# Petition — United States Gypsum Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0399%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 444 U.S. 884 ## Text Supreme Court, U. q- EILED JUN 27 jo79 IN THE MICHAEL RODAK, JR. , CLERK Supreme Court of the United States ~~ October Term, 1978 No. 78- UNITED STATES GYPSUM COMPANY, NATIONAL GYPSUM COMPANY, GEORGIA-PACIFIC CORPORATION, THE CELOTEX CORPORATION, Petitioners, v. UNITED STATES OF AMERICA. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT. H. Francis DELONE, STEPHEN A. STACK, JR., Mark A. KLUGHEIT, JONATHAN C. Levin, Decuert Price & RHOADS, Ropert C. Keck, James G. HIierinc, MicuHaet R. FLAHERTY, Weston W. HANscom, Keck, MAHIN & CATE, $300 Sears Tower, Chicago, IL 60606 Counsel for United States Gypsum Company. Cioyp R. MELLOTT, WrturaM B. MALLIN, J. Gary Kosrnsk1, D. RicuHarp Funk, ECKERT, SEAMANS, CHERIN & MELLOTT, 600 Grant Street, Pittsburgh, PA 15219 Counsel for Georgia-Pacific Corporation. 3400 Centre Square West, 1500 Market Street, Philadelphia, PA 19102 Counsel for National Gypsum Company. W. DonaLp McSwEENEey, WrtuiAM A. MontTGOMERY, RicHarp J. Hoskins, A. Eric ARNOLD, ScuirF Harpin & WAITE, 7200 Sears Tower, Chicago, IL 60606 Counsel for The Celotex Corporation. International Printing Co., 711 So. 50th St., Phila., Pa. 19143 — Tel. (215) 727-8711 2 2 ee ee CL e bbe SNES. dsdncasincsnesaes 2 3 4 7 Reasons FoR GRANTING THE WRIT ...........ccccccccccccs I. By Not Requiring Proof of Anticompetitive Effect or Purpose in the Statute of Limitations Period, the Court of Appeals Emasculated This Court’s Decision on Prior Review of This Case ................... 8 II. By Shifting to Petitioners the Burden of Persuasion on Their Withdrawal From the Conspiracy Charged, the Court of Appeals Violated Petitioners’ Right to ie kG neha pa wcews bp dis 66 4608's 14 III. The Court of Appeals’ Decision in This Case Violates the Due Process and Double Jeopardy Protection Afforded by This Court’s Decision in Burks v. United ENED CaU EL pana Vo te Wakes 4p 0.0s we'd wee cae ee 17 A. The Failure of Proof of Each of the Specified Ob- jectives in the Conspiracy Indictment ......... 18 B. The Failure of Proof of a Conspiracy Substan- tially as Charged in the Indictment .......... 20 SE Bhat. BE eSUG NE bids 4hic4 04 sea wanes es 24 APPENDICES: Appenpix A—Court of Appeals Opinion Dated May 29, 1979, as Amended June 14, 1979 ................. Al Appendix B—Written Question Distributed by ihe Court of Appeals at Oral Argument .................... Al3 AppenpIx C—District Court Memorandum Opinion and Order Dated September 7, 1978 .................. Al5 Aprenpix D—Supreme Court Opinion Dated June 29, a Seine haG on AR SW kate bo adds bina W'i nt pee 0% Al9 AppenDIx E—Court of Appeals Opinion Dated January 12, 1977, as Amended January 20, 1977 ........... A76 ED A134 TABLE OF CITATIONS. Cases: Page Anderson v. United States, 417 U. S. 211 (1974) .........-- 14 Burks v. United States, 437 U. S. 1 (1978) ...5, 8, 17, 18, 20, 23, 24 Ex Parte Bain, 121 U.S. 1 (1887) ..........ccceeeeeeeees 19 Heisler v. United States, 394 F. 2d 962 (9th Cir.), cert. denied, 393 U. S. 986 (1968) .......... cece eee e eens 19 In re Winship, 397 U. S. 358 (1970) .......... ee ee ween 14 Kotteakos v. United States, 328 U. S. 750 (1946) ........ 20, 21, 22 Mullaney v. Wilbur, 421 U. S. 684 (1975) ............05: 14, 16 Nishikawa v. Dulles, 356 U. S. 129 (1958) .............05- 16 Russell v. United States, 369 U. S. 749 (1962) ............. 19 Sanabria v. United States, 437 U. S. 54 (1978) ............ 19, 22 Sandstrom v. Montana, Dkt. No. 78-5384, — U. S. —, 47 U. S. L. W. 4719 (U.S. June 18, 1979) ............eeeeeees 14, 16 United States v. Bowline, 593 F. 2d 944 (10th Cir. 1979) ... 21 United States v. Bertoletti, 529 F. 2d 149 (2d Cir. 1975) .... 23° United States v. Container Corp., 393 U. S. 333 (1969) ..... 10, 11, 12, 15 United States v. Goldstein, 502 F. 2d 526 (3d Cir. 1974) .... 23 United States v. Morado, 454 F. 2d 167 (5th Cir. 1972) .... 23 United States v. Socony-Vacuum Oil Co., 310 U. S. 150 (1940) 7 United States v. Sperling, 506 F. 2d 1323 (2d Cir. 1974) .... 28 United States v. United States Gypsum Co., 438 U. S. 422 CRED inv cbs VecOn pad SENK OARS pA UNAGtehss exkas bes passim United States v. United States Gypsum Co., 404 F. Supp. 619 CE GR C. TRTB) sin sce saccsise ssecmensscsseceesiees 8 Miscellaneous: ALI, Model Penal Code, § 2.07(1) (Prop. Off. Draft 1962) .. ) Sherman Act, Section 1, 26 Stat. 209, as amended, 15 U. S. C. OS a peyiaves deers (ig cavecereiteevecestacbbedessdes 2,3,4 Perkins on Criminal Law (2d ed. 1969) ............... are 9 Ae ee ee, OD acc kde ha rRr easas HS LqbaN cee yene ke 2 4 CCH Trade Reg. Rep. {| 45,073-45,079 ..............000. 21 883 BNA Antitrust & Trade Reg. Rep. at p. A-17 (10/5/78) 14 894 BNA Antitrust & Trade Reg. Rep. at p. A-5 (12/21/78) 14 IN THE Supreme Court of the United States OcToBER TERM, 1978 No. 78- UNITED STATES GYPSUM COMPANY, NATIONAL GYPSUM COMPANY, GEORGIA-PACIFIC CORPORATION, THE CELOTEX CORPORATION, Petitioners, v. UNITED STATES OF AMERICA. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT. Petitioners, United States Gypsum Company (“USG”), National Gypsum Company (“National”), Georgia-Pacific Corporation (“G-P”) and The Celotex Corporation (“Celo- tex”), jointly pray that a writ of certiorari issue to review the judgment and opinion of the United States Court of Appeals for the Third Circuit entered in these proceedings on May 29, 1979. 2 Petition for a Writ of Certiorari OPINIONS BELOW. The opinion of the Court of Appeals, not yet reported, is set forth in Appendix A to this Petition. The unreported opinion of the United States District Court for the Western District of Pennsylvania is set forth in Appendix C to this Petition. This Court’s opinion on prior review of this case is reported at 438 U. S. 422 (1978), and is set forth in Appendix D to this Petition. The opinion of the Court of Appeals in the prior appeal of this case is reported at 550 F. 2d 115 (3d Cir. 1977) and is set forth in Appendix E. JURISDICTION. The judgment of the Court of Appeals for the Third Circuit was entered on May 29, 1979. This Petition is filed within 30 days of that date. This Court's jurisdiction is invoked under 28 U. S. C. § 1254 (1). QUESTIONS PRESENTED. 1. Whether, in a prosecution for violation of § 1 of the Sherman Act, the government can meet its burden to prove criminal intent without proof of either anticom- petitive effects or purpose within the statute of limitations period. Petition for a Writ of Certiorari 3 2. Whether, after a criminal defendant has introduced substantial, unrebutted evidence of withdrawal from a conspiracy prior to the statute of limitations period, his Fifth Amendment right to due process of law is violated by requiring him to carry the burden of persuasion on the withdrawal issue. 3. Whether a criminal defendant's constitutional pro- tection against double jeopardy would be violated by a retrial after the prosecution has failed to prove (a) one or more of the distinct objectives of the conspiracy charged in the indictment, or (b) a conspiracy substantially in con- ‘ formity with that charged in the indictment. CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED. The Fifth Amendment of the United States Constitu- tion provides in relevant part: “[No person shall] be subject for the same offense to be twice put in jeopardy of life or limb . . . nor be deprived of life, liberty or property, without due process of law... .” Section 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1, provides in relevant part: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or com- merce among the several States, or with foreign na- tions, is hereby declared to be illegal... .” 4 Petition for a Writ of Certiorari STATEMENT OF THE CASE. This case is before this Court for the second time. Petitioners were indicted on December 27, 1973 for al- legedly participating in a conspiracy to violate Section 1 of the Sherman Act. The indictment contained only one count, which charged the defendants with engaging, from 1960 to 1973, in a single nationwide anticompetitive agree- ment having three distinct objective to fix the prices of gypsum board, to fix the terms and conditions of its sale, and to adopt uniform methods of packaging and handling. The expansive nature of the charge brought about the wholesale admission of evidence at a lengthy trial, but produced no direct proof of any agreement among the defendants, either on prices, terms or conditions of sale, or methods of packaging and handling, or otherwise. The prosecution’s case was entirely circumstantial and frag- mented, consisting, as Judge Hunter stated in the court of appeals, of “masses of evidence concerning a multitude of seemingly unrelated events,” most of which “dealt with actions prior to the start of the applicable limitations period.” (A99, 550 F. 2d at 127) Although the jury found petitioners guilty, the court of appeals reversed their convictions. This Court affirmed that reversal, holding, in a majority opinion by the Chief Justice, that the trial judge had erred in instructing the jury on the issues of criminal intent and withdrawal from a conspiracy and also by having a private meeting with the jury foreman in which he imparted additional instructions on the deadlocked jury’s duty to reach a verdict. United States v. United States Gypsum Co., 438 U. S. 422 (1978) (App. D., pp. Al9 et seq.) (“Gypsum”). This Court ordered the proper instructions must be given “/i/f a new trial takes place.” (A62, 438 U. S. at 465, emphasis added ) Petition for a Writ of Certiorari 5 On remand, petitioners moved for judgments of ac- quittal on the grounds that the prosecution had failed to prove the elements of a § 1 Sherman Act criminal violation under the standards announced by this Court in its opinion in this case. Petitioners pointed out that a second trial for the same offense which the government had once failed to prove would violate their protection against double jeopardy under Burks v. United States, 437 U.S. 1 (1978). The district court denied the motion, and the court of appeals affirmed. In finding the evidence sufficient to warrant a retrial, the court of appeals disclaimed any reliance on the standard of criminal intent discussed at length in this Court’s earlier decision. That standard allowed a finding of criminal intent to be based upon proof that the de- fendants’ conduct produced anticompetitive effects and that it was undertaken with knowledge that such effects would probably occur (A39, 438 U. S. at 444). The court below noted that the prosecution “presented no expert testimony at trial to establish anticompetitive effects.” (A10, fn. 4). This fact, coupled no doubt with the “sub- stantial” record evidence of vigorous price competition during the relevant time period (A25, 438 U.S. at 430-31), led the court of appeals to conclude that “the Government appears virtually to have abandoned any contention of [having proven] anticompetitive effects... .” (A10, fn. 4). Having found inapplicable for lack of evidence the principal criminal intent standard discussed in this Court's prior opinion, the court of appeals purported to apply a footnote in the Chief Justice’s opinion suggesting a second, 1. Although petitioners had argued that the trial evidence was insufficient, neither the court of appeals nor this Court addressed that issue on the first appeal. Decision of this issue did not appear to be required, however, prior to this Court’s decision in Burks, which was handed down just two weeks before its decision in Gypsum. 6 Petition for a Writ of Certiorari stricter standard requiring proof of “conduct undertaken with the purpose of producing anticompetitive effects. . . .” (A40, 438 U. S. at 444-45 n. 21) Although the court of appeals found sufficient evidence of criminal intent based exn this stricter standard, it ignored the fact that there was no evidence of the existence of such intent during the statute of limitations period. The court relegated to a simplistic footnote the issue of criminal intent. That foot- note did not refer to any proof of anticompetitive purpose in the statutury period. The apparent rationale of the Third Circuit’s opinion was that any proof of price verification after December 27, 1968, the beginning of the statutory period, was sufficient to prove the existence at that time of the charged con- spiracy to fix prices, even though the small number of verification contacts in that period had no stabilizing effect on prices. (A7) But uncontradicted evidence showed that in the statutory period a severe price war was being waged and verification had dwindled to a few incidents, none among the three largest producers. The court made no effort to analyze those verification contacts in the light of these uncontradicted facts. Moreover, the court of appeals disregarded the evidence of lawful intent in the form of direct testimony on that issue. Petition for a Writ of Certiorari 7 REASONS FOR GRANTING THE WRIT. In its prior review of this case, this Court sought to correct a long-standing judicial failure to apply well- recognized criminal law standards to Sherman Act prose- cutions. (A33-34, 422 U. S. at 438-39) It required that the prosecution prove criminal intent as a necessary element in Sherman Act prosecutions, thus aligning the legal elements of antitrust offenses with those of other criminal offenses. But, as demonstrated by the decision below, this Court’s clarification of the elements of the offense will have little practical effect unless the Court also directs its attention to the standards of proof used in criminal anti- trust cases. In Gypsum, this Court expressed concern about the danger of overdeterrence in the antitrust context in those factual settings where “the conduct proscribed is difficult to distinguish from conduct permitted and indeed en- couraged.” (A36-38, 438 U. S. at 441-43 & fns. 16-17) But overdeterrence is at least as much a function of applied standards of proof as it is of declared elements of the crime. A person attempting to comply with the antitrust laws must be as concerned about whether evidence of his conduct raises a jury issue as he is about how that jury will be instructed. This Court’s earlier determination that intent is an essential element of a Sherman Act crime will become a dead letter if the court of appeals’ failure to apply that element properly is allowed to stand. It has been almost forty years since this Court last considered standards of proof in a criminal price-fixing case. See United States v. Socony-Vacuum Oil Co., 310 U. S. 150 (1940). Since that time the penalties have increased dramatically from a misdemeanor to a felony, from a maximum fine of $5,000 to $1,000,000, and from a maximum jail