# Petition — Brown v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1810%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 438 U.S. 915 ## Text IN THE Supreme Court of the United States Octroper TERM, 1976 No. 7 6-1556 Coton Brown and J. P. Nicery, Petitioners, v. Unirep States or AMERICA, Respondent. JOINT PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT CiaRK M. OCLIFrorD Carson M. Gass Tuomas RicHARD SPRADLIN Barry J. IsRaEL Ciirrorp, Giass, McILwain & FINNEY 815 Connecticut Avenue, N.W. (an) ae odes C. 20006 Counsel for Petitioners May 9, 1977 Pures or Bryson S. Apams Purine, Inc. Wasmrworon, D. C. INDEX Page Joust Petition ror a Writ or CerTIornaRi TO THE UNITED Sratres Court or Appgats ror THE Tuinp Crrcuir.. 1 GeO BING o.os coccoccadecececsecctotecessctoes 1 SEE nan cnathsccdedbimbedenaneenceseteanses 2 SS PUIG 6.06 vot ic decdécctecdcecocccacece 2 ED o.oo cdncutdencnenedasbeseanensee 2 STATEMENT oF THE CasE hpi ERA ep Ce aL ae ROE EE NE 4 Bo Bo GE Kddtidc Koike Gerdcccccavendte conccdecs 9 Reasons ror GRANTING THE WRIT 1. The Decision of the Court of Appeals To Re- verse and Remand for a New Trial Erroneously Ignored the Total Absence of Any Evidence To Implicate Either Colon Brown or J. P. Nicely During the Statutory Period in a Conspiracy To Violate the Antitrust Laws ............... 16 Colon Brown ...... wideeansededdsnuneds 17 i: is EE a catanecohotcanveseaihcanseben 20 ED cn ccnnnvecedvesadcodecetsbhdtes 22 2. By Effectively Perpetuating the Erroneously Retroactive Application Given by the Trial Court to United States v. Container Corp., 393 U.S. 333 (1969), the Court of A s Violated the Due Process Clause of the itution. .. 24 GRD. ocd ccc deccedteadésbédbtuccdccveupdedctt 32 APPENDIX Opinion of the Court of Appeals ............... la Excerpts From Appendix in the Court of Appeals 58a Selected Exhibits From the Trial Below......... 174a Excerpts From Trial Transcript ................ 192a Go t Memorandum, M 1 Docket Wo. 240 (Tr. 8058) nf. ts 16a ii AUTHORITIES CASES: Page American Tobacco Co. v. United States, 328 U.S. 781 CURED cccccccccccossccpecesescesecess A eeeeees Belliston v. Texaco, Inc., 455 F.2d 175 (10th Cir. 1972), certiorari denied, 408 U.S. 928 (1972) ........++- 26 Blumenthal v. United States, 332 U.S. 539 (1947) .... 16 Bouie v. City of Columbia, 378 U.S. 347 (1964) ..... 28, 29 Cement Manufacturers Protective Association v. United States, 268 U.S. 588 (1925) ........... 25, 26, 27, 30, 31 Conaway v. United States, 349 F.2d 907 (8th Cir. 1965), certiorari denied, 382 U.S. 976 (1966) ........... 17 Curley v. United States, 160 F.2d 229 (D.C. Cir. 1947), certiorari denied, 331 U.S. 837 (1947) .....--..-- Gray v. Shell Oil Company, 469 F.2d 742 (9th Cir. 1972), certiorari denied, 412 U.S. 948 (1973) ..........- °6 Hamling v. United States, 418 U.S. 87 (1974) ......-. 29 Harris v. United States, 404 U.S. 1232 (1971) ........ 20 Johnson v. Florida, 391 U.S. 596 (1968) ...........++ 20 Kotteakos v. United States, 328 U.S. 750 (1946) ...... 16 Kroger Co. v. Federal Trade Commission, 438 F.2d 1372 (6th Cir. 1971), certiorari denied, 404 U.S. 871 SEED -nocducentaccésdpunsssbetase ch ddeneseese 31 Lemon v. Kurtzman, 411 U.S. 192 (1973) ............ 30 Maple Flooring Manufacturers Ass'n v. United States, SD We ED GENO wanccscdcceceucscesscceses 25, 27 McKinney v. Parsons, 513 F.2d 264 (5th Cir. 1975) ... 29 Miller v. California, 413 U.S. 15 (1973) ............ 29, 30 Mortensen v. United States, 322 U.S. 369 (1944) ..... 17 Parker v. United States, 378 F.2d 641 (1st Cir. 1967), certiorari denied, 389 U.S. 842 (1967) .......... 17 Pierce v. United States, 314 U.S. 306 (1941) ......... 28 Stanley Marks v. United States, 45 U.S.L.W. 4233 PEE scenncustascudbdsndaduansounseseussets 29, 30 Theatre Enterprises, Inc. v. Paramount Film Distrib- uting Corp., 346 U.S. 537 (1954) .............45: 11 Thompson v. City of Louisville, 362 U.S. 199 (1960) . .16, 20 Toussie v. United States, 397 U.S. 112 (1970) ........ 23 United States v. Allard, 240 F.2d 840 (3d Cir. 1957), certiorari denied, 353 U.S. 939 (1957) ........... 17 United States v. Container Corporation of America, ff: e Ff eer. 2, 12, 19, 24, 25, 26, 27, 28, 29, 30, 31 Authorities Continued iil Page United States v. Insco, 496 F.2d 204 (5th Cir. 1974) .. 29 United States v. Jacobs, 513 F.2d 564 (9th Cir. 1975).. 29 United States v. Marchisio, 344 F.2d 653 (2d Cir. 1965) 16 United States v. Palladino, 490 F.2d 499 (1st Cir. 1974) 29 United States v. Sawyer, 294 F.2d 24 (4th Cir. 1961), certiorari denied, 368 U.S. 916 (1961) ........... 17 se _ v. Sherpiaz, Inc., 512 F.2d 1361 (D.C. Cir. EE PRE De OE RS ang ey EL eee 29 United States v. Thevis, 484 F.2d 1149 (5th Cir. 1973) 29 United States v. United States Gypsum Co., 550 F.2d RRR I cA a ie 1 — 2 v. Wasserman, 504 F.2d 1012 (5th Cir. RR ES EE ELS LO EN ae re ey ee 29 United States ex rel. Clark v. Anderson, 502 F.2d 1080 SPL PT 6, bkdddouanceanesieess hanced sdeece 29 Vachon v. New Hampshire, 414 U.S. 478 (1974) ...... 20 Viviano Macaroni Company v. Federal Trade Commis- ston, 411 F.2d 255 (3d Cir. 1969) ............... 31 Wall Products Co. v. National Gypsum Co., 326 F.Supp. if - 4 & RAR pai Saeed 26 Webster v. Sinclair Refining Com , 338 F.Supp. 248 (S.D. Ala. 1971) — - ad cae ca babae ies iataleedcns 26 STaTUTEs : Federal Rules of Criminal Procedure, Rule 29 ....... 17 Robinson-Patman Act, 15 U.S.C. § 13(b)....... 3, 7, 24, 25, 26, 27, 31 wes of the Supreme Court of the United States, Rule . Sherman Antitrust Act, 15 U.S.C. §1........ 2, 3, 4, 24, 25, United States Code ie SI eed ch See rs ed 3, 22 a 2 United States Constitution SIE WT digs benbbh ails dbdéccdncecsctkeeccs 2 Article I, Section 10 No. Coton Brown and J. P. Nicery, Petitioners, v. Unitep States or America, Respondent. JOINT PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Petitioners, Colon Brown and J. P. Nicely, pursuant to Rule 46 of the Rules of this Court jointly pray that a writ of certiorari issue to review the opinion and judgment of the United States Court of Appeals for the Third Cireuit entered in these proceedings on January 6, 1977. The opinion of the Court of Appeals (Appendix la) has been reported at 550 F.2d 115 (3rd Cir. 1977). The Judgment of the Court of Appeals for the Third Cireuit was entered on January 6, 1977. A timely pe- tition for rehearing filed by the respondent was de- nied on March 10, 1977. On March 31, 1977, Mr. Justice Brennan extended the time in which to file a petition for a writ of certiorari to May 9, 1977. This petition for certiorari is filed within that extended period. The Court's jurisdiction is invoked under 28 U.S.C. § 1254(1). 1. Whether the failure of the Respondent to intro- duce any evidence at trial connecting either petitioner with participation during the statutery period in a conspiracy charged under 15 U.S.C. § 1 required that the Court of Appeals for the Third Cireuit reverse the judgment of the District Court and enter an order aec- quitting the petitioners. ®. Whether fundamental fairness and the Due Proe- ess Clause were violated when the courts below effee- tively gave erroneously retroactive application to this Court's decision in United States vy. Container Corp., 393 U.S. 333 (1969). STATUTES INVOLVED United States Constitution, Amendment V: “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a present- ment or imlietment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or publie danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any ease to be a witness against himself, nor be de- 3 prived of life, liberty, or property, without due process of law; nor shall private property be taken for publie use, without just compensation.” United States Code, Title 15: § 13(b). “‘Upon proof beiug made, at any hearing on a complaint under this section, that there bas been discrimination in price or services or facili- ties furnished, the burden of rebu the prima- facie case thus made by showing justification shall the prima-facie case made by showing that his lower price or the furnishing of services or facilities to any chaser or purchasers was made in good to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.” United States Code, Title 15: if | | with foreign nations, is declared to be illegal . . . .”’ United States Code, Title 18: § 3282. Offenses Not ot as “Except as other- wise expressly provided , ho person shall spansetiel Gel on iy off ~ capital, unless the indictment is found or the formation is instituted within five years next after such offense shal] have been committed.”’ Rules of the Supreme Court of the United States: 4 a petition for writ of certiorari therefrom; or, without summons and severance, any one or more ot Gam any egy @ pes gee oe two or more of them may join in an appeal or petition.”’ STATEMENT OF THE CASE Colon Brown From January 1, 1965, to the time of his indictment on December 27, 1973, Colon Brown was Chairman of the Board and Chief Executive Officer of the National Gypsum Company, a producer of Gypsum wallboard. On December 27, 1973, he, along with some other de- fendants, both individual and corporate, was indicted for allegedly having conspired to violate Section 1 of the Sherman Antitrust Act, 15 U.S.C. 61, by fixing the price, terms, and conditions of sale of gypsum hoard products. Nearly 36 months were consumed by grand jury proceedings alone. Following a trial in excess of four months resulting in a transcript of over 15,000 pages, a jury entered a verdict of guilty as to all defendants. From this verdict, Petitioner Brown sought review by the Third Cirenit arguing that the evidence presented at trial was insuffi- cient to support the verdict. In the alternative he re- quested a new trial because the trial court committed numerous errors of law, failed to discharge the jury in light of the repeated misconduct of the prosecution, and coerced the hopelessly deadlocked jury. On January 6, 1977, the Third Cireuit agreed that prejudicial errors had occurred and thus the judgment of conviction was reversed and the case was remanded to the trial court. In doing so, however, the Third Cir- cuit ignored Judge Hunter's own significant observa- tion that the only possible references which might con- 5 ceivably link Colon Brown to a price-fixing conspiracy was for a period almost three vears prior to the be- ginning statutory period. (Appendix p. 27a). The evidence shows without dispute that Colon Brown prior to January 1, 1965, had nothing whatsoever to do with the pricing or sale of gypsum products. His entire experience during his years of employment with the National Gvpsum Company had been with other prod- uet lines aml in positions related only to the manu- facture and shipping of such products. Between January 1, 1965, and the commencement of the rele- vant period under the statute of limitations, De- eember 27, 1968, the evidence presented against Colon Brown fell into three categories discussed below. Even so, very little in the voluminous record of the case even referenced Colon Brown. The scarce mentions of him were legally innocuous. No witness testified as to any meetings, telephone conversations, or correspon- dence in which he engaged in any discussions with eom- petitors about the pricing of gypsum products. His own sworn and unrefuted testimony explains fully the legally valid purpose of any oceasion on which he com- municated with officials of other companies engaged in the manufacture and sale of gypsum. The prosecution made no slightest effort to produce witnesses or docu- ments that might cast any doubt on these explanations. Accordingly, the purported case against Colon Brown consisted solely of the prosecutor’s innuendo and sur- mise and failed utterly to meet the minimum standards of probative evidence. First, in an effort to connect Colon Brown with an alleged agreement among competitors to increase the price of gypsum wallboard effective December 15, 1965, the prosecution introduced calendar entries and ree- 6 ords showing that Colon Brown had some meetings and telephone contacts earlier in 1965 with officials of the United States Gypsum Company. But no evidence of any kind was introduced to show that these ever in- volved discussions of gypsum wallboard pricing. The only evidence in the record with regard to those meet- ings established their wholly lawful nature and pur- pose. (App. p. 154a-16l1a). Second, in an effort to connect Colon Brown with an alleged agreement to change terms of credit effee- tive March 1, 1966, the prosecution was able to argue only that in August of 1965 Mr. Brown had authorized a study of National Gypsum Company's eredit terms and that, ina quite unremarkable coincidence, one fol- lowup memorandum in a series of internal National (iypsum memoranda to and from Mr. Brown in con- nection with this credit study was dated December 10, 1965, a date on which his calendar showed the name of Mr. Fredericks, then with the Bestwall Division of Georgia-Pacitie Corporation. Neither Colon Brown nor Mr. Fredericks remembered any such meeting. (App. p. 15a). Totally lacking in the record is any indication that National's study of credit problems was initiated pur- suant to any diseussions with competitors or for reasons other than those completely internal to the National (ivpsum Company. There was no testimony offered and no doeument presented to prove that Colon Brown ever talked with a competitor about credit terms in the sale of gvpsum wallboard. In the end, the prosecution's case against Petitioner Colon Brown was reduced to the argument that he was Chairman of the Board and Chief Executive Officer of National Gypsum Company during a period when one or more of the Corporation's employees, in accord- ance with open policy followed pursuant to advice of outside legal counsel, on oeeasion called a competitor to verify a eustomer’s report that the competitor had offered lower competitive prices or more advantageous terms and conditions of sale. As was documented fully at the trial, such action—popularly referred to as **verifieation’’—was undertaken: (a) to ensure com- pliance with the requirements of the Robinson-Patman Act by establishing a bona fide basis for extending a lower price to meet a reported lower price offered by a competitor, 15 U.S.C, § 13(b); or (b) to prevent eus- tomer fraud. Virtually every witness who testified to a purpose for price verification in the gypsum indus- trv, including Petitioner Brown, cited the reasons of Robinson-Patman compliance or protection from eus- tomer fraud, or both." The great bulk of the Respondent's evidence pre- sented as to all defendants at the trial related to the period prior to December 27, 1968, and thus prior to the time Petitioner could be held responsible