United States v. Brumfield

• Decision Date: 23 August 1949
• Docket Number: Cr. No. 12204,12205.
• Citation: 85 F. Supp. 696
• Parties: UNITED STATES v. BRUMFIELD et al. UNITED STATES v. EDMONSON et al.
• Court: U.S. District Court — Western District of Louisiana

85 F. Supp. 696

UNITED STATES v. BRUMFIELD et al.

UNITED STATES v. EDMONSON et al.

Cr. Nos. 12204, 12205.

United States District Court W. D. Louisiana, Alexandria Division.

August 23, 1949.

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Malcolm E. Lafargue, U. S. Atty., Shreveport, La., for plaintiff.

Anthony J. Roy, of Marksville, La., for defendant Guy.

Fred Benton, of Baton Rouge, La., C. F. Gravel, Jr., of Alexandria, La., Harry V. Booth, of Shreveport, La., and Durrett & Hardin, of Baton Rouge, La., for defendant Brumfield.

Harry V. Booth, of Shreveport, La., C. F. Gravel, Jr., of Alexandria, La., for defendant Edmonson.

DAWKINS Chief Judge.

On April 8, 1949, a grand jury convened at Monroe, Louisiana, returned three indictments charging conspiracies, with two of which only are we concerned here.

In No. 12,204 H. Alva Brumfield and Hugh Arnold Guy were alleged to have conspired to violate Section 135a of the Federal Criminal Code, Sec. 241a,¹ Tit. 18 U.S.C.A., "by corruptly endeavoring to influence, obstruct and impede the due and proper administration of the law * * * a proceeding * * * then being had before an agency of the United States, to-wit: the Federal Petroleum Board * * *" and that said conspiracy was "carried into effect" by corruptly inducing certain witnesses "to testify falsely, to suppress and withhold material facts and to give exculpatory and false information" to "said Board * * *" while it was properly inquiring into the "operations of the said Hugh Arnold Guy and the Southern States Refining, Inc., of which he was president, involving or incident to the transporting, receiving, storing, refining and delivering of petroleum and products thereof, and the making, keeping, and filing of prescribed records and reports relating to such operations for the purpose of duly and properly administering the law, that is, the Connally Act, 49 Stat. 30, as amended, Sec. 715 et seq., Tit. 15 U.S.C.A., under which said proceeding was being had, and with the object of ascertaining whether any of the criminal provisions of the said Act had been or were being violated."

In the second indictment, No. 12,205, one D. O. Edmonson, the said Hugh Arnold Guy and Southern States Refining, Inc., are similarly charged with conspiracy, together with Louis B. Wilcox * * * "not indicted here" with violating "Section 35(A) of the Criminal Code, Section 80,² Tit. 18 U.S.C.A. * * * by the knowing, wilful, unlawful and felonious making and causing to be made * * * in a matter within the jurisdiction of a department and agency of the United States * * * certain false reports, accounts and certificates", knowing them to be false "* * * by filing * * * one of said false reports * * * on behalf and in the name of Southern States Refining, Inc. with the Federal Petroleum Board at Kilgore, Texas, each month during the continuance of said conspiracy * * * in violation of the provisions of the said Connally Act."

Motions to dismiss and attacks upon the proceedings of the grand jury, in all respects similar, were filed in both cases and they will be considered and disposed of in a single opinion.

On May 17, 1949, Guy was arraigned and plead guilty to both indictments.

On May 20, 1949, Brumfield plead not guilty without prejudice to the right to file any proper motions and pleas, and at the same time filed two motions to dismiss. Subsequently, on July 1, 1949, he filed a supplemental motion to dismiss and the Government in turn filed a "motion to strike defendant's motion to dismiss."

On the same day Edmonson plead not guilty and filed similar motions to dismiss. The corporation does not appear to have been arraigned in said case, No. 12,205.

Indictment No. 12,204.

The plea to the jurisdiction will be considered first. It is based upon the contention:

(1) That the Connally Act, Sec. 715d, 715h, 715i and 715j, Tit. 15 U.S.C.A., does not authorize the Federal Petroleum Board to conduct investigations or proceedings involving criminal violations of the said statute;

(2) Sections 241a and 242³ of Tit. 18 U. S.C.A. have been repealed and no proceeding was pending involving the subject matter of this indictment at the time thereof, which could preserve the right to institute this prosecution;

(3) That Section 135a of the Criminal Code, Section 241a, Tit. 18 U.S.C.A., is unconstitutional for "lack of specificity", in that said statute fails to set up an ascertainable standard of guilt in violation of the Fifth and Sixth Amendments of the Constitution of the United States;

(4) That said indictment does not allege facts constituting an offense under said last mentioned statute; and

(5) The indictment is too "vague, contradictory, duplicitous, uncertain and indefinite" to support an indictment of conviction or acquittal.

