Petition — PAYDOL COMPANY v. UNITED STATES (Nos. 80-605, 80-594)

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Supreme Court, U.S,

80-605 FILE

14 1980

MICHAEL RODAK, JR., CLER

In THE

Supreme Court of the United States

OcToBER TERM, 1980

KAYO OIL COMPANY anv THE MEADVILLE

CORPORATION anp PETROLEUM

MARKETING CORP.,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Witpur D. Preston, JR., Seymour KurLAND

Counsel of Record Barry F. ScHwartz

Wo tr, Bock, ScHorr & So.is-CoHEeN

Nevetr STee.e, JR. 12th Floor, Packard Building

Gerson B. MEHLMAN Philadelphia, Pennsylvania 19102

Wuirterorp, TAYLOR, PRESTON, (215) 569-4000

TrimBLe & JOHNSTON Counsel for Meadville Corporation

2000 First Maryland Building

25 South Charles Street Davin F. ALBRIGHT

Baltimore, Maryland 21201 Semmes, Bowen & SEMMES

(301) 752-0987 10 Light Street

Counsel for Kayo Oil Company Baltimore, Maryland 21202

(301) 539-5040

Counsel for Petroleum

Marketing Corporation

The Daily Record Co., Baltimore, MD 21202 cota ba

QUESTIONS PRESENTED

A. Whether gross negligence on the part of the govern-

ment in causing a pre-indictment delay of eight years

deprives the defendants of due process of law where the

defendant is actually prejudiced at trial due to the delay.

B. Whether the government’s failure to inform the

defendants in a antitrust criminal action of the series of

acts from which the government contends a conspiracy

may be inferred deprives the defendants of their sixth

amendment rights to be informed of the nature and cause

of the accusation where the government prosecutor stated

before trial that said acts would not be at issue.

C. Whether petitioners were deprived of a fair trial in a

criminal antitrust case by reason of the trial court’s role in

creating and issuing to the press prejudicial publicity and

the court’s subsequent failure to take or permit appropri-

ate remedial action to ascertain the impact of such

publicity on the jury.

ill

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......:sccscceeeeeeeeeeenseneeeeeeenseeeens

OPINIONS BELOW ...ccccccecececessssssceeeeeesenaeeeeserereeeeeeenes

JURISDICTION ..ccc.scccssssessessscccecsesssesscseeeeessssecseeeeeesenens

GTATEMENT OF THE CASE ....cssssccceeeesesseeeeeeensreneeeeeees

‘4 B.

The parties and the market .................

Events leading to the indictment ........

The indictment and pretrial proceed-

TQS .o..escesceccereercerceeescessersrscencersnsssseasnesseees

ie, CONN... ccoccsccsncccssesecssscsssconsccnsneccccseee

The appeal ..........cccccccseeseeseeseereeereeeeeeeneens

REASONS FOR GRANTING THE Writ oF CERTIORARI

Gross NEGLIGENCE ON THE Part Or THE

GoveRNMENT ResutteD IN An UN.

REASONABLE PrE-INDICTMENT DeLay OF

Eicht Years Wuicw Severety Pre-

yupIceD THE Derenpants At TriaL AND

Wuicu Deprivep THEM Or Due Process

ei. sccosenstbancedvinnvepdioneccccsoees

A Failure On The Part Of The Govern-

ment To Inform The Defendants In An

Antitrust Criminal Action Of The

Series Of Acts Which The Government

Contends Shows A Conspiracy Deprives

The D“endants Of Their Sixth Amend-

ment Right To Be Informed Of The

Nature And Cause Of The Accusation

Where The Government Prosecutor

Stated Before Trial That Said Acts

Would Not Be At Issue ...........::ccceeeeeeees

Petitioners Were Deprived Of A Fair

Trial By Reason Of The Trial Court's

Role In Creating And Issuing To The

PREVIOUS PAGE WAS BLANK |

Press Prejudicial Publicity And The

Court’s Failure To Take Or Permit

Appropriate Remedial Action To Ascer-

tain The Impact Of Such Publicity On

IED scligiisivissdscdaitnneninancsitdbduatianiiakeiness

Se AEDT TIES, eRe aECeS AIRPLANE RT OT OAD

CE ROS RPM th NEE a COREA TS BON oc MERA OI

Opinion of The Fourth Circuit .............

Trial Judge’s Opinion of February 11,

1977 re: Pre-Indictment Delay .............

| ISITE TRE ay ae Ree IS Sr nO aE

TABLE OF CITATIONS

Cases

American Tobacco Company v. United States,

A Pe MD eschcth sttcch i ibehbeicucaniecexdins

Barker v. Wingo, 407 U.S. 514 (1972)...

Berger v. United States, 295 U.S. 78 (1935) ......

Eastern States Retail Lumber Dealers’ Assoc. v.

United States, 234 U.S. 600 (1914) wo.

Hallman v. United States, 208 F.2d 825 (D.C.

IRD, SN instinateicilscainsseabilcosiiabsaspabettihabe iinniailalade dsaies

lannelli v. United States, 420 U.S. 770 (1975)

Mayer v. Moeykens, 373 F. Supp. 649 (D. Vt.

1973), affd F.2d 855 (2d Cir.), cert. denied,

SET CF ee CRO. seressnvit stint peebiesaaihatine.

Nash v. United States, 229 U.S. 373 (1913) ......

Rosen v. United States, 161 U.S. 29 (1896) .......

Russell v. United States, 369 U.S. 749 (1962) ...

Smith v. O’Grady, 312 U.S. 329 (1941) ww.

Sutton v. United States, 157 F.2d 661 (5th Cir.

PPO ctliinvcvacescinbnsibialasebipesntobibiancagalviménsanickebuiss

PAGE

29a

44a

16, 20

23, 24

22, 23

: PAGE

United States v. Barket, 430 F.2d 189 (8th Cir.),

cert. denied, 44 USLW 3329 (197E) ccesercccnsesee 16

United States v. Brozyna, 571 F.2d 742 (2d Cir.

VOFB), <ccccaccaconccssesensvsosesceseverensetscerecssnnsucneabacnsavees 23

United States v. Cerrito, 612 F.2d 588 (ist Cer.

TOTO) \caccccocccsarevcvecssssssssdeorensssnscscdencepunnscsousonenseeses 15

United States v. Comosona, 614 F.2d 695 (10th

. Cir. 1980) ...ccccccccccccosssscercecsssccnserceneseessssneensanenees 15

m4 United States v. Container Corp., 393 U.S. 333

(1969) ..ccccsacccscsccecscessscececsssncscvsensnssrsscacecsesssaeosoess 18

United States v. Flom, 558 F.2d 1179 (5th Cir.

VOTT) ccccoccosrceccscccsscsescsssssscsevoearoorsoressnccccsssesssasoes 27

United States v. General Electric Co., 40 F.

Supp. 627 (S.D.N.Y. TOGD) cickcvccceccsncsspnctaccooeess 24

United States v. General Petroleum Corp. of

Calif., 33 F. Supp. 95 (S.D. Calif. 1940) ....... 24

United States v. Glist, 594 F.2d 1374 (10th Cir.

