Rev. Stats. Ann. (Remington, 1932) Section 2382 provides (in part) that it is illegal for two or more persons to conspire to prevent another from entering a lawful trade or calling by force, threats, or intimidation, or by interfering or threatening to interfere with the property of another, or to conspire to commit any act injurious to trade or commerce. Section 2384 provides that every corporation which shall violate any provision of Sec. 2382 shall forfeit any right and franchise to do business in Washington. Judicial Decisions Application of the Common Law. The common-law doctrine against restraints of trade was adopted by the courts of Washington during its early days as a Territory. In a case involving an agreement by the parties not to run steamboats in the territory of the other, the court held this was an attempt by each party to secure a monopoly in their respective territories, and that such a monopoly would not be upheld. Oregon Steam Navigation Co. v. Calvin, 1 Wash. T. 283 (1870). Application of Constitutional Provisions. Where three corporations were engaged in the abstract business, and one of them acquired the business of the second and also leased the abstract plant of the third, the contract was held not within purview of art. XII, sec. 22, of the constitution. The court stated that as the records were free to all, there could be no monopoly and no injury to the public. Lumberman's Trust Co. v. Title Insurance, etc., Co., of Tacoma, 248 Fed. 212 (C. C. A. 9th, 1918) (1918). In a case involving a combination of nine door-manufacturing corporations controlling 85 percent of all fir doors exported from the States of Washington and Oregon, the court held that manufacturing of doors was not interstate commerce and that the combination came within purview of the constitutional prohibition. The combination contended that they were exempted from the State's monopoly laws under the Webb-Pomerene Act (40 Stat. 516, 15 U. S. C. A., secs. 61 to 65). But the court held that the common law and the constitutional prohibition against monopolies applied to the manufacture of the commodities and not to the commerce in the commodities involved. American Export Door Corporation v. Gauger Co., 154 Wash. 514, 283 Pac. 462 (1929). However, an agreement between 108 manufacturers and dealers of red cedar shingles all of whom manu factured their products in the State of Washington was held to be a combination in interstate commerce. Gibbs. v. McNeeley, 118 Fed. 120 (C. C. A. 9th, 1902) (1902), reversing 107 Fed. 210 (1901). The fact that the parties to the combination were all residents of the State of Washington was held immaterial. As to Monopolies Created by the State. Const. art. XII, sec. 22 is not applicable to the State's operation, nor does it prohibit the State itself from creating and maintaining a monopoly. The constitutional provision was intended to apply only to private combinations of persons or associations engaged in fixing prices and limiting production against public welfare (dicta). The Washington Agricultural Adjustment Act, which made marketing agreements under the Agricultural Adjustment Act the standard of fair competition for intrastate transactions, was declared invalid not under art. XII, sec. 22, but on the ground of an unconstitutional delegation of legislative power. Chas. Uhden, Inc. v. Greenough, 181 Wash. 412, 43 Pac. (2d) 983 (1935). In a suit to restrain the defendant from constructing a boom on a river near plaintiff's location, the defendant argued that if it were restrained, the plaintiff would obtain a practical monopoly of booms on the river in violation of the constitution. The court stated that if the extent of the river was such as to reasonably permit only one boom there was no violation of the constitution; the public interest being protected in that the State fixed the minimum and maximum charges. Nicomen Boom Co. v. North Shore, etc. Co., 40 Wash. 315, 82 Pac. 412 (1905). Cert. den. 205 U. S. 548 (27 Sup. Ct. 790, 51 L. Ed. 924) (1907), 212 U. S. 406, 29 Sup. Ct. 355, 53 L. Ed. 574 (1908). See also Seattle & Lake Washington Waterway Co. v. Seattle Dock Co., 35 Wash. 503, 77 Pac. 845 (1904) aff'd (per curiam) 195 U. S. 624, 25 Sup. Ct. 789, 49 L. Ed. 350 (1904). An act (Rem. 1935 Supp., secs. 5671-1 to 11, Laws, 1935, c. 1) granted to all persons who held licenses in 1932 and 1933 for life, the right to fish for salmon with gill nets prohibiting such right to all other persons. It was contended in a suit challenging the constitutionality of the act, that this violated Const. art. XII. The court upheld this contention (dicta), but decided the case on other constitutional questions. State ex rel. Bacich v. Huse, 187 Wash. 75, 59 Pac. (2d) 1101 (1936). As to Public Service Corporations. Several cases involving exclusive franchises for public service corporations have been challenged in the courts on the ground that Const. art. XII was violated. Since the combination under the exclusive franchise was, however, under the regulation of a public authority, the public interest was protected, and the constitutional prohibition was held not to have been contravened. A contract between two competing bus companies to the effect that one of them was to assign its rights to its certificate of convenience and necessity, subject to the approval of the public service commission, was held valid and not prohibited by art. XII, sec. 22, of the State constitution. Inter-City Co. v. Bothell Bus Co., 139 Wash. 674, 247 Pac. 1040 (1926). Cf. Manson v. Hunt, 82 Wash. 291, 144 Pac. 45 (1914) involving a contract between two competing steamship companies, whereby one of them agreed to withdraw its boats for three years for a consideration of $1,500. This was held to be in violation of Const. art. XII, sec. 22. See Contracts not to Compete, infra. See also State ex rel. Department of Public Works v. Inland Forwarding Corporation, 164 Wash. 412, 2 Pac. (2d) 888 (1931). Authorization permitting the acquisition of existing railway systems contained in a franchise granted by ordinance to a street railway line is not in violation of Const. art XII, sec. 22 of the State constitution as the provisions