342 U.S. 353 (1952), 8, Hughes v. United States

Docket NºNo. 8
Citation342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394
Party NameHughes v. United States
Case DateFebruary 04, 1952
CourtUnited States Supreme Court

Page 353

342 U.S. 353 (1952)

72 S.Ct. 306, 96 L.Ed. 394

Hughes

v.

United States

No. 8

United States Supreme Court

Feb. 4, 1952

Argued January 7, 1952

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

A Sherman Act consent decree provided for divorcement of a motion picture company's production-distribution assets from its theater assets. Two new companies were to be formed; their stock was to be distributed to stockholders of the old company, and the latter was to be dissolved. Relative to appellant, who owned 24% of the stock of the old company, the decree provided that he might "either" sell his stock in one or the other of the new companies "or" deposit such stock with a court-designated trustee under a voting trust agreement to remain in force until appellant "shall have sold" his stock in one of the companies. Appellant chose not to sell any stock, and the District Court appointed a trustee and approved the agreed terms of a voting trust. Without evidence or findings of fact, and over appellant's protests, the District Court later amended its order appointing the trustee and ordered that the trusteed stock be sold.

Held:

1. The provision of the decree did not require that appellant sell his stock within a reasonable time. Pp. 356-357.

2. Under the powers reserved in the consent decree, the District Court can require the sale of appellant's stock, but that would be a substantial modification of the consent decree, which cannot be made without a hearing that includes evidence and a judicial determination based upon it. Pp. 357-358.

Reversed.

From an order of a three-judge District Court in a Sherman Act proceeding, compelling appellant to sell certain shares of stock, he appealed directly to this Court under 15 U.S.C. § 29. Reversed, p. 358.

Page 354

BLACK, J., lead opinion

Opinion of the Court by MR. JUSTICE BLACK, announced by MR. JUSTICE DOUGLAS.

A three-judge District Court has construed certain provisions of a Sherman Act consent decree as compelling the sale of certain moving picture stocks owned by the appellant Hughes. This case is properly [72 S.Ct. 307] here on appeal from an order entered to compel the sale. 15 U.S.C. (Supp. IV) § 29.

These antitrust proceedings were originally brought by the United States against Radio-Keith-Orpheum Corporation and other moving picture producers, distributors, and exhibitors. From the District Court's judgment in the case, both the Government and defendants appealed. We affirmed in part and reversed in part. United States v. Paramount Pictures Inc., 334 U.S. 131. We remanded the case to the District Court leaving it free to consider whether it was necessary to require the production and distribution companies to divest themselves of all ownership and interest in the business of exhibiting pictures. Thereafter, a consent decree was entered containing detailed provisions for complete divorcement of R.K.O.'s production-distribution assets from its theater assets. To accomplish this, R.K.O. was to form two new holding companies: one, the "New Picture Company," was to take over all R.K.O. subsidiaries engaged in production and distribution; the other, the "New Theater Company," was to own and control R.K.O. subsidiaries which operated theaters. Upon formation of the new companies, R.K.O. was to be dissolved. Former stockholders were to become the owners of all the capital stock of the two new companies.

Page 355

A factor considered in connection with this divorcement was that Howard R. Hughes, appellant here, owned 24% of the common stock of R.K.O. No other person or corporation owned as much as 1%. He and government representatives agreed on terms to meet this situation. Their agreement was embodied in the consent decree, becoming section . This section of the decree, set out below,* is the center of the present controversy. It provides that Hughes may "either" (A) sell his stock in one or the other of the two newly formed companies, "or" (B) deposit such stock with a court-designated trustee

Page 356

under a voting trust agreement to remain in force until Hughes shall have sold his stock in...