VOTQ) ccccccccccesssccsscsccssssecscceccsasesvsccscssarsesenconeesess 19

United States v. Greater Blouse, Skirt & Neck-

ware Contractors Assoc., 177 F. Supp. 213

(S.D.N.Y. 1959) .sccsccscsscsseeseesssensenssncseeneereneeneoes 24

United States v. Greater Syracuse Board of

Realtors, Inc., 438 F. Supp. 376 (N.D.N.Y.

1977) ccccccccceccosscescssscssssescsccsrrsscsscosecssaensoscrscsensees 23

United States v. Harmon, 379 F. Supp. 1349

(D.Nid. 1974) cccccsccosscssscerrcesssecserseraseneesscesnnsnsees 17

United States v. Jessee, 605 F.2d 430 (9th Cir.

1971) cccccccscscescsccoscrsesscscceseserenscsccenconsesersnsosseecsons 16

United States v. King, 5Y3 F.2d 269 (7th Cir.

1979) cccccccccoscsccscscssscsscsssesncssscsscscssersensonsenosensennens 16

United States v. Lovasco, 431 U.S. 793 (1977)... 15,16

United States v. Marion, 404 U.S. 307 (1971) ...15, 16, 19

United States v. Matlock, 558 F.2d 1328 (8th

Cir.) cert. denied, 434 U.S. 872 (1977) ..........

United States v. Mays, 549 F.2d 670 (9th Cir.

|» SP RRRPRI Re STOR OREN PRET TA SET, N ee ID

RO siiihsciabicbebninciaiietitives telois tentiingsladinictnpepieltigiceha

United States v. Rubin, 609 F.2d 51 (2d Cir.

1979) cert. granted, 100 S. Ct. 1645 (1980) ..

United States v. Schembari, 484 F.2d 931 (4th

a ARI FPS tart TR OO Ne ee Oa AE Hs ey

United States v. Simmons, 96 U.S. (6 Otto) 360

LBRO ig SOOO TAAL OP Ree LN he ALE

ian OR Oe ARE PTO

United States v. Tedesco, 441 F. Supp. 1336,

el MOD siskndsabsecansicaiaientennnincdinens

Wong Tai v. United States, 273 U.S. 77 (1927) ..

Constitutional Provisions and Statutes

U.S. Constitution, amend. 8 ...........ccccccccccecsceeeeees

U.S. Constitution, amend. 6 .............cccccccccocsceccsees

PAGE

15, 22, 28

No.

In THE

Supreme Court of the United States

Ocrose®. TerM, 1980

KAYO OIL COMPANY anp THE MEADVILLE

CORPORATION anp PETROLEUM

MARKETING CORP.,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Petitioners, hereby petition the Court for a writ of

certiorari to review the judgment in a criminal case of the

Fourth Circuit Court of Appeals.'

‘Pursuant to Sup. Ct. Rule 21 (b), the parties to the

proceeding in the Fourth Circuit were: Kayo Oil Company;

Society of Independent Gasoline Marketers of America; Amer-

ada Hess Corporation; Ashland Oil Inc., The Meadville Corpor-

ation; Petroleum Marketing Corporation; Robert R. Cavin; and

the United States.

OPINION BELOW

The opinion in this case filed by the United States Court

of Appeals for the Fourth Circuit is reported at 624 F.2d

461 (4th Cir. 1980).? A copy of the opinion is contained in

the Appendix to this petition. App. at la.

JURISDICTION

On December 26, 1979, the Fourth Circuit filed an

opinion which affirmed petitioners’ conviction by a jury

sitting in the United States District Court for the District

of Maryland for an alleged violation of Section One of the

Sherman Act (15 U.S.C. § 1).° Petitioner timely filed in the

Fourth Circuit a petition for rehearing or in the alterna-

tive suggestion for rehearing en banc. The court denied

the suggestion for rehearing en banc in its opinion filed on

June 24, 1980. App. at 3a. With regard to the petition for

rehearing, the court again affirmed petitioners’ conviction,

but reversed the conviction of Ashland Oil, Inc., a

defendant in the trial below.‘ Jd. The government filed a

petition for rehearing concerning the reversal of Ashland’s

conviction, which was denied by the Fourth Circuit on

August 5, 1980. Petitioners received an extension of time

from the Chief Justice on September 30, 1980 to file the

instant petition by October 14, 1980.

The Supreme Court has jurisdiction to review this case

by writ of certiorari pursuant to 28 U.S.C. § 1254 (1).

* The Fourth Circuit originally filed an opinion in this case on

December 26, 1979, but withdrew that opinion and substituted

in lieu thereof the opinion referred to above.

* The Fourth Circuit reversed the conviction of Robert R.

Cavin, a defendant in the trial below.

‘ In addition, the court modified its opinion regarding the

disposition of the appeal of Robert R. Cavin. App. at 3a.

STATEMENT OF THE CASE

A. The Parties And The Market

Petitioners are three of seven corporate defendants,’ one

association® and four individual defendants’ charged with

participation in a conspiracy to fix the retail price of

gasoline throughout an area referred to as the Middle

Atlantic States [“MAS”|* between 1967 and 1974.

The corporate defendants in this case were members of

the “cut-rate”, “unbranded” or “private brand” segment of

the retail gasoline market.’ The other general category

that constituted the retail gasoline market was known as

the “major brand” segment, e.g. Exxon, Gulf, Texaco. The

private brand segment of the market was generally

characterized by high volume stations that sold gasoline at

a price below that charged by the major brand stations and

did not offer any repair services. As private brand

marketers, the defendants shared the following character-

> Amerada Hess Corporation [“Hess”]; Ashland Oil, Inc.

(“Ashland”); Continental Oil Company {“Continental”)}; Crown

Central Petroleum (“Crown”); Kayo Oil Company [“Kayo”], a

subsidiary of Continental; The Meadville Corporation [“Mead-

ville”) and Petroleum Marketing Corporation [“PMC”)}. Crown

and Continental were acquitted by the jury. Ashland’s convic-

tion was reversed by the Fourth Circuit.

* SIGMA.

’ Robert R. Cavin; Norman Goldberg; Charles J. Luellen and

W. H. Burnap. Cavin was Executive Director of SIGMA from

late 1972. Goldberg was Hess’ Manager of Gasoline Station

Operations until May, 1968, when he was promoted to Vice

President. Luellen was an Executive Assistant at Ashland until

1970, when he was promoted to Vice President. Burnap was a

Vice President of Continental. All of the individual defendants

but Cavin were acquitted by the trial court upon motions for

judgments of acquittal during the trial. Cavin’s conviction was

reversed by the Fourth Circuit.

* New York, New Jersey, Pennsylvania, Delaware, Maryland,

Virginia and the District of Columbia.

