326 U.S. 1 (1945)
The publishers of more than 1,200 newspapers are members of the Associated Press, a cooperative association incorporated under the Membership Corporation Law of the State of New York.1 Its business is the collection, assembly and distribution of news originally obtained by its direct employees, member newspaper employees, and foreign agencies such as the Canadian Press.2 Distribution occurs through interstate channels under an assessment plan that yields no profit to the association.3
All members consented to By-Laws that prohibit selling news to non-members and grant existing members powers to block competitors from admission.4 These provisions originated with an absolute veto in the prior Illinois corporation.5 They were altered after an Illinois Supreme Court decision to a right of protest requiring a four-fifths vote.6 The By-Laws were further amended in 1931 and 1942 to require competing applicants to pay ten percent of prior assessments, relinquish exclusive rights, and obtain a majority vote.7 The association also entered a contract with the Canadian Press under which each party agreed to furnish news exclusively to the other.8
The United States filed a bill in federal district court charging that the By-Laws and contract constituted a combination and conspiracy in restraint of trade in news among the states and an attempt to monopolize part of that trade.9 A three-judge district court considered cross-motions for summary judgment under Rule 56.10 It found no genuine disputes as to material facts because the defendants admitted the By-Laws and contract terms without denial of their effects on non-members.11 The court entered a decree enjoining continued observance of the restrictive membership provisions while temporarily enjoining the Canadian contract pending abandonment of those restrictions.12
Both sides appealed directly to the Supreme Court, which heard argument on December 5 and 6, 1944.13 The defendants assigned error to the grant of summary judgment and contended genuine issues of fact remained.14 Yet they identified no disputed facts essential to determining the validity of the admitted arrangements.15
Whether the By-Laws of the Associated Press and its contract with the Canadian Press violate the Sherman Anti-Trust Act?16
The Sherman Anti-Trust Act, 26 Stat. 209, prohibits combinations and conspiracies in restraint of trade and commerce among the states and attempts to monopolize any part of that trade.17 Arrangements that by concerted action block competitors from access to essential facilities or products through membership restrictions and exclusive contracts constitute unlawful restraints when they hinder the free flow of commerce, regardless of whether monopoly is complete.18
Yes. The By-Laws and contract violate the Sherman Anti-Trust Act.19 The publishers of more than 1,200 newspapers formed the Associated Press as a cooperative association under New York law.20 Its business is the collection, assembly and distribution of news obtained by its employees, member newspaper employees, and foreign agencies such as the Canadian Press.21 Distribution occurs through interstate channels under an assessment plan yielding no profit.22
All members consented to By-Laws that prohibit selling news to non-members and grant existing members powers to block competitors from admission. These provisions originated with an absolute veto in the prior Illinois corporation. They were altered after an Illinois Supreme Court decision to a right of protest requiring a four-fifths vote. The By-Laws were further amended in 1931 and 1942 to require competing applicants to pay ten percent of prior assessments, relinquish exclusive rights, and obtain a majority vote. The association also entered a contract with the Canadian Press under which each party agreed to furnish news exclusively to the other.
The United States filed a bill in federal district court charging that the By-Laws and contract constituted a combination and conspiracy in restraint of trade in news among the states and an attempt to monopolize part of that trade. The district court found that the By-Laws in and of themselves were contracts in restraint of commerce designed to stifle competition in the newspaper publishing field.23 It found that AP's restrictive By-Laws had hindered and impeded the growth of competing newspapers.24 The court held the membership restrictions unlawful and the Canadian contract unlawful when taken in connection with those restrictions.25
The admitted terms of the By-Laws block all newspaper non-members from any opportunity to buy news from AP or any of its publisher members.26 The erection of obstacles to membership makes it difficult if not impossible for non-members to obtain AP news or news from any of the more than twelve hundred publishers.27 These arrangements directly restrain interstate commerce in news as prohibited by the Act.28
The By-Laws and contract violate the Sherman Anti-Trust Act.
