Appendix — Hill v. Moe

IEA h Dy Office Supreme Court, U.S,

‘ FILED

AP2.04 19%

APPENDIX. a a ae

Se, ws =

IN. THE

SUPREME COURT OF he UNITED STATES.

OCTOBER TERM, 1961,

a 908

“RISS & COMPANY, ay

Petitioner,

v.

THE ASSOCIATION OF WESTERN RAILWAYS, TRAFFIC

“EXECUTIVE ASSOCIATION—-EASTERN RAILROADS,

EASTERN RAILROAD PRESIDENTS CONFERENCE,

* CARL BYOIR & ASSOCIATES, INC., and

THE PENNSYLVANIA RAILROAD,

Respondents.

APPENDIX TO PETITION FOR WRIT OF CERTI.

ORARI TO THE UNITED. STATES COURT

OF APPEALS FOR THE DISTRICT

OF COLUMBIA CIRCUIT.

/ ° ‘

“ail

Sr. Louis Law Painzinxe Co, Inc. 415 N. Eighth Street. CEntral 1-4477.

INDEX TO APPENDIX.

—_

> . “% ig are’

”

Order of the Court of Appeals on _Lelition for Writ |

of Certiorart, em@e P ge es te ee ie

Opinion ofthe Trial Court on Remand, January 16,

8 egal eee en ete eee ee Sn ee . ta

Order of the Court of Ropiaile of, tanec for Writ :

of Certiorani, Ma’ 19, 1950.0... Pe ee ar ay ae shar

Opinion of the Trial Court on Motions for Directed

Verdict, June 6, 160 00.0... Se Tee ee

Admissions by Riss, Read to the Jury During Trial... 49a

Excerpt From Closing Arguinent to Jury by One oft

PCIE SNE os di ca eo ns ve cues aoa

Instructions to the Bury, .......... 0.0.0 ee ede weet Oda

Explanation of Verdict Form by Triai Judge to Jury 105a

~The Jury’s Hypothetical Question... 0.2... POP CC Ne 10Sa

The Jury's Reqaest to Be Discharged .o.00..0. 0... Wha

The Jury's Kirst, Attempted Verdict o..... 0.0... 11a

Supplemental Listructious by the Trial Court ...... 129

The Jury's ecw. PEA IIS a oc seas Voss

Completed Form of Verdiet ..... WAG Veet . Wa

Distriet Court Judgment Mntered on Verdict et .. 13%e

Distriet Court Judgment Awarding Attorney’s Fees 14a -

Opinion Below... ee Prk ea

la

“°° 9 «6 x “ond

[6, k 4] OH; |

Uristed States, Court of Appeals

For the Distriet of Columbia Cireait:

April Term, 158.

Atlantic Coast Line’ Railroad Cer

pany, wf. al... : |

Petitioners,

gels Z No. 14,562.

Riss & Company, Tre.. rs ' ‘

Respondent

Before: Bazelon, Bastian and Burger, Cireyit Judges.

ORDER. .

This case ¢ame on for consideration on the order of

the District Court entered May 26, 195s, denying petition-

ers’ motion te suspend proceedings pending a determina-

tien by the Interstate Cofimerce Comission of whether

prior Conrmiission- Approved agreviments: are applicable to

the reduced rate agreéments referred to in Paragraph 18

of the Complaint as sappleriented, whether such rates are —

otherwise lawful and whether respondent» have abused the

processés of the Commission, on petitiovers’ motion to file

a petition for writ of certiorari, petitioners’ petition for

writ of certiorari, petitioners’ brief in. support thereof, re-

spondent’s brief in opposition thereto, the transeript of

proceedings in the Distriet Court antl on arguments of

counsel, ,

Whereas the order of the District Court Iss not a tinal

order appealable under 2s US. ©. 0 1291, nor an inter-

locutory oder appeakable under 2s ia i » 1292, and

it appears that petitioners sufficiently allege a conflict of

,

ae

‘jurisdiction between the Distriet Court and ai adminis-

trative agency, and stfliciently show that postponed ap-

pellate review may work hards ship on petitioners, United

States Alkali Export Ass'n v. United States, 325 U.S. 16,

907, POR (1945), and = *

Whereas it appears, from thie District Court's mem-

orandum opinion in-suppert of the order, that the District

Court relied upon the decision of this court. in Atchison,

Topeka & S. F. Ry. Co. v. Aircoach Transport Assn., ..

U.S. App. D.C. 2... 298 BF. 2a Sic (1958). and did not

-consider in ifs Opinion the effect of Federal Maritime

Board v. Isbrandtsen Co., 356 U.S. 481. 499 (decided May

19, 1998), and so: ’

Whereas it is the view of this court that the Isbrandtsen

opinion modifies the holding of the Aircoach case by re-

quiring that the issne of 4iie intent and effect of an agree--

ment approved by the Commission must, in a case where

such issue is the solecor dominant issue in the case, first

he referred to the Conmmutssion. prior to a court determina-

tien of whether such agreenient Violates the anti-trust

laws, and

Whereas it is the view of this court that the Isbrandtsen

decision does not necessarily require referral to the Com-

nission of issues such as those sought to he referred to

the Commission be petitioners’ motion where the agree-

ment is only one ef a considerable number of overt acts

alleged and where the poliey favoring referral is clearly

-ontweighed by other factors snehoas the probability. of

undue delay and the overriding importance of early con-

sideration of the other overt ets allowed, ane .

Whereas the Uistriet Court, having considered this ease.

in “all of its aspects, As ih) gb chetter position to ACT Tinine

whether, Or balance, Hspenston uf proceedings is Ware.

ratited,

,

It is hereby, ordered that petitioners’ motion for leave

to file a petition for writ of certiorari and petitioners’ pe.

lition for writ of certiorari are granted, and the case is

remanded to the District Court with directions to vacate

its order of May 26, 1958, and to reconsider petitioners’

motion to suspend Proceedings in tight of this order,

> Per Curiam,

Dated: Angustss, 105s. :

ORDER.

This case came on tor consideration on petitioner's

motion for claritieation of an order of this court in this

cause dated Auaust-S, 1958, respondent's reply thereto, the

motion of Aireoach Transport Association, Ine.. et al., for

leave to file a memorandum of law as amieus curiae and

to participate in oral argument, the lodged memorandum

of Aireoach Transport: Association, Ine. et al, and. re-

spondent’s reply to the motion of Aircoach Transport

Association, Ine., et al.

Tt appears theretrom that the order of August’ 8, 195s, |

did not fully set forth the view of this court concerning

the effect of Federal Maritime Board v. Isbrandtsen Co.,

6 TLS. 487, 499 (1958), upon the decision of this court.

in Atchison, Topeka & S. F. Ry. Co. v. Aircoach Trans-

' port Assn, ... U.S. App. D.C. 2... 253 F. 2d 877 (1958).

The intent, however, of the order of August 8 was to assert

our view that the Isbrandtsen opinion. modifies the holding

of the Aircoach case by reqniring that the issue of the

intent and effect of arate rednetion claimed to have been

-taken pursuant to procedures set forth in agreements ap-

proved by the Commission under See. Sa of the Interstate

Commerce Aet. must. inaense where such issne isthe sole

or dominant issne, first he referred to the Commission prior

to a conrt determination of whether snceh rate reduction *

violates the anti-trost laws. The ‘tissne' referred to in

4 --

the order was not intended toemear the issue of the ap-

plicability of See. da agreements to the rate reductions.

It is therefore Ordered that petitioner’s motion for clari-

fication of the order of August S, 1958, is granted to the

extent indicated in the foregoing paragraph.

It ix Further Ordered that the motion of Aircoach Trans-

port Association, Inc., et alc for leave to file a memorandum

of law as amiens curiae is granted, ut its Hotion for oral

argument is eheriteek. |

: _ Per Curiam,

Dated: Decenber 15,4858,

.

jak Supp. -bod4. |

tnited States Distriet Court for the Distriet

Hiss & Compuatiy, Ine.,

Phaaintit?, .

| Civil-Aetion.

3 : Mon No 4056 44.

Association of American Ratlroad-

etal,

Defendants. ener

nie eee & ~

‘OPINION.

Qn Autnst 8, 105s, the United States Court of Appreai-

for the District of Columbia remanded this cnse te the

District Court with directions to vacate its order of May

2H, TSS, and to reconsider petitioners” motion to suspend

proceedings in the light of said order.’

In the early part of 1958 petitioners moved to. stspened

all proc. ding= in this antitrust litigation excep? discovery

not connected with this motion, and urged the Court te

refer fo the Tne restate Commerce Commission one of the

hal

issues set forth in the complaint regarding rate-making,

pursnant to agreements on procedure tiled With the Com-

mission, se that the Court might obtain ruling on whether

these joint rate reductions were immunized: from the opera-

lien of the antitrust laws. Extensive briefs were tif and

the Court heard oral arguments. After delivering an oral

opinion trom the bench, the Court denied the motion in an

order entered May 26, 18. Relying strongly on a recent

Supreme Court decision not mentioned hy the Court in its’

oral opinion, most of the. railroad defendants then peti-

Heted fora writ of certiorari from the Conrt oy Appeals

”

zine asked that court te reverse this Court's order and te.

direct this Court to suspend proevedings and refer the

ahove issue to the Commission.” The Court of Appeals |”

eranted the writ, but declined to rule on the merits. In-

stead, Horemanded the case to this Court with directions

to. vacate the order of May 26-and to reconsider petitioners?

motion in the fight of its order and of the Supreme Court's

fecent holding in Federal Maritime Board v. Isbrandtsen

Co. et ab. 356 1S. 481 (1958).

Petitioners then requested the Court: of Appeals te

clarify certain language in its order of August S158,

The Court granted this request in an order dated Decem-

her 16, 105s,

Before disenssing the legal issues raised by this motion,

* .

ifois necessary to summarize the background of this com

y . . . *

ile ens sa threat all Iss tyes may be View onl 1m) their Hroper

content.

In 154 Riss & Company. Ine. a common « carrier by

motor vehicle in interstate commerce, filed this civil anti-

trust suit, seeking an dijunetion and SOO000,000 in treble

damages. It alleged that beginning in or about 1950 de-

fendants, most of whom are railroad companies, had agreed

and conspired in unreasonable restraint of trade and com

meres to injure or destroy plaintiff's business amd to ae.

—ta—.,

quire a monopoly of land transportation of property in the

United States, and had thus violated Sections Land 2 of

the Sherman Act (15 U.S. ©. $5 1, 2):

Plaintiff alleges it has been a common carrier of prop-

erty by motor vehicle since 1927 and operates as authorized |

by the Interstate Commerce Commission * throughout

Awenty-two states plus the District of Columbia. it ses

over SOO truck units and employs over two thousand pier-

sons. Riss also has alleged that during the yeary from

1950 to 1953, inclusive, i was one of the five larwest inter.

staie motor carriers in the United States im terms of gross

revenues and i ix, and has heen for several years, one of the

largest motor earriers of wilitary supplies, including am-

mfnition and explosives, for the Arined Forces. About

fifty-eight first-class railroad companies, several joint raii-

road organizations and trade associations and one pub lie

relations firm are defendants in this action.

In order to effectuate the object of the allegea con- ~

xpiracy. plaintift charges that defendants employed various

means, some-of which are cited as examples in the com-

plagnt. Defendants are occused of having carried on a

‘program of soliciting, directly as-well as indirectly through

front’ organizations, the elected and appointed officials —

of various states to take steps leading to the revocation

and cancellation of the interstate operating authority held

by plaintiff. In 1952 it ix alleged that some of the defend-

ants employed a public relations expert to persuade the

Publie Utilities Commission of Ohio to file proceedings

before the Inftrstate Commerce Commission looking toward

the cancellaffon of plaintiff’ operating authority.

By similar methods of solicitation, according to the eom-

plaint, officials of states, cities and towns through which

plaintiff operates, were urged by defendants to enact stat-

utes, ordinances and regulations designed to unduly hamper

the operations of the plaintiff and to render them ec momi-

.

a.

cally unfeasible, such as by imposing unreasonably low

Weight limits on truck shipments or by banning the use hy

Plaintifl's vehicles of certain inportant highway rottes,

Defendants are alse alleged to have urged, irvetly amed

indirectiy through ‘front’ organizations, that «tate offi.

cials carry ont a campaien of nnusnally <ttiet enforcement

of statutes, ordinances and veogulatians partic ularly aimed

at plaints s Vehicles «neh as by arging the Public Utilitie<

Comm! ton of hie to assign <pecial investigators to fol

low plaintiff's truck= for hundred< of miles in order te

discover possible vied: Wiews. «

Defer nedlant= alse are alleged te have abused their privi-

hex of intervention in | procemdinw before the Interstate

Commerce Commission. ecording to plaimtitt, defendants

Joined together to carry On AN eStensive and vicious cam-

paicn of anti truck propuag camels in order to persuade eiti-

wens" “roups, automobile elutes ane other neutral organiza-

Hens to register their complaints against Riss in Hie course

of proe vonlings started by Riss before the 10. €. to obtain

new operating authorizations. Other hehe, compet tive

practices, such as cirenlating and publishing fale and

‘malicious statements about Ris~ and it- officers afte also

charged in the complaint.

According to the complaint, « fendant< used railreniel

eroups in their publie relations campaign as well as

“front organizations whose « connection with the railroads

would not be known to the public. It ix also asserted, that

defendants tried to infiltrate and make use of several inde-

pendent public organizations such as the -MMinois Parent-

Teachers Association and the Congress of Parent« amd

Teachers of Oklahoma in order to achieve their unlawt al

objectives. Chief reliance, however, ix alleged to have veen

placed on such instrumentalities ax + ‘ompetitive Trans.

portation Research." ** Motor Carrier Buren * arel **Com-

mittee on Motor Transportation ’*-<et np by defendants: as

— !

well as upon other temporary committ\es and organiza-

tions. Plaintiff Claims that defendants spgnt large sums of

money, estimated at about $1,000,000, ip“earrying out their

unlawful activities.”

In aaiare, 1958, with the permission of the Court,

plaintiff filed a supplement to its complaint, which is .em-

bodied in paragraph 18. Plaintiff claims therein that, pur-

suant to the unlawful plan described above, defendant

railroads submitted to traffic officials of the Department of.

Defense in 1955 a forty per cent reduction in rate on the

carriage of explosives, totaling more Qian 50) 000 pounds —

by railroads competing with Riss for the same kind of -

trafic. It is plaintiff’. claim that this reduction was in-

tended to aecomplish one of the principal objects of the

conspiracy, i. e., to exciude plaintiff from the explosives

traffic, and it has allegedly had that effect with respect to

the principal points served by the plaintiff. }

Plaintiff further alleges that defendants’ con has

caused serious damage to its business and to its pAputa-

tion ard has forved plaintiff to spend large sums fo coun-

teract the effects of defendants’ conduct. By way of relief

plaintiff demands the following: — a

ee. Injun tive relief permanently enjoining and re-

straining AAR, Western Railways, Presidents Confer-_

ence and Eastern Khilroads, and each of them, .from

creating or continuing any cofamittees, subcommittees,

bureaus, departments, sections, divisions, subdivisions,

or other association activity, the principal purpose of

which is to festrain, impede, impair, hamper, harass

or eliminate the competition of plaintiff and of other

motor carries; —

**2. Injunctive relief permanently enjoining, restrain-

ing and prohibiting eh ay and each of them and

their officers, directors, ag@nts, servants and employees

_

~ ih

“from agrecing, conspiring or combining to restrain the

competition of plaintiff and from conspiring, combin

ing and attempting to monopolize land transportation

- by the elimination of plaintiff and trom perforning

any-acts in furtherance of suc ho unlawful obiects and

purpose;

. Judgment against drlcndants and each of them

for weeny being the amount equal te three times

the damages sustained by plaintiff; 0 £

og Judgement against defendants and each of then

_ for the amount of reasonable attor Heys” fees and Costs

of this ae tion:

‘). Such other and further relief as to the Court

may appear just and proper: and

. ,

“e. Injunctive relief enjoining the defendant riatl-

roads from accepting traffic pursuant te. te illegal

_ quotation described in paragraph bs hereéet

This is a summary of plaintiff's allegations. In thesr

motion to suspend and to refer the rate reduction issue te

the I. (. €., defendants sevk to invoke the doctrine of

“primary administrative Jurisdiction.”"> The defendants

contend Shat a new issue was raised whic ‘h mvelves the

primary, if not the exe lusive, jurisdiction of the Interst; ate

Commetre ( omission When plaintiff? was allowed by the

Court to supp’ ment its complaint and to imelude in pura

graph IS the ajlegation that the uniform dnd Concerted rate

reduction, Which took effect on or about November 20,

1955, was intended to exelude the plaintiff from the Pasi

hess of carrying such shipment. of explosives: that said

quotation was made for the purpose of effectuating one of

the principal objects of the conspiracy, th: at ois, the elimi.

nation of the plaintiff as a competitor with the railroads |

j ,.

Pg

ci jor *:

‘fint © “xplosives traffic, As a defense ‘to this allegation, ‘it’

is also’ argawd that the new wates. are reasonable and eom-

pensatory when all thegeost factors are taken into consid-

‘eration, and that, furthermore, the. rate quote ition Was set

?

up according. to: procedural agr erments “approved by the

(‘ommission and thus i Is LIM ZeC ‘from the operation of

the antitrust laws by virtue of 49 ELS. CL, Sob (9). It is

> glefendants’ position that this matter iMedtremely. techni-

®cal cand complex and ‘thus ‘the Court should: obtain the

- expert opinion of the Co MISSION Ww ith respect to defend-

amts?* contentions-beforys the Cast woes to ‘trial.

