GULF COAST SHRIMPERS & OYSTER. ASS'N v. United States

• Decision Date: 06 September 1956
• Docket Number: No. 15680.,15680.
• Parties: GULF COAST SHRIMPERS AND OYSTERMANS ASSOCIATION, Louis S. Simmons, Leon Strong and Walter McVeay, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

236 F.2d 658 (1956)

GULF COAST SHRIMPERS AND OYSTERMANS ASSOCIATION, Louis S. Simmons, Leon Strong and Walter McVeay, Appellants, v. UNITED STATES of America, Appellee.

No. 15680.

United States Court of Appeals Fifth Circuit.

September 6, 1956.

Albert Sidney Johnston, Jr., Howard A. McDonnell, Biloxi, Miss., C. Paul Barker, New Orleans, La., for appellants.

Earl E. Pollock, Daniel M. Friedman, Attys., Dept. of Justice, Washington, D. C., Robert E. Hauberg, U. S. Atty., Jackson, Miss., George R. Blue, U. S. Atty., New Orleans, La., Stanley N. Barnes, Asst. Atty. Gen., Henry M. Stuckey, Attys., Dept. of Justice, Washington, D. C., for appellee.

Before RIVES, CAMERON and BROWN, Circuit Judges.

RIVES, Circuit Judge.

This appeal is from judgments of conviction entered upon jury verdicts finding appellants guilty of engaging in a combination or conspiracy in restraint of trade or commerce in violation of the Sherman Anti-Trust Act.¹ The errors specified and argued relate mainly to the sufficiency of the indictment, the adequacy of the court's oral charge, the refusal of the court to give certain written instructions requested by the appellants, and the overall sufficiency of the proof to support the verdict.

The appellant Association is a corporation organized under the laws of Mississippi, with headquarters at Biloxi and affiliated branches at Pascagoula, Bay St. Louis, Gulfport and Pass Christian. During the 1950-1953 period here material, appellant Simmons was President of the Association, and appellant McVeay was Secretary of the Pascagoula branch.²

The evidence shows that practically all commercial shrimp and oyster fishermen operating from the aforementioned Mississippi ports were members of the appellant Association. Upon stipulated conditions, Association membership was extended to both fishing boat captains and crew members.³ Association members were permitted to sell their catches to about twenty-two shrimp and oyster packers and canners at various locations along the Mississippi coast, and practically all of the shrimp and oysters packed by these companies were shipped in interstate commerce. All packers and canners were required by Association rules to purchase every catch tendered by Association fishermen, to furnish free ice for the fishermen to prevent spoilage, and to pack both shrimp and oysters.

The majority of the smaller boats used were owned by individual fishermen-members of the Association, but most of the larger boats were owned by the packers or "dealers". An Association rule purported to require the dealers to purchase fishing licenses for all boats, whether owned by them or by the fishermen, though the proof shows that a number of fishermen-members of the Association owning their own boats purchased their own licenses.⁴ The boats used by the fishermen-members fall into three separate classifications: (1) those both owned and licensed by the dealers; (2) those boats owned by the fishermen, but licensed by the dealer; and (3) those boats both owned and licensed by the individual fishermen. Fishermen who operated boats in the first classification were generally required to sell their catches to the dealer who owned the boat, except in emergency instances when it became necessary during a voyage to sell and deliver the catch to some other dealer's "freight boat" to prevent spoilage. Fishermen who operated boats in the second classification generally sold their catches to the dealer who purchased their boat license, but there was no compelling obligation for them to do so if other dealers were offering a higher price. Of course, fishermen who operated boats which were both individually owned and licensed could dispose of their catches to whatever dealer they desired.

The captains of the boats were selected by the dealers, and the captains generally had the right to select and hire or fire their crew members. The boat captains were in actual charge of the fishing operations after the vessels left port, and the dealers had no right to direct them as to when and where to fish, though the dealers could specify the type fish to be caught, usually shrimp, and the locations to which the catches should be returned. There is some defensive testimony that the dealers, through their failure either to permit use of their boats, or, in some instances, to agree to purchase the catch of boats owned and operated individually by the fishermen, could at any time effectively terminate the services of any particular captain and his crew members with whose work they were dissatisfied.