under the antitrust laws. None of this evidence sueceeds even remotely in connecting Petitioner with any unlaw- ful conspiratorial conduct. For the period relevant to a criminal trial based on an indictment issued on De- cember 27, 1973, there is an absolute absence of any evidence even purporting to implicate Colon Brown in any conspiracy to violate the antitrust laws. ' See the testimony of witnesses : Bean, App. 58a-59a ; Simpson, 60a-61a; Gimlin, 62a-65a ; McCaskill, 66a-67a; Burch, 68a-69a; A. L. Meyer, 70a-Tla; Sikes, 27a-74a; Atwell, 80a-82a; Montgomery, 90a-92a; Galvin, 93a-95a; Hayes, 96a-97a ; Thompson, 98a-108a ; Fisch, 109a-113a; and the individual defendants; Watt, 114a-115a; and Brown, 168a-169a. S In any event the central issue of the case was verifi- cation. Yet the record shows, without question, that verification had first taken place long before Colon Brown became Chairman of the Board or had anything to do with the entire company’s pricing procedures. In the four vears after he became Chairman of the Board and before National ceased verifving, there is no in- stance shown by the record in which Petitioner Brown ever made or requested a verification call to a competi- tor, Nothing in the reeord establishes that he super- vised such calls or had any knowledge of their extent. Colon Brown's sworn testimony was that he had nothing to de with competitive price verification and that he did net even learn of its existence until 1968 shortly before the practice was diseonutinned by the National Gypsum Company. CApp. p. Pola-T2a). Mr. Atwell, who was the National officer auth- orized to make verification calls, did not recall ever talking to Mr. Brown about them. (App. p. 75a-76a). Nor is there proof of any kind that Colon Brown even knew what, if anything, other gypsum wallboard pro- ducers did with respect to verification of customers’ reports of competitive pricing. The record shows that compaiy poliey required cessation of price verifiea- tion with competitors in January of 1969. CApp. p. 89a; Dla-M2a). There is no evidence that Colon Brown knew of a single verification eall by National (ivpsum Company thereafter or, indeed, at any time within the statute of limitations. ‘The unimportance of verification to Colon Brown is obvious from the evi- dence that in December of 1969 his assistants were un- sure that he even knew that these calls had been stopped in January of that year. (App. p. S3a-86a; GX-25, App. p. 174a). J. P. Nicely Unlike any of the other several appellants to the Third Cireuit Court of Appeals, Petitioner J. P. Nicely did not seek the alternative of a new trial. Instead, Mr. Nicely chose to base his appeal on the single com- pelling fact that after over four months of trial it was painfully obvious that he had been mistakenly indicted. There was an utter absence of evidence even to sug- gest that Petitioner Nicely had participated in the conspiracy charged. Yet presented with only this request for acquittal because of insufficient evidence, the Court of Appeals somehow ignored the basis for Mr. Nicely’s appeal and the clear statement that he did not seek a new trial and instead reversed and re- manded his case to the trial court. By ignoring the clear thrust of his appeal, the Court of Appeals was in error. The evidence presented at trial failed completely to implicate Petitioner Nicely even as a participant in most of the fragmented and sporadic events which the prosecution portrayed as elements in a price-fixing couspiracy. There was as to Mr. Nicely no evidence that he had even opportunities to reach agreements or understandings with competitors that could conceivably have violated the antitrust laws. Petitioner Nicely was a sales specialist for National Gypsum Company. Throughout his employment with the Company he spent at least 60 percent of his time in the field calling on customers. (App. p. 118a-119a). His responsibility was for sales, not for pricing. This spe- cialized nature of his service is further demonstrated by Mr. Nicely’s position with the Company. During the statutory period he was not even a corporate officer. 10 He was instead a‘ Vice President, Sales’’ for the Gold Bond Building Products Division. (App. p. 117a). He had no official pricing authority. Mr. Nicely, while fulfilling his specialty of calling on dealer customers of the Division during his term as a sales vice-president, had no occasion to meet with his competitors or to discuss industry matters with them either in person, by telephone, or through correspon- dence. His infrequent contacts with representatives of National's competitors were limited to casual greet- ings at customers’ conventions and the occasional ne- gotiation of intra-industry sales with procuremen: per- sonnel. (App. p. 135a-136a). Apart from one dinner in 1954 or 1955, he never attended a meeting of the Gypsum Association, one touchstone of the Govern- ment’s case, and never received any reports about such meetings. (App. p. 136a-137a). As to the elements of the prosecution's case to which the bulk of its evidence was directed, Petitioner Nicely appears only as a peripheral participant. Moreover, all the meager attempts to link him toe the major events supposedly constituting the conspiracy were well prior to the beginning of the statutory period. For instance, the prosecution's opening statement described the December 15, 1965, price increase, three years prior to the statutory period, as one of the most important elements of its case. Yet on this assertedly key ele- ment, no evidence of improper conduct by Petitioner Nicely was ever introduced. The proseeution’s evi- dence against Mr. Nicely relating to this price increase was confined to its confused questioning with regard to a series of so called “Plan of Action’? documents (GX 500-502, App. p. 176a-178a). Mr. Nicely partieci- pated in the preparation of these documents which un- ll disputed evidence proved were developed by National in reaction to learning on November 17, 1965, of a sur- prise announcement by United States Gypsum Com- pany (**USG’’) of a price increase. Those documents constituted National’s efforts to implement an inde- pendent business decision to follow USG’s price in- erease. (App. p. 77a, et seq.; p. 137a; p. 14la, et seq.; p. 162a, et seq.). Although National and other industry members followed USG’s lead, such action is not indicative of collusion. It is completely consistent with competition. Parallel pricing action is not proof of conspiracy even in a civil case against a corporation. It has no proba- tive value in a criminal case against an individual. Theatre Enterprises, Inc. v. Paramount Film Distri- buting Corp., 346 U.S. 537, 541 (1954). In any event, Mr. Nicely did not make the decision to follow USG’s price increase. He received no advance word of the change (App. p. 137a), and participated only to the extent that he followed the orders of his superior, National’s President, Mr. Manske. (App. p. 148a; p. 146a-147a; p. 149a-153a). No evidence was ever presented to offer even the slightest challenge to Petitioner Nicely’s testimony that this was his sole connection with the 1965 price change. The prosecution also offered evidence to link Peti- tioner Nicely with another pre-statutory period inci- dent involving a March, 1966, change in credit terms even though Mr. Nicely had no authority in this area other than to indicate whether from a Sales Depart- ment standpoint proposed changes were acceptable. (App. p. 138a-139a). On the record presented below there was nothing which could connect Mr. Nicely in 12 any way with a conspiracy to fix credit terms, even if one had been shown to exist. Absolutely no evidence was offered to place him at meetings, discussions, or in correspondence with competitors about credit matters. A third and perhaps the major area of allegedly conspirational activity was the antitrust policy of the National Gypsum Company permitting direct verifica- tion with competitors of customers’ claims of lower prices. This policy was already in effect when, on February 25, 1964, Mr. Nicely became Vice-President, Sales-East located in Buffalo. (App. p. 116a). He was unable to testify when verification calls began. (App. p. 127a-128a). He testified without contradiction that he had no direct participation in verification, that he never made a verification call to a competitor or received one from a competitor, and, that he never talked to a competitor about verification of a price. He testified further that he never gave instructions to anyone else with regard to verification of prices with competitors and never asked any employee of National Gypsum Company to make a verification call. (App. p. 127a-128a, 134a; p. 140a). ° Moreover, the sole initiative taken by Petitioner Nicely with respect to verification was to suggest to Mr. Kenneth Atwell that the practice of verification be discontinued when, in January, 1969, he read of this Court’s decision in United States v. Container Corp., 393 U.S. 333 (1969). (App. p. 132a-133a). It is clear that Petitioner Nicely had no role in veri- fication other than to question in light of the Container case whether it should continue. There was no evidence that he made or received verification calls. Neither was he shown ever to have supervised procedures for 13 such calls or to have received reports of their results. He vigorously denied any participation in verification other than his suggestion that it be terminated, and no witness was shown to have made a verification call to or received one from Mr. Nicely. Even the Government’ prosecutor finally appeared to recognize Mr. Nicely’s lack of involvement. When objecting to a line of questions directed to Mr. Nicely on the verification issue, he stated: ‘*Objection, Your Honor. Mr. Warnke has asked a series of questions now as to this man’s understanding of the practices [verification] which he wasn’t even engaged in he said.”’ (App. p. 129a-130a). The objection was sus- tained. (Jd.) Perhaps the proseeution’s most outrageous effort to build a case against Petitioner Nicely where none existed was its allegation of predatory conduct allegedly designed to discourage the competition of single-plant producers. That specious effort by the prosecution related to Mr. Claude Huckleberry in his operation of Texas Gypsum Company in the early 1960's. The dominant theme of Mr. Huckleberry’s testimony at trial was that he had some inherent right to take over the customers of other gypsum producers in the Texas market without competitive reaction. (£.g., App. p. 194a). Adopting this theme in its effort to convict Mr. Nicely, the prosecution strained to attach significance to a sales call he made on a Texas customer in 1962, over six years prior to the statutory period. Mr. Nicely’s call was on Groves Lumber Company in Dallas, Texas, where he had a conversation with its manager, Mr. John D. Tinsley. The offer of proof led the trial judge aptly to characterize the Tinsley testi- 14 mony as something ‘‘less than earthshaking.’’ (Tr. 2521). Nonetheless, the trial court admitted and then re- fused to strike the Tinsley testimony over defense objection that this unremarkable incident, occurring over 13 years prior to trial, was irrelevant and im- material to any issue of the case in that it did not tend to prove the existance of a price-fixing conspiracy. The Court of Appeals also ignored this prejudicial and improper testimony. The evidence whieh was introduced threugh Mr. Tinsley certainly fell far short of what the prosecution had promised in its opening statement and offer of proof. It was shown only that Mr. Nicely, accompanied hy one of National’s local sales representatives in Dallas, visited the Groves Lumber Company among other customers on March 22, 1962. For some vears Groves had been a customer of National, but, prior to Mr. Nicely's visit, had dropped National and had begun to purchase from Texas Gypsum Company. CApp. p. 192a-193a). The Dallas-Fort Worth market was an im- portant one for National, as it was for many of the other manufacturers of gypsum wallboard. It was therefore, entirely reasonable, as Mr. Tinsley readily admitted, for National and its sales force to want the (ireves account back again. Also, just prier to Mr. Nicely’s visit the salesman who had formerly handled the Groves account had left National’s employment, thereby giving another reason for Mr. Nicely’s eall to reestablish communication. (/d.). The esseice of the prosecution's contention that this normal business call was in some way predatory in- volved a conversation Mr. Nicely had with Mr. Tinsley. 