Supreme Court Backs FTC Order Against Pacific Coast Paper Price Lists

The Supreme Court ruled Monday that the Federal Trade Commission may bar paper wholesalers on the Pacific Coast from using association price lists across state lines. Justice Butler wrote the opinion in Federal Trade Commission v. Pacific States Paper Trade Association, which reverses an appeals court decision that had set aside two paragraphs of the commission’s order.

Wholesalers in Seattle-Tacoma, Spokane, Portland, San Francisco and Los Angeles belonged to local associations that circulated uniform price lists for sales within each state. Salesmen carried the lists across state lines and quoted from them elsewhere. The Court said the commission could reasonably infer that habitual use of the lists lessened competition, and that an understanding, express or tacit, that agreed prices will be followed is enough to violate the law.

The Court also held that when a seller chooses to ship from a mill outside the state, the sale to an in-state retailer is part of interstate commerce. Commerce among the states, Butler wrote, is not a technical legal conception but a practical one. The Court declined to examine other parts of the order, saying the respondents were not entitled to review of them as of right.