United States v. Outer Harbor Dock & Wharf Co.

• Decision Date: 22 September 1954
• Docket Number: No. 22984-CD.,22984-CD.
• Citation: 124 F. Supp. 337
• Court: U.S. District Court — Southern District of California
• Parties: UNITED STATES of America, Plaintiff, v. OUTER HARBOR DOCK & WHARF COMPANY, a corporation, Jerry H. Powell, B. F. Johnston (deceased), Charles L. Tilley, Ronald D. Gibbs, and A. F. Mortensen, Defendants.

124 F. Supp. 337

UNITED STATES of America, Plaintiff, v. OUTER HARBOR DOCK & WHARF COMPANY, a corporation, Jerry H. Powell, B. F. Johnston (deceased), Charles L. Tilley, Ronald D. Gibbs, and A. F. Mortensen, Defendants.

No. 22984-CD.

United States District Court S. D. California, Central Division.

September 22, 1954.

Laughlin E. Waters, U. S. Atty., Louis Lee Abbott, Asst. U. S. Atty., Los Angeles, Cal., Richard M. Darby, Asst. U. S. Atty., Pasadena, Cal., for plaintiff.

Frank P. Doherty, Los Angeles, Cal., for Outer Harbor Dock & Wharf Co., Inc., Jerry H. Powell, B. F. Johnston, Ronald D. Gibbs, and A. F. Mortensen.

Frank B. Belcher, J. E. Simpson, Los Angeles, Cal., for Outer Harbor Dock & Wharf Co., Inc., and Charles L. Tilley.

YANKWICH, Chief Judge.

The indictment charges the Outer Harbor Dock and Wharf Company and five individual defendants with conspiracy.¹ Of the five defendants, B. F. Johnston is dead. So the action has proceeded against the corporation and the four individual defendants, its officers.

The conspiracy charge is that of knowingly and willfully making and causing to be made a false, fictitious and fraudulent representation and statement in a matter within the jurisdiction of a department and agency of the United States² by falsely representing and stating to the representatives of the Eleventh Naval District that "the defendant Outer Harbor Dock and Wharf Company was obligated under its lease with the City of Los Angeles to remove warehouse buildings and installations erected by the United States Navy on land leased by the said City to the defendant Outer Harbor Dock and Wharf Company, whereas, in truth and in fact, as the defendants well knew, the Harbor Department of the City of Los Angeles had agreed with defendants that said warehouse buildings and installations erected by the United States Navy would be accepted by the City of Los Angeles and that the Outer Harbor Dock and Wharf Company was not obligated to remove them from said land."

The case is thus reduced to one alleged representation, — namely that the Company was obligated to remove certain buildings and installations on land leased by the City, when in fact, it was not so obligated.

The government has closed its case. The defendants have moved for a judgment of acquittal under Rule 29(a) of the Federal Rules of Criminal Procedure, 18 U.S.C.A., which provides, in part:

"The court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such offense or offenses."

This rule reenacted what had been the law before.

The higher courts have determined the quantum of proof necessary to warrant an acquittal at the conclusion of the Government's case. They are not in agreement as to wording, but our own circuit and others agree that whether proceeding under this rule or under the rule for a directed verdict obtaining before the Federal Rules of Criminal Procedure were adopted, the criterion is the same: the facts in the record must be such that the elements of the offense can be readily inferred.³ And, generally, if, after taking the view of the evidence most favorable to the Government, there is substantial evidence in the record from which to infer the existence of a conspiracy and the participation of a particular defendant in it, the evidence is sufficient.⁴

The Court of Appeals for the District of Columbia, after analyzing the diverse manners in which the rule has been stated, gives the following summary which, I believe, correctly states the law:

"The true rule, therefore, is that a trial judge, in passing upon a motion for directed verdict of acquittal, must determine whether upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt. If he concludes that upon the evidence there must be such a doubt in a reasonable mind, he must grant the motion; or, to state it another way, if there is no evidence upon which a reasonable mind might fairly conclude guilt beyond reasonable doubt, the motion must be granted. If he concludes that either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible, he must let the jury decide the matter. In a given case, particularly one of circumstantial evidence, that determination may depend upon the difference between pure speculation and legitimate inference from proven facts. * * *

