Amicus Brief — American Soc. of Mechanical Engineers, Inc. v. Hydrolevel Corp.

"Bice. Supreme Court, US.

FILED

MAY 26 1968

No. 80-1765 |g cpauocai srevas,

K

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

THE AMERICAN SOCIETY OF MECHANICAL

ENGINEERS, INC.,

Petitioner

Vv.

HYDROLEVEL CORPORATION,

Respondent

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

BRIEF AMICUS CURIAE OF THE AMERICAN

SOCIETY FOR TESTING AND MATERIALS IN

SUPPORT OF PETITION FOR WRIT

OF CERTIORARI

Lewis H. Van Dusen, Jr.

Morris R. Brooke

Robert J. Hoelscher

DRINKER BIDDLE & REATH

1100 PNB Building

Broad & Chestnut Streets

Philadelphia, PA 19107

(215) 988-2700

Attorneys for the American

Society for Testing and

Materials

adelphia, Pennsylvania

TABLE OF CONTENTS

CONSENT TO THE FILING OF THIS BRIEF.

INTEREST OF THE AMICUS CURIAE. .

QUESTION PRESENTED . ... «+s

SUMMARY OF ARGUMENT. . .. «. « «

ARGUMENT . . © 2 © © © © © © ©

CONCLUSION . . «© «© © © © © © «© «

AFFIDAVIT OF FILING AND SERVICE.

a uwe &

12

13

TABLE OF AUTHORITIES

CASES

pppl hcat ton of American Society

or Testing and Materials,

F.Supp. Wcaees, 2968) s « oe Ay D

and Materials v. Board o

Revision of Taxes, 423 Pa

530, 225

American Society for Testing

a.

cee eee Ceeer)s « 2 2 6 4, 58

mT

CONSENT TO THE FILING OF THIS BRIEF

Counsel for petitioner and counsel

for respondent have each consented to

the filing of this brief amicus curiae

by the American Society for Testing and

Materials ("ASTM" or “the Society").

Copies of their letters are filed with

this brief.

INTEREST OF THE AMICUS CURIAE

ASTM is a scientific and educa-

tional Society. It was incorporated in

1902 for the stated purpose of “the

development of standards on character-

istics and performance of materials,

products, systems and services, and the

promotion of related knowledge.”

ASTM is the major developer and

publisher of standards in the United

States. Its activities are limited

to the development of standards (and

methods of test to determine compliance

with standards) and the promotion of

related knowledge. It does not certify

products; it does not test products; it

does not involve itself in any way in

the marketing of any product, material,

system or service for which a standard

has been developed under its auspices.

Its standards are widely used solely

because of the universal respect for

the technical and scientific validity

of its work.

The standards development work

of the Society is carried on by approx-

imately 84,000 participants who, volun-

tarily and without compensation, serve

on the thousands of committees, sub-com-

mittees, task groups and other units

within the Society. These persons

are representatives of industrial com-

panies, government agencies, academic

institutions, libraries, consulting

firms, etc., as well as individual

scientists, doctors, architects, en-

gineers and others interested in the

Society's work. Approximately 10%

of them come from outside the United

States.

The Society has provided the

framework within which these volun-

teers do their important work. The

Society provides only administrative

assistance and procedural rules and

regulations designed to insure that

due process is afforded all partici-

pants in its work and a true consensus

of their views is achieved.*

The opinion and judgment of the

United States Court of Appeals for the

Second Circuit in this action may

impose upon ASTM liability under the

anti-trust laws for the acts of any of

the many thousands of participants in

its work, even though those acts are

not authorized or endorsed by the

Society and are, in fact, beyond the

Society's power to prevent or control.

The Society has an interest in seeking

to prevent this unfortunate (and, we

believe, unwarranted) new development

in the law.

*ASTM is exempt from federal income tax-

ation under Section 501l(c) (3) of the

Internal Revenue Code, and exempt from

state and local taxation under Penn-

sylvania law. Application of ASTM, 231

F.Supp. 686 (E.D.Pa. 19564); ASTM Ve

Board of Revision of Taxes, 423 Pa. 530,

225 A.2d 557 (1967).

QUESTION PRESENTED

May a non-profit, membership

organization be held liable under the

anti-trust laws for acts of participants

in its work which purport to be taken

on behalf of the organization, but

which are not authorized or endorsed

by the organization and are beyond the

organization's power to control?

SUMMARY OF ARGUMENT

It is unreasonable, and contrary

to the public interest, to impose

liability under the anti-trust laws

upon a voluntary membership organiza-

tion for acts of participants in its

work which the organization has not

authorized or endorsed and which it

cannot control.

ARGUMENT

As we have pointed out above,

there are some 84,000 participants

in the work of ASTM's thousands of

technical committees, sub-committees,

task groups and other units. The stan-

dards and methods of test published by

the Society are the product of the work

of these persons.

Each of these units has a chair-

man and other officers. Virtually all

participants are (and must be to do

their work) equipped with ASTM station-

ery and other paraphernalia which could

be misused without the Society's know-

ledge.

ASTM has a headquarters in Phila-

delphia and a staff of approximately

200 persons whose function it is to

provide the administrative services and

support to enable the committees, sub-

committees and other units of the

Society to do their work. There is

absolutely no way that headquarters

personnel can control each and every

written communication (much less every

oral communication) emanatisg from the

chairmen, officers or members of the

Society's committees, sub-committees

and other units. There is no way that

the Society can prevent one or more

of these individuals from issuing

some interpretation of one of the

Society's standards or methods of test

which he purports to be issuing on the

Society's behalf but which is, in fact,

unauthorized.

