United States v. Radio Corporation of America – Oral Argument – December 08, 1958 (Part 2)

Media for United States v. Radio Corporation of America

Audio Transcription for Oral Argument – December 08, 1958 (Part 1) in United States v. Radio Corporation of America

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Earl Warren:

Mr. Segal, you may proceed.

Bernard G. Segal:

Your Honor.

I was just in the midst, when the recess came, of addressing myself to Mr. Justice Harlan’s inquiries concerning the MacKay case.

I had pointed out that that was quite a different type of regulated party than in this case.

In that case, it involved a regulated common carrier.

Well, of course it’s different in many ways from the one involved here.

And all the Court held there was that the Federal Communications Commission could not grant the application of MacKay solely in order to increase competition.

That couldn’t be the sole standard it used regardless of other factors where a telegraph common carrier was involved.

But I might point out there quite different from the position taken by the Solicitor General here today and I quote from the Government’s brief in this Communications Commission case, “It has settled laws,” said the Government there, “that the public interest embraces national policies reflected in general legislation and judicial decision.

Thus, the national policy in favor of competition which is reflected in the antitrust laws becomes a part of — becomes a part of any statute which sets forth a public interest standard.”

Now, Your Honors, I was going through the stipulation and I’m almost through with it, I’ve gotten through the point that they had all the evidence on all of the antitrust issues.

They had a duty to consider the antitrust issues and I come to paragraph 9, which says not only did they have a duty to consider but the FCC decided all issues relating to the exchange which it could lawfully decide.

It left nothing — left nothing undecided.

And then the question is, well, might could have been invalid, might have not be pursuant for the Act when we come to paragraph 10.

The FCC granted the exchange applications.

It was argued, the date is given.

Its action was a valid exercise of its jurisdiction and was taken pursuant to and in accordance with the Act.

So, there’s no question about the validity of what is here in issue as I shall show.

Charles E. Whittaker:

You have —

Potter Stewart:

Mr. Segal, excuse me.

Charles E. Whittaker:

(Inaudible)

Bernard G. Segal:

I say to Your Honors that the stipulation was batted out by the Government and by us.

What happened was, we were in a long, long hearing before the judge and the Government was present.

And saying that all the facts are simple and I was saying, “Well, would you concede this fact?”

And the Government said, “Yes, we would concede it, we think it’s present.”

“Would you concede this fact?”

And in that way, the transcript was gotten up and finally, it happened that I left for the meeting of the American Bar Association in London and I couldn’t participate in my associates and the — the members of Department of Justice got up a stipulation which Judge Kirkpatrick read and approved as being in accord with the transcript.

And by the way, for some reason, I don’t understand that too has been put in the transcript of the record — of testimony in this case by the Government.

They have certified it up as part of the transcript of record.

All that argument and all our argument below is somehow rather has crept up into this transcript.

Hugo L. Black:

Do you think if the stipulation as to the duty of the Commission under the statute is binding?

Bernard G. Segal:

I think, Your Honor that quite clearly it’s not binding.

I think it’s correct, and I think to the extent that it shows that here are two litigants whose horns are locked in battle, who have divergent interest, agree that this is the law, is at least persuasive.

That if the Department of Justice and counsel for RCA and NBC think it’s the holding, at least to enlighten me of what it is Your Honor that it is, I agree it’s not binding.

I may say to you that I think all of the stipulations except perhaps that part of it, relate the to the fact that are not involved.

The — paragraph 11 I referred to and it just shows that we did exchange in for — that the FCC and the Department did exchange information, but more than that, that the Department kept — the Depart — Federal Communications Commission kept the Department fully informed.

Paragraph 12, I shall not belabor, that simply is a statement of all of the four or five procedures that the Department of Justice couldn’t take it.

It didn’t have to come in the beginning of the proceeding when maybe it didn’t know what was on.

It could have come in at any stage of the proceeding.

It could have asked for a hearing, it could have filed a protest in the 30 days after the decision.

It could have filed a petition for rehearing and then could have taken an appeal for the Court.

