207 F. 434 | N.D. Ala. | 1913
This is a proceeding against the defendants for a criminal contempt, alleged to have been committed by them
The amended specifications of the acts on which the United States relied to show a violation of the decree are 51 in number. It is not necessary to consider them seriatim. They may all be classified into five distinct kinds and so treated. They relate: (I) To the maintenance of the organization after the date of the decree for the purposes and objects set out in its constitution and by-laws; (II) to the issuance of lists of wholesale grocers, issued after the decree, alleged to have been of the description enjoined thereby; (III) to alleged acts of the association in exacting promises from prospective members not to sell direct to consumers; (IV) to alleged undue persuasion or coercion exercised by the association, its officers and members, upon manufacturers to prevent their selling their products direct to the retailer or for the accomplishment of other objects and purposes; and (V) to acts of the association through its president or other officers and members alleged to have been obstructive of justice, in that their effect was to disparage the decree and induce disobedience thereto. The United States introduced evidence in support of each of these five classes of acts. It was not seriously controverted that they happened, if at all, in connection with interstate commerce, so as to confer jurisdiction on the court.
The issue was not so much whether the specific acts complained of by the United States were in fact done as it was whether the doing of them, under the circumstances, constituted violations of the decree of the court, and it is to this aspect of the case that this opinion will be addressed. The United States disclaims any purpose of asking punishment for any act not a violation of the act of July 2, Í890, though it might be held to be a violation of the terms of the decree. It rested its case entirely upon the first section of the act of July 2, 1890, which prohibits contracts, conspiracies, or combinations in restraint of interstate trade.
“The said association and its officers and members are not restrained from maintaining said organization for social or other purposes than those herein prohibited.”
In order to constitute an act or omission a contempt, the United States is, in view of its concession, required to establish, with the degree of certainty required in criminal cases: (1) That the act or omission is a restraint of interstate trade under the Sherman Law, and (2) that it is prohibited by the' terms of the decree. No reciprocal concession was made by the defendants, having the effect of relieving the plaintiff from establishing the second proposition.
The contention of the government is that, while the decree permits the continued maintenance of the association’s organization as a legal entity, it’does not legalize its existence for the purposes and objects set out in its constitution and by-laws. ,The general tenor of the alleeed objectionable purposes there set forth was the promoting of harmony between the members of the association, who were exclusive wholesale grocers doing business in 14 southern states, and the manufacturers of food products, to the end that the wholesale grocers might be recognized as the economical channel of distribution of the products of the manufacturers.
It is not necessary to determine whether an association with such a declared object would constitute an illegal restraint of trade, without reference to the character of the activities employed by it to accomplish such purposes, and therefore a violation of the onerman Law, unless it is to'be held also to constitute a violation of the terms of the decree in this cause, since both must concur to result in a conviction in this proceeding. It seems to me that the Circuit Court will be presumed to have familiarized itself with the fundamental nature of the association, as set out in its constitution and by-laws, before the decree recognizing its legality was entered, at least to the extent that would have enabled it to pass on the legality of the association, on the face of its organic laws. In view of this presumption, the declaration of the decree that the “said association, its officers and members, are not restrained from maintaining said organization” for certain purposes seems intended to mean that the court found no illegality in the framework of its organization, so> far as appeared from its records, but only in certain of its activities, those which were expressly enjoined by the decree. “Said organization” referred to in the decree is the organization under the same constitution and by-laws which is now asserted to be illegal. Not only is there no expressed injunction in the decree against the maintenance of that organization, but an express disclaimer by the court, which prevents any implication of one. Hence the continued maintenance of the organization under the same constitution and by-laws, after the decree, is not a violation of the decree.
“And they and each of them be and are likewise enjoined, restrained, and prohibited from publishing, causing to be published, and assisting or encouraging the publication, distribution, or circulation of any book, pamphlet, or list, wherein is contained only the names of wholesale grocers, located in the territory embraced by said organization, who have announced their intention or agreed directly or indirectly, expressly or impliedly, to work in harmony with the association.”
It was conceded that the association, after the date of the decree, issued to manufacturers some of its lists that were in existence at the time of the entry of the decree, and also some that were subsequently published by it. The question was whether they were of the kind enjoined.
