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Federal Trade Commission v. Brown Shoe Company

United States Supreme Court
384 U.S. 316 (1966)


Facts

Brown Shoe Company (Brown) (defendant) was the second-largest shoe manufacturer in the United States. Brown entered franchise agreements with retailers that prohibited the retailers from selling competing shoe brands. In exchange, the franchise retailers received valuable services and benefits from Brown. The Federal Trade Commission (FTC) (plaintiff) sued Brown, arguing that the franchise agreements were an unfair method of competition in violation of § 5 of the FTC Act. The FTC issued a cease-and-desist order that required Brown to discontinue the franchise agreements. Brown appealed. The court of appeals vacated the cease-and-desist order. The court of appeals held that the FTC exceeded the scope of its authority by declaring the franchise agreements an unfair method of competition. The FTC appealed to the United States Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Black, J.)

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