Plaintiff argues, on the other hand, that it is immaterial

whether defendants’ act, of reducing rates, considered by

“itself, is ‘covered by prior procedural agreements approved -.

byethe Commission or is immunized from the antitrust

laws because it-is’a well-settled principle -of law that-a

lawful act may be properly alleged as a means of effee-

tating one ‘of the principal objects of the alleged con-

spifacy; that is, the elimination of plaintiff as a conr

7 “petitor with the railvoads for explosives traffie.

T hese, then, are the basic legal ixsnex before the Court.

Certaih practical gonsiderations also enter into the ease.

This private antitrust, suit against almost sixty defend-

ants has been On the@locket over four years, ‘During that

time, five diffe in: have made rulings. on various

preliminary motions. In the interest of finally resolying

the complex and serious isstes raised by this case and of

‘doing so in the spirit of Rule 1 of FL R. GC. P., this Court

_ has set Qetober, 1999, as a tentative time for trial A

great deal: of work by hoth’ Court and counsel will vet have

~ to he done in order to meet such a schedule, and this date

may be delayed because of the -recent proceedings in our

Court of Appeals. Both ‘sides liave- requested trial? hy jury,:.

and: have estimated that thie trial will last from? four. to

sit motiths. The Court’. has i¢ problem is this: Should this

?

?

Ud

e

; —+ Ha +é

important antitrust suit, already more . thati four, years

_ old, and ‘involving i Issues of serigus’ Importance io the fra.

. tional transportation industry, be further delayed tor

‘ue or perhaps several years inorder that the. Court ivigehit

— the “expert opinion of. the Luterstate) Commerce,

Conimission as to whether one of me ¥ overt acts alleged

to have been committed purstiant Ne vn. Sherman Act con:

spiragy ought “to be Imnunized from the operation of the

antitrust laws? os

The rate reduction issne is, raised in paragraph IS of

the ¢ pent iis Supplanente d, which reads as follows:

"18. On or about Oct. 20, 1955, the railroad: defend:

agits herein eaused to be submitted to. traftie offigials

emploved by thie Department of Defense a tmiform, une

published rate quotation, by and on behalf of the rail-

roads engaged in cartying explosives traffic in com.

petition with the plaintiff, Said quotation established

railroad rates for carrying explosive shipments total"

lig more than 50,000 pounds which were nearly forty

percent below the veneral level of such rates prevail-

ing for the previous eight Years. Said uniform and |

concerted rate reduction, which took effect on or about _

November 20, 1955, Was intended to exclude the plain-

tiff from the dusiness of carrying such shipments of ¢

explosives and has had that effect with respect to the

principal points served by the plaintiff. Said quota-

tion was imaile for the purpose of effectuating one of

the principal objects of the CONSPIT: ney ch reread herein,

to wit, the elimination of the plaintiff as a competitor

with the railroads for explosives traffic and has sub-

“stantially injured the plaintiff's business., The Tnter-

state Commerce Commission hi aS no jurisdiction over

‘said. quotation and plaintiff will continue to aut

substantial and irrepar, te injury from said: jlleg

quotation -until and unless the acceptance of a

pursuant thereto i is enjoined by this Court, ol

,

~

‘

—

Ila

In its earlier ruling on this motion, thix Court) was

strongly influenced by the decision “in Atchison, Topeka

and Santa Fe Railway Co. et al. v. Aircoach Transporta-

tion Association, Inc., et al., 102 U,S. App. D.C. 355, 253

F. 2d S77 (1958), here Inatter referred. to as ACTA. On

notions by both sides for summary judgment, the District

Court there had ruled thit the ¢oneerted quotation by rail-

roads under Section 22: of the LC: €. Aet of certain var--

iable rates and package bids for military passenger traffic

Were por se illegal under the antitrust laws, qnd that Ue

US. C2 5b (9), did not grant immunity from these laws,

In reversing, the Court. of Apfreals held that it could

not be said as a matter of law that all joint rate -redue-

tions under section 22 must be excluded from, the’ class of

_ concerted action’ covered by prior proe odural agreetie its

approved by the Commission under 49 FL S. C., $4b (9),

and, therefore, it was error to hold that all such redue-

tions in rate must be denied immunity from the antitrust

laws under 49 UL S.C, ¢ 5b (9). Hence, some section 22

rates arrived at. by joint. netion might he within the cov-

erage of pr ior approved arrangements: for rate making and |

heneé might be immunized, from the antitrust. laws. The

Court of Appeals felt that the Cor mission's prior rulings

us to the possible or vetual coverage of defendants’ conduct

_by proe edural agree ments or as to the-C OMniission’s power

“to decide these very questions were not clear’ and decisive.

The Conrt observed. at p. S85: ;

**Nevertheless,- the questions are appropriate for -

(‘dénimission consideration, even though, as we believe,

exclusive primary jurisdiction over either of them does

not reside in the Commission by reason of section

Ba (7) [49 US. ©. Sb yd

: The Court of Appeals then ruled that the District Court

should, in its diseretion, withhold decision on the inter-

pretation of the F.C. C. Aet and the approved procedural

¢

.

loa

agreements until! the Commission has had a chance to

decide initially whefher, in its opinion, the railroad rate

reductions can be relieved from the antitrust laws because

of coverage by approved agreements.

After discussing the relationship of defendants’ practices

to unlawful price-fixing, the Court of Appeals their set a

limitation on the power of the Commission to resolve the —

autitrust aspect of the rate practice... Jt said at page 365:

“One further substantive legal question must be eon-

sidered. Even though it-should be found in the end

that the practices as such have been validly imununized

by section 5a approved agreements, nevertheless, if

they are part of an effort by Railroads: in combination

or conspiracy to eliminate the competition of Aircoach,

rather. than used merely to méet that competition, the”

practices’ would be removed from the. protection. of

section da -(9).° We do not think the Actor any agree-

ment which has been approved under it can bes con-

strued as authorizing the use of such practices for the

purpose of eliminating the competition of Aircoach

for the section 22 transportation involved. See, by

analogy, American Tobaceo.Co. v. United States, 328

U.S. 78i, 809, 66'S. Ct, 1125, 96 L.Ed. 1575;"STate of

Georgia v. Pennsylvania R., supra, 324. U.S. at page

$58, 65 S. Ct. at page 726: Kobe, Inc., v.. Dempsey

Pump Co., 10 Cir., 198 F. 2d 416, 422; Noerr Motor

Freight, Inc, v. Eastern R. R. Pres. Conf., D.C. E- D.

Pa., 155 F. Supp. 76%, 814-816, 822-825; Parmalee

Transp. Co. y. Keeshin, D. (. N..D. TIL, 144 F. Supp.

“480, 484; Noerr Motor Freight, Ine., v. Eastern R. R. |

Pros. Conf, D. C. B.D. Pa. 113 F. Supp. 737, 142-04;

Slick ‘Airways, Ine., Vv. American , Airlines, Ine, D. ©.

DN: J., 107 F. Supp. 199, 214, appeal dismissed sub.

- nom. American Airlines, Inc., v. Forman, 3 Cir., 204

F. 2d 230, certiorari denied 346 U. S. 806, 74.8. Ct. 54,

4a — ; ;

-, USL. Ed. 336; United States vy. Association of Ameri-

_ can Railroads, D.C. B. Nebo-4 FR. D. 510, 526. 5 0

The motion of Railroads i is not to be construed as ad-

_mitting factual allegations in regard to a purpose to

’ destroy competition which would have the legal result

of removing Railroads from any possible protection

from the antitrust laws; sor can Aircoach’s motion be’

construed as dhandoning those allegations. Thus, on

this aspect of the case, there remains a factual dispute.

Moreover, this aspect of the.case need not, be submitted

for.consideration or initial decisiom by the Commission

: us to either questions of fact or of law.

“There thus arises a matter of ‘procedure. As to

this, a discretion must be left to the District Court |

after aires the parties. It might be considered pref-

erable, Aireoach desires to pursue the assertions

ata a purpose to-destroy competition, that this

branch of the case shotild be the subject of a hearing,

limited to that problem. — Should Aircoach prevail

Railroads would be liable in damages, and an appro-

priate’ injunction also could be granted. Or proceed-

ings in the Distriet Court on this subject, could await

reference to the Commission of the _— of cover-

age by statute or approved agreement.’ (Emphasis

supplied.)

The case of American Tobacco Company v. United States,

98 U.S. 781, 809, decided in 1946 and cited above was a

criminal action brought under the Sherman Act and the

defendants, who were ‘officers of Jarge tobaceg companies, -

were convicted on four counts of an indictment charging

‘conspiracy in restraint of trade, monopolization, attempt-

ing to monopolize, and conspiracy to monopolize, In the

petition for éertiorari the question was limited ‘to ‘whether

actual éxclusion of competitors is nee essary to. the crime

‘of monopolization under Section 2 of the Sherman Act.’

e

s

A

-—~ lou —~

. At page 809 the Court said: ‘

“It is not the form of the combination or the pur.

ticular medns used but the result to be achieved that

the Statute condemns. It is not of importance whether

the means used to accomplish the unlawful objective

are in themselves lawful or ‘unlawful. Acts done to

give effect to the conspiracy may be in’ themselves

Wholly innocent acts. Yet, if they: are part of the sum

conspiracy whic h the statute forbids, they come within

its prohibition. <i

The case of: State of Georgia v. Pennsylvatia Railroad

Company, 324 U.S. 439, decided in 1945, was“a suit by a

‘state charging that the ‘defendant railrodds had set up

“rates -that diseriminated against the ports and cities of

Georgia and greatly hampered the- industrial and eeonomie-

development of the entire state, in violation of the antitrust

laws. oy

One of the defendants’ contentions was that the T. C. ¢

had jurisdiction-over these rate matters and: had actually

approved these rates under I. C. C. Act standards. The

court held that carriers are also subject to the antitrust

laws. Even though the rates had to be cleared through

the [. C. C, it may he that circumstances make these rate

agreements restrictive rather than competitive. The court

said that a conspiracy. to fix rates might be illegal though

the rates fixed were reasonable and nondiscriminatory,

and, as Mr. Justice Brandeis had said in the Keogh case

(260 U.S. 156), the fact that rates had been approved by

As I. €. C. would not. it’ seems, bar proceedings by the

Government.

The court then stated: , "

‘Tt is sufficient here to note that we find no warrant

in the Interstate Commerce’ Act and the Sherman ‘Act

for Saving that the authority to fix joint through rates

of the acts Which are relied upon to effectuate the.

~~ Iba. - ;

clothes with- legality ‘a conspiracy to discriminate

O against a State or a region, to use coercion in the fixing

ce of rates, or to put in the hands of a combination of

carriers a veto power over rates proposed by a single

carrier." (Kmphasis supplied.)

It is clear from the above language in the ACTA Case.

—™ that a court. need not refer to the Commission the issue of

whether a rate quotation was made as part of a combina-

tion or conspiracy’ to eliminate a competitor. This follows

logically because such a joint act if combined with the.

unlawful intent af{-eliminating a compefitor would fall

outside of mite “eve granted by 49 U. S. C. 5b (9)

“regardless of a possible T. C. C. ruling that the methods of

arriving ‘at the new rate conformed to prior procedural

agreements filed with and sanctioned by the’ Commission.

The Court of Appeals also authorized a separate hearing

on the allegations of intent to destroy competition which

might, if the defendants in ACTA lost, result in a deter-

nination of lability and an award of damages and injurie-

tive relief:~Thus, a ‘clear distinction was drawn between

the antitrust aspects and the technical rate-making issues

in the ACTA case. In ACTA, both aspects. grew out of

the same type of activity, namely, section 22 rate uuota-_

tions. The lawfulness of these quotations formed, for all

practical purposes, the sole issues of that case, Since the

Court of Appeals anthorized the Distriet Court, in ACTA,

in its discretion, to itself decide the fundamental questions

__ of antitrust liability and damages, it seems to be far more

important to follow that reasoning. in this ease where the

technical aspects of section 22 rate-muaking constitutes only

one part of the issue raised by paragraph 18 of the com-

plaint as supplemented und where this rate reduction itself

forms only one out of the many overt acts’ alleged by’ the

plaintiff.

However, in the view of«the Court of Appeals, the deci-

sion of the Supreme Court in Federal Maritime Board v.

f

V

Isbraudtsen Co. et al, : 336-1 _S. 481 (1958), has modified

the holding in ACTA by placing on District Courts g duty

under clearly detined conditions to refer certain issues to

administrative agencies? The ‘ourt of Appeals in its order

dated August §, T95S8. stated as follows:

. &

Sit is the view-of this court that ‘the Isbrandt-

s€0 opinion niodifies the holding of the Aircoach case

by requiring that the issue of the intent and effect of

an agreement approved by the Conmimission must, in

@ case where such issue is the sole or dominant issue

in the case, first be referred to the Commission prior

to a court determination of whether such agreement

violates the anti-trust laws,

plied.) / ; :

*

(Emphasis sup-

Answeriny defendants’. motion for clarification of the

above language, the Court of Appeals in an order dated.

December 16, 1958, stated as follows:

se

‘+ The-intent; however, of the order of August

% was to assert our view that the Isbrandtsch opinion

modifies the holding of the Aircoach case by requiring

that the issue of the intent and effect of a rate redue-

tion claimed to have been taken pursuant to procedures

‘set forth ii agreements approved by the Commission’

under Sée. Ja of the Interstate Commerce Act, must,

in-a case where suchssue is the sole- or—dominant —

Is the

_issue,first-he-referred to the -C oOMmIssion’ prior to a

court determination: of whether such rate reduction.

violates the anti-trust Jaws. The ‘is«ne’ referred to |

in the order was not intended to mean the issne of the

applicability of seg. Sa agreements to the rate reduc-

tions.’’

The Court, in its order of August 8, interpreted Isbrandt.

sen as applying to a factual] sitnation more in line with

the case at bar, and used the fotiow' ing language:

*

&.

— sa — fe

Gt is the view of thisseourt that the Isbrandt-

sen Aecivion does not necessarily require referral to

the Commission of ‘issues such as those sought te be .

Jeferred to the Commission by petitioners’ motion

where the agreement is only one of a considerable

number of overt acts alleged and wheré the policy

favoring referral is clearly outweighed by other factors

such as the probability of undue delay and the over-

riding importance of early consideration of the other

overt acts alleged. .. ." ( Emphasis supplied. )

Before considering the preeise way in which Isbrandtsen

modified ACTA with respect to thisronse, it may bé noted

that this Court, at the yequest of defendants; had) con- —

sidered Isbrandtsen before it denied the original motion

~ to suspend. | |

The sequence of events leading up to this Supreme Court

decision is of importance in’ defermining its scope. In

“1952, an association or ‘conference’ of steamship lines

engaged in foreign trade adopted a dual system of inter-

national freight rates. Under this system, a shipper would

_ pay less than regular rates for the same sery ice if he signed

an agreement-to patronize the conference exclusively. The

ostensible purpose of the dual-rate arrangement owas to

meet the competition of an‘independent carrier, Isbrandt-

sen Co..-Inc. The proposed system wes submitted % the

Federal. Maritime Board. fér approval pursuant te law,

and orders offapproval were issued in December, 1955, and

January, 1956. Isbrandt<en Company, Inc,, petitioned our

Court of Appeals to review these orders. ThatCourt set —

aside the Board's order on the ground that the system of

dual rates was illegal per se under 414 ef the Shipping

Act of 1916 [99 U.S. App. DLC. 312, 239 F. 2d 923 (1956) ]:

The Supreme Court granted certiorari to resolve the

issue as to the legality of the-dual-rate system and stated

,

.

in its opinion at page 487:

“4

Its

The question. for our decision is whether the

Court ef Appeals correctly’ set) aside the Board's |

orders." oe :

The Supreme Court agreed with the Court of Appeals —

held that the dual-rate system was illegal. .

Examination of the opinion shows thht the case was not

_ decided by application of the. doctrine of ‘primary admin-

istrative jurisdiction". Under this doctrine, the courts |

- often decline to determine a controversy, first presented

to it, where it involves a question which ix within’ the

jurigdietion of an administrative ageney, prior to the de./

‘cision of that queftion by <he administrative tribunal, awd

where “the question demands tie exercise of sdinjaien-

tive interpretation requiring the special knowledge, ex.

_ perience and services of the ageney to decide Aeohnical

_amd ent ivate matters of fact. by >

" 4

The cotirt in Isbrandtsen discussed this ppactic al policy

‘of judicial administration in the course of ‘explaining the

rulings in two of its earlier decisions hic h had been re-

lied upon by Par hast Conference. 4On page 496 of its

Py

opinion, it said: \ 4G

‘Petitioners ‘argue that @fir construction of * 14

Third is foreclosed by ‘this Court "s decisions in United

- States Nav. Co. v. Cunareé S. S. Co... 284 U.S! 474

(76 L. Fd. 408, 52 S.A't. WAT): and Far Kast Confer-

ence v. United States, 342 US. 570 (96 LL. Ed. 576, 72

S. (Ct. 492). A reading of those opinions immediately

"refutes any snegestions either that fhis issue was

expressly decided in those cases or that our holding

here is a fully consistent with the disposition of

those cases.’

The Court then summarized petitioners’ contentions ius

toliows: tka

The Board and the Conferenee argue that, if the

Court in these earlier cates had thought that © 14

tad

> “i : a . -“; -

aac “Thy — -

Third in any way makes dual rates per se illegal and

—~ thus not within the power of the Board to authorize

it would not have found it nevessary to require that:

the Board first pass upon the claims.’’

” In rejecting this reasonime, the Court said at page: 48:

**It is,: thereforg, very clear that these cases, while

holding that the Board had primary jurisdiction to

_ hear the case in the first instane e, did not signify that

the statute left the Board free to approve or dis-

approve the agreements under attack. Rather, those

cases recognized that in certain kinds of Viigation

‘practical considerations dictate a ‘division. of fune-

, tions between corfrt and ageney unde, which bl

ter makes a preliminary, comprehensive investightion

of all the facts, analyzes them, and applies to them

the statutory scheme as it ix construed,”

. . .