Related opinions on this issue
Justice Douglas joined the opinion of the Court but added words to indicate the narrow compass of the decision.29 Every exclusive arrangement in the business field may produce a restraint of trade, yet the Sherman Act includes only those restraints that are unreasonable.30 An exclusive arrangement between a newspaper in Seattle and one in New York might be innocent standing alone.31
Such an arrangement might nevertheless be part of a scheme that violates the Act in one of two respects.32 It might be part of the machinery utilized to effect a restraint of trade in violation of section 1.33 The exclusive arrangement employed by the Associated Press had the necessary effect of hindering or impeding competition with members of the combination.34
The District Court properly enjoined continuance of the exclusive arrangement until the restraint effected by the by-laws had been eliminated.35 That injunction served as an interim measure pending revision of the by-laws.36
Justice Frankfurter would sustain the judgment substantially for the reasons given below by Judge Learned Hand.37 The Associated Press is in essence the common agent of about 1,300 newspapers for the interchange of news which each paper collects in its own territory.38 The by-laws in controversy operate in substance as a network of agreements among the members whereby they mobilize the interest of all against the danger of competition to each by a present or future rival.39
While a member newspaper no longer has an absolute veto power, for practical purposes there remain effective barriers to admission based solely on grounds of business competition.40 Indubitably these are agreements in restraint of commerce.41 The decisive question is whether the restraint is unreasonable.42
The restrictions are unreasonable because they offend the basic functions which a constitutionally guaranteed free press serves in the nation.43 The interest of the public is to have the flow of news not trammeled by the combined self-interest of those who enjoy a unique constitutional position precisely because of the public dependence on a free press.44
Joined by The Chief Justice
Justice Roberts dissented and concluded that the judgment should be reversed.45 In respect of most of the questions involved he might rest on the discussion by Judge Swan in his dissenting opinion in the District Court.46 The novelty and importance of the questions moved him to state his views in detail.47
The members of AP were within their legal rights in forming a cooperative organization with facilities for the collection and exchange of news and in limiting membership therein.48 Members of an incorporated society may extend the privilege of membership or withhold it on such terms as they see fit.49 The Sherman Act does not require them to furnish news copy on equal terms to all newspapers desiring it.50
The question is whether the Sherman Act precludes such a cooperative arrangement and renders those who participate liable to furnish news copy on equal terms to all newspapers which desire it.51 The court's opinion blends and mingles statements of fact, inferences and conclusions in such fashion that it is impossible to deduce more than that orderly analysis and discussion of facts relevant to any one of the possible methods of violation of the Sherman Act is avoided.52
Justice Murphy dissented and stated that the evidence falls far short of proving a program to hamper or destroy competition.53 If it were made clear by the undisputed facts that by adopting their by-laws the members of the Associated Press were engaged in a program to hamper or destroy competition he could accept the decision reached by the Court.54 But the evidence introduced falls far short of proving such a program and hence the decision has grave implications relative to governmental restraints on a free press.55
The admitted facts do not constitute clear evidence of an alleged restraint of trade sufficient to justify governmental interference with the Associated Press membership rules on a motion for summary judgment.56 The issues are too grave and the possible consequences are too uncertain not to require the Government to prove its case by more probative and convincing evidence than it has submitted so far.57 Accordingly he was unable to agree that this case should be disposed of in favor of the Government on a motion for summary judgment.58
Whether summary judgment is appropriate in this case under Rule 56 when the defendants admit the existence and terms of the By-Laws and contract?59
Summary judgment is appropriate where defendants admit the existence and terms of the challenged arrangements and identify no disputed facts essential to determining their validity.60
Yes. Summary judgment is appropriate under Rule 56.61 The United States filed a bill in federal district court charging violations of the Sherman Anti-Trust Act through the By-Laws and contract.62 A three-judge district court considered cross-motions for summary judgment under Rule 56. It found no genuine disputes as to material facts because the defendants admitted the By-Laws and contract terms without denial of their effects on non-members. The court entered a decree enjoining continued observance of the restrictive membership provisions while temporarily enjoining the Canadian contract pending abandonment of those restrictions.
