United States v. Greyhound Corporation

• Decision Date: 18 July 1973
• Docket Number: Civ. A. No. 69-C-1148,Crim. No. 71-Cr-924.
• Citation: 363 F. Supp. 525
• Parties: UNITED STATES of America, and Interstate Commerce Commission, Petitioners, v. The GREYHOUND CORPORATION et al., Respondents. UNITED STATES of America, and Interstate Commerce Commission, Petitioners, v. The GREYHOUND CORPORATION, and Greyhound Lines, Inc., Respondents.
• Court: U.S. District Court — Northern District of Illinois

363 F. Supp. 525

UNITED STATES of America, and Interstate Commerce Commission, Petitioners, v. The GREYHOUND CORPORATION et al., Respondents.

UNITED STATES of America, and Interstate Commerce Commission, Petitioners, v. The GREYHOUND CORPORATION, and Greyhound Lines, Inc., Respondents.

Civ. A. No. 69-C-1148, Crim. No. 71-Cr-924.

United States District Court, N. D. Illinois, E. D.

June 27, 1973.

As Amended July 18, 1973.

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John E. Sarbaugh, Joel Davidow, U. S. Dept. of Justice, Chicago, Ill., Lubomyr M. Jachnycky, I. C. C., Bernard A. Gould, Director, Bureau of Enforcement, I. C. C., Bernard M. Hollander, Chief, Judgments & Judgment Enforcement Section, Antitrust Div., U. S. Dept. of Justice, Robert S. Turkington, Chief, Court Enforcement Branch, I. C. C., Washington, D. C., for petitioners.

George Christensen and Edmund J. Kenny, Winston & Strawn, Chicago, Ill., William W. Schwarzer and John R. Reese, McCutchen, Doyle, Brown & Enersen, San Francisco, Cal., Robert J. Bernard and W. L. McCracken, Phoenix, Ariz., for respondents.

MEMORANDUM OPINION AND ORDER

ROBSON, Chief Judge.

I. INTRODUCTION

The United States and the Interstate Commerce Commission (ICC) filed two petitions seeking orders to show cause why the Respondents should not be held in contempt for failing to comply with an order of a three-judge panel of this court, entered February 5, 1970, reported at 308 F.Supp. 1033.¹ The civil contempt petition named as respondents: The Greyhound Corporation, Greyhound Lines, Inc., R. F. Shaffer, J. L. Kerrigan and F. L. Nageotte. The criminal contempt petition was directed only at The Greyhound Corporation and Greyhound Lines, Inc. Pursuant to these petitions this court issued orders for the respondents to show cause why they should not be held in civil and criminal contempt. There was a response to the Orders to Show Cause and the case proceeded.

In accordance with a Pre-Trial Order of March 8, 1972, the two petitions were consolidated for all purposes and there was no evidentiary hearing. The trial record of this case included:

a) The record of the prior proceedings in this case both before the Interstate Commerce Commission and before this Court;

b) The pleadings, interrogatories and supporting affidavits and exhibits on file herein and in Mt. Hood Stages, Inc. v. The Greyhound Corporation, No. 68,374, in the United States District Court, District of Oregon;

c) The testimony taken and exhibits identified in the depositions in this case and in Mt. Hood Stages, Inc. v. The Greyhound Corporation, supra;

d) The documents produced by either party in this proceeding and in Mt. Hood Stages, Inc. v. The Greyhound Corporation, supra, as well as correspondence between Mt. Hood Stages, Inc. and Greyhound relating to the subject matter of this action.

Because of the large number of individuals who are mentioned in the opinion and to whom reference was made, the court shall identify these persons here and finds:

1. Mr. R. F. Shaffer is President of The Greyhound Corporation. He is a resident of Arizona.

2. Mr. J. L. Kerrigan is President of Greyhound Lines, Inc. He is a resident of Arizona.

3. Mr. F. L. Nageotte, President of Greyhound Lines-West, an operating division of Greyhound Lines, Inc., with its principal place of business in San Francisco, California. Mr. Nageotte is a resident of California.

4. Mr. Gerald H. Trautman, Chairman of the Board and Chief Executive Officer of The Greyhound Corporation.

5. Mr. Bart Cook, Vice-President of Traffic for Greyhound Lines-West.

6. Mr. R. N. Dick, Vice-President of Transportation for Greyhound Lines-West.

7. Mr. William E. Hastings, Staff Vice-President of Greyhound Lines, Inc.

8. Mr. Bernard Gould, Director of the ICC's Bureau of Enforcement. He is responsible for enforcement by court action of administrative proceedings of all violations of the Interstate Commerce Act.

9. Mr. Fredrick J. Carson, an ICC Rate and Tariff Examiner 1970-1971.

10. Mr. William Niskanen, President of Mt. Hood Stages, Inc., which does business as Pacific Trailways. Throughout this opinion this company shall be referred to as "Mt. Hood". It should also be noted that Mt. Hood was permitted to intervene in this action for the limited purpose of submitting a statement in support of the government's civil contempt petition and to appear at any hearing held on the issue of civil relief.

