United States v. New York Great Atlantic & Pacific Tea Co. , 137 F.2d 459 ( 1943 )

HUTCHESON, Circuit Judge.

The indictment brought under Sections i and 2 of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1, 2,¹ was in two counts. The first charged a continuing conspiracy to unreasonably restrain interstate trade and commerce in food and food products among the several states. The second charged a continuing conspiracy to monopolize a part of the interstate trade and commerce among the several states in such food and food products. The defendants, except Carl Byoir and Business Organization, Inc., were New York Great Atlantic & Pacific Tea Co., Inc., corporations alleged to be its subsidiaries, and certain individuals alleged to be officers, agents and employees of the A & P group. Business Organization, Inc. and Carl Byoir,² as chairman of its board, were alleged to be public relations counsel for the group.

The A & P group filed a lengthy demurrer in which, under ten numbered paragraphs, some of them greatly subdivided, they attacked, first, the sufficiency of the jurisdiction and venue allegation of the indictment, second, its validity as a whole, and, third, various paragraphs and portions of it as vague, indefinite and wanting in specificity, and as alleging not facts but conclusions. Business Organization, Inc., in a brief demurrer and motion to quash, denied the jurisdiction of the court, attacked the indictment generally for insufficiency to allege an offense, and particularly for its failure to state facts showing its criminal complicity in the crimes charged.

The district judge was of the opinion that the indictment did sufficiently charge offenses under the statute. He thought, though, that the demurrers should be sustained, (1) because the indictment contained so many irrelevant and inflammatory statements designed to create and creating a prejudice against the defendants as that it would be impossible for them to have a fair trial under it, and (2) because it contained no allegation of an overt act done in the Northern District of Texas sufficient to give that court jurisdiction of the offense. Setting his views out with care in an oral opinion, he entered an order sustaining the demurrers and dismissing the indictment, and the United States has appealed.

Here, denying that the allegations of the indictment as to the bigness of the group defendants, both absolutely and in relation to other food handlers, had an inflammatory purpose or effect, and insisting that all of these allegations are relevant to the charge properly made in the indictment that the defendants had conspired to restrain and to monopolize trade and commerce among the several states, the United States urges upon us that the indictment may not be quashed and dismissed because of them. As to the venue issue, the United States, pointing out that the indictment charged both that the conspiracy was in part formed, and that overt acts in furtherance of it were performed, in Dallas County, insists that its sufficiency may not be questioned.

Appellees of the A & P group support the ruling below by a full and thorough brief and argument, urging upon us that the indictment (1) fails to show that there was jurisdiction in the court a quo in that the allegation that the conspiracy was formed in part in Dallas County was but a conclusion and that the overt act alleged as to Dallas County was not alleged to be in furtherance of the conspiracy, (2) fails to allege a combination and conspiracy in restraint of interstate trade and commerce in violation of the Sherman Anti-Trust Act, (3) alleges not facts but conclusions which are not bindinsr upon the defendants, (4) is, in its allegations, too vague and indefinite to charge an offense, (5) is duplicitous, and (6) is inflammatory and prejudicial.

Appellee, Business Organization, Inc., while urging on its part that the venue was improperly laid in Dallas, and that the indictment contains inflammatory allegations prejudicial to a fair trial, makes its main attack upon the indictment upon the ground that whatever might be the correct view as to whether the indictment states an offense as to the other defendants, no facts are alleged as to Business Organization, Inc. and Carl Byoir, charging them with complicity in any criminal act, and the indictment is, therefore, wholly insufficient as to them.

We agree with the district judge and with the appellees that there are many allegations in the indictment which are irrelevant and unnecessary to the charging of the offense and which, if not designed to be, are in fact inflammatory and prejudicial, and that the defendants are entitled to relief against them. We think it clear, however, that the necessary relief from their effect may be accorded³ without dismissing the indictment and requiring a reindictment and that it was error for the court to quash the indictment and dismiss it for this ground. Only a careless and cursory reading of the indictment would give support to the view that the only offense it charges is bigness. It does state that the A & P group of defendants constitutes a powerful group, but this is stated not as the offense but by way of background and inducement and as throwing light upon the reasonableness of the charge of a conspiracy to restrain and monopolize. It is true that the indictment is for conspiracy and not for the commission of a substantive offense and that to convict for a conspiracy it would not be necessary to prove that those conspiring had the ability to make their purpose effective, but it is equally true that it is entirely proper in an indictment and prosecution for conspiracy to allege and prove that the defendants charged with conspiring had the ability to give effect to the conspiracy charged.