To continue reading

Request your trial
62 practice notes
  • 644 F.2d 551 (6th Cir. 1981), 80-3468, Brown v. Neeb
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • March 3, 1981
    ...is contained in United States v. Atlantic Refining Co., 360 U.S. 19, 79 S.Ct. 944, 3 L.Ed.2d 1054 (1959) and Hughes v. United States, 342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394 (1953). In both of these cases the Court concluded that the consent decree in question could not be reasonably const......
  • 680 F.2d 315 (3rd Cir. 1982), 82-1039, Fox v. United States Dept. of Housing and Urban Development
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Third Circuit
    • June 1, 1982
    ...see also United States v. Atlantic Refining Corp., 360 U.S. 19, 23, 79 S.Ct. 944, 946, 3 L.Ed.2d 1054 (1959); Hughes v. United States, 342 U.S. 353, 357-58, 72 S.Ct. 306, 308, 96 L.Ed. 394 (1952). VII. As the district court candidly observed: "The consent decree was deliberately drafte......
  • 801 F.2d 799 (6th Cir. 1986), 84-6055, Geier v. Alexander
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • September 5, 1986
    ...to the decree. See, e.g., United States v. Ward Baking Co., 376 U.S. 327 [84 S.Ct. 763, 11 L.Ed.2d 743] (1964); Hughes v. United States, 342 U.S. 353 [72 S.Ct. 306, 96 L.Ed. 394] (1952); Ashley v. City of Jackson, 464 U.S. at 902 [104 S.Ct. 255 at 257, 78 L.Ed.2d 241] (REHNQUIST, J., dissen......
  • 153 F.R.D. 524 (S.D.N.Y. 1994), 78 Civ. 957 (RJW), Wilder v. Bernstein
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • February 23, 1994
    ...unambiguous language. The Court will not grant a modification in the guise of construing a consent decree. See Hughes v. United States, 342 U.S. 353, 357-58, 72 S.Ct. 306, 308, 96 L.Ed. 394 (1952); United States v. Atlantic Refining Co., 360 U.S. 19, 23-24, 79 S.Ct. 944, 946-947, 3 L.Ed.2d ......
  • Request a trial to view additional results
62 cases
  • 644 F.2d 551 (6th Cir. 1981), 80-3468, Brown v. Neeb
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • March 3, 1981
    ...is contained in United States v. Atlantic Refining Co., 360 U.S. 19, 79 S.Ct. 944, 3 L.Ed.2d 1054 (1959) and Hughes v. United States, 342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394 (1953). In both of these cases the Court concluded that the consent decree in question could not be reasonably const......
  • 680 F.2d 315 (3rd Cir. 1982), 82-1039, Fox v. United States Dept. of Housing and Urban Development
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Third Circuit
    • June 1, 1982
    ...see also United States v. Atlantic Refining Corp., 360 U.S. 19, 23, 79 S.Ct. 944, 946, 3 L.Ed.2d 1054 (1959); Hughes v. United States, 342 U.S. 353, 357-58, 72 S.Ct. 306, 308, 96 L.Ed. 394 (1952). VII. As the district court candidly observed: "The consent decree was deliberately drafte......
  • 801 F.2d 799 (6th Cir. 1986), 84-6055, Geier v. Alexander
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Sixth Circuit
    • September 5, 1986
    ...to the decree. See, e.g., United States v. Ward Baking Co., 376 U.S. 327 [84 S.Ct. 763, 11 L.Ed.2d 743] (1964); Hughes v. United States, 342 U.S. 353 [72 S.Ct. 306, 96 L.Ed. 394] (1952); Ashley v. City of Jackson, 464 U.S. at 902 [104 S.Ct. 255 at 257, 78 L.Ed.2d 241] (REHNQUIST, J., dissen......
  • 153 F.R.D. 524 (S.D.N.Y. 1994), 78 Civ. 957 (RJW), Wilder v. Bernstein
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • February 23, 1994
    ...unambiguous language. The Court will not grant a modification in the guise of construing a consent decree. See Hughes v. United States, 342 U.S. 353, 357-58, 72 S.Ct. 306, 308, 96 L.Ed. 394 (1952); United States v. Atlantic Refining Co., 360 U.S. 19, 23-24, 79 S.Ct. 944, 946-947, 3 L.Ed.2d ......
  • Request a trial to view additional results