United States v. A & P Trucking Company

PETITIONER:United States
RESPONDENT:A & P Trucking Company
LOCATION:Fargo, North Dakota

DOCKET NO.: 32
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 358 US 121 (1958)
ARGUED: Oct 20, 1958
DECIDED: Dec 08, 1958

Facts of the case

Question

  • Oral Argument – October 20, 1958 (Part 1)
  • Audio Transcription for Oral Argument – October 20, 1958 (Part 1) in United States v. A & P Trucking Company

    Audio Transcription for Oral Argument – October 20, 1958 (Part 2) in United States v. A & P Trucking Company

    Earl Warren:

    Mr. Spritzer, you may proceed.

    Ralph S. Spritzer:

    If the Court, please.

    In elaboration of my answer to Mr. Justice Black’s question earlier I’m able to confirm that there has been no legislation offered on the subject as covered by this Court’s American Freightways decision since that day.

    Turning to the implications that flow from the fact that these statutes require proof of scienter or knowledge, the suggestion that the inclusion of the word “knowing” should lead the Court to conclude that a partnership entity is not liable.

    It seems to us, to begin with, proved too much because appellees apparently don’t questions as indeed they hardly could in the light of the numerous decisions, including decisions of this Court that a corporation may be held criminally liable under 18 U.S.C. 835.

    Therefore, it must be, we think, that this is a statute in which the word “knowing or willful” requires the Government to prove that the violation was conscious, but not a case in which the Government is required to prove criminal intent or evil or corrupt purpose in the sense that one must prove mens rea in a common-law crime.

    We think, in other words, that “knowing” and “willful” in this statute means simply that it is a defense that the violation was wholly inadvertent.

    We don’t think it’s a defense for the proprietors of the business to say, “We’re not liable because we didn’t bother with this.

    We delegated all responsibility to our underlings.”

    To take such a view of the statute would indeed hamper enforcement if not largely cripple it and I say that for these reasons.

    If one looks at the explosives regulations that are involved in part in this case, one finds some 700 pages of detailed regulation dealing with all types of chemical compounds, all types of containers which should be used and the like, regulations which make it almost the job of industrial engineering to comply.

    Now we think it’s obvious that these regulations are intended to impose a responsibility upon management.

    Management can employ the expertise required to know and understand and implement these regulations.

    It alone can engage in the supervision, the discipline, the training which is necessary if this type of enterprise is to be carried on with a high degree of faith and we think it would defeat the congressional purpose in adopting commercial regulation of this type.

    If it were a defense for the business entity to say as I’ve mentioned a moment ago, we don’t know whether these explosive regulations were complied with.

    We leave that to the assistant dispatcher or the driver.

    Felix Frankfurter:

    Of course one way of dealing with that problem, is not dealing with these words that give rise to these argument of purposeful desire?

    Ralph S. Spritzer:

    Well we — we do argue them and when we think with considerable basis that these words are adequate and clear in their purport.

    Certainly we don’t see how Congress could do better than it has in 222 (a) which in the very, I’m sorry in Section 203.

    Now that that Section, which is in the very same part of the statute as the misdemeanor Section, defines “person” to include every type of business organization and we think insofar as 18 U.S.C. 835 is concerned that the emphasis upon the regulations being binding upon all common carriers is highly persuasive of the thesis that liability should go where responsibility is placed.

    Felix Frankfurter:

    I don’t think it adds social policy or even judicial policy to exact care brought us upon this in training fee to legislation and the lax of the interpretation by Court, the lax the responsibility exercised by the Congress.

    Ralph S. Spritzer:

    That’s true.

    We —

    And the opposite way to paraphrase it in hearing (Inaudible)

    Ralph S. Spritzer:

    Well it was sufficiently clear Your Honor so the — dozens and dozens of district courts have enforced this statute against partnership entities and until 1956, the question had never even been raised.

    Of course if one goes so far as to say language isn’t clear because there’s been litigation that — I suppose one couldn’t argue plain language in any case.

    We think this is sufficiently plain to leave Your Honors to conclude that this is what Congress proposed and we think the whole purpose, the whole thrust of the regulations that are embodied in these statutes eloquently support that view.

    These after all are — are classic-type business offenses.

    What Congress is doing here is attempting to see to it that the people who run the business live up to prescribed standards.

    Felix Frankfurter:

    But the same — but the same requirement applies to an individual.

    Ralph S. Spritzer:

    Yes, and I think it —

    Felix Frankfurter:

    So that — so that — the stiffness of the construction has to be judged in the light of all those on whom the construction falls.

    Ralph S. Spritzer:

    Well we certainly recognize that where one is dealing with imputed liability they’re – there is a problem in the criminal law and that — then it has to be kept within bounds.

    And we have no quarrel certainly with decisions which indicate that a man may not suffer any deprivation of liberty, any imprisonment, without a showing of direct personal fault or causation on his part.

    We do not suggest that the principal, where the principal is an individual, sued as an individual, can go to jail where there has been neither knowledge nor acquiescence on his part nor a showing of something like gross recklessness on his part.