The association seems to have construed the words of the decree, “to work in harmony with the association,” as being synonymous with “members of the association.” That this was too narrow a construction is obvious. There was evidence pro and con upon the issue as to' whether the list contained the names of persons or firms out of sympathy with the declared purposes of the association. It is clear that, if its names were purposely confined to those (whether members or nonmembers, or those otherwise not in sympathy with its purposes) who worked in harmony with the association in effecting its purpose of confining the sales of manufacturers to those who were exclusive wholesalers, then it answered the description of the lists that were enjoined by the decree; and the issuance, after the entry of the decree, of such lists would be a violation of it. Nor would the adding to or omission of names from the list, with the intent to evade the decree, change the situation in this respect. Whether the evidence is persuasive beyond reasonable doubt that the lists were of the description enjoined, so that the issue of them, disconnected from the circumstances under which they were issued, constituted of itself a contempt, need not be determined, in view of the difficulty, if not the impossibility, of considering it apart from all the surrounding circumstances, and in view of the decision reached by the court that their - issue, considered in connection with the attendant circumstances, constituted a violation of the decree.
III. The third class of acts of the association upon which contempt is predicated relates to the promise, alleged to have been exacted of the prospective members of the association by it, as a condition to election and continuance in membership, viz., not to sell direct to consumers while they remained members of the association.
These acts have an added significance to that of merely assisting a manufacturer in carrying out a policy of his own voluntary adoption and maintenance and partake of the coercion which had concededly accompanied similar acts of the association before the date of the decree. They constituted a deliberate utilization by the association,
For these reasons, I think the association and its president violated the decree in sending the lists» and information to the manufacturers, under these conditions, and when chargeable with this knowledge. The secretary was also technically guilty, but the evidence shows his acts were ministerial and that he had no direction of the policy of the association.
My conclusion is that the defendant the Southern Wholesale Grocers’ Association is guilty of contempt in violating the decree of the court, -and it is adjudged to pay a fine of $2,500 and such' part of the-costs as were incurred because of the issues found against it; and that the defendants J. H. McLaurin, H. Lacy Hunt, and L. A. Melchers are guilty of contempt in violating the, decree of the court, and each is adjudged to pay a fine of $1,000 and such costs as each incurred because of the issues found against them, respectively. All the other defendants' are discharged, with their costs.
Decree of Injunction.
“In the Circuit Court of tlie United States for the Northern District of Alabama.
"The United States of America, Petitioner, v. The Southern Wholesale Grocers’ Association et ah, Defendants. In Equity. No. 20D.
“This cause coming on to he heard before D. D. Shelby and Don A. Pardee, Circuit Judges, and Thos. G. Jones, District Judge, come the United ¿States of America by Oliver D. Street, United States attorney for the Northern Dis-*445 Met of Alabama, and O. E. Harrison, Special Assistant to the Attorney Cimera 1, who prosecute in this behalf, and come also the defendants, by their solicitors, Luke E. Wright and Oaruthers Ewing, and petitioner moves the court for an injunction in accordance with the prayer of the bill, and by consent: of all parties, in open court, it is adjudged, ordered, and decreed as follows: ,
“(1) That the said defendants the Southern Wholesale Grocers' Association, and all the members of said association, the Southern Wholesale Grocers’ Association, a corporation, the McLester-Van Hoose Company, James A. Van lloose, lioliert McLester, the xllabama Grocery Company, S. W. Lee, Joseph IT. McLaurin, L. M. Hooper, E. E. Hashagen, C. W. Bartleson, llobert .Moore, Thomas O. Davis, B. B. Earnshaw, C. 0. Guest, T. TI. Scovelí, W. T. Ileeves, Tí. xV. Morrow, J. H. C. Wullrarn, J. D. Faueette, W. A. Scott, and .Tames W. Lee, and each and all of them, their directors, officers, agents, servants, and employes, and all persons acting under, through, by, or in behalf of them or either of them, or claiming so to act, be, and they are hereby, perpetually enjoined, restrained, and prohibited from combining, conspiring, confederating, or agreeing together or wilh others expressly or impliedly, directly or indirectly, to prevent manufacturers or producers engaged in selling or shipping commodities among the several states and in the District of Columbia from selling such commodities to any person who is not a member of the said the Southern Wholesale Grocers’ Association, or who is not listed on the so-called Green Book, published by said association, its officers, and agents, and entitled ‘Official List of Wholesale Grocers in the States of Alabama, Arkansas, District of Columbia, Florida, Georgia, Indian Territory, Louisiana, Maryland. Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia,’ or any book, pamphlet, or list of like character; and they and each of them be and are likewise enjoined, restrained, and prohibited from publishing, causing to be published, aiding, assisting, or encouraging the publication, distribution, or circulation of any book, pamphlet, or list wherein is contained only the names of wholesale grocers located in the territory embraced by said organization who have announced their intention or agreed, directly or indirectly, expressly or impliedly, to work in harmony with said association.
“They are also enjoined, restrained, and prohibited from publishing or distributing, or causing to be published or distributed, or aiding or assisting or encouraging in the publication or distribution of any list or lists of manufacturers or producers who have, expressly or impliedly, directly or indirectly, agreed to sell only to members of said association, or to persons, firms, or corporations listed in said Green Book, or book, pamphlet, or list of like character.
