United States v. General Electric Co.

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtLEIBELL
Citation40 F. Supp. 627
PartiesUNITED STATES v. GENERAL ELECTRIC CO. et al.
Decision Date18 April 1941

40 F. Supp. 627

UNITED STATES
v.
GENERAL ELECTRIC CO. et al.

District Court, S. D. New York.

April 18, 1941.


40 F. Supp. 628
COPYRIGHT MATERIAL OMITTED
40 F. Supp. 629
Charles H. Weston and Ernest S. Meyers, Sp. Assts. to the Atty. Gen. (Thurman Arnold, Asst. Atty. Gen., of counsel), for the United States

John Lord O'Brian, of Buffalo, N. Y. (Quincy D. Baldwin and Slee, O'Brian, Hellings & Ulsh, all of Buffalo, N. Y., of counsel), for General Electric Company and others.

LEIBELL, District Judge.

Two motions have been made by the defendants (excepting Krupp, which has not been served); (1) to quash Count Two of the indictment or, in the alternative, to compel the government to elect between Counts One and Two; and (2) for a bill of particulars.

The indictment contains three counts, but the third (a violation of the Wilson Tariff Act) is not directly involved on this motion. Counts One and Two charge a violation of Section 1 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1, from which I quote as follows: "§ 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. * * *"

In the first count a conspiracy is charged between General Electric, its subsidiary Carboloy Company, Fried. Krupp Aktiengesellschaft a German corporation, and the individual defendants who were officers of General Electric or Carboloy Company.

For many years General Electric, through Carboloy, made, distributed and sold, in interstate and foreign commerce, hard metal compositions in the form of blanks, tips and nibs, and tools and dies made therefrom. Krupp likewise was engaged in that business and exported its German made products to the United States, where they were received by Krupp's two corporate agents, for ultimate resale in interstate commerce at prices fixed by said agents.

Prior to November 5, 1928, General Electric and Krupp each owned interests in certain American patents and patent applications, concerning which disputes had arisen. Negotiations were entered into with a view to settling these differences and a price fixing agreement resulted for United States territory.

Prior to May 1, 1936, General Electric and Carboloy contemplated exporting their hard metal products in competition with Krupp. On April 22, 1936, General Electric and Krupp entered into an agreement pursuant to which Krupp discontinued the sale of its hard metal compositions and dies in the United States and received instead a royalty on what General Electric and its subsidiary sold here. General Electric agreed not to export its hard metal products, except with the specific consent and approval of Krupp. Since 1938 Carboloy has manufactured the same products which Krupp ceased to export to this country in 1936 and 1937, and has distributed and sold them in interstate trade.

Count One of the indictment sets forth in some detail the conspiracy "in restraint of interstate trade and foreign commerce in hard metal compositions". The gist of it is that General Electric and Krupp executed, on November 5, 1928, a fifteen-year agreement, the purpose of which was to fix high and unreasonable prices for hard metal compositions and products in interstate trade. By its terms General Electric was empowered to fix minimum prices for the sale of the hard metal compositions, etc., in the United States, and agreed to compel its patent licensees to observe them. Krupp agreed to be bound by the prices so fixed and not to sell below those levels in this country. In consideration, a fund was created to pay royalties to Krupp. The conspiracy, of course, is stated in general terms, but this written agreement of November 5, 1928, is the basis of it and is set forth as the first "means" whereby the conspiracy was effectuated.

There are alleged certain other means and methods, to wit: A contract between General Electric and Carboloy whereby the latter became the particular instrumentality through which the hard metal field was exploited and General Electric performed its part of the bargain with Krupp; the granting of certain licenses to other manufacturers in this country, and the manner in which the licensees were limited and the means whereby the industry was "policed" and the minimum prices enforced. As a result the price of hard metal compositions was increased almost ten fold.

As an additional "means" for effectuating the conspiracy pleaded in Count One, it is alleged that "for the purpose of obtaining

40 F. Supp. 630
for Carboloy and its licensees the entire United States market for hard metal compositions", a further agreement was entered into between the same parties, on or about April 23, 1936, whereby the 1928 contract was "amended". By the amendment it was agreed that Krupp would no longer import its products into the United States and General Electric would not export. The consideration to Krupp was increased to 10% of all sales in the United States by Carboloy and its licensees, and General Electric agreed that no more licenses would be issued. At the same time General Electric agreed to make suitable terms to compensate the two United States import agents of Krupp

The results of this amendatory agreement are then averred: A new agreement between General Electric and Carboloy to conform to the above; the fact that since that date Krupp has not exported to this country, and General Electric has not exported, except with Krupp's consent; that General Electric has continued to fix prices, and that Carboloy and its licensees continue to sell at those prices; and that Carboloy has thus gained an unfair advantage over the field.

Count Two of the indictment contains by reference all of the introductory matter (paragraphs 1 to 19 of Count One). For the balance it is almost a counterpart of Count One, beginning with the execution of the April, 1936, agreement. The difference is, whereas in Count One this April, 1936, contract is set forth as a "means" of effectuating the conspiracy begun in 1928, in Count Two there is an attempt to allege it as a new and distinct conspiracy.

