United States v. Borden Co.

Background

The United States sued ten Chicago-area dairies, accusing them of conspiring to restrain milk sales and of illegal price discrimination. Five small defendants earlier agreed to a consent decree in a private suit. After the government put on its case against the remaining five, the district judge dismissed the Sherman Act conspiracy claims and refused the government an injunction on the Clayton Act price-discrimination charge because of the earlier private decree.

Reasoning

The Court first considered whether excluded evidence might have changed the outcome on the conspiracy charge. Even assuming the trial judge erred in some evidentiary rulings, the Court concluded the government still failed to prove a Sherman Act conspiracy and affirmed that dismissal. The Court then addressed the judge’s refusal to enjoin price discrimination. It held that a private consent decree cannot automatically prevent the Government from seeking an injunction. The Justice Department has a distinct public duty to stop antitrust violations, and private suits are meant to supplement—not replace—public enforcement. Denying government relief solely because a private decree exists was an abuse of discretion.

Real world impact

The decision lets the Government pursue injunctive relief even when a private consent decree already exists, so public enforcement can address the wider public interest. The case will go back to the district court to reconsider the request for an injunction under the Clayton Act with the Court’s guidance. Businesses in the milk trade and other industries should expect that private settlements will not automatically shield them from government antitrust injunctions.