# Reply Brief for the United States — United States v. National Dairy Products Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386410_0149%3A07 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief for the United States - **Published:** January 1, 1963 - **Citation:** 372 U.S. 29 ## Text ” a p . e CITATIONS - s ‘ * Cases: Bandini I retroli um CON, :. Supe rior ourt, 24 USS Blackunood v. United States: 13S F. 24 461. Braatelien v. United States, }47 F.2d 888. Bryan v. United States, V75 F.2d 223, Land v.. United States, 177 F.2d 34h Met oy Vv. United States, 160 F. 24 776. -cortiorari dle. nied, 334 US. SOS “ Moore v. Meads Fine Bread, 348 US. VS Rescue Army v. Muniespal Court 331 US. 549 Stirone v. United States, 361 US. 242 « United States v. Alford, 274 U.S. 264 United States v. Evans, 333 VS. 4882000002 — | Re United States vo Five Gambling Devices, 346 US. 441 United States v. Glasser, VV F.2d 690. modified, 315 - US. 60 : United States'n. Halseth, 342 Us. re ree — United States v. Harriss, 347 U.S 612 United States v, Kahriger, 345 U8. 22 | United States v. Lem Hoy, 330 U.S. 274 = United States v.. Minneapolis Flee. Contractors’ Ass'n. ', ,99 F. Supp. 75. ae 3 l ’nited States v. Ne ff, 212 F. 2d 297. O United States v. Shindle r.173 F. Supp. 393 : ' United States v. ‘Spector, 343 ULS: 169 7 United Statés v. Wurzhach, 280 US. 396° a 6 Vi illiams v. United States, 341 US. 97 th. Statutes and Rides: ‘Federal Rules of Criminal Proc ‘edure, Rule 7c) 4 Robinson-Pat man Act, Section 3, 49 Stais 1526, 15 USC. 138 er Ee ecieeen nee ‘ 1,545.84, 10 M ' (1) 632801--62 - . “Se -de =) ‘“ Gn the Supreme Court of the Binited States —Ocrosrn Term, 1961 No. 173 UNITED STATES OF AMERICA, ATPELLANT we National. Dairy Propucts Corv., Et AL. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE. WESTERN DISTRICT OF MISSOURI REPLY BRIEF FOR THE UNITED STATES Most of appellees’ contentions have already been fully answered in our main brief. A few of their arguments, however, call fora short reply. 1. Appellees challenge our contention that the con- stitutionality of the prohibition in Section 3 of the Robinson-Patman Act against selling :t unreasonably low prices for the purpose of destroying competition is to be détermingd on the basis of the predatory sales charged in this indictment, namely, sales below cost with the loss absorbed by the profits on other activities of a nationwide businéss. Appellees argue (Br. 5-16) that the offenses charzed in the indict- _ ment are not limited to sales below cost: and that, a) " 9 . in any event, the issue is the constitutionality of the statute “on its face’ (Br, 9). Neither contention is sound. ; an a. Each of the seven counts charging violation of the Robinson-Patman Act sets forth the offense in two -paragraphs under the single heading: ‘Offense Charged—Robinson-Patman Act.”” Count Two (R.-8- 9) is typical. Under the foregoing heading, para- graph 22 alleges that National sold milk to its’ dis- tributors in, the Paola-Osawatomie, Kansas, market - “af unreasonably ‘low prices for - the purpose of 7 dvstroying competition’’ in that market, “in violation: of Section 3 of the Act of-Congress * * * commonly known as the Robinson-Patman Act.”’ This.clause is in the language of the statute. Paragraph 23 alleges that, **[pJursuant to and in effectuation of the. offense charged in paragraph 22 of ‘this indictment, National utilized’ the advantages it possesses by rea- sen vf the fact that it operates in a gveat many | different geographical localities in order to finance and subsidize a price war against small dairies selling milk in competition with it and its distributor in the Paola-Osawatomic, Kansas market by tntentionally selling milk to its distributor Martin at prices below National’s cost?” (emphasis added). Paragraph 24, under the heading “ Effecis.’’ states that the ‘‘effects of the aforesaid offense, among others, have been to cause severe financial losses to small dairies doing | business’’ in that market, and *‘to cause such dairies to suffer losses in sales volume’ (emphasis added). 