* Continental was not a member of this segment of the

market.

istics common to all private brand marketers: i) their

brand names were not advertised; ii) they provided no

repair services at their stations; iii) they did not accept

credit cards; and iv) their principal marketing tool was the

price of their gasoline, which was anywhere from 2¢ to 5¢

per gallon lower than the prices of gasoline sold at major

brand stations." At trial, it was established that in order

for the private brand marketer to compete with the major

brand marketer, it was essential that its gasoline be

offered to the consumer at a lower price. If both major and

private brands were being offered for substantially the

same price, the motoring public would choose to purchase

at the major brand station based on name recognition and

the extra services offered by that marketer.

In the MAS, the private brand segment of the retail

gasoline market held from 5% to 20% of market sales,

depending upon the state. The defendants owned or sold to

approximately 2% of the total number of outlets in the

area and held about 6% of the total retail gasoline sales."

Evidence adduced at ti:al showed that the MAS was in

reality a potpourri of countless markets as opposed to one

market. Competition was generated among outlets located

within, at most, a three to four mile radius. Pricing charts

for representative markets within the area revealed

erratic retail pricing which varied widely from market to

market, often within the same city. Not only was there

extreme pricing volatility among the stations within the

° A major brand marketer (such as Exxon or Shell) utilized a

different marketing concept iu that its brand name was widely

recognized due to advertising, it offered repair services, accepted

credit cards and placed its marketing emphasis on methods of

competition such as service and credit.

' These figures exclude Continental as that company does not

market at retail in the MAS.

market, but the competitors and prices from market to

market were not even remotely similar.”

The typical retail gasoline market within the MAS

contained a high concentration of major brand stations.

The existence of lower priced, high volume, private brand

stations created a positive competitive situation for the

consumer within the local market, as they were an

alternative to the higher price charged by the major brand

stations. Because the private brand marketer survived

only by charging a lower price for its gasoline, the price at

the major brand stations was a “cast iron” ceiling over the

price charged at private brand stations. In those markets

where there was a high concentration of private brand

marketers, e.g., New York Avenue in Washington, D.C.,

both major and private brand prices were lower than

anywhere else in the city.

SIGMA was an association of private brand marketers

that represented members throughout the entire United

States. The private brand marketers that belonged to

SIGMA generally had their stations thinly scattered over

a wide geographic area. These marketers, committed to

low overhead, could not justify a mammoth field organiza-

tion to conduct price surveys such as developed by major

brand marketers. As such, each company had to make

retail pricing decisions from one central location for

stations located in widely disparate markets.

As noted above, the “life blood” of a private brand

marketing operation was price. A necessity of operation

was the possessicn of current, up to the minute, accurate

data on prices and price trends. Because defendants’

stations were thinly scattered, their field personnel did not

have an overview of what was happening in adjoining

® Spot comparisons of prices at differing locations on the

same day showed prices ranging from 26.9¢ per gallon to 32.9¢

per gallon.

’*%

market areas which could have ripple effects upon them.

In addition, their field personnel often sent in false

information about price increases in the market as they

had a vested interest in keeping prices low and volumes

high. Since a private brand marketer operated with an

extremely low margin at very high volumes, even a slight

error of judgment in current prices in one market could

mean that the entire company worked for a full month at a

loss.

SIGMA sought to fill the private brand marketers’

critical need for current and accurate price information by

collecting pricing data from trade papers, press releases,

private brand marketers, major brand marketers and

other sources. This data was relayed by SIGMA to the

private brand marketers so that they would be aware of

what was happening in adjoining markets and their own

markets. SIGMA saw its pricing surveys as the equivalent

of an oral Platt’s Oilgram,” with its focus of attention

being on the private brand sector of the market.

Whether a major anncunced a restoration in a large

area, a small area, or repeatedly announced restorations

for several adjoining areas, the independents were pri-

marily interested in what happened at the street level. A

price increase by a major oil company would not have an

effect until its retail dealers would pass on the price

increase to the public as their current inventories of

low-cost product ran out. During this interim period,

'’’ For at least forty years, the “bible” of the retail gasoline

industry was a trade newspaper known as “Platt’s Oilgram,”

published by McGraw-Hill. Platt’s conducted regular pricing

surveys and published pricing data on markets throughout the

United States. Platt’s usually carried announcements about

changes in wholesale prices by majors. Platt’s carried little or no

information on private brand marketers. Because conditions

varied from street corner to street corner and because the

independents were primarily interested in retail changes, Platt’s

was of limited utility to them.

SIGMA collected data on the impact of wholesale price

changes on retail prices. These announcements often led to

several calls to the same marketer over a short period of

time in order to keep track of rapidly changing events.

Information collected and disseminated by SIGMA was

current data, which occasionally included announcements

just as Platt’s Oilgram did of price changes to take place in

the near future." It included both upward and downward

price changes. SIGMA considered this information public.

Although there were occasions when its information was

inaccurate, SIGMA was generally regarded in the industry

as a source of reliable data and it took care to preserve this

reputation.

SIGMA disseminated information as quickly and as

accurately as possible. SIGMA had no expectation that a

recipient of information would do anything other than use

it as input in making its own marketing decisions.

B. Events Leading To The Indictment

The instant case actually originated on November 18,

1968, almost eight years before an indictment was sought

by the government, and almost nine years before trial. On

that date, George Spencer, a newspaper reporter, tape

recorded a meeting that was held by SIGMA. The meeting

was open to the public, and the guest speaker was Greg

Potvin, majority counsel of the Small Business Committee

of the House of Representatives. At the meeting, there

were some public remarks made by Howard Teak, the then

Execu:ive Director of SIGMA, concerning SIGMA’s pricing

activities. Mr. Teak died of cancer in 1972, four years prior

to the indictment in this case.

“ Platt’s routinely carried announcements of price increases

by major oil companies to take place at a future time. Because of

limited appeal to its readership, Platt’s only occasionally

published future announcements by independents.

In late 1968 or early 1969, Spencer delivered either the

original or a copy (he was unsure at trial) of the tape

recording of the SIGMA meeting to John Waters, a senior

attorney in the Justice Department’s Antitrust Division.

Spencer played sections of the tape for Mr. Waters in

which Teak made his statements concerning SIGMA’s

pricing activities. Spencer also told Waters about the

circumstances surrounding the recording of the tape.

Spencer left a copy of the tape with Waters. About one

year later, when nothing had occurred, Spencer telephoned

Waters to ask if anything had been done about the tape,

but was told that no investigation had been initiated by

the Justice Department. In mid-1969, Howard Teak and

William Cady, another SIGMA official, had a meeting

with the Justice Department to discuss SIGMA’s activities

concerning pricing information. Mr. Cady could not recall

which Justice Department attorneys he and Mr. Teak met

with, and could not recall the substance of the meeting. He

did recall, however, that he and Teak were happy about

the meeting and believed SIGMA’s activities were lawful.

Still. no investigation was begun.

In 1973, one of the defendants acquitted below, Crown,

was accused of price fixing in a civil case filed by a private

plaintiff in the United States District Court for the

District of Maryland. Cyéwn was subsequently found

liable in 1975 by Judge Alexander Harvey II. Phillips v.

