United States v. E. C. Knight Co.
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''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
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 l ...
case that severely limited the federal government's power to pursue antitrust actions under the Sherman Antitrust Act. In Chief Justice Melville Fuller'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 case

In 1892, the American Sugar Refining Company gained control of the E. C. Knight Company and several others which resulted in a 98% monopoly of the American sugar refining industry. President Grover Cleveland, 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 vari ...
''?"


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 John Marshall Harlan 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 ''Swift & Co. v. United States'', 196 U.S. 375 (1905), was a case in which the United States Supreme Court ruled that the Commerce Clause allowed the federal government to regulate monopolies if it has a direct effect on commerce. It marked the su ...
'') 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 l ...
* Commerce Clause * **
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 ...
**
Sugarcane Sugarcane or sugar cane is a species of (often hybrid) tall, Perennial plant, perennial grass (in the genus ''Saccharum'', tribe Andropogoneae) that is used for sugar Sugar industry, production. The plants are 2–6 m (6–20 ft) tall with ...


References


External links

* * {{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