The proceeds of each catch were ordinarily divided between the fishermen and dealers according to the "Mississippi system of sharing", which system required that the fuel and grocery expenses for each trip first be deducted from the value of the entire catch, after which equal shares were received by the boat owner, the boat captain, and each member of the crew. In those instances where the boat's "rig"⁵ was not paid for, an additional and equal share was also first allocated to discharge this indebtedness. If the catch was small and its value did not exceed the expenses incurred, the fishermen received nothing and were still responsible for repayment of any expenses advanced, though further testimony shows that certain dealers would "carry over" these unpaid expenses until other trips were made where the catches were sufficient to cover the expenses already accrued from a prior, unsuccessful trip. As to dealer owned or licensed boats, some of the dealers admitted their payment of state severance taxes levied upon shrimp and oysters caught under this arrangement; that they further withheld and paid income tax of fishermen, based upon the fishermen's share of each catch, and deducted social security taxes and unemployment insurance contributions from the value of the fishermen's share for transmittal to the federal and state taxing authorities.

The proof adduced by the Government in support of its indictment allegations that appellants had conspired to fix and maintain prices shows that, whatever the type boat used, all Association fishermen were prohibited from selling shrimp or oysters below the prices set by the Association; that member-captains operating dealer-owned "freight boats" were also prohibited from buying at below Association prices; that neither the fishermen-members nor the dealers were permitted to buy shrimp or oysters from any fisherman who was not a member in good standing with the Association; and that any member who sold his catch below Association prices was subject to a fine, suspension from membership, and forfeiture of the proceeds from the sale of his catch. Other Government proof shows that, to insure dealer compliance with its pricing policies, the appellant Association either authorized or ratified mass member picketing, designed to prevent nonmember or out-of-state fishermen from fishing in Mississippi waters or selling to Mississippi coast packers; boycotting of nonconforming dealers by Association members; and coercion of nonmember fishermen to join the Association and comply with its price schedules.⁶

The Association President, appellant Simmons, in his statement prepared for grand jury presentation, captioned "The Way the Prices Are Fixed", reported that up until 1952 the membership of the Association met as a body to discuss prices; that after a price was fixed the Association officers were instructed to notify the dealers that such price would be demanded; that, subsequently, the Association adopted a faster and less cumbersome method of determining prices through an Association "price control committee", consisting of nine member-fishermen authorized to raise or lower the price according to the season and the way the catch was running; and that the dealers did not participate in the discussions and deliberations of the price control committee. A seriously contested issue at the trial was whether raw shrimp and oyster prices were arbitrarily fixed by this "price control committee" without the consent of the dealer-packers, or whether they were arrived at through mutual bargaining and negotiation between the Association and its members on the one hand, and the dealer-packers on the other. Though appellant Simmons at the trial re-affirmed his prior grand jury statement that the dealers did not participate in the determinations of the "price control committee", his overall testimony along with other defensive proof tends to show that a number of dealers did, upon invitation, attend committee meetings to contest the prices there agreed upon and demanded of them by the committee, especially when an increase in the prices of raw shrimp and oysters was sought; and in a number of instances actually initiated meetings of the price control committee to obtain a price reduction when prevailing local prices were higher than those paid by packers elsewhere with whom the dealers felt they could not successfully compete. However, a number of packers testified for the Government that they either were not invited to attend the meetings, or that at such meetings they had no effective means of blocking the price determinations of the committee, their only alternative being either to pay the prices fixed by it or suspend their packing operations.

I. Sufficiency of the Indictment.

Appellants first insist that certain allegations of the indictment render it fatally insufficient to charge any offense under the Sherman Act.⁷ They argue that the indictment allegation of the Association's incorporation under Mississippi law by necessary reference restricts the objects and purposes of the Association to those of a "labor group", as supposedly revealed by its corporate charter;⁸ that Sections 6 and 20 of the Clayton Act and Section 7 of the Norris-La Guardia Act insulate such labor organization activity from Sherman Act liability;⁹ and that the indictment is further defective in charging a conspiracy with...