3 ; i F - The particularizaiton of the offense set forth in para eraph 23 plainly limits and qualities the broader lan- enage of paragraph 22.0 Paragraph 23 makes itexplieit that the sales at unregsonably low prices” charged m this indictment are sales “at prices below National's cost.” Tt is the two paragraphs together, the second jimiting ‘the first, that set forth the offense charged in. Count Pwo. PP phe indictment must) be read asa Whole hot bey sentences, te nited States Vo. Mipne- a polis Elec. Contractors’ Ass’ in, 99 I. Supp. Ta, TS OD: Minn). The chareing portion of the count explicitly “eontam. sets forth the “Offense Charged) in two. paragraphs under threat headin, ane hot Hist the statutory liuti- oul te used in the fist paragraph. The ot effects’ paragraph of the count, whieh immediately Follows the hwo paragraphs Setting. | forth the Offense © harged.” plainks refers to those twe preceding pari niin When i speaks of the effects of the “aforesaid offense” "Phe two pare gra pins of-the charge portion of the eount thus constitute the “plain, concise amd definite written statement of the essential facts constituting the offense eharged.”? whieh Rule 7(c) of the Federal Rules of Criminal Procodure requires the tmdictment . te - “Contrary to appellees: contention (Br. 8-9), government counsel did not state te the distriet court that “the indictment has.a broader scope than below-cost sales.” The collquy upon which appellees rely, during whieh government counsel stated — that an unreasonably low pricedoes not have to be below cost” (R. 115). related to the general scope of -tie statute, and not to the offense charged in this particular indictment.” Indeed, appellees’ counsel himself previously had recognized that “one argument’ that the Government makes is, certainly it is an un- reasonably low price where a defendant charged ander Section 3 sells below cost’ “(R. 95). : 4 This interpretation of the indictment is im gecord with the rule that when various acts are alleged in it single count, “all of its. recitations and averments must ’ therefore be read and considered together.” Blackwood v. United States, 38 FL 2d 461, 465 (CLA. 8); see, also, McCoy vo United States, 169 F. 2d 776, TSO (CLA. 9), “certiorari deiied, 335 U.S. 898; United States v. SRindter, 173 FL Supp. 395, 395. (S.D.N.Y.). In the Shindler case, Count Two of the cindietment charged a violation -of Section 17(a)(2) of the Securities Act of 1933, “fiesta thie™ language of the statute: [the defendant ‘did unlaw- fully.* * * obtain) money * *.* by means of. an omission to state a material fact necessary to make the ‘statements made, in the. light of the ciremm stances under whicl: they were made, nov TMislead ing’], and then by particuiarizing the acts complained ef [having ecailed the attention of the purchasers of stovk te the price at wiielf it Was selling on thie ‘American Stock Exchange, ‘but having omitted te ‘state the material fact toat’said price of -said stoc k had been ecatised to rise ana had been prevented’ from falling by the said) defendant: * * i el erefusing to dismiss this count, the court Atated (p. _ 895. ciuphasis added): “* By goiagboyond the statutory danguage with greater specific itythe defendants are more fully informed of the erime charged, enabling them thereby °to prepare their defense to meet the prosecution’s case, and at the same tjine protected aaginst double. jeopardy. The ‘parts of the count must he read togethor.’ & se ” 5 ~ Appellees’ argument implicitly assumes that. the government will tiot be limited at trial to proof of the acts specified in. the second paragraph of each of the Robinson-Patman Act counts. | Yet sich oa limita ” eee Ap So tion would elearly Jbe imposed if the specifications had been contained ina bill of partieuiars. buy. United, States v.' Neff, 212] * 2d 297, 309 (CLA. B?: Land Vv. United Ntates, 17 F.2d 346, 349 (CLA. 4); Bryan v. United States, V5 FF. 2d 223. 224 (CLA. 5) traatelien v.. United’ States, 147 FE. Yd RBS, SOR (CA, Bye lonited States v; (riusxse , nt 92d G90, 702 (CLA. 7), modified on other grounds, 315 U.S. OU" A fortiort, When the mdietment itself partienu- larizes the acts alleged) te Violate the statute, ap pellees sean be convicted only if> tlie, specific acts charged ave proven. Cf. Stirone vy. United States, Sol US. 2k. fe The contention that’ the constitutionality. of Section Ooonwst be deterniied ‘ton its hage™ (Br. 9-16), rather-than “tas applied” in’ this particular cast, is but another way of arguing that the statute ages be invalidated “if: hypothetical situations can iy x Hnagined to which its application may pose serious © constitutional problems. The Coutt, of course, nec essarily looks to the “face” of the statute in decid ing the constitutional ISSUC, In the sense that it must ‘first ascertain. what the statute does; to Whom it ap- _ plies, and what standards it provides. Thus, in‘ the ° '*For the purposes of the Criminal Appeals “Act. the partic-_ ilavs are to be considered as limiting the indi tment, unless-the district court has not so treated them. Kee United States v. Lem Hoy. 350 U.S. 724, 725. 