While, therefore, defendants are entitled to be relieved against and protected from all the allegations of the indictment, which, going beyond the legitimate office of pleading to bring forward relevant background, are inflammatory and prejudicial, they are not entitled, because of inflammatory allegations, to the relief of dismissal of the indictment, o-r,to have excluded, from the jury facts as-to the group set up, which are relevant to and have bearing upon the conspiracy charged.

Of appellees’ points that the indictment is not sufficient because it consists mainly of conclusions and is vague and indefinite in its allegations of fact, we need only say that no one can read the indictment without understanding what is charged; that the A & P group defendants have entered into a common understanding to control, dominate and restrain trade in food and food products among the states and have instituted practices designed and calculated to make the conspiracy effective. Indeed, the indictment, too wordy to be good pleading, has the fault not o-f vagueness and indefiniteness, but of a too detailed pleading of evidence, a fault, however, which does not affect the validity of the indictment. As to the charge that it contains mere conclusions, a stereotyped complaint against indictments, we need only call attention to the fact that while good pleading in an indictment requires allegations of fact rather than of conclusions, the line between what is a statement of fact and what is a conclusion is not so broadly and easily drawn as that he who runs may read. Indeed, as the cases and text books amply show, it is sometimes quite finely drawn. Most words are syntheses, that is, the result of conclusions which have been drawn. We analyze to synthesize. We synthesize to analyze again. Tested by the rule and principles applicable, the indictment, in its statement of what was agreed to be done and what was done, sufficiently alleges facts rather than conclusions, and is fully sufficient to support the charge.

Appellee’s claim that the indictment is duplicitous in that it charges more than one separate offense seems to be the familiar one so often raised in connection with conspiracy indictments involving many persons and facts, that instead of charging one general conspiracy, the indictment charges many separate ones. In George W. Burk et al. v. United States, 5 Cir., 134 F.2d 879, we have had recent occasion to consider this issue of whether the indictment charged one general or several separate conspiracies, and have there pointed out that where a common thread runs through all of the actions and a common purpose animates all of the conspirators, the fact that many persons come into, and many acts are embraced in, the conspiracy does not make the charge duplicitous by charging many instead of one conspiracy. Here the common thread is the dominance of ■ what is called the headquarters defendants in the A & P group. As Green, in that case, was the bridge, which carried the conspiracy over from the first into the second administration and, from the standpoint of the criminal conspiracies, made the two administrations one, so here, upon the allegations of the'indictment, the interrelation and ramifying activities of all the associated and affiliated companies and their dominance and control by the headquarters defendants make the conspiracy charged not several but one.

It remains only to consider the two points most vigorously and confidently urged against the indictment, (1) that it does not allege facts showing that the venue jurisdiction was properly laid, and (2) that it fails to charge a conspiracy and combination in violation of the Sherman Anti-Trust Act. Unless, as appellees argue, the positive allegation in Par. 22 of the indictment that the conspiracy was “formed * * * ” and that in Par. 26, that it has been “entered into * * *” in part within the Northern District of Texas, can be completely disregarded as mere conclusions, we think it may not be doubted that the indictment sufficiently lays the venue in Dallas County, Texas, wholly without regard to its allegations that overt acts were performed there. Nash v. United States, 229 U.S. 373, 33 S.Ct. 780, 57 L.Ed. 1232, and United States v. Socony Vacuum Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129, settle it that the offense of conspiracy under the Sherman Act is complete when the agreement or conspiracy is formed, that jurisdiction and venue lie in the district where it was formed, and that it is not necessary to allege the commission of an overt act. It is settled, too, that a conspiracy in restraint of trade is, or may be, a continuing offense, United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168, and that “A conspiracy thus continued is in effect renewed during each day of its continuance”, United States v. Borden Co., 308 U.S. 188, 60 S.Ct. 182, 190, 84 L.Ed. 181. As each new member later joins the conspiracy, he in effect makes the agreement then and there to become a party to it.

The charge in Par. 22 of the indictment, that the conspiracy was in part formed, that is, made, in Dallas, and in Par. 26, that it has been entered into in part in Dallas must, we think, be taken as the statement not of a conclusion but of a fact. Just as a witness may in a civil suit say, not as a conclusion but as a fact, that he made or entered into an agreement at a certain time and place, so an indictment may charge, and a witness may say, in a criminal case that a defendant made or entered into an agreement at a particular time or in a particular place. But the indictment does not stop with this. It alleges also that the conspiracy was in part performed in Dallas County, and that certain overt acts were performed there. While it is not essential to an indictment for a conspiracy to violate the Sherman Anti-Trust Act that the commission of an overt act in furtherance of such conspiracy be alleged, the commission of such an act and its allegation in such an indictment does give local venue. United States v. Trenton Potteries, 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989, and United States v. Socony Vacuum, supra. Par. 22 of the indictment alleges that the conspiracy was carried out in part in the Dallas Division. Pars. 23, 24 and 25 state what the conspirators have agreed to do and have done, and the effect of that doing. Par. 26 directly alleges that the combination and conspiracy was carried out in part in the Northern District of Texas by performance there of “many of the acts set forth in Par. 23 hereof. Particularly, the defendants have continuously since September 1, 1939, and down, to the present time, advertised food and food products, particularly meat, below cost and below the price charged for the same meat in other locations served by A & P retail stores, for the purpose and with the intent of injuring and destroying competition of independent concerns, meat dealers, and local chain stores”. These allegations, when read in the light of the settled principle that an act done in furtherance of or to give effect to the conspiracy need not be in itself a violation of the statute, indeed, it may be in itself wholly innocent, leave in no doubt that the indictment, sufficiently to give venue there, charges the performance of acts in Dallas County.

