United States v. St. Louis Dairy Co.

79 F. Supp. 12, 1948 U.S. Dist. LEXIS 2232
Procedural entryThis page is a short order in United States v. St. Louis Dairy Co.. Read the opinion of the Court — 77 F. Supp. 853
District Court, E.D. Missouri·Decided July 19, 1948·No. Cr. 25713·Published

Opinion

79 F.Supp. 12 (1948)

UNITED STATES
v.
ST. LOUIS DAIRY CO. et al.

Cr. 25713.

District Court, E. D. Missouri, Eastern Division.

July 19, 1948.

Drake Watson, U. S. Atty., of New London, Mo., George B. Haddock, Special Asst. to the Atty. Gen., and John R. Niesley, Walter D. Murphy and Joseph R. Cannon, Special Attys., Department of Justice, all of Washington, D. C., for plaintiff.

*13 Jacob M. Lashly, of St. Louis, Mo., for defendants St. Louis Dairy Company and Basil M. Lide.

James A. Finch, of Cape Girardeau, Mo., and E. C. Hartman and William H. Allen, both of St. Louis, Mo., for defendants Pevely Dairy Company, Arthur Kerckhoff, Richard D. Kerckhoff, Elmer M. Kerckhoff, Daniel M. Kerckhoff and Alexander Kerckhoff.

HULEN, District Judge.

The two corporate defendants and certain of their officers by indictment were charged with conspiracy to fix uniform and non-competitive retail and wholesale prices for fluid milk sold by the corporate defendants in the St. Louis area, under Section 1, Title 15 U.S.C.A., commonly known as the Sherman Anti-Trust Act. Trial by jury resulted in acquittal of all individual defendants. The corporate defendants were found guilty. Defendants assert:

(1) There is no substantial evidence to support the verdict.

(2) The guilt of the corporations could have been established only through the defendant officers and the officers having been acquitted the conviction of their principals cannot stand.

(3) The government proved two separate conspiracies, if any, and therefore the record cannot support a single continuing conspiracy as charged.

The indictment charged that — during a period of ten years immediately preceding its return the defendants continuously engaged in an unlawful conspiracy to fix uniform and non-competitive retail and wholesale prices for fluid milk sold and distributed by the defendants in the St. Louis area; the conspiracy consisted of a continuing agreement and concert of action among the defendants that the defendants would charge uniform and non-competitive retail and wholesale prices for fluid milk sold by them, and neither corporate defendant would make any change in price until an agreement had been reached between them that the other would make an identical change. Changes in price during 1946, 1947 and 1948 are specifically mentioned in the indictment.

There is little dispute in the testimony. The Government would draw an inference of guilt and the defendants an inference of innocence from the record. The Government's evidence in substance was that in 1938 the defendant dairies "were losing money" — their "sales were deteriorating rapidly" — when a Mr. Gee, sales manager for defendant St. Louis Dairy Company, and Mr. Wasser, sales promotion agent for defendant Pevely Dairy Company, commenced a regular course of conduct of conferring with each other on the subject of change by them in the retail price of milk, wholesale and retail, in the St. Louis area. These conferences, at intermittent times, continued to 1941. The parties last named testified that when either of their principals had decided on a price change he (Wasser or Gee) would meet with the representative of the other defendant dairy to notify him of "proposed price changes". In "every instance" where this was done the corporate defendant to whom the information was conveyed "increased its price exactly the same amount." The corporate defendants changed, by increase, their price on retail and wholesale milk in exactly the same amount, even to a fraction of a cent, simultaneously on April 8, 1938, August 7, 1939, February 9, 1940, December 1, 1940, and July 1, 1941. The defendants decreased their price in exactly the same amount, retail and wholesale, simultaneously on June 12, 1939. Defendant Pevely Diary increased its price on retail and wholesale sales one cent on September 1, 1941, and defendant St. Louis Diary made the same change on the following day. The record does not show prices or dates on which prices were changed of either defendant prior to April 8, 1938. During the period defendants operated under the Emergency Price Control Act there were some changes by defendants in the price of milk from January 19, 1943 to June 19, 1946. The jury was instructed to disregard these price changes. During the year 1946 there were three price changes by the two corporate defendants. They follow a different pattern from the price changes prior to the period of the Emergency Price Control Act. On July 3, 1946 defendant Pevely Dairy increased its price one cent. Defendant *14 St. Louis Dairy followed with a like increase on the next day. On July 9, 1946 St. Louis Dairy raised its price a cent and a half and Pevely Dairy followed with a like increase the next day. On October 4, 1946 defendant Pevely Diary raised its price two cents and defendant St. Louis Diary followed with the same increase the next day. For the year 1947 the price change pattern reverts to that of the time prior to "O.P.A." The two defendants made a reduction in retail and wholesale price of milk in exactly the same amount, to a fraction of a cent, simultaneously on January 20, 1947. The two defendants made an increase of exactly the same amount, to a fraction of a cent, simultaneously on August 1, 1947. The two defendants made an increase of exactly the same amount, to a fraction of a cent, simultaneously on September 16, 1947. Commencing on January 27, 1948 Pevely Diary increased its price to 22½ cents on retail and 20½ cents on wholesale price of milk and on the following day defendant St. Louis Dairy made the same increase.