15 Mr. Tinsley confirmed the substance of the conversa- tion which oceurred between them. It was also de- scribed in DX (Nicely)-1 (App. p. 179a-180a), a sworn statement by Mr. Nicely dated August 24, 1964, only two years after the conversation. Mr. Tinsley remem- bered the use of three words—** policy of containment” —which were alleged to have some predatory signifi- cance. However, a review of Mr. Nicely 's statement and his testimony makes clear that he was merely giving his opinion on the reason why United States Gypsum Company, a competitor of both National and Texas Gypsum, would not willingly surrender its business. (App. p. 124a-126a). It certainly could not have in- volved any conspiracy including Mr. Nicely or National Gypsum because, as paragraph (d)(i) of the exhibit shows, National was not even meeting the competition of Texas Gypsum at the time. There was no evidence to refute Mr. Nicely’s sworn testimony that he never discussed his call on Groves Lumber Company with any competitor, before or after the event. His uncontested testimony was that when he went to Dallas he had no plans to call on Groves Lumber and had no prior knowledge that Texas Gyp- suum was selling in the area. When the Tinsley incident is reduced to its essentials, it is nothing more than one of several visits by Mr. Nicely, then a Central Division Sales Manager—Eastern Area, seeking to regain a lost National account. Its receipt in evidence was error, as was its retention, since it proves no part of the alleged conspiracy. (App. p. 120a-126a). Objective analysis of the entire record requires the conclusion that Mr. Nicely must be acquitted. The record was ignored by the Court of Appeals even though it was Petitioner Nicely’s request that as to him 16 this was the only issue to be considered. Ordering that he be sent back to the District Court for retrial provides no remedy. As in any mass conspiracy trial, a serious risk exists that stale or irrelevant evidence as to Mr. Nicely might be considered by the jury as bearing on the issue of his guilt or innocence. The utter absence of evidence of Mr. Nicely’s guilt at the first trial failed to protect him from this danger. A retrial would merely subject him te a rehashing of what is obvieusly not evidence of guilt—merely an im- proper case of guilt by implication. The question before this Court is very similar te that which it faced in the case of Thompson v. City of Louisville, 362 U.S. 199 (1960) : are the charges against petitioners so totally devoid of evidentiary support as to render the conviction unconstitutional? In Thomp- sow this Court observed that the “[dJecision of this question turns not on the sufficiency of the evidence, but on whether this conviction rests upon any evidence at all.” As a matter of law, both Mr. Nicely and Mr. Brown were entitled to be judged solely on the evidence ap- plicable to them. See Blumenthal v. United States, 332 U.S. 539, 559 (1947); Kotteakos vy. United States, 328 U.S. 750 (1946); United States v. Marchisio, 344 F.2d 655, 666 (2d Cir. 1965). As to each petitioner, the Constitution and laws of the United States require 17 that the evidence be considered separately to deter- mine first if the alleged conspiracy existed and, if so, whether each petitioner was a knowing participant. Here, whatever might be concluded with respect to others involved in the trial, there is nothing whatsoever to show that either Colon Brown or J. P. Nicely partici- pated in any conspiracy of any kind. Under estab- lished principles of law, as embodied in Rule 29 of the Federal Rules of Criminal Procedure, the District Court was thus required to order the entry of judgment of acquittal. American Tobacco Co. v. United States, 328 U.S. 781, 787 (1946); Mortensen v. United States, 322 U.S. 369, 374 (1944) ; Parker v. United States, 378 F.2d 641 (1st Cir. 1967), cert. denied, 389 U.S. 842 (1967) ; Conaway v. United States, 349 F.2d 907 (8th Cir. 1965), cert. denied, 382 U.S. 976 (1966); United States v. Sawyer, 294 F.2d 24 (4th Cir. 1961), cert. denied, 368 U.S. 916 (1961); United States v. Allard, 240 F.2d 840 (3d Cir. 1957), cert. denied, 353 U.S. 939 (1957); Curley v United States, 160 F.2d 229 (D.C. Cir. 1947), cert. denied, 331 U.S. 837 (1947). Colon Brown The record in the District Court established that as to Petitioner Brown evidence of participation im a conspiracy for which he could be adjudged guilty is non-existent. As specifically recognized by Judge Hun- ter, author of the majority opinion below, the only possible evidence relating to Colon Brown concerned episodes predating the statutory period by almost three years. Clearly very little in the voluminous record of this case even had reference to Colon Brown. The searce mentions of him were legally innocuous. No witness testified as to any meetings, telephone conver- sations or correspondence in which he engaged in any 18 discussions with competitors about the pricing of gyp- sum wallboard. His own sworn and unrefuted testi- mony explains fully the legally valid purpose of any vceasion on Which he met with officials of the other companies engaged in the manufacture and sale of gypsum wallboard. (App. p. 155a, ef seq.). The Govern- ment made no consequential effort to produce witnesses or doemmnents that might cast any doubt on these ex- planations. In one of the rare references to Colon Brown in his opening statement, the prosecutor announced to the jury: “you will learn from the evidence how [he], too, attempted to, whenever and wherever possible to seek agreement with (his) competitors, in fact, did effect and obtain an agreement with (his! competitors, on terms and conditions of sale."’ (App. p. 192a). No sueh evidence was ever presented, Instead, Colon Brown was convicted, not by evidence of illegal conduct on his part, since none existed, but by errors which prejudiced all of the defendants and by the trial court's failure to honor Petitioner Brown's constitutional protection against improper imputation or transference of guilt in this multi-party conspiracy trial which, according to the Government's contentions, invelved over 160 co-conspirators. Accordingly, the case against Colon Brown consisted solely of the prosecutor's innuendo and surmise which failed totally to meet even the most minimum standards of probative evidence. It was alleged that Petitioner Brown had conspira- torial contacts with officials of another gypsum manu- facturers. Not only is there no evidence of price-fixing discussions, but there is complete and une: atroverted evidence that the only and lawful purpose of these contacts which occurred in 1965 was to settle under 19 court deadline longstanding patent litigation involving the potential loss to his company of millions of dollars and settled through his efforts for under $200,000. There was further innuendo with respect to a March 1966 change in credit terms. Rather than bcing indica- tive of conspiracy, the record shows only that this stale event was one in which Petitioner Brown acted in the independent business interest of his own company and is devoid of anything proving collusion with competitors. And, of course, there was price verification. Peti- tioner Brown did not initiate, supervise or receive re- ports of verification calls, and the practice was dis- contimed under his Chairmanship as soon as the legal question was raised by outside counsel after the Su- preme Court’s decision in the Container case. The only pertinent evidence with regard to the charge that Colon Brown engaged in an antitrust con- spiracy is his own sworn testimony categorically deny- ing the allegation. No testimony and no documents refute his denial. None indeed presents even minor inconsistency with his testimony. Perhaps it was this absence of evidence which caused the jury foreman—prior to the time the trial court coerced the verdict—to tell the court that in his opin- ion the jury was hopelessly deadlocked: ‘‘We have taken enough ballots now, and we have had enough discussions, and the way it is divided is not going to be settled by any document, any remembrance of tes- timony.”’ (App. p. 172a-173a). For reasons not expressed, the Third Circuit failed to order the acquittal of Colon Brown despite the fatal deficiency in the evidence. This failure is in direct con- 20 flict with this Court’s holdng that ** [i]t is beyond ques- tion, of course, that a conviction based on a record lack- ing any relevant evidence as to a crucial element of the offense charged .. . violate{s] due process.’’ Vachon v. New Hampshire, 414 U.S, 478, 480 (1974), citing Har- ris V. l nited States, 404 U.S. 1232, 1233 (1971). (Doug- las, J.. in chambers); Thompson v. City of Lowsrille, 362 U.S. 199 (1960); Johnson v. Florida, 391 US. 596 (1968). The failure of the Third Circuit to exercise its responsibility and protect Petitioner Colon Brown’s due process rights deserves the attention of this Court. J. P. Nicely As a review of the trial record makes painfully clear, there was as to Mr. Nicely no basis for any trial on the charges or issues involved in this case. No evi- dence relevant to the charge that he violated the anti- trust iaws was presented in the nineteen weeks of the trial. Apart from his own testimony and the proseeu- tion’s improper introduction of testimony eoncerning the routine sales call he made to John D. Tinslev of Groves Lumber Company in March of 1962, the over 15,000 pages of transcript are devo.d of meaningful references to him. In the prosecution's opening statement at the trial there were a few and highly general references to Petitioner Nicely. However, the follow-up in the prosecution’s proof was conspicuous by its absence. At page 218 of the trial transcript, the prosecution purported to link Mr. Nicely to a Gypsum Association Task Force claimed to be ‘‘a cover-up so that these defendants could get together and agree on terms and conditions of sale.”’ Nothing in the evidence intro- duced by the prosecution indicated that Mr. Nicely had 21 anything whatsoever to do with any ‘Task Force,” regardless of its nature, or indeed with any Gypsum Association unit or activity. The prosecution in its opening statement alleged further: ‘‘You will learn from the evidence how { Mr. Nicely], too, attempted to, whenever and wherever possible, to seek agreement with [his] competitors, in fact, did effect and obtain an agreement with [his] competitors.’’ (App. p. 192a). There was no evidence ever offered to deliver on the prosecutor’s pledge. In its opening statement the prosecution also de- scribed the December 1965 price increase as one of the most important elements of its case. On this assertedly key element, no evidence at all of any improper con- duct by Mr. Nicely was introduced. Neither was any evidence offered to place Mr. Nicely at meetings with competitors or as a participant in telephone conversa- tions with competitors relating to price changes. As to him even ‘‘opportunity evidence’’ was lacking. More- over, the decision for National to follow United States Gypsum ’s lead in the 1965 price change was not Mr. Nicely’s decision. Mr. Nicely’s only role was to carry out the directions of his superior, Mr. Manske. (App. p. 143a-153a). Called as a witness in his own defense, Mr. Nicely testified fully and freely as to the facts involved in each of the few episodes for which evidence was intro- duced concerning him. The extensive cross-examina- tion served only to confirm the truth of his denials of any complicity in conduct violative of the antitrust laws. No rebuttal witnesses were called in an effort to challenge this testimony. No witness and no document presented by the prosecution was even relevant to the oo — issue of Mr, Nicely’s guilt or innocence of the charges brought against him. The record, therefore, demon- strates that he has been wrongly accused, Given this dearth of evidence, risk is inescapable here that even the mere review of the proseeution’s feeble efforts to connect Mr. Nicely with events on which the alleged conspiracy is based may magnify the ‘‘ease’’ against him to a degree it does not deserve. It should be remembered, therefore, that the matters dis- cussed in this petition constitute the prosecution’s en- tire case against J. P. Nicely—a case that flagrantly fails to meet the criterion of proof of guilt beyond a reasonable doubt. Summary As to both of these petitioners, Brown and Nicely, there is no evidence of participation in a conspiracy to violate antitrust laws. Moreover, the very few refer- ences to each of them were for incidents far prior to the statutory period. The statute of limitations which is applicable to the offense with which Petitioners were charged is found at 18 U.S.C. § 3282 and reads as follows : ‘Except as otherwise expressly provided by jaw, no person shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or the information is instituted within five years next after such offense shall have been committed.” The Indictment was returned on December 27, 1973. Thus the statutory period began to run on December 27, 1968. The record below, however, demonstrated con- 23 clusively that for this statutory period there is an abso- lute absence of any evidence even purporting to impli- eate either Colon Brown or J. P. Nicely in any con- spiracy to violate the antitrust laws. As this Court observed in Toussie v. United States, 397 U.S. 112, 114-15 (1970): “The purpose of a statute of limitations is to limit exposure to criminal prosecution to a certain fixed period of time following the occurrence of those acts the legislature has decided to punish by crimi- nal sanctions. Such a limitation is desi to pro- tect individuals from having to defend themselves against charges when the basic facts may have become obscured by the of time and to minimize the danger of punishment because of acts in the far-distant Such a time limit may also have the salutary effect of encouraging law enforcement officials promptly to investigate suspected criminal activity.”’ For the pertinent five years, not even so-called ‘‘op- portunity evidence”’ exists to support the charge that Petitioners conspired to fix prices and terms and con- ditions of sale. Perhaps the best evidence of this comes from the prosecution itself. A pleading signed by the chief prosecutor and filed with the trial court was represented as showing ‘‘Price-Fixing Discussions Within the Statutory Period.’’ Neither that document nor a supplement to it even mentioned the name of either Colon Brown or J. J. Nicely. (App. p. 196a- 199a). The key elements of the prosecution's case were all before the statutory period. The December, 1965, price change was three years prior to it. The March 1966 credit change was two and one-half years prior thereto. Verification, even if it were improper, ended within 24 the first month of the statutory period and Petitioner Nicely was at least partially responsible for alerting his Company to the questions raised by this Court's de- cision in Container. And, of course, the most prejudi- cial and improper pre-statutory period submission by the prosecution related to the 1962 sales call on Tinsley by Mr. Nicely which oceurred fully six and one-half years prior to the statutory period. The failure of the respondent to introduce any evi- dence at trial connecting either of these petitioners with participation during the statutory period in a conspiracy charged under 15 U.S.C. § 1 required that the Court of Appeals for the Third Circuit reverse the judgment of the District Court and enter an order ac- quitting the petitioners. The failure to do so requires review by this Court. 2. By Effectively Perpetuating the Erroneously Retroactive Application Given by the Trial Court to United States v. Container Corp.. 393 U.S. 333 (1969), the Court of Appeals Violated the Due Process Clause of the Constitution. As the Court of Appeals noted, the central theme of the Respondent's case was the issue of ‘‘ verification.” In those instances when confirmation could not be ob- tained in other ways an employee of one gypsum board manufacturer would occasionally telephone a competi- tor to determine the price at which the competitor was offering gypsum board to a specific customer. Virtu- ally every witness who testified during the trial about the purposes of verification established overwhelmingly that those purposes were fraud protection, Robinson- Patman Act compliance, or both. Indeed, National Gypsum Company had a compilation of legal guide- lines cleared by outside counsel which specifically ap- proved the practice of checking with competitors to 25 verify a competitive situation which would justify, un- der the Robinson-Patman Act, meeting a lower com- petitive price or more favorable terms. (DX (NG)-77, App. p. 182-191a).’ This policy was based wpon prior decisions of this Court which approved of such exchanges among com- petitors under certain controlling circumstances. In Maple Flooring Mfrs. Ass’n vy. United States, 268 U.S. 563 (1925), the Sherman Act was held to permit the ex- change of average cost data relating only to closed transactions, despite an apparent stabilizing effeet on price, where no intent to constrain individual competi- tive activity was found. Further, the Court in Ce- ment Mfrs. Protective Ass’n v. United States, 268 U.S. 588 (1925) approved the exchange of specific price information concerning specific customers, de- spite possible effects on prices, where the purpose of the dissemination scheme was to prevent buyers from defrauding sellers. In mid-January 1969, after the Court's decision in United States v. Container Corp., 393 U.S. 333 (1969). National decided, as a matter of company policy and on the advice of outside legal counsel, to discontinue * Section 2(b) of the Robinson-Patman Act, 15 U.S.C. § 13(b) permits a prima facie showing of price discrimination to be re- butted or justified by the seller— “by showing that his lower price or the furnishing of serv- ices or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.’’ The Act emphasizes, however, that : “the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination. . . ."’ (Emphasis added). 26 any verification calls to competitors. The decision was made because Container cast at least some doubt on whether any verification of competitive discounts should continue. National apparently exercised good judgment in terminating the practice. Some confusion did exist particularly with the trial court below. Notwithstand- ing the consistent finding by other Federal courts that verifieation by competitors of customers’ claims of more favorable competitive offers does not violate the Sherman Act when done for the purpose of complying with the Robinson-Patman Act or to protect against eustomer fraud,’ the trial court below believed that the Container decision in 1969 had changed the law of Cement Manufacturers. It was the trial court’s position that Container prohibited even good faith veri- fication for Robinson-Patman purposes, at least, where such verification might have had a stabilizing effect on prices. The trial court inaccurately instructed the jury that ‘defendants do not dispute the fact that they did ex- change price and other competitive information among themselves and with each other and with others.”’ (App. p. 170a). Not only did this instruction not differ- entiate among defendants, it also did not identify the periods for which various defendants acknowledged that they had verified. It left the jury with the mis- taken judicial assertion that Petitioners Colon Brown * Belliston v. Teraco, Inc., 455 F.2d 175 (10th Cir. 1972), cert. denied, 408 U.S. 928 (1972); Gray v. Shell Oil Co., 469 F.2d 742 (9th Cir. 1972), cert. denied, 412 U.S. 943 (1973); Webster v. Sinclair Refining Co., 338 F.Supp. 248 (S.D.Ala. 1971); Wall Products Co. vy. National Gypsum Co., 326 F.Supp. 295 (ND. Cal. 1971). 27 and J. P. Nicely had made sweeping admissions of general price discussions with competitors. Both did and do dispute that they at any time exchanged price and other competitive information with competitors or that they either authorized or participated in the ex- change of price and other competitive information by National’s employees with employees of other gypsum producers. Moreover, there was no evidence within or before the statutory period proving otherwise. The trial court’s attention was called to the error of its instruction, but it did not correct the situation. (App. p. 171la). Thus the jury was allowed to measure the defendants’ verification activities before Container and before the statutory period by an erroneous stand- ard which the judge drew from Container and errone- ously applied retroactively. That was a fatal error which the Court of Appeals for the Third Circuit did not correct. But even if the trial court had been correct in its reading of Container, it would still have been erro: to permit the jury to consider good faith verification prior to Container as evidence of Sherman Act illegal- ity." Such a reading of Container would constitute a sharp departure from the previously established prin- ciples of Maple Flooring Mfrs. Ass’n vy. United States, 268 U.S. 563 (1925) and Cement Mfrs. Protective Ass'n Vv. United States, 268 U.S. 588 (1925). Retro- * Both National and Andrew Watt submitted requests, which (under the procedures established for the multi-party trial) ac- erued to all defendants’ benefit, for an instruction that, under the court's interpretation of Container, the jury could not con- sider pre-Container verification for Robinson-Patman purposes to be evidence of unlawful conduct. (National’s Supp. Req. Regard- ing Retroactivity of Intervening Change of Law). 28 active application of such a changed rule of law would do violence to basic fairness and is prohibited under the Due Process clause. Such unexpected judicial enlargement, by decisional interpretation or the expanded definition of a crime, if retroactively applied would be unconstitutional.’ In Bouie v. City of Columbia, 378 U.S. 347, 352-54 (1964), the Supreme Court approved the prospective applica- tion only of unanticipated judicial changes of law and compared such changes to ex post facto laws: “There can be no doubt that a deprivation of the right of fair warning can result not only from vague statutory language but also from an un- foreseeable and retroactive judicial expansion of narrow and precise statute language. As the Court recognized in Pierce v. United States, 314 U.S. 306, 311, ‘judicial enlargement of a eriminal Act by interpretation is at war with a fundamen- tal concept of the common law that crimes must be defined with appropriate definiteness.’ .. . Indeed, an aatesmneall e judicial enlargement of a crim- inal statute, applied retroactively, operates pre- cisely like an ex post facto law, such as Art I, § 10, of the Constitution forbids .... If a state legis- lature is barred by the Ex Post Facto Clause from passing such a law, it must follow that a State Supreme Court is barred by the Due Proe- ess clause from achieving precisely the same re- sult by judicial construction.’’ ° * Importantly, Container itself was filed as a civil injunction suit, not a criminal prosecution. This fact reinforces the inherent unfairness of retroactive application, in this criminal case, of the drastie change which the trial judge believed Container had effected in the antitrust laws. “It might be suggested that the Sherman ME? + ; i ! i + i : S4a The judge responded that he would allow the jury to con- tinue until Friday, and at that time would rule on the mo- tion. Sinee the verdicts were returned on Tuesday, the following morning, the motion became moot. On the preceding Friday, July 11, the fourth day of de- liberation, the judge advised counsel that some jurors were not feeling well and others were tired. He listed a number of alternatives which might alleviate the jurors’ discom- fort, including the option of sending them home for the weekend. When the defense objected, the judge acquiesced, although he recalled that this court had approved the prac- tice of allowing jurors in a criminal case to return to their home during deliberations. See United States v. Piancone, 506 F.2d 748 (3d Cir. 1974). In an effort to ease the jurors’ task, the hours of deliberation were shortened but the sequestration contined. The coneurring opinion contends the jury had the mis- taken impression that it was required to reach a verdict of guilty or not guilty. But at no time did the trial judge so charge or otherwise suggest this to the jury. Indeed, he was well aware that such an instruction would be error. After the Fioravanti charge was given on Sunday, the sixth day of deliberation, the judge and counsel had the following conversation : | Derexse Counser]: ‘*That has oceurred after Your Honor had on two prior occasions given the charge, first of all in your original charge, then again yester- day afternoon advising them as to their obligation to reach a verdict. * > eo Tue Covrt: I would only point out that I did not charge them as to their obligation to reach a verdict. I at no time said they had a duty to reach a verdict. I said they had a duty to deliberate toward reaching 55a tee nt * think that would be error, and I did not do [Derexse Counser]: I didn’t mean to indicate you used those words. I used that as a short-hand way of referring to the charge Your Honor had given and I believe in all these instances it was similar to the Third Circuit charge. ...’’ In concluding his remarks to the foreman on Mon- day, the judge said: and = **You tell them to deliberating and if the come to a verdict. - Uiighade caaeay, on? I do not read this as a direction to reach a verdict, but rather that the jury should attempt to reach a verdict. This was a perfectly proper admonition. Plainly the judge anaes wt the Possibility that the jury could not come a ve since i A language of his remark was con- In my view it would not have been proper for the judge to have told the foreman at the private conference that the jury had the option of reaching no verdict. The judge had assured counsel in advance that he would give no in- struction on the law during the conference and, indeed, the defense lawyers were most anxious that there be no repetition of the Fioravanti charge. It is also highly un- likely that thereafter defense counsel would have asked the court to tell the jury about its privilege to return no verdict. For some time before the conference, all the law- yers were aware that the possibility of a true deadlock existed, but no request for additional charge along that line had been made. Moreover, I would doubt that such an instruction should be given. Experience demonstrates that juries should be encouraged to reach verdicts and should not be proffered an ‘‘easy way out” by a judicial sugges- 56a tion that a deadlock is an equally satisfactory alternative. It is the duty of the trial judge to determine when the jury has ‘‘hung,’’ and then declare a mistrial. This procedure adequately protects the right of the parties to a ‘‘no ver- dict’’ trial.’ The reasoning of Jenkins v. United States, 380 U.S. 445 (1965), is not pertinent here. In that case, after only two hours of deliberation, the trial judge stated to the jury in part, ‘‘You have got to reach a decision in this case.’’ Jd. at 446. The Solicitor General’s brief referred to the prin- ciple that jurors may not be coerced into surrendering views conscientiously held. Fioravanti also refers to that principle, and the trial judge here cautioned the jury in that vein on several occasions. United States v. Fioravanti, 412 F.2d 407 (3d cir.), cert. denied, 396 U.S. 837 (1969). The record does not support the assertion that he imper- missibly insisted on a verdict. The decision to declare a mistrial must in large measure be entrusted to the diseretion of the trial judge. He is ‘‘on the scene’’ and is in a position to make an informed judg- ment on the physical and emotional conditions of the jurors, the difficulties involved in the issues submitted to them, and the likelihood that a verdict will be reached. No reeord can convey all the imponderable factors to an appellate court, aor does its experience better qualify it in any but the exceptional case to second-guess the trial judge. The fact that the foreman thought no verdict could be reached * The problem engendered by a charge to the jury advising of its right to return ‘‘no verdiet’’ is similar to that in which a crim- inal jury would be told that it may disregard the charge and acquit the defendant in spite of the law. While a jury does have such a right, the wisdom of such an instruction has been vigorously debated. Sec the opinion of Judge Sobeloff in United States v. Moylan, 417 F.2d 1002 (4th Cir. 1969) } 8. (1970). Cf. United States v. Alper, 449 F.2d 1223, 1233 (3rd Cir. 1971), cert. denied, 405 U.S. 988 (1972). Ae ; 57a is not conclusive upon us or the trial judge. It is not un- common that a verdict is returned after a jury has sin- cerely thought it was deadlocked. The foreman was not endowed with the experience of the trial judge, and it is understandable that with so many complex issues to be resolved, he became discouraged during the deliberations.° This was a lengthy and vigorously contested case, where the factual issues were close and the mass of exhibits for- midable. It would seem inconceivable that any reasoned, responsible verdict could have been reached without ex- tended deliberations. Moreover, the expenditure of time, resources and effort on the part of all concerned obligated the trial judge to exert his best efforts to secure a verdict if one could be reached without injustice or coercion. I am convineed that he properly exercised his discretion. The defendants’ contention to the contrary rings somewhat hollow in my ears, particularly in view of their objection to permitting the jurors to return home during che delibe- rations, at least over the weekend.’ It has often been said that there are no perfect trials, and the best that our system can provide is a fair one. I believe that criterion was met here and, accordingly, I would affirm. * After the jury returned its verdicts, it was polled several times and each juror unequivocally confirmed the findings of guilt. "It is difficult to understand the defense’ reluctance about allow- ing the jurors to return home since they had done so each evening during the months when testimony was being received. If there had been danger of damaging publicity or improper approaches to the jury, it would not have sprung into existence simply because deliberations had begun. 