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UNITED STATES v. UNITED STATES GYPSUM CO.

DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLUMBIA


February 26, 1941

UNITED STATES
v.
UNITED STATES GYPSUM CO. et al.

The opinion of the court was delivered by: MORRIS

MORRIS, Justice.

On June 28, 1940, an indictment was returned in this Court by the grand jury, charging the defendants (five corporations and nine individuals) with violation of Sections 1 and 3 of the Sherman Anti-Trust Act, 26 Stat. 209, 15 U.S.C.A. ยงยง 1, 3. *fn1" All defendants entered a plea of not guilty and thereafter leave was granted by the Court to the defendants to withdraw the pleas of not guilty, and to file demurrers or other preliminary motions within thirty days. No demurrer was filed by any of the defendants within such period. However, the defendants have joined in a single motion for a bill of particulars, and the case is now before the Court on such motion, upon which arguments have been heard and extensive briefs have been submitted.

In substance the indictment charges a single combination and conspiracy -- a combination and conspiracy to fix and make uniform the resale prices charged for gypsum wall board and gypsum plaster board by manufacturers of gypsum products otherer than gypsum board (the indictment refers to such manufacturers as "distributors") who purchased their gypsum board requirements from manufacturers of gypsum board (the indictment refers to the gypsum board manufacturers as "manufacturers"). The parties to the alleged combination and conspiracy fall into the following separate classes: (1) Five corporations, now engaged in the manufacture and sale of gypsum board, and named as defendants; (2) four corporations, formerly engaged in the manufacture and sale of gypsum board, but not in existence at the time of the return of the indictment, and therefore named as co-conspirators, but not named as defendants; (3) twelve corporations engaged only in the wholesale distribution of gypsum board and named as co-conspirators, but not named as defendants; and (4) nine individuals, eight of whom are officers or employees of the defendant companies, and one of whom was an employee of one of the manufacturers named as a co-conspirator.

 The indictment describes the method by which the alleged combination and conspiracy was entered into and effectuated over a period beginning in the year 1929 and continuing to the date of the indictment. It is charged that the defendant United States Gypsum Company, which owned a number of patents covering gypsum board, had licensed the manufacture of that product by the other manufacturers by agreements permitting the United States Gypsum Company to fix prices and other terms and conditions of sale by the manufacturers, and which required the written consent of the United States Gypsum Company to sales by manufacturers to distributors. Neither the license agreements, as such, nor the price fixing, or other provisions therein contained, as such, are claimed to be illegal, but it is charged that the alleged combination and conspiracy resulted because the United States Gypsum Company, as a condition to its consent to sales of gypsum board to distributors at a price below that which it charged to dealers, required distributors to maintain and adhere to United States Gypsum Company dealer prices in reselling such gypsum board to dealers and consumers. It is further charged that the manufacturers agreed among themselves to sell gypsum board to distributors at a price below United States Gypsum dealer prices only on condition that distributors maintain and adhere to United States Gypsum Company dealer prices in reseling to dealers and consumers. It is further charged that the manufacturers required the distributors, as a condition of sale, to agree, and the distributors did agree, to resell at United States Gypsum Company dealer prices such gypsum board as was purchased by the distributors from the manufacturers. The indictment sets forth other acts by defendants and co-conspirators, not named as defendants, pursuant to the alleged combination and conspiracy. *fn2"

 The defendants, by their motion for a bill of particulars, seek definite and specific particularization in detail as to substantially every act mentioned in the indictment. The motion consists of seventeen sections and thirty-five subsections, a summary of which is given in the margin.2a

  The proper office of a bill of particulars in criminal cases is to furnish to the defendant further information respecting the charge stated in the indictment when necessary to the preparation of his defense, and to avoid prejudicial surprise at the trial. An accused is entitled "to be informed of the nature and cause of the accusation" against which he is to defend himself, and this is so, I think, even though what is needed is an identification, within reasonable limits, of information in the possession of the accused, or the furnishing of information which in other circumstances would not be required because evidentiary in nature. An accused is not only entitled, as of right, to such information as is reasonably necessary to the preparation of his defense, but it is in accord with the present trend of adjudicatory procedure, both administrative and judicial, that the controversial issues should be narrowed to the extent of which they are susceptible, particularly is this true where, as here, the trial of the facts by a jury must proceed without serious interruption. But this does not mean that specific identification of particular constituent primary facts should be required where, by reasonable investigation in the light of information contained in the indictment, or otherwise furnished by the prosecution, a defendant will not be prejudicially surprised. And this principle is particularly important in cases involving conspiracties to violate the antitrust laws. Such cases, as here, involve entire industries and competitive factual situations covering lengthy periods of time. As stated by Mr. Justice Holmes in Swift & Company v. United States, 196 U.S. 375, 25 S. Ct. 276, 279, 49 L. Ed. 518: "The general objection is urged that the bill does not set forth sufficient definite or specific facts. This objection is serious, but it seems to us inherent in the nature of the case. The scheme alleged is so vast that it presents a new problem in pleading. If, as we must assume, the scheme is entertained, it is, of course, contrary to the very words of the statute. Its size makes the violation of the law more conspicuous, and yet the same thing makes it impossible to fasten the principal fact to a certain time and place. The elements, too, are so numerous and shifting, even the constituent parts alleged are, and from their nature must be, so extensive in time and space, that something of the same impossibility applies to them. The law has been upheld, and therefore we are bound to enforce it notwithstanding these difficulties. On the other hand, we equally are bound, by the first principles of justice, not to sanction a decree so vague as to put the whole conduct of the defendants' business at the peril of a summons for contempt. We cannot issue a general injunction against all possible breaches of the law.We must steer between these opposite difficulties as best we can." This was said with respect to the sufficiency of a bill in equity, challenged by a demurrer, but the same inherent difficulty of furnishing exact and specific information exists whether it be sought in the statement of the case, civil or criminal, or in a bill of particulars supplementary thereto.