sentence of one year to a term of three 8 Petition for a Writ of Certiorari years. Thus, the penalty for unjustified convictions is now far more severe, and, as this Court observed, the danger of overdeterrence is far greater. (A38, 438 U. S. at 442 fn. 18) Equally important is the fact that, as a result of this Court’s recent decision in Burks v. United States, 437 U. S. 1 (1978), a criminal defendant’s con- stitutional protection against double jeopardy now depends on application of the proper standards of proof. The im- portance of this protection is particularly acute in an anti- trust case like this one, where the initial trial lasted almost five months at great expense and burden to the parties and to the court system.” For these reasons, this petition presents questions at least as important as those which led the Court to grant the earlier writ of certiorari in this case. I. By Not Requiring Proof of Anticompetitive Effect or Purpose in the Statute of Limitations Period, the Court of Appeals Emasculated This Court's Decision on Prior Review of This Case. The court of appeals held that the prosecution had failed to satisfy its burden of proving the “less elevated standard of criminal intent set out in this Court's earlier opinion in this case. The present appeal thus puts before this Court the shadowy dimensions of the “elevated stand- ard” of criminal intent which were suggested, but not dis- cussed, in the Court’s previous opinion. The latter stand- ard required the prosecution to prove a distinct purpose to produce anticompetitive effects. (A40, 438 U. S. 2. In a related case, Judge Parker held that a second trial of the charges in this case would involve such length, ae ex- pense and voluminous evidence as to violate due process of law. He therefore dismissed, on that ground and double jeopardy grounds, a criminal —, petition filed by the government which sought such a second trial on the heels of the Pittsburgh trial. United States v. United States Gypsum Co., 404 F. Supp. 619, 624 & fn. 15 (D. D. C. 1975). Petition for a Writ of Certiorari 9 at 444-45 fn. 21) In finding sufficient evidence of this “elevated standard,” the court below gave no consideration to the necessity for proof of criminal intent existing in the statute of limitations period. In fact, there was no evi- dence of any such criminal intent or the part of any de- fendant within that period. To prevent emasculation of its earlier decision in this case, this Court should grant certiorari to consider the standard of proof of criminal intent which must be met in this and other Sherman Act cases. The Court of Appeals treated the statute of limitations as irrelevant to the intent issue. (A10,fn.4) It relied on testimony of a former employee of petitioner USG who had left the company’s employ many years before the commencement of the statute of limitations period, upon the testimony of employees of petitioners who did not engage in the challenged conduct during the period of the statute of limitations,* and upon the testimony of an employee of another petitioner who stated, as did the others, that his purpose was to comply with the Robinson- Patman Act. Whue relying on this non-probative evidence, the court at the same time ignored the relevant evidence ap- plicable to defendants’ conduct within the period of the statute of limitations, which evidence overwhelmingly demonstrated the absence of criminal intent. Petitioner USG ceased verifying with its gypsum competitors prior 3. Since a corporation may not be guilty of criminal intent ex- cept oo the actual intent of one of its high corporate officials, ALI, Model Penal Code, § 2.07(1) (Prop. Off. Draft 1962); Perkins on Criminal Law, 639-43 (2d ed. 1969), it necessarily follows that the mental state of corporate agents at an earlier point in time can- not be imputed to the corporate petitioners where those agents are no longer engaged in the activity in question. 10 Petition for a Writ of Certiorari to the commencement of the statutory period.‘ National Gypsum directed its employees to cease such verification upon the announcement of this Court’s decision in United States v. Container Corp., 393 U. S. 333 (1969). The evidence shows that, with minor unauthorized excep- 4. The court referred to the prosecution’s contention that cer- tain testimony by Rhine Simpson of Republic Gypsum “indicates” verification by USG in the statutory period. (A7, fn. 3) The testi- mony, viewed in context, does not support that interpretation: “Q. Now, when you were in session at a Gypsum Asso- ciation meeting with the secretary present and the lawyer present, was there ever an open discussion of an exchange of prices? “A. OK. The only thing I remember is the Association counsel talking about some court cases on exchange of price information and his report to the membership. “Q. Was this at or about the time that Mr. Watt said he wasn't going to exchange with you any more? “A. It was in the latter time that I was in the Association. I got out in the fall of "70. It would have been in the ’69-'70 period.” (Tr. 2464-65). The reference to the “’69 to "70 period”-clearly referred to the date of the Association meeting, not the date when Watt advised Simpson that he had ceased verification. Even if Simpson's answer is tortuously interpreted to refer to a date when Watt advised him that he had ceased verification, any statement that USG was no longer verifying does not establish when the practice stopped. It woul as easily have been several years earlier. . Moreover, this testimony is not inconsistent with Simpson’s earlier express testi- mony that USG, including Watt, stopped verification before Simp- son's subordinate, Montgomery, began verifying for Republic in 1967. (Tr. 2423, 1966, 2416) Montgomery, also a prosecution witness, supported Simpson’s recollection by stating that although he took over verifying “possibly as early as ’67” (Tr. 6288-90), [ never verified with anyone from USG. (Tr. 6314) Furthermore, a wealth of other uncontradicted, unimpeached testimony shows that USG stopped all verification on gypsum products in the late sprin of 1968, months before the commencement of the statutory period. ( Tr. 8170-71; 8162-63; 8479-80; 12,686-88) The only possible basis for the court of appeals’ conclusion is that the jury could have ignored all evidence favorable to USG and that USG had the burden of proving its innocence. Petition for a Writ of Certiorari 11 tions,’ these directions were adhered to by the companies’ employees. Such conduct is vital evidence of the absence of wrongful intent. Celotex, based upon the considered professional ad- vice of its lawyer as to the scope of the Container decision and the requirements of the Robinson-Patman Act, con- tinued to verify, on a limited and infrequent basis, in the statute of limitations period. The Celotex witnesses who did so uniformly testified that their purpose was to avoid the discrimination forbidden by the Robinson-Patman Act. (Tr. 7473, 7486, 11,528-42, 11,703-13) Similarly, in the statutory period the limited verification * in which Georgia- Pacific participated was carefully designed, with the as- sistance of legal counsel, to comply with both the Sherman and Robinson-Patman Acts. (Tr. 5258, 5273) Thus, the evidence explaining the actions of these two defendents likewise shows a law-abiding purpose rather than anti- competitive motive. In this Court’s prior review of this case, it observed that petitioners’ acts of price verification were “difficult to 5. The evidence shows that Webster, a National employee, made only “four, five or six” (Tr. 6394) unauthorized verification contacts with Flintkote in late 1969. Webster testified that he made these contacts on his own after having been instructed not to verify and that he ceased upon being told “verbally and in writing” to stop as soon as his superior found out about it. The court errone- ously asserted that Atwell of National also verified in the statutory eriod. The evidence shows only that Atwell stopped verifying no fbr than this Court’s decision, 18 days after the opening of the statutory period, in United States ». Container Corp., 393 U. S. 333 (Jan. 14, 1969), and there was no evidence that Atwell verified during that 18-day interval. A single document from Celotex’ files arguably suggests one unauthorized response by an unidentified USG credit employee to an inquiry on the creditworthiness and existence of special terms to a single account. 6. GP’s Burch testified to “10, maybe, or 12” verification con- tacts over a 32-month period, none of which were with USG or National, the two largest competitors in the industry, and in very few of which Burch provided any information (Tr. 5336, 6320). 12 Petition for a Writ of Certiorari distinguish from the gray zone of socially acceptable and economically justifiable business conduct,” the legality of which can only be determined by considering the sur- rounding circumstances. (A36, 438 U. S. at 441 & fn. 16) ad the court of appeals followed this direction, it could only have concluded that the evidence of verification in the statutory period would not support any finding of anti- competitive purpose. The unrebutted evidence with respect to the statu- tory period showed vigorous price competition, coupled with the shrinkage of price verification activity to a few insignificant contacts proving, if anything, the complete absence of the requisite criminal intent throughout that period. With respect to the insignificance of verification in the statutory period, the record which the court of appeals ignored showed unequivocally: (1) entirely disparate conduct among each of the four defendants with regard to verification; (2) no verification at all by USG, the largest pro- ducer; (3) virtually non-existent and completely unauthor- ized verification by National, the second largest producer; (4) extremely rare verification attempts involving one G-P employee acting on advice of counsel; (5) no verification contacts among USG, National and G-P, the three largest producers; and (6) infrequent verification by Celotex with certain producers based on the advice of its counsel as to the scope of Container and the requirements of the Robinson-Patman Act. By the commencement of the statutory period an intervening price war had completely changed the market context of these sporadic contacts. As noted by this Court, Petition for a Writ of Certiorari 13 petitioners introduced “substantial evidence” of “vigorous price competition” beginning prior to and continuing throughout the entire statute of limitations period. (A25, 438 U. S. at 430-31) This evidence consisted of con- temporaneous marketing reports describing increased com- petitive discounting and declining prices beginning in 1967, continuing into 1968, the year prior to the beginning of the statutory period, and intensifying to “chaotic” pro- portions throughout the entire statutory period. The con- temporaneous evidence was reinforced by detailed eco- nomic studies showing, through the entire statutory period, extreme disparity among defendants in actual prices and discounts, constant changes in market share, frequent moves by customers to change suppliers, frequent changes in published list prices and widely varying marketing and distribution techniques among the defendants. Based upon a review of this economic evidence, a distinguished economic expert called by the petitioners concluded that the gypsum board market was, during the relevant period, characterized by “rampant price competition” completely inconsistent with any criminal conspiracy. This intervening price war severed any factual or pre- sumptive connection between pre-statutory events and those in the statutory period, and it particularly precluded any inference of a criminal intent in the statutory period. If the purpose of verification within the statutory period had been to fix prices, verification would have intensified after 1968 when prices declined and unstable pricing pre- vailed. But the reverse happened. Where, as here, verifi- cation dwindles to a few insignificant contacts during a price war and the few witnesses who have any verification contacts during the limitations period testify that their conduct was guided by the advice of counsel and their purpose was to comply with the Robinson-Patman Act, the factual circumstances, even when viewed most favorably 14 Petition for a Writ of Certiorari to the prosecution, simply do not permit the conclusion of an anticompetitive purpose underlying the verification activity. The court of appeals’ decision in this case thus violated the mandate of this Court’s prior opinion in Gypsum and the Court's general admonition to “scrutinize the record for evidence of . . . intent with special care in a conspiracy case” to avoid “ ‘piling inference upon infer- ence... ..” Anderson v. United States, 417 U. S. 211, 224 (1974). . The government has repeatedly indicated its belief that this Court’s prior decision in this case will have no practical effect.’ The court of appeals’ failure properly to apply that decision to the facts in this case unfortunately bears out that prediction. This Court should act promptly, by granting certiorari in this case, to instruct the lower courts that it meant what it said in Gypsum. II. By Shifting to Petitioners the Burden of Persuasion on Their Withdrawal From the Conspiracy Charged, the Court of Appeals Violated Petitioners’ Right to Due Process of Law. Due process requires the prosecution in a criminal case to prove beyond a reasonable doubt every fact nec- essary to constitute the crime with which the accused is charged. In re Winship, 397 U. S. 358, 364 (1970). This means, as explained in Mullaney v. Wilbur, 421 U. S. 684, 701-702 (1975) and reiterated just this term in Sandstrom v. Montana, Dkt. No. 78-5384, — U. S. —, 47 U. S. L. W. 4719, 4723 (U. S. June 18, 1979), that the prosecution bears the burden of persuasion beyond a reasonable doubt on every critical element of the offense, even where the matter relates to an “affirmative” defense as to which the defendant may bear an initial burden to 7. See, e.g., 894 BNA Antitrust & Trade Reg. Rep. at p. A-5 (12/21/78); 883 BNA Antitrust & Trade Reg. Rep. at p. A-17 (10/5/78). Petition for a Writ of Certiorari 15 produce some evidence. The teaching of these cases was ignored by the court of appeals in this case. In so doing, the court further undercut the holding in Gypsum that the prosecution has the burden to prove criminal intent in a case such as this. The court below paid lip service to the principle that the prosecution has the initial burden to prove the con- tinuation of the charged conspiracy into the statute of limitations period. But the court of appeals failed to recognize that, because of defendants’ “substantial” evi- dence of “vigorous price competition” prior to and through- out the statutory period (A25, 438 U. S. at 430), the gov- ernment became obligated to prove, beyond a reasonable doubt, that petitioners had not withdrawn from the charged conspiracy prior to the beginning of that period. In its discussion of withdrawal the court below placed the burden squarely on the defendants to prove that they | abandoned any anticompetitive conspiracy prior to the statute of limitations period. (A8) Shifting the burden of persuasion in this fashion enabled the court to overlook the prosecution’s failure to introduce any evidence negat- ing withdrawal and to allow the government to rely solely on purported “short-comings” in this evidence which might have permitted the jury to reject it.