Both sides appealed directly to the Supreme Court, which heard argument on December 5 and 6, 1944. The defendants assigned error to the grant of summary judgment and contended genuine issues of fact remained. Yet they identified no disputed facts essential to determining the validity of the admitted arrangements. The only assignments of error relating to this question were that the court erred in holding there was no genuine issue as to any material fact and in not entering summary judgment against the plaintiff.63
None of the appellants pointed to any disputed facts essential to a determination of the validity or invalidity of the By-Laws and the contract.64 Admitting the existence of both, their answers and affidavits defended the legality of the restrictive arrangements but did not deny that non-members were denied access to news of AP and its member publishers by reason of the concerted arrangements.65 The district court carefully abstained from consideration of any evidence which might possibly be in dispute.66 There was no injury to any of the appellants as a result of the summary proceedings since the restrictive arrangements admitted were sufficient to justify summary action.67
Summary judgment is appropriate under Rule 56 when the defendants admit the existence and terms of the By-Laws and contract.68
Whether the First Amendment protects the Associated Press arrangements from application of the Sherman Act?69
The First Amendment guarantees freedom of the press but does not afford non-governmental combinations a refuge when they impose restraints upon that constitutionally guaranteed freedom.70 Freedom to publish is guaranteed, but freedom to combine to keep others from publishing is not.71 The Amendment provides powerful reasons for applying the Sherman Act to protect the widest possible dissemination of information from diverse and antagonistic sources.72
No. The First Amendment does not protect the Associated Press arrangements from application of the Sherman Act.7374 The publishers of more than 1,200 newspapers are members of the Associated Press whose business is the collection, assembly and distribution of news through interstate channels.75 All members consented to By-Laws that prohibit selling news to non-members and grant existing members powers to block competitors from admission. The association entered an exclusive contract with the Canadian Press.76
The United States charged that these arrangements violated the Sherman Anti-Trust Act.77 The district court held the By-Laws unlawfully restricted admission to membership and violated the Act insofar as they clothed a member with powers to impose conditions upon admission of a business competitor.78 The Supreme Court rejected the contention that application of the Sherman Act to this association of publishers constitutes an abridgment of the freedom of the press.79 It held instead that the First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public and that a free press is a condition of a free society.80
The Amendment does not sanction repression of freedom by private interests through combinations to restrain trade in news and views.81 It affords not the slightest support for the contention that such a combination has any constitutional immunity from the Sherman Act.82
The First Amendment does not protect the Associated Press arrangements from application of the Sherman Act.
Whether the District Court's decree enjoining observance of the restrictive By-Laws and the Canadian contract pending changes is proper in scope?83
In an antitrust case the fashioning of a decree to prevent future violations and eradicate existing evils rests largely in the discretion of the court.84 A decree that enjoins observance of restrictive membership By-Laws and temporarily enjoins an exclusive contract pending abandonment of those restrictions is proper when the findings justify the injunction and the court retains the cause for further proceedings if needed.85
Yes. The District Court's decree is proper in scope.86 The district court held that the By-Laws unlawfully restricted admission to AP membership and violated the Sherman Act insofar as the By-Laws' provisions clothed a member with powers to impose or dispense with conditions upon the admission of his business competitor.87 It further held that the Canadian contract was an integral part of the restrictive membership conditions.88 The court enjoined continued observance of the restrictive membership provisions and temporarily enjoined the Canadian contract pending abandonment of those restrictions.89
The Supreme Court approved the decree, interpreting it to mean that AP news is to be furnished to competitors of old members without discrimination through By-Laws controlling membership or otherwise.90 The court held that the findings justified this phase of the injunction and that the fashioning of the decree rested largely in the discretion of the district court.91 The court retained the cause for such further proceedings as might become necessary if the decree should not prove adequate.92
The government appealed from the refusal to hold the items unlawful standing alone and sought a broader decree.93 The Supreme Court was unable to say that the decree should have gone further than it did given the narrow issues presented on undisputed facts.94
The District Court's decree enjoining observance of the restrictive By-Laws and the Canadian contract pending changes is proper in scope.95
Whether the District Court should have held the By-Laws and Canadian contract unlawful standing alone rather than only in combination?96
The Sherman Anti-Trust Act reaches combinations whose necessary effect is to restrain trade even if individual features might be lawful standing alone.97 A district court acts within its discretion when it declines to hold By-Laws and an exclusive contract unlawful standing alone but enjoins them when taken in connection with restrictive membership agreements that the court has found violate the Act.98
No. The District Court should not have held the By-Laws and Canadian contract unlawful standing alone.99 The district court held the By-Laws unlawfully restricted admission to membership and violated the Sherman Act insofar as they clothed a member with powers to impose conditions upon admission of a competitor.100 It held the Canadian contract unlawful when taken in connection with the restrictive membership conditions.101 It declined to hold these By-Laws and the agreement with Canadian Press illegal standing by themselves and consequently enjoined their observance temporarily pending AP's obedience to the decree enjoining the restrictive membership agreements.102
The government's appeal sought to have each item held a violation standing alone and the decree broadened to permanently enjoin them.103 The Supreme Court held that the fashioning of the decree rested largely in the discretion of the district court and that on the narrow issues presented on undisputed facts it could not say the decree should have gone further.104 The district court retained the cause for further proceedings if the decree proved inadequate.105
The findings justified the phase of the injunction that was entered.106 The court below properly limited its holding to the combination of the provisions rather than declaring each unlawful in isolation.107
The District Court properly declined to hold the By-Laws and Canadian contract unlawful standing alone.108