And finally on —

Potter Stewart:

Could it, Mr. Segal, have asked the FCC to defer its decision pending of further investigation demanded by the Department of Justice?

Bernard G. Segal:

I assume it could but I want to emphasize here, Your Honor that I can see a very good reason for it.

Actually, my friend, the Solicitor General has talked about the statutory practices in good — this is a governed capsule transaction.

And the reason in answer to who wrote the stipulation that Mr. Justice Whittaker asked, the reason of stipulation was not difficult to get to at, is it — with such a simple statement of fact.

Here, two companies had a transaction and here they agreed on it.

And here, the FCC had said that the affiliation was a two-year proposition and RCA had — NBC had the right either to renew it or not to renew it.

Now, to answer Mr. Justice Stewart’s question very directly, the fact was that the parties had come to an agreement and there were no other facts that the Department of Justice had to look into, but had the Department needed more time, the record is clear it didn’t because they discovered no facts but the FCC didn’t know.

I haven’t the remotest doubt that the Communications Commission would have grant time.

And they say, Your Honors, it took seven months if it was, to decide this case from the date of application to the time we could make our exchange.

Potter Stewart:

There’s one other thing, Mr. Segal.

As I — and I — did I correctly understand you to state as to say at the outset of your argument that in — on many, many occasions, the Department of Justice has intervened in cases of this nature before the Federal Communications Commission.

Bernard G. Segal:

No.

This Court has had just quite recently the, (Inaudible) case where the Department of Justice, even where they had the power to grant exemption, where the Department of Justice went in and carried the proceeding before the Federal Maritime Board.

The McLean Trucking case where the associated trucking tried to absorb six or seven companies.

The Department of Justice Antitrust Commission went in before the Interstate Commerce Commission and tried the case to argue that it would be a violation of the antitrust laws for them to perform for the ICC to authorize this.

It would — it — it’s not at all unusual in our jurisprudence more than to come into these cases.

Now, I don’t think they come in to this case but neither, Your Honor, have they filed this kind of proceeding anywhere.

I take it that it’s simply because they haven’t taken the position that the very grant of a permit or a license which is what they’re taking here is the grant of the license that they say as I shall show, violates the law.

Bernard G. Segal:

And not all this extraneous business that’s been talked about and I want to get to the complaint in a minute.

It’s the back that the department now takes the position that in granting the application, ipso facto, a violation to antitrust law was authorized in perpetrators.

I would take it if there’s a conspiracy here that as much a conspirator would be — well I — I believe that I was going to say that the Department didn’t act.

The FCC did act.

We acted pursuant to it and if there’s any conspirator, I take it we’re not one.Now —

Earl Warren:

Mr. Segal, at — at what precise point in this procedure did the Government lose its jurisdiction to prosecute —

Bernard G. Segal:

I think it —

Earl Warren:

— an action of such as it’s here, prosecuted?

Bernard G. Segal:

I think, Your Honor that when I get to the complaint and show you what they’re asking for here.

I can persuade Your Honors that the — when the FCC approved this transaction and when the parties — and that’s paragraph 13, I was getting through in the stipulation which says that, “We acted in reliance on the determination and affecting the exchange.”

When we did act in reliance on that determination and that’s paragraph 13 of the stipulation.

When we acted in reliance when the time to appeal to the United States Court of Appeals for the District of Columbia had expired, when the Department of Justice and everyone else with full knowledge of all of the facts refrained from doing anything and when we went ahead and effected these large business transactions involving the uprooting of people from Philadelphia to Cleveland and Cleveland to Philadelphia and all the rest of what’s in Judge Kirkpatrick’s opinion, then the Department lost its right to say that the very transaction approved by the Federal Communications Commission, it could ask the District Court to disapprove.

Earl Warren:

One of the thing — things that’s crossing my mind is this.

The — the facts within the knowledge of the Government now might be the same as they were at the time that they were asked to come into the case by the Federal Communications Commission.

But if the case was under investigation by the Department of Justice, needed necessarily know at that time that — that it knew all of the facts and that they wouldn’t change and that there wouldn’t be more upon which it could base a successful charge of conspiracy.

