This is a direct appeal under § 238 of the Judicial Code, as amended by the Act of February 13, 1925, c. 229, 43 Stat. 936, from a final decree of the United States District Court of Colorado, three Judges sitting, granting a permanent injunction against the enforcement by a state officer of a state law, on the ground of its unconstitutionality. The bill was brought by the Frink Dairy Company, the Windsor Farm Dairy Company and the Climax Dairy Company, corporations of Colorado, and H. Brown Cannon, Clarence Frink, A.T. McClintock and Morris Robinson, citizens and residents of the same State, against Foster Cline, the District Attorney for the City and County of Denver, Colorado.
The bill alleges that the suit involves for decision the question of the validity under the Constitution of the United States of what is known as the Colorado Anti-Trust Act, being chapter 161 of the Session Laws of the State of Colorado, for 1913, approved April 17th of that
The bill alleges that Foster Cline, the defendant, in his capacity as district attorney of Denver City and
A motion to dismiss was made by the defendant, on the ground that the bill presented no case for equitable relief. On the hearing before the three judges, a preliminary injunction was issued and the motion to dismiss was denied. The defendant standing upon his motion to dismiss, and declining to plead further, a decree for a permanent injunction was entered, and this is an appeal from that decree.
The first question is whether the practice and precedents in equity justified the granting of relief by injunction, where one criminal prosecution had been begun and where many others, together with suits for forfeiture of corporate franchises, were threatened. The general rule is that a court of equity is without jurisdiction to restrain criminal proceedings to try the same right that is in issue
The affidavits in support of the bill were very full in their showing that the District Attorney, by his action and threats, had already greatly injured the plaintiffs' properties and their businesses. They present a case in which the question of the validity of the Act under which, if invalid, great injuries to properties and businesses are being unjustly inflicted, should be promptly settled. We think the basis for equitable jurisdiction is made sufficiently clear.
It is objected, however, that the injunction can not be supported under the authorities, in so far as it is directed against actual proceedings pending in the criminal court. One of the District Judges below dissented from this part of the decree. Of course the injunction is not only against actual prosecution but is also against a multiplicity of future suits and the threatened proceedings for forfeiture, by which the District Attorney proposes to end the businesses of all the plaintiffs, and the objection would only lead to a narrowing of the decree. The majority in the District Court were influenced by a remark of this Court in Davis & Farnum Company v. Los Angeles, supra, in speaking of a bill to restrain invasion of rights of property by the enforcement of an unconstitutional law, in which the Court said:
This semble does not seem to have received the approval of the Court in Ex parte Young, 209 U.S. 123, where it was said:
"It is further objected (and the objection really forms part of the contention that the State cannot be sued) that a court of equity has no jurisdiction to enjoin criminal proceedings, by indictment or otherwise, under the state law. This, as a general rule, is true. But there are exceptions. When such indictment or proceeding is brought to enforce an alleged unconstitutional statute, which is the subject matter of inquiry in a suit already pending in a Federal court, the latter court having first obtained jurisdiction over the subject matter, has the right, in both civil and criminal cases, to hold and maintain such jurisdiction, to the exclusion of all other courts, until its duty is fully performed. Prout v. Starr, 188 U.S. 537, 544. But the Federal court cannot, of course, interfere in a case where the proceedings were already pending in a state court. Taylor v. Taintor, 16 Wall. 366, 370; Harkrader v. Wadley, 172 U.S. 148."
We, therefore, agree with the view of the dissenting Judge that the injunction is too broad, in so far as it restrains proceedings actually pending, and that it must be accordingly modified.
This brings us to the consideration of the constitutionality of the Anti-Trust Act. We think that the act is so vague and uncertain in its description of what shall constitute its criminal violations that it is invalid under the Fourteenth Amendment. It in this respect violates due process and can not be distinguished from the case
"That it is hereby made unlawful for any person willfully . .. to make any unjust or unreasonable rate or charge in handling or dealing in or with any necessaries; to conspire, combine, agree, or arrange with any other person . . . to exact excessive prices for any necessaries . . . Any person violating any of the provisions of this section upon conviction thereof shall be fined not exceeding $5,000 or be imprisoned for not more than two years, or both."
