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06/27/57 In Re: Dolcin Corporation and Victor Van Der Linde


June 27, 1957


Before BAZELON, FAHY and WASHINGTON, Circuit Judges.


Shimmerlik and Albert T. Wantz, individually and as

officers of Dolcin Corporation.

June 27, 1957.


WASHINGTON, Circuit Judge:

This proceeding is before us on a petition for reconsideration of our finding that the respondents Shimmerlik and Wantz, individually and as officers of Dolcin Corporation, were guilty of criminal contempt. See In re Dolcin Corporation, U.S. App. D.C., F.2d (1956), cert. denied, U.S. (1957). *fn1

Shimmerlik and Wantz are respectively treasurer and secretary of Dolcin Corporation. Each was a named respondent - individually and as an officer of Dolcin - in the proceeding before the Federal Trade Commission. Each admitted and acquiesced in the following finding made by the Hearing Examiner and adopted by the Commission:

"Paragraph One: ... Respondents ... George Shimmerlik, and Albert T. Wantz, individuals, are now and at all times mentioned herein have been directors of said corporate respondent, and respectively, the ... treasurer, and secretary thereof ... and are now, and at all times mentioned herein have been, in control of the management, policies, and operation of the said corporate respondent, including the acts, practices and methods herein found." Record in No. 11,700, Dolcin Corp. v. Federal Trade Commission, supra n. 1.

Shimmerlik and Wantz did not challenge that finding in this court when they sought review of the Commission's cease and desist order.

The order entered by the Commission expressly named - and ran against - Shimmerlik and Wantz. And this court's decree, effective April 8, 1955, enforcing that cease and desist order, as modified and affirmed, likewise ran against them. It directed each of them - individually and as officers of Dolcin - to cease and desist from certain specified advertising practices.

Shimmerlik and Wantz press two grounds for reconsideration of our finding of guilt: (1) They say they did not know of the letter from the corporation's counsel to the corporation's president dated May 17, 1955, which stated:

"... there is nothing to settle because the courts have settled the matter for us.Therefore, we are in no position to bargain.

"The F.T.C. order, as modified by the Court speaks for itself. There is nothing further to be done now except comply with its provisions until such time when it is amended by the Commission. ...."

Since Shimmerlik and Wantz had not been alerted by the corporation's counsel to the need for immediate compliance, they say they could not have been expected to make any effort to effect a change in Dolcin's advertising policy.

In seeking reconsideration, Shimmerlik and Wantz do not claim that they did not know of our decree against them. They say, however, that there was a "general uncertainty" as to the effective date of that decree. In our opinion of December 18, 1956, we rejected this argument:

"... We think the terms of our decree did make it clear that they were to [comply with our decree without awaiting further action by the Commission], especially when read in the light of our opinion of July 1, 1954, and the opinion of Judges Edgerton, Prettyman, Bazelon, Fahy and Washington of February 3, 1955, in support of the order denying respondent's petition for rehearing en banc. In the latter opinion it is made explicit that respondents were to comply with our decree from and after its date, that is, that they were required, notwithstanding an interim between our decision and possible subsequent modification of its order by the Commission, to comply immediately with the terms of the order of the Commission, as modified, affirmed and enforced by our decree."

We adhere to our former statement and add this comment: It is clear from the above quotation that we considered Shimmerlik and Wantz guilty from and after the effective date of our decree. We chose, however, as a matter of grace, to date our finding of guilt from May 17, and to dismiss the charges as to conduct between April 8 and May 17. The evidence in the case other than the May 17 letter provided a sufficient basis for holding Shimmerlik and Wantz guilty of contempt.

(2) Shimmerlik and Wantz say they had no reason to know that their inaction would result in violation of this court's order by the corporation. Dolcin's advertising policy was - they say - completely controlled by Victor van der Linde, and was handled by him through his advertising agency. The petition for rehearing states:

"If there were any indication in the record that Shimmerlik and Wantz knew, or had reason to believe, that unless they personally took measures the Dolcin Corporation would violate this Court's order, they might conceivably be found to have failed in their duty to this Court. Without such a finding, a requirement that they insulate themselves from criminal liability by essentially meaningless articulations to van der Linde of the obvious - that they expected and wished the corporation to take all necessary and proper steps toward compliance - would be a travesty."

Shimmerlik and Wantz acknowledge that after April 8, 1955, they did nothing to comply with our decree. Indeed, they claim that they neither could have nor should have done anything to bring both themselves and their corporation into compliance.In essence, their claim is that this whole proceeding, insofar as it affected them, was wasted effort.

But this court did not impose an obligation on Shimmerlik and Wantz that they could discharge by remaining inert. we imposed an affirmative obligation upon them, individually and as officers of Dolcin, to take all reasonable steps to effect compliance with this court's order. Those steps included, at least, that they become currently informed of the advertising conduct of Dolcin. That their "articulations" to van der Linde might have been unavailing does not relieve them of the responsibility to make those articulations. And we are not prepared to predict that such efforts, had they been made, would have been "meaningless." Whatever the order of this court directed Shimmerlik and Wantz to do, it did not permit them to stand idly by while the Dolcin Corporation - their corporation - continued to flout our order.As the Supreme Court has said:

"When one accepts an office of joint responsibility, whether on a board of directors of a corporation, the governing board of a municipality, or any other position in which compliance with lawful orders requires joint action by a responsible body of which he is a member, he necessarily assumes an individual responsibility to act, within the limits of his power to do so, to bring about compliance with the order. It may be that the efforts of one member of the board will avail nothing. If he does all he can, he will not be punished because of the recalcitrance of others." United States v. Fleischman, 339 U.S. 349, 356-57 (1950). See also Wilson v. United States, 221 U.S. 361, 376-77 (1911).

Were we to take the opposite view, we would be putting a premium on ignorance and offering a sanctuary for those remiss in performing their duties as corporate officers. See Fleischman, supra at 364. Shimmerlik and Wantz should not be permitted to use their own inertia as a shield against the force of this court's decree.

We thus will not vacate our finding that petitioners are guilty of criminal contempt. They have committed a serious offense against the law and the court's authority. At the same time, in view of all the circumstances here, we should not be understood as implying that they have been convicted of a "crime" in the ordinary sense of that term. See Myers v. United States, 264 U.S. 95, 103-105 (1924); Ex parte Grossman, 267 U.S. 87, 117 (1925); Cf. Nye v. United States, 313 U.S. 33, 43-44 (1941).Furthermore, in fixing the punishment to be imposed we have taken into account their assertions that they did not know of the May 17, 1955, letter of the corporation's counsel and that their contemptuous conduct was a result of inertia rather than of active participation in the advertising practices which violated our decree. Cf. In re Door, 90 U.S.App.D.C. 190, 194, 195 F.2d 766, 770 (1952).

We fix the punishment as a fine of $1,000.00 on petitioner Shimmerlik and a fine of $750.00 on petitioner Wantz, and "shall enter an order to that effect, which will state the time, place and means of payment." In re Door, loc. cit. supra .

The petition for reconsideration and rehearing is denied.


FAHY, Circuit Judge, dissenting: I would grant the petition of George Shimmerlik and Albert T. Wantz for reconsideration and rehearing.

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