Bernard G. Segal:

I submit to Your Honor that in this field and I don’t think it is.

But if this field is a field in which any government agency needs more than the time that Congress has prescribed, then it’s for Congress to enlarge the time.

Here, seven months elapsed during which the Commission investigated and re-investigated.During which they asked for information and more information.

During which they notified and re-notified the Department of Justice.

If that seven-month period and if the time allowed for appeal is inadequate for the Department of Justice not to attack any general conspiracy, I’m going to get to that.

But to attack this very transaction, then I submit Mr. Chief Justice, that it is for Congress to say that the time shall be enlarged.

I may say to you that I think the Department of Justice had more than adequate time and subsequent events have so demonstrated.

And while I’m on that question, I may ask to answer the question Mr. Justice Douglas asked which was followed up by another question from Mr. Justice Stewart.

Mr. Justice Douglas asked whether the position of the Department was made known to the Apellees and Mr. Justice Stewart followed that up by asking whom did the Government tell?

Well, my answer to Mr. Justice Douglas is “No” and my answer to Mr. Justice Stewart is “Nobody.”

Actually, when 11 months after the department has been notified that they were antitrust issues, it instituted a grand jury proceeding.

Nobody could have been more surprised than we were.

We had no prior knowledge of any kind that that proceeding would be called or that that proceeding would be forthcoming.

We were going likely on our way in the belief that in investing millions of additional dollars to put in colored television and all else that was done in Philadelphia, we were doing so with the greatest security that a party could have, a licensee could have a license from the agencies setup by Congress.

The license, the very transaction which the Federal Communications Commission did license and I’ll just get to one other matter —

Does the — excuse me, sir.

Bernard G. Segal:

Sure.

Does the — does the record show what has been expanded by your client?

Bernard G. Segal:

It does not, Your Honor.

Other than the $3 million for the purchase?

Bernard G. Segal:

It — it does not, except it does show that we did take over the Philadelphia stations in reliance that they did take over to Cleveland and somewhere in the interrogatories that were printed which I hesitate to ask — as to refer to because I don’t think they were properly printed.

It does refer to the fact that a great many people were uprooted from one city and transferred to another.

But except as its common knowledge of what was done in Philadelphia, the colored television and all else, it’s not in this record.

Now —

Hugo L. Black:

You cannot then rely on special circumstances to show that —

Bernard G. Segal:

I’m sorry —

Hugo L. Black:

— if you’re entitled to have to say that there was some kind of estoppel or laches or something.

It has to be on the basis of what was actually done and deprive to all other cases in both special circumstances here.

Bernard G. Segal:

Oh, yes Your Honor.

Hugo L. Black:

Oh, they are.

Bernard G. Segal:

Here — here, and I’ll come to it a little more fully, but here, we’re acting on a Federal Communications Commission determination and the stipulation of states.

We just completely overturned the situation.

We’re operating — Cleveland Station ceased to operate them, terminated all our contracts, gave up all our connections, took whatever employees were involved and went to Philadelphia.

Westinghouse did — did just the reverse and all of these was permitted to go on for close to a year before the Department of Justice first brought it suit.

And even if we — it might as well, you might say three or four years because, obviously we couldn’t then undo it merely because a suit was brought.

Earl Warren:

Well, when did you start making this transfer?

Bernard G. Segal:

We started making the transfer as the stipulation states, Your Honor, when the appeal period had elapsed.

Earl Warren:

Yes.

Bernard G. Segal:

And I may say further that under the order, we had to do it within 15 days thereafter, because the order gives you 45 days within which to do it.

And I presume the reason is that 30 days is the appeal period and they allow you 15 more days to act after the appeal period has gone by.

Could I ask you one more question?

I hate to take your time.

Bernard G. Segal:

Yes, sir.

I notice in the record this exchange of memorandum between two of the Commissioners, they’re not involved which seems to be that after the dissenting Commissioner who thought there should be a hearing and have hearsay one of the majority came forward and said among other things which I take it’s the fair inference you’re speaking for the proclamation for all majority that they — the Commission did not consider that it was binding the Government in any way with respect to bringing a future antitrust suit.