This Court said:
"The sole remaining inquiry, therefore, is the certainty or uncertainty of the text in question, that is, whether the words `That it is hereby made unlawful for any person willfully . . . to make any unjust or unreasonable rate or charge in handling or dealing in or with any necessaries,' constituted a fixing by Congress of an ascertainable standard of guilt and are adequate to inform persons accused of violation thereof of the nature and cause of the accusation against them. That they are not, we are of opinion, so clearly results from their mere statement as to render elaboration on the subject wholly unnecessary. Observe that the section forbids no specific or definite act. It confines the subject-matter of the investigation which it authorizes to no element essentially inhering in the transaction as to which it provides. It leaves open, therefore, the widest conceivable inquiry, the scope of which no one can foresee and the result of which no one can foreshadow or adequately guard against. In fact, we see no reason to doubt the soundness of the observation of the court below, in its opinion, to the effect
The opinion cites in support of its conclusion, United States v. Reese, 92 U.S. 214, 219-220; United States v. Brewer, 139 U.S. 278, 288; Todd v. United States, 158 U.S. 278, 282; United States v. Sharp, 27 Fed. Cases, 1041, 1043; Chicago & Northwestern Ry. Co. v. Dey, 35 Fed. 866, 876; Tozer v. United States, 52 Fed. 917, 919-920; United States v. Capital Traction Co., 34 App. D.C. 592; United States v. Pennsylvania R.R. Co., 242 U.S. 208, 237-238; also International Harvester Company v. Kentucky, 234 U.S. 216, 221; Collins v. Kentucky, 234 U.S. 634, 637; American Seeding Machine Company v. Kentucky, 236 U.S. 660, 662.
The Colorado Anti-Trust law denounces conspiracies and combinations of persons and corporations, 1st, to create and carry out restrictions in trade or commerce preventing the full and free pursuit of any lawful business in the State; 2d, to increase or reduce the price of merchandise, products or commodities; 3rd, to prevent competition in the making, transportation, sale or purchase of commodities or merchandise; 4th, to fix any standard of figures whereby the price shall be controlled or established; 5th, to make or execute any contract or agreement to bind the participants not to sell below a common standard, or to keep the price of the article at a fixed or graded figure, or establish or settle the price between themselves so as to preclude a free and unrestricted competition among themselves, or to pool, combine or unite any interest they may have in such business of making, selling or transporting that the price of the article may be affected. The foregoing language sufficiently describes
"And all such combinations are hereby declared to be against public policy, unlawful and void; provided that no agreement or association shall be deemed to be unlawful or within the provisions of this act, the object and purposes of which are to conduct operations at a reasonable profit or to market at a reasonable profit those products which can not otherwise be so marketed; provided further that it shall not be deemed to be unlawful, or within the provisions of this act, for persons, firms, or corporations engaged in the business of selling or manufacturing commodities of a similar or like character to employ, form, organize or own any interest in any association, firm, or corporation having as its object or purpose the transportation, marketing or delivering of such commodities; . . ."
