United States v. Wise, 488

Citation370 U.S. 405,82 S.Ct. 1354,8 L.Ed.2d 590
Decision Date25 June 1962
Docket NumberNo. 488,488
PartiesUNITED STATES of America, Appellant, v. Raymond J. WISE
CourtUnited States Supreme Court

Robert L. Wright, Fort Worth, Tex., for appellant.

John T. Chadwell, Chicago, Ill., for appellee.

Mr. Chief Justice WARREN delivered the opinion of the Court.

A grand jury returned an indictment charging the National Dairy Products Corporation with engaging 'in a combination and conspiracy to eliminate price competition in the sale of milk in the Greater Kansas City market in unreasonable restraint of * * * trade and commerce, in violation of Section 1' of the Sherman Act, 15 U.S.C. § 1, 15 U.S.C.A. § 1. Two counts incorporated by reference the alleged illegal acts of the corporation and named the appellee as codefendant. In a bill of particulars the Government charged that the appellee had 'been acting solely in his capacity as an officer, director, or agent who authorized, ordered, or did some of the acts' constituting the violation. The appellee moved for a dismissal on the ground that the indictment, as particularized by the bill, failed to charge a crime. According to appellee, the Sherman Act does not apply to corporate officers acting in a representative capacity; he contends that the statute exclusively applicable to these officers is § 14 of the Clayton Act, 15 U.S.C. § 24, 15 U.S.C.A. § 24. Over the Government's opposition the dismissal was ordered by the district judge. 196 F.Supp. 155. An appeal was perfected pursuant to 18 U.S.C. § 3731, 18 U.S.C.A. § 3731, and we noted probable jurisdiction. 368 U.S. 945, 82 S.Ct. 387, 7 L.Ed.2d 342.

Although the Sherman Act has been in existence for over 70 years and although corporate officers have been indicted under that Act for almost as long, see, e.g., United States v. Greenhut, 50 F. 469 (D.C.D. Mass.1892); United States v. Patterson, 55 F. 605 (D.C.D Mass.1893),1 this question is one of first impression for this Court. The impetus for raising this issue at such a late date comes from the fact that in 1955 the Congress raised the penalty provision in the Sherman Act from $5,000 to $50,000 without making a corresponding increase in the $5,000 penalty found in the Clayton Act.

Section 1 of the Sherman Act imposes criminal sanctions upon 'every person' who violates that provision, 15 U.S.C. § 1, 15 U.S.C.A. § 1.2 The Government contends that a corporate officer is obviously a 'person' within the Act. The appellee, however, distinguishes between a corporate officer who represents his corporation and one who acts on his own account. In the latter case the appellee agrees that the Sherman Act applies. But, when the officer is acting solely for his corporation, the appellee contends that he is no longer a 'person' within the Act. The rationale for this distinction is that the activities of an officer, however illegal and culpable, are chargeable to the corporation as the principal but not to the individual who perpetrates them.

No substantial support for such an artificial interpretation of a seemingly clear statute is provided by the legislative history. The most that can be said for the appellee's position is that the Reagan Bill, an unsuccessful competitor of the Sherman Bill, specifically included corporate officers in its penal section while the Sherman Bill had no penal section at one time. The penal provision of the Reagan Bill was offered as an amendment to the Sherman Bill, and the Senate Committee on the Judiciary then redrafted and resubmitted a bill in the form which became the Sherman Act. 21 Cong.Rec. 2731, 3152. That Act outlawed certain acts by 'persons,' and there is nothing to indicate that the Congress intended to restrict the meaning as applied to corporate officers. See Trailmobile Co. v. Whirls, 331 U.S. 40, 61, 67 S.Ct. 982, 992, 91 L.Ed. 1328.

