United States v. Johns-Manville Corporation

• Decision Date: 16 April 1964
• Docket Number: Cr. No. 21118.
• Citation: 231 F. Supp. 690
• Parties: UNITED STATES of America v. JOHNS-MANVILLE CORPORATION, Keasbey & Mattison Company, Robert F. Orth, Louis F. Frazza, Robert R. Porter, Norman L. Barr, and James R. Reichel.
• Court: U.S. District Court — Eastern District of Pennsylvania

231 F. Supp. 690

UNITED STATES of America v. JOHNS-MANVILLE CORPORATION, Keasbey & Mattison Company, Robert F. Orth, Louis F. Frazza, Robert R. Porter, Norman L. Barr, and James R. Reichel.

Cr. No. 21118.

United States District Court E. D. Pennsylvania.

December 4, 1963.

December 31, 1963.

April 16, 1964.

COPYRIGHT MATERIAL OMITTED

Raymond K. Carson, Kenneth R. Lindsay, Rodney O. Thorson, Department of Justice, Washington, D. C., for the Government.

Henry T. Reath, Philadelphia, Pa., Bradley M. Walls, New York City, for Keasbey & Mattison Co., Norman L. Barr & James R. Reichel.

Thomas D. McBride, Philadelphia, Pa., Ralph M. Carson, New York City, for Johns-Manville Corp., Robert F. Orth and Louis F. Frazza.

Joseph W. Swain, Jr., Philadelphia, Pa., for Robert R. Porter.

Memorandum Sur Defendants' Request for Ruling etc. December 31, 1963.

Order Sur Motions of all Defendants for Judgments of Acquittal April 16, 1964.

VAN DUSEN, District Judge.

MEMORANDUM SUR DEFENDANTS' SUGGESTED ORDER REQUIRING THE UNITED STATES TO ESTABLISH BY INDEPENDENT EVIDENCE THE CONSPIRACY AND MEMBERSHIP OF THE CONSPIRATORS THEREIN

Defendants have asked for this provision in the pretrial order (paragraph 27):

"27. The Government shall be required to establish by prima facie evidence (1) the existence of the conspiracy charged in the indictment; and (2) membership in the conspiracy of

"(a) each defendant before offering the ex parte acts or declarations of one defendant against another defendant,

"(b) each defendant and each non-defendant conspirator before offering the ex parte acts or declarations of a non-defendant conspirator against any defendant."

The general rule is that a prima facie conspiracy should be shown before the acts and/or declarations of a conspirator are admissible against the other conspirators.¹ There are cases where acts² and declarations of co-conspirators were admitted against the other conspirators before proof of the conspiracy.³ A conspiracy may be shown by: a course of dealings,⁴ tacit understanding, agreement or acquiescence,⁵ circumstantial evidence,⁶ and acts and declarations of the co-conspirators.⁷

This court is bound by the rulings of the Supreme Court of the United States, which has said:

"In order that the declarations and conduct of third parties may be admissible in such a case, it is necessary to show by independent evidence that there was a combination between them and defendants, but it is not necessary to show by independent evidence that the combination was criminal or otherwise unlawful. The element of illegality may be shown by the declarations themselves."⁸

Part (2) of the above paragraph 27 is dependent upon the court's discretion. A series of cases support the following proposition:

"The order in which evidence is received is within the discretion of the trial court and, therefore, error could not be predicated upon the admission of evidence as to the acts of an alleged co-conspirator prior to proof that the defendant was connected with the conspiracy."⁹

However, proof that the co-conspirator, whose declarations are admitted against the other defendants, has joined the conspiracy must be from an independent source.¹⁰

It is noted that evidence which may fall under the terms of the above-quoted suggested paragraph 27 may be admissible for other reasons. Alleged criminal violations committed by agents of the two defendant corporations may be admissible under the general rule that where "there is an officer or agent of a corporation with broad express authority, generally holding a position of some responsibility, who performs a criminal act related to the corporate principal's business. * * * the courts have held that so long as the criminal act is directly related to the performance of the duties which the officer or agent has the broad authority to perform, the corporate principal is liable for the criminal act also, and must be deemed to have `authorized' the criminal act."¹¹

Additional reasons for the admission of acts or declarations of corporate agents against their principals are discussed in cases such as United States v. United Shoe Machinery Corp., 89 F.Supp. 349 (D.Mass.1950).