58a Excerpts From Circuit Court Appendix Henry C. Bear, Cross but it is important to avoid any conversation with competitors about our or their future prices and selling policies because such conversations, even though there is no attempt to or thought of reaching any agreement or understanding, are often looked upon with sus- picion, and our policy is to avoid the subject entirely.” By Mr. Keck: Q. Mr. Bear, who was MacLeish, Spray, Price & Underwood? A. Well, they were our legal counsel. This was the name of the firm, with which you are presently associated, at that time. Q. Thank you. You were asked a number of questions, yesterday and [1648] this morning, about price verification. Do you recall that? A. Yes, sir. Q. I wonder if you can tell us what are the basic rea- sons why, in the limited instances in which you made calls, you made price verification calls. The Witness: The first reason was—and the basic reason—was to avoid liability under the Robinson- Patman Act requiring us to not discriminate in price between competing buyers, and, in order to avoid such discrimination, we had to assure ourselves that any price that we might quote a given buyer, lower than our regular published price, was made in good faith to meet the equally low price of a competitor. By Mr. Keck: Q. Would it be fair to epitomize or summarize that reason as compliance with the Robinson-Patman Act? 59a Henry C. Bear, Cross [1649] A. That is what legal counsel has advised me, sir. Q. Were there any other reasons, Mr. Bear? The Witness: I believe there is one other basic reason, Mr. Keck, and I believe that reason or that problem arose in some situations where a sharp buyer would attempt to play one manufacture against another in order to obtain a lower price for himself. He very often—quite plainly, in our opinion—was lying to us. And we were advised by counsel that we were entitled to protect ourselves against the fraud or attempted fraud perpetrated on us by such a dealer through the medium of price verification. [1650] By Mr. Keck: Q. Well, then, could I summarize your second reason as protecting against fraud from the lying buyer? A. Yes, sir. Q. Were these the principal reasons for your price verification calls, or were there others? A. Those were the principal ones, sir. [1709] Q. You testified this morning, in answer to questions of Mr. Thorson, that you had not made any verification calls to or received any from a Mr. Huckleberry. Do you recall that? A. Yes, sir. Q. You gave a reason why you had not. I show you a document and ask you if that refreshes your recollection as to whether there was still another reason why you had 60a Rhyne Simpson, Jr., Direct teriorating and my motive was to try to keep it from de- teriorating any further. It was much lower in our market than in other places in the United States and I didn’t think it was right and I wanted to prevent the continued decline, so our company could make money. We were losing money and I wanted to prevent the price from sliding down, so we could stay in business. Q. How did this exchange of pricing information ac- complish your objective? A. It didn’t in the long run, no. In the short run, it might have slowed the price decline down. Q. What area are you speaking of? A. I am speaking of my prime market, the Southwest, Texas, Oklahoma and the states surrounding. Q. Mr. Simpson, were you at all concerned about the legality of these discussions that you were having with your [1897] competitors? A. Yes. Q. Did you continue to engage in them, in any event? A. I did, yes, sir. Q. Why? Mr. McSweeney: That question has been asked and answered. The Court: He just told you why. Mr. Fricano: All right. By Mr. Fricano: Q. Did you have any other motives or any other reason other than the business one you just advanced? 6la Rhyne Simpson, Jr., Direct A. Well, I had, at that point. I was concerned about the legality of it, yes. I convinced myself that I had the right to do it under the Robinson-Patman Act. Q. Did you continue on thereafter, then? A. Yes. Q. Did you keep a record of conversations which you had with your competitors over the period late 1964, "70 or "71? A. No. Q. Why not? Mr. Bartlit: I object, irrelevant, Your Honor. The Court: Well, let’s change that and [1898] see whether anybody told him not to. Just why he didn’t, I agree, is irrelevant. By Mr. Fricano: Q. Did it ever occur to you that you should be mak- ing a record of your conversations for Robinson-Patman Act purposes? Mr. Bartlit: Objection, irrelevant, Your Honor. Mr. Fricano: If Your Honor please— The Court: I think that is all right. Mr. Warnke: I would further object. It calls for a legal opinion and you have already addressed your- self to that kind of question. Mr. Fricano: If Your Honor please, on cross- examination of Mr. Bear one legal opinion after an- other was elicited. The Court: I know, and I said I didn’t want any 62a Robert Gimlin, Cross Q. And if he answered yes, what did you do? A. We would meet the price, generally speaking, to the best of my recollection. [3587] Q. You made your own decision, whether you would or would not meet the price. You didn’t meet it in every instance, did you? A. I have no recollection as to the specifics in that regard, but we would make a decision after we—after we verified it. Q. Now, I would like to turn, Mr. Gimlin, to the pur- pose of USG in engaging in the practice of price verifica- tion, and I will read to you from yesterday's transcript at page 3343. Mr. Fricano asked, “What was the purpose of United States Gypsum engaging in this practice, this understand- ing of exchanging this kind of information we have been talking about?” And you answered: “So we wouldn't be over-com- petitive on price.” Do you recall that? A. Yes, sir. Q. Now, I would like to ask you, Mr. Gimlin, why you did not want to be over-competitive, and specifically ask you if it is not a fact that one of the reasons that you did not want to be over-competitive was so that you could be in compliance with the Robinson-Patman Act. A. Yes, sir. Q. You were told by counsel, were you not, on many, [3588] many occasions, that it would be illegal, under the Robin- son-Patman Act, generally speaking, to sell at a lower price to a customer, unless you were meeting in good faith the lower price of a competitor. Is that not correct? 63a Robert Gimlin, Cross A. Yes, sir. That would be correct. 64a Robert Gimlin, Cross A. Yes, sir. That is correct. Q. Now, if you had not verified with the competitor and if it were a situation where you had a substantial doubt about the truthfulness of the report, such as in cases 4, 5, and 6 on the chalk board, you doubted the truthfulness of the claim, then were you not advised by counsel that it would be improper to meet the lower price under the Robinson-Patman Act? A. Yes. Q. And you did not meet it in those cases, did you? A. No, sir. Q. So that, if you got a negative response from your competitor when you called him, that didn’t change any- thing as far as what you did; did it? A. No, sir. Q. If you got an affirmative response from the com- petitor when you called him, and he said, “Yes, the report is true, I am selling this customer at $48,” then, that en- abled you to make a decision whether you would or would not meet that price. Is that not correct? A. Yes, sir. [3591] By Mr. Hiering: Q. And in many cases you did meet when you got such a response, did you not? A. To the best of my recollection, generally we did. Q. So that when you got a negative response from the competitor, he said that the claim was untrue and you did not meet that lower price, to the extent that this had a stabilizing effect on prices, was this not due to the fact that you were following the directions of your counsel with regard to compliance with the Robinson-Patman Act? A. Yes, sir. 65a Robert Cimlin, Cross [3592] Q. Now I would like to turn, Mr. Gimlin, to some further questions about verification and the nature of verification calls. When you made a verification call, is it not a fact that you made this call to get information on which you could base your independent decision to meet or not to meet the claimed lower price? A. Yes, sir. Q. Is it not also a fact that when you made these calls you asked your competitor whether the clair: made by the customer was true with respect to the price at which he had sold or was selling or had offered or was offering the product? Is that not correct? A. Yes, sir. Q. You did not ask him, did you, whether he was going to continue to sell at this price? A. No, sir. Q. And you didn’t ask him whether he intended to increase the price? A. No, sir. Q. And you didn’t ask him whether he intended to decrease the price? A. No, sir. Q. And you didn’t ask him anything else about what he intended to do or would do in the future? A. No, sir. Q. Nor did you tell him what you intended to do? A. No, sir. Q. Or what you would do? A. No, sir. Q. By way of summary, when you made these calls you wanted information that you could use to make your own independent decision, is that not correct? . 66a K. A. McCaskill, Direct (). How do you know that, sir? A. Well, 1 dealt with many of them. I have been told this. I know it for a fact. Q. That they would tell each other that they were ectting discounts notwithstanding the fact that the invoice didn't show the discount? A. Yes. Q. Then why go through this business to begin with? A. You are asking me to speculate again, sir. Q. All right, sir. Isn't it a fact from time to time you gave a discount to one customer of yours and didn’t give a discount to another customer of yours who competed in the same marketing area? Mr. Mellott: I object to the form of the question unless the time frame is tied down. Mr. Fricano: Throughout the time period 1962 through June 1969. The Witness: Should I answer it? The Court: Sure. {4380} The Witness: Mr. Fricano, we have been through the process, I believe, of exploring discounts granted to customers of certain trade classification, including job price protection. The verification prac- tice—if you will—in my understanding and under the guidance of cur Legal Department, was set forth to establish as best we could the means to avoid viola- tion of the Robinson-Patman Act. If we gave a discount to a trade factor, if we gave a certain price concession, whether it be in the form of a discount or otherwise, to a certain trade factor, which was different from another trade factor 67a K. A. McCaskill, Direct in this same place of trade, it was based upon the process that our Legal Department had established Q. So then... A. And that meant that we were either in the process of meeting competition according to our best judgment, or we were making a business judgment without doing any kind of verification practice. Q. All right. Then is it fair to say, sir, that the an- swer to my question is “yes” with that explanation that you just gave? A. With the explanation that I just gave, my answer would be yes. [4381] Q. Now, did these same lawyers tell you to put phony ; ri i r : i 1 68a Oliver Eugene Burch, Direct Q. Was he also at these meetings, these Gypsum Asso- ciation meetings thatyou attended? A. Some of them, sir. Q. When you made a call, from time to time, and, from time to time when there was an incoming call, did either you or the other person refuse to give out the infor- mation concerning the price? A. Yes, sir. Q. Why? A. I don't know why the other person would refuse, but I know why I would. [5268] Q. Why did you refuse? A. There were certain accounts that we felt were extremely important to the interests of Georgia-Pacific, that we felt was not in our best interest to discuss our marketing policies. Q. Would one of those accounts be M. Ecker and Company in Chicago? A. Yes, sir. Q. Were they a large volume account of Georgia- Pacific? A. At one time, they were; yes, sir. [5273] Q.° * ° If you wouldn't discuss certain accounts, why did you check prices with competitors on other transac- tions? A. We were concerned with the ramifications of the Robinson-Patman, for one reason. We wanted to be sure that we were not being led on by a dealer who wasn't tell- ing us the truth. So it became necessary at times, on rare [5274] A. I have discussed it with Mr. Wilson at times, yes. Q. Did he help you, too? . Yes, sir. A. Yes, Q. Now you have testified that you wanted to make sure that the customer was telling you the truth, is that ? 70a Arnold L. E. Meyer, Cross Q. Do you recall making any price verification call or receiving any price verification call in the year 1969? A. Well, I don’t recall any specifics. It is very pos- sible in the early part of the year that I did, because [5532] of the habit of people calling me. I wouldn't be originat- ing them, because other people had that responsibility. But others might call me, not knowing that I was on a special assignment. Q. You say “might.” Do you recall? A. No, I do not. Q. And since you left, your official leaving at the end of the year, even though you hadn't been there physi- cally for some time, the end of ‘69, from that period on you haven't been involved in the gypsum business; have you? A. Not in any way at all. Q. Mr. Meyer, with respect to price verification prac- tice where you made calls to verify a price or other com- petitive practice with a competitor, did you do that in the circumstance where you had received a report from the Georgia-Pacific organization of a lower price or a competitive condition out in the marketplace? A. That is right. That is where those things orig- inated. Q. And the information came to you from Georgia- Pacific employees who had gotten it from customers? A. Correct. Q. And the purpose of the customer advising of the lower price was so that that customer could get a lower price? A. From us, to meet a competitive price. Q. Yes. Tla Arnold L. E. Meyer, Cross [5533] A. That he allegedly received from someone else. * Q. What I mean is: The customer would advise the Georgia-Pacific individual of a lower price of a competitor and requested Georgia-Pacific to give a lower price? A. That's right. Q. And as a result of that request by the customer coming to you through the organization, you sometimes made a verification call with a competitor? oo Q. to verify the existence of a lower offered price or other practice that had been made or offered before the time that you made your telephone call to the competitor to es. made that verification call to find out By Mr. McSweeney: Q. Mr. Meyer, I believe in answer to Mr. Fricano you said that you understood that Celotex directed the prices of Big Horn Gypsum. I take it that you do not know that as a fact, do you? A. I know it as a fact from having been told so by Mr. Miller. ' Q. Mr. Miller of Celotex told you that? A. That is correct. Q. When did he tell you that? 72a Robert Sikes, Cross [5645] correct. Q. Was there also a significant percentage of them that was incorrect? Mr. Fricano: Objection. The Court: He is entitled. It is cross-examina- tion. Go ahead. The Witness: That could be. By Mr. Mallin: Q. Now, at the time that you were with Georgia- Pacific, did you understand that it was the policy of Georgia-Pacific to attempt to avoid price discrimination to customers located in the same trading area? A. Yes, sir. Q. And did you in your job function, to the best of your ability, attempt to carry out that policy of nondis- crimination? A. Yes, sir. Q. And did you understand that it was the policy of Georgia-Pacific, when faced with a lower price being of- fered by a competitor, to attempt to meet that competitive price but not to beat it? A. That is correct, sir. (Proceed to next page—no loss of context. ) [5646] Q. So that you understood those to be company poli- cies during the time you were with Georgia-Pacific? A. Yes, sir. Q. And did you understand that those twin policies of non-discrimination in the trading area and meeting but not beating competition were complementary policies? 