Thus, it is elear that the problem of whether or not a

distriet court. should refer certain, issues to dn adminis-

trative agency was not squarely bedore the court in the

Isbrandtsen cas. . . ‘

*- Pe

The question next arises: In what jifecise “way does |

' Isbrandtsen - modify ACTA! ACTA contained two basic

holdings. “The first related ‘to the proper forum for de-

cision of issues as to the procedural agreements and their

connection with Section 2 rate practices. ~ The second,

dealt with the exceptional cireumstances under which See.

oa immunity wouki not apply, On the first issue, the ¢ ‘ourt.

of Appeals held in the ACTA case that the T. Co €. and

the District Court had coneurrent jurisdiction to decide

the intent and effeet of approved procedural agreements

in telation to Seetion 22 rates, and whether coverage by

these agreements would immunize these rates from the

antitrust laws. On page 364 of that opinion the court

stated ax follows:

2

Vv

‘In short, the court. while retaining jatisdiction.

should in its discretion withhold decision on the inter

pretation of the statute and existing agreements ap.

proved under section 5a. in-ular as the challenged

practices aré concerned, until thi Commission has hig

ah opportunity te-decide initially whether in’ its view

thie Railroads Cah, With respect to- thes practices, be

- relieved of the operation< of the avtitrust laws unide 'T

the statute and, if so. whether they hate heen so re.

‘lieved by any approved agreement, and, if _se, by

Which agreement or agreements, by what provisions

‘refrain from deciding these questions. We do not

hold that it is required to decide them. The court

could then proceed according to its own light to inter-

pret either the statute or the agreements.”’ : mphiasi-«

<upplied. ) -

On the-sxecond question, it was held in AS‘TA that, under

no circumstances could antitrost immunity under 49 US.

ob (9) be held tp apply to the use of approved procedures

to stt Section 22 rates if they were part of an effort by

railroad~ in combination or conspiracy to eliminate the

competition of Atreoach.

It is clear from the language in its order that the Court

of Appeals interpreted Isbrandtsen a- modifying the first

holding in ACTA only by limiting the District’ Court's

discretion to refer ixsues.

It ix the governing rule now that the issue. of the intent

and effect of a rate reduction, claimed to Have been taken

pur-giant to procedures set forth-in agreements approved

by the Commission under Section 5a of the Interstate Com-

merce Act, must, in a case where such issue is the sole or

dominant issue, first be er Sos to the Commission prior

-to a Court determination of whether such rate redaction

violates the antitrust:-law-.

+.

tereot, and a= of what date. The Commission might .

isclaim jurisdiction, or for-some other reason might ©

uh.

Der,

Thus, it would appear. that the second holding of AC TA

stands unaffected by Isbrandtsen.

Tt plaintiff, during Ahe-téial, cannot prove an affirmative

answer to this- question, then it concedes it cannot recover > *

based on the rate reduction issue. On the other hand, if . | -

it should develop at the trial that the plaintiff can prove ~

that the rate reduction ax set forth in paragraph 18 was

one of séveral overt acts alleged, and prove that this‘ rate

reduction was made for the. purpose of. effectuating one

1 therein;

that is, the elimination of the plaintiff as/a competitor

with the railroads for explosives traffic, then under ACTA

no amount of coverage by approved agreements and no

degree of immunity -under 49 U.$. C. Sb (9) could remove:

—the-rate reduetion from the prokibitions of the Sherman

Act.

of the principal objects of the conspiracy charge

In reaching either of these alternatives, no detérmina-

tion by the Commission seems ne cessary on the above

contentions made by the plaintiff. E ven if the C ommission

were.to decide that the rate reduction, considered by itself,

conformed to the standards of the Interstate Commerce

Act, it is nevertheless well settled that a lawful act may

be validly alleged as forming a part of a conspiracy for

an unlawful purpose such as to restrain trade. Noerr-

Motor Freight v. Eastern Railroad Pres. Conf., -155 F.

Supp. 768 (KF. D. Pa. 1957).

The basie reason behind defendants’ motion-to suspend

is the expectation of obtaining av LC. (. ruling that the

Section 22 rate yeduction is ‘timmunized’’ from the op-

eration of the antitrust laws by 49 U.S.C. 5b (9). This

Court cannot. say how the Commission cad be likely to:

rule if this issue alone were -submitted ‘to it. After'a sub-

stantial delay in the. final disposition of this issue, it is

_possible that defendants might obtain an adverse ruling..

Then all the harmful effects that a long delay brings to

.

protracted litigation would have been endured to ho pur-

Las

- The result would not be different if the de ‘Tendant~ won

all of theiMarguments hetfdre the Commission, ‘In effect,

the Commission would be ruling that the Sfction 22 rate

reduction on ‘explosives, standing alone, we re covered by -

approved agreement= on cate procedures and that there-

fore they are pas from the operation of the antitrust’

laws by 49 U. obe().° Thus, no antitrust suit could

be branght. ci on et act of reduei ng rates alone. This

would simply nican that a private party could hot validly

file a complaint alleging that defendants violated the anti-

trust laws solely because they concertedly Jowered the

rates on explosives traffic for the United States Govern-

ment. Without such an immunity. provision, railroads

would often be suspected of combining th fix prices when

_ they make even routine changes. in their rates in coopers

tion with each other. The railroads are right in their

contention that cooperative or ‘joint rafe-making is. often

exsential, especially when the goods jn question. ‘are nor-

mally handled by many ec mpanies on a vast, interlocking *

‘rail system. As the court in ACTA observed at 102 US.

‘App. D.C. 2355, 361, 293 F DUNTT, 883 (195s): :

*. . . Furthermore, upon the basis of extensive

testimony in committee hearings on section Sa, bear-

ing on its porsible applic ation to section 22 ‘rate ad-

justment’ or reduced rates for war materials, the:

House and Senate Committee Reports pointed out that

the evidence Was convincing that the joint) organi-

zations maintained by the carriers were not only neces-

sary to ehable them to meet the commercial require-

‘ments of the nation but al<o were: indispensable to

‘the requirements of national defense.’

. Thus, tt would seem that the antitrust immunity that de-

fendants inv ke was designed te protect ordinary rate.

\

\

— a

aan

‘making i in the course of regular business so as to, adjust

to changing .cost® and to-meet the challenges of outside

‘competition. C@uld the protection of 49 U. S.C. Sb (9),

assumed above, exténd to the use of the power to set rates

in concert as part of a plan or conspiracy to eliminate

competition? According to the holding in ACTA quoted

above it could not. Even if a given joint det of reducing

rates were to ‘Ne considered as lawful standing by itself,

it may still’ be. properly alleged as one of the means used

to effectuate a conspiracy to accomplish an unlawful ob- —

‘ject. _ This is clear from the cases: cited in the ACTA

opinion.

Thus, the rate issue is gn integral part of the alleged .

conspiracy, and cannot be evaluated apart from the other.

a allegations in the complaint. There are two possibilities

that would result from referral to the L. C. C. If the LC. €.

heard argument or tonducted a hearing solely upon the

immunization issue raised by defendants, then ifs ultimate ~

ruling’ would, under the plaintiff's allegations, certainly

-be indecisive. On the other hand, the parties. might be. .

permitted ‘to present all of the issues raised by the plead-—

ings so that the Commission could get the entire picture.

This would be @labo-ious w ay to resolve only one issue

in.this complex case. Several, months would probably be

required to present all‘of this evidence.. Furthermore, at

the end of this process plaintiff, if it prevailed, would still

‘be unable to obtain the substantive relief it seeks here.

- An entire retrial. of the case would.then be necessary in

the District Court.

The Court must conclude, therefore, thafa reference of

the rate-reduction issue to the I. C. C. would be a waste

of time and offort and would .entail unnecessary ="

- on the part of all parties to this litigation. |

_ Furthermore, it is also clear that the intent and effect

of the Section ee rate-reduction ‘is in no sense the dotn-

Fé

— 2a

inant, Much less the sole, issue of: this litigation, The com-

plaint as supplemented alleges a complex gonspiracy in

violation of the Sherman Act. A concerted reduction in

explosives rates, is alleged to have been one of the many

overt acts designed to effectuate the unlawful plan. When

the plaintiff filed the, original complaint the rate issue

was not included andthe other allegations were relied

upon to constitute. a cause .of action. . °

Defendants, in their) supplemental memorandum. filed

September 29, LOo8. try to de-cmphasize the non-rate alle-

gations of the complaint.’ On page 8 it is said:

6

~ There may be some evidence relating to the

alleged-campaign of defaniation. But this will be only

to lend color to plaintiff's claim. that there is a con-

tinuing conspiracy among the defendants.

cc <s * * + ¢€ @

“Obviously, plaintiff can say that the complaint

- raises issues as to defamation. Bat the assertion of

issues does not make them substantial."’

However, in the course of oral argument on this motion on

May 23, 1958, this Court asked Mr, Bail, counsel for some

of the defendants, whether he would be wiling to stipu-

late that the non-rate or other charges contained ‘in plain-

tiff's complaint are true if spa) rate-reduction -issue by

itself were sent to the TC. C. (Tre pp. 35, 96, 97). The

exact colloquy is as follows on page 95 of yr Transcript

of Proceedings before the Court on May 23, 195s:

»*'*The Court: Let me ask vou this. FE don’t suppose

you would consent to this. I wouldn't cither if I were

you. Would you be willing to go over to the Com-

mission and say to this Commission, in effeet, this:

. that we-admit for the purpose of this case, if it sent

over there, that we are guilty of every single thing

that the plaintiff says we are guilty of in this com-

- 26a —

plaint; but regardless of that, the Act which you have

been speaking about, which enacted 5a, I think, of

the Interstate Commerce Commission Act, immunizes-

us from the antitrust laws; so it makes -not a particle

of difference’ whether or not we were guilty of any |

- conspiracy?

Mr. Ball: I ¢annot say that because the com-

‘plaint 7

~The Court: Would you do that?"’ -

=

Furthermore, these allegations of defamation as well as

other charges are not unique to this case. In Noerr Motor

Freight, cited above, several of the allegations appear to

resemble some of those in this litigation. It, too, was a

private antitrust suit for treble, damages and injunctive

relef brought by trucking firms against railroads, rail

associations and a public relations firm; At the outset,

Judge Clary, the trial judge, felt that the charges seemed

_ somewhat in@edible. Cf. 155 F. Supp. 80%. After pre--

siding over a four month trial, the Judge made the follow-

ing finding, on page 816: .

‘‘The proofs in this ease have definitely established °

joint action on the part of all of the defendants to

destroy the good will and injure’ the business of the

plaintiffs. They have proved. the formation of so-

‘called ‘independent citizen groups’ which were mere. :

pawns in cirtulating information derogatory to the .

‘plaintiffs; dissemination of false information to cus-

tomers: of the plaintiffs for the same purpose, the -

organization of groups to protect the use of the high-

ways by plaintiffs’ ‘Big Trucks’, and the’ duping and

using of public: officials and officials_of - independent

’ organizations to accomplish the same purpose of driv-

ing the plaintiffs out of competition with ‘the deferid-

ants. The actions of the defendants do not fall within

legal bounds of. either proper means or proper ob-

--Lia—

jectives and consequently such aetivities non be con-

demned.’

After a separate hearing on the issue of relief and dam-

ages, the Court enjoined defendants from continuing the

_ conspiracy Vv charged ip bigesogi $652,000 damages plus

200,000 counsel fees, . 166 F. Supp. 163. The judg-

ment is now on et .

>

Defendants also contend that plaintiffs request for in-

junctive ‘relief to prevent further aets unrelated to the

rate cut is not to be taken seriously, because plaintiff has _

male no effort to seek a preliminary injunction. This —

failure, it is argued, shows that plaintiff does not really

think it ean show substantial injury resulting from the

alleged defamation campaignu.. But more reasonable in--

ferences may also be made. The size and scope. of the

conspiracy alleged would make necessary a lengthy and

costly hearing. Preparation for this would involve the

sanie kind of detailed discovery that is now going on int 7

preparation for the trial itself,

“coay, Ball: I would not, because the complaint al-

leges things that go beyond the rate-making actions

themselves. | r

— The Court: T understand. TF didn't expect you to

do it, frankly. IT mean that Lam saying that it seems

to me that a hearing would have to be conducted Over

“there, pursuant to the ACTA case, to determine

whether or not the defendants were guilty of the very

things that the plaintiff says they were guilty of. I

don’t know whether they are or not, and T am not

going to know until the evidence is in this case.

Mr. Ball: Now, let me clarify one point.. The -Com-

“mission is. not going te decide whether we went he-

fore or did the public relations job.

The Court: Of course, they are not going to decide. °

7

that. . ;

Mr. Ball: Those are the allegations that are not

rate-making allegations. — re

The Court: I understand that.

Mr. Ball: But the Commission is the one that has

got to decide.

The Court: They are going to decided whether or

not this agreement, the way it was prepared and

agreed to, they are going to decide whether. or not

that agreement itself was a valid agreement, correct?

Mr. Ball: And first and second whether the activ-

ities under it were in accordance with it and;.third,

whether the rate made under jt, was it. made in ae-

cordance with it, or whether there was a predatory

practice or some violation of transportation policy.

The Court: T understand, and they will limit their

investigation and hearing on that point.

Mr. Ball: Now, with that

The Court: These points.’’

Counsel declined to so stipulate and thus impliedly ree-

_ ognized the importance of those allegations if they could

be established as true. _ —-——

>

On the factual importance of these non-rate allegations,

little can be said at this stage of the case. The parties

are in the midst of discovery and the over-all picture is

far fyem complete. It is impossible now to tell what evi-

dend¢e thé plaintiff will present at the trial. Isolated state-

ments of plaintiff's officers in answer to, interrogatories «

and by wa¥ of depositions cannot be the basis for judging ~

the weight or importance-of evidence, as it may develop

at trial, months from now. The procedufe of . waiting

until the case has been presented on its merits’ was fol-

lowed in the Noerr case and, furthermere, a separate hear-

ing on the question of relief and damages was there held

some time after the trial. Thus, no inference adverse to

plaintiff can be made based on its failure to seek an in-

junction befose the trial on the merits.

oP

>»

~

From: the above discussion, it is clear that the purely

legal standards for referral of the rate reduction issue to

the Commission have not been met. It is not the sole or

dominant issue of the case ayf no possible ruling as to its

coverage by prior approved procedural agreements would .

be conclusive where such rate reduction is alleged to be

part of a conspiracy to restrain trade. At this point, cer-'

tain practical aspects of the referral problem must be

considered. oe

In the first place, undue delay with accompanying hard-

ship and expense to the parties would almost certainly

result if this issue were referred to the Commission. The °

rate question, while not the sole or dominant issue of the

case, is, nevertheless, an essential segment of plaintiff's

» :

cause of action-and equally as important as the other al- -

legations. The trial on the merits could not proceed prop-

erly with this aspect _of the case missing. Referral would —

delay the entire’ litigation. This Court has no power to

compel the Commission to make. any ruling-at-all, much —

less to bring gbout a prompt decision. A determination

would have to await its turn on the Commission's crowded

docket. It might be that many months would pass without

Commission action. The Court- would then probably have

to wait a reasonable time before itself taking action, and

this might.amount to one or more years What ‘*a reason-

able time*’ might ‘be ean perhaps be ga red by examining

the duration of past ‘Confmission pr eedings involving

numerous parties. In the memorandum filed by plaintiff,

it cites the so-called Government reparations suits as an ex-

ample. These actions involved many of defendants here

and dealt with the reasonableness of the railroad explo-

sives rates which had been in effect prior to the rate re-

duction in November, 1955. _Thésuits were. initially filed

by the Government in September and October, 1947. It

was not unti) February, 1955, almost eight years later,

that the Commission ruled ‘that the pre-1955 explosives

%

.

— itt ha °

rates were reasonable, Cf. 294 LC. C. 5. Approval by

the Commission df some of the Seetion 5a procedural

agreements _ mentioued above consumed a great amount

of time. This tanged from eleyén months for the Western

Traffic Assoc ‘iation’s agreement to two years nine months

for the, agreement submitted by the Southern Freight

Association.! .

The experience of the plaintiff in ACTA may also be rele-

vant here. On pages two and three of fhe Memorandum

of Aircoach Transport Association, Ine., et al., as amicus.

curiae, filed in our Court of Appeals m this cause (No.

14, 562), it ix stated that on April 18, 1958 the District

Court in ACTA entered an order’ in’ which ‘proceedings

were to be ingtituted before the LC. C. by one or more

of the parties within 20 days of this dafe; that proceedings

before the I. C. C. were commenced before it on April 22,

1958, ry the Tiling of a petition or complaint initiating

proceedings; and that the Commission has not vet acted

on the issues referred “to it under. the District ‘Court's:

order .of reference. he

Thus, it will be seen that it has been over eight months

sine proceedings were started before the Commission and .

as of October 31, 1958 it had not yet taken any. action. |

Besides that, there ‘s noihing.to indicate to this court how ~

Jong it will take fer the Commission to render its decisiow

in that case, andeven after the Commission has rendered

nt t. 4— Agreement application filed November ‘15, 1948; de-

cidgd October 3, 1949, 276 1 CC. 1R3. Eastern Railroads [TEA].

Agreeme nts application thed December 7, 1948; decided March

v4 1950, .2 77 I CC. 99. Southern Freight Association, et al —

Agreements? applic: ation tiled January 5, 1949, decided October 18,

1051, 283 1. Co C., 245.

See also, Mhnors Frew ut Assoc iation—Aarcement. application

tiled April 28, V950:. decinied August 17, 1951, 283 1. C . we

Southern Ports Forci wn Freight Committee—Agreement, applica-

tion filed, March 16, 1950; decided April 11, 1952, 224 1 ¢. ¢.

