U.S. v. Greyhound Corp.

• Decision Date: 24 December 1974
• Docket Number: No. 74-1124,74-1124
• Parties: UNITED STATES of America and Interstate Commerce Commission, Petitioners and Appellees, v. The GREYHOUND CORPORATION and Greyhound Lines, Inc., Respondents and Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 529

508 F.2d 529

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

No. 74-1124.

United States Court of Appeals, Seventh Circuit.

Argued May 29, 1974.

Decided Dec. 24, 1974.

Thomas E. Kauper, Asst. Atty. Gen., Richard H. Sayler, Lee I. Weintraub, Joel Davidow, Dept. of Justice, Washington, D.C., Bernard A. Gould, Robert S. Turkington, A. James Gilmore, Attys., Interstate Commerce Commission, for petitioners and appellees.

William W. Schwarzer, John R. Reese, Lynn H. Pasahow, McCutchen, Doyle, Brown & Enersen, San Francisco, Cal., Edmund J. Kenny, Winston & Strawn, Chicago, Ill., Robert J. Bernard, W. L. McCracken, San Francisco, Cal., for respondents and appellants.

Before CLARK, Associate Justice, and FAIRCHILD and PELL, Circuit judges.

PELL, Circuit Judge.

The Greyhound Corporation and its wholly owned subsidiary Greyhound Lines, Inc. (collectively, Greyhound) appeal from a conviction of criminal contempt, under 18 U.S.C. 401(3), ¹ for willfully violating certain provisions of an order entered by a three-judge district court. The principal issue on appeal is whether the evidence was sufficient to prove that the violations of the order were willful.

i

The background of this case dates back to 1947. Greyhound, a common carrier operating throughout most of the United States, sought and obtained, between 1947 and 1956, approval of the Interstate Commerce Commission (ICC) for the acquisition of eight bus companies and their routes in the western United States. Mt. Hood Stages, Inc. (Mt. Hood), doing business as Pacific Trailways, is a common carrier authorized to operate in Oregon, Idaho, and Utah. At the acquisition hearings before the ICC, Mt. Hood opposed a number of the acquisitions, pointing out that its north-south route through central Oregon was being completely encircled by Greyhound. To overcome this opposition. Greyhound officers made certain representations to the ICC concerning Greyhound's policies and implementing practices with regard to Mt. Hood. Following the making of these representations Mt. Hood withdrew at least some of its objections to acquisitions.

In 1964 Mt. Hood petitioned the ICC to reopen the acquisition proceedings and sought a supplemental ICC order, under 49 U.S.C. 5(9), specifically enforcing the representations and assurances made to the ICC by Greyhound during the previous acquisition proceedings. The ICC hearing examiner found that Greyhound was violating a number of representations made during the earlier hearings; this finding was adopted by Division Three of the ICC. ² Generally, the ICC found that Greyhound had made specific representations in the prior acquisition proceedings which amounted to assurances of public benefit and interest and no harm to existing carriers or service. The failure of Greyhound to abide by its commitments, without sound reasons, Division Three observed, 'constitute(d) destructive competition in contravention of the national transportation policy.' 104 M.C.C. at 463. The ICC, however, did not enter a specific order but, rather, gave Greyhound time voluntarily to conform its practices to its representations.

Greyhound did not voluntarily conform and in 1968 the full ICC entered an order directing Greyhound, inter alia, to cease and desist from 'all practices of the character found in the prior reports of Division 3 (of the ICC) and the hearing examiner to be unreasonable and inconsistent with (Greyhound's) representations in the above-entitled proceedings . . ..' The ICC denied Greyhound's subsequent petition for reconsideration, and Greyhound petitioned for judicial review.

A three-judge district court denied Greyhound's motion to set aside the ICC order and granted the Government's counterclaim for enforcement of its order. ³ The court issued a ten-paragraph order, the portions of which are material to this appeal are set out in the margin. ⁴

In June 1971, the Government filed petitions charging Greyhound with criminal and civil contempt for failing to comply with the order of the three-judge district court. After a bench trial, Chief Judge Robson, in a careful and detailed opinion, found Greyhound in criminal contempt of five paragraphs of the order and in civil contempt of three paragraphs. ⁵ The court fined Greyhound Corporation $100,000 and Greyhound Lines, Inc. $500,000 for their criminal contempt. ⁶ Greyhound has appealed from the criminal contempt convictions and the fines imposed under these convictions.

II

Greyhound concedes, there being no appeal of the civil contempt judgment, that it violated the 1970 order of the three-judge district court but argues that the evidence was insufficient to prove that the violations were willful.