Crown Central Petroleum Corp., 395 F. Supp. 735 (D. Md.

1975). rev'd in part, 1977-1 Trade Cas. para. 6i, 377 (4th

Cir. 1977). According to Judge Harvey in an opinion after

the Crown case was remanded, his civil proceeding led to

the commencement of the grand jury investigation that led

to the indictment in this case. See 1977-2 Trade Cas. para.

61, 599 at 72, 487 (D. Md. 1977). The grand jury was

organized in December of 1974, some twenty months after

the civil case was filed.

C. The Indictment And Pretrial Proceedings

On June 1, 1976, a one count indictment was returned

in the District of Maryland against the twelve defendants

mentioned above. In vague and general terms, the indict-

ment alleged a conspiracy to fix prices involving the

twelve defendants throughout the MAS over a seven year

_ period. See App. at 44a. Essentially the defendants were

charged with being in contact through SIGMA at the time

of price :hanges.

The problems facing the defendants due to the indict-

ment’s lack of specificity were immense. The geographic

area referred to as the MAS contained more than 300

competitors and over 55,000 retail stations. Kayo, with

only 126 stations in the MAS had over 1,100 price changes

during 1971 alone. The potential number of price changes

during an almost eight year period was astronomical.

In addition, although the statute of limitations only

covered activities back to 1971, the indictment referred

back to 1967. The defendants filed a motion to dismiss the

indictment based on the pre-indictment delay since the

government had been given the Teak tape in 1968. This

motion was denied by the trial court in its opinion of

February 11, 1977. App. at 29a. The defendants also

sought before trial to suppress the Teak tape, which was

denied by the trial court.

The first hint given the defendants as to the cause of the

accusation of price fixing occurred during a hearing on

January 26, 1977 in connection with a motion for addition-

al time to analyze hundreds of thousands of documents

turned over to the grand jury by third parties. The

defendants informed the trial judge that they had been

able to isolate only three price changes that occurred

throughout the MAS at any specific time during the period

covered by the indictment. The defendants requested more

time to prepare to rebut any allegations of conspiracy

concerning localized price changes in any of the local

markets within the MAS. The prosecutor vigorously

opposed this request, stating:

You cannot look at a Sherman Act conspiracy in

isolation by dissecting and dismembering each little

part... . [I]f we start this dissecting and isolating of

every price in every station throughout every market

area within the Mid-Atlantic States, this trial will

never come to an end.

The prosecutor represented to the court that the trial

would not involve analyzing price changes at various

individual stations, and would not involve comparing price

changes of defendants’ stations lovated in discrete geog-

raphic areas. In light of the prosecutor’s remarks, the trial

judge denied the request for more time.

The defendants requested a bill of particulars regarding

the events the government would rely on to show the

existence of the alleged conspiracy. The prosecutor agreed

to answer one of the requests, indicating that the alleged

conspiracy was a single vonspiracy among all the defen-

dants and alleged coconspirators extending throughout the

geographic area during the entire period of time. The trial

court denied the remainder of the defendants’ requests,

which sough, inter alia, information as to which retail

gasoline prices were allegedly fixed.

The defendants subsequently filed a motion for more

specifics. At the hearing on this motion on April 15, 1977,

the prosecutor once again reiterated that his case would

involve evidence of the effect on prices throughout the

area. The prosecutor further stated that the evidence in

his possession could not supply the itemization requested

by the defendants.

Thus, prior to trial, the government stated that it would

not or could not identify instances in which the retail price

of gasoline was fixed within the MAS. The prosecutor

made it clear that the case would not involve the price

changes in the local markets within the MAS. Instead, the

defendants were informed that the causes of the charge

against them were area-wide price changes such as those

referred to above.

D. The Trial

There was never any direct evidence in the trial below of

an agreement to fix prices. As noted above, the defendants

had guessed on the basis of pretrial discovery and some of

the exhibits that were designated in a timely fashion

before the trial that the government might focus on three

national price changes that occurred in November of 1970,

July of 1971 and August of 1972. The first half of the

prosecutor’s case was devoted to proving that a conspiracy

could be inferred from these incidents by juxtaposing the

defendants’ phone records with pricing records that

showed price increases at the time of contact. The

defendants were prepared for this contention and demons-

trated to the jury that these area wide price changes were

nationwide, that they had been led by the major oil

companies, that the moves of the major companies had

been presaged in trade publications, and that the price

changes by the defendants were normal responses to

certain economic and governmental events, and not the

result of any price fixing conspiracy.

It soon became apparent to the prosecutor that he could

not rely on the three area-wide instances to imply a

conspiracy to fix prices. Thereafter, despite earlier assur-

ances to the contrary, the government sought to show the

existence of a conspiracy by circumstantial evidence

relating to 19 incidents of price changes in local markets

within the MAS. Almost all of these local incidents

occurred prior to 1972, and many were before 1971, the

limitations period. Due to the prosecutor’s assurances

before trial and the trial court’s refusal to order the

government to furnish a bill of particulars, the defendants

had no idea that the government would attempt to use this

evidence or evidence of this nature. Indeed, over one

hundred exhibits used by the prosecutor in connection

with these incidents were not among those turned over .v

the defendants before trial, a clear violation of the

pre-trial stipulation. Objections to the introduction of

testimony concerning these local incidents were denied

routinely by the trial court.

As the defendants had no knowledge that these 19 local

incidents were the cause of the accusation of criminal

activity, they were surprised at trial and unprepared to

present a defense. The prosecutor sought to prove the

existence of a conspiracy by showing price changes in

these local markets at the time of telephone contact among

the defendants. With regard to 19 localized price changes

out of the thousands upon thousands that had occurred

during the seven years, the defendants were not prepared

to offer evidence rebutting the inference that the prices

changed as a result of te:ephone communications among

the defendants.

In addition, the prosecutor was permitted over the

defendants’ objections to introduce the tape recording into

evidence that contained the remarks made by Howard

Teak at the 1968 SIGMA convention. This recording was

played several times during the government’s case, during

the government’s closing argument and three times during

jury deliberations.

After the jury deliberated for a number of days, the

petitioners were convicted and fined fifty thousand dollars

$50,000.00) each.

E. The Appeal

On appeal, the defendants argued that they were not

informed cf the cause of the accusation against them based

on the prosecutor’s shift in mid-trial to evidence of price

changes in the local markets within the MAS as opposed

to price changes on an area-wide level throughout the

MAS. The Fourth Circuit held, however, that evidence of

the local incidents was proper consideration for the jury.

App. at 7a-8a. Nowhere in the court’s opinion is it

mentioned that the government had represented that this

evidence would not be in the case. The court also stated

that the defendants had ample notice of the cause of the

charge against them, based in large part on its erroneous

statement that the defendants had possession of all

government exhibits prior to trial. In fact, the government

used over 100 exhibits that were not turned over prior to

trial in accordance with the pretrial stipulation. Many of

these exhibits related to the 19 local incidents of price

changes. Although it was clear from the record that these

“add-on” exhibits were introduced against the defendants,

the Court overlooked this point in its initial opinion. The

petitioners raised this point in their petition for rehearing

before the Fourth Circuit, and the facts were not disputed

by the government. The court, however, did not address

this issue in its final opinion and continued to assume

erroneously that the defendants received all exhibits

thirty days before trial.