775; Railroad Interritorial Agreement, application filed October 18,

1950; decnied January 21, 1953, 287 T°. C. 701

31a

_ its decision, its ruling may be appealed by one: of the’

parties. If this happens, considerably more time will un-

doubtedly elapse before the Courts will be able to render

a final decision in that case:

It must also be remembered that in connection with

defendants’ motion to suspe nd proceedings, it also re--

quests that all discovery proc ‘oodings regarding the rate

reduction issue’ be suspended until the Conimission hais

made itx ruling.

It would thus seem tht a reasonable-tine before (‘om-

mission action might well be, measured in years rather .

than.months. The Court has taken into consideration the

fact that this action has been pending more than four

vears; that it will be many months before a trial ean be

had, and that it will take fron: four to six months to try

the case. It would by contrary to sound judicial dise ‘retion’”

to permit this addifional delay to this over postponed liti-

gation merely to xeek an optional ruling from the Com-

mission on the rate r eduction aspect, whic h is nat the sole

or dominant issue in this ease.

In addition, the very nature of the other overt acts

alleged reveal the great importane e of early consideration

of these acts on their merits as soon as practicable. The

claims und counterclaims in this case indicate continuing

injury to‘the business of the various parties. Plaintiff's

request for injunctive relief should be- resolved without

unnecessary delay. New delay will add to the difficulty

of obtaining witnesses and will further dim memories of

facts essential ‘to ali parties. The extraordinary cost to

all parties of this litigation would also be increased.

Thus, the Court concludes that too much delay has al-

ready taken place in-the disposition of this case. In fair-

ness to all parties, the Court deems it essential to get to.

the merits ‘of the case as speedily as possible. Reference

to the Commission would only serve to thwart this parpone,

<5

II.

In addition to the joint meyprandam filed on beualf of

- most of the railroad defendants, Atlantic Coast. Line and

‘ seven other southern railroads filed a supplemental memo-

randum on September 29, 195%, raixing questions allegedly

* relating to them alone. Two defendants who did not take

part in the joint memorandum, namely, the Central Ver-

mont Railway and the Grand Trunk Western Railroad

"Company, axked permission to file a memorandum con-

taining their contentions with respect to the motion to

suspend, and their request was granted. The questions

graised by both memoranda will we considered together at

this time.

* The underlying contention here is that the rate reduction

ix clearly the dominant issue as to them and hence they,

‘ at least, should be permitted to litigate the question of

‘anti-trust immunity under 49 U. S. (. 5b (9) before the

I. ¢. C. The southern railroads, on page 3 of their brief,

point to statements by plaintiff's counsel in connection with

an earlier motion that they were neither prime movers

nor principal beneficiaries of the alleged defamation con-

spiracy.- They also cite the depositions of plaintiff's prin-

cipal officers to the effect that no official was able to state

of his own knowledge , what specific role was played by

the.southern railroads in: the alleged defamation campaign

outside of the publication ofa certain anti-truck article -

in one of their magazines. At page 6 of their memorandum,

the southern railroad defendants concede that they also —

made a contribution toward the production of a film by

the Farm Roads Foundation. The publication of the maga- |

zine article is set forth in the complaint as one of the overt °

acts done to effectuate the conspiracy and the film predue-

tion has been mentioned by plaintiff in affidavits as one of

the concerted methods used by defendants in connection

with the alleged conspiracy The southern railroads admit-

a

tedly took some part in the I. (. (. hearings in apposition.

to the application by Riss and other motor carriers for-

operating authority. “As to the rate reduction, it is said

at page & of their brief:

‘While rates ina southern. territory were reduced

severél months later, in March and April of 1956, the

reductions ‘could hardly have heen intended to and

did not affect the competition of Riss since Riss does

not operate te any signific ayt extent in southern terri--

tory. Thus, the supplement to the complaint does not

‘include this later reduction in its allegations. "*

Thus, it is clear that southern railroads are merely

urging statements of facts and inferences contrary to

those maJe by the plaintiff in its complaint and sworn

affidavits. The court is asked to divide this litigation

and to refer the rate reductiop issue regarding a few de-

fendants to the L. (. (. based on conflicting assertions

as to how much or how little these few defendants may

be involved in the issues raised’ by the complaint: J

Despite the conflict, there seems to be a suffigient basis

in the siatements of defendants alone to connect them in

some degree with the activities of the other defendants.

‘Even if the evidence should show these defendants took,

only a small part in the alleged conspiracy, if they did so

with knowledge of the conspiracy and consented to take

part in it, then they. assume equal responsibility for the

acts of all conspirators. As was said in United States v.

National City Lines, 146 F. 2d 562,571 (7th Cir. 1951):

*. . » Nor does thegcirenmstance that certain ‘of

the supplier defendants had requirements contracts

with one hut not both of the City Lines defendants

absolve. those defendants of participation in the con-

spiracy charged ip the indictment or prove that no

such conspiracy existed; it Was not incumbent on the

oo 4a -_—

‘government to prove that each defendant participated

_ in that conspiracy in all of its ramifications, for, in

« order that one be found guilty as a conspirator, it:

need only be shown that, with knowledge of the exist-

ence of the conspiracy, he knowingly performed an -

act designed to promote or al in thé attainment of

> the object of that known conspiracy.”

is "" .o3 ;

When one enters after the inception » a continuing con-

‘ spiracy, he becomes liable for the acts of all the conspira-—

tors since the conspiracy is, in effect, renewed each day of

its existence. United States v. Borden Co., 308 U. S.

INH, 202 (1959); United States v. N. Y: Atlantic and Pacific

' Tea Co., 137 F.2d 459, 463 (Sth Cir. 1943), cert. denied,

320 U.S. 783 (1945). A reading of the complaint reveals

that plaintiff will attempt to prove the existence of an

anti-trust conspiracy continuing over a period of several

years, When dealing with such a charge, it is essential

‘to consider the allegations as a whole and not to dis-

“member it into many parts. United States v. Patten, 226

U.S. 525,544 (1913).

Sinee, therefore, the defendants’ degree of participation

cannot be judged before plaintiff has presented all its

evidence and since even a lesser role in a conspiracy may

ring about liability equal to that of prime movers, it

cannot be said that any one allegation such as the rate

reduction issue is of dominant importance as. to these

defendants. —_

These considerations apply with equal force to defend-—

ants Grand Trunk Western Railroad Company and Central

Vermont Railway. They urge on page 3 of their separate

meniorandum that the only connection with the defama-

tion allegations whivh has been so far adduced is the mere

‘*mute membership’* of each petitioner in two of the ‘rail

assoviations named as defendants, and that, hence, the’ rate

: 4

a. itl

P

——.-Kl -- «

reduction is: the dominant issue as to them. They cite

United States v- Food and Grocery Bureau of Scuthern

California, 43 F. Supp. 966, 973 (S. D. Calif. 1942), to

establish the principle that mere mute membership in an

association charged with an unlawfal criminal conspiracy

will not impose liability upon a member. This would seem .

to be in accordance with the general principles of con-

‘spiracy law discussed abové. Some degree of knowledge

and consent to the conspiracy or some kind of khowing

assistance given in furtherance of it is usually required

to impose ligbility.

‘

In their brief, these <efendants simply deny any other

connection with the alleged defamation conspiracy except

‘mute membership” in railroad associations which are

defendants in the case and base this dénial on certain

answers to interrogatories. On page 3 of their memo-

randum it_is said:

«|. Indeed, after almost four years. of pleading

and discovery procédures the only nexus relating the

undersigned defendants to the alleged conspiracy is

their membership in several railroad associations to

. whom Riss has imputed deadership in this supposed

campaign of defamation. These two railroads were

members of the Association of American Railroads

and the Eastern Railroad Presidents Conference, and

the Grand Trunk Westerr Railroad Company be-

longed to the Traffic. Executive Association—Eastern

’ Railroads (Central Vermont Railway, Ine.,’ did not).

However, no officer or employee of either railroad

served as an officer in any of the axsoviations.’’

The Court ix axked to accept the above statement at this

stage of the case for the’purpose of granting their motion

to suspend proceedings as to them and’ refer ;

redaction issue to the Commiéfon apart from the

tion of the motion with gyApect to the other defe

_ = Sha a

However, thi was not the question before Judge Yank-

wich in the Pood and Grocery case which was particularly

relied-upon by defendants in this motion. That case does

not stand for the proposition that allegations of member-

ship in an association charged with a conspiracy, without

more, warrants a dismissal of that party from the case

before Court has had an opportunity to hear the evi-

fence. The statements relied upon by defendants were

mad® by Judge Yankwich in connection with motions by,

various defendants to dismiss at the close-of the govern-

ment’s case. ,The charges were dismissed as to some de-

fendants after the government had presented its entire case

‘becaisxe the Court was satisfied that the evidence had

failed to establish consent to or participation in the alleged °

conspiracy. The Court approves of this procedure. . If

it appears at the end of plaintiff’s case that the evidence

does not adequately connect any defendant with the

charges contained in the complaint, then-a motion for a

directed verdict as to such defeudant may be entertained.

oweaii tate as the Court could nof logically dismiss —

defendants from the case at this point becauseit is not’ yet

_aware of what the evidence may show at trial, in like

manner, it would not be proper to ‘assume that these two

‘ defendants hal. little or no connection at all with the

alleged defamation conspiracy in order to reach the conclu-

sion that the rate reduction issue is the sole or dominant

isaue as to them. Besides, it is a well-settled principle

of conspiracy law that a defendant may be held fully liable

for the consequences of a conspiracy even, though its de-

gree of participation may turn out to have been somewhat

less than that of other defendants. :

The very sound judicial policy against dealing with

litigation piecemeal also militates against defendants’ posi-

tion. Since the court eould not proceed with the trial

uitil the Interstate Commerce Commission had an oppor-—

po.

tunity to take action, unnecessary délay would result in

this long-delayed case if the defendants’ motif to suspend

were granted.

Conclusion.

The order of this Court dated May 2%, 1958, hiieitiaa ;

the motion by. certain railroad detendants to suspend pro-

ceedings in+ this case and to, refer certain issues to the

Interstate Commerce Comminnion for determination is

‘hereby vacated.

For the reasons xet forth in the above opinion, and in

“conformity with the orders of the United States Court of

Appeals for the District of Columbia Circuit dated August

8, 1958, and December 16, 195 mS, the ¢ ‘ourt makes the fol-

lowing rulings:

1. The motion of defendant railroads to suspend pro-

ceedings and to refer certain issues to the Interstate Com-’

Juerce Corfimission as supported by the memorandum on

behalf of all itovants filed September 29, 1958, as well as by

thé supplemental memorandum on behalf of Atlantic Coast

Line Railroad Company, et al, filed September 29, 1958,

ix hereby denied. af

2. The motion of defendants Central Vermont Railway,

Inc., and Grand Trunk Western Railroad ( ompany to have

proceedifigs suspended as to them is hereby denied.

Counsel for plaintiff will submit an appropriate order

in accordance with this opinion.

1: . .

| /s/ John J. Sirica,

United States District Judge.

January 16, 1959,

os 1 Cl ee

[267 F. 2d 659.)

—_United States Court of Appeals

For the District of Columbia Circuit,

September-Ferm, 1958.

Atlantic Coast Line Railroad Coni- )}

pany: Atchison, Topeka and Santa

Fe Railway Company, et al.,

- Petitioners, :

. ae - No. 15,019

v. . Le

Riss and Company, Inc., J

a Respondegt. ae Se

Beforé: Bazelon, Bastian, and Burger,

Circuit Judges, in Chambers. ae

ORDER.

“

This case carhe on for consid . tion on petitioners’ mo-

tion for leave to file a petition for writ of certiorari and

on the petition for writ of certiorari and said motion and

petition were argued by counse?,

SI appearing that the petition for writ of certiorari has |

been. lodged with the elerk it is

Ordered by the court that the petition for writ of cer-

tiorari shall be filed.

- «

*

“In response toa previous petition of the same nature by

the same petitioners, this court, on August, 8, 1958, en-

_ tered an order which; as clarified by an order entered on

December 16, 1958, provided that the issue, which petition- .

ers seek to refer to the commission. for initial considera-

tion was required to be referred only if found by the Dis-

trict Court, in the exercise of a discretion based upon its

- Ma ~ ‘6 ~

ktiow ledge of the, case, to he the ‘sole or douinant”® j issue

in the case. In its opinion of January 16, 1959, support-

ing its order of January 26, 1959, the District Court con-

cluded, inter alia, that the issue in question’ ‘tis in no

. sense the dominant, much less the “ole; issue of this litiga-

tion.™ oar.

. . Bt

Our Straordinary piialicttins under 28 U, S. bs £1651

(19: oa): to review by ce mmon-law writs the interlocutory

‘orders. of the District Court should be exercised only: in

very limited and unusual circumstances. We have exam-

ined carefully the: contentiony made by petitioners and

have concluded that. in the circumstances of this case, it

would not be in the best interests of sound judicial admin-

istration to review at this stage of the litigation the. Dis-

trict Court's decision either hy writ of certiorari or by the

alternatively requested amendment or clarification of our

orders of August &, 1958, and amcrenner 16, 1958.

Therefore, it is Ordered by the court that the petition

for writ of certiorari, or in the alternative, the motion for

( clarification of our orders of Avgust 8, 195%, and December

°16, 1958, is hereby denied. _ | gk

, Per Curiam.

Dated: May 19, 1959.

ry.

a ee

{187 F. Supp. 306]

United States Dis‘rict Court

For the District of Columbia.

Riss & Company, Inc., ; . oe a

. ‘Plaintiff,

yest | Civil Action.

Re No. 4056-54.

Association of American .

Railroads et al.; i

Defendants.

OPINION. .

This is a private antitrust action for treble damages and

jnjunetion brought by Riss & Company, a Kansas City

trucking concern, against’ twenty-three of the nation’s

Class 1 railroads, four railroad associations and a public

relations firm, Carl Byoir and Associates, Inc.?

Plaintiff's contention, as set forth on page one of its

‘*Memorandum Summarizing Plaintiff's Conspiracy Proof /

against all Defendants’’, is that the defendants conspired

to mo@epolize tae. transportation of ammunition and ex-

plosives for the United States Government in violation of

Sections 1 and 2 of the Sherman Act (15 U. S. C. A,,

§$1, 2) by means which, if: considered by themselves, are

entirely lawful. Plaintiff claims that the purpose of this

unlawful conspiracy was to obtain for the railroads, as a

1 Prior opinions dealing with preliminary motions and discovery |

matters are reported in Riss,<> Co. v. Association of W. Rys., 159

F. Supp. 288 (D. C. D. C. 1958); Riss & Co. 7. Association of

HW. Rys., 162eF Supp. 69 (D. C.D. C. 1958); Riss & Co. v. As-

sociation of Am. R. R., 170 F. Supp. 354 (D.C. D. C.), cert.

denied, 267 F. 2d 639 (D.C. Cir.), cers. denied 28 U. S. L. Week

3111; (U.S. Oct. 12, 1959); Riss & Co. v. Association of Am.

R_R., 23 F. R.D. 211 (D.C. D.C. 1939); Riss & Co. v. Associa-

tion of Am: R. R., 24 F. KR. D.7 (D. C.D. C. 1959), Riss & Co. 7.

Association of Am. R. R.; 178. F. Supp. 438: (D.C. D. C. 1959),

cert. denied. No. 13.476 (D. C. Cir... Mar. 7. 1960).

--4dla—

whole, at least 90° of the government. niunitions traffic,

. without regard to the merits of any particular railroad or

_ group. of railroads as competitors for such traffie. Plain- |

tiff further alleges that the railroad association defend-

ants and the public relations firm were the agents of the

individual railroads in accomplishing this unlawful purpose

and that‘the key to the participation of the individual

railroads és their knowledge’ of the alleged unlawful de-

‘sign?

‘

The trial of ‘this ease began jon January 5, 1960, and

plaintiff has*now completed the presentation of its evi-

dence, The trial transcript mumbers 11, f58 pages, and the

number of actual trial days totals 67. Plaintiff has intro-

. duced 283 txhibits, and the various defendants have had

marked for identification 378 documents, of which 253

have been used on cross-examination. Now, after almost

five months of trial, the Coart has before it Motians to.

Dismiss or for a: Directed Verdiet, filed by all deferdants

pursuant to rules 41 and 50 of the Federal Rules of Civil

Procedure.

This opinion will first consider defendants’ Motions to

Dismiss the Complaint. Plaintiff has offered evidence

which it contends shows that certain rate reductions by*

the defendant railroads in the fall of 1955 and the spring

of 1956 were made .for the purpose of eliminating plain-

tiff from the business of transporting — and ex-

plosives for the United States Government: i. e.. that such.

rate reductions were overt acts pursuant any a ye Sin

‘conspiracy to eliminate plaintiff as a railroad competitor

for this traffie. In 1958, defendants moved this Court to

F .

2 The oninion of this Conrt in Rise & Co.¢. Association rf Am

R. R..170 F. Supp. 354. supra. vet- forth in detail the factual back-

ground of this case. However, plaintiff has not introduced evidence

en some of the charges indicated therein: e. ¢.. “that defendants

tried to infiltrate and make u-e of |. . the Tlinois Parent-Teacher. -

Association” (170 F. Supp. at 358)

a

— 42a — \ :

%

suspend proceedings and refer these challenged rate: re-

_ ductions to the Interstate Commerce Commission under

the doctrine of primary jurisdiction. Defendants argued ~

then that the intent and effect of these rate: reductions,

made pursuant to procedural agreements approved by the

Commission, should be first considered by the Commission,

so that the Court could obtain that agency's expert opin-

ion on this issue before trial.- Defendants contended that

these rate reductions were imprtinized from the _

of the antitrust laws by virtue of 49 UL S.A. C., § 5.(b)

(9)..The Court denied this motion. The Court of Ap-

peals far the District of Columbia Cirenit held that such

issue should be referred to the Interstate Commerce Cém-

mission if, in the opinion of the trial court, it was ‘‘the

- sole or dominant .issue in the @ase.’’ (Atlantic Coast Line —

R. RB. v. Riss & Co., 267 F. 2d 659, 660 (D. C. Cir. 1959)),

and that referral was not necessarily required:

‘*. . where the agreement is only one of a consider-

able number of overt acts alleged and where the pol-

icy favoring referral is clearly outweighed by other

factors such as the probability of undue delay... .”’