* Obviously, neither the attempt to discredit petitioners’ evidence nor a “contention” unsupported by evidence suffices to meet 8. The court of appeals also shrugged off defendants’ evidence of withdrawal by citing United States v. Container Corp., 393 U. S. 333 (1969) for the ree Aaa proposition that “[t]he continuation of some price competition is not fatal to the Government's case.” (A8) But Container was a civil case as to which a different stand- ard of proof applies. See United States v. United States Gypsum Co., supra, 438 U. S. at 446-47 fn. 22. (A42-43 fn. 22) And petitioners do not urge that they proved abandonment “as a matter of law,” but rather that the prosecution had the burden of proof on that issue once the petitioners’ substantial evidence relating to the point had been introduced. 16 Petition for a Writ of Certiorari an affirmative burden of proof. Cf. Nishikawa v. Dulles, 356 U. S. 129, 136-38 (1958). The court of appeals’ error had enormous practical consequences, as exemplified by its treatment of petitioner USG, the largest competitor in the industry. Finding no evidence of any conduct in furtherance of the alleged criminal conspiracy by USG in the statute of limitations period,’ it nevertheless ordered a retrial of USG on the basis that the jury was entitled to disbelieve the testimony of USG witnesses that they had ceased verifying prior to the start of the statutory period. (A7,fn.3) This errone- ous shifting of the burden of persuasion had a serious impact on all defendants, in light of the government's own concession in this Court that “the success of any price-fixing venture depended on the participation of all respondents; if any major producer had withdrawn, price maintenance would have been impossible.” Brief for the United States, Docket No. 76-1560, p. 99. In other words, no USG, no conspiracy. All defendants introduced overwhelming and uncon- troverted evidence negating their participation in any criminal conspiracy in the statutory period, in the form of substantial evidence of intense price competition and proof that-the purpose of any interseller price verification was to comply with, not to violate, the law. This evidence should be viewed in the context of the virtual disappearance of such verification among defendants—the very practice which the government relied upon to prove the existence of a criminal conspiracy in the pre-statutory period. In this factual setting, maintenance of the integrity of this Court’s decisions in Gypsum, Mullaney and Sand- strom requires certiorari review. Moreover, the question 9. The Court’s plain misreading of Simpson's testimony re- garding USG’s cessation of verification is discussed at p. 10, above. Petition for a Writ of Certiorari 17 of which party bears the burden of persuasion on the issue of withdrawal from a criminal conspiracy raises a funda- mental and persistent constitutional issue. This Court should therefore review and redress the court of appeals’ -violation of petitioners’ due process rights in imposing that burden on the defendants. III. The Court of Appeals’ Decision in This Case Violates the Due Process and Double Jeopardy Protection Afforded by This Court’s Decision in Burks v. United States. The indictment returned by the grand jury in this case charged the defendants with engaging in a single, unitary, nationwide conspiracy, beginning in approximately 1960 and continuing until 1973, with three specifically desig- nated objectives—to: “(a) raise, fix, maintain and stabilize the prices of gypsum board; (b) fix, maintain and stabilize the terms and conditions of sale thereof; and (c) adopt and maintain uniform methods of packaging and handling such gypsum board.” (Indictment, § 11, A138). The indictment further listed 13 specific types of activity allegedly used by the defendants to further the conspiracy, and four effects allegedly ensuing from it. Notwithstanding its decision adverse to petitioners, the court of appeals was obviously troubled about whether the prosecution's trial evidence was insufficient and about the consequence of a prosecutorial failure to show the existence of the broad conspiracy charged.'” Yet the court 10. At oral argument, the court submitted a written question asking counsel for both sides about the pe gr consequences of the prosecution’s failure to prove the entirety of the conspiracy charged in the indictment. (A13) Specifically, the question suggested the 18 Petition for a Writ of Certiorari of appeals failed to address the fundamental constitutional question: how does Burks affect the disposition of con- spiracy cases where the proofs adduced at trial fall sub- stantially short of the offense charged in the indictment? A. The Failure of Proof of Each of the Specified Ob- jectives in the Conspiracy Indictment. The court of appeals apparently recognized the fact that the prosecution failed to prove two of the three dis- tinct objectives of the conspiracy charged in the indict- ment.” However, the court circumvented the duty im- posed upon it by Burks to ascertain the sufficiency of the evidence to prove the crime charged by simply rewriting the indictment. In a retrospective effort to conform the indictment to what the court described as “the govern- ment’s theory” of the case, the court arbitrarily determined “that the second and third objectives—to fix, maintain and stabilize the terms and conditions of sale and to adopt and maintain uniform methods of packaging and handling of gypsum products—are integral parts of the first.” (AQ) 10. (Cont’d.) court’s concern with the possibilities (1) that the evidence had failed to show a conspiracy for all purposes charged in the indict- ment and (2) that the evidence did. not demonstrate “a conspiracy of the full magnitude and scope charged in the indictment.” 11. (A8-9). The only evidence discussed in the court of ap- peals’ opinion relates to the first objective (price fixing), and even that evidence relates only to the verification and _ stabilization aspects of that charge. 12. By “the government’s theory” of the indictment, the court of —< presumably meant the government's most recent assertions of what this case was about, as found in its statements at oral argu- ment and in its brief in the court below. It might be noted, how- ever, that “the government’s theory” of this case has changed re- peatedly. At trial the prosecution argued that this was a straight price fixing case (Tr. 8027-29) and that “[t]here are no charges in the indictment that defendant corporations . . . agreed upon market Petition for a Writ of Certiorari 19 This expedient is supported by neither logic nor legal authority, and is tantamount to a court’s amendment of an indictment, which this Court has condemned in similar circumstances. Ex parte Bain, 121 U. S. 1 (1887).”* Here the three distinct objectives are the essence of the conspiracy as alleged in the indictment. Without them the conspiracy is totally undefined. The independent nature of these objectives is attested to by the fact that the indictment specifically designated them as separate ob- jectives. It is not proper, given this distinct enumeration of the conspiracy’s objectives, for a court to “make a subse- quent guess as to what was in the minds of the grand jury at the time that they returned the indictment.” Russell v. United States, 369 U. S. 749, 770 (1962).”* 12. (Cont'd. ) shares”. (Tr. 12,125) In the court of appeals the prosecution argued, in contradiction to its position at trial that petitioners con- ired “so that each manufacturer could retain his own percentage of the market”. (Arg. Tr. 1114-15) In this Court, the prosecution argued that there was a single verification conspiracy with numer- ous subconspiracies (Brief for the United States, Dkt. no. 76-1560, pp. 10-35). The prosecution abandoned that position on remand and now argues that this was solely a price fixing case with no independent objectives of fixing credit terms or packaging and handling mathelle, (AQ) But in any event, it is an astonishing legal proposition that a defendant may be tried (or convicted) based on the government’s theory” of the charges rather than on the stated terms of an indictment or information. 13. See also, Heisler v. United States, 394 F. 2d 692, 695 (9th Cir.), cert. denied, 393 U. S. 986 (1968): “Ever since the decision [of this Court] in ex parte Bain, 1887, 121 U. S. 1. . . , it has been the rule that any substantial amendment to the body of an indictment renders the convic- tion void. The reason is that the defendant is not tried on the indictment of the grand jury, as is his constitutional right under the Fifth Amendment, but on a different charge, and there is no way of knowing whether the grand jury would have returned the amended indictment if given the opportunity. Therefore an indictment cannot be amended in any substantial way, even with the defendant's consent.” 14. Cf. this Court’s decision in Sanabria v. United States, 437 U. S. 54, 65-66 (1978): 20 Petition for a Writ of Certiorari B. The Failure of Proof of a Conspiracy Substantially as Charged in the Indictment. The substantial difference between the prosecution’s proof and the broad conspiracy charged in the indictment is clear from the court of appeals’ own recitation of the evidence. Although the government charged a nation- wide, 14-year conspiracy to accomplish three distinct anti- competitive objectives, the opinion below rests solely on evidence of insignificant episodes of price verification’ within the statute of limitations period. This Court has long recognized that where a criminal defendant is charged with participation in a broad con- spiracy, he can only be convicted if the proof shows his participation in a conspiracy of the scope charged, rather than his participation in one or more smaller sub-conspira- cies. Kotteakos v. United States, 328 U. S. 750 (1946). In the past, when confronted with broad conspiracy in- dictments and evidence showing only narrower conspira- torial involvement, courts have remanded such cases for trial on the smaller subconspiracies. But that procedure is no longer appropriate in light of this Court’s decision in Burks. In Burks, this Court held that where the evidence at a defendant’s earlier trial was insufficient to sustain the verdict, retrial is prohibited notwithstanding the fact that 14. (Cont'd. ) “In the Government’s view, the numbers theory was ‘dismissed’ from the case as effectively as if the Government had actually charged the crime in two counts and the District Court had dismissed the numbers count. The first ergy | this argument encounters is that the Government did not in fact charge this offense in two counts. Legal consequences ordinarily flow from what has actually happened, not from what a party might have done from the vantage of hindsight. . . [citation omitted]. The precise manner in which an indictment is drawn cannot be ignored... .’” Petition for a Writ of Certiorari 21 a defendant may also have sought a new trial on the basis of other errors. The rule is absolute. “The Double Jeopardy clause forbids a second trial for the purpose of affording the prosecution another opportunity to supply evidence which it failed to muster in the first proceeding.” 437 U. S. at 11. Applied to the Kotteakos situation of a conspiracy indictment substantially broader than the evi- dence actually proves, this prohibition on its face bars a retrial. See United States v. Bowline, 593 F. 2d 944, 950- 951 (10th Cir. 1979) (Holloway, J., dissenting ). Substantial policy considerations also support such a rule. The prosecution has enormous freedom in drafting indictments. The court of appeals’ holding encourages prosecutors to abuse this freedom by presenting indict- ments far broader than any set of facts which they can prove,” and to rely on their opportunity for repeated re- trials if their evidence cannot sustain such broad charges. Significant tactical advantages flow to the prosecution in obtaining extremely broad single-count indictments. Such indictments virtually preclude the defendants from excluding evidence on the basis that it is irrelevant to the charges brought. Should a defendant be convicted, the government then has the right to seek sentencing on the basis of the broad conspiracy to which the jury’s verdict of guilty has attached.’* Such overbroad indictments also allow the prosecution to shift its theories to fit the circum- stances—a tactic which the prosecution has embraced 15. Public sources show that the government frequently obtains indictments charging nationwide antitrust conspiracies covering time periods many years longer than the statute of limitations oor See 4 CCH Trade Reg. Rep. {{ 45,073-45,079. 16. Indeed, even a defendant who may not wish to contest the charges has the opportunity only to enter a plea of guilty or nolo contendere to the entirety of the conspiracy alleged by the govern- ment. 22 Petition for a Writ of Certiorari wholeheartedly in this case (see pp. 18-19, fn. 12, supra) and which this Court has condemned in the past.'’ Had the prosecution here elected to proceed by separate-count allegations of discrete conspiracies, its position at trial and on appeal would have been materially weaker. Many of its discrete conspiracy charges would have merited dis- missal by the trial court for lack of evidence, and the dis- missal of those charges would have precluded the jury’s consideration of evidence relevant only to the unproven conspiracy charges. This Court in Kotteakos warned emphatically against the danger of “transference of guilt from one to another across the line separating conspiracies,’ 328 U. S. at 774. In this case the danger of a spill-over of guilt from one disconnected episode to another is markedly greater than in Kotteakos. The conspiracy allegation here involved a myriad of unrelated episodes, over 160 claimed co-con- spirators, the events of 14 years, and a severe statute of 17. Cf. Sanabria v. United States, supra, 437 U. S. 5 at 73 & n. 32: “The Government having charged only a single gambling busi- ness, the discrete violations of state law which that business may have committed are not severable in order to avoid the Double Jeopardy Clause’s bar on retrials for the ‘same offense.’ Indeed, the Government’s argument that these are discrete bases of liability warranting co gy cranes following a final judgment of acquittal on one such ‘discrete basis’ is quite simi- lar to an unsuccessful argument that it presented in Braverman v. United States, 317 U. S. 49 (1942). A single gambling business theoretically may violate as many laws as a State has prohibitin gambling. and § 1955 specifies six means by which a defendant may illegally participate in such a business, i.e., by conducting, financing, managing, super- vising, directing, or owning it. If we were to accept the Government’s theory, each of these could be varied, one at a time, to charge a separate count on which a defendant could be prosecuted following acquittals on any of the others.” Petition for a Writ of Certiorari 23 limitations problem. That sprawling conspiracy charge allowed the prosecution to direct the jury’s attention al- most exclusively toward events predating the statute of limitations period which were essentially unrelated to any offense which the government might claim to have proven within the limitations period. The government should not be free to create with impunity such advantages for itself and such adverse con- sequences for defendants. Just as Burks forbids the prosecution two chances to adduce evidence sufficient to prove the charge, it must also forbid the prosecution's successive refinement of a broad charge to meet the evi- dence. Having chosen, in this case, to charge the de- fendants with a single sweeping conspiracy, the prosecu- tion must bear the consequences of that tactical decision." The consequence of its failure to prove substantially the offense charged must be the dismissal of that charge.” Unless this Court enforces Burks in such a situation, the courts (and defendants) will continue to be burdened with trials of needlessly broad indictments drafted by prosecutors who have nothing to lose if their proofs are inadequate. 18. See United States v. Bertolotti, 529 F. 2d 149, 151 (2d Cir. 1975), where the Second Circuit reversed a criminal conviction be- cause the government ignored its admonition in United States v. Sperling, 506 F. 2d 1323 (2d Cir. 1974) to “cease combining in an alleged single conspiracy, criminal acts loosely, if at all, connected.” The same admonition mandates dismissal of the Government's drag- net indictment in the present case. As the Court stated in United States v. Morado, 454 F. 2d 167, 170 (5th Cir. 1972), “[h}aving chosen to proceed to trial on the single conspiracy count alone, the Government may not negate its duty to prove the charge laid be- yond a reasonable doubt . . . .” 19. In United States v. Goldstein, 502 F. 2d 526, 531 (3d Cir. 1974), the court admonished: “[H]aving chosen to utilize the in- dictment process, fair dealing would require that the government assume the burden as well as the benefits.” 24 Petition for a Writ of Certiorari IV. Conclusion. The court of appeals’ failure to apply this Court's decision on prior review of this case has effectively nulli- fied that decision. That result will also subject petitioners to an entire replay of their five-month trial in violation of the constitutional protection against double jeopardy an- nounced in Burks. Accordingly, a writ of certiorari should issue for review of the judgment and opinion of the United States Court of Appeals for the Third Circuit. Respectfully submitted, Rosert C. Keck, James G. HIER1Nc, MicHaet R. FLAHERTY, Weston W. HANscoM, Keck, MAHIN & CATE, 8300 Sears Tower, Chicago, IL 60606 Counsel for United States Gypsum Company. C.Loyp R. MELLOoTT, WittuaM B. MALLIN, J. Gary Kosrnsk1, D. RicHarp Funk, Eckert, SEAMANS, CHERIN & MELLOTT, 600 Grant Street, Pittsburgh, PA 15219 Counsel for Georgia-Pacific Corporation. H. Francis DELOoNE, STEPHEN A. STACK, JR., Mark A. KLUGHEIT, JONATHAN C. LEviN, DecuertT Price & RHoaps, 3400 Centre Square West, 1500 Market Street, Philadelphia, PA 19102 Counsel for National Gypsum Company. W. Donatp McSwEENEeYy, WiLutiaM A. MONTGOMERY, Ricuarp J. Hoskins, A. Eric ARNOLD, ScuirF HarpIn & WaAITE, 7200 Sears Tower, Chicago, IL 60606 Counsel for The Celotex Corporation. APPENDIX A. UNITED STATES COURT OF APPEALS For THE THIRD CIRCUIT Nos. 78-2263/ 64/65/66 UNITED STATES OF AMERICA Appellee, v. UNITED STATES GYPSUM COMPANY; NATIONAL GYPSUM COMPANY; GEORGIA PACIFIC COR- PORATION; KAISER GYPSUM COMPANY, INC.; THE CELOTEX CORPORATION; THE FLINT- KOTE COMPANY; GRAHAM J. MORGAN; AN- DREW J. WATT; COLON BROWN; J. P. NICELY; WILLIAM H. HUNT; CLAUDE E. HARPER; ROBERT A. COSTA; WILLIAM D. HERBERT; GEORGE J. PECARO; JAMES D. MORAN UNITED STATES GYPSUM COMPANY, (D. C. Criminal No. 73-00347-01 ) Appellant in No. 78-2263 NATIONAL GYPSUM COMPANY, (D. C. Criminal No. 73-00347-02 ) Appellant in No. 78-2264 GEORGIA-PACIFIC CORPORATION, (D. C. Criminal No. 73-00347-03 ) Appellant in No. 78-2265 THE CELOTEX CORPORATION, (D. C. Criminal No. 73-00347-05 ) Appellant in No. 78-2266 (Al) A2 Appendix A Appendix A A3 APPEAL FROM THE UNITED STATES DistRicT COURT Opinion of the Court FOR THE WESTERN DistTRICT OF PENNSYLVANIA Hunter, Circuit Judge: 1, The appellants, United States Gypsum Co. (USG), National Gypsum Co. (National), Georgia-Pacific Corp. (G-P), and The Celotex Corp. (Celotex), appeal from the denial of their consolidated motion for judgments of ac- Argued March 15, 1979 Before Apams, Hunter, WEIts, Circuit Judges (Opinion filed May 29, 1979) (As amended June 14, 1979) Rodney O. Thorson (Argued ) L. John Schmoll Peter A. Mullin Attorneys for Appellee H. Francis De Lone (Argued ) Stephen A. Stack, Jr. Mari M. Gursky Dechert Price & Rhoads Cloyd R. Mellott (Argued ) William B. Mallin J. Gary Kosinski D. Richard Funk Eckert, Seamans, Cherin & Mellott Robert C. Keck James G. Hiering Michael R. Flaherty Weston W. Hanscom Keck, Cushman, Mahin & Cate W. Donald McSweeney William A. Montgomery Richard J. Koskins Schiff, Hardin & Waite Attorneys for Appellants quittal on the ground of insufficiency of the evidence to support the convictions. They contend that the district court should have granted their motion and, on the author- ity of Burks v. United States, 437 U. S. 1 (1978), should have held that retrial was barred by the double jeopardy clause. Finding sufficient evidence, we affirm. 2. On December 27, 1973 appellants were indicted, along with two other companies and ten individuals not before us, for violating section 1 of the Sherman Act, 15 U. S. C. §1 (1976). They are alleged to have engaged in a nationwide conspiracy to fix the prices, the terms and conditions of sale, and the methods of handling gypsum board products. The Government charged that the con- spiracy began sometime prior to 1960 and continued until the indictment was returned. The indictment listed thir- teen means by which the conspiracy was allegedly ef- fected, the most pervasive of which was price verification. Appellants were convicted after a nineteen week trial, and appealed to this court. We reversed the appellants’ con- victions, though without ruling on the sufficiency of the evidence. 550 F. 2d 115 (3d Cir. 1977). The Government appealed to the United States Supreme Court, which af- firmed this court’s judgment. 46 U. S. L. W. 4937 (June 29, 1978). The case was remanded to the district court for a new trial. 3. On remand appellants moved for judgments of acquittal, contending that the evidence introduced at the A4 Appendix A first trial was insufficient to support the convictions. 7 motion was denied on September 7, 1978. Because appel- lants’ original conviction on the charges involved here a reversed on appeal, if the defendants are correct that the evidence tendered at the first trial is insufficient to support a conviction, retrial would subject them to double jeop- ardy. Burks v. United States, 437 U. S.1 (1978). ape sequently, they may appeal the denial of their motion : this juncture, under the “collateral order exception to t : final judgment rule. See Abney v. United States, 43 U. S. 651 (1977). 4. In reviewing the denial of a motion for judgment of acquittal on the ground of insufficiency of the se mg to support a conviction, we must sustain the verdict i there is substantial evidence, viewed in the light most fav- orable to the Government, to uphold the jury's decision. _ Both sides agree that we must test the sufficiency of the eibeuant using the = to established by the via ag ara in this case. The Supreme Court held that the jury had been = instructed in two major areas. First, on the element of intent | ; Court held that the instruction which allowed the jury in a cong a action under the Sherman Act to presume intent to fix prices = a stabilizing effect was improper. If the Government ies — competitive effects, then it must show at the least that the de “se “a ant’s actions were taken with knowledge that pre gp." powtk e = would occur. However, in the absence of proof of — _ competitive effects, the Government must prove that the efend- ant’s conduct was es hig hye oy of proteee re itive effects. 46 U. S. L. W. a n. 21. ; States ra Gillen, No. 78-2082 (3d. Cir., filed May 8, 1978) (Adams, gy Court held that the instruction on withdrawal bene the conspiracy was erroneous. The district court had charged the jury that to establish withdrawal, the defendant must either —— tively notify every other member of the conspiracy or —_ a = closure of the illegal scheme to law enforcement officials. “wi appellants argued that the resumption of intense competitive havior may be sufficient to establish withdrawal from the ov spiracy, but that the district court’s instruction precluded that de- fense. The Court agreed, holding that the taking of affirmative acts Appendix A A5 Burk v. United States, 437 U.S. 1, 17 (1978); Glasser v. United States, 315 U. S. 60, 80 (1942). Moreover, we are aware that “the character and effect of a conspiracy is not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole.” United States v. Patten, 226 U. S. 525, 544 (1913). I. 5. The appellants primarily contend that there was presented insufficient evidence of conspiracy in the statu- tory period to support the conviction, particularly given what they describe as intense price competition beginning immediately prior to the statutory period.2 We focus our attention on that argument. 6. The gist of the crime of conspiracy to violate the Sherman Act is the agreement itself. United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 252 (1940). No overt acts need be alleged or proved: “[I]t does not make the doing of any act other than the act of conspiring a condition of liability.” Nash v. United States, 229 U. S. 373, 378 (1913). To determine whether the conspiracy is a continuing one, we must look to the scope of the agree- ment allegedly entered into by the parties. Fiswick v. United States, 329 U. S. 211, 216 (1946). See Grunewald v. United States, 353 U. S. 391, 397 (1957). The Supreme Court in United States v. Kissel, 218 U. S. 601, 607 (1910), 1. (Cont’d.) inconsistent with the object of the conspiracy and communicated in a manner reasonably net whe Ton to reach the co-conspirators is suf- ficient to show withdrawal. 46 U. S. L. W. at 4948-49. In review- ing the sufficiency of the evidence, we will apply the standards as enunciated by the Supreme Court. 2. The statute of limitations in a criminal antitrust action is five years. 18 U. S. C. § 3282 (1976). Since the indictment was returned on December 27, 1973, the statutory period began on December 27, 1968. AG Appendix A . “ S defined a continuous conspiracy - - ~~ push i i t that wi bringing to pass a continuous resu : iliac the continuous cooperation of the agragcires . keep it up.” The conspiracy charged here, to ma high and stable prices, certainly fits that test. 7. The appellants would have us hold the >a ernment is limited in the proof of its case sole : ~ events which occurred during the statutory perio ; ve context of a continuing conspiracy, we do not be ieve . the Government is so limited. When the serie alleged to have been formed prior to the statutory pe . the issue becomes one of continuation. We agree asa the Second Circuit that “the Government must pee a ‘ evidence justifying the jury in finding beyond Puag en : doubt that the particular agreement into which a ; — ant entered continued into the period not barred by ere tion.” United States v. Borelli, 336 F. 2d 376, ( Cir. 1964), cert. denied, 379 U. S. 960 (1965). There is no requirement that the Government prove a new ate ment in the statutory period. United States v. Kissel, U. S. 601 (1910). Moreover, the “overt act of one part- ner may be the act of all without any new secon specifically directed to that act.” Id. at 607. See Uni : States v. Nowak, 448 F. 2d 134, 139 (7th Cir. 1971). This court discussed the utility of pre-statutory period evidence to prove a conspiracy in United States v. Johnson, 165 F. 2d 42 (3d Cir. 1947), cert. denied, 332 U. S. 852 (1948). There, the defendants were charged under 18 U.S. C. § 371 (1976) with conspiracy to obstruct the administration of justice. In finding sufficient evidence to support the con- viction we held: “Some of the acts necessarily occurred [prior to the statutory period], but these acts could be proved to show the existence and continuance of the con- spiracy even though there could have been no prosecution —_ Appendix A A7 for any substantive offense charged as an overt act.” Id. at 45. 8. Here, we find sufficient acts in furtherance of the conspiracy committed in the statutory period to justify a jury in concluding that the agreement continued therein. The Government’s proof of conspiracy rested heavily on the practice of price verification. The defendants’ own recitation of the facts reveals various incidents of price verification in the statutory period. See Appellants Brief at 34-41. The testimony discloses that Kenneth H. Atwell and Charles D. Webster, Vice President and Administra- tive Assistant respectively of National’s Sales Administra- tion, engaged in numerous verification contacts after December 27, 1968. These apparently involved both price and credit term verifications. Also, the management of G-P did not instruct its branch managers to discontinue verification until February, 1969. Certainly, the jury could infer that the conspiracy continued until that time. More- over, O. E. Burch, General Sales Manager of G-P, had humerous contacts with competitors between June 1969 and 1972. The testimony also discloses that Celotex con- tinued verifying until 1973. 