73a Robert Sikes, Cross A. Yes, sir. Q. And did you understand that price verification calls was one method that was used in order to implement those twin policies of non-discrimination in the trading area and meeting but not beating competition? A. Yes, sir. Q. Now, when you received a report from Georgia- Pacific's own sales organization of a lower price in a particular area, was it sometimes true that, based upon other information received from Georgia-Pacific’s own sales organization, that you could decide to meet that price by Georgia-Pacific? A. Yes, sir. Q. And you could make that decision on those occa- sions without making a price verification? A. That's correct. Q. And, on other occasions, you made the price veri- fication call to ascertain what that truth was? A. Yes, sir. [5647] Q. Now, in a case where there was a report from the sales organization of Georgia-Pacific that indicated there was a lower price, was it sometimes true that you didn’t believe that report? A. That's correct. Q. And did you understand—strike that. And, in the case where you didn’t believe the report, you would not meet the lower price? A. That's correct. Q. Now, if, in that case where there was a report from the sales organization, which you didn’t believe, and you made a vertification call and found out that the report was, in fact, true, then you were in the position to meet that lower price? T4a Robert Sikes, Cross A. Yes, sir. Q. And so the making of the price verification call, in those circumstances, made it possible for Georgia- Pacific to put that lower price into the marketplace? A. That is correct, sir. Q. Incidentally, Mr. Sikes, did you attend Gypsum Association meetings? A. No, sir. Q. During the time you were with Georgia-Pacific, did anyone instruct you not to keep a record of price verification calls? [5648] A. Never had any such instructions. Q. And the notes—but it was a fact, on various papers, some of which have been used by the Government, you sometimes made notes about price verification calls? A. That is correct. Q. And sometimes, in your notes, you used shorthand symbols to make those notes? A. Just the 1, 2, 3 code. Q. Weljglid you write anything out in the notes in longhand, or did you use abbreviations or any other kind of symbols, like people do when they are making notes? A. Oh, initials, made it brief. Q. Were you able to read everybody else’s short- hand notes made in the office on whatever subject—— Mr. Fricano: Objection, outside the scope of di- rect examination. The Court: I haven't heard any testimony about shorthand. I don't know what we are getting at here. Mr. Mallin: Well, there was questioning, Your . Honor, about the way he kept notes and whether 75a Kenneth Atwell, Direct A. To my knowledge he didn’t do it, no. [5727] Q. Well, is that your present knowledge, too? A. My present knowledge of course, since the docu- ment was brought up late in ’69 stating that I had written to them, that there was some reason for me to write the document, that I don’t really know. And that was after price verification had stopped on my part. Q. But not on theirs? A. I don’t know anything about their part. Q. Why did you write them the document? A. I wished I knew that. I don’t know. Q. Were you in here when Mr. Sikes was testifying? A. Yes, I was. Q. Did you hear Mr. Sikes testify that he engaged in the verification p-actice with Mr. Earl Kroth? A. I heard that. Mr. Fricano: If Your Honor please, I think perhaps one of the jurors might wish a recess. The Court: Well, I am not going to ask, but we will take a ten-minute recess. (Recess taken.) The Court: Proceed. By Mr. Fricano: Q. Mr. Atwell, who then at National Gypsum author- — + “cece described it? J A. Mr. Brown. [5828] Q. Who else? A. Well, he is the only one that authorized me. Q. Did Mr. Nicely authorize you? Tha Kenneth Atwell, Direct A. Well, I was doing it at the time Mr. Nicely became my superior, and no one said to stop. Q. How about Mr. Colon Brown? A. I never talked to Mr. Colon Brown about this at all that I know. Q. Mr. Atwell... A. Yes, sir. Q. Didn't you from time to time discuss a specific price verification with a competitor when Mr. Brown was stand- ing right there? A. Never to my knowledge, no, sir. Q. Did Mr. Brown, Colon Brown now, was he aware of the fact that you were engaging in this practice? A. Well, I didn’t talk to him about it, but I think he was, yes. Q. Now, with respect to job price protection itself. A. Yes, sir. Q. Did you from time to time check with your com- petitors on job price protection? A. Even though I don’t recall it, there is a possibility I did, yes, sir. Q. And at what time, times, did job price protection [5729] - become more critical? A. With National, job price protection became more critical at the time of a price increase. Q. Would that be between the time of an announce- ment and the time of the effective date? A. Generally it would be between the time of our an- nouncement and our effective date, yes, sir. Q. Is it fair to say that if there is job price protection in the market, enough of it . . . A. Yes. 77a Kenneth Atwell, Direct [5835] Q. All right, sir. Now, it refers, in paragraph 8, to “our new policy.” Do you see that, paragraph 8? A. Yes, it does. Yes. Q. All right, sir. When was that new policy for- mulated? A. I don’t know that the policy was even formed at that time. This was—this plan of action was a result of a meeting we had, saying what we were going to do after we heard that USG had announced a price increase in the field, and this, to me, means when we decide, and I don’t know when this was made. We may have made a decision by then, but, at any rate, if and when we decided, we would send that new policy to the people, the states. Q. Well, isn’t it fair to say, Mr. Atwell, that the new policy referred to there had to be formulated prior to November 17, 1965? A. No. No. Q. Was that new policy discussed on November 17, 1965? A. Yes, it was. Q. With whom? A. A meeting that we had with Mr. John Brown and Mr. Jay Nicely and Mr. Manske. Q. And what was the new policy? A. The policy was we were going to try to find out what USG did, and we were going to follow it just as closely [5836] as we could, and that would be our policy, and we would let our dealers know it and our sales people know it and all. Q. So you were going to prepare a letter, Mr. Brown was going to help, and Mr. Nicely, and you were going to 78a Kenneth Aiwet, Direct send it to all your dealers throughout the country, saying you were going to be just like USG; is that right? A. I wouldn't say it in those words, no, but that would be the intent. We were going to follow it, whatever we found it to be, we were going to follow it. Q. Have you, in the past, told your dealers you wanted to be just like USG? A. I don’t think we ever did. Q. Well, that doesn’t mean that, then, does it? A. I wouldn't send a bulletin out and say we were going to be like USG or anyone else. It would be a policy that would recite things that we want to have done, and it would have been, and they were, at that time. This is just about the same as those we picked up. Q. Did all the events, as depicted on GX 500 actually occur on the dates specified? A. Oh, you want me to go down item for item, sir? Q. Well, if you can glance at it, sir—— A. Well, on November the 17th, we knew there was a letter out. We had had a call from one of our people, and we were going to procure that from our man who had called in, [5837 | and that we did not have on the 17th, no—and, when the man called in on the second item, he also told us that he had a copy of a USG letter of November 17, too, the sales force, and we told him to send that in, and we were going —this is what we meant by procuring that, getting that into the Buffalo office. On the 19th, “Procure USG price list for all zones,” this was living in hope. We were going to go out to our people and tell them of what we heard and tell them to pick up what they could and send it in to us, and we had 79a Kenneth Atwell, Direct hoped, within a few days, we could get all the information we needed. Q. And, ultimately, in that connection, you had to call United States Gypsum directly; did you not? A. I don't recall whether I did or not. Q. Didn't you get what is called a mint set of USC price sheets about an inch thick? A. We~yes. Yes. Q. And were these not United States Gypsum prices, for the United States Gypsum products in every zone? A. I do know that it was a thick file, but I can’t testify it was for every zone. I don't know that. Q. All right, sir. Proceed. A. Then, it appears here, and now—except for jump- ing down to the 24th, I would be testifying from the docu- ment, because my memory doesn’t serve me that well. [5838 } By Mr. Fricano: Q. All right, sir. Now did you know or were you aware, I should say, that originally United States Gypsum intended to announce its price increase not on November 17, but on November 15? A. This is the first time I ever heard that. Q. All right. Do you know whether or not they intended to an- nounce it in the Wall Street Journal, as you said about your decrease yesterday? A. The first time I knew was when our man called from Chicago. Q. What—— A. Mr. Wright. Q. Did Mr. Wright tell anybody where he got that information? 80a Kenneth Atwell, Cross A. Oh, yeah, competitive invoices or believing the customer or hy = pate Q. How did you verify the report the customer made was true, cept by aig Your competion What other ies have A. eet eaten teen ent did then, to send us whatever documentation he could get from the field and those would be competitive invoices, or to get a customer to sign these RTMC’s or requests to meet competition forms or get a letter from a customer. And in some cases we just believed the customer, because we have never—we have always found him to be trust- worthy. Q. Did you ever have occasion to—you, Mr. Atwell, when you were passing on one of these requests to meet competition, did you ever have occasion to check back with your field sales people who had reported the situa- tion to find out whether they could assure you of its re- liability or accuracy? A. You mean after I got a request from them, did I contact them again? Q. Yes. A. Oh, yes. 1 was on the phone with them regularly, yes. [5988] Q. When you called back to them, did you always make notes of your conversations with them? : : i z i : approved, those that came to you, you have to sign to indicate your approval or not, I guess, didn’t you? A. Well, if I approved it, I signed it. And I think in most of the cases where we didn’t approve it, we wrote reject on the face of the document, as I recall. Sla Kenneth Alweti, Cross Q. Now, in those instances when you did call a com- petitor—— The mike is still working, too. Yes, it is. It doesn’t have a sore throat, though. The Court: Do you have a sore throat? The Witness: Yes, I do, but I think I am going to make it all right. By Mr. DeLone: Q. In those instances where you did call a competitor out of, say, in 1965, out of these 40,000 requests, where A. Q. A. I'm all right. y do we had a report of a low price and I didn't do best to try to make sure that that report was ve that and didn’t give it to the rest of my would be discriminating against my other 82a Discussion Q. And wasn’t your understanding—was it your un- derstanding, whether or not it was right, that it would be unlawful to so discriminate against other customers? A. Yes, it was. Q. Have you been advised about any statute or laws that concern this subject? A. Yes. Mr. Fricano: Objection, Your Honor. The Court: The basis? Mr. Fricano: He is asking a layman [5990] about the law now. Mr. DeLone: I didn't ask him the content of the law. I asked if he had been advised about the law. The Court: You can answer. The Witness: Yes, sir. I was told about the Robinson-Patman Act. [6038] The Court: Yes. May I call your attention, Mr. DeLone, though, to what Exhibit 15 says? The first paragraph is not—doesn't give me any trouble, then, but it refers to the conference with the lawyers. Then, “they quoted the section of the Robinson-Patman Act which upholds our theory. However, they brought to our attention, also, a recent decision by the United States Circuit Court and the only one squarely decid- ing the precise issue; that is, the Sunshine Biscuit case. Then, they go on to say that the FTC argued Section Sa Kenneth Atwett, Cross it was, Jay Nicely called me at some later time. Now, it may have been the same date, or it may have been the next day. The reason I think it was near the time I talked to counsel is, when Jay called me from out of town, he said he had just read something about this in the Wall Street Journal. Q. And what was the gist of your discussion with Mr. Nicely, as best you recall it? A. Well, Jay talked about the article, and he said that— Q. The article in the Wall Street Journal? A. In the Wall Street Journal; and he said that he thought that it would be advisable for us to cease and desist, and I told him I had already talked to counsel and already made the decision. Q. Now— [6073] The Court: Cease and desist from what? The Witness: Well, stop making verification calls. By Mr. DeLone: Q. Now, except for the credit—you weren't responsible for the Credit Department and its activities; were you? A. No. Q. And that wasn’t under your decision? A. No, it wasn't. Q. I show you also Government Exhibit 25. Do you have that there? Maybe I didn’t ask for that yet. A. I don’t have it. Q. Sorry. What is that exhibit, Mr. Atwell? S4a Kenneth Atwell, Cross A. This is a letter I wrote to Mr. Hayes and Mr. Nicely on December 12, 1969, and the subject is “Price Verifica- tion.” Mr. DeLone: Again, this is marked a Government exhibit. I will offer it. Mr. Fricano: I will offer it, Your Honor. Mr. DeLone: If Mr. Fricano wants to offer it, that is fine. The Court: It is admitted. Government Exhibit No. 23 was received in evi- dence. Mr. DeLone: This document is dated December 12, 1969, from Mr. Atwell, subject, “Price [6077] Verification,” directed to J. P. Hayes, Vice President, J. P. Nicely, Vice President, reads as follows: “Dear Jack and Jay: “I believe I did advise you men of the follow- ing action taken by me early this year to stop price verification calls in the building products division of our company. I am not sure Colon was ever made aware of this decision. As chief executive of our company, I think he should have this infor- mation. If you agree, please route the extra copy to Colon. “As you know, I have been in constant touch with outside