The appellee points to § 8 of the Sherman Act, 15 U.S.C. § 7, 15 U.S.C.A. § 7, which defines 'person' 'to include corporations and associations.' He argues that, since corporations are included within the term, individual corporate officers are thereby excluded. This is a non sequitur. The mere fact that the term is given a broad construction does not alter its basic meaning, and no such inference can be drawn from the express inclusion of corporations as 'persons.' The reason for this inclusion is readily understandable. The doctrine of corporate criminal responsibility for the acts of the officers was not well established in 1890. See New York Central & H.R.R. Co. v. United States, 212 U.S. 481, 29 S.Ct. 304, 53 L.Ed. 613. When a criminal statute proscribed conduct by 'persons,' corporate defendants contended that only natural persons were included. United States v. Amedy, 11 Wheat. 392, 6 L. Ed. 502. The same issue raised in other cases was not always resolved by a unanimous Court. Beaston v. Farmers' Bank of Delaware, 12 Pet. 102, 9 L.Ed. 1017. Cf. United States v. Shirey, 359 U.S. 255, 79 S.Ct. 746, 3 L.Ed.2d 789. The dissent by Mr. Justice Story in the Beaston case would be sufficient reason for a careful draftsman to avoid the whole problem of a provision such as § 8. Further reason for caution lay in the language found in cases then recent. Sinking-Fund Cases, 99 U.S. 700, 718—719, 25 L.Ed. 496, and Canada Southern R. Co. v. Gebhard, 109 U.S. 527, 542, 3 S.Ct. 363, 373, 27 L.Ed. 1020 (dissenting opinion), which distinguished between per- sons and corporations when considering the application of the Fourteenth Amendment's protection to 'persons.' See Philadelphia Fire Assn. v. New York, 119 U.S. 110, 120, 7 S.Ct. 108, 113, 30 L.Ed. 342 (dissenting opinion). Therefore, we attribute no significance to the specific inclusion of corporations in the definition of 'persons' in determining whether a corporate officer is within the term.

This Court was faced with the same problem in United States v. Dotterweich, 320 U.S. 277, 64 S.Ct. 134, 88 L.Ed. 48, involving the construction of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301—392, 21 U.S.C.A. §§ 301—392. An earlier version of the Act stated that the acts of a corporate officer would be chargeable both to him and to the corporation. In a 1938 revision the statute made any 'person' responsible and specifically included corporations within that term. 52 Stat. 1040. The Court of Appeals reversed the conviction of a corporate officer on the ground that only a corporation was a 'person' within the Act. This Court reversed the Court of Appeals, rejecting substantially the same argument that is advanced by the appellee in this case. The reason for the rejection is equally applicable to the case at bar. No intent to exculpate a corporate officer who violates the law is to be imputed to Congress without clear compulsion; else the fines established by the Sherman Act to deter crime become mere license fees for illegitimate corporate business operations. Following Dotterweich, we construe § 1 of the Sherman Act in its common-sense meaning to apply to all officers who have a responsible share in the proscribed transaction. Cf. Carolene Products Co. v. United States, 323 U.S. 18, 21, 65 S.Ct. 1, 3, 89 L.Ed. 15.

This construction is supported by the decisions of the lower federal courts which considered the problem of whether corporate officers were 'persons' within the Sherman Act in the interim before the passage of the Clayton Act. The most significant case is United States v. MacAndrews & Forbes Co., 149 F. 823 (C.C.S.D.N.Y- .1906), in which the Court, considered the joint indictment of a corporation and some of its officers for violations of the Sherman Act. The defendants demurred to the joinder, the corporation pleading that only the human agents could be held responsible for the misdemeanor while the officers pleaded that only the corporation was responsible. The Court refused to hold as a matter of law that either proposition was correct because responsibility was, in each case, a matter of fact. The Court noted that the officers may or may not be convicted, depending upon whether they were personally responsible for the crime.3

In United States v. Winslow, 195 F. 578 (D.C.D.Mass.1912), the same contention by corporate officers was given short disposition:

'The indictment, however, expressly charges them (the corporate officers) as actors, and two fundamental principles are thoroughly settled. One is that neither in the civil nor the criminal law can an officer protect himself behind a corporation where he is the actual, present, and efficient actor; and the second is that all parties active in promoting a misdemeanor, whether agents or not, are principals.' 195 F., at 581.

We have found no case between 1890 and 1914 in which a corporate officer successfully secured the dismissal of an indictment or the reversal of a conviction on the ground that he was not a 'person' within the Sherman Act when he acted solely as a representative of the corporation.

Unless subsequent statutes have repealed or amended this aspect of the Sherman Act, our inquiry is at an end.

The appellee seeks succor in the subsequent legislative history accompanying attempts to amend the Sherman Act between 1890 and 1914. He particularly relies upon H.R. 10539, 56th Cong., 1st Sess. (1900). This bill would have expressly included corporate officers and agents in the definition of 'persons' found in § 8. The report accompanying that bill stated that the existing law did not subject agents, officers, and attorneys to penalties. H.R. Rep. No. 1506, 56th Cong., 1st Sess. However, statutes are construed by the courts with reference to the circumstances existing at the time of the passage. The interpretation placed upon an existing statute by a subsequent group of Congressmen who are promoting legislation and who are unsuccessful has no persuasive significance here. United States v. Price, 361 U.S. 304, 313, 80 S.Ct. 326, 331, 4 L.Ed.2d 334; United States v. Turley, 352 U.S. 407, 415, n. 14, 77 S.Ct. 397,...

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