9. Finally, the appellants attempt to show abandon- ment of the conspiracy by demonstrating that the gypsum board industry was experiencing intensive price competi- tion beginning in 1967. They argue that the resumed price 3. Because we have used the appellants’ version of the facts, our discussion of the incidents of cantiadiees in the statutory period has omitted any mention of USG. To support its contention that it had ceased verification in 1968, USG relies on testimony of Andrew J. Watt, Executive Vice-President of USG and Joseph L. Baldwin, Jr., Director of Marketin Policy of USG. The Government, on the other hand, points to evidence which could lead a jury to disbelieve the Watts-Baldwin testimony. It also cites us to testimony by Rhyne Simpson, Jr., President of Republic Gypsum, which indicates that verification by USG continued into the statutory period. A8 Appendix A competition proves as a matter of law that they had abandoned any anticompetitive conspiracy at least two years prior to the statutory period. The Supreme Court in United States v. Container Corp., 393 U.S. 333 (1969), pointed out, however, that “[t]he continuation of some price competition is not fatal to the Governments case. The limitation or reduction of price competition brings the case within the ban. . . .” Id. at 337, citing United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 224 & n. 59 (1940). Moreover, the Government contends that the stepped-up price competition did not commence until at least 1970. While not presenting expert testimony of its own, the Government pointed to shortcomings in the testi- mony of the defendants’ expert which would justify the jury in rejecting it. 10. Therefore, we find sufficient evidence from which the jury could have concluded that the conspiracy con- tinued into the statutory period. II. 11. The appellants argue that unless there is sufficient evidence within the statutory period on each of the three separately stated objectives and each of the thirteen specific means charged in the indictment, they are entitled to a judgment of acquittal. The indictment charges the defendants with conspiracy to a) raise, fix, maintain and stabilize the prices of gypsum board; b) fix, maintain, and stabilize the terms and conditions of sale thereof; and c) adopt and maintain uniform methods of packaging and handling such gypsum board. 12. First, the failure of the government to prove that the defendants engaged in each of the thirteen specific means is not fatal. In United States v, Adamo, 534 F, 2d 31, 38 (3d Cir.), cert. denied, 429 U. S, 841 (1976), we Appendix A AQ held that “the Government is under no obligation to prove every overt act alleged.” See Nash v. United States, 229 U. S. 373, 380 (1913) (in criminal antitrust actions, “not all the means alleged need be proved”). Nor is the Gov- ernment limited in its proof to these overt acts alleged in the indictment. United States v. Adamo, 534 F. 2d at 38. 13. Second, the three allegedly distinct objectives of the conspiracy are not separate. Rather, it is and has been the Government's theory that the second and third ob- jectives—to fix, maintain, and stabilize the terms and con- ditions of sale and to adopt and maintain uniform methods of packaging and handling of gypsum products—are integral parts of the first. Moreover, the district court charged the jury without objection by the defendants that any agreement to fix the methods of handling gypsum board would not be illegal unless it had the purpose or effect of stabilizing prices. App. at 3885a-86a. Further, the court charged that the terms and conditions of sale are really components of price. App. at 3900a. The con- sistent theory of the Government's case is that the defend- ants had engaged in a conspiracy “with a single conimon design and objective—that of maintaining high and stable prices.” Brief for Government at 10. See Addendum to Brief for Government at 15. Given, then, that a single unitary conspiracy was alleged, the holdings of this court in United States v. Tarnopol, 561 F. 2d 466 (3d Cir, 1977), and United States v, Dansker, 537 F. 2d 40 (3d Cir, 1976), cert, denied, 429 U. S, 1038 (1977), are not applicable. ITI. 14. The focus of this opinion has been on whether the jury could find that the conspiracy continued into the statutory period. We have, as well, reviewed the record and find sufficient evidence on each element of the offense Al0 Appendix A to support the jury's guilty verdict.*. Therefore, the order of the district court denying the defendants’ motion for judgment of acquittal on the ground of insufficiency of the evidence to support the conviction will be affirmed and the case remanded for a new trial. 4, One note about the element of intent is necessary. The Supreme Court held that the instruction requiring the jury to pre- sume intent from effect on prices was erroneous. 46 U.S. L. W. at 4944, See note 1 supra. On this appeal, the Government appears virtually to have abandoned any contention of anticompetitive ef- fects other than making the conclusory statement that “tphese price exchanges had the tendency to moderate the number and degree of competitive deviations and arrest the downward trend of price level.” Brief for Appellee at 16. See 46 U. S. L. W. at 4947 (“Re- gardless of its putative purpose, the most likely consequence of any such agreement to exchange price information would be the stabili- zation of industry prices.’). See also United States v. Container Corp., 393 U, S. Ssh (1969) (anticompetitive effect of exchange of price information inferred from market structure). The Govern- ment presented no expert testimony at trial to establish anti- — effects, nstead, the Government has relied in this appeal on evidence of anticompetitive purpose under the Supreme Court's elevated standard, 46 U.S. p W. at 4943 n. 21. The Government points to testimony by several company executives to the effect that verifica- tion was engaged in with the purpose of insuring market stability and avoiding destruction of the market. See, ie., Testimony of A. L. Meyer, Director of Marketing Services of G-P, App. at 1 56a; Testimony of Kenneth H. Atwell, Vice-President of Sales Admin- istration at National, App. at 1695a-97a; Testimony of Henry C, Bear and R, C, Gimlin, Vice-Presidents of Merchandizing at USG, App. at 548a-49a and 1121a; and Testimony of Homer D. pose, General Credit Manager of Celotex, App. at 2034a-35a, We believe that the record would support a jury finding of anticompetitive purpose, Appendix A All UNITED STATES COURT OF APPEALS For THE Turrp Crrcult Nos. 78-2263, 78-2264, 78-2265 and 78-2266 UNITED STATES OF AMERICA v. UNITED STATES GYPSUM COMPANY; NATIONAL GYPSUM COMPANY; GEORGIA PACIFIC COR- PORATION; KAISER GYPSUM COMPANY, INC.; THE CELOTEX CORPORATION; THE FLINT- KOTE COMPANY; GRAHAM J. MORGAN; AN- DREW J. WATT; COLON BROWN; J. P. NICELY; WILLIAM H. HUNT; CLAUDE E. HARPER, ROBERT A. COSTA; WILLIAM D. HERBERT; GEORGE J. PECARO; JAMES D. MORAN United States Gypsum Company, Appellant in No. 78-2263 National Gypsum Company, Appellant in No. 78-2264 Georgia-Pacific Corporation, Appellant in No. 78-2265 The Celotex Corporation, Appellant in No. 78-2266 (D. C. Criminal Nos. 73-00347-01/02/03/05) On AppeAL From Tue Unitep States Districr Court FOR THE WesTERN District OF PENNSYLVANIA Present: ApaMs, Hunter and Weis, Circuit Judges. Al2 Appendix A Judgment. This cause came on to he heard on the record from the United States District Court for the Western District of Pennsylvania and was argued by counsel on March 15, 1979. On consideration whereof, it is now here ordered and adjudged by this Court that the order of the said District Court, filed September 7, 1978, which order denied de- fendants’ motion for judgment of acquittal on the ground of insufficiency of the evidence to support the conviction be, and the same is hereby affirmed, and the cause re- manded for a new trial, in accordance with the opinion of this Court. ATTEST: Thomas F. Quinn CLERK May 29, 1979 Appendix B Al3 APPENDIX B. Written Question Distributed by the Court of Appeals at Oral Argument. The government’s thesis, as framed in the single count indictment, is that from sometime around 1960 and until 1973, the defendants engaged in a single, unitary, continu- ing, nationwide conspiracy in violation of § 1 of the Sher- man Act. The indictment lists three principal objectives of this conspiracy: , (1) to raise, fix, maintain and stabilize the prices of gypsum board; (2) to fix, maintain and stabilize the terms and con- ditions of sale thereof; and (3) to adopt and maintain uniform methods of pack- aging and handling gypsum board. In addition, the indictment lists 13 specific types of activi- ties and 4 effects of the conspiracy. A lot of evidence has been introduced at trial, and the question now before this Court is whether the govern- ment’s evidence, when viewed in the light most favorable to the government, is sufficient to enable a reasonable jury to arrive at a finding of guilt beyond a reasonable doubt. Both the defendants’ briefs and the government's brief ably dealt with the massive record as it relates to this question, but to my understanding, neither brief has given this Court guidance as to what it should do if it concludes that there is sufficient evidence to support a conviction for violation of § 1 of the Sherman Act, but that there is in- sufficient evidence to establish a conspiracy of the full magnitude and scope charged in the indictment. For Al4 Appendix B example, what if we conclude that there is sufficient evi- dence to support a conviction for stabilizing prices, but not for raising prices or for fixing the terms and conditions of sale? Or, to give another example, what if we conclude that there is sufficient evidence as to all the objectives cuarged in the indictment, but that the evidence is insuf- ficient on six of the thirteen specific acts charged, or that there is no evidence as to any of the 4 effects changed? Must we in any or all of these possible situations conclude that the evidence is insufficient to support a conviction, and held that a retrial is barred under the double jeopardy clause? Is it appropriate for us instead to consider the indict- ment as chargiig multiple conspiracies and permit a retrial on che thecry or theories that we believe may be supported by sufficient evidence? Or. perhaps, may we hold that if there is sufficient evidence as to any part of the charged conspiracy, which part by itself would constitute a viola- tion of the Sherman Act, the government may retry the entire case on the broad theory on which it first tried the matter? Appendix C Al5 APPENDIX C. © IN THE UNITED STATES DISTRICT COURT For THE WESTERN DisTRICT OF PENNSYLVANIA CrIMINAL No. 73-347 UNITED STATES OF AMERICA, v. UNITED STATES GYPSUM COMPANY; NATIONAL GYPSUM COMPANY; GEORGIA-PACIFIC COR- PORATION; THE CELOTEX CORPORATION, Defendants. Memorandum Opinion and Order. Defendants were convicted under Section 1 of the Sherman Act. The United States Court of Appeals for the Third Circuit vacated the convictions and returned the case to this Court for a new trial. The government peti- tioned the Supreme Court for certiorari and review was granted. The Supreme Court affirmed the Court of Ap- peals’ decision with certain modifications in the ratio decidendi. Before this Court once again for the new trial, defendants have now moved for judgment of acquittal on the grounds of insufficient evidence. The Court of Appeals denied defendants’ motion for judgment of acquittal with- out prejudice to the submission to the trial court of a motion for judgment of acquittal. Al6 Appendix C Defendants’ position simply stated is that no court to this time has reviewed the trial record in light of the law of the case to determine whether or not the government presented sufficient evidence to submit the matter to the jury. Defendants’ contention is that the government evi- dence is insufficient when scrutinized in the context of the recent Supreme Court review of the instant case. The evi- dence being insufficient, it is contended that retrial is pro- hibited by the Double Jeopardy Clause. Burks v. United States, 46 U.S. L. W. 4632 (U. S. June 14, 1978); Greene v. Massey, 46 U. S. L. W. 4636 (U.S. June 14, 1978). The Court has considered the Third Circuit Court of Appeals’ Opinion, the Opinion of the United States Su- preme Court, the motion for judgment of acquittal and briefs related thereto, views expressed at oral argument on the instant motion and evidence introduced at trial. After evaluating all of the above to the best of the Court’s ability and viewing the evidence in the light most favor- able to the government, as must be done, this Court be- lieves that there was sufficient evidence introduced at the first trial to sustain the convictions under the redefined legal standards promulgated by the United States Supreme Court. Specifically, there was sufficient evidence of crim- inal intent and conspiratorial involvement to support guilty verdicts. The decision to deny defendants’ motion for judgment of acquittal is solely predicated upon the continued ex- istence of sufficient evidence for conviction under the Su- preme Court's redefinition of the law.’ Nonetheless, a few brief comments are in order as to whether or not the Double Jeopardy Clause would be violated even if there 1. The government stated at oral ar vert gument that it preferred the case su a to be decided solely with pes oa to the — : absence of by ren evidence as judged under the upreme Court's post-trial Opinion. Defendants simi to such a basis for disposition. ah aie Appendix C Al7 were not sufficient evidence under the reformulated stand- ards. It has long been recognized that retrial does not run afoul of the Constitution where reversal is based upon trial error. United States v. Tateo, 377 U. S. 463 (1964); United States v. Ball, 163 U. S. 662 (1896). Only recently, however, the Supreme Court has indicated that the Double Jeopardy Clause will not permit retrial where the govern- ment’s case suffers from insufficiency of evidence. Burks, supra and Greene, supra. The case sub judice possesses a blend of both characteristics. The Supreme Court, with- cut forewarning to the prosecution, the defendants, this Court or the United States Court of Appeals for the Third Circuit, redefined the applicable law in certain particulars of the instant case which would normally necessitate a new trial. Defendants, however, contend that the lack of sufficient evidence at the first trial, as measured by the sub- sequently reformulated standards, precludes such a new trial. Assuming arguendo lack of sufficient evidence for conviction, the government's failure to supply such proof may have been caused by its inability to predict the Su- preme Court's post-trial requirements at the time of the first trial Under such a circumstance it is difficult to say that the government is getting a second bite at the same apple. While stare decisis provides no discernible as- sistance, this Court doubts very seriously whether retrial would be proscribed by the Double Jeopardy Clause under these circumstances even if there were insufficient evidence of record from the first trial. An appropriate Order will issue. /s/ Hupert I. TEITELBAUM Hubert I. Teitelbaum United States District Judge 9. This situation was not present in either Burks or Greene. A18 Appendix C Order. . AND Now, this 7th day of September, 1978, in accord- ance with the foregoing Opinion, It Is Orperep that de- fendants’ motion for j ; . ‘ee motion for judgment of acquittal is hereby /s/ Husert I. Terretpaum Hubert I. Teitelbaum United States District Judge ped. Appendix D Al9 APPENDIX D. SUPREME COURT OF THE UNITED STATES. UNITED STATES v. UNITED STATES GYPSUM CO. ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 76-1560. Argued March 1, 1978—Decided June 29, 1978. Deputy Solicitor General Friedman argued the cause for the United States. With him on the briefs were Solici- tor General McCree, Assistant Attorney General Shene- field, Frank H. Easterbrook, Robert B. Nicholson, Rodney O. Thorson, and Robert J. Wiggers. H. Francis DeLone, W. Donald McSweeney, and Fred H. Bartlit, Jr., argued the cause for respondents. With them on the briefs were Stephen A. Stack, Jr., Mari M. Gursky, William A. Montgomery, Joseph R. Lundy, Thomas A. Gottschalk, Robert C. Keck, James G. Hiering, Cloyd R. Mellott, William B. Mall'n, J. Gary Kosinski, D. Richard Funk, Clark M. Clifford, Carson M. Glass, and Thomas Richard Spradlin® ° A brief of amici curiae urging reversal was filed for their re- spective States by Evelle J. Younger, Attorney General of California, Sanford N. Gruskin, Chief Assistant Attorney General, Warren J. Abbott, Assistant Attorney General, Michael I. Spiegel and Charles M. Kagay, Deputy Attorneys General; William J. Baxley, Attorney General of Alabama, Thomas Troy Zieman, Jr., Jerry L. Weidler, and Susan Beth Farmer, Assistant Attorneys General; Bruce E. Babbitt, Attorney General of Arizona, and Alison B. Swan, Assistant Attorney General; J. D. McFarlane, Attorney General of Colorado, and Robert F. Hill, First Assistant Attorney General; Carl R. Ajello, Attorney General of Connecticut; Theodore L. Sendak, Attorney General of Indiana; Curt Schneider, Attorney General of Kansas, and Thomas W. Regan, Assistant Attorney General; William J. A20 Appendix D Opinion of the Court. ew age Justice Burcer delivered the opinion of This case presents the following questions: (a) whether intent is an element of a criminal antitrust offense: (b) whether an exchange of price information for pur- poses of compliance with the Robinson-Patman Act is ex- empt from Sherman Act scrutiny; (c) the adequacy of jury instructions on membership in and withdrawal from the alleged conspiracy; and (d) the propriety of an ex parte meeting between the trial judge and the foreman of the jury. I Gypsum board, a laminated type of wallboard com- posed of paper, vinyl, or other specially treated coverings over a gypsum core, has in the last 30 years substantially replaced wet plaster as the primary component of interior walls and ceilings in residential and commercial construc- tion. The product is essentially fungible; differences in price, credit terms, and delivery services largely dictate the °* (Cont'd. ) Guste, Jr., Attorney General of Louisiana: Francis B Bu ana; . Bur - od General of Maryland; John Ashcroft, Attorney Sr a eg William F. Hyland, Attorney General of New Jersey: oney Anaya, Attorney General of New Mexico; Louis J. Lef. salle, Attorney General of New York, and John M. Desiderio, Assistant ae General; Rufus L. Edmisten, Attorney General of North , arolina, and David S. Crump, Special Deputy Attorney General; or A. Redden, Attorney General of Oregon, and Stephen ey unne; John L. Hill, Attorney General of Texas; Robert B Hansen, mr posed General of Utah; M. Jerome Diamond, Attorney General of Vermont; Anthony F. Troy, Attorney General of Virginia; Slade Gorton, Attorney General of Washington, and Thomas L Boede —— 7 rp A General; Bronson C. LaFoilette, Attorney Gen. pacha isconsin, and Michael L. Zaleski, Assistant Attorney Stanley T. Kaleczyc, Lawrence B. Krau Pa ee ; s, and Stephen A. Bokat petal —— the Chenier of Commerce of the United States as Appendix D A21 purchasers’ choice between competing suppliers. Overall demand, however, is governed by the level of construc- tion activity and is only marginally affected by price fluctuations. The gypsum board industry is highly concentrated, with the number of producers ranging from 9 to 15 in the period 1960-1973. The eight largest companies accounted for some 94% of the national sales with the seven “single- plant producers” * accounting for the remaining 6%. Most of the major producers and a large number of the single- plant producers are members of the Gypsum Association which since 1930 has served as a trade association of gyp- sum board manufacturers. A Beginning in 1966, the Justice Department, as well as the Federal Trade Commission, became involved in inves- tigations into possible antitrust violations in the gypsum board industry. In 1971, a grand jury was empaneled and the investigation continued for an additional 28 months. In late 1973, an indictment was filed in the United States District Court for the Western District of Pennsylvania charging six major manufacturers and various of their cor- porate officials with violations of § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S.C. § 1" 1. The major producers operate numerous plants to serve a wide range of geographical markets. The single-plant producers are limited in terms of the markets they can serve because of the difficulties and expense involved in long-distance transportation of gypsum board. 2. The corporate defendants named in the indictment were: United States Gypsum Co,, National Gypsum Co., Georgia Pacific Corp., Kaiser-Gypsum Co., Inc., the Celotex Corp., and the Flint- kote Co. The individual defendants included: the Chairman of the Board and the Executive Vice-President of the United States Gypsum, the Chairman of the Board and Vice-President for Sales of National Gypsum, the President of Georgia Pacific, the President A22 Appendix D The indictment charged that the defendants had en- gaged in a combination and conspiracy “[b]Jeginning sometime prior to 1960 and continuing thereafter at least until sometime in 1973,” App. 34, in restraint of interstate trade and commerce in the manufacture and sale of gyp- sum board. The alleged combination and conspiracy con- sisted of: “[A] continuing agreement understanding and concert of action among the defendants and co-conspirators to (a) raise, fix, maintain and stabilize the prices of gyp- sum board; (b) fix, maintain and stabilize the terms and conditions of sale thereof; and (c) adopt and maintain uniform methods of packaging and handling such gypsum board.” Ibid. The indictment proceeded to specify some 13 types of ac- tions taken by conspirators “[i]n formulating and effec- tuating” the combination and conspiracy, the most relevant of which, for our purposes, is specification (h) which al- leged that the conspirators “telephoned or otherwise contacted one another to ex- change and discuss current and future published or market prices and published or standard terms and conditions of sale and to ascertain alleged deviations therefrom.” The bill of particulars provided additional details about the continuing nature of the alleged exchanges of competi- tive information and the role played by such exchanges in 2. (Cont'd. ) and the Vice-President and General Manager of Kaiser-Gypsum, the President of Celotex, and the Chairman of the Board and the Presi- dent of Flintkote. The Gypsum Association was named as an un- indicted co-conspirator as were two other gypsum board producers —Johns-Manville Corp. and Fibreboard Corp. ame Appendix D A23 policing adherence to the various other illegal agreements charged. B The first skirmish in the protracted litigation of this case was a motion for dismissal filed hy the defendants alleging that their due process rights had been denied be- cause of unreasonable preindictment delay. The District Court, after holding a five-day evidentiary hearing on the motion, concluded that there was “no evidence of unrea- sonable delay on the part of the Government,” 383 F. Supp. 462, 470 (WD Pa. 1974), and that the defendants were not prejudiced to any extraordinary degree whatsoever by the chain of events leading to this indictment.” Ibid. The District Court denied a motion to dismiss the indictment. Thereafter, nine of the defendants entered pleas of nolo contendere and were sentenced.’ The trial of the remain- ing seven defendants commenced on March 3, 1975, and lasted some 19 weeks. The focus of the Government's price-fixing case at trial was interseller price verification—that is, the practice allegedly followed by the gypsum board manufacturers of telephoning a competing producer to determine the price currently being offered on gypsum board to a specific cus- tomer. The Government contended that these price ex- changes were part of an agreement among the defendants had the effect of stabilizing prices and policing agreed- upon price increases, and were undertaken on a frequent basis until sometime in 1973. Defendants disputed both the scope and duration of the verification activities, and further maintained that those exchanges of price informa- 3. The remaining corporate defendants were United States Gypsum, National Gypsum, Georgia Pacific, and Celotex, and the remaining individual defendants were the Chairman of the Board and the Vice-President of Sales of National Gypsum and the Executive Vice-President of United States Gypsum. A24 Appendix D tion which did occur were for the purposes of complying with the Robinson-Patman Act‘ and preventing customer fraud. These purposes, in defendants’ view, brought the disputed communications among competitors within a “controlling circumstance” exception to Sherman Act liabil- ity—at the extreme, precluding, as a matter of law, con- sideration of verification by the jury in determining de- fendants’ guilt on the price-fixing charge, and at the minimum, making the defendants’ purposes in engaging in such communications a threshold factual question. The instructions on the verification issue given by the trial judge provided that if the exchanges of price informa- tion were deemed by the jury to have been undertaken “in a good faith effort to comply with the Robinson-Patman Act,” verification standing alone would not be sufficient to establish an illegal price-fixing agreement. The para- graphs immediately following, however, provided that the purpose was essentially irrelevant if the jury found that the effect of verification was to raise, fix, maintain, or stabilize prices. The instructions on verification closed with the observation: “The law presumes that a person intends the necessary and natural consequences of his acts. Therefore, if the effect of the exchanges of pricing in- formation was to raise, fix, maintain, and stabilize prices, then the parties to them are presumed, as a matter of law, to have intended that result.” The aspects of the charge dealing with the Govern- ment’s burden in linking a particular defendant to the con- 4. Defendants contended that the exchange of price informa- tion or verification was necessary to enable them to take advantage of the meeting-competition defense contained in §2(b) of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U. S. C. § 13(b) (1976 ed.); see Part III, infra. EP Cine . Appendix D A25 spiracy, and the kinds of evidence the jury could properly consider in determining if one or more of the alleged con- spirators had withdrawn from or abandoned the conspiracy were also a subject of some dispute between the judge and defense counsel. On the former, the disagreement was essentially over the proper specificity of the charge. De- fendants requested a charge directing the jury to determine “what kind of agreement or understanding, if any, existed as to each defendant” before any could be found to be a member of the conspiracy. The trial judge was unwilling to give this precise instruction and instead emphasized at several points in the charge the jury’s obligation to consider the evidence regarding the involvement of each defendant individually, and to find, as a precondition to liability, that each defendant was a knowing participant in the alleged conspiracy.* On the matter of withdrawal from the conspiracy, de- fendants sought an instruction stating explicitly that evi- dence of vigorous price competition during the period covered by the indictment could be considered by the jury as indicating abandonment of the charged conspiracy by one or more of the defendants. Substantial evidence on this subject had been presented by the defendants in the course of the trial. The judge again was unwilling to accept defendants’ construction of the applicable law and substituted an instruction specifying that withdrawal had to be established by either affirmative notice to each other member of the conspiracy or by disclosure of the illegal enterprise to law enforcement officials. The trial judge allowed the defendants to argue their theory of withdrawal to the jury despite his unwillingness to refer to it explicitly in his charge. 5. Relevant portions of the charge dealing with this issue are excerpted in the opinion of the Court of —— 550 F. 2d 115, 127 n. 12 (1977); id., at 137-138 (Weis, J., dissenting ). A26 Appendix D C The jury retired to deliberate early on the evening of Tuesday, July 8, 1975. Supplemental instructions were given in response to questions from the jury on Wednesday and Thursday, and the hours of deliberation were short- ened on Friday after the court was informed that some of the jurors were exhausted and not feeling well. On Satur- day, after responding to further requests from the jury, the judge, sua sponte, in open court, used the supplemen- tal instruction approved by the Court of Appeals“ to re- mind the jurors of their obligation to continue the de- liberations. Essentially the same instruction was given to the jury again on Sunday, after the judge had received a note detailing the jury's inability to reach a unanimous verdict. } On Monday, the court received yet another note from the jury, this time stating that the foreman wished to “dis- cuss the condition of the Jury” and to “[seek] further guid- ance” from the judge. The judge suggested to counsel that he confer privately with the foreman and that a tran- script of the meeting be kept but impounded. The judge indicated that if his suggestion was rejected he would sim- ply deny the foreman’s request for the meeting. In re- sponse to questions from counsel, the judge stated that the purpose of the meeting would be to determine if the jury was in serious physical condition, and he further in- dicated that no instructions on the law would be given to the foreman without calling in the jury and instructing them in open court with counsel present.’ After further 6. See United States v. Fioravanti, 412 F. 2d 407 (CA 3), cert. denied sub num. Panaccione v. United States, 396 U. S. 837 (1969). 7. The judge observed that the only instruction he might give the foreman was “to go back and continue his deliberations.” App. 1823. A! WE RRs See LE > - Appendix D A27 discussion, al! counsel agreed, albeit somewhat reluctantly, to the proposed meeting. Most of the discussion between the jury foreman and the judge concerned the deteriorating state of health of the jurors after almost five months on the case followed by five days of intensive deliberations and the existence of per- sonality conflicts among the members of the panel. The foreman also stressed at least twice during the conversation with the judge his belief that the jury was unable to reach a verdict and that further discussion would not eliminate the disagreements which existed. The judge indicated that while he would take into consideration what the fore- man had said, he wanted the jury to continue its delibera- tion. Near the close of the meeting, the following colloquy took place: “THE Court. I would like to ask the jurors to continue their deliberations and I will take into con- sideration what you have told me. That is all I can say. “Mr. RussEtu. I appreciate it. It is a situation I don't know how to help you get what you are after. “Tue Court. Oh, I am not after anything. “Mr. RussEtu. You are after a verdict one way or the other. “THE Court. Which way it goes doesn’t make any difference to me.” * Shortly thereafter, the foreman returned to the jury room and deliberations continued. The judge then in- formed counsel, in abbreviated fashion, what had tran- spired at the meeting with the foreman, and of his direc- __ 8. The complete a between the foreman and the judge is reproduced as an appendix to this opinion. A28 Appendix D tion that the deliberations continue.’ Defense counsel asked to see the transcript of the in camera meeting and moved for a mistrial because of the jury’s apparent dead- lock. These requests were denied,’ although the judge indicated that if no verdict were rendered by the following Friday, he would then reconsider the mistrial motions. The following morning, the jury returned guilty verdicts against each of the defendants. D The Court of Appeals for the Third Circuit reversed the convictions. 550 F. 2d 115 (1977). The panel was unanimous in its rejection of the claim of preindictment delay, but divided over the proper disposition of the re- maining issues. Two judges agreed that the trial judge erred in in- structing the jury that an effect on prices resulting from an agreement to exchange price information made out a Sherman Act violation regardless of whether respondents sole purpose in engaging in such exchanges was to estab- lish a defense to price-discrimination charges. Instead, they regarded such a purpose, if certain conditions were met," as constituting a “controlling circumstance” which, 9. “Significantly, the judge did not tell counsel about the fore- man’s 0 808 that the jury was hopelessly deadlocked; did not in- dicate that the foreman was under the impression that the court wanted a definite verdict either for the prosecution or the defend- ants; and did not mention the directive to the jury that it should ‘see if [it] can come to a verdict.” 550 F. 2d, at 132 (Adams, J., concurring ). 10. After the conclusion of the trial, the Court of —_ ordered the transcript of the meeting between the judge and the foreman released to counsel to aid them in preparation of the appeal. 11. “Therefore, appellants were entitled to an instruction that their verification practice would not violate the Sherman Act if the jury found: (1) the appellants engaged in the practice solely to comply with the strictures of Robinson-Patman; 2) they had first = ete Done Appendix D A29 under United States v. Container Corp., 393 U. S. 333 (1969), would excuse what might otherwise constitute an antitrust violation. One judge considered the instructions regarding the purpose and scope of the conspiracy and the kinds of conduct necessary to demonstrate a withdrawal therefrom to be infirm, while another concluded that the convictions should be reversed because the trial judge “improperly induced” the jury into reaching a verdict during the in camera conversation with the foreman. One judge, in dissent, would have sustained the con- victions. He regarded the charge on verification to be consistent with Container Corp., and rejected the notion that the Robinson-Patman Act required the exchange of price information even in the limited circumstances identi- fied by the majority. Neither of the alleged infirmities in the general conspiracy instructions, in his view, afforded any basis for reversal, and he disagreed with the charac- terization of the trial judge’s conduct as coercing a verdict. We granted certiorari, 434 U. S. 815 (1977), and we affirm. II We turn first to consider the jury instructions regard- ing the elements of the price-fixing offense charged in the indictment. Although the trial judge’s instructions on the price-fixing issue are not without ambiguity, it seems rea- sonably clear that he regarded an effect on prices as the crucial element of the charged offense. The jury was in- structed that if it found interseller verification had the 11. (Cont’d.) resorted to all other reasonable means of corroboration, without success; (3) they had good, independent reason to doubt the buyers’ truthfulness; and (4) their communication with competitors pl aed limited to the one pricé and one buyer at issue.” Id., at ; A430 Appendix D effect of raising, fixing, maintaining, or stabilizing the price of gypsum board, then such verification could be con- sidered as evidence of an agreement to so affect prices. They were further charged, and it is this point which gives rise to our present concern, that “if the effect of the ex- changes of pricing information was to raise, fix, maintain, and stabilize prices, then the parties to them are presumed, as a matter of law, to have intended that result.” App. 1722. (Emphasis added. ) The Government characterizes this charge as entirely consistent with “this Court’s long-standing rule that an agreement among sellers to exchange information on cur- rent offering prices violates Section 1 of the Sherman Act if it has either the purpose or the effect of stabilizing prices,” Reply Brief for United States 1, and relies pri- marily on our decision in United States v. Container Corp., supra, a civil case, to support its position. See also Ameri- can Column & Lumber Co. v. United States, 257 U. S. 377 (1921); United States v. American Linseed Oil Co., 262 U. S. 371 (1923); Maple Flooring Mfg. Assn. v. United States, 268 U. S. 563 41925); Cement Mfrs. Protective Assn. v. United States, 268 U. S. 588 (1925). In this view, the trial court’s instructions would not be erroneous, even if interpreted, as they were by the Court of Appeals, to direct the jury to convict if it found that verification had an effect on prices, regardless of the purpose of the respond- ents. The Court of Appeals rejected the Government's “effects alone” test, holding instead that in certain limited circumstances, a purpose of complying with the Robinson- Patman Act would constitute a controlling circumstance excusing Sherman Act liability, and hence an instruction allowing the jury to ignore purpose could not be sustained. We agree with the Court of Appeals that an effect on prices, without more, will not support a criminal convic- Deere DT At a OE SEN eet, Late ome Appendix D A31 tion under the Sherman Act, but we do not base that con- clusion on the existence of any conflict between the re- quirements of the Robinson-Patman and the Sherman Acts."* Rather, we hold that a defendant’s state of mind or intent is an element of a criminal antitrust offense which must be established by evidence and inferences drawn therefrom and cannot be taken from the trier of fact through reliance on a legal presumption of wrongful intent from proof of an effect on prices. Cf. Morissette v. United States, 342 U. S. 246, 274-275 (1952). Since the challenged instruction, as we read it, had this prohibited effect, it is disapproved. We are unwilling to construe the Sherman Act as mandating a regime of strict-liability criminal offenses.'* A | We start with the familiar proposition that “(t]he ex- istence of a mens rea is the rule of, rather than the excep- tion to, the principles of Anglo-American criminal juris- prudence.” Dennis v. United States, 341 U. §. 494. 500 (1951). See also United States v. Freed, 401 U. S. 601 613 (1971) (BreNNan, J., concurring in judgment): United States v. Balint, 258 U. S. 250, 251-253 (1922). In a much-cited passage in Morissette v. United States, supra, at 250-251, Mr. Justice Jackson ki Court observed: J speaking for the 12. See Part III, infra. 13. Our analysis focuses solely on the elem imi eng under the antitrust laws, aa leaves patie aa Beer — bens: a civil violation can be established by proof of either an awful purpcse or an anticompetitive effect. See United States v ontainer Corp., 393 U. S. 333, 337 (1969); id., at 341 (MARSHALL. J., dissenting ). Of course, consideration of intent may play an im- a ae oe actual nature and effect of the alleged ve conduct. i j States, 46 US. 231 258 (4 oa “deneieds Board of Trade v. United A32 Appendix D “The contention that an injury can amount to a crime only when inflicted by intention is no provincial or transient notion. It is as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil. A relation between some mental element and punish- ment for a harmful act is almost as instinctive as the child’s familiar exculpatory “But I didn’t mean to,’ and has afforded the rational basis for a tardy and un- finished substitution of deterrence and reformation in place of retaliation and vengeance as the motiva- tion for public prosecution. Unqualified acceptance of this doctrine by English common law in the Eight- eenth Century was indicated by Blackstone's sweep- ing statement that to constitute any crime there must first be a ‘vicious will.” (Footnotes omitted. ) Although Blackstone’s requisite “vicious will” has been re- placed by more sophisticated and less colorful characteri- zations of the mental state required to support criminality, see ALI, Model Penal Code § 2.02 (Prop. Off. Draft 1962), intent generally remains an indispensable element of a criminal offense. This is as true in a sophisticated criminal antitrust case as in one involving any other criminal offense. This Court, in keeping with the common-law tradition and with the general injunction that “ambiguity concern- ing the ambit of criminal statutes should be resolved in favor of lenity,” Rewis v. United States, 401 U. S. 808, 812 (1971), has on a number of occasions read a state-of-mind component into an offense even when the statutory defini- tion did not in terms so provide. See, e.g., Morissette v. United States, supra. Cf. Lambert v. California, 355 U. S. Appendix D A33 225 (1957). Indeed, the holding in Morissette can be fairly read as establishing, at least with regard to crimes having their origin in the common law, an interpretative presumption that mens rea is required. “[M]ere omission . of intent [in the statute] will not be construed as eliminating that element from the crimes denounced”; instead Congress will be presumed to have legislated against the background of our traditional legal concepts which render intent a critical factor, and “absence of con- trary direction [will] be taken as satisfaction with widely accepted definitions, not as a departure from them.” 342 U. S., at 263. While strict-liability offenses are not unknown to the criminal law and do not invariably offend constitutional requirements, see Shevlin-Carpenter Co. v. Minnesota, 218 U. S. 57 (1910), the limited circumstances in which Con- gress has created and this Court has -recognized such offenses, see e¢.g., United States v. Balint, supra; United States v. Behrman, 258 U. S. 280 (1922); United States v. Dotterweich, 320 U.S. 277 (1943); United States v. Freed, supra, attest to their generally disfavored status. See gen- erally ALI, Model Penal Code, Comment on § 2.05, p. 140 (Tent. Draft No. 4, 1955); W. LaFave & A. Scott, Criminal Law 222-223 (1972). Certainly far more than the simple omission of the appropriate phrase from the statutory definition is necessary to justify dispensing with an intent requiccment. In the context of the Sherman Act, this gen- erally inhospitable attitude to non-mens rea offenses is re- inforced by an array of considerations arguing against treating antitrust violations as strict-liability crimes. B The Sherman Act, unlike most traditional criminal statutes, does not, in clear and categorical terms, precisely A34 Appendix D identify the conduct which it proscribes.* Both civil rem- edies and criminal sanctions are authorized with regard to the same generalized definitions of the conduct pro- scribed—restraints of trade or commerce and_ illegal monopolization—without reference to or mention of intent or state of mind. Nor has judicial elaboration of the Act always yielded the clear and definitive rules of conduct which the statute omits; instead open-ended and fact- specific standards like the “rule of reason” have been ap- plied to broad classes of conduct falling within the purview of the Act’s general provisions. See, e.g., Standard Oil v. United States, 221 U. S. 1, 60 (1911); United States v. Topco Associates, 405 U. S. 596, 607 (1972); Continental T. V., Inc. v. GTE Sylvania, Inc., 433 U. S. 36, 49 (1977). Simply put, the Act has not been interpreted as if it were primarily a criminal statute; it has been construed to have a “generality and adaptability comparable to that found to be desirable in constitutional provisions.” Appalachian Coals, Inc. v. United States, 288 U. S. 344, 359-360 (1933). See generally 2 P. Areeda & D. Turner, Antitrust Law § 310 (1978). Although in Nash v. United States, 229 U. S. 373, 376- 378 (1913), the Court held that the indeterminacy of the Sherman Act’s standards did not constitute a fatal consti- tutional objection to their criminal enforcement, never- theless, this factor has been deemed particularly relevant by those charged with enforcing the Act in accommodating its criminal and remedial sanctions. The 1955 Report of 14. Senator Sherman adverted 2 i open texture of the statu- tory language in 1890 and accurately forecast its consequence—a pa | ~~ ty the courts in giving pho and content to the Act's oscriptions. . “I peers that it is difficult to define in legal language the pre- _cise line between lawful and unlawful combinations. This must left for the courts to determine in each particular case. All that we, as lawmakers, can do is to declare age on principles, and we can be assured that the courts will apply them so as to carry out the meaning of the law . . . .” 