United States v. MINNEAPOLIS ELECTRICAL CONTR. ASS'N

• Decision Date: 24 July 1951
• Docket Number: Crim. A. No. 8161.
• Citation: 99 F. Supp. 75
• Parties: UNITED STATES v. MINNEAPOLIS ELECTRICAL CONTRACTORS ASS'N et al.
• Court: U.S. District Court — District of Minnesota

99 F. Supp. 75

UNITED STATES v. MINNEAPOLIS ELECTRICAL CONTRACTORS ASS'N et al.

Crim. A. No. 8161.

United States District Court D. Minnesota, Fourth Division.

July 24, 1951.

Donald M. Wakefield and C. A. Taney, Jr., of Minneapolis, Minn., for Minneapolis Electrical Contractors Ass'n, Skeldon & Green Electric, Inc., L. Arthur Clausen, John Morris, and Claude Skeldon.

Donald M. Wakefield, of Minneapolis, Minn., for Midwest Electrical Council, Inc., and Gordon Tucker.

Gustav A. Larson and Felhaber & Larson, of St. Paul, Minn., for St. Paul Electrical Contractors Ass'n, Kehne Electric Co., Inc., Tieso & Kostka Electric Co., Donald F. Kehne and John Kostka.

Seth Lundquist and Victor J. Larson, of Minneapolis, Minn., for Midwest Electric Company and David A. Mandel.

Heinrich J. Kuhlman, of Minneapolis, Minn., for Northland Electric Supply Co.

Franklin D. Gray and Morley, Cant, Taylor, Haverstock & Beardsley, of Minneapolis, Minn., for Westinghouse Electric Supply Co. Loring M. Staples and John S. Pillsbury, Jr., of Minneapolis, Minn. (Faegre & Benson, of Minneapolis, Minn., of counsel), for Graybar Electric Co.

Chester L. Nichols and Ralph H. Lee, of Minneapolis, Minn., for Local Union No. 292, International Brotherhood of Electrical Workers.

S. Robins and Robins, Davis & Lyons, of Minneapolis, Minn., for Local Union No. 110, International Brotherhood of Electrical Workers.

W. R. Poseley and Harroun, Anderson & Poseley, of Minneapolis, Minn., for Albert J. Fleming.

C. U. Landrum, U. S. Atty., and James J. Giblin, Asst. U. S. Atty., both of St. Paul, Minn., H. G. Morison, Asst. Atty. Gen., and Edward R. Kenney, Washington, D. C., and John H. Waters, Department of Justice, New York City, for the United States.

NORDBYE, District Judge.

The defendants have been indicted for conspiring and combining to restrain commerce in violation of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1. Section I of the indictment names as defendants two trade associations of electrical contractors, an organization to which those trade associations belong, four jobbers of electrical equipment, three electrical contractors, two unions whose members perform electrical work, seven individuals who are or have been officials of the defendant organizations or electrical contracting firms, and one manufacturers' representative who deals in electrical equipment. Section II of the indictment alleges the existence of co-conspirators who are not identified except as "jobber co-conspirators", "contractor co-conspirators", "manufacturers representatives co-conspirators", and "union co-conspirators". Section III defines "Twin City area" (where the alleged conspiracy is alleged to exist) to mean Hennepin and Ramsey counties. "Electrical contractors" is defined as individuals or business enterprises which install, repair, or alter electrical equipment and sell it to the consumer. "Electrical jobbers" are defined as purchasers of electrical equipment from manufacturers for resale to electrical contractors and others. "Manufacturers representatives" are defined as agents for manufacturers of electrical equipment, and who solicit and accept orders for electrical equipment produced by the manufacturers. "Electrical equipment" is defined as all kinds of electrical equipment which is customarily affixed to or permanently installed in buildings by skilled labor, or other equipment used to provide a complete electrical lighting and power system in said buildings.

