Sam Fox Publishing Company v. United States

• Citation: 81 S.Ct. 1309,6 L.Ed.2d 604,366 U.S. 683
• Decision Date: 29 May 1961
• Docket Number: No. 56,56
• Parties: SAM FOX PUBLISHING COMPANY, Inc., et al., Appellants, v. UNITED STATES et al
• Court: United States Supreme Court

366 U.S. 683

81 S.Ct. 1309

6 L.Ed.2d 604

SAM FOX PUBLISHING COMPANY, Inc., et al., Appellants,

v UNITED STATES et al.

No. 56.

Argued March 29 and 30, 1961.

Decided May 29, 1961.

Mr. Charles A. Horsky, Washington, D.C., for appellants.

Mr. Daniel M. Friedman, Washington, D.C., for appellee, The United States.

Mr. John F. Dooling, Jr., New York City, for appellee, American Society of Composers, Authors and Publishers.

Mr. Justice HARLAN, delivered the opinion of the Court.

The appellants, proceeding under the Expediting Act, 15 U.S.C. § 29, 15 U.S.C.A. § 29, appeal directly to this Court from an order of the District Court for the Southern District of New York denying their motions to intervene as of right in a proceeding to modify a consent decree previously entered in a government antitrust suit. The appellants were not named as parties either in the suit or modifica- tion proceeding.¹ The motions were made pursuant to Rule 24, subdivision (a)(2) of the Federal Rules of Civil Procedure, 28 U.S.C.A.²

The matter arises in the following setting: In 1941 the United States brought suit under § 1 of the Sherman Act, 15 U.S.C. § 1, 15 U.S.C.A. § 1, against the American Society of Composers, Authors and Publishers (ASCAP), an unincorporated association of which appellants are members, and certain of its officers. The Society and the defendant officers besides being named as an entity and individuals, respectively, were also sued as representatives of all members of the Society. The Society, comprising some 6,400 writers and publishers of musical compositions, was organized to take nonexclusive licenses to the works of its members, to license such works out for public performance, and to distribute among the members the revenues resulting therefrom. The three appellants are among the Society's publisher members.

The Government's complaint in the action was aimed at two distinct types of antitrust violation: (1) alleged restraint of trade arising out of ASCAP's mode of dealing with outsiders desiring licenses of compositions in the Society's catalogue; and (2) alleged restraint of competition among the Society's members inter sese, result- ing from the asserted domination of the Society's affairs by a few of its large publisher members who, it was claimed, were able to control the complexion of the Board of Directors and the apportionment of the Society's revenues. As to the latter type of restraint, the prayer for relief sought to insure (a) that Board elections be by no method 'other than by a membership vote in which all * * * members shall have the right to vote,' and (b) that the distribution of revenue to members should be on a 'fair and non-discriminatory' basis. It is apparent from the record that appellants' particular interests in the suit related entirely to the second aspect of the Government's charges, that is those involving the Society's internal affairs, and that their motions to intervene were so directed.

During the same year in which the suit was brought it was settled by a consent decree, approved by the District Court. In addition to provisions dealing with what may be called the Society's external affairs, the decree, in broad terms, contained requirements for Board elections by membership vote and for revenue distributions on an equitable basis. Subsequent to the decree, both the vote of the members and their share of license revenues were accorded on a weighted basis relative to the particular member's contribution to the revenue-producing value of all members' contribution to the Society's catalogue, all as determined by the Board of Directors. In 1950, pursuant to a reservation-of-jurisdiction clause in the 1941 decree, a modification of the original decree was effected at the instance of the Government. The modified decree ordered, among other things, that 'in order to insure a democratic administration of the affairs of defendant ASCAP * * * (the composition of the) Board of Directors shall, as far as practicable, give representation to writer members and publisher members with different participations in ASCAP's revenue distributions * * *.'