The defendants also argued on appeal that the tape

recording of the 1968 SIGMA meeting containing Howard

Teak’s remarks should have caused the indictment to be

dismissed and at the very least should not have been

admitted into evidence. The Fourth Circuit’s opinion did

not mention this issue.

WHY THE SUPREME COURT SHOULD ISSUE

A WRIT OF CERTIORARI IN

THE INSTANT CASE.

A. Gross Negligence On The Part Of The Government

Resulted In An Unreasonable Pre-Indictment Delay Of

Eight Years Which Severely Prejudiced The Defendants

At Trial And Which Deprived Them Of Due Process of

Law.

One of the center pieces in the government’s case was

the tape recording of the 1968 SIGMA meeting in which

Howard Teak, the then Executive Director of SIGMA,

spoke in general terms about SIGMA’s role in dispensing

price information. The tape was played countless times by

the government over the defendants’ objections during its

case and was played again during closing argument. While

deliberating, the jury requested to hear the tape three

times.

Prior to trial, the defendants filed a motion to dismiss

the indictment based on the inordinate pre-indictment

delay. The government never offered an explanation as to

why there was a six year delay in investigating this

matter and an eight-year delay in seeking an indictment.

The trial court denied the defendants’ motion on the basis

that the defendants had failed to show an improper

motivation on the part of the government for the delay. In

addition, the trial court ruled that no prejudice had been

shown as a result of the delay.’ The defendants also

moved before trial to suppress the tape, but this motion

was denied.

While the sixth amendment protects an accused from

delays between indictment and trial, the Court has

recognized that the due process clause of the fifth amend-

'® On appeal, the defendants maintained that the Teak tape at

the very least should not have been admitted in evidence

because inter alia, of the pre-indictment delay. The Fourth

Circuit failed to address this issue in its opinion.

ment has a role to play in protecting an accused from

delays prior to an indictment. United States v. Lovasco,

431 US. 793 (1977); United States v. Marion, 404 U.S. 307

(1971). The Court noted in Marion that the statute of

limitations protects a defendant from the possible pre-

judice that might result from a delay between commission

of a crime and an arrest or indictment. 404 U.S. at 322. It

is a deprivation of due process where there is an unreason-

able delay prior to an indictment that actually prejudices

the defendant. Jd. at 324.

In Lovasco, the Court stated that proof of actual

prejudice “is generally a necessary but not sufficient

element of a due process claim... . ” 431 U.S. at 790. To

complete a due process inquiry into pre-indictment delay,

the Court stated that the reason for the delay must be

considered by the Court. Jd. The Court in Lovasco accepted

the trial court’s conclusion that actual prejudice resulted

from a delay of eighteen months, but held that a

prosecutor’s decision to delay in seeking an indictment so

as to investigate the matter further did not amount to a

deprivation of due process.

With regard to the second element set forth in Lovasco,

the reason for the delay, the circuits have split as to

whether the delay must be intentional as opposed to

negligent and what sort of reason or purpose behind the

delay must be shown to amount to a due process violation.

Some courts have held that the defendant must show that

the delay was intentional for an improper purpose such as

to give the government a tactical advantage or to harass

the accused. See, e.g., United States v. Comosona, 614 F.2d

695, 697 (10th Cir. 1980); United States v. Cerrito, 612

F.2d 588, 593n.3 (1st Cir. 1979); United States v. Stinson,

594 F.2d 982 (4th Cir. 1979); United States v. Ramos, 586

F.2d 1078, 1079 (5th Cir. 1978); United States v. Matlock,

558 F.2d 1328, 1330 (8th Cir.), cert. denied, 434 U.S. 872

(1977). Other courts have held that the defendant need not

show that the government acted intentionally with a bad

purpose but can meet the test by showing aegligence on

the government’s part. See, e.g., United States v. Mays, 549

F.2d 670, 678 (9th Cir. 1977); United States v. Barket, 530

F.2d 189, 195 (8th Cir.), cert. denied, 44 USLW 3329

(1976). See also United States v. Jessee, 605 F.2d 430, 431

(9th Cir. 1979) (culpable). Cf. Barker v. Wingo, 407 U.S.

514, 531 (1972).'® The courts in these latter cases speak in

terms of whether the delay was “unreasonable” and not

intentional, and, relying on the language in Marion

calling for “a delicate judgment based on the circum-

stances of each case”, 404 U.S. at 325, balance the actual

prejudice against the reasons for the delay. See, e.g.,

United States v. Rubin, 609 F.2d 51, 66 (2d Cir. 1979), cert.

granted on other issues, 100 S. Ct. 1645 (1980) (emphasis

added);"’ United States v. King, 593 F.2d 269, 272 (7th Cir.

1979); United States v. Mays, supra, 549 F.2d at 677;

United States v. Barket, supra, 530 F.2d at 193. The fact

that the delay might be the result of negligence as opposed

to intentional conduct with a bad purpose is merely

factored into the weighing process. United States v. Mays,

supra, 549 F.2d at 677.

The trial court in the instant case ruled that the delay

must be the result of intentional conduct on the part of the

government done for a bad purpose. App. at 35a. Using

such a stringent standard, a defendant in a criminal trial

may be severely prejudiced at trial by a stale prosecution

but have no recourse because the government’s conduct

was not evil but grossly negligent.

‘© The view that negligence on the part of the government as

opposed to intentional conduct to gain a tactical advantage is

sufficient to make out a due process claim seems to be supported

by the Court in Lovasco. The Court noted with approval the

government’s concession that reckless disregard on the part of

the government would be enough. 431 U.S. at 795n.17.

" The petitioner in Rubin did not raise the pre-indictment

delay issue before the Court.

In the instant case, the defendants cannot demonstrate

that the eight year delay on the part of the government

prior to the indictment was intentionally done to gain a

tactical advantage at trial. The government has never

advanced any reason for the delay.”

The circumstances surrounding this case lead to the

inescapable conclusion that the pre-indictment delay was

the result of gross or culpable negligence on the govern-

ment’s part. It was uncontroverted at trial that the tape

was delivered to and played in the presence of John

Waters, a senior government attorney in the very depart-

ment charged with enforcing the antitrust laws. See note

24 infra. The reporter who delivered the tape, George

Spencer, was a knowledgeable source whose business it

was to report on the oil industry. Spencer recontacted

Waters approximately one year later to determine what if

anything had been done about the tape.

Shortly after the government received the tape, the

government was contacted by Howard Teak, and officials

of the Justice Department met with Mr. Teak and another

SIGMA official, Mr. Cady. Presumably, the SIGMA repre-

sentatives and the Department of Justice personnel spoke

about SIGMA’s activities with regard to price

information.’® Thus, the Justice Department was advised a

* In United States v. Harmon, 379 F. Supp. 1349, 1351

(D.N.J. 1974), the court held that the government’s failure to

offer a satisfactory reason for pre-indictment delay gave rise to

an inference that the purpose was to gain a tactical advantage.