Witness Gee was asked the following question:

"On every time, every occasion that either of these dairies, Pevely or St. Louis, has increased the price, the other dairy has immediately put into effect a corresponding increase in price, hasn't it?

His answer was:

"Yes, but that is confined to our two dairies."

The two defendants set the price of milk in the St. Louis area and when the defendants raised their price "the other companies raised almost immediately or within several days usually * * *".

The witness Wasser was asked why he communicated the proposed price changes to the sales manager of the defendant St. Louis Dairy. His answer was:

"Because I knew it was impossible for us to sell at a higher price than our competitor, and I wanted to tell him what our price was, what the increase was, hoping that their company would increase their price, too."

"Q. And your hope was never disappointed, was it? A. I don't think so.

"Q. As a matter of fact, you wanted a stable market, didn't you? A. We all want that.

"Q. In fact, you wanted to avoid any competition in price, didn't you? A. Well, it was impossible for us to get a higher price than our competitor."

Neither Wasser nor Gee testified to a specific agreement with the agent of the other corporate defendant for a price change. Gee testified he never agreed with Mr. Wasser to a price change. Mr. Wasser testified that Mr. Gee never assured him that his principal would go along with the price change. The corporate defendants sell and distribute over sixty per cent of the fluid milk consumed in the St. Louis area.

St. Louis Dairy Company, on page 3 of its brief, states its position on the Government's case as follows:

"The foregoing facts upon which the government rests exclusively, by themselves, would support two logically permissible inferences: one of conspiracy and one of normal, law-abiding, business-like conduct on the part of defendants.

Free access — add to your briefcase to read the full text and ask questions with AI

United States v. St. Louis Dairy Co., 79 F. Supp. 12, 1948 U.S. Dist. LEXIS 2232 (E.D. Mo. 1948).

79 F. Supp. 12 (United States v. St. Louis Dairy Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

United States v. Patten
226 U.S. 525 (Supreme Court, 1913)
Lawlor v. Loewe
235 U.S. 522 (Supreme Court, 1915)
Schenck v. United States
249 U.S. 47 (Supreme Court, 1919)
United States v. A. Schrader's Son, Inc.
252 U.S. 85 (Supreme Court, 1920)
American Column & Lumber Co. v. United States
257 U.S. 377 (Supreme Court, 1921)
United States v. American Linseed Oil Co.
262 U.S. 371 (Supreme Court, 1923)
United States v. Trenton Potteries Co.
273 U.S. 392 (Supreme Court, 1927)
Dunn v. United States
284 U.S. 390 (Supreme Court, 1932)
Interstate Circuit, Inc. v. United States
306 U.S. 208 (Supreme Court, 1939)
Glasser v. United States
315 U.S. 60 (Supreme Court, 1942)
American Medical Assn. v. United States
317 U.S. 519 (Supreme Court, 1943)
American Tobacco Co. v. United States
147 F.2d 93 (Sixth Circuit, 1945)
Cravens v. United States
62 F.2d 261 (Eighth Circuit, 1932)
American Medical Ass'n v. United States
130 F.2d 233 (D.C. Circuit, 1942)
Pearlman v. United States
20 F.2d 113 (Ninth Circuit, 1927)
Bailey Farm Dairy Co. v. Anderson
157 F.2d 87 (Eighth Circuit, 1946)
Egan v. United States
137 F.2d 369 (Eighth Circuit, 1943)
United States v. Meltzer
100 F.2d 739 (Seventh Circuit, 1938)