730 Mnited States v. [lalseth. 342 U.S, 277, 278-279. J \ : present case the Court will have te determine whether the statutory language applies to the conduct char ‘ged in the indictment, t.e., whether the sales below cyst for the purpose of pane ing competition are covered by’ the statutory prohibition on, selling aft unreasonably _ low prices for that purpose. | But legal issues-are not decided in a vacuum. In the delicate field of constitutional adjudication, this ~ Court eonsistently has refused to reach beyond the particular case before it and to strike down a federal statute on the basis of its conjectural application to other . situations. | See our main brief, pp: 32-35: Wilhams v. U nitéd States, 341 U. S. 97, 101: United States v. W urzbach, 280 U.S. 396, 399. The principle 1S equally applicable whether¢he Court ‘iis called uj ou to decide the constitutional issue on direct appeal under the Criminal Appeals Act from a dismissal of an indictment, or upon review of a conviction For the primary purpose of the rule requiring definiteness in criminal statutes is to give adequate warning of » What conduct is prohibited, and this purpose is, satis- titd, as to a*particular de fendanty when he -is ade-— quately ‘informed by the statute that his conduct is prohibited thereby. The cases upoh which appellees rely (Br. 11-14). do not require a contrary conclusion. In most of - ‘them where.the Court decided the constitutional ques- tion ton the face” of the statute, the indictment it- self was drawn in the statutory terms, and the con- _& > ° ¥ stitutional issue posed was thus as broad as the statute itself. In other instances, the issue of ‘vagueness would be the same no matter to what faets the statute were applied. In none of them, however, did the. Court reach out to strike down, on the basis of its possible: applicability to other facts, a “statute which, as applied to the particular offense before it, Was not indéfinitely \ vague. 2Vpitd States \. Nahriqer, JAS US. 22 (No. 167, O.T. 1952, R. Ae | : Ve niti dl Nthatex Vv. Nye chor, 3455 ’ oa SS. 16% . No. 4433. oy e 151, / ‘ R. 2): Vneted States vo AV ford, 274 US. 264 (No. 983, OLT. 126, R. 2, other than the ambiguous first count): United Nee v. Berane 2338 US, 483 ONb. is. OY. 47, Ro 1). E In Toasted Ntates. v. fers Gambling Pevices, 346 e +41, the stagute required dealers inSgambling devices to register with the Attorney General the/address of their principal pl ee Of bust- hess “nd of their place of business “in such district.” The quoted words were not defined. and were apparently left in the bill through oversight. In considering whether this provision was unconstitutional ly vague, the facts of the specific ease were Immaterial and there was no distinction between judging the statuteon its face or viewing it as applied. . Similarly, in Bandini Petroleum Co. %. Superior Conrt, 284 US. 8 whic sustained x petroleum conservation statute prohibiting ““unrea- sonable waste’, the statute was examined on its face) because -the proceeding was fora writ of preaibition against its enforce- ment. The issue was whether the statute conferred jurisdiction on the lower court to entertain apy enforcement action whatevef, without new: ard io whether a particular defe ndant had been denied his right to a ‘fair warning: (See 284 U.S. at 15-16.) Contrary to appellees’ contention (Br. 12 103), the well: seftled™ ruling of Bandiné which this Court cited in Resene Arity vo Municipal Court, 331-U IS, 549, was that a judgment denying-a writ of pro- hibition was final for appeal purposes notwithstanding that en- forcement proceedings might follow: the rule was not related to the question in the instant case. | S. e. In urging the Court to decide only whether Section 3 is’ constitutional as applied to the sales below cost charged in this indictment, we are hot suggesting that, if the constitutional isste were to be decided on the broader basis -of the “face” of | tlie statute, the statute would be invalid. On the contrary, we believe that the arguments we have — made in our main brief to show. that. the statute is constitutional as here applied are equally: ‘applicable* to uphold its constitutionality on its face. See United States v. Harriss, 347 U.S. 612, 618.. We. press the ‘argument, however, because we believe ‘that sound judicial administration strongly counsels against the decision of hypothetical constitutional questions that are in fact not presented by the actual ease hefore the Court. A oe aoe, 2.. Appellees argue (Br. 19-20, 40-42, 55-57) that: in our main brief we