'° Unfortunately the testimony of Mr. Cady showed the effects

of the passage of almost nine years (as of the trial date), in that

he was unable to remember the date or exact place of the

meeting, the names of the persons present, or the exact matters

discussed. It was revealed during this testimony, however, that

Teak was the person who really knew about the details of the

meeting, and had the names of the justice department personnel

with whom they had met. Although Mr Cady testified that when

he and Howard Teak left the meeting with the Justice

Department officials,"we went back to the hotel and sought out

third time of facts which, it contended a trial almost eight

years later, amounted to an illegal conspiracy to fix

prices.”

On April 3, 1973, over four years after the Teak tape

was delivered to the Justice Department, one of the

defendants in the trial below, Crown, was accused of, inter

alia, price fixing in the United States District Court for

the District of Maryland. Thus, on a fourth instance, the

government had notice of alleged illegal activity on the

part of the defendants but did nothing until December of

1974 when the grand jury was organized.

The indictment of the defendants for the alleged con-

spiracy was returned on June 1, 1976. This was over three

years after the same conspiracy was alleged in a civil case

in Maryland; approximately six and one-half years after

Spencer telephoned the Antitrust Division to find out if it

had taken any steps concerning the conspiracy that he

believed was evidenced by the Teak tape; and approxi-

mately seven years after Howard Teak and William Cady

met with the Antitrust Division to discuss SIGMA’s

pricing activities. It was almost eight years after the tape

was played for and given to the Antitrust Division.

our friends and fellow members of SIGMA who happened to be

staying there and told them of our exhilaration and feelings

about the results of the meeting. . . ”, he was unable to recall

the details of the meeting with sufficient clarity to convey

adequately to the court why he and Mr. Teak were satisfied with

the results of the meeting.

*” Particularly significant in this regard is that the Court’s

decision in United States v. Container Corporation, 393 U.S. 333

(1969) was issued at almost the precise time that the Teak tape

was given to the Antitrust Division. This case raised serious and

substantial antitrust questions concerning the pricing activities

of organizations such as SIGMA. This should have been an

additional factor in sparking an investigation of SIGMA’s

activities, which the government knew of as a result of the tape

and the Teak visit. Teak met with the Justice Department as a

result of the Container decision.

The length of delay in the instant case is considerably

longer than the statute of limitations itself. Because the

crime alleged was a conspiracy, however, the prosecution

was permitted to introduce the Teak tape and much of the

other evidence it presented, all of which were outside the

statute of limitations. Thus, the statute of limitations, the

primary protection against pre-indictment delays as seen

by the Court in Marion, 404 U.S. at 322-24, was of no

avail to the defendants. By their own lack of diligence, the

government was able to deprive the defendants of the

protection offered by the statute of limitations. As stated

by a trial judge upon dismissing an indictment due to

pre-indictment delay:

(N]o citizen of the United States should be required to

answer in a criminal courtroom to charges that are

(as] stale as these charges with conspiracy as broad in

scope as has been charged here. And to compel such a

trial is a denial of the constitutional rights of the

accused.

United States v. Glist, 594 F.2d 1374, 1377 (10th Cir.

1979).

It would seem obvious that a delay of eight years shows

on its face a reckless disregard for the defendants’ ability

to mount an effective defense. But the rule applied by the

trial judge in the instant case and by some other judges in

the cases cited above, that is that the defendants must

show intentional conduct on the part of the government to

gain an advantage at trial, foreclosed the defendants from

securing any relief.

Moreover, the prejudicial effect on the defendants as a

result of the eight year delay was severe at trial. First and

foremost, as noted above, the speaker on the tape, Howard

Teak, died in 1972, fully three years after the Antitrust

Division had the tape of his remarks, but still some two

years before any investigation was begun by the govern-

ment. With the loss of Mr. Teak, defendants were left

without the primary means to refute or defend against one

of the government’s primary pieces of evidence. They could

not explain what Teak actually meant or bring to his

sometimes incoherent and always ambigious remarks

some kind of clarity. Mr. Teak’s death deprived the

defendants of the opportunity to cross examine the man

who, considering the prominence given his remarks on the

tape by the prosecutor, was the government’s star

witness.”' Incredibly, however, other witnesses were per-

mitted to testify as to what Mr. Teak meant by his

remarks.

The loss of Mr. Teak also deprived the defendants of

their ability to investigate adequately the meeting he had

with Justice Department attorneys. This meeting led Mr.

Teak to tell all who would listen that his and SIGMA’s

activities were legal.

In addition to the loss of Teak, the delay of over eight

years resulted in the deaths or disabilities of at least eight

other persons who were intimately involved during the

relevant time period ir. the activities which were the

subject of the trial. As SIGMA was the alleged hub of the

conspiracy, Teak, the Executive Director, was a critical

witness. These other persons included: three former direc-

tors of SIGMA, a former President of SIGMA, a former

Vice President of SIGMA, a former secretary-treasurer of

SIGMA and two former Presidents of companies which

figured prominently at trial.”

21 Because Mr. Teak’s death was not a sudden one, but was

the result of a gradually terminal cancer over a period of years,

the defendants could have taken appropriate steps to preserve

his testimony if the government had timely begun its investiga-

tion.

# The loss of these persons to the defense preparation is

analogous to the loss of records and memories referred to by the

Court in Barker v. Wingo, 407 U.S. 514 (1972), which could not

be accurately measured because “what has been forgotten can

rarely be shown.” Jd. at 532.

In addition to the loss of important witnesses, the

government’s inexcusable delay resulted in many of the

defendants’ business records being lost through the normal

course of the defendants’ document retention plan. When

the government switched in mid-trial and sought to show

that a conspiracy could be inferred as a result of price

changes that occurred in 19 local markets within the

MAS, many of which occurred eight years and more before

trial, the defendants were often faced with circumstantial

proof concerning matters for which the defendants had no

records.”

Despite the blatant unfairness of an eight year delay,

the trial court denied the defendants’ motion to dismiss

the indictment or suppress the tape. Indeed, the trial court

® For example, the prosecution developed a highly question-

able chain of circumstantial facts which it claimed proved

existence of a conspiracy to raise prices on Harford Road in

March 1968 (more than three years before the period reached by

the statute of limitations). This market included at least 18

stations, eight of which were private branded stations, three of

which belonged to the defendants. A fourth station was operated

by Fisca, an alleged co-conspirator. Using records of a series of

telephone calls on March 25, 1968, pricing data for stations

which were not even in the Harford Road competitive area, and

a generalized Crown market report which referred to a group of

“independents” located in “East Baltimore”, the prosecution

claimed that prices in Harford Road were stabilized in March,

1968. Defendants were thus confronted by a circumstantial

presentation of technical evidence which depended on juxtaposi-

tion of schedules of telephone calls with no particular geog-

raphic area, generalized references to specific markets, and

isolated records, when they had no complete records of their own

with which to combat it. Moreover, since even the prosecution

witnesses could not testify as to the substance of these telephone

calls, the government was able, by virtue of its delay, to

orchestrate an array of technical evidence which was irrebutt-

able because of that delay. Further, the government was allowed

to present its material forcefully while at the same time arguing

that the inability of defense witnesses to recall was evasion.

permitted wholesale use of the Teak tape.** The basis for

the court’s ruling was the standard that has been adopted

by some of the circuits requiring that the government act

intentionally and with a bad purpose before any claim of

pre-indictment delay can be sustained. Other circuits have

recognized that due process protects an accused from

pre-indictment delay even where the government’s negli-

gence brings about the prejudice to the defendants.