(Atlantic Coast Line R. R. v. Riss & Co., 267 FP. 2d

"697, 658 (D. C. Cir. 1958) )..

wr

This Court, thereafter, in Riss & Co. v. Association of

Am. R. R., 170 F. Supp. 354, supra, found that the chal-

lenged rate practice was not the sole or dominant issue

in the case, and again denied the motion to suspend. A

petition for writ of certiorari was denied by the Court of

Appeals for the District of Columbia Cireuit (267 F. 2d

659, supra) and a motion for leave to file a petition for

certiorari was denied by the Supreme Court (Atlantio

Coast Line R. R. v. Riss & Co., 28 U. S. L. Week. 3111

(U.S. Oct. 12, 1959)). In its earlier opinion in this matter,

this Court jound that the rate reduction practice was not

the sole or dominant issue. The present motion to dismiss

42

ix based 6n defendants’ contention that ‘planit'ff's evidence -

makes it clear that the intent and effect of the-rate reduc-

tions ‘‘in reality is the ‘dominant, issue’ ’’ (Memorandum

in Support of Motion to Dismiss or Direct Verdict for-all

Defendants, p. 2). The Court is not in agreement with this

argument.

‘: After almost five months of trial, the Court is cou-

vinced more than ever that the challenged rate reduction

ix not the “sole or dominant issue’? in-this ease. Defend-

auts’ motions to dismiss are accordingly denied,

Defendants’ Motions for Directed Verdict are based es-

sentially on three grounds: (1) the recent decision of the |

Supreme Court in Talley v. California, 2s U.S. L. Week.

4186 (U. S. March 7, 1960); (2) lack of stibstantial evi-

dence of a pre-existing conspiracy in violation of the

Sherman Act; and (3) Jack of substanfial evidence of the

causation of injury or fact of damage. These grounds will

he. considered. in order. :

In the presentation of its’ prima facie case, plaintiff's

evidence of the alleged ‘pre-existing conspiracy’? con-

sisted in part of documents from which a jury could find

that the defendants used the ‘so-called non-attribution or

“third-party technique”

of publicity is not disclosed. It is plaintiff's contention

that such publicity methods,-when done for an unlawful

purpose (e. g.,. monopoly), are not protected by the’ First

Amendment guarantees of freedom of speech and press

((‘f: Noerr Motor Freight v. Eastern R. R. Pres. Conf.,

155 F! Supp. 768 (E. C. Pa. 1957), aff'd 273 F. 2d 218 (3rd

Cir. 1959), cert. granted, 28 U.S. L. Week. 3307 (U. a. -

April 18, 1960). . :

in which the author or sponsor

In the recent Talley case, the: Supreme. Court had oeca-

sion to deal with the problem of anonymous speech. There .

the Court held invalid a broad municipal ordinance of the

0

s % - C

”

j=

— 44a --

City of Los Angeles which provided, in substance, that no

handbills speuld be .distributed which did not bear ort

their face the name and address of the person who caused

the same to. be printed, written; compiled, manufactured~ ~~ -

‘or distributed. Talley was convicted of distributing. pam-

phiets of” the “National Consumers. Mobilization’’ which

urged the reader to boycott certain merchants who carried

. products of manufacturers who did not give equal. em-

ployment opportunity to certain minority groups. His

conviction - was- reversed by the Supreme Court) which,

after citing examples showing that, historically, anonymous

pamphlets have played.an important role in the fight for

freedom, proceeded to the rationale of its holding:

*“*We have recently had occasion to hold . . . that

there are times and circumstances where States may

not compel members of groups engaged in the dissem-

ination of -ideas to be publicly identified). Bates v.

Little Rock, 361 U.S. ...; N. A. A. C. P, v. Alabama,

357 U, S. 449, 462. The reason for those holdings was

that identification and fear of reprisal might deter per-

fectly peaceful discussions of public matters of im-

portance. This broad Los Angeles ordinance ‘is sub-

ject to the same infirmity.’’ (28 U.S. L. Week. at 4188.

Emphasis added.) fs

Defendants cite Talley fer | a blanket holding that all

faonymonn. publicity 1s thus protected by the Constitution -

and that therefore the publicity activities by ne corporate

defendants and associations complained of. here are sim-

, Hlarly protected. The Court does not agree. “In Talley and .

Little Rock, the -basis for the Supreme Court’s ruling was

that established fears of reprisal and intimidation might

deter minority groups from peaceful discussion on matters

of public interest. Such is not the situation here. The

- railroad defendants are among the largest corporations in

the country. It certainly cannot be contended that the

o : dona

railroads of the nation will be in danger of intimidation

or reprisal if their identities in coimection with publicity

are revealed: Plaiptiff’s evidence could justify a jary in -

~—-finding-that defe udants employe ‘d hostile publicity against

plaintiff by means of the “third Patty technique’. For

‘the reasons mentioned, this Court finds that Talley is not

controlling here (See Noerr Motor’ Freight v. Eastern

R. RB. sage Conf., 155 F. Supp. 768 (KE. DY Pa. 1957),

Aff’d 2723 F. 2d 218 (3rd Cir: 1959), cert. granted 2s

U.S. L: Week. 3507 (U.S. April 18, 1960).

Before proceeding to a consideration of defendants’ eon-

tentidn that the. record discloses a Tack of substantial evi-

dence from whieh a jury could find the existence of a pre-

existing conspiracy and the fact of damage to plaintiff,

the Court feels it would be helpful to review some of the

well established principles of law re dating to motions for

- directed verdict.

‘In considering defendant<’ motions for a directed ver-

dict, the trial court must, of course, view the evidence

and all inferences from the standpoint most favorable to.

the plaintiff (Shewmaker v. Capital Transit Co., 143 F. 2d

142 (D. ©. Cir. 1944)). However. a party is not entitled

to rely on inferences which ‘are unreasonable and the jury

may not speculate (Gallaway v. United States, 319 U.S

372 (1942)). Regarding the quantum of evidence, if has

leng been the rule in the Federal Courts that a mere sein- -

-tilla of evidence is insufficient to allow the ease to go to

the jury (Pennsylvania R. R. v. Chamberlain, 2s 1°. S. 233,

344 (1932): Murray v. Towers, 220 F. 2d 914 (D. ©. Cir.

1956)). Substantial evidence must be present (Baltimore

& O. R. R. v. Postom, 177 Fo 2d 52 (DD. ©. Cir. 1999)). -

Where the fact< are in dispute, and where fair minded

men may draw different infere nees from the evidence re-

lating to them, a jury is the proper tribunal to try the

ixsne (Tiller v. Atlantic Coast Line R. Co. 214 US. 34

Mia --

(f94). Kendall v. Gore Properties, Inc., 226 F.2d °7%

(1) € Cir 195): MeCoy v. Moore, 14) F.2d 6 (D.C.

(ir VObb))

Moe ain the light of the-e principles that the Court will

concider defendant<" contention that there is not substan-

Hab evidence from which the jury could find the existence

of a conspiracy to violate the antitrust laws. The Court

fools an this regard that: it) would be iopracticable and,

further, that it i- nnneressary to review in this opinion

all the evidences presented by the plaintiff in this already

voluminous record. The Court has listened attentively to

all the evidence, the excellent arguments by all counsel

on these motions, and has examined on more than one oe-

casion all of the documentary evidence introduced. It is,

of course, elementary in conspiracy cases of this nature

that until the participation of an individual defendant

has been established by competent evidence admissible

avaimef if, evidénee of acts of other alleged co-conspirators

will not-be admitted to establish the particular defendant’s

“participation in the alleged conspiracy (United States v.

Gypsum Co., 67 Fo Supp. 397, 452. (1. C. D.C. 1946) rev'd

on other grounds 233 U.S. 364 (1948); Plintkote Co. v.

Lysfjord, 246 #. 2 368.87 (9th Cir.) cert. denied 355 U.S.

St (1957))5 Mere membership in an unincorporated. as-

sociation, in and of itself, is, of course, not stfficient to

establish participation in a eonspiraey (Phelps Dodge Re-

fining Corp. v. PTC, 1:0 Fo 2d 398, 396 (2d Cir. 1943)).

However, continued membership in sueh an association

and puavinent of dues, with a reasonable opportunity to

learn of the association's activities on behalf ‘of its mem-

Y Neteteis: comsperacsy cases are. of course. usually. tele on etre

emmmstamtil cunfence of netcd Stes 2 Vorgan TIS. F Supp. 21,

wees PONY MS or “PITAcies are sellom capable of

pervert fog atrreet testemormn arnt gmay fe inferred from ¢! © tings

setiealley Lome amd trae the crrcimstance.” a Ransckh “Waclene PF

‘ “ie ‘ in b. ’ *s 3° ‘ : - > :

te

YF ra ‘

bers, are sufficient to charge the miebern with liability

for such activities (Metropolitan Bag & P. Dist. Ass’n v.

PTC, 240 F. 2d 241, .244 (2d Cir), cert. denied 255 U.S

819 (1957)). The individual railroad members of the asso-

ciations can he held responsible for the unlawful conspira-

torial acts or declarations of the associations only if they

are shown to have known and approved of suclp activities

and of their unlawful objective4

Qn the basis of all the evidence presented, the Court

feels that a jury could find that a conspiracy of the type

alleged by the plaintiff did exist, with the defendant as-

sociutions and the public relations firm as its principal

participants. Further, the Court feels, on the basis of the

evidence admitted as to each individual railroad defend-

ant, that the jury could find that each of these defend-

ants, though not involved in every detail of sneh eonspir- °

ey, bad knowledge and approve of its illegal objective.

and the .general means. of ¢arrying it out. If the

evidence is such that a jury could find that a Conspiracy

under the antitrust laws existed, only slight evidencecis

necessary to connect individual conspirators with it

(United States v. Morgan, 11% I. Supp. 621, 743-44 (S. D.

N.Y. 1953)).

4

Defendants’ third point on these Motions for Direeted

Verdict ix that the evidenee does not present sufficient

proof of causation of injury or fact of damage from which

the jury could find that plaintiff was ‘injured as a result

of any conspiracy on the part of the defendants. “The

(‘ourt, in the tria! of this case has, in its diseretion, aliowed

counsel for defendants considerable latitude on eross-ex-

‘amination, ever to the extent of allowing examination on

matters which might -be more properly part of an affirma-

4 De fe ulant- agree that.this 1. a correct -tatement of the law

See "Defendants 0. 16, 21, ete. Memorandam in Support of Mo

tion for Directed Verdict. page 9 .

ne GR con, Geita

tive defense. The number of docaments marked for

identification and used by defense counsel on cross-exam-

inatidn totals 353. This croxs-examination has placed be-

fore the jury charts and documents from which they é

coukl conclude that several factors were responsible for

the loss which plafntiff alleges it suffered as a result of

the Alleged conspiracy. _ Defendants’ cross-éxamination

has .attempted to develop that a number of causes other —

than the conduct of the defendants were responsible for

the plaintiff’s loss. “Plaintiff’s president.on cross-exam.

ination has dénied that these factors were responsible for

plaintiff’s losses. These other influences include the end

_ of the hostilities in Koreain 1953, the cancellation -by the

. Interstate Commerce Commission of certain of the tem-

porary operating rights of the. plaintiff to transport am-.“

munition and explosives, difficulties resulting from certain

purchases of defeetive equipment by plaintiff, and certain

errors in management and business: judgment by plaintiff.

Judge Wyzanski, in a well-reasoned opinion in the case

of Nomand v. Universal Film Exchanges, Inc., 72 F. Supp.

469° (D: Mass, 1947), aff'd 172 F. 2d 37 (1st Cir. 1948),

cert. denied 336 U. S. 967 (1949), a case ‘where the evidence

tended to show multiplicity of causes of injury, stated as

follows: : ;

** . .. the loosest construction [ofthe Anti-trust laws]

would require a plaintiff in a private Anti-trust case

to bear the burden of proving that defendants’ unlaw-

ful acts ... were either a cause of a specific fraction

of his losses or, at any rate, a more substantial cause

of his losses than was any other known factor.’' (72

F. Supp. at 482. Emphasis added.)

Applying this test to the evidence of damages pre-

sented by plaintiff and the evidence tending to show. other

causes elicited by defendants on cross-examination, the

Court feels that in view of all the evidenee the jury could

EB L

find that the alleged acts of defendants were ‘ta more sub-

stantjal catise’? of plaintiff’. loxs “than was any other

known factor’’. :

s- Ata

-

Accordingly, the VMotion of all Defendants for a Directed

Verdict is denied. The Court does not wisli to be under-

stood as indicating that at the close of all the evidence, the

plaintiff will of necessity Juve made a case fer the jury.

The Court only holds that at thix stage of the evidence,

‘the defendants are not entitled to a direcwed verdict. De-

fendants, of course, under the provisjons< of Rule 50, Ped-

eral Rules of Civil Proeeilyre, may renew. <uch motion at

the close of all the evidence.

. " » @, e *

All exhibits introduced by plaintiff may gow be econ-

sidered by the jury as haying been received in evidence as

against any or all of the defendants. The jury will be in- *

' structed that they may <o ¢éonsider these exhibits, giving

to them the weight to which they think they are entitled.

Counsel for plaintiff will prepare av apptopriate order .

in accordance with this opinion. -

‘John J. Siriea,

; (United States District Judge.

June 6, 19600,

ADMISSIONS BY RISS, READ TO THE

JURY DURING TRIAL. ‘

Mr. Ball: If the Court please, I want to‘read first two

answers to the interrogatories that the Western Railroads

served on the plaintiff in July 1958. The fir-t ix interroga- ~

tory E II 9 (a).

The interrogatory reads this nad

“Was any part of the damages claimed by Rixs

eansed by revocation or cancellatiOh of its interstate

operating authority?

* Answer. No."

— Ha —

“Then Interrogatory E IV 11 (a): :

Ww as any part of the damages claimed by ‘Riss

caused by the enforcement of statutes, erenaners, or

.’ regulations against Riss?

**Answer.No." ,

This is Interrogatory D-(i):-

_ tivities “by the defendants or any of them, in support

of or in opposition to proposed ordinances or legis-

lation, Js eviderice of an alleged conspiracy?

: Answer: No.?"

:

of =» © @ # @

Interrogatory D-14-F: :

‘*Does Riss contend that the Association of Ameri-

.can Railroads, the Association ot Western Railroads,

the Traffic Executive Association Eastern Railroads,

and the Eastern Railroad Presidents Conference, or

any of them, constitute an agréement, combination

and conspiracy in restraint of trade!

‘Answer: No.”’ }

D-14-G: ©“. :

‘Does Riss contend that membership in the AAR,

AWR, TEAER and ERP, or in any of ‘them, consti-

tutes in itself participation in an alleged conspiracy?

**Answer: No.’ E :

D-14-H: | ‘

**Does Riss contend that joint participation in pro-

eeedings before the Interstate Commerce Commission

-or before. any other regulatory agency, or in the

courts, by the defendants, or any of them, ix evidence

of an alleged conspiracy !

** Answer: No.”*

-« aia -

E-V-5: . ° ,

**Does Riss claim that any of the defendants yvio-

lated the antitrust. laws by participating in MC-zoy

Snb-84 | Riss's application to the 1. C. for perma-

nent’ explosives: authority |?

‘Answer: No,*? |

E-V-6: , | é

,

/

"Does Riss-claim that if Was a violation of the

antitrust laws for any defendant to solicit the purtict-

pation of others ip that proceeding? .

**Answer: No."’

F-2:

> ‘Does Riss claim that it is a violation of law fer

a railroad or railroad-as-ociation to attempt to drfer-

Le

est public organizations in the activities of iss, or

_of truckers; of explosives generally, or of long-alis--

fanee truckers generally?

“*Answer: No."*

F-6: ; - .

~ ** Does Riss contend that Joint action by railroads

to assert their generally common interest in Opposi>

tion to the grant of operating authority in a proceed-

ing before a regulatory agency is a violation of the

antitrust laws?

‘Answer: No.’ - ,

(i-1: i .

‘Does Riss Claim that the organization of 4 com-

mittee of counsel to répresent a number of railroads

@. ia proceeding before the Interstate Commerce Com

mission is a violation of law?

**Answer: No."’

(j-2: "aA

‘Does Riss claim that it is a violation of law for

a railroad or an association of railroads t@ expend”

funds to publicize the activities of truckers?

** Answer: No.”’

a.)

G3: | ane

‘Does Riss claim that it is unlawful for a railroad

to expend funds in the preparation and presentation

of evidence’ before ‘tye Tnterstate Commerce Commis-

sion in opposition™%o an application for increased

authority by Riss? : '

.** Answer: No."’ <

H-11: |

‘Does Riss contend that the quotations of Section |

.22 rates°of which it complains, were made with the

specific intent to exclude Riss alone from the business

of transportation explosives?

‘*Answer: No.”

H-13: |

‘Does Riss contend that each railroad defendant

participating in one or more of the Section 22 rate

quotations of which’ plaintiff complains acted with

the specific intent of eliminating Riss as a competitor .

tor explosives traffic? ‘

‘Answer: No.’*” .

}i-14: . : ;

“If the answer. to the preceding question is in the

negative, state which if any defendants are alleged

to have | acted with sue ‘h intent.

“Answer: None.’ ; er

_An adinission, paragraph 4, paragraph 31

“The-elimination of Piss froyn the Nee. of trans-

porting property in interstate commerce would not.

result in the monopolizing of land transportation by

the defendants.”’ ae fa

_Interrogatory, H- 37:

‘“Doos Riss contend that participation by a defend-

ant railroad in the establishment:in a Section 22 rate.’

yf

A

“”

ebeetl -

for the transportation of explosives applicable to more

than one railroad, of which Riss complains, is in itself

evidence of participation ino the conspiracy alleged:

in the complaint?