improperly. relied upon the legislative history of the geographical price diserimi- | nation clause of Section 3. to- show Congressional intent to prohibit sales below cost in the unzeason- ably low prices clause of that section. Both clauses, however, are designed to prevent the same kind of illegal action, namely, predatory pricing practices for the purpose of destroying competition or eliminating. a competitor. They differ only in that they condemn different means td achieve this illegal objective. a ‘one prohibits sales in.one part of the country *?: prices lower than exacted by said persons a a ‘in the United States’’; the other, which is involved in this case, prohibits sales at ‘unreasonably. low prices.” But successful selling below cost can be rs a "4 9 accomplished over .an extended 2 a only if the seller has other profitable markets or product lines in which it can recoup: its losses; in the present case, the ‘indictment charges that) National “utilized the ad- vantages it possesses by reason of the fact that Ht oper- ates ina great many different geographiGil localities in order to finance and subsidize a price war against Small dairies selling milk in competition with it and its distributor’ in certain local markets (R. 9. 12. 15, 19, 22, 29, 52). The use of such predatory price cutting by large. firms as a means of dest roving competition has Jong been recognized by the courts. and Congress. See Moore ve Mead’s Fie Bread, 348 US. 115" 119-120, and our main brief, pp. 1- 17. - Since both clauses of Section 3 are designed to achieve the same. basie purpose, their legislative histories may be considered togetlfer to show Con gressional concern with below-cost sales in Section 3. 3. Finally, ‘appellees contend (Br. 58-71) that, even as apphed to the sales below cost charged in this indictment, Seetion, 3° would. still be unconste tutional, since “*below cost” is itself a “Vague and Indefinite Standard” (Br. 58). While there may. be problems of defining cost im other contexts, the in: dictmen. in this case charges National with" cnfen- = @& tionally selling inilk to its distributor “at prices below.. National's cost’? (eg., R. 9, -empliasis added). In other words, * is indictment charges National with willfully and knowingly selling below cost. If National’s own books show, under whatever cost accounting system the company follows, that it sold 10 @: ir ‘ below cost, or if there is evidence that National’s officials admitted selling below cost, plainly appellees eould not complain that they did not havegidequate warning that they sold intentionally below cost within N\ the meaning of the indictment and in violation of the statute. - If appellees are uncertain as to what the in- aiviinent means in charging them with intentionaily elling below cost, they can seck additional information through a bill of particulars. ae 4. The basie fallacy in appellees’ argument is that they. would havethe Court decide this casé as if it” a scholastic exercise) in etymology and cost , accoynting. Section 3 must be read in the context of gur.-historical and. continuing antitrust policy — a poly of preventing the destruction of competition and the growth of monopoly. The words,-especially words like “unreasonable,’? take meaning .frem the context. Beginning with the Clayton’ Act of 1914. later in the Robinson-Patman Act and again in the Celler-Kefauver amendment to Section 7, Congress sought to halt restraints: of trade in their gel piency, especially by outlawing those specific tacties which the dominant firms in a market may use to suppress their competitors. , Sales betaw cost (t.¢., at less than the seller’s.own cost) for the-purpose of destroying com- ; eRe or éliminating a\cqgmpetitor have been recog- nized ag undesirable predatory practices since before the Sherman Act was enacted. It is entirely plain that Section 3 makes this practice unlawful per se. without requiring the government to prove that there . has. been a conspiracy in unreasonabhe restraint of trade or that a monopoly has developed. CONCLUSION . . ‘For the foreloing reasons, ‘and thiose set forth in or f.{ strict @oirt ) of Ate ie our main. brief, the judgment of the « dismussing counts 2, 4, 6, & 10, 13, and dictment should be reversed, Respectfully submitted. r eeemeaaedanet tT en ' ARCHIBALD Cox, ig : Solicitar We neral, SN eS LORVINGER, LIONEL Feesrennat Jorn KE. Horraray, tee, Afforne YS Marcu 1962. © es P , o- % . oe » | ‘ ‘ * r se ‘ O.8 GOVERNMENT PRINTING OFFICE t962 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386410_0149%3A07. Public record. Not legal advice.