Finally, we are quite clear, as the district judge was, that the indictment taken as a whole sufficiently charges as to the defendant corporations and individuals described as the A & P group that they have conspired and done things to carry out the conspiracy to restrain and monopolize trade and commerce among the several states in food and food products produced, distributed and sold throughout them. It will serve no useful purpose to discuss or cite the numerous cases⁴ which have settled it that the Sherman Act condemns every means, no matter how novel, to accomplish the objective of carrying out a conspiracy to restrain or monopolize trade. It is not the form of the combination or the particular means used, but the result to be achieved that the statute condemns. It is equally clear that it is of no importance whether the means used to accomplish the unlawful objective are in themselves unlawful. Acts done to give effect to the conspiracy may be in themselves wholly innocent acts, yet if they are a part of the sum of the acts which are relied upon to effectuate the conspiracy the Sherman Act forbids, they fall within the condemnation of the statute.

As to defendants, Business Organization, Inc. and Carl Byoir, the matter stands differently. The only factual allegation in the indictment even inferentially connecting these defendants with the other defendants is that “said defendants are public relations counsel for the A & P group”. No facts are alleged to show that they committed any act, overt or otherwise, or that they dealt in food products. They are merely indicted. It is not alleged that these two defendants were employed by A & P, or that A & P has used them in the furtherance of the alleged conspiracy, or that they were stockholders, or directors, or managers, or even agents of the corporate defendants. Defendants may not be hailed into courts to stand the expense and embarrassment of trial upon an indictment of this kind without being definitely informed of the specific acts upon which their alleged guilt or complicity is predicated. Being an employee or public relations counsel for a large corporation, standing alone, is not sufficient to subject a defendant to the expense, embarrassment, and loss of time the trial of this case will involve. To join a defendant in an indictment of this kind with no further allegation of fact than is made against these two defendants is a denial of due process. It is to place upon an accused the burden of disproving a conspiracy in which the part played by him is not alleged with such definiteness as to permit him to prepare his defense. Upon the innocent it would cast a more intolerable burden than upon the guilty. Judged by these standards, the indictment is fatally defective as to Business Organization, Inc. and Carl Byoir, whose alleged complicity seems to have no other factual predicate in the indictment than that they were public relations counsel for one of the corporate defendants, and the demurrer of Business Organization, Inc. shotdd have been sustained.

As to the individual defendants, members of the A & P group who are accused, but as to whom it is not alleged when they came into the conspiracy or what particular part they had in it, while the information is meager, it is not so meager as to require quashing of the indictment as to them, since fuller information could, and if requested should, be supplied by a bill of particulars. The judgment dismissing the indictment is reversed and the cause is remanded for further and not inconsistent proceedings.

1 “See. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal: * * * Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished. * * *

“Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished * * *

2 The only reference in the indictment is par. 5a as follows:

“Business Organization, Inc., a corporation duly incorporated under the laws of New York, with its principal office in New York, New York, and whose Chairman of the Board is Carl Byoir, is hereby indicted and made a defendant herein. Said Carl Byoir is also indicted, individually and as an officer, director, and agent of Business Organization, Inc. Said defendants are public relations counsel for the A & P group.”

3 Ralston v. Cox, 5 Cir., 123 F.2d 196, at page 198 and eases cited in Note 4. Also Johnson v. United States, 5 Cir., 124 F.2d 101.

4 A few of the leading cases are: Swift & Co. v. United States, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518; Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.,N.S„ 834, Ann. Cas. 1912D, 734; United States v. American Tobacco Co., 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663; United States v. Socony-Vacuum Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044; Fashion Guild v. Federal Trade Comm’n, 312 U.S. 457, 688, 61 S.Ct. 703, 85 L. Ed. 949; Wickard v. Filburn, 317 U.S. Ill, 63 S.Ct. 82, 87 L.Ed. —.