United States v. H & M, INC.
Decision Date | 22 March 1983 |
Docket Number | Crim. No. 82-00040-01,82-00040-04,82-00040-05 and 82-00040-06.,82-00040-02 |
Citation | 562 F. Supp. 651 |
Parties | UNITED STATES of America v. H & M, INC., RSE, Inc., William H. Quigley, Jr., D. Robert Rimmer, Walter E. Rimmer. |
Court | U.S. District Court — Middle District of Pennsylvania |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Richard A. Small, Antitrust Div., Dept. of Justice, Philadelphia, Pa., for plaintiff.
P. Daniel Altland, Harrisburg, Pa., for H & M, Inc. and William H. Quigley, Jr.
Charles W. Boohar, Pelino & Lentz, Philadelphia, Pa., for RSE, Inc., D. Robert Rimmer and Walter E. Rimmer.
The four individual defendants and two corporations in this action were charged with a conspiracy in unreasonable restraint of interstate trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The trial of all defendants resulted in a jury verdict of guilty against all defendants. On September 3, 1982 defendant Jack D. Murphy died. On October 1, 1982 a joint motion of dismissal of the charges and an abatement of the proceedings as to Jack D. Murphy was filed. The motion was granted by order of this court on the same date.
Now pending before the court are the post-trial motions of H & M, Inc., RSE, Inc., William H. Quigley, Jr., D. Robert Rimmer and Walter E. Rimmer. All the defendants have moved under Rule 29 of the Federal Rules of Criminal Procedure for judgment of acquittal on the grounds that there was insufficient evidence to support the verdict. Defendants RSE and the Rimmers allege the evidence was insufficient to prove their acts were within the ambit of the Sherman Act. They have also moved for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure alleging that the verdict was contrary to the weight of the evidence or that trial error was committed. Defendants H & M, Inc. and William H. Quigley, Jr. have moved for an arrest of judgment under Rule 34 of the Federal Rules of Criminal Procedure alleging that the indictment does not charge an offense and that the court is without jurisdiction.
Section 1 of the Sherman Act prohibits contracts, combinations and conspiracies "in restraint of trade or commerce among the several States." 15 U.S.C. § 1 (1976). This phrase both defines the conduct prohibited by the Statute and its jurisdictional reach. Western Waste Service Systems v. Universal Waste Control, 616 F.2d 1094, 1096 (9th Cir.) cert. denied, 449 U.S. 869, 101 S.Ct. 205, 66 L.Ed.2d 88 (1980). The jurisdictional requirement may be satisfied under either the "effect on commerce" or the "in commerce" theory. McLain v. Real Estate Board of New Orleans, 444 U.S. 232, 242, 100 S.Ct. 502, 509, 62 L.Ed.2d 441 (1980).
Defendants have moved this court to find that the Government has neither sufficiently alleged in the indictment nor proved at trial that motopaving in the four-county area of Dauphin, Cumberland, Perry and Lebanon affected interstate commerce or was in the flow of commerce. Specifically, defendants H & M, Inc., Quigley, contend that the indictment must allege either that the complained of activities affected interstate commerce or that the conspiracy involved a product in the flow of interstate commerce. Defendants RSE, Inc. and the Rimmers contend the evidence was insufficient at trial to show the requisite interstate nexus. The court will first examine defendants' arguments concerning the affect on commerce test.
In McLain1 the Court held that it was unnecessary for the alleged antitrust violations to have affected interstate commerce as long as defendants' business activities, independent of the violations, affected interstate commerce. The Court stated:
To establish jurisdiction a plaintiff must allege the critical relationship in the pleadings and if these allegations are controverted must proceed to demonstrate by submission of evidence beyond the pleadings either that the defendants' activity is itself in interstate commerce or, if it is local in nature, that it has an effect on some other appreciable activity demonstrably in interstate commerce... To establish the jurisdictional element of a Sherman Act violation it would be sufficient for petitioners to demonstrate a substantial effect on interstate commerce generated by respondents' brokerage activity. Petitioners need not make the more particularized showing of an effect on interstate commerce caused by the alleged conspiracy to fix commission rates, or by those other aspects of respondents' activity that are alleged to be unlawful. 444 U.S. at 242, 243, 100 S.Ct. at 509, 510.
The McLain Court then used a two part test to examine the record as it stood to determine if petitioners had a sufficient basis to proceed to trial to establish Sherman Act jurisdiction. The Court first found that an appreciable amount of interstate commerce was involved in the financing of residential property in the Greater New Orleans area and in the insuring of titles to such property. The Court then examined whether the defendants' activities "which allegedly had been infected by a price-fixing conspiracy ... had" as a matter of practical economics" ... a not insubstantial effect on the interstate commerce involved." 444 U.S. at 246, 100 S.Ct. at 511 (citation omitted). The Court found that:
Brokerage activities necessarily affect both the frequency and the terms of residential sales transactions. Ultimately, whatever stimulates or retards the volume of residential sales, or has an impact on the purchase price, affects the demand for financing and title insurance, those two commercial activities that on this record are shown to have occurred in interstate commerce. Where, as here, the services of respondent real estate brokers are often employed in transactions in the relevant market, petitioners at trial may be able to show that respondents' activities have a not insubstantial effect on interstate commerce. Id.