Willfulness is, of course, an element of criminal contempt and must be proved beyond a reasonable doubt. In re Brown, 147 U.S.App.D.C. 156, 454 F.2d 999, 1006 (1971); United States ex rel. Porter v. Kroger Grocery & Baking Co., 163 F.2d 168, 173-174 (7th Cir. 1947). In United States v. Seale,461 F.2d 345, 368 (7th Cir. 1972), a criminal contempt case involving alleged disruption and obstruction within a trial, this court noted that 'the minimum requisite intent (for criminal contempt) is better defined as a volitional act done by one who knows or should reasonably be aware that his conduct is wrongful.' A finding of criminal contempt cannot stand, moreover, if the court's order is vague or uncertain. International Longshoremen's Ass'n, Local 1291 v. Philadelphia Marine Trade Ass'n, 389 U.S. 64, 76, 88 S.Ct. 201, 19 L.Ed.2d 236 (1967). Greyhound relies substantially on the claimed obnubilation of the three-judge court order.

Willfulness for criminal contempt may, as in other areas of criminal law, be inferred from the facts and circumstances in proof. Kroger Grocery,supra. In cases involving in-court obstruction or disruption, such as Seale, these facts and circumstances will typically involve simply the conduct and statements occurring during the trial. In a criminal contempt case involving a court order, such as the one before us, on the other hand, the court should consider the entire background behind the order-- including the conduct that the order was meant to enjoin or secure, the interests that it was trying to protect, the manner in which it was trying to protect them, and any past violations and warnings-- in determining whether the order is sufficiently specific and in determining whether the defendant knew or should have known that his conduct was wrongful. ⁷ Terminal R.R. Ass'n v. United States, 266 U.S. 17, 29, 45 S.Ct. 5, 69 L.Ed. 150 (1924); United States v. Christie Indus., Inc., 465 F.2d 1002, 1007 (3d Cir. 1972).

Willfulness, for the purpose of criminal contempt, does not exist where there is a 'good faith pursuit of a plausible though mistaken alternative.' In re Brown, supra, 454 F.2d at 1007. To provide a defense to criminal contempt, the mistaken construction must be one which was adopted in good faith and which, given the background and purpose of the order, is plausible. The defendant may not avoid criminal contempt by 'twisted interpretations' or 'tortured constructions' of the provisions of the order. United States v. Gamewell, 95 F.Supp. 9, 13 (D.Mass. 1951). See also United States v. Christie Indus., Inc., supra, 465 F.2d at 1007. As Chief Judge Robson noted, a defendant, if he has doubts as to his obligations under an order, may petition the court for a clarification or construction of that order. 363 F.Supp. at 534. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 192, 69 S.Ct. 497, 93 L.Ed. 599 (1949). While a defendant is, of course, not required to seek such a clarification, a failure to do so when combined with actions based upon a twisted or implausible interpretation of the order will be strong evidence of a willful violation of the decree. ⁸ Federal Trade Comm'n v. Gladstone, 450 F.2d 913, 915 (5th Cir. 1971); United States v. Tijerina, 412 F.2d 661, 667 (10th Cir. 1969), cert. denied,396 U.S. 990, 90 S.Ct. 478, 24 L.Ed.2d 452.

Similarly, while actions showing a good faith effort to comply with the order will tend to negate willfulness, Kroger Grocery, supra, delaying tactics, indifference to the order, or mere 'paper compliance' will support a finding of willfulness. In re Holland Furnace Co., 341 F.2d 548, 551 (7th Cir. 1965), cert. denied, 381 U.S. 924, 85 S.Ct. 1559, 14 L.Ed.2d 683. The very issuance of the order puts the party on notice that his past acts have been wrongful. 'No concept of basic fairness is violated by requiring a person in this position to be more than normally careful in his future conduct.' United States v. Custer Channel Wing Corp.,247 F.Supp. 481, 496 (D.Md.1965), aff'd, 376 F.2d 675 (4th Cir. 1967), cert. denied, 389 U.S. 850, 88 S.Ct. 38, 19 L.Ed.2d 119.

III

We turn now to the specific paragraphs of the order as to which Greyhound was found to be in criminal contempt.

A

Paragraph 1 of the order requires:

'that Greyhound show Mt. Hood schedules in Greyhound folders on an equal basis with other non-Greyhound lines.'

The district court in finding that Greyhound had violated this provision interpreted the phrase 'on an equal basis' to mean that Mt. Hood should be treated at least as well as other non-Greyhound carriers. Having reviewed the record, we conclude that the evidence was more than sufficient to support Chief Judge Robson's finding that Greyhound's violation of this provision was willful.

We note first that Greyhound unreasonably delayed in complying with this paragraph of the order. Rather than taking special care to include Mt. Hood schedules in its folders, Greyhound, as was pointed out below, did not make many of the required changes until after the contempt petitions were filed, ⁹ which was eighteen months after the court order was entered. We agree with Chief Judge Robson t...