“(2) That the said defendants and each and all of them, their directors, officers, agents, servants, and employes, and all persons acting under, through, by, or in behalf of them, or either of them, or claiming to so act, be, and they «re hereby enjoined, restrained, and prohibited from combining, conspiring, confederating, and agreeing together or with others to fix a price at which any commodity shall bo sold, or to coerce manufacturers und producers engaged in selling and shipping commodities among the several states, and in the District of Columbia, to fix a limited selling price at which such commodities art' to be sold, and to have such price printed on cards and distributed; and they are hereby enjoined, restrained, and prohibited from printing, causing to be printed, or encouraging or aiding in the printing of such cards or their distribution; and they and each of them are likewise enjoined, restrained, and prohibited from conspiring, confederating, or agreeing together or with others, expressly or impliedly, directly or indirectly, to prevent such manufacturers and producers from selling and shipping commodities to any wholesale grocer who does not maintain the infice so fixed and listed: and they and each of them are likewise enjoined, restrained, and prohibited from demanding and receiving from any such manufacturer or producer any rebate, bonus, or emolument of any kind to be paid to any wholesale dealer or jobber for and on account of the fact that he has maintained the limited selling price, and are likewise enjoined, restrained, and prohibited from paying or delivering any such rebate, bonus, or emolument of any kind, directiy*446 or indirectly, to any such wholesale grocer or jobber who has maintained such limited selling price, or demanding or receiving any fine or penalty, directly or indirectly, from any wholesale grocer or jobber engaged in commerce among the several states and in the District of Columbia for and on account of such wholesale grocer or jobber not having maintained said limited selling price.
“(3) That said defendants and each and all of them, their directors, officers, agents, servants, and employés, and all persons acting under, through, by, or in behalf of them, or either of them, or claiming so to act be and they are hereby perpetually enjoined, restrained, - and prohibited from conspiring, confederating, or agreeing together or with others, expressly or impliedly, directly or indirectly, to boycott any manufacturer or producer, wholesaler, or jobber engaged in commerce among the several states and in the District of Columbia for and on account of any such manufacturer, producer, wholesaler, or jobber having sold or transported in interstate commerce any commodity to any person, firm, or corporation who is not a member of said association or who does not maintain the said limited selling price or who is not listed in the said Green Book or book, pamphlet, or list of like character, and also from combining, conspiring, confederating, and agreeing together, or with others, expressly or impliedly, directly or indirectly to prevent any person, firm, or- corporation who refuses to join said association or who refuses to maintain said limited selling price or who sells commodities direct to the consumer from purchasing such commodities from manufacturers, jobbers, producers, or wholesalers engaged in commerce among the several states and in the District of Columbia, and also from conspiring, confederating, and agreeing together or with others, expressly or impliedly, directly or indirectly, to increase jobbers’ profits by increasing prices at which wholesalers and jobbers shall sell any commodity in interstate commerce.
“(4) That said defendants and each and all of them, their directors, officers, agents, servants, and employes, and all persons acting under, through, by, or in behalf of them or either of them or claiming so to act be and they are hereby perpetually enjoined, restrained, and prohibited from conspiring or agreeing together'or with others, expressly or impliedly, to do or to refrain from doing anything, the purpose or effect of which is to fix or maintain the price at which any commodity employed or intended to be employed in commerce among the several states and in the District of Columbia shall or should be sold by any manufacturer, jobber, wholesaler, or retailer, or the purpose or effect of which is to hinder or prevent, by intimidation or coercion, any person, firm, or corporation from buying or selling any such commodity wherever, whenever, from and to whomsoever and at whatsoever price may be then and there agreed upon by the seller and purchaser.
‘•(5) The Southern Wholesale Grocers’ Association, its officers and members, and all who shall hereafter become officers and members of said association, are hereby perpetually enjoined and inhibited from doing, or combining or conspiring to do, either or any of said acts. The said association and its officers and members are not restrained from maintaining said organization for social cr other purposes than those herein prohibited.
“(C) It is further ordered, adjudged, and decreed that petitioner have and recover of the defendants judgment for the costs in this behalf expended, for which let execution issue.
“The parties have consented to the foregoing; it is ordered entered as the decree of the court. DON A. PARDEE, Circuit Judge.
“DAVID D. SHELBY, Circuit Judge. ’
“THOS. G. JONES, District Judge.
“It is agreed by all parties that the foregoing be entered as the decree of the court.
“October 17, 1911. O. D. Street, United States Attorney for Petitioner.
“Luke E. Wright, Attorney for Defendants.”