Bernard G. Segal:

Well —

And the question that prompts me to ask is this.

That in this field of law, whatever that aspect of the case may turn out to be, being unnoticed that at least the agency didn’t consider that it was tying the hands of the Government.

Did you people take any steps to ascertain from the antitrust division whether or not they intended to go forward or whether they were calling acquits or whatnot?

Bernard G. Segal:

And we really considered it, Your Honor, not of much significance.

All that Commissioner Doerfer said was that this wouldn’t bar an overall look.

In other words, that the fact did approve, this transfer wouldn’t bar the Commission or the Department of Justice from looking into the question of whether generally, the — the NBC was violating the antitrust laws.

You see, he started by saying it’s difficult to see how approvals and preclude others from examining into the transaction.

Into this or any other —

Bernard G. Segal:

He says that.

And then he says that such an overall look is still available for the FCC or any other governmental agency.

Now, if what he meant was that after the Commission, as I hope you shall decide that this is in the public interest.

This very transaction and therefore I think inevitably decide that it’s not a violation of the antitrust law.

Anyone can come along and say this, “I think he was wrong.”

To the extent that he means that this gives us no immunity, gives us no exemption so that conduct by us in operating under the license or conduct that wasn’t an issue here can permit an overall look and he says, “I think it was loose language, can permit an overall look.”

I think he’s right and I shall so argue.

So, that this gave us no concern.

Earl Warren:

But I think that your answer to Justice Harlan in — is that you did not take it up with the antitrust division.

Bernard G. Segal:

No, I may say Your Honor that we saw nothing to take up and I still think that is true.

What he said was not shocking and except for a little loose language, was — was probably very good law as I shall show.

Earl Warren:

But didn’t too the dissenters on the Commission indicate that there might be antitrust?

Bernard G. Segal:

No.

The dissenter took the position he feared that the Government could not bring it.

He feared the — the — Commissioner Bartley said that his fear was that this would forestall the Government.

Earl Warren:

Yes, but — and the —

Bernard G. Segal:

That was the only dissent.

Earl Warren:

— can’t we have — will declare that — that there might be a violation.

Bernard G. Segal:

Oh, not — not that there might be a violation, the only question was, “Would this bar the Government?”

Earl Warren:

Why would he say to them that the Government would be debarred from — by this — by this order?

That he didn’t think possibly, there was a violation.

Bernard G. Segal:

I have to read his mind.

Bernard G. Segal:

But certainly, Commissioner Doerfer couldn’t have been more categorical within the portion I read to Your Honors in saying that there wasn’t as he said, a scintilla of evidence of any such and he had everything the Department of Justice had.

Now, this present suit, I’d like to point out to Your Honors.

Your Honors will remember that the Solicitor General said that the issue in a Sherman Act case is whether there was a conspiracy and whether the defendants acted in pursuance of the conspiracy.

And in answer to a question, I think for Mr. Justice Black, he said that if there wasn’t, then he thought this case fell out.

With that in mind, I would like to ask Your Honors whether you would turn to the complaint, because after all, that does define the issues.

And I ask Your Honors to look first at paragraph 21 at page 7.

And there we find what I think is the gravamen of the complaint.

It complains that on a certain day, May 16th, 1955, a month by the way before the applications were filed, defendant NBC entered into a contract with WBC in an unreasonable restraint of trade and commerce in violation of Section 1 and he tells what the contract provided for.

So, the unreasonable restraint of trade alleged in what is the gravamen in the complaint is the very contract that’s authorized here.

Now, I’ll come in a minute to a vague allegation of general conspiracy, but first I’d like to fix Your Honors’ attention if I may on that.

Might I ask you then to go to 23 where he gives the effects of all of the offenses?

The effects, which I take it is the critical question of what was the result of this conspiracy, what did it do?

And without burdening Your Honors, I say that every single effect related solely and exclusively to this exchange transaction, (a) “Reduce the ability of who?”

WBC, (b) “To preclude competition where?”

In the Philadelphia market, (c) “To preclude competition where?”