1. It is common knowledge that the Connally Act grew out of the distressing conditions in the crude oil industry following discovery of the East Texas Oil Field in the early 1930's, coincidentally with the worldwide depression, which caused the price of crude, which had, following the first world war, soared to more than $3.00 a barrel, to become a drug on the market and to be sold for as little as 10¢ a barrel. The state of Texas and others, had, in order to prevent waste, and to conserve their natural resources, passed certain statutes and imposed restrictions requiring proration, and limiting the quantities that could be taken from the wells in various fields. Widespread violations of these laws and regulations were taking place, and what was called "hot oil" was moving into interstate commerce in large quantities. The situation became such that Congress was induced to take notice of it under its power to regulate interstate commerce, and while first efforts were abortive, what is now called the "Hot Oil" or Connally Act, having been sponsored by Senator Connally of Texas, was passed, has been held valid and been in force now for more than a decade. This statute, Act of Feb. 22, 1935, 49 Stat. 30, prohibits the shipment in interstate commerce of crude oil produced in violation of state laws and regulations. In the first section it is declared "to be the policy of Congress to protect interstate and foreign commerce from * * * the harmful effect * * * caused by contraband oil * * * and to encourage the conservation of deposits of crude oil situated within the United States". Section 2 defines contraband as "petroleum * * * which was produced, transported, or withdrawn from storage in excess of the amounts permitted * * * under the laws of a state * * *"; and Section 3 prohibits its shipment in interstate commerce.

Section 4 authorizes suspension of certain provisions of the Act not pertinent here.

Section 5(a) directs the President to prescribe such "regulations as he finds necessary * * * for the enforcement of the provisions of this Act, including but not limited to regulations requiring reports, maps, affidavits, and other documents relating to the production, storage, refining, processing, transporting, or handling of petroleum * * * and providing for the keeping of books and records, and for the inspection of such books and records and of properties and facilities * * *." (Emphasis by the writer.)

Subsection (b) of said section 5 provides:

"Whenever the President finds it necessary or appropriate for the enforcement of the provisions of this Act he shall require certificates of clearance for petroleum and petroleum products moving or to be moved in interstate commerce from any particular area, and shall establish a board or boards for the issuance of such certificates. A certificate of clearance shall be issued by a board so established in any case where such board determines that the petroleum or petroleum products in question does not constitute contraband oil. Denial of any such certificate shall be by order of the board, and only after reasonable opportunity for hearing. Whenever a certificate of clearance is required for any area in any State, it shall be unlawful to ship or transport petroleum or petroleum products in interstate commerce from such area unless a certificate has been obtained therefor." (Emphasis by the writer.)

Section 5(c) details the manner in which the Board shall determine whether oil is contraband, for hearing and review by the Courts; and Section 6 prescribes a fine of not more than $2000, or not more than six months imprisonment, or both for violations of the statute and regulations made pursuant thereto. Section 7 provides procedure for the seizure, condemnation, and forfeiture of oil shipped in interstate commerce in violation of said Act. Section 8 permits common carriers to refuse acceptance for shipment of contraband oil and relieves them from any criminal or civil liability therefor when they act in good faith.

Section 9 declares:

"Any board established under authority of section 5, and any agency designated under authority of section 11, may hold and conduct such hearings, investigations, and proceedings as may be necessary for the purposes of this Act, and for such purposes those provisions of section 21 of the Securities Exchange Act of 1934 relating to the administering of oaths and affirmations, and to the attendance and testimony of witnesses and the production of evidence (including penalties), shall apply."

Section 10 provides for enforcement of the Act by the Attorney General through both civil and criminal process, including "mandatory injunctions commanding any person to comply with the provisions of the Act or any regulation issued thereunder," and by criminal proceedings where "the violation occurred."

Section 10(c) is quoted as follows:

"The United States District Courts shall have exclusive jurisdiction of violations of this Act or the regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by, or to enjoin any violation of, this Act or the regulations thereunder. Any criminal proceeding may...