GOVERNMENT: Double Jeopardy

Can the Government force a U.S. company to compete in foreign markets? Answered the U.S. Supreme Court last week: it can indeed. By a 4-to-4 tie vote (Justice Harlan disqualified himself from the case), the court let stand a lower-court ruling that Holophane Co., maker of prismatic glassware, must not only scrap all agreements with foreign companies to split up world markets but actively push its products overseas regardless of foreign laws or its own economic best interest. Snapped Justice Hugo Black, incredulously, during the hearing: “Is what you are saying this: that a distiller must goout and do everything in his power to sell his whisky in a dry state?”

The Antitrust Department started the case by hauling Holophane into an Ohio District Court. It charged that contracts between Holophane and a British and French firm, granting each other exclusive markets for their products, were “designed to eliminate competition.” With previous Supreme Court decisions to go on, the lower court declared the cartel arrangement illegal. Then it went a giant step further. It ordered Holophane to use “reasonable” efforts to sell its products abroad.

The Supreme Court wrote no opinion outlining its reasons for upholding the lower-court decision. But its technical approval had the unhappy effect of putting Holophane—and possibly other companies —in a position of double jeopardy. By competing abroad, Holophane leaves itself open to law suits in Britain and France, where courts may not recognize the jurisdiction of the U.S. Supreme Court. Commented the Wall Street Journal: “The four justices who voted against the decision . . . must content themselves with observing of the Supreme Court what Alice said of herself: ‘Curiouser and curiouser! Now I’m opening out like the largest telescope that ever was!’ “