“Answer: No.”

I-38;

‘Does Riss contend that any defendant railroad

acted to establish Section 22 rates for the transporta-

tion of explosives applicable to more than one rail-

road, of which Riss complains, except pursuant to and

in conformity with the terms of agreements validly

approved by the; Interstate’ Commerce Commission

. under Section 5-A of the Interstate Commerce Actt

‘Answer: No." | ae:

EXCERPT FROM CLOSING ARGUMENT TO JURY

BY ONE OF RESPONDENT’S COUNSEL.

(Mr. MeGlothlin] Now, the final thing that I wanted to

‘talk about is-on the base year system on Meyers [Riss’s

‘expert witness on evaluation]:

‘Do you want to put that up there? |

(A chart was placed.on easel.) ,

You remember Mr. Meyers took as his base year ’49-750.

That chart doésn't say ** “49-"50,"° but Iam coming to

that.

oo. Meyers took "49-50,

Now, from a statistical standpoint, using two vears is

usually. better than one year, because in any event you can

iron out some of the matter.

But the one he chose, ’49-"50—50 was an abnormal vear

economically in the trucking business, and particularly an

‘the explosives business, because in the ‘niddle of 1950

North Korea invaded South Korea and the United States

sme, ‘We will defend South Korea’? and ammunition and

— dda —

explosives started flowing from all the arsenals as fast as

they could, across the United States, fer shipment across:

the Pacific to .Korea. /

Now, thaf's trucking business, and that 4s abnormal.

So we said, ‘Mr. Meyers, do something more for ws.

Let’s take the two peacetinie years in that same range

of period. you are talking about.’

Remember, that’s the w hole period. I'm still talking on

his figures.

I will not take you down on that . © ‘hart partly. because |

don’t understand it.

At the bottom, however, vou will See, that the construe-

tive net income before. taxes of Riss & Company, usiiig

Mr. Meyers’ method, whatever it may have been, is:

$5,600.00. ; ae :

_ And ‘using. the multiplication factor that he used, you

get a constructive value of Riss & Company of $30,000.00,

‘ Now, use the same factors that he did, he said that it

had a minus value, I, think of $40,000.00, or $45,000.00,

_ Let’s say $45,000.00, it comes out even, .

Well, the: difference between 230 and minus’ 45. is

$75,000.00.

So if you used two peacetime years instead of one peace-

- time and one war year and vou used Meyers’ own method,

you come out with a maximum difference off the average

for all the values of $75,000.00. y

INSTRUCTIONS TO THE J URY.

The Cunt: Ladies and gentlemen of the jury, we are

now approaching what in the final analysis is the most

important part of this case. After the better part of ten

months of trial we have now reached the place where there

- are no more witnesses to be heard, no more exhibits to be

- read, and no further arguments by counsel.

I know that I speak for counsel on both sides when I

say that your unfailing attention, your patience, and your

. --

‘

3 vid --

interest in this long and complex case should be a model |

for other juries. ‘ :

Your responsibilities are great, but you have shown by

your attitude that you are fully aware of them.

The fact that you have been selected for jury duty’ in

such an important case as this one is a tribute to your

qualifications and indicates the confides nee that all counsel

have, reposed in you.

Your untiring efforts, and your obvious sense of duty

are worthy of the greatest commendation.

Blackstone, a great jurist of England, and one whose

writings were so familiar to-our Founding Fathers, ¢: alled

the jury system the glory of the English law. It is cer-

tainly one of the splendid achievements of our Western

civilization. . ;

You have served here in. the finest tradition of that

system.

The Court at this time Wishes also to formally extend

its compliments to the able counsel on both sides for the

manner in which they have conducted themselves, and. to

thank them for the continued cooperation which they have

shewn to the Court during the many days of the trial and

the many conferences and proceedings prior to trial.

As you will recall, at the beginning of the case, the

Court gave you a preliminary instruction in the hope that

because of the nature of the case those remarks would be

of assistance to you during the course of the trial.

I mentioned to you at that time and during the course

of the trial that at the end of the case you would receive

the Court’s final instructions on the law.

These instructions that I now give you are to be vour

guide in applying the law to the facts.” These instructions,

then, are the final step before you retire to the jury rootn

to deliberate upon the evidence in this controversy and

to arrive at your verdict. Fit,

‘The word ‘verdict’ has ancient’ and important. roots

in our legal system. Our English word ‘*verdict’’ is com-

s

ees eee

posed of the parts of two Latin words, ‘*Ver’’ is taken

from the Latin word ‘‘Veritas’’, meaning “the truth’.

**Dict’’ is the root of the Latin word ““dicto"’, meaning °

‘*to speak’’, - e- , |

So that literally your responsibility in this case, as in

any case, in returning a verdict, is to speak the truth as

to the rights, responsibilities and obligations of the parties

to this litigation.

After your deliberations, then, you | will be called upon -

to speak the truth regarding your findings in this case.

You have taken an oath to try this case according to.

the law and the evidence. As | have told you on an

*

- earlier occasion? your responsibilities as jurors are great,

as is my obligation and ‘solemn -duty in this vase.

Your oath includes the words ‘according to the law’!

My duty is to acquaint you with that law.

My duty, and responsibility is to instruct you as to the

law that will govern you in reaching your verdict. It is

your responsibility and duty under your oaths to accept

*? .

this law as I shall state it to you. :

You, -however, are the exclusive judges of the facts, the

‘sole power to determine the credibility of witnesses, deter-

mine-who has testified to the truth, where there is some

question in issue, to judge and determine the weight ef

the evidence, to find the facts and to apply the law thereto

as it is outlined to you by the Court, and to then declare

your result ‘rests’ with you.

In this regard I want to make two observ ations to you

at this time:

First-of all, if during the course of these instructions

I have’ oceasion to refer to some of the evidence in the

case, my recollection of the evidence is not binding on

you: Ht is your recollection and*your recollection alone

which must guide you in reaching your verdict.

Secondly, as a matter of explanation, I want to say to

you that the Judges of the Federal Courts have a right

4

under the law to comment on the evidence. This means

that the Judge in the course of his ‘instructions ‘to the

_ jury may take the testimony of the individual witesses,

nay discuss the testimony pro and con, and may say to

vou, **T believe this Witness," or *' 1] do not believe him: **

*L believe this mucelr of his testimony, | don't believe the

rest,” or can make whatever comment he sees fit upon

the evidence,

This power of a Federal Judge is subject only to the

qualification that the Judge must say on the record’ the

sass words, “OF course, HY Views are not binding upon

vou.”

However, it does seem to me thant if a Judge ix entitled

to any respect in the courtrooni, the comments he makes

from the bench in giving his instruction must have some

effect upon the jury. Consequently, I do not believe that

a ‘Judge can comment upon the evidence and then say,

Of course, my comments are not binding upon you™

without having his remarks on the evidence affect) the

jury in, some way.

As a matter of practice, then, this ¢ ‘ourt, at least, low 2 ae

not comment apon the evidence. —

It is for vou alone to determine, under the Court's in-

structions, what witnesses are worthy of belief and what

facts have been established or have-not been ‘established.

Therefore, if the Court has said or done anything dur-

ing this trial which has suggested or ‘indicated to you

that it’is inclined. to favor the claims‘or position of any

party, I instruct you to disregard it.

I have not expressed or intimated any opinion to you

as to what witnesses are worthy of belief or disbelief; what

facts are established, or- which facts have not been estab-

lished; or what inferenees should be ‘drawn from the

evidence. — |

Before instructing you on the law as specifically applied

to. this ease, and reviewing for vou some of the evidence,

I will now comment on some general principles of law

which you should apply in your deliberations on the specific

facts in this case: ‘

First, all these instrivtions I give you should he con-

sidered as a whole. If in them any rule, direction, or idea

be stated in varying ways, no emphasis therein is intended

by me and none must be inferred by yon. '

For that reason you are not to single out any .certaiis

‘sentence or any indivieual point or instruction and ignore -

the others, but you are to consider all the instructions as

a whole and to regard each in the light of all the others.

You are not bound to accept or to decide in conformity

with the testimony of a number of witnesses which does

not produce conviction in your mind as against the declara-

tion of a lesser number of witnesses or other evidence

which appeals to your mind with more convincing force.

In other words, you are not to decide an issue by the

simple process of counting the number of witnesses who

have testified on the opposing side.

The final test is not in the relative number of witnesses,

but in the relative convincing foree of the evidence which

may be offered in support of or against any particular

proposition.

-In this regard you are instructed that the testimony of

one witness whom you find is enfitled to full faith and

credit is sufficient for the proof of any fact.and ean justify

a verdict in accordance with such testimony, even if a

number of witnesses have testified to the contrary, if upon

the whole case, and considering the credibility of the wit-

nesses, as I will explain that phrase to you, and after

weighing the various factors in evidence, you should decide

that there was a halance or probability pointing to the

aceuracy and honesty of that one witness.

As I mentioned earlier, you are the sole judges of the

credibility of the witnesses. This means that you must

determine which witnesses yon are going to believe and to

what extent you are going to believe them.

‘

rit tea

’

Now, in determining how meh credibility. or how moch

Weight you are geing Yo give to the testimony of the wit-

Hesses, vou should consider the slemeanor of the witness

when testifying; that is, his manner while testifviny,

whether he Hnpresses vou as having an acenrate recolber.

tien and memory of the facts abont which he is testifving;

Whether he impresses vou as a truth-telling’ individual:

Whether: he manifests. any bias or prejudice, or faver to-

wards one side or the other in the case,-and whether he

has any interest in the outconie of the case.

In determining the weight ta be wiven the testinneons of

any witness vou have the right to draw npon the experi-

ence of your own lives, the COMNTOD setise Van have gained

in the conduet of your own affairs, and all other factors

that may appear important to vou in determining whether

a person is telling the truth or telling a ‘falsehood. .

Tf you believe that any witness wilfully has testified

falsely as to any material fact concerning which that wit-

ness could not have: been reasonably mistaken, then the

Jury are at liberty, if von see fit to do so, to disrezard any

part of the testimony of that witness, or the entire testi.

mony of that witness.

As T mentioned to ven in my preliminary remarks, the

statements and arguments of counsel are not evidence in

the case, It is your recojlection alone of what the varions

Witnesses testified to and what the varions dochments and

exhibits admitted into evidence contained, that morst isis

and govern vou in reaching vour yerdict.

During the course of the trial von. have heard the at-

torneys representing the varions parties making objections,

and on oceasion giving the reasons for their objections.

The Court made rulings on these objections. Yon should

not be concerned with such rulings or the reasons for then.

‘Whether offered evidence is admissible for vour con-

sideration or not is purely a question of law. No inference

should be drawn from these varions rilings by the Court.

‘

— ia

‘You are not to consider the number or type of objections

as evidence against any party. |

Further, when admitting evidence te which an objection

has been made, the Court, as you have so often been told,

ix not ruling on the weight to be given. to that evidence.

The question of weight is solely for the ae deterjnine.

’ When the Court has sustained an objection to a question

that withdraws from your consideration that question.

You should not under any cireumstances speenlate as to

what the answer might have been. ‘

_ Also, as I told you at the beginning of the trial, you

should not dyaw any favorable or unfavorable inferences

for or against any party from: bench conferetices which the

Court has had from time to time with the various counsel,

‘or from the fact that occasionally during the course of the

’ trial the Court has requested that vou retire to the jury

room. : , .

You, again, should not® spec ‘ulate as to what was said—

during. these conferences.

Remember, also, that ‘the questions which wére pro-

pounded to the witnesses by the. various attorneys are

not to be considered as evidence. Only:the answers given ~

by the witnesses are the evidence. :

The plaintiff in this case, by filing its .omplaint against

the defendants, has assumed the burden of proving its

allegations by a fair preponderance of the evidence, which,

however, is not necéssarily determined by the greater num-

ber of witnesses téstifying to a particular set of facts.

This phrase **preponderance of the evidence,’ means

such evidence as,.when weighed with that opposed to it,

has the more convincing force.

Actually, this phrase is a legal one whici is really.easier

‘to illustrate than it is to define. ‘To explain to you the

meaning, the significance of this phrase *‘fair preponder-

ance of the evidence,” I ask you to visualize when you’

go into the jury room that you have on the.table there a

scale on which two trays are hanging evenly in balance. .

5 eae

. should be for that defendant. °

Ola as

Now, label the right wand tray the plaintiff's tray. Then

put into that tray all of the evidence in the case which you

feel favors the plaintuT'’s case; giving to that ev idence the

weight that vou believe it is entitled to.

Then place on the defendant's tray all of the evidence

in the case that fav ws the defendant’ « side of the case,

again giving to the evidence the weight that you believe

it is entitled to reveive, ; °

If the plaintiff's tray goes down, in other words, if the

plaintiff’s evidence outweighs the defendant’s evidence,

then the plaintiff has sustained the burden-of proof by a

preponderance of the evidence, and. your verdict should be

for the plaintiff against that defendant.

But if the defendant's tray goes down, that is, if that

defendant's outweighs the plaintiff's, then your verdict

Now, if the trays remain in equal balanee ‘upon all of

the issues in the ease, upon which the plaintiff has the

burden of proof, then your verdict must be for the defend-

ant because, if the evidence Weighs the same for both sides,

the plaintiff has not sustained the burden of proof by a

preponderance of the evidence.

In this re.ord, ‘plaintiff's claim must be judged sepa-

‘rately as to each defendant, and-the position of each de-

_fendant must be judged 6n its own merits.

Fach defendant, therefore, is entitled. to individual con-

sideration of the particular evidence applicable to it to .

determine ‘whether that particular defendant participated

in any conspiracy. - .

You cannot return a verdict against any defendant unless’

you find specifically that the defendant conspired with one

or more of the other defendants to unreasonably restrain

trade or to monopolize, or to attempt to monopolize ex-

plosives and ammunition traffic. '

Now, to summarize on this matter of burden of proof, a

party has suceeded in carrying the burden of proof on an

Se Seas: *

; ’

issue of fact if the evidence favoring his side of the ques-

tion ix more convincing than that tending to support the

contrary side, and if it causes youn, the jurors, to believe

that on that issne the probability of truth tav ors that party.

Now, what is this ease all about?

Plaintiff, Riss & Company, Ine., is 4 corporation with its,

. principal offices in Kansas City, Missouri, and is engaged in

the transportation of property by motor carrier in inter-

state commerce. That is, among and between the various

States. Plaintiff is a common carrier, which means ‘that

the plaintiff company ix required under the law to make -

its services available to any shipper complying with the

law.

The defendants in this civil anti-trust snit are four rail-

road associations: The Association of American Railroads,

The Association of Western Railways, and Traffie Execu-

tive Association—Fastern Railroads, and the Eastern Rail-

road Presidents Conference; one pu'die relations firm,

namely, Carl Byoir and Associates, Incorporated, with

offices in New York City, and twenty-three. railroads.

Fifteen of. the railroad defendants have all or the pre-

ponderance of their trackage located in, Western Territory.

They are: 2

(1) The Atchison, Topeka and Santa Fe Railway

Company, which has sometimes been referred to as the

‘*Santa Fe.*’ . ,

(2) Chicago, Burlington & Quiney Railroad Company,

which has sometimes been referred to as the ‘* Burlington.*’

( 3) Chicago and Northwestern, Railway Company, which’

has sometimes been referred to as the ‘‘Northwestern.”’

(4) Chiedgo, Milwaukee, St. Paul & Pacifie Railroad

Company, which has sometimes been referred to as the

**Milwankee."’

(5) Chicago, Rock Istand & Pavifie Railroad Company,

Which has sometimes been referred to as the **Rock

Island.** :

(6) fireat Northern Railway Company, whith has <ome-

fines been referred to as the “Great Northern. ”’

(7) Hlinoiz CentrabRailroad Compan’, which has some-

times heen referred to ax the **IWinoix Central.”

(8S) Missouri-Kansas-Texas Railroad Company, which

has -ometines been referred to as the “eee.”

a) Minneapolis, St. Paul & Sault Ste. Marie Railroad

Company,, which has. <ometines been referred to as the .

**Soo.**

(10) Missouri Pacific Railroad Company, which has

sometimes been referred to ax the ** Missouri Pacifie’”’

(11) Northern Pacific Railway Company, which has

sometimes been referred to as the ** Northern Pacities*

(12) St. Lonis-San Francisco Railway Company, which

has sometimes. been referred to as the “*Friseo.""

(12) Southern Pacifie Company, which has sometimes

been referred to as the “Southern Pacifie."*

(14) Union Pacific Railroad Company, which hax <éme-

times been referred to as the ** Union Pacific." ,

(15) Wabash Railroad Company, which has <ometimes

been referred to as the ** Wabash.**

Five of the railroad defendants have all or the pre-

pondetance of their trackage located in Eastern Territory.

"They are: | as

(1) Baltimore & Ohio Railroad Company, sometimes

referred to as the “B. & 0.""

(2) The Chesapeake & Ohio Railway Gompant, <omm-

times referred to as the °C. & OL"

~~ Fin —

(3) Erie Railroad: Company, sometimes referred to as

the ** Erie." oes

' (4) The New York Central Railroad Company, sometimes *

referred to as the New York Central."’

(5) The Pennsylvania Railroad, Company, sometimes re-

' ferred to as the **Pennsylvania.’

Three of the railroad defendants have all or the pre-

ponderance of their trackage located in Southern Territory.

They are: é ‘ he

(1) Atlantie Coast Line Railroad Company, sometimes

referred to ax the **Coast Line.”

