United States v. HE Koontz Creamery, Inc.

• Decision Date: 22 July 1966
• Docket Number: Crim. No. 26128.
• Citation: 257 F. Supp. 295
• Parties: UNITED STATES of America v. The H. E. KOONTZ CREAMERY, INC., et al.
• Court: U.S. District Court — District of Maryland

257 F. Supp. 295

UNITED STATES of America v. The H. E. KOONTZ CREAMERY, INC., et al.

Crim. No. 26128.

United States District Court D. Maryland.

July 22, 1966.

COPYRIGHT MATERIAL OMITTED

Edna Lingreen, Sinclair Gearing, Leonard Henzke, Jr., Milton A. Kallis and Margaret H. Brass, Attys., Dept. of Justice, Washington, D. C., Thomas J. Kenney, U. S. Atty. for Dist. of Maryland, for the Government.

M. William Adelson, Baltimore, Md., for The H. E. Koontz Creamery, Inc., Will's Dairy, Inc., and George C. Oursler.

John T. Chadwell, James E. Hastings, David L. Aufderstrasse and Richard E. Wiley, Chicago, Ill., J. Cookman Boyd, Jr., Baltimore, Md., for National Dairy Products Corp., and for John M. Lescure.

Ambler H. Moss and David R. Owen, Baltimore, Md., for Green Spring Dairy, Inc.

Z. Townsend Parks and H. Emslie Parks, Baltimore, Md., for William S. Hebb.

G. C. A. Anderson and Ward B. Coe, Jr., Baltimore, Md., for James J. Ward, Jr.

WATKINS, District Judge.

Certain of the captioned defendants, having pleaded that they were twice placed in jeopardy by the indictment herein, moved for a separate hearing of their motion to dismiss the indictment, before the court without a jury, prior to the trial of the general issue. After hearing, the motion was granted. United States v. H. E. Koontz Creamery, Inc. et al., D.Md.1964, 232 F.Supp. 312. Thereafter, an evidentiary hearing was held, pre- and post-trial briefs were filed, and the case was fully argued. While the moving parties were adequately identified in the opinion in 232 F.Supp. 312, a more detailed statement¹ of their relationships to the present and prior criminal proceedings is required.

Statement of the Case

On March 22, 1961 the United States filed a three-count indictment against:

Aristocrat Dairy Cloverland Farms Dairy, Incorporated Green Spring Dairy, Incorporated The H. E. Koontz Creamery, Incorporated Milk Distributors Association, Incorporated National Dairy Products Corporation Will's Dairy, Incorporated John M. Lescure George C. Oursler Maurice M. Thomas James J. Ward, Jr.

On July 17, 1961, the United States substituted an information for the indictment. It amended the information on January 12, 1962. That case, Criminal Action No. 25658 in this court, in the first count charged Aristocrat, Cloverland, Green Spring, Koontz, Milk Distributors Association (hereinafter "MDA"), National Dairy (hereinafter sometimes "Sealtest"), and Will's Dairy with violations of Section 1 of the Sherman Act by engaging in a conspiracy to allocate Baltimore City school milk contracts from 1946 to the fall of 1957. In the second count it charged all of the defendants with having conspired to allocate Baltimore City and Baltimore County school milk contracts in the school year 1959-1960.

A third count charged individual defendants Lescure, Oursler, Thomas, and Ward, Jr., with violating Section 14 of the Clayton Act by authorizing or doing the acts alleged in the second count, in their capacity as corporate officers. On January 12, 1962, this court ordered the dismissal of the above-named individual defendants from the second count of the information, pursuant to an opinion filed on December 29, 1961. United States v. Milk Distributors Association, Inc., D.Md.1961, 200 F.Supp. 792. On February 23, 1962, the court accepted and ordered the entry of pleas of nolo contendere for all defendants and fined each of them.

Thus, Aristocrat, Cloverland, Green Spring, Koontz, MDA, National Dairy, and Will's Dairy stand convicted of Counts I and II of the information in Criminal No. 25658 in this court. Individual defendants Lescure, Oursler, Thomas, and Ward, Jr., stand convicted of Count III only.

These are the convictions that, according to those defendants in the present case who have moved for dismissal on that ground, raise the bar of former jeopardy.

On the 20th of December, 1962, the Grand Jury returned the Indictment in this case, Criminal No. 26128, against:

Cloverland Farms Dairy, Incorporated Green Spring Dairy, Incorporated High's of Baltimore, Incorporated The H. E. Koontz Creamery, Incorporated Milk Distributors Association, Incorporated National Dairy Products Corporation Royal Farms Dairy, Incorporated Will's Dairy, Incorporated Wilton Farm Dairy, Incorporated William Sears Hebb (Aristocrat Dairy) John M. Lescure George C. Oursler Clyde Shugart C. Y. Stephens James J. Ward, Jr. James J. Ward, Sr.

