UNITED STATES SUPREME COURT DECISIONS ON-LINE

UNITED STATES V. E.I. DU PONT DE NEMOURS & CO., 366 U. S. 316 (1961)

366 U. S. 316

U.S. Supreme Court

United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316 (1961)

United States v. E.I. du Pont de Nemours & Co.

No. 55

Argued February 20-21, 1961

Decided May 22, 1961

366 U.S. 316

Syllabus

In this civil antitrust proceeding, this Court held that acquisition by the du Pont Company of 23% of the common stock of General Motors Corporation had led to the insulation from free competition of most of the General Motors market in automobile finishes and fabrics and tended to create a monopoly of a line of commerce, in violation of § 7 of the Clayton Act. Therefore, this Court reversed the District Court's judgment dismissing the complaint and remanded the case to that Court for a determination of the equitable relief necessary and appropriate in the public interest. 353 U. S. 353 U.S. 586. After the taking of further evidence, pertaining mostly to the tax and market consequences to the shareholders of the two companies, the District Court declined to require du Pont to divest itself completely of the General Motors stock, as urged by the Government, and sought to satisfy the requirements of this Court's mandate by requiring du Pont to transfer its voting rights in most of the General Motors stock to certain of du Pont's shareholders, by enjoining the two companies from having any preferential or discriminatory trade relations with each other, and by various other injunctive provisions designed to prevent du Pont from exercising any control over the management of General Motors.

Held: this remedy is not adequate, and the District Court is directed to proceed expeditiously to enter a decree requiring du Pont to divest itself completely of the General Motors stock within not to exceed 10 years from the effective date of the decree. Pp. 366 U. S. 318-335.

(a) When a violation of the antitrust laws has been proved, the initial responsibility to fashion an appropriate remedy lies with the District Court, and this Court accords due regard and respect to the conclusion of the District Court; but this Court has a duty to be sure that a decree is fashioned which will effectively redress the violations of the antitrust laws. Pp. 366 U. S. 322-325.

(b) Since the decree in this case was fashioned by the District Court in obedience to the judgment sent to it by this Court after reversal of the District Court's judgment dismissing the Government's clubjuris

Page 366 U. S. 317

complaint, this Court has plenary power to determine whether its own judgment was scrupulously and fully carried out. Pp. 366 U. S. 325-326.

(c) In civil proceedings, courts are not authorized to punish antitrust violators, and relief must not be punitive; but courts are required to decree relief effective to redress the violations and restore competition, whatever the adverse effect of such a decree on private interests. Pp. 366 U. S. 326-328.

(d) In this case, the proposed partial divestiture through the transfer of voting rights would not be an effective remedy; and, notwithstanding the adverse tax and market consequences which the District Court found would result, the Government is entitled to a decree directing complete divestiture -- a remedy peculiarly appropriate in cases of stock acquisitions which violate § 7 of the Clayton Act. Pp. 366 U. S. 326-333.

(e) The alternative, suggested belatedly by du Pont, that its General Motors stock be disenfranchised, would not provide effective relief, and it might have undesirable effects on the capital structure, management and control of General Motors. P. 366 U. S. 333.

(f) The injunctive provisions of the District Court's decree would not adequately remove the objections to the effectiveness of its main provision for the transfer of voting rights, and the public is entitled to the surer, cleaner remedy of complete divestiture. Pp. 366 U. S. 333-334.

(g) Once the Government has successfully borne the considerable burden of establishing a violation of the antitrust laws, all doubts as to the remedy are to be resolved in its favor. P. 366 U. S. 334.

(h) The District Court's decree is vacated in its entirety, except as to the provisions enjoining du Pont itself from exercising voting rights in respect of its General Motors stock. Pp. 366 U. S. 334-335.

(i) In order that this protracted litigation may be concluded as soon as possible, the District Court is directed to proceed expeditiously to formulate and enter a decree providing for the complete divestiture by du Pont of its General Motors stock, to commence within 90 days, and to be completed within not to exceed 10 years, of the effective date of the decree. P. 366 U. S. 335.

177 F.Supp. 1 affirmed in part, vacated in part, and remanded for further proceedings. clubjuris

Page 366 U. S. 318


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