United States v. San Francisco Electrical Cont. Ass'n

• Decision Date: 05 September 1944
• Docket Number: No. 26893-R.,26893-R.
• Citation: 57 F. Supp. 57
• Parties: UNITED STATES v. SAN FRANCISCO ELECTRICAL CONTRACTORS ASS'N, Inc., et al.
• Court: U.S. District Court — Northern District of California

57 F. Supp. 57

UNITED STATES v. SAN FRANCISCO ELECTRICAL CONTRACTORS ASS'N, Inc., et al.

No. 26893-R.

District Court, N. D. California, S. D.

September 5, 1944.

James McI. Henderson and Joseph L. Alioto, Sp. Assts. to Atty. Gen., and Frank Loughran, Sp. Atty., of Oakland, Cal., Lawrence W. Somerville, Sp.Atty., of San Francisco, Cal., and Stephen Maffini, Sp. Atty., of Berkeley, Cal., all of Department of Justice, for the United States.

Harold C. Faulkner and Walter J. Walsh, both of San Francisco, Cal., for defendants San Francisco Electrical Contractors Ass'n, Inc., Electrical Industry Depository of California, Inc., H. S. Tittle Co., Inc., Frank J. Klimm Company, Inc., Enterprise Electric Works, Inc., Decker Electrical Const. Co., Inc., William J. Varley, Edward W. Scott, Carl C. Severin, George W. Abbett, George D. F. Smith, William Weindorff, James Galvin, Clyde L. Chamberlain, G. Walter Spencer, Bert J. Doherty, James Surtees, Charles C. McLean, Harold L. Hammond, Carl B. Kenney, Herbert A. Porter, Samuel M. Radelfinger, Edward Conroy, Victor Lemoge, H. C. Reid, Thomas Harris, George W. Brouillet, Edgar J. Douglas, and Peter Decker.

Edwin V. McKenzie and J. H. Sapiro, both of San Francisco, Cal., for defendants Local Union No. 6, International Brotherhood of Electrical Workers, Local Union No. 595, International Brotherhood of Electrical Workers, Samuel E. Rockwell, William A. Kelly, Joseph Nunan, Charles J. Foehn, J. R. Johnston, and D. W. Tracy.

James B. O'Connor, of San Francisco, Cal., and Roscoe D. Jones, of Oakland, Cal., for defendants Electrical Contractors' Ass'n of Alameda and Contra Costa Counties, Inc., Scott-Buttner Electric Co., Inc., Pacific Electric Motor Co., Inc., California Electric Co., Inc., Carl E. Gossler, C. D. Bronson, Archie R. Matson, Edward L. Buttner, and T. I. Rosenberg.

YANKWICH, District Judge.

The indictment, returned on March 2, 1940, charges, in substance, that certain unions combined with their employers to fix prices on electrical equipment moving in interstate commerce, to exclude such equipment from the San Francisco market and to increase the cost of electrical equipment moving in interstate commerce in that market in violation of Section 1 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1. More particularly, it is averred that the defendants have been engaged continuously from January 3, 1938, to the date of the indictment "in an unlawful combination and conspiracy (a) arbitrarily, unreasonably, and unlawfully to increase, regulate, fix, dictate, and control the bids which all electrical contractors should submit to general contractors for the installation, alteration, and repair of electrical systems for the purpose of establishing arbitrary, collusive, and non-competitive bids, and (b) arbitrarily, unreasonably, and unlawfully to eliminate electrical contractors who refuse to participate in said bid-control scheme as prospective purchasers of electrical equipment shipped in interstate commerce into the San Francisco Bay Area; and (c) arbitrarily, unreasonably, and unlawfully to increase the cost of electrical equipment which has been shipped in interstate commerce into the San Francisco Bay Area and of the installation, alteration, and repair of aforesaid electrical systems to ultimate purchasers; and (d) arbitrarily, unreasonably, and unlawfully to restrict the amount and volume of electrical equipment shipped into the San Francisco Bay Area in interstate commerce from others of the United States."

The defendants fall, generally, into two groups—the employers or contractors, and the unions or employees. In the employer group are three associations, organized as corporations. One of the associations is known as the San Francisco Electrical Contractors Association; the second is known as the Electrical Contractors Association of Alameda and Contra Costa Counties; and the third is the Electrical Industry Depository of California. Other defendants in the employer group are corporations or individuals engaged in the business of electrical contracting.

In the employe group are two labor unions, Local No. 6, International Brotherhood of Electrical Workers, with headquarters at San Francisco, California, and Local Union No. 595, International Brotherhood of Electrical Workers, located at Oakland, California. Both are affiliated with the International Brotherhood of Electrical Workers.

Certain officials of the two local unions, and of the International are also made defendants.

A large portion of the electrical equipment, which goes into electrical installations, is manufactured outside the State of California by large national manufacturing concerns, and distributed in the state, through their local sales agents.