In the Philadelphia market, (d) “To reduce the ability of who?”

Westinghouse Electric.

Earl Warren:

Where —

Bernard G. Segal:

What — couldn’t mean anywhere.

Earl Warren:

You said “Where” to every other, all the other specification, how about that one?

Bernard G. Segal:

Well, I may say there Your Honor, it couldn’t mean anything, except in the Philadelphia market because it was in the sale of equipment.

And obviously, the only effect was that in Philadelphia, as they — as the Government contends, maybe NBC would advertise RCA products more than it would Westinghouse’s products.

And it couldn’t possibly affect San Francisco for instance, where we have an affiliate.There’s no such allegation of any kind.

The allegation is directly that maybe this exchange transaction, the fact that we, instead of Westinghouse owned a station in Philadelphia, would have these effects.

Hugo L. Black:

What do you say to 18, 19 —

Bernard G. Segal:

I’m going to come to those if I may Your Honor, if I may just for a moment — as I said, I want to get to this general conspiracy, but we take —

Hugo L. Black:

That’s the general conspiracy.

Bernard G. Segal:

There — well, that’s 18 and 19.

They do.

Hugo L. Black:

Began in 54 and continued.

Bernard G. Segal:

What did you say?

Yes, I’m going to —

Hugo L. Black:

Began in 54 and continued.

Bernard G. Segal:

Yes, I just — if I may just say about this one, that the relief requested under — and I’m going to come if I may in just a half a minute Your Honor.

In 21 and 23, the relief requested by the Government is that the District Court ordered the revocation of the Philadelphia licenses and that the District Court ordered the divestiture of the Philadelphia station.

So that its relief on 21 and 23, different from the relief that I’m going to come to, Mr. Justice Black, on the two averments that you referred to.

Its — its question there is — its relief there is order them to get rid of the license the FCC granted.Order them to give up the stations which they acquired in the exchange agreement that the FCC approved.

Hugo L. Black:

But why could they not do that?

I’ve got all the references but I don’t quite get why they do not find it reviewable.

Bernard G. Segal:

Why, what isn’t?

Hugo L. Black:

Well, it’s not alright for them to order that.

Bernard G. Segal:

Because we —

Hugo L. Black:

That if it was true that a year or two before, they had entered into a conspiracy that violates the law, then this could be means — views of the means to carry out it through.

Bernard G. Segal:

Well, Your Honor in the first place, to the extent — to the extent that they allege that there was a conspiracy to acquire this station, that was all gone into by the Federal Communications Commission.

As a matter of fact, that was all the Federal Communications Commission went in, in the quotation I read from Your Honors.

“Was there coercion?

Did they use these methods?

Did they illegally use power?”

And the Commission getting extensive evidence on that question concluded as Commissioner Doerfer says that there wasn’t a scintilla of evidence, that there was illegal coercion or that RCA or NBC exercised coercion on Westinghouse incidentally, a much greater and more powerful, both in size and wealth corporation.

And Commissioner Doerfer says it’s just is no evidence.

Now, they passed on that Your Honor.

Hugo L. Black:

Suppose there was — suppose — suppose there was no question here about how they got registration.

Would be alright, they get it, everybody knew this.

But the Government came in and said that two years before they come to that decision.

Can a conspiracy violate the antitrust laws, because they found there had been one?

Why — why would they not have some power?

Bernard G. Segal:

Well, even unrelated to this one.

Hugo L. Black:

Required to give it up if it was to be used as a means for carrying on —

Bernard G. Segal:

Well —

Hugo L. Black:

— the conspiracy which they found has begun long before this thing is served.

Bernard G. Segal:

They didn’t do that Your Honor.

Hugo L. Black:

But that —

Bernard G. Segal:

This — we have a stip —

Hugo L. Black:

— that’s what they allege.

Bernard G. Segal:

No.

We have a stipulation here that every fact pertaining to every antitrust issue which the Department of Justice now has, the Federal Communications Commission had at the time it decided, this case is nothing new.

There’s no general conspiracy of a nature that doesn’t relate to this particular transaction.

It all relates to this transaction, this is the conspiracy they allege.

