United States v. Bressler, 135
| Decision Date | 20 March 1947 |
| Docket Number | No. 135,Docket 20437.,135 |
| Citation | 160 F.2d 403 |
| Parties | UNITED STATES ex rel. WEINSTEIN et al. v. BRESSLER et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Jess G. Schiffmann, Atty., Dept. of Justice, of Washington, D. C. (John F. Sonnett, Asst. Atty. Gen., Lester S. Jayson, Sp. Atty., of New York City, Joseph M. Friedman, Chief, War Frauds Civil Section, and J. Gregory Bruce, Atty., Dept. of Justice, both of Washington, D. C., and John F. X. McGohey, U. S. Atty., of New York City, on the brief), for the United States.
Louis Waldman, of New York City (Samuel Duker, of New York City, on the brief), for appellees.
Before SWAN, AUGUSTUS N. HAND, and CLARK, Circuit Judges.
In United States ex rel. Brensilber v. Bausch & Lomb Optical Co., 2 Cir., 131 F.2d 545, affirmed by an equally divided court, 320 U.S. 711, 64 S.Ct. 187, 88 L.Ed. 417, we decided that fraud must be proved to sustain a recovery by an informer under the Informer's Act, 31 U.S.C.A. §§ 231-235, for conspiracy to secure payment of a false claim. United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443. We must now decide whether, assuming our previous decision to stand, it is fraudulent for contractors to submit by agreement uniform bids for a government contract after previously disclosing to government procurement officials the noncompetitive character of the prospective bidding.
The underlying facts were brought out by affidavits of the parties and, indeed, in substantial detail from those presented on behalf of the plaintiff. While some question is now made as to summary judgment, we do not see that there is any real dispute as to what took place. Hence we accept the complete statement made in the opinion below, D.C., 60 F.Supp. 676, to which we make reference for details, stating here only such facts as are necessary to present the issues of law involved.
The defendants are hat manufacturers and officials of labor unions representing the employees of such manufacturers. In 1941, defendant manufacturers submitted three separate sets of bids to the Army for the manufacture of Army hats, in February, June, and September. The June bids only form the basis of this action.
The February bids were originally submitted without agreement among the defendants. The Army procurement officials, however, thought that some of the bids submitted were too high and therefore awarded contracts for only a part of the hats desired. Thereafter the defendant Roberts, who was a labor union official, and some of the defendant manufacturers conferred with civilian and Army procurement officials. The conferees negotiated a price for the hats, and all the defendant manufacturers amended their bids to quote this price. Thereafter contracts were awarded for the remainder of the hats.
Because of his success in securing agreement among the parties in February, Roberts again conferred with a procurement official prior to the submission of the June bids. This official, one Becker of the Office of Production Management, told Roberts the quantity sought and the maximum price the Army would pay. Roberts, in turn, assured him that all the shops could be brought into line. As a result of this conference Roberts promoted the June bidding arrangement among all the defendant manufacturers. By this agreement the defendants allocated the total quantity sought among themselves, and each submitted a bid for his share at the maximum price Becker had set. This arrangement was not a secret one. Roberts had of course in effect formulated it with Becker, and thereafter he disclosed it to an Army procurement official, Colonel Jones. Colonel Jones and one Rice, Becker's successor, recommended rejection of these identical bids, however; and only four of defendant manufacturers were awarded contracts in June.
In 1943, one Weinstein, acting on his own behalf and that of the United States, brought this suit against defendants. In it he alleged that in all three sets of transactions defendants had violated the Informer's Act, 31 U.S.C.A. §§ 231-235, and the Sherman Anti-Trust Act, 15 U.S.C.A. § 1 et seq. As violations of the former Act he alleged a conspiracy "to secretly fix arbitrary, noncompetitive, unfair, excessive, identical and fraudulent prices" in the bids submitted; to represent the bids as competitive; to secure contracts with them; and to collect fees under the contracts. In 1944, the United States, acting under 31 U.S.C.A. § 232(C), intervened and took over the conduct of this suit....
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