''United States v. E. C. Knight Co.'', 156 U.S. 1 (1895), also known as the "Sugar Trust Case," was a
United States Supreme Court
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
case that severely limited the federal government's power to pursue antitrust actions under the
Sherman Antitrust Act
The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author.
T ...
. In Chief Justice
Melville Fuller
Melville Weston Fuller (February 11, 1833 – July 4, 1910) was an American politician, attorney, and jurist who served as the eighth chief justice of the United States from 1888 until his death in 1910. Staunch conservatism marked his ...
's majority opinion, the Court held that Congress could not regulate manufacturing, thus giving state governments the sole power to take legal action against manufacturing monopolies.
[.] The case has never been overruled, but in ''
Swift & Co. v. United States'' and subsequent cases the Court has held that Congress can regulate manufacturing when it affects
interstate commerce
The Commerce Clause describes an enumerated power listed in the United States Constitution ( Article I, Section 8, Clause 3). The clause states that the United States Congress shall have power "to regulate Commerce with foreign Nations, and among ...
.
The case
In 1892, the
American Sugar Refining Company
American(s) may refer to:
* American, something of, from, or related to the United States of America, commonly known as the "United States" or "America"
** Americans, citizens and nationals of the United States of America
** American ancestry, pe ...
gained control of the E. C. Knight Company and several others which resulted in a 98% monopoly of the American sugar refining industry.
President
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*President (government title)
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Automobiles
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Grover Cleveland
Stephen Grover Cleveland (March 18, 1837June 24, 1908) was an American lawyer and politician who served as the 22nd and 24th president of the United States from 1885 to 1889 and from 1893 to 1897. Cleveland is the only president in American ...
, in his second term of office (1893–1897), directed the national government to sue the Knight Company under the provisions of the Sherman Antitrust Act to prevent the acquisition. The question the court had to answer was, "could the Sherman Antitrust Act suppress a monopoly in the ''
manufacture
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a rang ...
'' of a good, as well as its ''
distribution Distribution may refer to:
Mathematics
*Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations
*Probability distribution, the probability of a particular value or value range of a varia ...
''?"
The decision
The court's 8–1 decision, handed down on January 21, 1895 and written by
Chief Justice Melville Weston Fuller
Melville Weston Fuller (February 11, 1833 – July 4, 1910) was an American politician, attorney, and jurist who served as the eighth chief justice of the United States from 1888 until his death in 1910. Staunch conservatism marked his ...
, went against the government.
Justice
Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...
John Marshall Harlan
John Marshall Harlan (June 1, 1833 – October 14, 1911) was an American lawyer and politician who served as an associate justice of the U.S. Supreme Court from 1877 until his death in 1911. He is often called "The Great Dissenter" due to his ...
dissented.
The court held "that the result of the transaction was the creation of a monopoly in the manufacture of a necessary of life"
but ruled that it "could not be suppressed under the provisions of the act".
The court ruled that manufacturing—in this case, refining—was a local activity not subject to congressional regulation of interstate commerce. Fuller wrote:
That which belongs to commerce is within the jurisdiction of the United States, but that which does not belong to commerce is within the jurisdiction of the police power of the State. . . . Doubtless the power to control the manufacture of a given thing involves in a certain sense the control of its disposition, but . . . affects it only incidentally and indirectly.
Under the ''Knight'' decision, any action against manufacturing monopolies would need to be taken by individual states. The ruling prevailed until the end of the 1930s, when the court took a different position on the national government's power to regulate the economy.
In the dissent, Harlan argued "the doctrine of the autonomy of the states cannot properly be invoked to justify a denial of power in the national government to meet such an emergency." He continued to argue the Constitution gives Congress "authority to enact all laws necessary and proper" to regulate commerce, citing ''
McCulloch v. Maryland
''McCulloch v. Maryland'', 17 U.S. (4 Wheat.) 316 (1819), was a landmark U.S. Supreme Court decision that defined the scope of the U.S. Congress's legislative power and how it relates to the powers of American state legislatures. The dispute in ...
''. .
Later developments
Although the decision was never expressly overturned, the Court later retreated from this position in a series of cases (see for example ''
Swift and Company v. United States'') that defined various steps of the manufacturing process as part of commerce. Eventually, ''E.C. Knight'' came to be a precedent narrowed to its precise facts, with no force whatsoever.
See also
*
American sugar industry
American(s) may refer to:
* American, something of, from, or related to the United States of America, commonly known as the "United States" or "America"
** Americans, citizens and nationals of the United States of America
** American ancestry, pe ...
*
Antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
*
Commerce Clause
The Commerce Clause describes an enumerated power listed in the United States Constitution ( Article I, Section 8, Clause 3). The clause states that the United States Congress shall have power "to regulate Commerce with foreign Nations, and among ...
*
**
Sugar refining
Sugar is the generic name for sweet-tasting, soluble carbohydrates, many of which are used in food. Simple sugars, also called monosaccharides, include glucose, fructose, and galactose. Compound sugars, also called disaccharides or double s ...
**
Sugarcane
Sugarcane or sugar cane is a species of (often hybrid) tall, perennial grass (in the genus '' Saccharum'', tribe Andropogoneae) that is used for sugar production. The plants are 2–6 m (6–20 ft) tall with stout, jointed, fibrous stalks ...
References
External links
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{{DEFAULTSORT:United States V. E. C. Knight Co.
American sugar industry
1895 in United States case law
United States Constitution Article One case law
United States antitrust case law
United States Commerce Clause case law
United States Supreme Court cases of the Fuller Court
United States Supreme Court cases