United States v. Drumm

• Decision Date: 23 March 1964
• Docket Number: No. 6214.,6214.
• Citation: United States v. Drumm, 329 F.2d 109 (1st Cir. 1964)
• Parties: UNITED STATES of America, Plaintiff, Appellant, v. Orville H. DRUMM, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

329 F.2d 109 (1964)

UNITED STATES of America, Plaintiff, Appellant, v. Orville H. DRUMM, Defendant, Appellee.

No. 6214.

United States Court of Appeals First Circuit.

March 23, 1964.

Robert V. Zener, Attorney, Department of Justice, with whom John W. Douglas, Asst. Atty. Gen., W. Arthur Garrity, Jr., U. S. Atty., and Alan S. Rosenthal, Attorney, Department of Justice, were on brief, for appellant.

Philip T. Jones, East Weymouth, Mass., with whom Edward D. Hassan, Boston, Mass., was on brief, for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

HARTIGAN, Circuit Judge.

This is an appeal by the plaintiff-appellant, United States of America, from a judgment of the United States District Court for the District of Massachusetts, entered June 20, 1963, following a jury verdict directed by the court in favor of the defendant-appellee, Orville H. Drumm.

The government brought this civil action against defendant Drumm for an accounting of payments made to him by a private company while he was in the employ of the United States Department of Agriculture during the years 1951 through 1956. The complaint alleged that while employed as a federal poultry inspector the defendant breached a fiduciary duty which he owed the government by receiving payments as a consultant to the very processor whose operations it was his federal duty to inspect. Defendant admitted receiving payments totalling $35,022.50 from the Thorndike and Gerrish Company, two-thirds owner of Native Prepared Poultry Company and Derry Dressed Poultry Company whose poultry he was assigned to inspect, but contended that such payments were for professional services rendered the parent company "separate and apart from and in no manner connected with or in derogation of" his duties as a poultry inspector for the Department of Agriculture. He further claimed that his supervisors in the Department knew of and acquiesced in his work for Thorndike and Gerrish and in the receipt of the money paid to him for this work.

As a poultry inspector defendant was charged with the duties, among others, of inspecting the processing of poultry, ensuring that the poultry that was inspected was of sufficiently high quality to meet the standards set forth by the Department of Agriculture and ensuring that certain standards of sanitation and wholesomeness were maintained. He was required to report all violations coming to his attention. Failure of a processor to meet Department standards could mean suspension of the inspection service. Poultry inspection was voluntary at that time but many processors sought to participate in the program because of the refusal of many large buyers to buy any but government inspected poultry. The processor was billed by the Department for the inspector's time.

Defendant's employment as a consultant to Thorndike and Gerrish began in late 1951 or early 1952. He testified that while he was inspecting poultry at the plant of the Native Prepared Poultry Company he had a number of conversations with Dan McLaughlin, an officer of Thorndike and Gerrish and, apparently, of the two poultry companies as well. In one of those conversations McLaughlin asked him whether he could "help them after hours in the processing of the finished products or any part of the products." For this "part-time" work, defendant received a salary of $85 a week plus bonuses, adding up to a five year total of over $35,000. At the time of his retirement from the federal service in 1956 defendant's annual salary as a poultry inspector was $6,250.

As part of his employment for Thorndike and Gerrish, defendant testified that he assisted the company in deciding which of the available methods of packaging should be used in the packaging of cut-up birds. He had "a great many" conferences with representatives of the A & P food chain — a major Thorndike and Gerrish customer — to instruct them how to handle chickens after delivery so as to reduce contamination. He assisted Thorndike and Gerrish in tracking down and eliminating the source of discoloration of ducks received by producers in a discolored condition. In his attempt to work out these difficulties defendant often sought help from other government employees. There was no evidence as to whether, in so doing, he ever revealed that he was acting as an employee of Thorndike and Gerrish rather than as a government inspector interested in helping the inspected plant to solve some of its problems.

Throughout the five years in question defendant, who was a veterinarian, conducted a private veterinary practice at his home in Lunenburg, Massachusetts. On May 4, 1953 he received a letter from Bernard Meeks, assistant to the Director of the Poultry Branch of the Production and Marketing Administration of the Department of Agriculture, pointing out that complaints had been received from other veterinarians in the Lunenburg area and that it was contrary to the rules of the Department to engage in outside employment without permission. The rule, which was quoted in Meeks' letter, provided in part:

"Outside work — If an employee wishes to perform outside work after official hours, he should advise his supervisor who will clear all outside work with the appropriate PM office. An employee may not engage in outside work (including teaching) that might prevent efficient performance of duties as an employee of PMA or might cause an embarrassment * * *."

On October 5, 1953 defendant addressed the following letter to his supervisor:

"Dear Dr. Harney: On May 4, 1953 I received a letter from Bernard M. Meeks of the Poultry Branch relative to my conducting private practice of Veterinary Medicine at my home in Lunenburg and I gave him a statement of facts¹ as they were but misunderstood that a formal request should have followed.

"I would like permission to continue with my private practice on week ends and in my office in the evenings as I find my income from my poultry inspection work is not sufficient to meet my financial obligations.

"I have one daughter, a senior, at Brown University and four younger children coming along in the grades and high school and the needs are on the increase which means all the earning power I possess is a necessity.

"If this permission is at all possible I will be very grateful for this consideration in view of the above facts. Thanking you for this consideration, I am,

"Very truly yours O. H. Drumm, V.M.D."

Permission was granted by means of an office memorandum from the Chief of the Eastern Area Personnel Management Division to defendant's supervisor:

"This will acknowledge receipt of a copy of Dr. O. H. Drumm\'s letter to you of October 5, 1953 requesting permission to continue with his private practice on weekends and in the evenings.

"This is to advise that permission has been granted Dr. Drumm to continue his private practice on weekends and in the evenings as long as it does not prevent efficient performance of his duties as an employee of CSS, Department of Agriculture."

Having established the above mentioned facts, primarily through the testimony of ...