United States v. JM Huber Corporation

• Decision Date: 30 December 1959
• Citation: 179 F. Supp. 570
• Parties: UNITED STATES of America, Plaintiff, v. J. M. HUBER CORPORATION and Western Newspaper Union, Defendant. UNITED STATES of America, Plaintiff, v. AMERICAN SMELTING & REFINING CO., and Western Newspaper Union, Defendants.
• Court: U.S. District Court — Southern District of New York

179 F. Supp. 570

UNITED STATES of America, Plaintiff, v. J. M. HUBER CORPORATION and Western Newspaper Union, Defendant.

UNITED STATES of America, Plaintiff, v. AMERICAN SMELTING & REFINING CO., and Western Newspaper Union, Defendants.

United States District Court S. D. New York.

December 30, 1959.

Philip L. Roache, Jr., Joseph J. O'Malley, Attys., Dept. of Justice, Washington, D. C., for the United States.

Royall, Koegel, Harris & Caskey, New York City, for defendant Western Newspaper Union. Frederick W. P. Lorenzen, Paul Kerins, David F. Dobbins, New York City, of counsel.

DIMOCK, District Judge.

Motions to Dismiss Indictments.

Defendant, Western Newspaper Union, hereinafter WNU, moves to dismiss the indictment in each one of these cases. The only other defendants, J. M. Huber Corporation, in Cr. 159-149, and American Smelting & Refining Co., in Cr. 159-150, have pleaded nolo contendere, so that in each case the only remaining defendant is WNU.

Each indictment charges "an unlawful combination and conspiracy in restraint of * * * interstate trade and commerce in violation of section 1 of the Act of Congress of July 2, 1890, entitled `An Act to Protect Trade and Commerce Against Unlawful Restraints and Monopolies,' as amended, 26 Stat. 209, 15 U.S.C. Section 1, commonly known as the Sherman Act."

The motions to dismiss are based upon the existence of a consent decree in the case of United States of America v. Western Newspaper Union, et al., Civil No. 87-60, entered in this court on August 18, 1953. The worst that WNU can say about the indictments is a claim that the Government is now bringing criminal proceedings in which it seeks to convict WNU of a crime where the issue is the same as that determined adversely to WNU by the consent decree. It is doubtful whether this claim that the issue is the same as one determined by the consent decree can be supported but WNU argues that, under certain circumstances, the consent decree would constitute a bar even if the issues were not precisely the same as those created by the indictment. Since my conclusion is that even were the issues precisely the same the consent decree would not be a bar to criminal prosecution, I need consider no other question.

The Sherman Act plainly contemplates concurrent civil and criminal proceedings based upon the same state of facts. Section 1 makes contracts, combinations or conspiracies in restraint of trade misdemeanors and provides for their punishment. Section 2 makes monopolies and attempts to monopolize and combinations and conspiracies to monopolize misdemeanors and provides for their punishment. Section 4 provides for such civil proceedings as those in which the consent decree was entered. It gives jurisdiction to the District Courts to prevent and restrain violations of sections 1-7, and makes it the duty of the several United States Attorneys in their respective districts under the direction of the Attorney General to institute proceedings in equity to prevent and restrain such violations. The Act bears no indication that Congress intended the civil and criminal remedies to be alternatives. Indeed, on the face of the Act, it appears that the remedies are complementary. No reason is suggested why conduct, which has been proved to violate the statute and thus merit an injunction against it, should by virtue of that injunction be absolved from criminal consequences despite the Government's ability to prove it by the requisite degree of proof for a criminal conviction.

In what I have just said, I have dealt with the ordinary decree entered after trial. Certainly a consent decree such as that here relied upon as a bar would have no more or less conclusive effect.

This is evidently a case of first impression. It is settled that an existing judgment in a criminal case does not prevent the bringing of a subsequent civil case by the Government. See, as to a judgment of acquittal, United States v. National Ass'n of Real Estate Boards, 339 U.S. 485, 493-494, 70 S.Ct. 711, 94 L.Ed. 1007, and, as to conviction, Local 167 of International Brotherhood, etc. v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804, and United States v. National City Lines, D.C.N.D.Ill., 118 F.Supp. 465. The Government need not rely upon the threat of a second criminal prosecution as a deterrent but may ask the court for an injunction forbidding future violations. No reason is perceived why, when an injunction forbidding future violations has been obtained, the Government should not be allowed to press for punishment for past violations.

Defendant argues that the consent decree here involved by its terms prevents criminal prosecution. For this it relies on a provision of the consent decree that it shall not operate as a bar or estoppel against any suit or proceeding based upon any acquisition by any defendant of any of the capital stock, physical assets, business or good will of any person engaged in the manufacture, sale or distribution of printing supplies, printing machinery or printers' services. Defendant argues that the injunctive provisions of the consent decree deal solely with price fixing and that the subject matter of the indictment is similarly confined. He says that, by the express reservation of the Government's rights to bring proceedings based upon acquisition of competing interests, there is a negative implication that the Government may not bring a proceeding based upon price fixing. Passing the question of the propriety of an agreement by the Government not to prosecute for crime, the provision under consideration is not susceptible of that construction. The consent decree provides:

"Now, therefore, before any testimony has been taken herein, and without trial or adjudication of any issue of fact or law herein, and upon consent of all parties hereto, it is hereby

"Ordered, adjudged and decreed, as follows:"

The only conclusions in the judgment are that the court has jurisdiction of the subject matter and of the parties and that the complaint states a cause of action against the defendants under section 2 of the Sherman Act. All of the other provisions are merely injunctive or disclaimers. A decree which disclaims any adjudication except that the court has jurisdiction of the controversy and of the parties and that the complaint states a cause of action under section 2 of the Sherman Act is so far from operating as a bar or estoppel that a disclaimer of that effect as against any suit or proceeding based upon an acquisition of competing business interests must be regarded as no more than the result of an excess of caution. I have concluded above that under the statute the Government may, upon a basis of the same conduct in each case, obtain an injunction and after the injunction has been obtained institute a proceeding by indictment. The question now raised is whether this court in the consent decree by implication prohibited the institution of such criminal proceedings. The circumstances are simply too weak to support the implication of an injunction against the Government in a decree enjoining defendants. The motions to dismiss the indictments are denied.

Motions for Bills of Particulars.

Defendant moves also for bills of particulars. The indictments in each case are substantially identical except that the indictment in No. 159-149 charges a combination by WNU with J. M. Huber Corporation in connection with the sale of ink and the indictment in No. 159-150 charges a combination of WNU with American Smelting & Refining Company in connection with the sale of typemetal. WNU is alleged to be in the business of selling both ink and typemetals. Since the indictments are substantially identical, mutatis mutandis, the demands for particulars are substantially identical except that the demand in the case involving the American Smelting & Refining Company seeks particulars in one respect not covered by the other demand. I shall therefore deal with the demand in that case, No. 159-150.

The Government strenuously opposes most of the requests. The principal ground of opposition is one which long ago ought to have been laid at rest. I quote an example: "It seems too obvious for argument that a conspirator knows with whom he conspires." I can do no better than to repeat the comment made by the then District Judge Whittaker in United States v. Smith, D.C.W. D.Mo., 16 F.R.D. 372, 375:

"Nor is it any answer to a motion for a bill of particulars for the government to say: `The defendant

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