The effect of the first proviso is that combinations, with the purposes defined in the 1st, 2nd, 3rd, 4th and 5th paragraphs of § 1, and declared thereby to be unlawful and void, are not to be regarded as unlawful if their purpose shall be to obtain only a reasonable profit in such products or merchandise as can not yield a reasonable profit except by marketing them under the combinations previously condemned. The second is like the first in declaring that it shall not be unlawful or within the condemnatory provisions of the Act for persons engaged in the business of selling or manufacturing commodities of a class that can only be dealt with at a reasonable profit by such previously condemned trust methods, to employ or own interests in an association having as its object the transportation, marketing or delivering of such commodities at a reasonable profit. These provisos make the line
We have examined the opinions of the Supreme Court of Colorado in reference to the construction and operation of these provisos in the Colorado Anti-Trust law. Campbell v. The People, 72 Colo. 213; Johnson v. The People, Id., 218; People v. Apostolos, 73 Colo. 71; and we find nothing there which is in conflict with our construction of them. Such an exception in the statute leaves the whole statute without a fixed standard of guilt in an adjudication affecting the liberty of the one accused. An attempt to enforce the section will be to penalize and punish all combinations in restraint of trade in a commodity when in the judgment of the court and jury they are not necessary to enable those engaged in it to make it reasonably profitable, but not otherwise. Such a basis for judgment of a crime would be more impracticable and complicated than the much simpler question in the Cohen Grocery case, whether a price charged was unreasonable or excessive. The real issue which the proviso would submit to the jury would be legislative, not judicial. To compel defendants to guess on the peril of an indictment whether one or more of the restrictions of the statute will destroy all profit or
The Cohen case was a violation of a federal law and involved the Fifth and Sixth Amendments, the first providing that no person shall be deprived of life, liberty or property without due process of law, and the second that in all criminal prosecutions the accused shall enjoy the right to be informed of the nature and cause of the accusation. We are now considering a case of state legislation and threatened prosecutions in a state court where only the Fourteenth Amendment applies; but that amendment requires that there should be due process of law, and this certainly imposes upon a State an obligation to frame its criminal statutes so that those to whom they are addressed may know what standard of conduct is intended to be required. And such is the effect of our cases. Connally v. General Construction Company, 269 U.S. 385; International Harvester Company v. Kentucky, 234 U.S. 216; Collins v. Kentucky, 234 U.S. 634; American Seeding Machine Company v. Kentucky, 236 U.S. 660; Waters-Pierce Oil Company v. Texas, 212 U.S. 86; Fox v. Washington, 236 U.S. 273; Omaechevarria v. Idaho, 246 U.S. 343; Miller v. Strahl, 239 U.S. 426; Tedrow v. Lewis & Son. Co., 255 U.S. 98; Weeds, Inc. v. United States, 255 U.S. 109, and Kinnane v. Detroit Creamery Co., 255 U.S. 102.
In the latest of the foregoing cases, Connally v. General Construction Company, 269 U.S. 385, 391, the validity of a statute of Oklahoma providing that not more than the current rate of per diem wages in the locality where the work was performed should be paid to laborers, workmen, mechanics, prison guards, janitors in public institutions or other persons so employed by and on behalf
"That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties, is a well-recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law. And a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law.
"The question whether given legislative enactments have been thus wanting in certainty has frequently been before this court. In some of the cases the statutes involved were upheld; in others, declared invalid. The precise point of differentiation in some instances is not easy of statement. But it will be enough for present purposes to say generally that the decisions of the court upholding statutes as sufficiently certain, rested upon the conclusion that they employed words or phrases having a technical or other special meaning, well enough known to enable those within their reach to correctly apply them, Hygrade Provision Co. v. Sherman, 266 U.S. 497, 502; Omaechevarria v. Idaho, 246 U.S. 343, 348, or a well-settled common law meaning, notwithstanding an element of degree in the definition as to which estimates might differ, Nash v. United States, 229 U.S. 373, 376; International Harvester Co. v. Kentucky, supra, p. 223, or, as broadly stated by Mr. Chief Justice White in United States v. Cohen Grocery Co., 255 U.S. 81, 92, `that, for reasons found to result either from the text
The chief authority upon which counsel for the appellant rely is the case of Nash v. United States, 229 U.S. 373, 376. That case involved the question whether the Sherman Anti-Trust law, in making criminal every contract and all monopolies in restraint of interstate trade or commerce, fixed a permissible and ascertainable standard of guilt. It was held that it did. Because this Colorado act is an anti-trust law punishing with even more detail of description all combinations in restraint of trade in Colorado, with the excepting provisos, it is supposed that the Nash case has direct application and supports the claim of validity for the Act. It is first to be noted that the Court, in its consideration of the Cohen case, had before it the Nash case, and found nothing in that case inconsistent with its Cohen case ruling.
In the Nash case we held that the common law precedents as to what constituted an undue restraint of trade were quite specific enough to advise one engaged in interstate trade and commerce what he could and could not do under the statute. In commenting on and affirming the Nash case, this Court said in International Harvester Company v. Kentucky, 234 U.S. 216, 223:
"The conditions are as permanent as anything human, and a great body of precedents on the civil side coupled with familiar practice make it comparatively easy . . . to keep to what is safe."