    Felix Frankfurter:

    You — you didn’t cover more than you have given me up to this point.

    If you think that the — the content of liability would be different in the case of an individual from that of a party.

    Ralph S. Spritzer:

    I think under 18 U.S.C. 835 where we pursue an individual, where we pursue an individual partner in this case, quo individual, that we would then have to establish his personal fault.

    And I think certainly the Court would not readily hold that an individual sued as such even for an offense arising in the course of — of the operation of the business could be imprisoned without a showing of personal fault.

    Felix Frankfurter:

    Could it be by — and you would make a distinction between the imposition of a money that was here and the term imprison which is under the —

    Ralph S. Spritzer:

    Yes.

    Felix Frankfurter:

    — same statute — under the same statute?

    Ralph S. Spritzer:

    Well I would say under 18 U.S.C. 835 where imprisonment is a possible penalty, if we were to sue an individual as an individual we would have to prove personal fault or, and personal causation, a direct involvement or participation by the individual so sued.

    Felix Frankfurter:

    But no different involvement or relationship between the deed and the consequence than would be the case of an agent for the partnership.

    Ralph S. Spritzer:

    No sir.

    And that all that we’re arguing here is that where we sue a business entity that response that a case is made out as in the criminal prosecution of a corporation by showing the required conscious violation on the part of an agent or employee who committed it in the course of his — his business action.

    Felix Frankfurter:

    Is that like applicable to this?

    I mean the — the requirement, the extent of the requirement of the nexus between the agents doing and the responsibility of the principal.

    Is that correct on that point?

    Ralph S. Spritzer:

    Yes, and on that point certainly.

    Earl Warren:

    Mr. Cioffi?

    Anthony J. Cioffi:

    Mr. Chief Justice and Mr. Associate Justices.

    In order to properly go into the background as to what law was in effect when Congress enacted the statutes in question, it was — it is first necessary for me to give a very brief resume of what happened in the U.S. District Court.

    I appeared on behalf of the appellee in this matter and I appeared before Judge Smith of the United State District Court and the partnership were indicted as entities and the individual partners were named if the entity affirmed a — and that our contention was, in view of the American Freightways case and in the view of the Boyce Motor Lines case which just came down shortly before that that a partnership is not an entity separate and distinct from the partners for the purposes of criminal liability.

    And I substantiated the arguments with the various cases which had interpreted US — 18 U.S.C. 835 and the other statutes thereto.

    And Judge Smith in his decision, in the record on page 19, the official record next to the — at the semicolon at the Commerce Commission stated, “The Court having decided that defendant partnership as an entity is not subject to a criminal liability under the Section set forth and therefore the informations were dismissed.

    Now, in order to properly decide whether or not a partnership is an entity, it is necessary to go into the history of partnership and I will try to be very brief.

    There are two theories of partnership.

    There is a mercantile theory which was the entity theory and after that we had our common law or aggregate theory and at that time that the Section was enacted by the court, the original Section, we were operating on the common law theory.

    In 1900, the Dean Ames at the request of the commercial institution submitted through drafts, which drafts were based on the entity theory of partnership similar to a corporation of partnership is separate and distinct from the members who composed a partnership.

    Anthony J. Cioffi:

    This was objected too because of the various state constitutions and in Dean Ames’ definition, he stated that a partnership was a legal person composed of two or more individuals to conduct a business for a profit, and that was objected to by the persons who were there in its Uniform Partnership Act.

    On Dean Ames’ death, the drafting of the Uniform Partnership Act evolved to (Inaudible).

    Now, this same question, “is a partnership an entity?”

    came up in 1911 at the time that these drafts were being submitted and they were fairly discussed as to whether we should had the aggregate theory of partnership, the theory which we have today or whether or not we should have the entity theory of partnership and Dean Lewis submitted two drafts of the Uniform Partnership Act for approval.

    One draft was a Legal Entity Theories we have which the governors intending to proceed on now and the other draft which he submitted was the aggregate theory draft.

    There was considerable discussion of attorneys, businessmen, teachers attended these conferences and the conferences lasted for two days and they decided that in view of the long history of common law as to the fact that a partnership was an association of two or more persons who carry on a business as co-owners to the profit that they would accept the aggregate theory and the partners would be — not distinguished from the partnership themselves, they would be more or less joint principles as co-owners of property.

    Now, there are various reasons why it would be very detrimental if the existing law as to the aggregate theory of partnership were to be disturbed.

    Many persons engaged in business going to business as a partner.

    They lent to each other their skills and they donate their moneys into this partnership effort and persons who deal with these partners, know that they cannot own — they can look to their partnership for payment of their obligations and they also can look to the individual partners for payment of any obligations arising out of the conduct of the business.

    Felix Frankfurter:

    Mr. Cioffi.

    Anthony J. Cioffi:

    Yes, sir.

    Felix Frankfurter:

    The question before us isn’t this abstract question whether you should adopt the mercantile theory of Madison or the old common law theory of an aggregate because long before that the discussion was ripe for the — through this whole commission the Congress of the United States in what is now 1 U.S. 1 it simply goes back to define the statute to define person to include the partnership not as an abstract juristic problem, but as a legislative definition which is preceded theories to the constitutional acceptance.