counsel for several years regarding antitrust regulations. Very early this year, coun- [6078] 85a Kenneth Atwell, Cross sel advised me of the decisions in the Container case and emphasized the telephone price verifica- tion aspect of that case Even though this activity in the Container case is significantly unlike that which was infrequently used by us, we were ad- vised that until clarification of the Container de- cision, “serious consideration should immediately be given to complete cessation of verification calls.” Based on this counseling, and only as a re- sult of this counseling, I have made no verification calls since some time in January, 1969. “We, at National Gypsum Company, know we did not violate our internal antitrust policies nor the laws of the land as regard to antitrust. We did not dis- cuss future prices, policies, terms or conditions of sale with any competitor, nor did we enter into, or discuss, any a ts on any of these items, nor on distribution, sharing of markets, selection of customers, etc. We simply answered specific inquiries with a yes or no and only inquired about specific reports received from our sales force of tive activity. I am knowledgeable of the above because I believe I am the only one who made any of the occasional verification calls by our building products division in many years. “However, making the above decision doesn’t necessarily lead me to believe we have no other concern. To the contrary, I continue to be con- cerned about le inadvertent violations of the Robinson-Patman Act. We have done our best in good faith to make our decisions in meeting com- petitive situations on whatever evidence was available. There may have been cases where we 6a Kenneth Atwell, Cross were deceived by customers, and as a result, met false competitive reports. This leaves a question in my mind as to whether or not we have exer- cised every precaution legally obtainable. This kind of decision making will be a risk that, in our division, we will continue to take until we get further clarification of the legality of tele- phone price verification calls where the purposes thereof are to avoid fraud and to obey the federal laws against price discrimination among customers. “K. H. Atwell” [6079] The Court: What is the date of that? Mr. DeLone: December 12, 1969. By Mr. DeLone: Q. Mr. Atwell, might I ask you, this makes mention of Colon and refers to Colon as chief executive officer. I take it that is Colon Brown? A. Yes, it is. Q. Do you recall why you wrote, what occasion you are writing this letter to Mr. Hayes and Mr. Nicely in De- cember, 1969? A. Well— Q. December 12, 1969, to be precise. A. Mr. Colon Brown and Mr. Jack Hayes were going to be called as witnesses in some litigation and although I don't ever recall telling Mr. Colon Brown about price veri- fication, the complaint in 1967 that led to this litigation had as one of its items price verification. So it was, I as- sumed, of course, since it was a complaint which Mr. Colon Brown knew about the price verification, but I didn’t know how much he knew, if anything, about us stopping verif- cation. 87a Earl Kroth, Direct A. If I did, 1 don’t recall. 1 don’t recall the name, or I don't really recall specifically doing it, no. Q. When you mado these contacts with competiians, did you get answers to your questions? A. In most cases. Q. What would you do with the information after you received it? Would you take it back to Mr. Atwell or Mr. John Brown, or Mr. Nicely, or whoever made the request that you check it out? A. In some cases, yes. And in some cases, no. In some cases when I was requested to find out if the price exsited, I was told that if that competitor does have that price in there, that I was authorized to meet that price [6238] for our own customer. And in that case then I wouldn't have to go back to my superior. In other cases, yes, I had to carry the information back. And then we possibly talked about it to make a determina- tion. “Is there any advantage to meeting this price?” “Should we pass up the order?” Or, “Do we meet the price and hopefully get an order?” Q. What was your in contacting the com- petitor if you weren't sure or not you were going to meet the to begin with? A. Well, it is pretty hard to run a business unless you know what is going on in the market. And even if you might not meet the price, maybe you can't afford to meet the lower price. It still—-Maybe it is a matter of ego, but you sure would like to know what is going on in the market as far as price is concenred. Q. Did you make any notes of these contacts with competitors? A. No, I didn't. Ra Earl Kroth, Direct Q. Do you know whether or not Mr. Colon Brown knew of these contacts by yourself and Mr. Atwell, and others in National Gypsum Company with competitors? A. He knew that Mr. Atwell was calling competitors. I am not sure that he knew that I was making calls. Q. How do you know—Excuse me. [6239] A. I am not sure that they knew that anybody else was making calls. Q. How do you know that he knew Mr. Atwell was making calls to competitors? A. On a few occasions, at least a few occasions, I was present when Mr. Atwell advised Mr. Brown—Mr. Colon Brown that is,—that he had contacted a certain com- petitor and contirmed that a certain discount or a certain price was in at a certain dealer or in a certain market or what have you. Q. This was in your presence? A. Yes, it was. Q. Was anyone else present on these occasions? A. I believe in a few cases there may have been other people present, but I don’t recall who they were. [6240] Q. Do you know what time period these occasions took place in? A. It was in the later sixties, but I can’t be real specific as to when they—when they happened. I could pin it down to the point of somewhere in about late '66, early '67, possibly, when they were still not meeting competition, when they were still not lowering our price to be competi- tive in the market. 89a Earl Kroth, Re-Direct [6280] Re-Dmect EXAMINATION. By Mr. Schmoll: Q. Mr. Kroth, you say you stopped making these con- tacts with competitors in mid-January of 1969. Why did you stop? A. The company’s legal counsel advised us, advised the management of the company that there had been some court decision—which I have heard referred to as the Con- tainer Case—where the judge had ruled that it either was illegal, or there was some question concerning the legality of price verification. And, until further clarification, we were told to cease and desist. Q. Who told you this? A. I was either told by Mr. Atwell directly or in con- junction with one of the attorneys. Q. Do you know whether or not anyone else at National Gypsum was told that they should stop? A. To my knowledge, all of the people in our own department who in any way would be involved with this type of procedure were informed. Q. Do you know whether or not those instructions were followed? A. To the best of my knowledge they were, except in one case that I know of where apparently the party became confused. Q. What case was that? [6281] A. The case of Mr. Webster. Q. Did Mr. Webster make calls after these instruc- tions were issued, receive calls? a O. Max Montgomery, Cross Mr. DeLone: It was about the time of his conver- sations with Mr. Atwell, and I submit, sir, that what I read shows his vagueness of recollection. The Court: Now, wait a minute. Mr. DeLone: Well, in light of— The Court: Wait a minute. Mr. DeLone: Very well. The Court: Let's not either one do that. When you spoke about these conversations, were you talking about area prices, or were you talking about conversa- tions concerning a specific—a request to verify price on a particular transaction? I am talking about the ones as late as 1967. The Witness: Well, it is difficult to be specific. The Court: Was it both? | [6312] The Witness: Yes. The Court: All right. Go ahead. The Witness: To the best of my recollection, both. [6314] By Mr. Keck: Q. You have been asked certain questions about verification, and 1 understood you to say, did you not, that you had not verified with anyone from United States Gypsum Company? A. That is correct. Q. At any time? A. That is correct. 9la O. Max Montgomery, Cross Q. Would you please describe simply for me the practice of verification as you practiced it, as you have testified here this morning? What prompted you to make a verification call? The Court: You mean—he said he didn’t do it with United States Gypsum. Mr. Keck: He didn’t do it with my clients, but he said he did do it with some others. The Court: All right. The Witness: Uncertainty as to the validity of the competition, for one thing. By Mr. Keck: Q. Did you have a way of determining the existence of lower competitive prices within your company? A. Well, we would ask to see invoices of competitive [6315] companies to verify whether or not they were selling at below our prices or not. We have a field sales force chat we depend on heavily to keep us advised as to what the competitive situation is in the market. Q. And how do they keep you advised? A. Through reports and telephone conversations; very few written reports. Q. Well, then, do I understand that, occasionally, you would verify the existence of the lower competitive price by a contact with a competitor? A. That is correct. Q. How did you determine which ones to verify and which ones not to verify? A. It was just a matter of judgment as to the feel we had for the particular account, whether or not we were 92a O. Max Montgomery, Cross being told the truth as to what the competitive situation was or not. Q. The truth by whom? A. By the dealer. Q. The customer ? A. To our—that’s right, the customer, te our sales- man or direct to me. [6319] By Mr. Mellott: Q. Mr. Montgomery, my name is Cloyd Mellott. I represent Georgia-Pacific. Would you look at the two pages of 1668-A, Government Exhibit 1668-A and tell me, please, whether the names of any Georgia-Pacific em- ployees appear on your list of telephone numbers. A. No, they do not. Q. All right, sir. If I understand your direct testimony correctly, [6320] the only person at Georgia-Pacific that you had any verification calls with was Gene Burch. A. Yes, sir. Q. And I believe—excuse me. A. Yes, sir, that is correct. Q. And I believe you said you had two, three or four, is that correct? A. That is correct. Q. Isn't it a fact that each of those calls was orig- inated by you? A. That is correct. Q. Mr. Burch never called you? A. Not to my knowledge. Q. And if it is approved, then what happens? A. Then it becomes the basis for the Accounting De- partment to invoice at that lower price or to adjust to that lower price. Q. And what is the Accounting Department authority for that purpose? A. The P/A. Q. And that’s the pink document on the right; is [8903] that correct? A. That's correct. Q. Have you ever had any advice from your lawyers with respect to compliance with the Robinson-Patman Act? Mr. Hiering: I am not asking him for a legal con- clusion, Your Honor. I am just asking him whether he had any advice from lawyers with respect to com- pliance with the Robinson-Patman Act. The Court: You can answer it yes or no, but you can’t ask him what the advice is. The Witness: Yes. Va James B. Galvin, Direct By Mr. Hiering: Q. On more than one occasion? A. Yes. Q. And were there occasions when you asked specific advice from your lawyers with regard to approval of price adjustments? A. Yes. Q. Now, were there instances when the information regarding the competitive situation, as contained on the green sheets, raised doubts in your mind as to the accuracy or the truthfulness of the report of the competitive situa- tion? A. Yes. Q. And what did you do in those instances? A. The usual procedure is to send the file back to the initiating, or back to the responsible sales manager, and tell him that he needs to get additional information or you can’t approve that particular price recommenda- tion. The Court: The reason I ruled that he couldn't ask what the advice was is this: You ask a lawyer for advice—and I like to think judges are still lawyers. If you ask a lawyer for ad- vice—and I don’t mean to derogate the advice—and he gives it to you. And, by following his advice you violate the law, it is still a violation of the law. That doesn’t make it okay just because a lawyer advised you to do it. That's why what the advice was may be relevant in some situations. But, in the matter that we have before us today, I don’t think it is. By Mr. Hiering: Q. Now, were there ever any instances when you doubted the accuracy or the truthfulness of the claim of : %a James B. Galvin, Direct the lower competitive price made by the customer where you chock Go cssumnay of Ghat cate by calling « compet A. Yes. Q. And can you give us some approximation of how many instances? Pa... They were very few. I would estimate not more ten, and probably less. rnin is poet a A. I don’t specifically recall the last date on which ~ I made such a call. Q. Approximately when would it have been? A. Well, it would have been—No later than 1968, and possibly earlier than that. Q. Why did you stop making these calls? A. Well, the reason I stopped making the calls was when I—as the year 1967 progressed, the market became increasingly more competitive, and the field intelligence we were receiving started to flow in with increasing fre- quency, and that, by 1968, it was—there was a consider- able number of green sheet forms flowing in every week, maybe every day, so that it—in my mind, by that time, because of the very competitive nature of the market, I had all the information at hand that I needed to deal 6a John Patrick Hayes, Direct Q. Now, you knew the practice was goiug on yourself? A. Yes. Q. And as far as you were concerned, what was the reason for verifying? A. Well, the main reason was that—there were two reasons. One was to avoid conflict with the Robinson- Patman Act, which we were very conscious about a violation of the Robinson-Patman Act which was price discrimination which would have been involved if we were discriminating in price among our customers in the same competing area. And the second reason was that on some occasions our customers didn’t tell us the truth, and we were attempting to find out what actually was the truth. Q. Now, in this period in 1968, from February, I think it was, when you were authorized to meet competitive situ- ations, did you verify with competitors in every instance when you had a report up from the field? A. You mean me? [10,375] Q. You or persons working under you whom you au- thorized? A. No, 1 did not. And, certainly, not in every instance. That was a relatively rare thing. Q. And in what situations, so far as you know, were verification calls made; when, or what reason, what infre- quent occasions? You indicated it wasn't always done. Why was it done sometimes and not others? A. Well, you have a circumstance where something entirely new and different hits you that you have not had reported from the field before and which you do not have documentary evidence of. And, on occasion, as I men- tioned, where there is reason to believe that the custemer may not be telling the truth. 