(2) Seaboard Air Line Railroad Company, sometimes

referred to as the **Seaboard.”’ - :

(3) Southern ‘Railway Company, sometimes referred to

as the **Southern.”’ P

The defendant Association of American Railroads. which

has sometimes been referred to as ‘* AAR," is an uninecor-

4 *. . . 2. . - .

porated Association which in 1954 numbered among -its

members some 131 railroads, among whom were all of

the railroad defendants in this case. It is a lawful organ-

ization and mere membership by a railroad defendant in

AAR is not in and of itself evidence of participation in

the alleged conspiracy. se

‘The defendant Association. of W ‘extern Railway; which

-has sometimes been refer red to ax the “*AWR”, is an

unineorporated association which in 1955 numbered among

its members some 64 Western railroads. -The only defend:

ants which are members of AWR are the 15 Western

railroad defendants, and none of the 5 Eastern railroad

defendants nor the three Southern railroad defendants are

members.’ It is a lawful organization and mere thember-

“ship by a railroad defendant in AWR is not in and of

itself evidence of participation in the alleged conspiracy.

c*

th.

The defendant Eastern Railroad Presidents Conference,

Which has sometinwes been referred to as *ERPC, is an

unincorporated Assoc ‘ation Which in 1954 was composed

of the Presidents of some °37 Eastern railroads. five of

w hie a are defendants in this action. Those five are the

. five Eastern railroad defendants, and none of the 1b W vst-

ern railroad diéfendants or the three Southern railroad de-

fendants, or their P residents, are members of ERPC. It

is a lawful organization and mere membership by the

‘President of a railroad defendant in ERPC ix not in and

of itself evidence of partic ipation in the alleged conspiracy.

The defendant Triffie Exevntive Autociation—Rastern

_ Railroads, which has sometimes been referred to as **TEA”’

“TEA-ER,” is a railroad rate bureau which in 1954

uutubered among its members some 24 railroads that

opekate either wholly oc partially in’ Bastern Territory.

The five Eastern railroad defendants are members of TEA,

TEA operates pursuant to an agreement, introduced in

evidence as TEA Exliibit 5053, whieh was approved by

the Interstate Commerce Commission. That. agreement

defines the functions and procedures of the Association,

" and describes the duties and’ authority of the Chairman.

‘and other officers of the Association. In-essence, TEA

provides a means -whereby railroads eperating within

Eastern Territory can engage in joint rate-making activ.

ities required or authorized by the Interstate Commerce

Act, «TEA is a lawful organization and mere membership

by a railroad defendant in TEA is not in and of itself

evidence of participation in the alleged conspiracy,

‘Defendant Carl Byoir and Associates, Which has some--

times been referred to as Byoir, isa corporation engaged

in public relations activities. on behalf of matiy clients,

It entered into a contract with defendant Eastern. Rail-

roads Presidents Conference on August 15, 1949, to per. -

form certain services for ERPC. This contract is Plain-

tiff’. Exhibit 49.

*?

— fia —

You will notice that the plaintiff is a ccorporation and

defendants are all either corporations or associations. You

shovld remember-that for purposes ot this case, a corpora-

tion is a person. Since it is net a person in the physical

Sense of the word, but only in the eves of the law, it ¢: un

only aet through human beings: that is, through its officers,

“uents, employees or servants, and the acts or declarations

of those persons when done within the scope of their em-

ployment are.deemed,to be the acts or declarations of the:

corporation, Also, ef course, associations. can act only

through their employees and officers. [tis important for you

to bear in mind that not everything that is done in the name

of a corporation or assoviation, or by an officer or employer

thereof, can properly be taken as an act of the corporation

or association. Before you can. find against: any corpora-

tion or association on the basis of the acts or statements

_ of its employees or officers, you must be satisfied that plain-

tiff has proved, with respeat to each act upon which it

‘relies; that the corporation or association authorized or

ratified what the agent did or said. This authorization or

ratification, however, does not have to be express, but

may be implied or inferred ‘from things done or said or

not said, and from the circumstances.

Some of the detendants in this case are associations—as-

sociations of railroads or of their officers or employees.

Such associations are perfectly lawful. Moreover, there is

absolutely nothing unlawful incand of itself in any of the

railroad defendants being metmbers of -one ov Inany asso-

e1atlons, or participating in their committees, their meet-

ings or their other aetivities. :

~The individual members of the association ean be held

responsible for the unlawful conspiratorial acts or declara-

tions of the associations only if} they‘are shown to-have

known and approved of such activities and their inlawiul

I

objective, either expressty or impliedly, and OUTSe,

-

fii r

Evidence of participation by some: members of an asso-

Clation in an illegal conspiracy is not sufficient to estab:

lish participation by the Association or other members of

the Association in the conspiracy. The Association is not

liable for the acts of its members vinless the. Association,

- as such, has directed or authorized the nets complained: of

or ratified then, either expressly or impliedhy,

. In regard to this situation of all parties being either

corporations or associations, | wish té submit to vou a eau

tion Which perhaps is not necessary, but in view of the very

large stmus of money whith have been mentioned in. thie

_case, may bear mentioning, You will, remember that on

the examination on sour voir dire, when vou were being

selected as jurors, that vou were asked) whether the fact

_thataanany large corporations were involved in this ease

would influence vour verdict, and vou all answered that

it would not: You were also asked. whether the. presence

ef many defendants and only a single plaintiff would in-

Huenee. your verdict, and again ‘vou answered that. it

would not. Exeept for a limited purpose, whieh Twill

explain later, vou should have no concern with the fact

that large assets, property holdings and earning power

have been mentioned in this case, and you should enter:

tain no bias or prejudice against any party on that ae-

count. This Court and this juryomust render equal justice

to all. Remember that everyone is equal in the eves of the

law. -This is a legal proceeding and yon must not permit

either sympathy or prejudice to affect your verdict in any

way. You are instructed that no inference unfav orable to

defendants is to be. drawn from the mere: fact that tins

snit has been brought by one plaintiff against several de-

fendants. Further, vou are instrneted that no significance

shonld he attached to cooperation of counsel for ‘defend.

ants during the course of the trial. That practice is quite’

normal in cases involving multiple parties on both sides.

Now, before T reyiew some of the evidence in this ease,

Twill state to you in an abstract way, the law applicable

®

ow (iin i.

to this ease, However, when LT said that To wonld review

the evidence, | did not mean that | was going to attempt

to go into detail and: specifically review all the evidence.

You have already heard the arguments of counsel for both

sides, each explaining his theory in regard to the evidence.

To review it in detail at this time would be a repetition

which would serve no useful purpose. “Therefore, my later

review of the evidence will be a general reference only to

it, in the hope that it will be of some: atssistance to vou

in Clarifying ande perhaps simplifving: the issnes and

eelarifying the application of the law..

‘Plaintiff's action is bronght under Section Fonr of the

Clayton Act which was passed by Congress in 114. This

Section of the Aet allows a private person, or a corpora:

tion sueli as the plaintiff, alleging injury as a result of

another's violation of the anti-trust laws, to bring a private

Suit for damages, As | indicated to vou in my preliminars

remarks, the person or corporation secking damages must

establish that he. or it, has suffered money damage as a

result of the other's wrongdoing.

Plaintiff’. complaint alleges that) defendants violated

Sections one and two of the Sherman Antitrust Net. Sec-

tion One of ‘that Net reads as follows: P

“Every contract, combination in the form: of trust

or etherwise; or conspiracy in restraint of trade or

commerce among the several States or with foreign

nations is declared to be Wbewal

Section Two of the Act provides that it ix unlawful for

(any) person (to) monopolize, or attempt to monopolize,

“or combine or conspire with any other person or persons,

to monopolize any part of the trade vor eommerce among

the several States or with foreign nations."*

As T have mentioned earlier, the words ‘*person’’ or

‘persons’ ' as used in the Act include corporations and as-

sociations organized and existing under authority of law

= ON

Plaintiff contends that the evidence shows thy sane means

were used to violate both sections of the Aet; that is, that

the same methods were used in the alleged couspiraey. in

restraint of trade under Section One, as were used in the

aueged conspiracy to monopolize and attempt to monop-

olize under Section Two. . .

A few general comments on the autitrust law. along the

lines that Lo mentioned in my pretaminary remarks, may

aid you in vour deliberations in this case. The Sherman

Act was made law by our Congress in the year PSO and,

as you have probably noticed, is couched ino very broad

and general language. This geners! language ha- been

coustrued by the Supreme Court a= prohibiting only un

reasonable restraints and not all) possible restraints of

trade. Now, what were the purposes of Congress in pass-

ing this Act, whieh has been called a Charter of Free.

dow iy

It was the feeling of the Congress that ‘the public in-

terest is Test served when cotnmerce and trade are deft un-

fettered by combinations and agreements whieh have the

effect of destroying competition in whole or in part, There-

fore, the broad purpose of the Act is te maintain free com

petition-in interstate commierce.

Thus the Act broadly condemns all combinations and

conspiracies Which restrain the free and natural tlow of

trade in the channels of interstate corimeree: Any con

certed action, therefore, by any combination of men or

corporations or associations to cause, or which in faet

‘does vanse, direct and undue restraint in such COMMmETEE,

falls within the prohibitien of the Net and is unlawful.”

~ As T told von on a prior occasion, the term ‘monop-

lize? as used in the Sherman’ Act. means the joint ac-

“sition or mainteaanee by the members of a VONSP racy,

formed for that purpose, of the power te” contral and

dominate trade and- commerce in a commodity or eom-

modities, or in a business te snch an extent that they are

.

*

dae — 70a ---.

able, as a group, to exclude. actual or potential com-

. petitors from the field accompanied by the intention and

the purpose to exercise such power. Since the transporta-

tion of government ammunition and explosives has’ not

been monopolized, plaintiff must “prove that some or all

of the defendants attempted to monopolize that) business

_ pursuant to a conspiracy to monopolize the busitiess, The

phrase ‘attempt to monopolize, means the employment of

methods, means and practices, which, if successful, ac-

complish monopolizftion and which, though falling short,

nevertheless sg ha ‘h so” close as to create. a dangerous:

probability of it, which nieans atid methods are “so” em-

ployed by the aia of and pursuant to, a combination

or conspiracy formed for the purpose of such accomplish-

ment.

This offense of an attempt to monopolize requires proot

that the parties to the alleged’ conspiracy had an actual,

; specific intent to obtain for themse!ves a monopoly of the

relevant market by means. of the over¢ acts éngaged i

by them pursnant to the alleggd conspiracy.

Section One of the Act does not forbid all restraints of

trade, but only combinations aud ‘cotspiracies v hich un--

reasonably restraim trade. You see, all business action

affects trade in some way. The law triés to keep the proc-

ess natural and reasonable. Let me give you an example.

When a person goes out of business because liq Ts Tiiwoin-

petent; that is, he jast isn’t a good businessman,-ecompe-

tition is lessened naiurally anit obvionsly, since, of course,

there is one less business in the field of competition. But

no one is held responsible for that man’s business failure.

_It was the result of the Competitive’ process, But when

“you combine and conspire to drive a competitor ont of a

_business, and commit acts to effect that result. that is

another thing. The result is the same in. both cases, that

ix, there ix one less business in the field. But in.the latter

ease the restrain! of trade, especially when part of’ a

larger scheme. to monopolize, violates the Sherman Act.

a

Ome ‘

-~jla—

So, therefore, you ‘see that there are three offenses

"charged by the plaintiff:

— One, that. the railroads tried to Climinate Riss as an eX-

plosives trucker in unreasonable restraint. of. trade, as one

of their principal competitors in that field. and as part

of their plan to monopolize the ammunition bus siness for

the government ; ‘

Two, that the defendants, cons -pired to monopolize this

trade for themselves; and

Three, that they then attempted to movepolize this

business,

I, of course, intimate no opinion on whether or not these

allegations are in fact correct. That is-for you alone, the

jury, to decide.

Thus you see that an ennenitial element of the Violations —

charged by the plaintiff in its complaint is a combination

or conspiracy by the defendants. p

These terms, * combination” and *‘conspiraey.”* ns used

in the Sherman Act have the same legal effect. T shall use.

them in these instructions interchangeably ‘without in-

tending any distinetion in their meaning.

As I told you in my remarks at the start of the trial, di

conspiracy is an agreement between two or more persons to

accomplish a lawful objective by unlawful means, or to

accomplish an unlawful objective by lawful nreans. No

formal agreement. is necessary to constitute a conspiracy,

“It is not the form of the combination or the par-

ticular means nsed but the result to be achieved that

the statute condemns. It is not of importance whether

the means used to accomplish the unlawful objective |

are in themselves lawful. or unlawful, Acts done to

give effect to the conspiraey may be in themselves

wholly innocent acts. Yet, if they are: part of the sum

ot) P

of the acts which-are relied upon to effectuate the

. conspiracy which the statute forbids they come within

its prohibition, No formal agreement is necessary to

constitute an unlawful conspiracy. The essential com-

bination or conpiracy may be found in a course of

dealings or. spade circumstances ax well as in an ex-

change of words.’

Now,. a conspiraeéy may be .proved by circumstantial

evidence; that is, it is not necessary that there be direct

evidence of the conspiracy, but it may be inferred from -

_the things actually done and from the circumstances.

Let me read you over this definition,

As I told you in my remarks at the start of the trial, a

conspiracy is an agreement ne two or more. persons

to accomplish a kaiwful objective by unlawful means or

‘to accomplish an unlawful objective by lawful means.

There are two kinds of evidence in the law. One we

call ‘direct’? and the other we: call ‘indirect’? or ‘*cir-

cunstantial."" Direct evidence is evidence presented by

someone who has personal knowledge of a fact “in issue

in the case—the testimony of the witness himself as to

what he-saw or heard. ?

Circumstantial evidence is evidence presented by some-

one who does not have actual knowledge of a fact im issue

hut who does have personal knowledge of certain other

facets which tend to prove or disprove the fact in issue. —

Direct evidence is.evidence which, if believed, proves

the existence of a faet in issue without any inference or

presumption. While circumstantial evidence does not di-

rectly prove the existence of a fact in issue, but gives rise

to a reasonable inference that such facts exist.

To illustrate the difference between direct and eireum-

stantial evidence, let us assume that the faet in issue in

a case is whether or not John, shot and killed Mary. Tf

a witness testified that he personally saw John shoot Mary,

we would say that we had direct evidence. .On the other

” .

e

hand, if a witness.testified that an hour -before Mary

was shot, he sold Jolin the pistol which has been identitied

ws the murder weapon, and it was found-in. the possession

of John shortly after the murder, we would say that we

Aad circumstantial evidence of the fact that John did

shoot and kill Mary. This rule of admitting c¢ireiimstan-

tial eviderice ix one of necessity and justice. Justice would

seldom be done if direct or eyewitness testimony were re-

quired exclusively. At times, in tact, if the circumstantial

evidence is sufficiently strong, it may be even more con-

Vineing than direct evidence, for e<ample. an eyewitness

may niake a mistake in identifying the person whom he

suw, Or a witness’ memory may be inaceurate. On the

other hand, circumstances speak for themselves, and it

they are strong enough and unanibignous enough at times

irresistably, lead to a definite conclusion.

Persons entering into such illegal relationships usually,

and perhaps naturally, seek to coneeal their plans and

their purposes, Hence the law recognizes that the nets

ofthe parties, their courses of conduct and all surround

ing conditions and circumstances are competent as evi-

dence upor’ the question and may be ‘considered upon the

question of Whether or not such an illegal conspiracy or

combination was made or entered inte and in determining |

the parties to it. .

To constitute an illegal conspiracy, it is not necessary

that the parties thereto meet together at the same time, or.

at the same place, or even that they meet at all, nor is it

necessary that all parties be present or participate in

every act committed for the accomplishment or furthert

anee of the objects of the conspiracy. Nothing mere is

essential than that some character or manner of compu

cation take plae® between them <nfficient to enable them

fo reach a definite, mutual understanding of the eommaon,

unlawful objective or purpose to be thereafter: aecom-

plished and that they will unite or combine their efforts ©

-

to that end.

— ita —

Further, an unlawful conspiracy may be formed without

simultaneous action or agreement on the part of th® con-

spirators, It is enough that knowing that concerted action

was contemplated, the conspirators gave their adherence

to the scheme and participated in it. Before a conspiracy

can be said to have been proved by cireumstantial evi-

alence alone, it ix necessary wot only that the circumstances

proved by the evidence shall reasonably give rise to an

inference of such conspiracy, but alxo that no other equally:

reasonable inference ean he drawy from the same cireum-

stances. If two equally reasonable inferences can be

drawn from circumstances proved by the evidence, one

consistent with the existence of the conspiracy sought to

be proved and the other inconsistent therewith, you should

not infer the existence of the conspiracy from such cir-

‘cumstances alone.

Plaintiff's clan must be jndgec separately as to each

defendant, and the position of each defendayt must. be

judged on its own merits. Each defendant, therefore, is

entitled to individial consideration of the particular evi-

-dence applicable to it to determine whether that par-

ticular defendant participated in any conspiracy. You

cannot return -a‘verdict against any defendant unless

you find specifically that that defendant conspired with

one or, more of the other defendants to unreasonably

restrain trade by eljminating Rixs-from the explosives

business, or to monopolize explosives and ammunition

traffic, or attémpt to monopolize such trafic

If vou should determine that there was such a con-

piracy to unreasonably restrain trade or to monopolize

the business of hauling exploxives and ammunition for the

government, or an attempt to monopolize, then in order

for von to find tffat any individual defendant participated

in that conspiraa, it must be shown that said defendant

had **knowiedge of the existence of that conspiracy’’ and

that it knowingly performed an act designed to promote

~-

— iM -

.

or aid in the attainment of the object of that known ‘con-

spiracy.

- In order to find that a defe ini had knowledge of the

conspiracy, if any, the eviderice of knowledge must ‘be

clear and not equivocal.

I instruct you that yon may not find that any individual

defendant participated in the alleged conspiracy by per-

forming an act in furtherance of and with knowledge of

the conspiracy unless vou find that it had such know ledge

and took such action prior to September 22, 1954.