Section IV of the indictment alleges that 85% of the electrical equipment used and installed in the Twin City area is shipped into the area in interstate commerce from the states where it is manufactured, and that a substantial part moves in an uninterrupted stream from its place of origin in other states to its places of installation and use in the Twin City area structures. A major part of this equipment is sold and installed by the defendant electrical contractors and contractor co-conspirators, who employ and supervise skilled labor for that purpose.

Several channels or systems have been used to sell and distribute the equipment from the manufacturers to the consumers in the Twin City area. One channel is from manufacturer to jobber, jobber to electrical contractor, and electrical contractor to consumer. Both the jobber and electrical contractor there make an additional charge in connection with the sale and distribution of the equipment. The electrical contractor also makes an additional charge for installation of the equipment. Electrical equipment also may be sold by the manufacturer to the jobber or directly to the electrical contractor, and the jobber or contractor, as the case may be, then sells directly to the consumer. Under this system the jobber or electrical contractor omitted from the channel has no opportunity to profit by the sale to the consumer.

Electrical equipment also may be sold directly by the manufacturer to the consumers. Under this arrangement neither jobbers nor electrical contractors have opportunity to make a charge or obtain a sale profit.

In 1949 the contractor members of the defendant associations did gross business of approximately $7,000,000. In 1949 the defendant jobbers did gross business of approximately $4,500,000 in the Twin City area. More than 85% of this equipment was shipped to the Twin City area from other states.

The conspiracy is charged in Section V of the indictment, which alleges that from about February, 1945, and continuing to date of the indictment, the defendants, their co-conspirators, and others to the Grand Jury unknown, have engaged in an unlawful combination and conspiracy to establish and maintain an arbitrary and restricted system of distribution of electrical equipment in the Twin City area, whereby the electrical equipment would be sold by manufacturers only to jobbers, resold by jobbers only to electrical contractors, and resold by electrical contractors to the ultimate consumer in unreasonable restraint of the above noted commerce in electrical equipment among the states.

The alleged unlawful conspiracy to restrict the distribution of electrical equipment consisted of an agreement and concert of action among the defendants, the co-conspirators, and others to the Grand Jury unknown, in terms substantially as follows: Defendant jobbers and jobber co-conspirators would sell only to electrical contractors, not to consumers directly, and would refuse to sell to electrical contractors who bought directly from manufacturers. The defendant contractors and contractor co-conspirators would buy only from jobbers, not directly from manufacturers and would refuse to install equipment which the contractors did not sell. The defendant contractors and contractor co-conspirators would boycott or threaten to boycott both the jobbers who sold directly to consumers and the products of manufacturers who sold to jobbers who sold directly to consumers.

The defendant manufacturers representatives and co-conspirator manufacturers representatives were not to sell electrical equipment directly to electrical contractors or jobbers who sold directly to the consumers. They also were to persuade and induce manufacturers to refuse to sell electrical equipment directly to consumers and to jobbers who sold directly to consumers.

The members of defendant unions were to refuse to install electrical equipment not sold by an electrical contractor including electrical equipment which a consumer purchased directly from a jobber or manufacturer.

The purpose and intent of the conspiracy, Section VI of the indictment alleges, was to force consumers to pay a higher price for electric equipment, to discourage or prevent consumers from purchasing directly from manufacturers or jobbers, to discourage or prevent manufacturers from selling electrical equipment in commerce to contractors, to consumers, and to jobbers who sold directly to consumers; to exclude jobbers from business or handicap them unless they refused to sell directly to consumers, and to hinder, prevent, and restrain sale of electric equipment in commerce by methods other than from manufacturer to jobber, jobber to contractor, and contractor to consumer. The necessary effect of the conspiracy has been to accomplish its purpose. The conspirators have done the acts they agreed to do.

Section VII contains the required allegations of venue and jurisdiction in this Court.

The defendants attack the indictment generally upon the following bases:

(1) The indictment does not contain a plain, concise and definite written statement of the essential facts constituting the offense charged as required by Rule 7(c) of the Federal Rules of Criminal Procedure, 18 U.S.C.A.

(2) The indictment fails to charge any acts which constitute a restraint of commerce in violation of the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note, because the restraints alleged are reasonable, not unreasonable.

(3) The...