 In the light then of these two competing principles, I must conclude that the motion here under consideration cannot and should not be granted in its entirety. I do not consider, however, that, because the motion seeks specific description as to matters of which they are sufficiently informed in the indictment, or because it seeks information in extravagant detail respecting matters referred to in the indictment, but which are not sufficiently identified, the defendants should be denied such further information respecting the latter as will enable them, by reasonable diligence on their part, to avoid being prejudicially surprised at the trial. It must be borne in mind that many of the acts alleged in the indictment may be established, not by direct evidence, but by inference from numerous other facts and circumstances. Without knowledge of the material which the Government intends to make use of, it would be impossible for a court to determine the most practical means or indicia by which the Government should identify the acts as to which the defendants are entitled to further information. Doubtless the time of the happening of some particular act must be arrived at only within a reasonable range, and that by inference. It is not necessary for the protection of a defendant that acts respecting which he is entitled to further information be identified in any particular manner. The important thing is that in some reasonable manner they be identified. I have, therefore, concluded that many of the requests for particulars should be denied, and that certain of them should be allowed, to the extent, however, that the Government shall be permitted reasonable latitude, so that rigid specificity will not defeat the furnishing of information to which the defendants are entitled, or unduly hamper the Government in its proper prosecution of the case. When the information directed is furnished its sufficiency, if questioned, can then be better determined.

 An order will, therefore, be entered, requiring the United States within sixty days to serve upon the attorneys for the moving defendants a bill of particulars, setting forth the information respecting the allegations of the indictment indicated below. It will be further ordered that such bill of particulars may be supplemented if the Government should subsequently learn of further particulars with respect to the allegations of the indictment as to which it is required to furnish information indicated below, such supplementary bill of particulars to be served within ten days after learning of such further particulars, provided service be at least ten days prior to the trial. In all respects, except as otherwise indicated, the motion for a bill of particulars will be denied.

 1. (a) The acts charged to be illegal are sufficiently set out in paragraphs 15 to 18 of the indictment. By their nature they require a concert of action by the various defendants, and each of them should know whether or not they participated in the acts described in the indictment, or the extent of such participation. To require further specification would simply call for evidentiary matter.

 (b) and (c). This is denied for the same reasons stated with respect to 1(a), and for the further reason that the means and methods whereby the corporate defendants acted are peculiarly within the knowledge of such defendants.

 2. The failure to furnish the information here requested cannot prejudicially surprise the defendants, and the request is denied.

 3. This request seeks information affecting the jurisdiction of the Court and the venue of the action. The defendants should be apprised to the extent that the Government has knowledge of such sales made by distributors in commerce between the States and the District of Columbia, and to dealers and consumers within the District of Columbia. Information which would enable the defendants to meet this charge is particularly necessary as it is not stated that such sales were made by any of the defendants, and information as to the sales made by alleged co-conspirators not defendants might not be available to the defendants unless such sales were more particularly identified. The Government may identify such sales to the extent that it has knowledge thereof, with such particularity as to time, within reasonable limits, place, parties, or other information, as will enable the defendants to properly investigate the same.

 4. The method by which each of the defendants is claimed to have become a party to the combination and conspiracy charged in the indictment is sufficiently described in the indictment. The Government should not be required to set out all of the circumstances attending the ultimate fact charged. The period covered, however, is that of eleven years, and a defendant is entitled to know within more reasonable limits the time during which it is charged such defendant became a part of such conspiracy, or, by other information, enabled to direct attention to corporate records and communications with the other defendants and alleged co-conspirators, so as to properly prepare a defense. The Government shall, therefore, furnish information within its knowledge as will, with such particularity as it can, advise each defendant of the time, within reasonable limits, when it is charged that such defendant became a party to the combination and conspiracy alleged in the indictment, or furnish such other information as will enable each defendant, by proper investigation, to adequately prepare a defense to the charge that such defendant did become a party to the combination and conspiracy charged.

 5. In so far as acts done by alleged co-conspirators, not defendants, were accomplished through individual defendants in the District of Columbia, further information should be furnished by the Government respecting such acts so as to enable the defendants, by proper investigation, to prepare their defense. The Government shall furnish such information in its possession with respect to time, within reasonable limits, parties, or by other identification, as will accomplish this purpose.

 6, 7 and 8. It is deemed that, if the information herein required in response to other paragraphs of the motion is furnished, that, with the information set forth in the indictment, is sufficient to enable the defendants, by reasonable investigation, to properly prepare their defense.

 9. Unless the information furnished in response to other paragraphs is sufficient to enable the defendants, by proper investigation, to prepare a defense to the acts referred to in this paragraph, the Government shall furnish such information in its possession with respect to time, within reasonable limits, parties, or by other identification, as will accomplish this purpose.

 10. (a) The allegation here referred to is sufficiently clear in its meaning.

 (b), (c) and (d) The information here requested is evidentiary in character and not necessary to enable the defendants to properly prepare their defense.

 11, 12, 13, 14, 15, 16 and 17. Unless the information furnished in response to other paragraphs is sufficient to enable the defendants, by proper investigation, to prepare a defense to the acts referred to in these paragraphs, the Government shall furnish such information in its possession with respect to time, within reasonable limits, parties, or by other identification, as will accomplish this purpose.


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