The McLain decision has not been interpreted consistently by the circuit courts. The Ninth Circuit has held that Sherman Act jurisdiction exists when any business activity of a defendant affects interstate commerce. Western Waste Service, 616 F.2d at 1097; Ronwin v. State Bar of Arizona, 686 F.2d 692 (9th Cir.1981). Under a more conservative view of McLain, the Tenth and First Circuits have stated that a plaintiff must point to the relevant channels of interstate commerce logically affected by the defendant's unlawful conduct. Crane v. Intermountain Health Care, Inc., 637 F.2d 715 (10th Cir.1980); Cordova & Simonpietri Ins. v. Chase Manhattan Bank, 649 F.2d 36 (1st Cir.1981).
The parties have not cited any opinions from the Third Circuit Court of Appeals interpreting McLain.2 This court concludes that the Ninth Circuit's approach is consistent with McClain's language and application. McElhinney v. Medical Protective Co., 549 F.Supp. 121, 127 (E.D.Ky.1982). Contra, Pao v. Holy Redeemer Hospital, 547 F.Supp. 484 (E.D.Pa.1982). The court therefore rejects defendants' contentions that the conspiratorial activities themselves must affect interstate commerce. The court will now examine the indictment and the Government's proof at trial under McLain as interpreted by the Ninth Circuit to determine if the "affect on commerce test" has been met.
The allegations of the indictment pertaining to the connection between the alleged conspiracy and interstate commerce are as follows:
At trial the government proved the following facts. Crushed aggregate and liquid asphalt are the two major ingredients in motopaving (N.T. p. 45). The bulk, if not all, of the asphalt used by the motopaving companies in the four-county area came from refineries in Baltimore, Maryland (N.T. pp. 52, 56, 156-157, 262-265, 337, 571, 1135). The asphalt is the most expensive product of the blacktop mix (N.T. pp. 1063, 1135). There was evidence that on some days no trucks delivered the asphalt, on some days as many as four or five trucks would be dispatched to jobs (N.T. p. 53). Each truck load carried approximately 5000 gallons (N.T. pp. 53, 1265) with a cost of about $1500.00 in 1977. The cost varied during the years from 1972 to 1980 from .15 cents to .75 cents per gallon (N.T. p. 266).
Evidence was also presented to show that some bonding companies used by motopaving contractors in the four-county area for bid, performance and payment bonds were located outside the Commonwealth of Pennsylvania.3 See e.g. Gov't.Ex. 311-E and Gov't.Exs. 300-E, F, G and H. One motopaving contractor testified that the cost of the performance bonds was one percent of the contract price (N.T. p. 130).
In addition there was testimony that the equipment used in motopaving in the four-county area was purchased out of state (N.T. pp....
To continue reading
Request your trial-
U.S. v. Runnels
...that the jury found every fact necessary for a valid conviction.... 475 F.2d at 283-84 (emphasis added). In United States v. H & M, Inc., 562 F.Supp. 651, 660 (M.D.Pa.1983), a criminal antitrust case, the court submitted the case to the jury on two theories, the first based on the presence ......
-
U.S. v. Caputo
...1496 (11th Cir.) ("res gestae" exception), cert. denied, --- U.S. ----, 105 S.Ct. 567, 83 L.Ed.2d 508 (1984); United States v. H & M, Inc., 562 F.Supp. 651, 668 (M.D.Pa.1983) (statement against penal interest).The dissent's suggestion that Roberts only constitutionalizes pre-existing hearsa......
-
Maugeri v. State
...States v. White, 553 F.2d 310 (2d Cir.1977), cert. denied, 431 U.S. 972, 97 S.Ct. 2937, 53 L.Ed.2d 1070 (1977); United States v. H & M, Inc., 562 F.Supp. 651 (M.D.Penn.1983); State v. Valladares; State v. We further hold, contrary to the position of the defendant and the Fifth Circuit as st......
-
US v. Clemons
...to assess the credibility of the witnesses. United States v. Arrington, 757 F.2d 1484, 1485 (4th Cir. 1985); United States v. H & M Inc., 562 F.Supp. 651, 676 (M.D.Pa.1983); United States v. Phifer, 400 F.Supp. 719, 722 (E.D. Pa.1975), aff'd mem., 532 F.2d 748 (3rd Cir.1976). However, the p......