21 Cong. Rec. 2460 (1890). ee ee eee Appendix D A35 the Attorney General’s National Committee to Study the Antitrust Laws concluded that the criminal provisions of the Act should be reserved for those circumstances where the law was relatively clear and the conduct egregious: “The Sherman Act, inevitably perhaps, is couched in language broad and general.. Modern business pat- terns moreover are so complex that market effects of proposed conduct are only imprecisely predictable. Thus, it may be difficult for today’s businessman to tell in advance whether projected actions will run afoul of the Sherman Act's criminal strictures. With this hazard in mind, we believe that criminal process should be used only where the law is clear and the facts reveal a flagrant offense and plain intent un- reasonably to restrain trade.” Report of the Attorney General's National Committee to Study the Antitrust Laws 349 (1955). The Antitrust Division of the Justice Department took a similar, though slightly more moderate, position in its en- forcement guidelines issued contemporaneously with the 1955 Report of the Attorney General’s Committee: “In general, the following types of offenses are prosecuted criminally: (1) price fixing; (2) other vio- lations of the Sherman Act where there is proof of a specific intent to restrain trade or to monopolize; (3) a less easily defined category of cases which might generally be described as involving proof of use of predatory practices (boycotts for example) to accom- plish the objective of the combination or conspiracy; (4) the fact that a defendant has previously been convicted of or adjudged to have been, : violating the antitrust laws may warrant indictment for a sec- ond offense. The Division feels free to seek A36 Appendix D an indictment in any case where a prospective de- fendant has knowledge that practices similar to those in which he is engaging have been held to be in vio- lation of the Sherman Act in a prior civil suit against other persons.” *° Id., at 350. While not dispositive of the question now before us, the recommendations of the Attorney General s Committee and the guidelines promulgated by the Justice bp ea highlight the same basic concerns which are manifeste in our general requirement of mens rea in criminal ra and suggest that these concerns are at least equally salient i ntitrust context. ss jefe attention to the type of conduct regulated by the Sherman Act buttresses this conclusion. With certain 4? ceptions for conduct regarded as per se illegal because ¥ its unquestionably anticompetitive effects, see, e.g., Unite States v. Socony-Vacuum Oil Co., 310 U. S. 150 (1940), the behavior proscribed by the Act is often difficult to ese tinguish from the gray zone of socially acceptable - economically justifiable business conduct. Indeed, the type of conduct charged in the indictment in this case— the exchange of price information among sig anne illustrative in this regard.’* The imposition of crimina i ivisi i idelines to . In 1967, the Antitrust Division refined its gui aieatee that criminal prosecutions should only be ce against willful violations of the law. See The President : — sion on Law Enforcement and Administration of eg tg Report: Crime and Its Impact—An Assessment 110 ( ). 16. The exchange of price data and other ee) elgg competitors does not invariably have anticompetitive ettec deed deed such practices can in certain circumstances ggg etnies efficiency and render markets more, rather than ag — : - - For this reason, we have held that such exchanges of i _ : do not constitute a per se violation of the a : ~ 3 United States v. Citizens & Southern Nat. Bank, 7 ae (Peatac (1975); United States v. Container Corp., “as A bs os a eens ' J., concurring). A number of factors including most p y Appendix D A37 liability on a corporate official, or for that matter on a corporation directly, for engaging in such conduct which only after the fact is determined to violate the statute because of anticompetitive effects, without inquiring into the intent with which it was undertaken, holds out the dis- tinct possibility of overdeterrence; salutary and procom- petitive conduct lying close to the borderline of impermis- sible conduct might be shunned by businessmen who chose to be excessively cautious in the face of uncertainty regarding possible exposure to criminal punishment for even a good-faith error of judgment.’” See 2 P. Areeda & D. Turner, Antitrust Law 29 (1978); R. Bork, The Anti- trust Paradox 78 (1978); Kadish, Some Observations On the Use of Criminal Sanctions in Enforcing Economic Regulations, 30 U. Chi. L. Rev. 423, 441-442 (1963). 16. (Cont'd.) the structure of the industry involved and the nature of the infor- mation exchanged are generally considered in divining the pro- competitive or anticompetitive effects of this type of interseller communication. See United States v. Container Corp., supra. See generally L. Sullivan, Law of Antitrust 265-274 (1977). Exchanges of current price information, of course, have the greatest potential for generating anticompetitive effects and although not per se un- lawful have consistently been held to violate the Sherman Act. See American Column & Lumber Co. v. United States, 257 U. S. 377 (1921); United States v. American Linseed Oil Co., 262 U. S. 371 (1923); United States v. Container Corp., supra. 17. The possibility that those subjected to strict liability will take extraordinary care in their dealings is frequently regarded as one advantage of a rule of strict liability. See J. Hall, General Principles of Criminal Law 344 (2d ed. 1960); W. LaFave & A. Scott, Criminal Law 222-223 (1972). . However, where the conduct proscribed is difficult to distinguish from conduct permitted and indeed encouraged, as in the antitrust context, the excessive caution spawned by a regime of strict race will not necessarily redound to the public's benefit. The antitrust laws differ in this regard from, for example, laws designed to insure that adulterated food will not be sold to consumers. In the latter situation, excessive caution on the part of producers is entirely consistent with the legislative pur- pose. See United States v. Park, 421 U. S. 658, 671-672 ( 1975). A38 Appendix D Further, the use of criminal sanctions in such circum- stances would be difficult to square with the generally ac- cepted functions of the criminal law. See Hart, The Aims of the Criminal Law, 23 Law & Contemp. Prob., 401, 422- 425 (1958); ALI, Model Penal Code, Comment on § 2.05, p. 140 (Tent. Draft No. 4, 1955). The criminal sanctions would be used, not to punish conscious and calculated wrongdoing at odds with statutory proscriptions, but in- stead simply to regulate business practices regardless of the intent with which they were undertaken. While in certain cases we have imputed a regulatory purpose to Congress in choosing to employ criminal sanctions, see, e.g., United States v. Balint, 258 U. S$ 250 (1922), the availability of a range of nonpenal alternatives to the criminal sanctions of the Sherman Act negates the im- putation of any such purpose to Congress in the instant context.'* See generally Baker, To Indict or Not To Indict: Prosecutorial Discretion in Sherman Act Enforce- ment, 63 Cornell L. Rev. 405 (1978). For these reasons, we conclude that the criminal of- fenses defined by the Sherman Act should be construed as including intent as an element." 18. Congress has recently increased the criminal penalties for violation of no Sherman Act. Individual violations are now treated as felonies punishable by a fine not to exceed $100,000, or by im- prisonment for up to three years, or both. Corporate violators are subject to a $1 million fine. 15 U. S. C. § 1 (1976 ed.). The sever- ity of these sanctions provides further support for our conclusion that the Sherman Act should not be construed as creating strict- liability crimes. Cf. Morissette v. United States, 342 U. S. 246, 256 (1952); Sayre, Public Welfare Offenses, 33 Colum. L. Rev. 55, 72 (19335 (strict liability generally inappropriate when offense punish- able by imprisonment). Respondents here were not prosecuted under the new penalty provisions since they were indicted prior to the December 21, 1974, effective date for the increased sanctions. 19. An accommodation of the civil and criminal provisions of the Act similar to that which we approve here was suggested by Senator Sherman in response to Senator George’s argument during ee eS i aa tia nl Appendix D A39 C Having concluded that intent is a necessary element of a criminal antitrust violation, the task remaining is to treat the practical aspects of this requirement.” As we have noted, the language of the Act provides minimal as- sistance in determining what standard of intent is appro- priate and the sparse legislative history of the criminal provisions is similarly unhelpful. We must therefore turn to more general sources and traditional understandings of the nature of the element of intent in the criminal law. In so doing, we must try to avoid “the variety, disparity and confusion” of judicial definitions of the “requisite but elusive mental element” of criminal offenses. Morissette v United States, 342 U. S., at 252. | The ALI Model Penal Code is one source of guidance upon which the Court has relied to illuminate questions of 19. (Cont'd. ) floor debate that the A imari ct was primarily a penal statute t - strued narrowly in accord with traditional Saline: re “The first section, bein i > : g a remedial statute, would b liberally with a view to promote its object. It a —— — and = courts will construe it liberally . . . . PEI A yes ing a remedy the intention of the combination is im- “The third section is a criminal statu i tion te, which would be - a pamepy 4 ay is an af eae In the esa eon t is impossible to describe, in precise lan h nature and limits of the off i seal ty le a Cong. Rec. 2456 (1890). ee ee though the bill being debated by Senators Geor _ ——— in form from the Act as ultimately hae. roa 3 tween them in-licates that Congress was full aware of the aditional distinctions between the elements of civil and criminal offe i i = pr and apparently did not intend to do away with them in 20. In a conspiracy, two different types of i , piracy, of intent are 9 gaeRione basic intent to agree, which is necessary to or - existence of the conspiracy, and the more traditional intent to : reosen'y — = ia vt “Nagrneg See W. LaFave & A. Scott aw ¥ . . ¥ poe ees Page he ). Our discussion here focuses only A40 Appendix D this type. Cf. Leary v. United States, 395 U. S. 6, 46 n. 93 (1969); Turner v. United States, 396 U. S. 398, 416 n. 29 (1970). Recognizing that “mens rea is not a unitary con- cept,” United States v. Freed, 401 U. S., at 613 ( BRENNAN, J., concurring in judgment), the Code enumerates four possible levels of intent—purpose, knowledge, reckless- ness, and negligence. In dealing with the kinds of busi- ness decisions upon which the antitrust laws focus, the concepts of recklessness and negligence have no place. Our question instead is whether a criminal violation of the antitrust laws requires, in addition to proof of anticompeti- tive effects, a demonstration that the disputed conduct was undertaken with the “conscious object” of producing such effects or whether it is sufficient that the conduct is shown to have been undertaken with knowledge that the proscribed effects would most likely follow. While the difference between these formulations is a narrow one, see ALI, Model Penal Code, Comment on § 2.02, p. 125 (Tent. Draft No. 4, 1955), we conclude that action undertaken with knowledge of its probable consequences and having the requisite anticompetitive effects can be a sufficient predicate for a finding of criminal liability under the anti- trust laws.”" Several considerations fortify this conclusion. The element of intent in the criminal law has traditionally been viewed as a bifurcated concept embracing either the spe- cific requirement of purpose or the more general one of knowledge or awareness. 21. In so holding, we do not mean to suggest that conduct undertaken with the purpose of producing anticompetitive effects would not also support criminal Viability, even if such effects did not come to pass. Cf. United States v. Griffith, 334 U. S. 100, 105 (1948). We hold only that this elevated standard of intent need not be established in cases where anticompetitive effects have been demonstrated; instead, proof that the defendant’s conduct was undertaken with knowledge of its probable consequences will satisfy the Government’s burden. Appendix D A4l1 “[I]t is now generally accepted that a person who acts (or omits to act) intends a result of his act (or omis- sion) under two quite different circumstances: (1) when he consciously desires that result, whatever the likelihood of that result happening from his conduct; and (2) when he knows that the result is practically certain to follow from his conduct, whatever his de- sire may be as to that result.”. W. LaFave & A. Scott, Criminal Law 196 (1972). See also G. Williams, Criminal Law: The General Part §§ 16, 18 (2d ed. 1961); Cook, Act, Intention, and Motive in the Criminal Law, 26 Yale L. J. 645, 653-658 (1917); Perkins, A Rationale of Mens Rea, 52 Harv. L. Rev. 905, 910-911 (1939). Generally this limited distinction be- tween knowledge and purpose has not been considered important since “there is good reason for imposing liability whether the defendant desired or merely knew of the prac- tical certainty of the results.” LaFave & Scott, supra, at 197. See also ALI, Model Penal Code, Comment on § 2.02, p. 125 (Tent. Draft No. 4, 1955). In either cir- cumstance, the defendants are consciously behaving in a way the law prohibits, and such conduct is a fitting object of criminal punishment. See 1 Working Papers of the National Commission on Reform of Federal Criminal Laws 124 (1970). Nothing in our analysis of the Sherman Act persuades us that this general understanding of intent should not be applied to criminal antitrust violations such as charged here. The business behavior which is likely to give rise to criminal antitrust charges is conscious behavior normally undertaken only after a full consideration of the desired results and a weighing of the costs, benefits, and risks. A re [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_IA40385006_0399%3A1. Public record. Not legal advice.