The contractors, in fulfilling contracts for installation, alteration or repair of electrical constructions and systems in buildings, stores, apartment houses, and private houses, purchase the materials which go into the building of the systems, such as cable, conduits, wire, panels, switches, switchboards, fuse boxes, and other apparatus, materials and fixtures, from local agents of these national concerns, or other jobbers.

The restraint of commerce which the government charges relates specifically to the fixing of prices for this equipment in making bids for electrical work.

Some of the testimony introduced was admitted as to certain defendants only. The government, at the conclusion of its case, has moved to apply it to all. The defendants resist this motion.

In turn, they have moved to limit the testimony so introduced to particular defendants, or, in the alternative, that the testimony be stricken as to the others.

At the same time, each defendant has requested a directed verdict, or, in the alternative, a dismissal, substantially upon these grounds:

"(1) The evidence is insufficient, as a matter of law, to warrant submission of the case to the jury.

"(2) The indictment fails to charge a violation of the Sherman Act, or of any other statute or law of the United States.

"(3) The evidence, as a matter of law, is insufficient to constitute a combination and/or conspiracy in restraint of interstate commerce, in violation of Section 1 of the Sherman Act, or any other section of the Sherman Act, or any other offense under any law of the United States.

"(4) The evidence fails to prove the offense set forth in the indictment.

"(5) If any conspiracies have been proven, legally or illegally, they are separate and distinct conspiracies and not the particular conspiracy charged in the indictment.

"(6) There is no evidence of a combination between either Local Union No. 595 or Local Union No. 6 of the International Brotherhood of Electrical Workers, or any of their officers or any officer of the International or the San Francisco corporations, or the San Francisco Electrical Contractors Association, or any individual firm in the San Francisco group with the Electrical Contractors Association of Alameda and Contra Costa Counties, and any of the east bay individuals or corporate defendants.

"(7) There is not sufficient evidence, as a matter of law, to sustain the charge that there was a violation of the Sherman antitrust law in respect to any article of commerce moving between the States."

The sufficiency of the indictment need not be considered, a demurrer to it having been overruled.

The fundamental legal question which underlies the other motions is whether the evidence shows restraint of interstate commerce.

Having had occasion, in recent years, to consider the nature of the Sherman Anti-Trust law in a group of opinions (United States v. Heating Piping & Air Conditioning Contractors Ass'n, D.C., 1940, 33 F. Supp. 978; United States v. Food and Grocery Bureau, D.C., 1941, 41 F.Supp. 884; United States v. Food & Grocery Bureau, 1942, 43 F.Supp. 965; United States v. Food and Grocery Bureau, D.C., 1942, 43 F.Supp. 974), I shall not discuss again, in detail, its scope or the policy behind it.

The general aim of the statute is "to suppress combinations to restrain competition and attempts to monopolize by individuals and corporations" (Parker v. Brown, 1943, 317 U.S. 341, 351, 63 S.Ct. 307, 313, 87 L.Ed. 315), and thus maintain freedom of commerce between the states.

In interpreting the commerce clause of the Constitution of the United States, Art. I, Sec. 8, Cl. 3, the line of demarcation between interstate and local activities is gradually being obliterated by judicial decision. As the law now stands, activities strictly local which interfere with interstate commerce, come under the interdiction of the Act. See cases cited in United States in Heating Piping & Air Conditioning Contractors Ass'n, D.C.Cal., 1940, 33 F.Supp. 978; also, Albrecht v. Kinsella, 7 Cir., 1941, 119 F.2d 1003; Montrose Lumber Co. v. United States, 10 Cir., 1941, 124 F.2d 573; Truck Drivers' Local No. 421, etc., v. United States, 8 Cir., 1942, 128 F.2d 227.

Workmen have the right to organize.

Employers may combine for the mutual protection of their interests. Employers and employees may bargain collectively. They may, in so doing, or in enforcing their demands, by strikes, lockouts, restrictions on the use of men or equipment, affect the flow of goods in interstate commerce.

But all the late decisions agree that, in the light of the Clayton (29 U.S.C.A. § 52) and the Norris-LaGuardia (29 U.S.C.A. §§ 101-115) Acts, such results are not the direct interference with interstate commerce which the Sherman Anti-Trust Act forbids. See: New Negro Alliance et al. v. Sanitary Grocery Co., 1938, 303 U.S. 552, 58 S.Ct. 703, 82 L.Ed. 1012; United States v. Hutcheson et al., 1940, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788; Apex Hosiery Co. v. Leader, 1940, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044; Milk Wagon Drivers' Union v. Lake Valley Farms Products, Inc., 1940, 311 U.S. 91, 61 S.Ct. 122, 85 L.Ed. 63; United States v. Building, etc., Council, 1941, 313...