I. It is the defendants' contention that Count Two should be quashed, claiming that the conspiracy charged therein is but a part of that charged in Count One and is not a new and distinct violation of the law; that the same means and methods asserted as having effectuated conspiracy number two, are set forth also as among the methods employed in conspiracy number one. Defendants' main contention is that the same acts are alleged as separate conspiracies, whereas at the most they constituted but a single conspiracy; that each alleged separate conspiracy is set forth in a separate count, and that the defendants are thus placed in double jeopardy for a single offense.

A comparison of Counts One and Two reveals that the second is completely included within the first, and that the language of the second is the same as the first with some minor exceptions.

In paragraph 22 of Count One it is alleged that the conspiracy was in restraint of "interstate trade and foreign commerce". In paragraph 23 it is stated more particularly that the purpose of the conspiracy was to "* * * fix * * * prices * * * in interstate trade and commerce."

Paragraphs 27 and 29, in Count Two (corresponding to paragraphs 22 and 23 of Count One) detail the alleged second conspiracy. Paragraph 27, except for the date on which the conspiracy is alleged to have commenced, is a repetition of paragraph 22. In paragraph 28 the purpose of the conspiracy is set forth: "to suppress and limit competition between them in interstate trade and foreign commerce" by agreeing that Krupp would not import and General Electric would not export hard metal compositions.

Paragraphs 25 and 30 compare the effects of the two conspiracies alleged. They are alike in that both are alleged to have (1) exacted high, excessive and...

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12 practice notes
  • United States v. Greater Kansas City Retail Coal M. Ass'n, No. 17328.
    • United States
    • United States District Courts. 8th Circuit. Western District of Missouri
    • 10 Agosto 1949
    ...reasonably be expected to prepare a defense, without surprise, such motions will be refused. United States v. General Electric Co., D.C., 40 F.Supp. 627, and cases there cited by Judge Liebell. Such motions are seldom granted where to do so will unduly limit the evidence of the prosecution.......
  • United States v. American Honda Motor Company, No. 40956.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 1 Septiembre 1967
    ...v. Koontz, 257 F.Supp. 295 (D.Md.1966); Lefco v. United States, 74 F.2d 66 (3rd Cir. 1934). See also: United States v. General Electric, 40 F.Supp. 627 (S.D. On the other hand, we believe the factual situation here is clearly distinguishable from those in Kotteakos, Canella and Rocha, supra......
  • United States v. Greater Syracuse Bd. of Realtors, Inc., No. 77-CR-57.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • 23 Agosto 1977
    ...law should be applied to those facts. See, e. g., United States v. J. M. Huber Corporation, supra; United States v. General Electric Co., 40 F.Supp. 627 (S.D.N. Y.1941). Unfortunately, for the sake of attempting to glean some basic principles from those cases, the uniformity ends there. On ......
  • United States v. Callahan, No. 68 CR. 684.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 4 Junio 1969
    ...76 S.Ct. 121, 100 L.Ed. 774 (1955); United States v. Verra, 203 F.Supp. 87, 92 (S.D.N.Y. 1962). United States v. General Electric Co., 40 F.Supp. 627 (S.D.N.Y.1941); United States v. Wexler, 6 F.Supp. 258 (S.D.N.Y.1933), aff'd 79 F.2d 526 (2d Cir. 1935), cert. denied, 297 U.S. 703, 56 S.Ct.......
  • Request a trial to view additional results
12 cases
  • United States v. Greater Kansas City Retail Coal M. Ass'n, No. 17328.
    • United States
    • United States District Courts. 8th Circuit. Western District of Missouri
    • 10 Agosto 1949
    ...reasonably be expected to prepare a defense, without surprise, such motions will be refused. United States v. General Electric Co., D.C., 40 F.Supp. 627, and cases there cited by Judge Liebell. Such motions are seldom granted where to do so will unduly limit the evidence of the prosecution.......
  • United States v. American Honda Motor Company, No. 40956.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 1 Septiembre 1967
    ...v. Koontz, 257 F.Supp. 295 (D.Md.1966); Lefco v. United States, 74 F.2d 66 (3rd Cir. 1934). See also: United States v. General Electric, 40 F.Supp. 627 (S.D. On the other hand, we believe the factual situation here is clearly distinguishable from those in Kotteakos, Canella and Rocha, supra......
  • United States v. Greater Syracuse Bd. of Realtors, Inc., No. 77-CR-57.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • 23 Agosto 1977
    ...law should be applied to those facts. See, e. g., United States v. J. M. Huber Corporation, supra; United States v. General Electric Co., 40 F.Supp. 627 (S.D.N. Y.1941). Unfortunately, for the sake of attempting to glean some basic principles from those cases, the uniformity ends there. On ......
  • United States v. Callahan, No. 68 CR. 684.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 4 Junio 1969
    ...76 S.Ct. 121, 100 L.Ed. 774 (1955); United States v. Verra, 203 F.Supp. 87, 92 (S.D.N.Y. 1962). United States v. General Electric Co., 40 F.Supp. 627 (S.D.N.Y.1941); United States v. Wexler, 6 F.Supp. 258 (S.D.N.Y.1933), aff'd 79 F.2d 526 (2d Cir. 1935), cert. denied, 297 U.S. 703, 56 S.Ct.......
  • Request a trial to view additional results

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