In 1959, this same concern for 'democratic administration of the (internal) affairs' of ASCAP and for an equitable distribution of license revenues led the Government to press for further amendments to the decree. In 1960 this resulted in additional court-approved modifications which, it is apparent, represented a substantial improvement over the earlier provisions relating to Board elections and the apportionment of revenues. Contending that the proposed modifications did not go far enough towards ameliorating the position of the small publishers as against the few large publishers, appellants, prior to the adoption of the modified decree, brought the intervention motions now before us. The District Court denied leave to intervene without opinion, stating in its order:

'* * * representation of the public and the applicants by the Department of Justice was adequate ad in the public interest; * * * applicants are members of and are represented by the Society with their consent; * * * applicants have permitted this cause in which they are not named as parties to proceed to judgment; and * * * it would not promote the interests of the administration of justice to permit the requested intervention * * *.'

Thereafter the District Court entered a judgment approving the proposed modifications to the existing consent decree. Appellants do not appeal from that judgment, but only from the order denying their motions to intervene as of right. We postponed consideration of the question of jurisdiction to the hearing of the case on the merits. 362 U.S. 986, 80 S.Ct. 1075, 4 L.Ed.2d 1020.

As the Government and appellants correctly agree, the controlling question on the issue of jurisdiction, the answer to which also determines the merits of this appeal, is whether the appellants were entitled to intervene in these proceedings as 'of right.' Sutphen Estates, Inc. v. United States, 342 U.S. 19, 72 s,.Ct. 14, 96 L.Ed. 19, where the Court said: 'If appellant may intervene as of right, the order of the court denying intervention is appealable.' Id., 342 U.S. at page 20, 72 S.Ct. at page 16. That case requires rejection of ASCAP's separate contention that the order below was not appealable because not final,³ and also its further contention that appellate review of intervention has become moot, in that no appeal was taken from the judgment eventuating from the proceedings in which intervention was sought. The latter contention is based on the erroneous hypothesis that review of the intervention order was obtainable only in connection with an appeal from such judgment.

The determinative question—whether appellants were entitled to intervene as 'of right'—depended upon their showing both that 'the representation of' their 'interest by existing parties' to the consent judgment modification proceeding was or might 'be inadequate,' and that they would or might 'be bound by (the) judgment' in such proceeding. See note 2, supra.

I.

Appellants first contend that the representation of their interests by the Government has proven inadequate. Although the most recent decree reduced and limited the Board representation of the 10 largest publishers and provided for a method of revenue apportionment more favorable than that of the past to the smaller and less well-established Society members, appellants' contention is that this amelioration of their position is not adequate to break the control of the larger publishers, and therefore the Government's representation was or may have been inadequate.

Apart from anything else, sound policy would strongly lead us to decline appellants' invitation to assess the wisdom of the Government's judgment in negotiating and accepting the 1960 consent decree, at least in the absence of any claim of bad faith or malfeasance on the part of the Government in so acting. However, we need not reach the question of the adequacy of the Government's representation of the appellants' interests because, as hereafter shown, it is in any event clear that appellants are not bound by the consent judgment in these proceedings, if their position in this litigation is deemed as aligned with that of the Government. See United States v. Columbia Gas & Electric Corp., D.C., 27 F.Supp. 116, 119.

We regard it as fully settled that a person whose private interests coincide with the public interest in government antitrust litigation is nonetheless not bound by the evn tuality of such litigation, and hence may not, as of right, intervene in it. In United States v. Borden Co., 347 U.S. 514, 74 S.Ct. 703, 98 L.Ed. 903, it was ruled that it was an abuse of discretion for the District Court to refuse the Government an injunction against certain acts held violative of the antitrust laws, even though the same acts had already been enjoined in a private suit. It was there stated in clearest terms that 'private and public actions were designed to be cumulative, not mutually exclusive' (id., 347 U.S. at page 518, 74 S.Ct. at page 706), and, quoting from United States v. Bendix Home Appliances, D.C., 10 F.R.D. 73, 77, "* * * (T)he scheme of the statute is sharply to distinguish between Government suits, either criminal or civil, and private suits for injunctive relief or for treble damages. Different policy considerations govern each of these. They may proceed simultaneously or in disregard of each other." Id., 347 U.S. at pages 518—519, 74 S.Ct. at page 706.

This principle is certainly broad enough to make it clear that just as the Government is not bound by private antitrust litigation to which it is a stranger, so private parties, similarly situated, are not bound by government litigation. See United States v. General Electric Co., D.C., 95 F.Supp. 165; United States v. Columbia Gas & Electric Corp., supra; United States v. Radio Corporation, D.C., 3 F.Supp. 23...