This is the conspiracy to get this Philadelphia station.

Now, the FCC passed on that necessarily.

This was what it had presented to it in the form of testimony.

And having had it presented to it in the form of testimony, the Federal Communications Commission said “No, we conclude that there isn’t anything conspiratorial here.

We see nothing improper.

We find no coercion such as might possibly be charged, then we therefore find it to be in the public interest.

And therefore necessarily not a violation of the antitrust law for them to own this particular station and operate it in the City of Philadelphia.”

Now, the — the fundamental proposition of what we say here Your Honor is, that when the FCC determines that a transaction is in the public interest, meets the standard of public interest which is the primary function which the Congress gave to the Federal Communications Commission.

What is its primary function here?

To license people and to license them, how?

To license them if they meet the public standard.

Now, that is the keystone, that’s the keystone of the system and having created the Federal Communications Commission to make that finding, we then come to the question of what does the finding entail?

We think that basically, the public interest must encompass the basic economic policy of the United States, namely the antitrust laws.

And that’s what Judge Kirkpatrick found.

He said there’s no doubt whatever that in finding this was in the public interest, his language was, if the FCC necessarily decided that the exchange did not involve a violation of the law which declares and implement a basic economic policy of the United States but we go further than that, that would be true if not for Section 313.

But here, in the very Communications Act as the Solicitor General has pointed out, we find Section 313 which appears at page 5 of the brief of the Government which says that, “All laws of the United States relating to one lawful restraints, monopolies, combinations and so on are hereby declared to be applicable to the manufacturer, to the interstate or foreign radio communications.

So we have not only the general law that the antitrust laws would be imported into the determination of public interest, but we have a mandate in the Communications Act from Congress to the Federal Communications Commission that when it decides the things in the public interest, it cannot decide so, if that particular transaction which it is approving would violate the antitrust laws.

Now, I take it that in inevitable corollary in answer to some of the questions of Your Honors is that the Federal Communications Commission cannot license an act or a transaction which itself constitutes a violation of the antitrust laws.

And if it did, then whether with the Department of Justice or a party in interest who isn’t protested, that appeal to the Court of Appeals for the District of Columbia, the Court would strike it down as being outside the power of the Federal Communications Commission.

Assuming that the Government did file its complaint the day after the FCC issued its order, what will be your position in that sort of circumstances?

Bernard G. Segal:

My position would be that it would be an invalid suit, one that could not be brought because its endeavored to strike down after the — you say the day after the order?

No, I’ll make it even more than that from my point.

Supposing that they brought suit before the Commission, after the hearings had concluded but before the Commission had issued its opinion.

Bernard G. Segal:

Oh I have no doubt.

We would have been put to a hearing and we couldn’t have objected to it.

No doubt whatever.

If it did after the order, Your Honor, there is a specific provision for a petition for rehearing and the Commission could then have granted a hearing and we would have been put to a full dress proceeding there as to whether this should or shouldn’t be granted, subject to appellate review to the District Court, to the Court of Appeals, and certiorari to this Court.

No doubt in my mind whatever.

Earl Warren:

Well, if it — would the Government be entitled to maintain an action in the District Court at that particular time?

Bernard G. Segal:

Oh, if they had brought it in the District Court, Your Honor —

Earl Warren:

Yes.

Bernard G. Segal:

— we would have come here and we would have said that Your Honors decisions in the Far East and in Cunard and in the whole line of cases starting with Abilene and Chief Justice White 50 years ago, would require that that suit be set aside and that it’d be tried before the Federal Communications Commission if this had happened before.

Well that my question was — perhaps I misspoke myself was what the Chief Justice has now amended and clarified, I’m talking about an antitrust action brought to the Court by the Government.

Bernard G. Segal:

Well I’m sorry.

I thought you meant before the FCC, then my answer would be that I gave the Chief Justice that under the primary jurisdiction doctrines, this case would have had to go to the Federal Communications Commission and the Court would have said as this Court has many times said before with respect to many regulatory bodies, you go to the Commission and try your case there.