Concerning the foundation upon which documents may be admitted under the Federal Business Records Act, 28 U.S.C.A. § 1732(a), the federal courts have held that it is not a requirement in a criminal case that the person who actually prepared the subject record testify concerning it. In United States v. Olivo, 278 F.2d 415 (3rd Cir. 1960), where a witness testified to the mode of preparation in the trade and then within his company, it was held that the paper was properly admitted, even though no employee from the particular branch where the paper was prepared testified. The court stated at page 417:

"* * * it the Federal Business Records Act was intended to eliminate the technical requirement of proving the authenticity of records and memoranda by the testimony of the maker."¹²

The trial judge contemplates including language such as the following in the pre-trial order, since the above authorities do not justify the use of the language used in the above-mentioned paragraph 27 as submitted by defendants:

"Wherever the Government does not plan to establish by prima facie evidence (1) the existence of the conspiracy charged in the indictment; and (2) membership in the conspiracy of

"(a) each defendant before offering the ex parte acts or declarations of one defendant against another defendant on the ground that they are acts or declarations of a co-conspirator,

"(b) each defendant and each non-defendant conspirator before offering the ex parte acts or declarations of a non-defendant conspirator against any defendant on the ground that they are acts or declarations of a conspirator,

the Government shall submit a written offer of proof to the trial judge and counsel for defendants the trial day before calling such witness to explain why it is not feasible to establish (1) and (2) above before showing such acts or declarations, unless the trial judge, for cause shown, dispenses with such requirement."

MEMORANDUM SUR DEFENDANTS' REQUEST FOR RULING THAT 28 U.S.C.A. § 1732 IS INAPPLICABLE IN THIS CASE (DOCUMENT 153)

On December 6, 1963, defendants filed with the pre-trial judge their MEMORANDUM IN SUPPORT OF DEFENDANTS' MOTION FOR A PRE-TRIAL RULING THAT 28 U.S.C.A. § 1732, RELATING TO THE ADMISSIBILITY OF BUSINESS RECORDS, IS INAPPLICABLE IN A CRIMINAL PROCEEDING, which has been docketed as Document 153. This Memorandum, relying on the Sixth Amendment provision that "the accused shall enjoy the right * * * to be confronted with the witnesses against him," concludes with the following language at page 10:

"III. Conclusion

"For the above stated reasons the defendants request that the Court rule that 28 U.S.C.A. § 1732 is inapplicable in the present case."

This request for ruling must be denied in view of the federal appellate cases on this subject. In United States v. Leathers, 135 F.2d 507, 511 (2nd Cir. 1943), the court said:

"The appellant Thomas argues that the records in question would not be admissible under the early common law rules and that the recent judicial and statutory changes we have referred to are in contravention of the Sixth Amendment. But statements by relatives as to pedigree, declarations against interest, and most important of all in criminal trials, dying declarations, have long been recognized as admissible. It is not necessary to say what limits the Sixth Amendment may set to the extension of exceptions to the rule against hearsay. Probably the permissible extension is a question of degree. We think that business records kept as a matter of ordinary routine are often likely to be more reliable than dying declarations. It cannot be reasonably argued that the extension of the common law book entry rule which we discussed in Massachusetts Bonding & Ins. Co. v. Norwich Pharmacal Co., supra, or the statute cited above, involve any violation of the Sixth Amendment."

Similarly, other federal appellate courts have stated that "the Sixth Amendment does not prevent creation of new exceptions to the hearsay rule based upon real necessity and adequate guarantees of trustworthiness"¹ in the light of the requirement of confrontation of the Sixth Amendment. See, also, Kay v. United States, 255 F.2d 476, 480-481 (4th Cir. 1958), where the court said:

"Admission of the certificate did not deprive the defendant of his right of confrontation by witnesses. Neither the Sixth Amendment to the Constitution of the United States nor Article I, Section 8 of the Constitution of Virginia can be said to have incorporated the rule against hearsay evidence, as understood at the time of their adoption. Each was intended to prevent the trial of criminal cases upon affidavits, not to serve as a rigid and inflexible barrier against the orderly development of reasonable and necessary exceptions to the hearsay rule.

"The power of the Congress and of a state legislature to provide for the admission of evidence is not subject to any such arbitrary limitation as the defendant supposes. They may carve out a new exception to the hearsay rule, without violating constitutional rights, where there is reasonable necessity for it and where it is supported by an adequate basis for assurance that the evidence has those qualities of reliability and trustworthiness attributed to other evidence admissible under long established exceptions to the hearsay rule."

In Tot v. United States, 319 U.S. 463, 467, 63 S.Ct. 1241, 1244-1245, 87 L.Ed. 1519 (1943), the court said:

"The rules of evidence, however, are established not alone by the courts but by the legislature. The Congress has power to prescribe what evidence is to be received in the courts of the United States."

The question may arise, when a document falling under 28 U.S.C. § 1732 (a) is offered at the trial: does that statute transgress the right of...