If the Society may be held liable

under the anti-trust laws for such a

communication, the Society (a non-

profit corporation with modest assets)

is likely to continue to exist only

until the entry of the first substan-

tial anti-trust judgment against it

under this new rule of law.

We believe that such a rule of

law is unfair, unreasonable and not

in the public interest.

ASTM (and other organizations

like it) perform an important public

function. Rather than attempting to

describe the importance of ASTM's work

ourselves, we quote below what courts

have said on this subject:

"ASTM is the first source to which

federal, state and municipal govern-

ments turn in seeking specifications,

and ASTM specifications [standards] are

more widely used by them than the spec-

ifications of any other body. These

governments rely extensively upon ASTM

since they have neither the time nor

the money to write all their own spec-

ifications, and their dependence upon

ASTM is increasing all the time,

"The writing of specifications

by ASTM is an activity in the public

interest and conducive to the public

welfare, and is important to the future

operation of industry and government.

"Membership in ASTM, participation

on its committees, the expression by

members of their scientific opinions

in committee meetings, and voting by

members on proposed specifications, are

activities in the public interest and

conducive to the public welfare."

(Application of the American Society

for Testing and Materials, U.S.D.C.,

ings of Fact, Nos. 20,21,23)

“Among the objective achievements

of the Society's works may be enumer-

ated: Safer buildings, better roads,

improved surgical implants, more ad-

vanced missiles; New scientific discov-

eries and developments resulting from

advanced research; Better education

for science and engineering students;

Free library, free lectures and free

knowledge for all people; Critical and

necessary work for federal, state,

municipal and foreign governments;

Savings to federal, municipal and other

taxpayers.

"It must be apparent from even

this meager summarization of the Society's

spheres of activity that it is more than

a ‘business pool’ as urged by the City.

Dr. Allen V. Astin, Director of the

National Bureau of Standards (an arm of

the U.S. Government), speaking of the

public benefits derivable from the Soc-

iety's work said: ‘The general public

benefits through having an efficient

economy. And our present technological

way of life, which has raised for all

of us our standard of living to unpre-

cedent heights, is based to a significant

extent on having available standard

methods, reliable methods, of evaluating

the characteristics and performance of

material. Now, this is the main product,

and from this all of us benefit. And,

of course, the other participants in

this economy, like the producers, and

the big technological consumers, also

benefit. But from all of these, the

public is the major benefactor.'"

(American Society for Testing and Mat-

erials v. Board of Revisions of Taxes,

423 Pa. 530, 534 (1967) .)

A rule of law which imposes lia-

bility upon ASTM for the acts of par-

ticipants in its work, which the Society

has not authorized and cannot control,

would jeopardize the Society and its

work for no reason. The person who

does these unauthorized acts (and pre-

sumably the organization which this

person represents) may be held liable

under the anti-trust laws for their

conduct. There is no public interest

to be served by formulating a rule of

law which makes an unwitting non-profit

corporation (which would disavow the

acts if it knew of them) also liable.

Such a rule, if allowed to stand, can

lead to the destruction of voluntary

organizations like ASTM and the termin-

ation of their important public work.

=1ji-

CONCLUSION

For the foregoing reasons, the

petition of the American Society of

Mechanical Engineers for a writ of

certiorari should be granted and the

judgment of the United States Court of

Appeals for the Second Circuit should

be reversed.

1 peaaint a submitted,

Rainah Ligier 2

Lewis H. Van Dusen, Jr.

Morris R. Brooke

Robert J. Hoelscher

DRINKER BIDDLE & REATH

1100 PNB Building

Broad & Chestnut Streets

Philadelphia, PA 19107

(215) 988-2700

Attorneys for The American

Society for Testing and

erials

Philadelphia, Pennsylvania

AFFIDAVIT OF FILING

AND SERVICE

COMMONWEALTH OF PENNSYLVANIA:

COUNTY OF PHILADELPHIA | : ara

Lewis H. Van Dusen, Jr., being

duly sworn according to law, deposes and

says upon his personal bnowledge:

1. I am a member of the Bar of the

Supreme Court of the United States and an

attorney for the American Society for

Testing and Materials ("ASTM") in this

case No. 80-1765.

2 On May 22, 1981, I caused to

be sent by first class United States

mail, postage prepaid, 40 copies of the

foregoing Brief Amicus Curiae of ASTM,

together with the ancillary papers re-

quired by the Rules of this Court, to

the Clerk of this Court for filing.

=13@

3. On May 22, 1981, I caused to

be served by first class United States

mail, postage prepaid, 3 copies of said

Brief upon Harold R. Tyler, Jr., Esquire,

30 Rockefeller Plaza, New York, NY 10112,

counsel for petitioner in No. 80-1765,

and upon Carl W. Schwarz, Esquire, One

Parragut Syuare South, Washington, DC

20006, counsel for respondent in No. 80-

1765.

Sworn to and subscribed

before me this 22nd day

of May, 1981.

Otarv Public

ROSE A. MULLIGAN

NOTARY PUBLIC

PHILA. CCUNTY, PHILA.

My Commission Expires Jan. 19, 1983