This indictment, in a single count, charges a continuing conspiracy to fix the prices at which milk and milk products would be sold to the regular retail and wholesale trade (other than to institutional customers purchasing by competitive bidding) in the Baltimore area from 1956 to 1960. It is this indictment that certain of defendants claim charges them again with the commission of the same offenses for which this court formerly convicted them on their pleas of nolo contendere.

Of the defendants listed just above, C. Y. Stephens has died and the case has been dismissed as to him. Wilton Farm has pleaded guilty. Defendants High's, Shugart, and Ward, Sr. were not charged in the school allocation case and of course have not joined in the double jeopardy dismissal motion. Defendants MDA and Royal Farms have not joined in the double jeopardy motion and Cloverland has withdrawn from it, although each pleaded nolo contendere in the school allocation case.

Those moving for dismissal on grounds of double jeopardy are corporate defendants Green Spring, Koontz, National Dairy, and Will's Dairy, and individual defendants Hebb, Lescure, Oursler, and Ward, Jr. Of these, Green Spring, Koontz, National Dairy, and Will's Dairy were convicted under Counts I and II in the school allocation case. These corporate defendants are the same persons as those who, under those names, pleaded nolo contendere and were fined in Criminal Case No. 25658 in this court on two counts of violating Section 1 of the Sherman Act.

Defendant Hebb was not charged as an individual in the school allocation case. Aristocrat Dairy was so charged, however, and suffered conviction and fine under Counts I and II. Aristocrat Dairy is a partnership and Mr. Hebb is its principal partner. For the purposes of this motion, the Government is willing to have the court consider William Sears Hebb and Aristocrat Dairy as one and the same person and consequently to consider that Hebb was convicted and fined in Criminal Case No. 25658 in this court for participation in the conspiracies alleged in Counts I and II therein.

Defendants Lescure, Oursler, and Ward, Jr., pleaded nolo contendere in the school allocation case to charges of violating Section 14 of the Clayton Act. Their charged offenses were, as corporate officials, authorizing, ordering, or doing the acts making up or effecting the conspiracy alleged in Count II of the Information in that case. For the purposes of this motion, the Government is willing that the convictions of John M. Lescure, George C. Oursler, and James J. Ward, Jr. under Count III of the Information in Criminal Case No. 25658 in this court, for a violation of Section 14 of the Clayton Act, be taken to have been convictions for violating Section 1 of the Sherman Act in the way and under the circumstances alleged in Count II of the amended information in that case. These named individuals are charged with violating Section 1 of the Sherman Act in this case.

In summary: In United States v. Milk Distributors Association, Inc., et al., Criminal No. 25658, the following movants were convicted of the counts appearing next their names:

Green Spring Dairy, Inc., Counts I and II;

William Sears Hebb, Counts I and II;

The H. E. Koontz Creamery, Inc., Counts I and II;

John M. Lescure, Count II;

National Dairy Products Corporation, Counts I and II;

George C. Oursler, Count II;

James J. Ward, Jr., Count II;

Will's Dairy, Inc., Counts I and II.

On July 19, 1963, the above defendants moved that the indictment in the present case be dismissed on the ground that it charged them with the commission of an offense which they had already been convicted of committing. After argument this court concluded that defendants' motion raised fact issues that could not be resolved solely by inspection of the record in the two cases and that these fact issues should be tried to the court without a jury, before trying the case-in-chief. (232 F.Supp. 312). On July 7, 1965, the hearing on the double jeopardy motion commenced. It ended on July 23, 1965, following nine days of trial, nearly all of which were spent in examining witnesses.²

Both sides are in agreement that there is no real conflict in the pleadings, admissions, bills of particulars (the factual averments of which, it is agreed, are to be treated as true for the purpose of this motion) and testimony, but they differ materially as to the inferences to be drawn therefrom, and therefore as to the legal consequences thereof. Likewise both sides are in agreement that the burden upon the moving defendants is to prove the existence of double jeopardy by a preponderance of the evidence.³ Here agreement substantially ends.

Apart from the obvious disagreement as to whether or not moving defendants met their burden, there are important differences between the parties as to what defendants have to prove, and how they may be permitted to proceed in endeavoring to offer proof.

The Government contends that the "evidence does not sustain what seems to be movants' contention that what was involved was one over-all conspiracy to achieve market stability."⁴

"Defendants' theory of the motion and the plan according to which they offered evidence seems to have been not that the school bid-rigging conspiracies in some way forwarded or were organic subplots in the general price fixing conspiracy; nor vice versa. Rather their idea seems to have been that all of them flowed from a larger conspiracy in restraint of trade that included all trade restraint...