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UNITED STATES v. NORTH AMERICAN VAN LINES

January 29, 1962

UNITED STATES of America
v.
NORTH AMERICAN VAN LINES, INC., Aero Mayflower Transit Company, Inc., Allied Van Lines, Inc., United Van Lines, Inc., James D. Edgett, Paul Clarke, John Sloan Smith, Emmett J. Flavin, Loren A. Larimore, Household Goods Carriers' Bureau



The opinion of the court was delivered by: MATTHEWS

The two count indictment in this case charges four corporations, five of their officers and a trade association with violating Sections 1 and 3 of the Sherman Act, 15 U.S.C.A. §§ 1 and 3. *fn1" In general the charge in each count is that the defendants engaged in a combination and conspiracy in unreasonable restraint of trade and commerce in the transportation of household goods. Count 1 relates to trade and commerce specified in Section 1 of the Sherman Act while Count 2 relates to trade and commerce specified in Section 3 of that Act.

Now before the court is a motion by the individual defendants to dismiss the indictment as to them. In support of their motion they assert that the indictment does not allege any acts done by them other than as representatives of their corporations in their capacity as corporate officers, and that acts authorized, ordered or done by officers of corporations in such capacity cannot constitute offenses by such corporate officers under Sections 1 and 3 of the Sherman Act but are covered only under Section 14 of the Clayton Act, 15 U.S.C.A. § 24, which provides:

 'Whenever a corporation shall violate any of the penal provisions of the antitrust laws, such violation shall be deemed to be also that of the individual directors, officers, or agents of such corporation who shall have authorized, ordered, or done any of the acts constituting in whole or in part such violation, and such violation shall be deemed a misdemeanor * * *.'

 Upon turning to the penalties prescribed under the mentioned provisions of the Sherman and Clayton Acts the significance of the issue here raised is manifest. Originally these penalties were identical, being a fine not exceeding $ 5,000 or imprisonment not exceeding one year, or both. However, in 1955 Congress changed Sections 1 and 3 of the Sherman Act by fixing the fine at not exceeding $ 50,000 *fn2" but left untouched the fine of not exceeding $ 5,000 under Section 14 of the Clayton Act.

 Opposing the motion of the individual defendants to dismiss, the Government maintains that these defendants charged in a dual capacity, that is, as representatives of their corporation in their corporate capacity and also as individuals in a personal capacity. The portion of the indictment labeled Offense Charged in respect of each count does not allege any capacity in which the individuals acted. Among introductory allegations in the indictment labeled The Defendants there appears a statement that each individual defendant is or has been an employee or officer of a specified corporate defendant and also a statement that acts charged in the indictment 'to have been done by each defendant corporation were authorized, ordered or done by the officers, agents, employees or representatives of such defendants, including, but not limited to, those individuals named as defendants * * *, while actively engaged in the management, direction or control of its affairs.' Although the quoted language may show that the individual defendants are being charged, at least in part, in their representative capacity, it cannot be said to limit the charges against them to acts so performed. But apparently it is this language upon which the individual defendants ground their claim that they have been charged only in their capacity as corporate officers.

 It is suggested by the individual defendants that if the court cannot determine from the face of the indictment that they are charged only in their capacity as corporate officers then the court should order the United States to furnish a bill of particulars stating whether any of them is claimed to have authorized, ordered or done any of the acts alleged other than in his capacity as a corporate officer, and if so, stating with particularity each such act and the capacity in which he is claimed so to have acted. Bills of particulars and statements of the parties, however, should not be considered as a part of the indictment or as a substitute therefor or amendment thereto, and can neither weaken the indictment nor change the crime charged. *fn3" And in passing upon a motion to dismiss, the allegations of the indictment must be accepted by the court as written. *fn4"

 As already stated, the defendants here argue that Section 14 of the Clayton Act affords the Government its sole statutory basis for prosecuting them. Section 1 and Section 3 of the Sherman Act each describes those coming within its provisions as 'Every person' doing the proscribed acts while Section 14 of the Clayton Act deals specifically with individual corporate officers by declaring that whenever a corporation shall violate any of the penal provisions of the antitrust laws, such violations shall be deemed to be also that of the individual officers, directors or agents of such corporation who shall have authorized, ordered or done any of the acts constituting in whole or in part such violation. In effect the argument of the defendants is that if corporate officers acting in their representative capacity ever were within Section 1 and 3 of the Sherman Act then they were lifted out of these sections when Section 14 of the Clayton Act was adopted.

 But Section 14 of the Clayton Act must be viewed in the light of its purpose and setting. 'The Clayton Act, as its title and the history of its enactment discloses, was intended to supplement the purpose and effect of other antitrust legislation, principally the Sherman Act of 1890.' Standard Fashion Co. v. Magrane-Houston Co., 1921, 258 U.S. 346, 355, 42 S. Ct. 360, 362, 66 L. Ed. 653. *fn5" Section 14 supplemented the existing laws by providing a specific statute under which a corporate officer, agent, or director could be held personally liable for contributing to a violation of an antitrust penal provision by his corporation even though his contribution, standing alone, might not be such a violation. *fn6" The legislative history of the Clayton Act makes it abundantly clear, however, that Congress did not intend by this section to supplant the penal provisions of the Sherman Act, or to relieve from liability any violators of such provisions. Representative Floyd, a member of the Judiciary Committee and floor leader in charge of Section 14, pointed this out in the debate on that section, saying:

 '* * * I will say this: That this in no way affects the procedure under existing law, either criminal or civil. If an individual is guilty of violating the Sherman law, he can be indicted independently of this provision; * * *' (Emphasis supplied.)

 51 Cong.Rec. 9679.

 In explaining the conference report on the proposed Clayton Act to the House of Representatives Mr. Floyd further stated:

 'Keep in mind that we have not disturbed the text of the Sherman law. We have not disturbed the penal provisions in the existing antitrust laws, including the Sherman law. We have on the contrary, supplemented the penal provisions of the Sherman law and of other ...


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