United States v. National Homes Corporation, Civ. No. 114.

• Decision Date: 04 August 1961
• Docket Number: Civ. No. 114.
• Citation: 196 F. Supp. 370
• Parties: UNITED STATES of America v. NATIONAL HOMES CORPORATION.
• Court: U.S. District Court — Northern District of Indiana

196 F. Supp. 370

UNITED STATES of America v. NATIONAL HOMES CORPORATION.

Civ. No. 114.

United States District Court N. D. Indiana, Hammond Division at Lafayette.

August 4, 1961.

William P. Rogers, Atty. Gen., Kenneth C. Raub, U. S. Atty., Fort Wayne, Ind., for plaintiff.

George T. Schilling, Lafayette, Ind., Herbert Borkland, Bergson and Borkland, Washington, D. C., for defendant.

SWYGERT, Chief Judge.

Introduction

The question presented at the pre-trial hearing on June 5-8, 1961 is the admissibility into evidence of the government's survey of the prefabricated house industry.

The government proposes to submit its survey to show the dimensions of the line of commerce involved in this case and as part of its claim that the defendant's acquisitions may be substantially to lessen competition or tend to create a monopoly.

The evidence introduced at the pre-trial hearing showed that the survey was undertaken by the Anti-trust Division of the Department of Justice beginning in March, 1960. It is based on a questionnaire sent to approximately 571 companies. The names of these companies were secured from the membership list of the Home Manufacturers Association, from trade literature and from answers to question 16 of the questionnaire which asked the respondents to list other companies engaged in the manufacture of prefabricated houses. 93% of the companies which were sent questionnaires have been heard from or accounted for. The 37 companies who have not been heard from are still being contacted by telephone and telegram as part of the follow-up procedure adopted by the government to assure responses to the questionnaires.

Contentions

The government argues that there is sufficient necessity to justify the admission of this survey in evidence. They urge that they surveyed the proper universe and that the survey was conducted in accordance with recognized survey procedures. Further, they state the questionnaire was understandable and unambiguous. Finally, they note that the defendant has not challenged the accuracy of the answers to questions 17 and 18 concerning the volume of sales of the respondent companies. Since the answers to the questionnaires are available to court and counsel, the government asserts that the parties or the court are in a position to interpret the results of the survey independently.

The defendant disputes the necessity for resort to this type of survey and urge that feasible alternatives exist for establishing the matters which the government wishes to show by means of the survey. They urge that the survey is inadmissible since it was prepared in preparation for the pending law suit by the government. The qualifications of the government economist are challenged and the coverage of the survey is deemed by the defendant to be inadequate, by reason of the claim that the total universe is not included. The questionnaire is attacked as being improperly designed and for containing ambiguous questions which cannot yield objective answers. Finally, the government's interpretation of the completed questionnaires which resulted in classification of companies as prefabricators or non-prefabricators is branded as arbitrary.

General Statement Relating to Evidence in "Big Cases"

At the outset some general consideration of evidence problems as they relate to big cases may be warranted. It seems rather clear that there is a tendency to relax or modify many of the ordinary evidentiary rules in cases involving complex economic issues. See: Dession, "The Trial of Economic and Technological Issues of Fact: II", 58 Yale L.J. 1242 (1949) reprinted in Selected Writings on Evidence and Trial, 512 (1957). This is especially true in cases like the present one where the case is to be tried by the judge rather than a jury. Rule 43(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., provides, inter alia, "all evidence shall be admitted which is admissible * * * under the rules of evidence heretofore applied in the courts of the United States on the hearing of suits in equity." In commenting on this rule Professor Moore has indicated that the courts have authority to admit evidence which might have been formerly barred by the exclusionary rules of evidence.

"It is well known that the extensive and highly refined rules of evidence have developed largely as methods of controlling juries. It has been thought that a number of exclusionary rules are essential to prevent an untrained group of men from reaching erroneous conclusions regarding the facts developed at a trial. The validity of exclusionary rules of evidence as aids in determining what is a particular fact situation has been denied and rejected in practice before the administrative boards. In great measure the same result has been occurring in suits in federal courts formerly denominated equitable." 5 Moore's Federal Practice, 1310 (1951).

The comments of Judge Foreman in United States v. General Electric Co., D.C.1949, 82 F.Supp. 753, are another reflection of this tendency to relax the exclusionary rules in antitrust cases:

"Exaggerated and over refined niceties in the rules of evidence must give way to the broad terms of Rule 43(a), Federal Rules of Civil Procedure, if full effect to the anti-trust laws is to be given." Id., at page 903.

In addition to the authority of Rule 43(a) practical considerations of time saving in "big cases" require that means be sought to shorten and streamline the trial of complex cases. Certainly the use of surveys, if they are accurate and reliable, are one of the methods which are available to shorten the time of trial. In United States v. United Shoe Machinery Corp., D.C.D.Mass.1953, 110 F.Supp. 295, Judge Wyzanski himself urged the parties to use surveys or sampling devices to shorten the length of trial.

Necessity for Survey, its Administration, and Coverage

There would clearly appear to be sufficient necessity to resort to some type of survey or polling technique in order to get the underlying economic data which will be needed to aid in deciding this case. The fact that there exist alternative methods for securing the type of data which...