Petitioners submit that violations of constitutional rights

should be measured in terms of prejudicial effects rather

than in terms of whether the violations were deliberate.

Given the prejudice that resulted in the instant case due to

an eight year delay, the Court should grant certiorari to

clarify the standards set forth in Lovasco and Marion.

B. A Failure On The Part Of The Government To Inform

The Defendants In An Antitrust Criminal Action Of

The Series Of Acts Which The Government Contends

Shows A Conspiracy Deprives The Defendants Of Their

Sixth Amendment Right To Be Informed Of The Nature

And Cause Of The Accusation. Where The Government

Prosecutor Stated Before Trial That Said Acts Would

Not Be At Issue.

The sixth amendment to the United States Constitution

provides that “[iJn all criminal prosecutions, the accused

shall enjoy the right . . . to be informed of the nature

and cause of the accusation... . ” The requirement that

an accused be informed of the nature and cause of the

accusation of criminal activity has been said by the Court

to be “the first and most universally recognized require-

ment of due process.” Smith v. O’Grady, 312 U.S. 329, 334

(1941).

* In its memorandum opinion, the court stated that “John

Waters apparently never listened to the Spencer [Teak] tape.”

App. at 37a. However, Spencer’s testimony was uncontroverted

that he played the tape for Mr. Waters when he first delivered it

in late 1968 or early 1969.

The standard set forth in the sixth amendment demands

more than merely identifying the crime and informing the

accused that he has been charged with a violation of the

crime. To meet the sixth amendment standard, the

accused must be informed of the charge against him to the

extent that he may prepare a defense and not be taken by

surprise at trial, as well as be able to plead double

jeopardy to a latter prosecution for the same offense.

Russell v. United States, 369 U.S. 749, 763 (1962); Berger

v. United States, 295 U.S. 78, 82 (1935); Wong Tai v.

United States, 273 U.S. 77, 80 (1927); Rosen v. United

States, 161 U.S. 29, 34 (1896). United States v. Simmons,

96 U.S. (6 Otto) 360 (1878). The test is whether the

accused has been informed of the charge to the extent that

he will not be misled when preparing his defense. Hallman

v. United States, 208 F.2d 825, 827 (D.C. Cir. 1953). See

also Smith v. O’Grady, 312 U.S. 329, 334 (1941); United

States v. Brozyna, 571 F.2d 742, 746 (2d Cir. 1978); Mayer

v. Moeykens, 373 F. Supp. 649, 654 (D. Vt. 1973), affd, 494

F.2d 855 (2d Cir.), cert. denied, 417 U.S. 926 (1974).

This basic sixth amendment protection afforded to

accuseds is lacking in the criminal antitrust area. The

Court has held that the combination or conspiracy to

restrain trade may be inferred from a course of dealing

among the alleged co-conspirators. American Tobacco Co.

v. United States, 328 U.S. 781, 809-10 (1946). The Court

has further recognized that agreements to restrain trade

“are seldom capable of proof by direct testimony, and may

be inferred from the things actually done. . . ” Eastern

States Retail Lumber Dealers’ Association v. United States,

234 U.S. 600, 612 (1914). As noted by the district judge in

United States v. Greater Syracuse Board of Realtors, Inc.,

438 F. Supp. 376, 380 (N.D.N.Y. 1977), most antitrust

action are presented by the use of circumstantial evidence

that involves proof of overt acts. See also United States v.

Tedesco, 441 F. Supp. 1336, 1340 (M.D. Pa. 1977).

Despite the fact that a Sherman Act violation is

generally shown by evidence of “the things actually done”,

the offense is founded upon the conspiracy or the agree-

ment among the defendants. Nash v. United States, 229

U.S. 373 (1913). The essence of the crime then is the

agreement and not “the things actually done.” See Jannelli

v. United States, 420 U.S. 770 (1975). Pursuant to this

principle, courts have held that an indictment alleging a

Sherman Act violation need not aver any overt acts. See,

e.g., United States v. Greater Blouse Skirt and Neckware

Contractors’ Association, 177 F. Supp. 213, 220 (S.D.N.Y.

1959). Instead, the typical defendant in such a case is told

that he must resort to a request for a bill of particulars.

See, e.g., United States v. Tedesco, 441 F. Supp. 1336, 1341

(M.D. Pa. 1977); United States v. Greater Syracuse Board

of Realtors, Inc., 438 F. Supp. 376, 380-81 (N.D.N.Y. 1977).

However, the granting of a bill of particulars has long

been held to rest solely in the discretion of the trial court,

see, e.g., Rosen v. United States, 161 U.S. 29 (1896), and it

has been held that the prosecution need not furnish a bill

of particulars in a criminal antitrust action setting forth

the series of acts from which the prosecutor claims a

criminal conspiracy may be inferred. See, e.g., United

States v. General Electric Co., 40 F. Supp. 627, 632-33

(S.D.N.Y. 1941); United States v. General Petroleum

Corporation of California, 33 F. Supp. 95, 97-98 (S.D. © if.

1940).*

The hardship and prejudice visited upon a defendant in

a criminal antitrust case by the above-stated principles

can be observed in the instant case. Here, the indictment

set forth vague, general and conclusory allegations of a

price fixing conspiracy involving a large number of actors

over a considerable length of time in a large area of the

country that did not constitute one market but in reality

% Interestingly, the defendant in Nash was furnished a bill of

particulars.

contained thousands of markets. From this the defendants

perhaps knew the nature of the accusation, but had no idea

as to the cause of the accusation. There was no direct

evidence of an agreement to fix prices and there was no

direct evidence as to the substance of conversations among

the defendants at the time of price changes that would

show an agreement to fix prices. Instead, the prosecutor

sought to prove his case by showing that at the time of

these contracts, there were changes in the price of gasoline

at the defendants’ stations from which the jury could infer

the existence of a conspiracy.

Given these circumstances, the question of which prices

were claimed to have been fixed became critical to the

defendants in their preparation for trial. Prior to trial, the

defendants were informed that the cause of the accusation

that they fixed prices throughout the MAS was the contact

among the defendants at the time of area-wide price

increases. During the first half of the trial, the prosecutor

showed the fact of contact among the defendants during

November, 1970, July, 1971 and August, 1972 and the fact

that there were price changes at defendants’ stations

throughout the MAS area during these months.” However,

because the defendants were informed that the causes of

the accusation were the area-wide changes, the defendants

were able to prepare their defense, meet the evidence and

rebut the inference that these price changes were the

result of a conspiracy to fix prices.