"To be valid, the first part of the above-quoted statement from the Hammond case, supra Hammond v. U. S., 75 U.S.App.D.C. 397, 127 F.2d 752, must be understood to mean that the judge cannot let a case go to the jury unless there is evidence of some fact which to a reasonable mind fairly excludes the hypothesis of innocence. The statement refers to the requisite presence of evidence, and not to the absence or effect of other evidence. The second part of the quoted statement means that if, upon the whole of the evidence, a reasonable mind must be in balance as between guilt and innocence, a verdict of guilt cannot be sustained."⁵

These criteria have the approval of our own Court of Appeals.⁶

In determining whether there exists the balance between guilt or innocence, of course, the Court may draw inferences from admitted facts, but inferences upon inferences cannot be made. As said by the Court of Appeals for the 8th Circuit:

"As said by us in Nations v. United States, 8 Cir., 52 F.2d 97, 105, in an opinion by Judge Stone: `Such double inferences are too remote to constitute evidence. As said by the Supreme Court in United States v. Ross, 92 U.S. 281, 283, 23 L.Ed. 707: "They are inferences from inferences; presumptions resting on the basis of another presumption. Such a mode of arriving at a conclusion of fact is generally, if not universally, inadmissibble. No inference of fact or of law is reliable drawn from premises which are uncertain."'"⁷

That case was a Harrison Narcotics Act case against a physician. The Court of Appeals was considering the question whether the trial court erred in refusing to grant a judgment of acquittal. The Government had sought to prove unlawful prescription of narcotics from mere possession. The court said that from possession of narcotics it would have to infer illegal possession and from illegal possession it would have to infer an intention to violate the law in giving prescriptions when sound medical practice did not warrant it. It, therefore, reversed the case with direction to enter a judgment of acquittal.

The evidence before the Court in this case shows that the negotiations were carried on chiefly with the defendant Charles L. Tilley. And the testimony of the Government's three chief witnesses, Donald B. Radcliffe, Frank F. Mead and James Shlicta, related chiefly to the defendant Tilley. The only other person by whom direct statements were alleged to have been made is the defendant Jerry L. Powell, an attorney, who is reported to have made certain representations at a conference on March 6, 1951, held at Washington, D. C. concerning the obligation to the city to restore the premises in 1956. Knowledge of the other defendants is sought to be fastened on them through the fact that there exists correspondence showing that they knew of the position which Tilley as the General Manager of the corporation was taking in his negotiations with the Navy.

While an inference of conspiracy may be drawn from the simultaneous doing of similar acts by persons connected with the same corporation, I believe what has been designated as "parallelism of action" in proving conspiracy has been greatly abused. The Supreme Court has taken cognizance of this.⁸ All the direct evidence shows here is that Powell and Tilley took the view that it was their obligation to "restore" the premises at the termination of the lease in 1956. There is no evidence in the record that even Tilley at any time used the phrase which is read into the indictment, — namely that the Company

"was obligated under its lease with the City of Los Angeles to remove warehouse buildings and installations erected by the United States Navy on land leased by the City."

The testimony of all the Government's witnesses, so far as Tilley is concerned, shows that they were talking at all times about "restoring" the land to its previous condition. Indeed, I doubt if it could be inferred that anyone but Powell, who is a lawyer, ever used the legal phrasing which is in the indictment.

The Government has given the date of the beginning of the conspiracy as September 15, 1949, and continuing to the filing of the Indictment on July 15, 1953. While testimony as to the prior negotiations was introduced, no conversation prior to May 1, 1950, can be given any consideration except as background. And, admitting that Tilley and Powell had made statements at various times and that the other defendants may have known of them, their acts are consistent with an individual position taken by them as individuals within their own sphere and not as a result of any conspiracy.

But assuming that the statements were made by all and that they were the result of concert of action, I am of the view that the statements were true. The Navy had a lease with the defendants from October 1, 1943, to June 30, 1944, which was renewable from year to year. In 1949, they began discussing the possibility of terminating the lease. In this lease, which the Government had a right to terminate on thirty days' written notice, the Navy obligated itself to remove the structures it had built and restore the premises to the condition existing at the time of entering the possession. (Lease Clause 8) The City of Los Angeles was not a party to this lease. Indeed, when it was requested to...