Eastern Paper Bag Company vs. Continental Paper Bag Company1908

We have for consideration the appropriateness of a preliminary, mandatory injunction requiring International Paper Company to deliver to White Bag Company monthly six hundred tons of multi-wall kraft paper. The injunction was based upon a finding or conclusion that International had attempted to monopolize the multi-wall bag market. We stayed the order of the District Court pending an expedited appeal, and, after full hearing, we conclude that the injunction was improvidently entered. Among other things, International manufactures kraft papers, including multi-wall papers. It also operates plants for the conversion of multi-wall papers into bags for use in packaging relatively heavy materials. A portion of its multi-wall paper production goes to supply its own bag plants, but most of it is sold to other bag manufacturers. There are many manufacturers of multi-wall paper bags. International is not the largest such converter, its sales of such bags accounting for only approximately nine per cent of such sales to the domestic market. International's production of multi-wall paper before conversion into bags accounts for 13.8 per cent of the domestic market, there being some twelve to fourteen producers of such papers. White Bag is a paper processor and bag manufacturer, some fifty to seventy-five per cent of its business being the making of multi-wall bags. Until recently, it had purchased approximately fifty percent of its requirements of multi-wall kraft paper from International. In early 1973, International had eleven customers for multi-wall kraft paper. White Bag was one of them. Each was being supplied under long term written contracts. White Bag's then current contract was for a three-year period ending May 31, 1973, with a provision for an automatic extension for an additional year unless one of the parties gave notice in advance of non-renewal. There began to develop a shortage in the supply of multi-wall kraft paper, and there were limits to International's productive capacity. The situation led International to undertake a general review of its long term commitments to sell such paper. Moreover, International was unhappy with the terms of its contract with White Bag. Negotiations between the parties had been conducted through a broker, to whom International was required to pay approximately