97a John Patrick Hayes, Direct Q. And were you aware that persons in your company to similar calls from your competitors in this period from 1965 to 1969? A. Yes, I was. Q. Did you make any verification calls yourself? No. > Q. Do you have there Government Exhibit 25? A. Yes, I do. Q. That is a document that is already in evidence, dated December 12, 1969, from Mr. Atwell to you and to Mr. Nicely. And in it he refers to the fact that as a [10,376] result of advice of counsel he had stopped—no verification had been made after some time in January of 1969. The letter though is dated December 12, 1969. A. Yes, sir. Q. Did you receive that letter? A. Yes, I did. Q. Did you take any action as a result of it? A. Yes. I suggested to the people that issued our policies and our general policy book that the section on antitrust compliance should be updated to include our Jan- uary decision. Q. Your January, 1969, decision? A. Yes. Q. And was your ng suggestion carried out? A. Yes, it was. “8” page was changed in the antitrust compliance policy. That removed the authority for verification. Q. Now, I want to turn to certain particular changes in published price, Mr. Hayes, in which you had some in- volvement. First I would like to go to the period back in December of 1965. That is the time when you were manager of the Central Region I think you called it? 98a Richard Thompson, Direct not saying, “You have got my authority to spend the Celotex money’? A. I told him this: that, if he was satisfied, from his investigation and his contact with the customer, that ap- proximately 25 cents per hundredweight would be the equivalent of the lower prices which were being offered to other customers in that area, and, if he would make that allowance to all of the customers in that area that he was [11,528] going to serve that way, that it would be a legal situation under any of the Antitrust Laws that I knew anything about. Q. By the way, where is that Hamlin, Texas, where we have the plant? A. The Hamlin gypsum plant of Celotex is located in Fisher County, Texas, which is approximately 400 to 450 miles east of El Paso and perhaps 150 to 200 miles west of Dallas. Q. Do you know whether Miller went ahead and au- thorized those unloading allowances? A. Yes. Iknow he did; yes. Q. He did. Now, were there occasions, after this advice that you gave Miller in the early ’60's about the El Paso market, occasions on which you advised Mr. Miller about the Antitrust Laws and the Robinson-Patman Act? A. Yes, sir. Q. Well, were there many or few or— A. Oh, several. Let's put it that way. Q. Several? A. Probably two or three times a month. Q. I see. Now, please tell the Court and the jury, then, on these occasions thereafter, what advice you gave Mr. Miller about the Antitrust Laws, about compliance with the Robinson-Patman Act. 99a Richard Thompson, Direct Now, you understand, we are confining ourselves to [11,529] the period prior to December 27, 1973, so, in that period, what advice on the Robinson-Patman Act and the Anti- trust Laws did you give him? A. Well, I him that, under the Robinson-Patman Act, as I understood it, he could not discriminate in favor of a customer to the detriment of another customer, if they were competitors and if the merchandise was of like grade and quality, and that, unless he could find a good faith defense, as the Robinson-Patman Act calls it, to meet the equally low price of some competing manufacturer, that he had to treat all of his customers of the same class in the same trading area the same, both as to price and service and facilities, promotional allowances, or anything else. Q. And did you advise him with respect to the Sher- man Act? A. I told him that, with respect to the Sherman Act, he could never agree with a competitor on anything, nor even discuss terms and conditions of sale or prices with tors. Q. Now, did you give him advice concerning this matter which has been called, here, verification? A. Frequently. Q. What did you tell him about that? A. Weil, I told him that, if he were confronted by a customer with a claim of a price below our price, in that (11,530) area, to that class of trade, for gypsum wallboard, and if he was unable, in his own mind, to establish the truth or falsity of the customer's claim by invoice froin competing manufacturer, examination of the customer's books, afli- davit from the customer, or other evidence which satisfied 100a Richard Thompson, Direct him, then, he could, if he were so inclined, telephone a counterpart in the competing gypsum compa. to ascer- tain if, in fact, that company had offered that customer the price which the customer claimed was available to him. Q. And did you tell him why he could do that; that is, the good faith meeting under the Robinson-Patman Act? A. I told him that that was the only defense that was available to him to discriminate in price, facilities, or ser- vices between customers; unless he could establish the fact that he was meeting a competitive condition, that he had no choice but to ‘orego the business or lower the price to everybody in the area, or lose it altogether. Q. Did you caution him about the type of inquiry which, under the Robinson-Patman Act, he could make of a competitive manufacturer? A. Yes, sir. I discussed that with him many times. Q. What did you tell him in that respect? A. I told him that he could call a competitor and say that the “XYZ Lumber Company in Paducah was advised that they have a price from you on half-inch wallboard of [11,531] such-and-such figure. Is it right or is it wrong?” Q. Did you tell him he could accept calls from others? A. I told him he could if he wanted to. Q. And tell them that information? A. As long as he confined it to answering that kind of question, I told him, it was all right. Q. So that, now, on the one hand, you had to tell him —and did you tell him, under the Sherman Act, he couldn't get together and agree with anyone? A. Right. Q. In fact, you discouraged him, under what you told him, from talking to others; is that right? Ola Richard Thompson, Direct A. That's right. Q. On the other hand, you told him that he could call up and verify? A. I tried to explain to him, many times, the difficult position that he or anybody in his capacity was put in by attempting to abide strictly to the provisions or with the provisions of those two statutes, because, in effect it is difficult to tread that narrow line between permissible, as I viewed it, and non-permissible contact, and I tried to point out to him the reason why his conversations should be so circumscribed. Q. And those two statutes, you are referring to the Sherman Act, under which the company, Celotex, is in- dicted and [11,532] stands trial? A. Right. Q. And, on the other hand, the Robinson-Patman Act, which you were trying to help that company comply with? A. Which is equally a Federal statute, the same as the Sherman Act; yes, sir. [11,533] By Mr. McSweeney: Q. Did Mr. Miller ever tell you that he called some competitor and they wouldn't answer him on price verifi- cation? A. Yes, he did. Q. By the way—going back. When you were there in the company talking to Miller back in the early—let’s say in the early ’60’s—when you and Mr. Miller talked, did you have this term “verification?” A. No, sir. We called it “checking.” lta Richard Thompson, Direct Q. Checking? And this term “verification” has grown up since? A. Lhave heard a lot of that. Q. And have you seen it in the case laws? A. Yes, I have seen it in the case law, yes, sir. Q. By the way, if he told you that a competitor would not answer him when he called up, what did you say to him? A. Well, I told him that the competitor didn’t need to answer him, that he had his freedom of choice just the same as Miller did, and he had no recourse. If a competi- tor chose not to respond, why he should hang up. Q. What could he do then about meeting the com- petitive price? : A. Well, then he had two choices. He could meet it and hope that the information that he already had was [11,534] sufficient and represented the true facts; or, he could give up the business of that particular account on that particu- lar occasion. Q. He always had available the lowering of price to everybody in the trade area? A. He could always lower the price to everybody in the areas, certainly. Q. Did you give the advice or the same type of ad- vice you gave to Don Miller to other people in Celotex? A. Yes, I did. To each of our product managers. Q. Your job as a lawyer—you weren't just advising Miller on gypsum? A. No, sir, I was not. —4t tr. Fricano: Objection to going into any other products aside from gypsum wallboard. The Court: Overruled. Richard Thompsvun, Direct By Mr. McSweeney: Araneae oe the company’s legal advice to the product managers of other products; did not? A. Correct. Yes, sir. _ Q. And you didn’t, in that about with the Robinson-Patman Act in good faith meeting of competition, you didn’t tell Miller one thing and the other people another thing; did you? A. No, sir, I did not. [11,535] Q. You gave that, generali speaking, the : vise toll dhe pendustmenegen?” on A. Correct. Q. Now what advice, if any, about compliance with the Robinson-Patman Act and the Scum Ast 28 oon give to the general credit manager from this ? Let’ take from late ‘65 through 1978. eee A. Well, I gave him practically the same advice that I had given to Miller. Of course, the credit man’s sphere of interest is slightly different. They were well aware of the practice in the ind of qubange f coiled lelgu tlemetin, hides amount owed, length of time to pay, and whether you had to sue to collect, and whether you had to put a lien on the job to get your money, and so on and so forth. But, the most frequent inquiry from the credit would be with respect to an alleged claim of extended terms within which to take a discount or a greater discount. And in those instances I told the credit manager that terms and conditions of sale, in my opinion, were a part of pan call Sus 5 Ge Sip Ge cane Gate Gat b gut or the other product managers with respect to the narrow limits within which I thought it was for them to make inquiries of competing companies with lita Richard Thompson, Direct [11,536] respect to extended terms or greater discounts. Q. Now, was there a difference in the legal advice which you gave the salesmen and district office men on the one hand, and a product manager like Miller—Well, say specifically Miller, on the other hand—with respect to the compliance with the Sherman Act and the Federal Antitrust Laws? A. Yes, sir. Q. What was that difference? A. I never discussed with the salesmen in the field, nor with the district branch manager, this thing that I previously referred to as this narrow exception, the so- called verification procedure. My advice to them always was to have no contacts with competitors of any kind under any circumstances. Q. Now, why did you make that distinction between what you covered and said with the product managers like Miller on the one hand, and the advice to the salesmen in the field and district officers on the other hand? A. Well, there are several reasons. The salesmen in the tield, or the district managers in the field, had no authority at any time to change or alter or modify any of our published terms and conditions of sale. Secondly, there were 12 or 15 managers in the [11,537] field, and possibly 150 to 200 salesmen. It was utterly impossible for me to have the same degree of frequent con- tact and the same opportunity to counsel and discuss and advise that I had with the half a dozen or so people around the home office with whom I was in daily or weekly con- tact, because we shared the same offices. Qa Richard Thompson, Direct And, I could keep them more currently and more carefully informed than I could ever try to do the same with a big sales force. Q. In other words if you talked about verification with them, were you concerned about suggesting to them that they would go right ahead and call up competitors willy-nilly? A. I was concerned that that might occur to some of them to do it, and I didn’t want them to do that under any circumstances. Q. Whereas, you were confident that with men like Don Miller you could give him the right advice as to how to do it and he would do it under controlled circumstances? A. Thad an opportunity to tell him what I thought was proper or improper, and I could tell him that whenever it occurred to me or to him. And frequently we would discuss the subject, yes. Q. You knew Miller for how many years? A. Well, the late ’50’s until he died in °74. [11,538] Q. When you gave him this advice, did he appear to you to be a person attentive to and receptive to the legal advice you gave him? A. He was an extremely attentive audience. He was most concerned to do nothing wrong. And he would come to me sometimes with questions that I was confident he didn’t need to ask, but I never discouraged him and I'd give him the best answer I could and as much time as I could find, because Miller was a very conscientious man. Q. Now, Mr. Thompson, we had reference here to a Supreme Court case referred to as the Container Case. Are you familiar with that case? A. Yes, sir. 106a Richard Thompson, Direct Q. And when did you first become familiar with it? A. The first notice I had of it was when I read in either the U. S. Law Week or the C. C. H. Trade Regula- tions Service—and I don’t recall which one, because we subscribed to both of them. I read the report of the case in the district court in North Carolina, I believe it was. Q. And then did you follow it through the courts? A. I followed it from then on through the Supreme Court. Q. And then it went to the Supreme Court and a decision was rendered; is that correct? A. Yes, sir. [11,539] Q. When did you learn about the Supreme Court de- cision? A. Well, the decision was rendered, I think, on Janu- ary 14, 1969, and I read it January 15th in the Wall Street Journal. About a week later I got a copy of the opinion through our regular services. Q. You subscribed to an antitrust service which re- ports cases? A. Oh, yes. We had Practicing Law Institute, BNA, and CCH. Q. The “CCH,” that’s the... A. Commerce Clearing House Trade Regulations Ser- vice. Q. And they report... [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1810%3A1. Public record. Not legal advice.