## Facts

- Colgate & Co. manufactured soap and toilet articles and sold them nationwide through wholesale and retail dealers.
- The United States indicted Colgate under the Sherman Act, alleging an unlawful combination in restraint of trade aimed at securing dealer compliance with resale prices set by Colgate.
- The indictment, as construed by the district court, did not allege contracts or binding agreements requiring dealers to maintain fixed resale prices.
- Instead, the allegations were treated as describing a unilateral policy: Colgate announced resale prices in advance and refused to continue selling to dealers who resold below those prices.
- The district court sustained a demurrer and dismissed the indictment as failing to charge a Sherman Act offense.
- The government sought direct Supreme Court review under the Criminal Appeals Act of 1907; the Supreme Court accepted the district court’s interpretation of what the indictment charged.

## Issues

1. Whether a manufacturer violates the Sherman Act, absent intent to create or maintain a monopoly, by announcing suggested resale prices and unilaterally refusing to deal with wholesalers or retailers who do not follow them, where no binding resale price agreements are alleged.
2. Whether such unilateral refusal-to-deal conduct constitutes a prohibited “combination” or “conspiracy” in restraint of trade under the Sherman Act, as charged in a criminal indictment.

## Decision

- The Supreme Court affirmed the judgment sustaining the demurrer and dismissing the indictment.
- Accepting the lower court’s construction that the indictment alleged only unilateral conduct (no dealer agreements), the Court held the conduct did not violate the Sherman Act.
- The Court distinguished cases involving resale price maintenance through binding dealer contracts, which can constitute unlawful combinations.
- The Court emphasized that, on the government’s writ of error, its review was limited to the statute’s construction and it could not revise the district court’s interpretation of the indictment’s allegations.

## Legal Principles

- In the absence of intent to create or maintain a monopoly, the Sherman Act does not bar a manufacturer from announcing in advance the prices at which its goods may be resold and refusing to deal with resellers who do not conform.
- A unilateral refusal to deal, standing alone, is not a “combination” or “conspiracy” under the Sherman Act; unlawful resale price maintenance typically requires agreements or other concerted action.
- On direct review under the Criminal Appeals Act from a demurrer sustained on statutory-construction grounds, the Supreme Court accepts the trial court’s construction of the indictment and addresses only whether the statute was misconstrued.
- Criminal Sherman Act charging requires allegations that clearly state conduct constituting a known statutory offense.

## Conclusion

The Court held that a manufacturer’s unilateral policy of announcing resale prices and refusing to sell to price-cutting dealers, without alleged dealer agreements and without monopoly purpose, does not state a Sherman Act offense, and it affirmed dismissal of the indictment.


United States v. Colgate & Co., 250 U.S. 300 (1919)