in the business of the person, firm, corporation, or association making such sales.

3. To willfully destroy or injure, or undertake to destroy or injure, the business of any opponent or business rival in the state of North Carolina with the purpose or intention of attempting to fix the price of anything of value when the competition is removed.

4. Who directly or indirectly buys or sells within the state, through himself or itself, or through any agent of any kind or as agent or principal, or together with or through any allied, subsidiary, or dependent person, firm, corporation, or association, any article or thing of value which is sold or bought in the state to injure or destroy or undertake to injure or destroy the business of any rival or opponent, by lowering the price of any article or thing of value sold, so low, or by raising the price of any article or thing of value bought, so high as to leave an unreasonable or inadequate profit for a time, with the purpose of increasing the profit on the business when such rival or opponent is driven out of business, or his or its business is injured.

5. Who deals in any thing of value within the state of North Carolina, to give away or sell, at a place where there is competition, such thing of value at a price lower than is charged by such person, firm, corporation, or association for the same thing at another place, where there is not good and sufficient reason, on account of transportation or the expense of doing business, for charging less at the one place than at the other, with the view of injuring the business of another. 6. Who is engaged in buying or selling any thing of value in North Carolina, to make or have any agreement or understanding, express or implied, with any other person, firm, corporation, or association, not to buy or sell such things of value within certain territorial limits within the state, with intention of preventing competition in selling or to fix the price or prevent competition in buying of such things of value within these limits: Provided, Nothing herein shall be construed to prevent an agent from representing more than one principal. But nothing in this proviso shall be construed to authorize two or more principals to employ a common agent for the purpose of suppressing competition or lowering prices: Provided, further, That nothing herein shall be construed to prevent a person, firm, or corporation from selling his or its business and goodwill to a competitor, and agreeing in writing not to enter the business in competition with the purchaser in a limited territory, as is now allowed under the common law: Provided, Such agreement shall not violate the principles of the common law against trusts and shall not violate the provisions of this chapter. (1913, c. 41, sec. 5.)

Sec. 2564. Violation a misdemeanor; punishment.-Any corporation, either as agent or principal, violating any of the provisions

For further treatment of sec. 2563, subsecs. (2) and (6), see Tying Contracts and Exclusive Dealing Arrangements and Contracts Not to Compete, infra. For further treatment of sec. 2563, subsecs. (3), (4), and (5), see vol. State Price Control Legislation: Antidiscrimination Legislation.

of the preceding section shall be guilty of a misdemeanor, and such corporation shall upon conviction be fined not less than one thousand dollars for each and every offense, and any person, whether acting for himself or as officer of any corporation or as agent of any corporation or person violating any of the provisions of this chapter shall be guilty of a misdemeanor and upon conviction shall be fined or imprisoned, or both, in the discretion of the court. (1913, c. 41, sec. 5.) Sec. 2565. Persons encouraging violation guilty.-Any person, being either within or without the state, who encourages or willfully allows or permits any agent or associates in business in this state to violate any of the provisions of this chapter shall be guilty of a misdemeanor, and upon conviction shall be punished as provided in the preceding section. (1913, c. 41, sec. 6.)

Sec. 2566. Continuous violations separate offenses. Where the things prohibited in this chapter are continuous, then in such event, after the first violation of any of the provisions hereof, each week that the violation of such provision shall continue shall be a separate offense. (1913, c. 41, sec. 7.)

Sec. 2567. Duty of attorney general to investigate. The attorney general of the State of North Carolina shall have power, and it shall be his duty, to investigate, from time to time, the affairs of all corporations doing business in this state, which are or may be embraced within the meaning of the statutes of this state defining and denouncing trusts and combinations against trade and commerce, or which he shall be of opinion are so embraced, and all other corporations in North Carolina doing business in violation of law; and all other corporations of every character engaged in this state in the business of transporting property or passengers, or transmitting messages and all other public-service corporations of any kind or nature whatever which are doing business in the state for hire. Such investigation shall be with a view of ascertaining whether the law or any rule of the North Carolina corporation commission is being or has been violated by any such corporation, officers or agents or employees thereof, and if so, in what respect, with the purpose of acquiring such information as may be necessary to enable him to prosecute any such corporation, its agents, officers, and employees for crime, or prosecute civil actions against them if he discovers they are liable and should be prosecuted. (1913, c. 41, sec. 8.)

Sec. 2568. Power to compel examination.-In performing the duty required in the preceding section, the attorney general shall have power, at any and all times, to require the officers, agents, or employees of any such corporation and all other persons having knowledge with respect to the matters and affairs of such corporations, to submit them

selves to examination by him, and produce for his inspection any of the books and papers of any such corporations, or which are in any way connected with the business thereof; and the attorney general is hereby given the right to administer oath to any person whom he may desire to examine. He shall also, if it may become necessary, have a right to apply to any judge of the supreme or superior court, after five days' notice of such application, for an order on any such person or corporation he may desire to examine to appear and subject himself or itself to such examination, and disobedience of such order shall constitute contempt, and shall be punishable as in other cases of disobedience of a proper order of such judge. (1913, c. 41, sec. 9.)

Sec. 2569. Person examined exempt from prosecution.-No person examined, as provided in the preceding section, shall be subject to indictment, prosecution, punishment, or penalty by reason or on account of anything disclosed by him upon such examination, and full immunity from prosecution and punishment by reason or account of anything so disclosed is hereby extended to all persons so examined. (1913, c. 41, sec. 9.)

Sec. 2570. Refusal to furnish information; false swearing.Any corporation unlawfully refusing or willfully neglecting to furnish the information required by this chapter, when it is demanded as herein provided, shall be guilty of a misdemeanor and fined not less than one thousand dollars: Provided, That if any corporation shall in writing notify the attorney general that it objects to the time or place designated by him for the examination or inspection provided for in this chapter, it shall be his duty to apply to the judge of the supreme or superior court, who shall fix an appropriate time and place for such examination or inspection, and such corporation shall, in such event, be guilty under this section only in the event of its failure, refusal or neglect to appear at the time and place so fixed by the judge and furnish the information required by this chapter. False swearing by any person examined under the provision of this chapter shall constitute perjury, and the person guilty of it shall be punishable as in other cases of perjury. (1913, c. 41, sec. 10.)

Sec. 2571. Criminal prosecution; solicitors to assist; expenses. The attorney general in carrying out the provisions of this chapter shall have a right to send bills of indictment before any grand jury in any county in which it is alleged this chapter has been violated or in any adjoining county, and may take charge of and prosecute all cases coming within the purview of this chapter, and shall have the power to call to his assistance in the performance of any of these duties of his office which he may assign to them any of