11. Mr. George A. Warrington, Vice-President and General Manager of Pacific Trailways.

12. Mr. Thomas E. Donohue, Traffic Manager of Pacific Trailways.

The court, having studied the testimony and exhibits submitted in this cause, and having examined the written briefs of counsel, and being fully advised of the premises, further finds as follows:

The jurisdiction of the court is not disputed.

The Greyhound Corporation is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Phoenix, Arizona.

Greyhound Lines, Inc., is a corporation organized and existing under the laws of the State of California with its principal place of business in Phoenix, Arizona. It is a wholly owned subsidiary of The Greyhound Corporation. Greyhound Lines, Inc., was a plaintiff in civil action 69-C-1148 and was subject to the order of this court entered February 5, 1970.²

The geographic setting for these contempt proceedings is Oregon, Idaho, Washington, and California. The several small cities mentioned regularly in the opinion are: Klamath Falls, The Dalles, Biggs, and Bend, Oregon; Redding, California; Pasco and Yakima, Washington.

The respondents Shaffer, Kerrigan, and Nageotte are actively engaged in the management, direction and control of Greyhound's affairs and are responsible for Greyhound's compliance with the order of this court entered in civil action 69-C-1148 on February 5, 1970.

Since the order was entered in this case, Greyhound has engaged in a course of conduct which evidences a willful failure to comply with several of its paragraphs. Gradually, the pressure of this contempt litigation forced Greyhound to bring its conduct into conformity with many aspects of the order. This conclusion is supported by examining Greyhound's eleventh hour remedial action.³ While these belated corrective actions may eliminate the need for further civil sanctions, they will not erase the record of past contempt, nor obviate the appropriateness of criminal sanctions. A criminal contempt proceeding is punitive in nature. It serves to vindicate the authority of the court where a defendant has willfully disobeyed a lawful court order, Gompers v. Buck's Stove and Range Co., 221 U.S. 418, 31 S.Ct. 492, 55 L.Ed. 797 (1911). Furthermore, a criminal contempt cannot be ended by any act of the contemnor, In re Curtis' Petition, 240 F.Supp. 475 (E.D.Mo.1965).

The evidence presented in this case compels the court to conclude that Greyhound willfully violated Paragraphs 1, 3, 4, 5, and 6 of this court's order and that such willful violations were established beyond a reasonable doubt. The court further finds that there was no criminal contempt as to Paragraphs 2, 8, and 9.

As to Paragraphs 1, 3, 4, 5, and 6 the Court finds that Greyhound had notice of the order and that it willfully failed to embark on a program of compliance that would meet the requirements of the order. With respect to some paragraphs, Greyhound failed to take any steps toward compliance. With respect to others, Greyhound interpreted the order in such a way as to render it meaningless. Yet the law is clear that a party who makes his own determination as to the meaning of a decree, acts at his peril. If Greyhound had doubts as to its obligations under the order, it could have petitioned this court for a clarification or construction of that order. McComb v. Jacksonville Paper Co., 336 U.S. 187, 192, 69 S.Ct. 497, 93 L.Ed. 599 (1949). The law is equally clear that even where there is "no open and direct defiance," a company which acts under a "twisted interpretation" that would render a decree ineffective may be found guilty of civil and criminal contempt. United States v. Gamewell Co., 95 F.Supp. 9, 13 (D.C.Mass.1951). So in this case Greyhound acted under twisted interpretations of parts of the court's order which lead it to violate that order.

To illustrate and support the court's conclusion, it is necessary to review the conduct of the respondents in light of the plain language of the order.

II. CRIMINAL CONTEMPT CHARGES

VIOLATIONS OF PARAGRAPH 1

Paragraph 1 required Greyhound to show Mt. Hood's schedules on an equal basis with other non-Greyhound lines.⁴ The government's criminal contempt petition charged that Greyhound failed to treat Mt. Hood on an equal basis with other non-Greyhound lines in that numerous Greyhound schedules failed to depict Mt. Hood's connecting or interline service, but that Greyhound did depict the service of other non-Greyhound lines on analogous tables.

The evidence shows beyond a reasonable doubt that Greyhound did not treat Mt. Hood on an equal basis with other non-Greyhound lines. For example, in January, 1970, Greyhound table 603A failed to show Mt. Hood's connecting service between Portland, Bend, and Salt Lake City. In July, 1970, five months after the court's order, Greyhound added Mt. Hood's connecting service between Boise and Salt Lake City, but still omitted Mt. Hood's service originating in Portland destined for Madras, Bend, and Salt Lake City. The fastest route between Portland and Bend, Oregon is via Mt. Hood. Since Greyhound does not serve Bend, this route via Mt. Hood is a connecting schedule with Greyhound at Portland. Greyhound shows schedules of other carriers which connect Greyhound service with points that Greyhound does not serve. For example, in table 585 Citizen Auto Stage Company's service...