The second half of the trial, however, presented a far

different picture. When it became evident to the prosecu-

tor that he could not create the inference of any conspiracy

concerning the area-wide changes, hé dramatically shifted

his case to present evidence concerning 19 local incidents

where there were price changes, despite his assurances

that the trial would not involve the examination of prices

® There was not evidence, however, that these changes were

uniform, or even that they occurred at the same time.

in the localized market areas within the MAS. Approxi-

mately 100 of the exhibits used by the prosecutor concern-

ing these local incidents had not been designated prior to

trial as required by the pretrial stipulation.” During

closing argument, the prosecutor vividly referred to these

local incidents as showing the existence of a conspiracy.

Because the defendants had been misled as to the cause of

the accusation, they were not able to prepare a defense to

meet the evidence and rebut the prosecutor’s claims of

conspiracy. In short, the defendants were not informed of

the true cause of the accusation.

The Fourth Circuit stated that even if the court were to

accept the defendants’ arguments that the three area-wide

changes were the results of economic forces in the market

place and not the result of any price fixing agreement, the

evidence relating to local market incidents would still be

legally sufficient to support the jury’s verdict. App. at

7a-8a. However, as seen from the above, the government

consistently represented that local price changes would

not be a part of the trial. Moreover, the exhibits concern-

ing these incidents were not turned over before trial as

promised. The point is that the defendants were not

informed that these local incidents were the cause of the

accusation in the indictment. Indeed, they were told the

contrary. The fact that they could be probative evidence of

the conspiracy is irrelevant.

The Fourth Circuit found that the defendants were

adequately informed of the charge against them relying on

the indictment, the government’s answer to the bill of

particulars, and the pre-trial stipulation, which required

the government to turn over to the defendants copies of all

intended trial exhibits before trial, all available Brady

material, all documents subpoenaed from and voluntarily

# The government’s promise to deliver intended trial exhibits

to the defendants prior to trial was one of the reasons that the

trial court denied the defendants’ requests for particulars.

turned over by third parties, a list of intended witnesses

and all Jencks Act materials. App. at 9a. None of these

materials, however, in anyway indicated that the cause of

the accusation against the defendants was localized price

changes in the local markets within the MAS, much less

the 19 incidents relied upon at trial. The one step that

might have informed the defendants that the 19 local

incidents were the cause of the accusation was if the

government had turned over the exhibits it eventually

used in connection with these local incidents as promised

in the pretrial stipulation. The government failed to do

this, however, and the result was that the defendants were

given no indication before trial as to the cause of the

accusation of price fixing.”

® After the incorrect assertion that copies of all trial exhibits

were received by the defendants prior to trial, the Fourth

Circuit cited United States v. Schembari, 484 F.2d 931 (4th Cir.

1973) in support of the proposition that the defendants had

adequate notice of the charge. In Schembari, the defendant was

charged with disorderly conduct as a result of his breaking

through police lines during a demonstration at the Pentagon. In

affirming the trial court’s denial of a motion for particulars, the

court noted that the prosecution had turned over its entire file to

the defendant.

Initially, defendants would note that the prosecution here did

not turn over its entire file before trial, as over 100 exhibits

were used at trial which were not given to the defendants as

required by the pretrial stipulation. Moreover, in Schembari,

the defendant knew the date, place and events that were the

cause of the accusation. Here, the defendants had no particulars

that would suggest the cause of the accusation.

In view of the prosecutor's shift in this case and the fact that

more than 100 exhibits were not turned over as required by a

formal pretrial stipulation and Order, United States v. Flom,

558 F.2d 1179 (5th Cir. 1977), lends more guidance than the

Schembari case. In Flom, an antitrust case involving the

allocation of contracts for sales of re-inforcing steel bars, the

government represented in its bill of particulars that no

evidence of particular contracts could be offered because it had

no such evidence in its possession. The government apparently

made similar representations at a pretrial hearing. The court

ruled that the defendants were entitled to rely on the bill of

In Sutton v. United States, 157 F.2d 661, 669 (5th Cir.

1946), the court noted:

Every defendant in a criminal case has the right to be

informed of the essential factual elements of the

offense sought to be charged. The [s]ixth [a]mend-

ment guarantees it. To withhold essential facts that

are required to describe the accusation with reason-

able certainty is to deny full information of the nature

and cause of the accusation.

Here, essential facts were withheld from the defendants

that were required to describe the accusation with reason-

able certainty. It was not until the second half of the trial

that the defendants learned that the causes of the

accusation against them were 19 price changes in local

markets, out of countless price changes in thousands of

markets. Given these circumstances, the defendants were

deprived of their sixth amendment rights to be informed of

the nature and cause of the accusation.

Generalized allegations of a conspiracy do not supply

information as to the cause of an accusation of antitrust

illegality where the goverr.ment’s case at trial is based on

specific incidents of conduct from which it maintains the

jury can infer a conspiracy. The offense of conspiracy is

admitted by the law to be vague, yet the same law permits

the government to give less detail to the accused to defend

against the charge. The Court should grant certiorari in

this case to assure that defendants charged with an illegal

conspiracy under the Sherman Act are afforded the same

sixth amendment rights given other criminal defendants.

particulars until validly amended, and that it was reversible

error for the lower court to have admitted evidence of specific

allocated contracts. 558 F.2d 1182, 1185-86. As noted by the

court, “[w]ith no notice in writing or in open court before the

jury entered the picture, this maneuver was basically unfair and

highly prejudicial.” Jd. at 1186.

C. Petitioners Were Deprived Of A Fair Trial By Reason Of

The Trial Court’s Role In Creating and Issuing To The

Press Prejudicial Publicity And The Court's Failure To

Take Or Permit Appropriate Remedial Action To

Ascertain The Impact Of Such Publicity On The Jury.

Petitioners adopt the argument regarding this issue

made by Amerada Hess Corporation, a defendant and

appellant below, in its Petition For A Writ Of Certiorari

filed on the same date as the instant petition.

CONCLUSION

For the reasons stated above, the Court should grant

certiorari in the instant case.

Respectfully submitted,

Witsur D. Preston, JR.,

Counsel of Record

Nevetr Srec e, JR.

Gerson B. MEHLMAN

Wuirerorp, TayLor, Preston,

Trims_e & JOHNSTON

2000 First Maryland Building

25 South Charles Street

Baltimore, Maryland 21201

(301) 752-0987

Counsel for Kayo Oil Company

Seymour KurLAnp

Barry F. ScHwartz

Wor, Biock, Scnorr & Sois-Conen

12th Floor, Packard Building

Philadelphia, Pennsylvania 19102

(215) 569-4000

Counsel for Meadville Corporation

Davin F. ALBRIGHT

Semmes, Bowen & Semmes

10 Light Street

Baltimore, Maryland 21202

(301) 539-5040

Counsel for Petroleum

Marketing Corporation

APPENDIX