The common law precedents as to forbidden and permissible restraints of trade were reviewed at great length by the Circuit Court of Appeals of the Sixth Circuit in a case under the federal Anti-Trust Act, in United States v. Addyston Pipe Company, 85 Fed. 271. It subsequently came to this Court, and is reported in the 175th United States, 211. The Federal Anti-Trust Act declares every contract, combination in the form of trust or otherwise,
The review of the many common law precedents as to due and undue restraints of trade shows that in only one or two cases, and those not well considered, was there left to the court or jury as a criterion of the validity of a restraint of trade the reasonableness of the prices fixed or the profit realized under it.
In the Addyston case, supra, which involved a scheme for fixing prices, this Court quoted with approval the following passage from the lower court's opinion (85 Fed. 271, 293):
". . . the affiants say that, in their opinion, the prices at which pipe has been sold by defendants have been reasonable. We do not think the issue an important
In the same case the Circuit Court of Appeals, referring to cases in restraint of trade, said (pp. 283 and 284):
"But these cases all involved contracts in which the covenant in restraint of trade was ancillary to the main and lawful purpose of the contract, and was necessary to the protection of the covenantee in the carrying out of that main purpose. They do not manifest any general disposition on the part of the courts to be more liberal in supporting contracts having for their sole object the restraint of trade than did the courts of an earlier time. It is true that there are some cases in which the courts, mistaking, as we conceive, the proper limits of the relaxation of the rules for determining the unreasonableness of restraints of trade, have set sail on a sea of doubt, and have assumed the power to say, in respect to contracts which have no other purpose and no other consideration on either side than the mutual restraint of the parties, how much restraint of competition is in the public interest, and how much is not.
"The manifest danger in the administration of justice according to so shifting, vague, and indeterminate a standard would seem to be a strong reason against adopting it."
This same view, when directed to the question of judging restraints of trade by reference to reasonableness of prices effected by the restraint is confirmed by the latest decision of this Court on the subject in United States v. Trenton Potteries Company, 273 U.S. 392, where it was said:
"The aim and result of every price-fixing agreement, if effective, is the elimination of one form of competition. The power to fix prices, whether reasonably exercised or not, involves power to control the market and to fix arbitrary and unreasonable prices. The reasonable price fixed
This review, showing what was the standard of criminality in the Federal Anti-Trust law, indicates clearly that the decision in the Cohen Grocery case was not inconsistent with the Nash case, because the latter did not relate to the reasonableness or excessiveness of prices charged for necessaries, without more, as a basis for criminality, while the former plainly did. The same reasons show that there is nothing inconsistent between the Cohen case and that of Waters-Pierce Oil Company v. Texas, 212 U.S. 86.
The principle of due process of law requiring reasonable certainty of description in fixing a standard for exacting obedience from a person in advance has application as well in civil as in criminal legislation, Small Company v. American Sugar Refining Company, 267 U.S. 233, 238, et seq.; but the fact that it is often necessary to investigate
The indictment was framed under the last clause of this statute. Such standard for the driver of an automobile on a highway is one to which it is neither harsh nor arbitrary to hold those criminally who operate such a possibly dangerous instrument of locomotion, and who are or ought to be aware of what degree of care is necessary to avoid injury to others under the conditions that prevail on a highway. See Hess v. Pawloski, ante, p. 352.
But it will not do to hold an average man to the peril of an indictment for the unwise exercise of his economic or business knowledge involving so many factors of varying effect that neither the person to decide in advance nor the jury to try him after the fact can safely and certainly judge the result. When to a decision whether a certain amount of profit in a complicated business is reasonable is added that of determining whether detailed restriction of particular anti-trust legislation will prevent a reasonable profit in the case of a given commodity, we have an utterly impracticable standard for a jury's decision. A legislature must fix the standard more simply and more definitely before a person must conform or a jury can act.
We conclude that the Anti-Trust statute of Colorado is void in that those who are prosecuted and convicted under it will be denied due process of law.
The decree is in part reversed and in part affirmed.