United States v. South-Eastern Underwriters Association

322 U.S. 533 (1944)

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Nature of the Case

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Facts

Ds were indicted for alleged violations of the Sherman Anti-Trust Act. The indictment alleges two conspiracies. The first, in violation of §1 of the Act, was to restrain interstate trade and commerce by fixing and maintaining arbitrary and non-competitive premium rates on fire and specified 'allied lines' of insurance in Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia; the second, in violation of §2, was to monopolize trade and commerce in the same lines of insurance in and among the same states. It is alleged that Ds not only fixed premium rates and agents' commissions but employed boycotts together with other types of coercion and intimidation to force non-member insurance companies into the conspiracies and to compel persons who needed insurance to buy only from D members on D terms. Companies not members of D were cut off from the opportunity to reinsure their risks, and their services and facilities were disparaged. Independent sales agencies who defiantly represented non-D companies were punished by a withdrawal of the right to represent the members of D. Persons needing insurance who purchased from non-D companies were threatened with boycotts and withdrawal of all patronage. Their defense, set forth in a demurrer, has been that they are not required to conform to the Sherman Act because 'the business of fire insurance is not commerce.' The District Court held that 'the business of insurance is not commerce, either intrastate or interstate'; it 'is not interstate commerce or interstate trade, though it might be considered a trade subject to local laws, either State or Federal, where the commerce clause is not the authority relied upon.' The Supreme Court granted certiorari.