If you should determine that there was <uch a eon-

piracy, recovery against any ind vidual defendant ean be

had only for conduct “ye h **the cOnspirigg contemplated

and embraced."" . . .-A defendant ix chargeable with the

acts of its Siew dloetaiie only if the acts are done in

the furtherance of the joint venture as all understood it: an

individual defendant cannot be held for what <ome of the

defendants, unknown to the rest. do hevond the reasonable

intendment of the common understanding.

If vou should determine that there asa conspiracy, you

/ cannot -find a defendant liable forthe acts of his eo- de-

,

*fendants which were not contemplated by their COMMON

understanding. If a defendant's co-defendant enters inte

unlawful undertakings with third parties, said: defendant >

ix not liable for acts performed by such co-defendant in’

- ~“furMleranee ef that latter conspiraey.

**Nobody ix liable in conspiracy except for the f4ir *

import of the concerted purpose or agreement as be

understands it: if later comers change that. he i< not

liable for the change: hi< liability is limited to the:

ieee common purposes while he remains in it.**

Further, a defendant docs not become a party to a eon-

Spiracy merely by rendering services to it. Ax T have men-

: tioned before, vou cannot return a verdict against a par--

. - ticular defendant unles< vou find that detendant knew of.

va

— jta — :

the conspiracy and participated in it. However, this

knowledge may be inferred from all the evidence and may

not be proven by direct ev idence. This knowledge issue is,

‘of course, for you, the jury, to decide.

Also, a conspiraey cannot be inferred merely from the

fact that several persons engage in similar business con-— -

duct with the same end in tiew. Such similar or -parailel

business behavior standing alone does not constitutes a

Sherman Act offense. It is,.of course; one type of relevant

evidence on that point. ,But proof of agreement, express 5.

or implied, is still inglispensable to the establishment of a | ™

conspiracy under the anti-trust laws.

You must keep in mind that the character and effect of

a conspiracy cannot be judged by reviewing its separate

parts, but‘only by looking at it as a whole. ”

‘Now we will take a 15 minude recess at this time.

The Deputy Marshal: This Honorable Court ‘stands re-

‘eessed for 15 minutes.

(Short recess, at 2:20 0’clockep. m.)

“ The Court: I just learned that I inadvertently used in

part of my charge the word **may** instead of the word

**need"*; n-e-e-d. Se I will read over that part of the

charge. i

**As T have mentioned before, vou can not returp a

verdict against a partic ular det ‘endant unless you find

that that defendant knew of the conspiracy and par-

ticipated in it. a é

‘However, thix knowledge* may. be inferred from ;

all the evidence and need not be prove by direct evi-

dence. This knowledge ixsue is, of course, for vou the

jury to decide.”’

Now, what is this case all about? What is the basic issue

. here? The plaintiff has charged that the defendant com-

bmed to monopolize the,dusiness of transporting ammuné-

64i°—, .

: .

’

tion and explosives for the United States Government.

‘Plaintiff claims that its explosives trucking business was

a special target of the defendants’ alleged campaign be-

cause plaintiff was an important trucker of ammunition

and explosives for the United States Government and al-

leges that the Deferidants would have to eliminate the

plaintiff's competition for that traffic in’order toqmonop-

lize that traffic, Bach defendant denies these allegations

of the Plaintiff. :

Plaintiff concedes that the De fendante used means,

Which, if considered by the momnlicen, were entirely lawful.

That is, the Plaintiff? is charging that type of conspiracy

which I told you consisted tof an agreement by two or

ore persons to accomplish an unjawtul objective by law-

ful means. If is Plaintiff's contention that thix ‘unlawful

objective was the obtaining for the railroads ax a whole,

at least 90 per cent of the Government ammunition traffie,

without regard to the merits of any partignlar railroad or

_ group of railroads, as competitors for such traffic.

Plaintiff? contends that tid alleged unlawful? conspiracy

had its beginning around the Veu? 1950, and that the Reil-

road Association Defendants ane Defendant Carl Byoir

ard Associates, Incorporated, the Public Relations Firm,

were the agents of the individual railroad defer wdants im

carrying out the alleged unlawful design. Thix, of course,

is for you the jury to decide, Tn order for von to consider

the allegations made and the evidence presented on them,

it would he-well to review what the record <he Ws concern:

ing the background of this ec trove TSy.

You will reeall -hearing testimony which neither side

has any disagreement with that, during the period em-

bracing the second World War. the railroads of the nation

had approximately 90 per cent or more of: the business of

hauling explosives for the Tnited States ‘Government.

After the war the trucking industry began to grow at a

rapid rate. Evidence relating to the competitive situation

*

40 - :

—TSa---

at this time ig permitted. and ‘coniipetent under the law

merely, for thie purpose of throwing light, if-it does throw

any light, in your opinion, upon subsequent events, This

Plaintiff alleged the Use of ‘se

is true also regarding fhe ev igence relating to the se-called

Reparations Cases, wha#th concerned rates which were,

charged by the railroads ‘during the Seéond World War.

This historical evidence is admitted for Wour consideration *

~—you are the judges ‘ds to w hether he ‘matters; throw

‘any light” upon the acts alleged here and ald you in any

way “im interpreting them anal understanding Them...

Tn i its. original -complait ay September,. 1954, the

al means by ‘Defendants

"pursuant to what has heen mned throhghout this trial,

the St pre- -existing conspiracy’’. Plaintiff contended, as™

you will recall, that Defendant Kastern Railroad “Presi-

dents ( ‘ouference hired a. public Felations firm to conduct

, an allegedly ‘false and nialicious campaign of publicity

ae ,

against’ long distance truck carriers of ammunition. and

explosives, the alleged purpose of such ¢: ampaign being—-

as I’ have préviously | indicated—the obtaining for the

railroads 6¥ at least 90 per cent of that business, It is.

Plaintiff's further contention that- the Defendants tried

“unsuccessfully to get certain state legislatures to pass

laws: which would’ prevent ‘all truekers ‘from competing

2 * ae ; : ,

_ for. the. Government ammunition and explosives business,

° the testimony pro and con |

. Pound Bills”’. ~ Plaintiff

the ‘right of intervention

You will reeall, in this reg

concerning the. so-c: tHed 5,

claims that Defendant~ soul

before the Interstate ¢ “ommerce Commission and that. both

the attempts at degislation and certain proceedings before

the Interstate C ‘ommerce (" ommission were used as a basis

for a public relations: campaign which was intended to

injure :the -Plaintiff’s .good will and ultimately to elim-

inate- the Plaintiff-from transporting any commodities, not

just explosives, in competition with the railroad deferrd?:

Plaintiff asserts that its exphosives businéss was a-

~

ants.

‘

-. passed.

ia ‘

special target of this alleged campaign of the Defendants

and explosives for the United States Government, and

that Defendants would have to eliminate the Plaintiff's

competition for the traftie in order to monopolize it.

Detyndahts deny. all of these cliarges, and in response

to them defendants claim in ‘regard to, thew alleged ‘prepa-

ration, circulation and publicatién of statements concern-

ing the Plaintiff and other truckers, that these statements

Decause Plaintiff was an important truckerlof ammunition |

were, in fact, true and fair comments ‘on matters of public —

interest, and were not part of any conspiracy to monopo- ,

lize. : Further, some Defendants*deny any, participation in

such activities, ieee _

> In this reg gard, T might tell you that the hauling of

explosives by ‘truck or ratl is a matter of public interest.

Defendants claim that for many years Plaintiff failed to

render adequate service as a commen carrier, and. that

the Plaintiff has on many occasions violated Federal and

State laws, and regulations: relating: to motor carriers, and

has conducted its operations with Inadequate, unsafe aud

improper equipment ; has disregarded the safety and wel-

fare of other users of -the public highways, and the safety

and ‘welfare of the communities through w hic ‘h its trucks

,

In regard to the evidence relating to certain violations

of State ajyl Federal laws: by Plaintiff Company, the evi-

dence-on these matters may be considered by you in your

determination of Defendants’ intent. vebves, vou should

a defense to the plaintiff's. charge that: the Defendants

have violated the antitrust laws by conspiring to elim.

‘inate the Plaintiff from competing with them or to T0-

nopolize the business in which Plaintiff was offering such

compefition. Evidence of such viol: itions has been ad-

mitted only for, the purpose of permipting the fullest ex-:

ploration of the ee purpose ‘and intent.

keep in mind that the existence of such violations ix not.

J

%.

. ‘ $

- a

3 eo?

— Sa —-

If you find that two or more Defendants did, in fact,

. conspire to eliminate Plaintiff's competition -in, or te mo-

a r

nopolize the business of transporting explosives for the

Government, then a belief by those defendants, no Matter

how sincerely held; that they were thereby weting in the

public . interest | would not: legalize such a-conspiracy or

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immunize Defendants against liability.

I do not, of course, intimate: in giving this or any ren

instruction, any opinien as te whether the evidence has

establighad that there was or was not such a conspiracy.

Those Defendants that ‘intervened allege that ‘their inler-

vention in certaiy proceedings before regulatory’ bodies

involving’ the Plaintiff have been the reagonable, ordinary,

‘and necessary result. of these alleged unlawful activities

of the Plaintiff. : ‘ |

It is the further, contention of the Defe ndants that when

governmental bodies and other publie organizations inter-

_vened or participated in proceedings before the Interstate

~ Commerce Commission involving the Plaintiff, that) such.

intervention was not the result of any unlawful activities”

on the part of the Defendants; hut was; instegd, the result

of an independent decision on the part of each such ergan-

ization that such action was necéssary by reason. of their

respective interests and Plaintiff's alleged unlawful and

improper aetivities. Defendants claim that any action

taken-by courts or administ ‘ative agencies against the

Plaintiff was based of good and reasonable cause and was

‘not the proximate result of: any action of the Defendants.

Both parties, as you have: heard from the arguments of

‘counsel, ¢laim that their evidence <hows these views. This

is, of course, for you to decide. The issue in this case is

not whether transporting ammunition and explosives by

truck, is more dangerous than transporting the same by

rail or whether yon believe that transporting ammunition

‘by truck is more dangerous than by rail, or whether the

tricks break up the roads or whetuer yon believe that |

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they break up the roads, or whether the tracks pay their

fair share of the pkey of the roads, ‘or whether you be-

lieve or do not believe that they pay their fair share of

road upkeep,

Evidence on these matters has heen introduced as bear-

ing on the issue of purpose and intent: that is, were the

railroads as they claim, acting in the railroads’ Own inter-.

est or in the public interest in publicizing these matters

“or was their intent to monopolize téw transportation of

anmunition and explosives for themselves, or to ufrea-

sonably restrain trade and: drive the acme’ out of the

‘explosives business? ie :

Public relations activities, as I have told vou during the

trial, in and of themselves, are not Unlawful but they cun-

not be used to violate the antitrust laws and [ do not

suggest that they were or were not so used. ‘That, again,’

is for you, the jury, to decide from all the’ evidence. It

has never heen deemed an abridgement_ot speech or press

to make a course of condtict iMegal mufely because the

conduct was in fact initiated, evidenced or carried out

by means. of language either spoken, written or printed.

Such an expansive interpretation of the constitutional

- guarantees of speech and ptess would make it practically

impossible to enforce laws against agreements ~ inPRtraint

of trade. be -

Further, you are instructed that sponsoring législation,

in and of itself, isnot unlawful. Therefore, .if you find

‘that the Defendants. or. any of them engaged in an effort

to obtain the enactment of any 5,000 pound bills which

were introduced in various state legislatures, such action

was not in itself unlawful. However, if done pursuant to

a pre-existing conspiracy. to drive a competitor out of the

explosives. business, or to monopolize or to ‘attempt to

monopolize such business, such activities, in view of the

over-all plan, if there was such a plan, would violate the

antitrust laws. These ixsues are for you, the jury alone

to decide.

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With regard to that part of the case dealing with pro-

-céedings before the literstate Commerce Commission and

other regulatory agencies and: bedies, it is necessary, for

a proper understanding of that aspect of the case, to. go.

into some detail... First of all, T want. you to keep firmly

in mitid that. You are to take the deci ‘isions of the Inter-

state Commerce Commission: as correct: as ua matter of"

fact and law and you ‘should not consider whether some

other result worfd have. been proper or more desirable in

these proceedings. The Commission is charged by” Con-

gress with the power and authority to regulate transporta-

tion, and the decisions of the Commission are entitled to

complete acceptance by the jury.

You are further instructed that the regulatory se scheme

established by+the Interstate Commerce Act contemplates

that interested carriers may intervene in proceedings in-

volving their competitors, and may contend in those pro-

ceedings that no new authority should be granted to their

competitors. It is uncontroverted that some of the De-

fendants participated in or intervened in proceedings be-

fore -the Interstate Commerce Commission involving the

Plaintiff, but this: participation or intervention, in and of

itself, whether iti be joint or single, is lawful under the

Antitrust Gaws. Intervention in these proceedings and

‘advocac v of limitations on,a competitor’ s operating au-

thority are proper, legal znd desirable in and of them-

selves, and cannot constitute evidence, by themselves, of

an intention to monopolize. In other words, from the act

alone of intervention or participation in these proceedings,

you cannot infer the existence of a conspiracy to violate

the antitrust laws. The purpose and intent’ of these de-

fendants is the key issue in this case, and such purpose

cannot be inferred from these acts standing by them-

selves. You cannot find such purpose from the mere fact

of intervention or participation. Your-initial determina-

tion is whetlier or not there was this ‘‘pre-existing con-

' spiracy’’ to violate fhe antitrust laws.

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Sponsoring legislation, in and of itself, is not unlawful:

Persuasion of, or attempts to persuade, departments of

the Governiyent, by itself, is not evidence of an unlawful

intent under the Sherman Act. Howey ver, if—and | “say

‘“if’’—the motivation of attempts to persuade or persua- |

sion of a department of the fiovernment emanates from:

and is a part of a pre-existing conspiracy or’ se heme tor

wreck a competitor or to monopolize trade and- commerce,

suc h action is a violation of the Sherman Act.

These same ‘principles also, apply to the solicitation of

Withesses or testimony of witnesses in’ Interstate Commerce

proc eedjngs.” Such action, standing by itself, is not in any

sense a violation of the antitrust laws.

Now, these Interstate Commerce Conimission proceed-

ings involved j in this ease and eoncerning which you have.

heard evidence are as. follows:: ‘Docket MC ——meaning

“Motor Carrier’ "—Sub oh 84, is the 4iesignation assigned

by the Interstate Commerce Commission to an application

filed by the Plaintiff in 1947 for permanent authority to

transport ammunition and explosives, In considering: such

applications as the Plaintiff's, the C ommission determines

whether the authority saught is required by present or

future publie convenience and nee essity and whether the

applicant is fits willing and able to perform the service —

for which it seeks, authority.

In. such proceedings, as. I have previously mentioned,

competitors are aot to participate in the proaced-

ings and ta present. evidence to show that the ; application

should not be granted, In Sub &4 these participants in-

cluded both railroads and motor carriers, The Plaintiff's

application: was initially. denied by the Commission but

this denial was vacated by the Supreme Court. The ap-

plication was reinstated and new hearings were ordered

in 1951. At this time -approximately sixty other motdér

carriers also asked the Commission for permanent author-

Te. o er -

ity to transport ammunition and explosives, These cases

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were consolidated, that is, the Plaintiff*s application was

heard separately, but by agree men? between the parties,

evidence introduced during the Plaintiff's hearing was in-

— by reference into the record made with respect

he other applications. Some ot the railroad defendants

nheaadl in these proceedings.

In 1955, the’ Interstate Commerce pe one toe decided

that no permanent authority would be granted to anyone,

’ but did grant temporary authority for a five-year period

for certain pointsgto four of the applicants, including the.

Plaintiff. The Commission postponed any actual grant of’

authority’ to the Plaintiff pending further hearings con-

cerning the Plamitiff. In 1959, the Plaintiff voluntarily

asked the Comission to dismiss its applic ation and the

request was granted. :

In January, 1952, certain Fastern and Western -Rail-

roads filed a petition with the Interstate Commerce Com-

mission asking the Commission to interpret. the scope of

the temporary authority to transport ammunition and

explosives which had previously been granted to Plaintiff

under an application denominated. MC-200 (Sub No. Go

~TA—meaning ‘*temporary authority’’). The Interstate~

Commerce Commission held that certain of the service in

the transportation of ammunition- and ‘explosives which

Plaintiff was then carrying on was not within the scope

of the authority granted in M&’-200 (Sub 60-TA) and

therefore was not authorized. Plaintiff was directed to

cease and desist from such operations and to -limit its

operations under Sub 60 TA to service partic ‘ularly de-

seribed by the Interstate Commerce Commission in its

report.

Plaintiff appealed this order of the Interstate Commerce

Commission to the United Statés District Court for

Missouri and to the Supreme Court of the United States

where it was affirmed and heeame ‘effective on De-

‘wae 98, 1953, the effective date of the order having

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been postponed by successive stays issued respectively by

the Interstaté Commerce Commission, the District: Court

and the United States Supreme Court. |

On July 14, 1952, the Publie Utilities ‘Commission of

Ohio petifioned the? Interstate Commerce Commission to *

revoke all ‘of Piaintiff’s interstate operating authority

through the. State of Ohio, alleging that Maintiff hac“om-

nitted an, @Xcessive number of¢ violations of the laws of

the State of Ohio, and the regulations of the PUCO and

the Interstate Commerce Commission in the course of its

operations through that state, This petition was desig-

nated, by the Interstate Commerce Commi&sion as M(C-C-.

14}5. The ‘action of the PUCO in filing the petition was

the only means by whiely the PUCO could obtain the relief

which it sought.

Shortly after-the PUCO filed ifs pet

This text is long and has been trimmed here. Open the source document for the complete record.