of this section were not intended as a limitation on the legislative power to authorize consolidation of utilities when deemed necessary for the public interest. Wood v. City of Seattle, 23 Wash. 1, 62 Pac. 135 (1900). Refusal by a railway to construct a spur connection to a warehouse was not in violation of Const. art. XII, sec. 22, of the State constitution. The plaintiff cannot compel construction of such facilities as have been furnished to other warehousemen, since the services rendered to him by the railroad are reasonably adequate; the public carriers being required to furnish only such facilities as are reasonably necessary. No evidence of a monopoly or combination between the other warehousemen and railroad company in restraint of trade having been presented, the petition to compel construction of such spur was therefore denied. Northwestern Warehouse Co. et al. v. Oregon Ry. Nav. Co., 32 Wash. 218, 73 Pac. 388 (1903). An existing ferry company operating under a certificate granted to it under Rem. Rev. Stat. secs. 10361-1 and 10361-2, obtained a restraining order against threatened competition by another ferry company. The court held that the grant of an exclusive franchise does not violate article XII of the State constitution as competition in public services may in most instances harass rather than promote public welfare. The State is authorized to grant such rights, privileges, and franchises as will best protect the public interest. Kitsap County Transp. Co. v. Manitou Beach-Agate Pass Ferry Assn., et al., 176 Wash. 486, 30 Pac. 2d, 233 (1934). Application of Statutes. An information charging that defendants, intending to prevent competition, agreed not to compete with one another nor sell milk below certain stipulated prices clearly charges a crime of conspiracy to accomplish an unlawful purpose. State v. Erickson, 54 Wash. 472, 103 Pac. 796 (1909). See also State v. Scollard, 126 Wash. 335, 218 Pac. 224 (1923). The defendant agency consisting of a substantial number of ice manufacturers refused to deal with plaintiff, except on certain conditions. Plaintiff dealer unable to get his regular supply of ice elsewhere brought action for damages. The court held that the agency may deal as any other person with whomsoever it chooses. Manufacturers choosing to reserve their wholesale business to a mutually exclusive agency are not engaged in such activity as violates any law or contravenes public policy. There was no evidence of a combination to restrain trade nor of an attempt to create a monopoly. The court did not pass on the price-fixing aspect of the agreement as that question was not before the court. Powell v. Graham, 183 Wash. 452, 48 Pac. 2d, 952 (1935). The court will not entertain a suit for the forfeiture of a charter or issue an order for other relief against an allegedly unlawful corporation unless judgment on the merits has been entered. State ex rel. Hamilton v. Standard Oil Co. of California, 176 Wash. 231, 28 Pac. (2d) 790 (1934). On the merits of the case the court held that the combination of dealers were privileged to buy and sell to whomever they pleased, that the fixing of reasonable prices between manufacturers and dealers was not unlawful and that certain competitors. chose to follow another's competitor's prices "does not establish suppression of competition or show sinister domination." The case was dismissed on ground that the evidence did not sustain the alleged charges. Id., 190 Wash. 496, 68 Pac. 2d, 103 (1937). B. EXCEPTIONS TO GENERAL ANTITRUST LAWS Rev. Stat. Ann. (Remington, Supp., 1938) Resale Price Maintenance Sections 5854-1 to 5854-16 provide that contracts fixing the resale price of trade-marked commodities in open competition with similar commodities are valid. The act is expressly inapplicable to agreements, between producers, between wholesalers, or between retailers. Sec. 5854-14. See Vol. State Price Control Legislation: Resale Price Maintenance. MARKETING LAWS SURVEY series. Rev. Stats. Ann. (Remington, 1932) Section 7614 provides that no person shall be prosecuted for entering into or carrying on any lawful arrangement, agreement, or combination between themselves made with a view of lessening the number of hours of labor or increasing wages or bettering the conditions of working men and women, or for any lawful act done in pursuance thereof. C. SPECIAL ANTITRUST LAWS 1. Special Industry Antitrust Acts CONSTITUTIONAL PROVISIONS Const. art. XII, sec. 14, prohibits combinations between common carriers and owners of vessels that make port in this State whereby the earnings of the one doing the carrying are to be shared by the one not doing the carrying. Const. art. XII, sec. 16, provides that no railroad corporation shall consolidate with any other railroad corporation owning a competing line. STATUTORY PROVISIONS Rev. Stat. Ann. (Remington, 1932) Section 10463 provides that a railroad may consolidate its stock, property, or franchises with any other railroad corporation other than one owning a competing line. This section further prohibits the purchase, either directly or indirectly, of any stock or interest in a railroad corporation owning or operating a competing line. Section 10464 legalizes all former consolidations of railroad corporations except those where the railroads involved were competing lines. Rev. Stat. Ann. (Remington, Supp., 1939) Copyrights Sections 3802- to 3802-12 provide that combinations of copyright holders to (1) fix prices on their copyrighted works, (2) collect fees, (3) issue blanket licenses for the right to commercially use copyrighted works are prohibited. Such persons may combine if they issue licenses on rates assessed on a per piece system of usage provided that rates charged are not in excess of those charged in other States. A complete list of copyrighted works of a combination must be filed with Secretary of State and is to be available to the public. This list must be filed by foreign and nonresident copyright holders if their copyrighted works are used in this State. Individual owners are exempted from this requirement. The transmission and production of copyrighted works are affected with the public interest and |