    Anthony J. Cioffi:

    Well at that time that Congress enacted that in 1866 that we were operating under the common law theory of partnerships which –-

    Felix Frankfurter:

    Well, I’m talking about the definition of partnership that which is now 1 U.S. as the model.

    That the theory of entity must begin to begin with your — someone accepts as legislative device for reading statutes Congress demanded this Court and all of the courts when appropriate to leave persons away when you of partnership.

    So the question is to get such questions with the common law concept (Inaudible)

    Anthony J. Cioffi:

    Well —

    Felix Frankfurter:

    Well in the first place, that definitory Section is applicable to 835 and secondly, whether (Inaudible) to the fact that he fixed it all come in carriers he tried the carrier was it all commentary to the matter what commercial — do we mean you’re carrying on what the commercial enterprise is or partnership, corporation of the New York State Association itself?

    Anthony J. Cioffi:

    Well —

    Felix Frankfurter:

    Aren’t you going to get — come to grips with that specific thing rather than that which everybody can see I suppose that the common law didn’t take the continental commercial view?

    Anthony J. Cioffi:

    Mr. Frankfurter –- Mr. Justice Frankfurter, as to the word partnership which was adopted at that time it was adopted as to what it meant at that time and at that time it meant that the partners were not an entity.

    They were not separate and distinct from the partnership in itself when they used the term partnership.

    Felix Frankfurter:

    That’s — that’s when the word — when the word partnership is good and I think that argument would prevail, but when they said — when we say the word person, when we say persons do we mean to include by a — as a collective conception — two or three people running a business — a partnership was never left to be deemed as one.

    The way I read 1 U.S.C. 1, don’t you?

    Anthony J. Cioffi:

    Yes, sir.

    I do read that way.

    Earl Warren:

    You don’t question the right the power of Congress to — to hold a partnership with those who wants to do it, do you, in the circumstances?

    Anthony J. Cioffi:

    In these circumstances, I do.

    I — I feel that Congress never intended partnership in the sense of being an entity in the statutes involved that when they said partnership they didn’t mean it as an entity.

    They meant it as the individual partners —

    Earl Warren:

    Under the power is it?

    The Congress has the power —

    Anthony J. Cioffi:

    The Congress does have the power but Congress has not done it clearly.

    Earl Warren:

    That’s the difference.

    Anthony J. Cioffi:

    But Congress does have the power.

    There is no question as to that.

    Potter Stewart:

    You pointed (Inaudible)

    Anthony J. Cioffi:

    It meant the members of the partnership and the partnership not as an entity.

    It meant that a partnership actually was accepted in that — during that period and that it was adopted by the aggregate theory of partnership and that — that it was the very discussion — that was the very discussion which came up at the time that it was being enacted as to what effect would it have on this whole theory of common law of the relationship of partners if they would declare a partnership as an entity.

    And — and then it was decided that we should accept the aggregate theory and not the entity theory and that’s what our state operates under and I believe 37 other states and their territories under the aggregate theory of partnership.

    We could have run into very serious problems.

    There were two cases if the Court would bear with me, in California, one case was in California, People versus Malgene, 167 Pacific 597 and its referred to in my brief on page 13 — 13 and 14.

    In that case, Peter Malgene was indicted for embezzlement and he was a partner in the Malgene Freight.

    They agreed to ship grapes for delivery and Peter Malegene charged and went off with the proceeds.

    He embezzled the proceeds.

    At the conviction the plaintiff appealed on the grounds that the indictment charge he was an agent of Homsy and thereby such agency the money came through his hands which was property of this — this individual and he embezzled it and the court said, “The District Attorney could not have charged a partnership as an entity with having embezzled these funds.

    The party charged with embezzlement in such cases must be the individual partner, who convert the funds” and there aren’t any cases at all that I — I have read the cases in the Government’s brief and in my brief, I tried to do as best as I could, where a partnership has been convicted as an entity.

    That our law is such that guilt is personal, we haven’t accepted to respondi act court theory in criminal law and in order to convict the man you cannot impute guilt on him he must be tried.

    Now, a — a partnership is no more than an extension of a proprietorship.

    You have a proprietorship which is one individual.

    He has employees working for him.

    Still it is necessary to indict him or to present him with information and prove — prove the case against him beyond reasonable doubt or with the criminal law that we have.

    A proprietorship is just two or more individuals and the same rule applies to proprietorship as applies to an individual.

    Now Congress has expressed its intent in the statutes involved 18 U.S.C. 835 and in 222 (a) of the Motor Carrier Act that knowledge and willfulness is a part that must be considered in finding a person guilty.

    And the 18 U.S.C. 835 has been decided and most of all our cases in this Court and in the Circuit Courts hold that they must prove — the court must prove willfulness and it is respectfully requested that the motion of — of the District Court be affirmed as to the dismissal.

    Earl Warren:

    Mr. Spitzer, do you (Inaudible)