And the Department of Justice couldn’t have said, “It isn’t our practice to try such cases because at that very time, they would have been engaged in (Inaudible) case before the Interstate Commerce Commission arguing that the dual rate setup was invalid because of violation of the antitrust laws.”

Earl Warren:

Would your answer be the same if it was the day after the — the order of the Commission?

Bernard G. Segal:

If it was the day after the order, it would be the same.

But if it was the day after the last day for appeal, then my answer would be what it is today.

Earl Warren:

Well, but will your answer would be the same if it was a day after the order was made as — as it would be if it was — the action was filed a day before.

Bernard G. Segal:

Yes, it would be exactly the same.

Exactly the same.

Because Your Honor — because Mr. —

Earl Warren:

Then in those circumstances, does the stipulation in any way weaken the Government’s case, does that — does that take away any further rights that the Government had, that stipulation?

Bernard G. Segal:

Well, what the stipulation demonstrates, Your Honor, is one of the reasons that I say the District Court couldn’t entertain a suit because the stipulation makes clear that the Department of Justice would then have a — had a complete remedy even at that time before the Federal Communications Commission.

It clarifies the right of the —

Earl Warren:

It’s important but —

Bernard G. Segal:

Or it — or confirms.

Earl Warren:

But it doesn’t — it doesn’t give away any rights of any kind, the stipulation itself?

Bernard G. Segal:

Oh, no.

I think if — I think, Mr. Chief Justice, if by any chance the Department of Justice and we were wrong and they didn’t have the rights that the stipulation says they had, the stipulation couldn’t give it to them.

Earl Warren:

Yes.

Earl Warren:

Now, let me ask you just one more question along that line.

Suppose the Commission had not notified the Department of Justice and had just gone along and — and made this order in this case, would your answer to the question of Justice Harlan and — and me be exactly the same?

Bernard G. Segal:

Well, that isn’t our case of course —

Earl Warren:

Well, wouldn’t you be —

Bernard G. Segal:

— and it’s a more difficult case but my answer would be the same.

My answer would be —

Earl Warren:

It would be the same.

Bernard G. Segal:

— that it was for Congress to prescribe whether — once the Federal Communications Commission acted and approved the pleadings, the condition is under which anyone else could act to set aside that very transaction with no new facts.

Now, of course if they discovered new facts, they would have had a right to go to the Federal Communications Commission on the usual principles of that, the discovered evidence.

Earl Warren:

Well, in other words, the Federal Communications could —

Bernard G. Segal:

Because they had a right of revocation.

Earl Warren:

— on a proceeding of this kind — on a proceeding of this kind, the Federal Communications Commission could act in the backroom so far as the Department of Justice was concerned and the Justice Department would be debarred from maintaining a suit under the antitrust laws after it had decided.

Bernard G. Segal:

Assuming, Mr. Chief Justice, the facts here that there were no new facts and no new issues and they discovered nothing that the FCC didn’t have, I think that’s true.

And I may say to Your Honors that it doesn’t shock me at all.

This is what Congress said the Federal Communications Commission up to do.

Earl Warren:

But that is —

Bernard G. Segal:

It is true that some agencies of Government don’t have all the knowledge that some other agencies had in a particular transaction.

Earl Warren:

But that’s in spite of the fact that this was not an adversary proceeding and that all three of the parties involved in the transfer agreed to the action of the Commission.

You — you don’t think that makes any difference?

Bernard G. Segal:

I suggest to Your Honor it wasn’t adversary because there was nothing improper about it.

If —

Earl Warren:

That’s to be that’s — that’s involved, isn’t it?

Bernard G. Segal:

No.

I think the question involved here is whether that hasn’t been decided, whether we aren’t passed the time to decide whether there was anything improper.

The Commission has decided there’s nothing improper and I submit to Your Honor, Mr. Chief Justice that the Commission having decided it, no one else can again say that.

That’s precisely what I mean in saying that it’s not now to be decided whether there was anything improper, the — the time to have decided that was one that was before the Commission.

And if that’s wrong, it’s for Congress to change it.

And I may say I doubt whether Congress would ever hold that a finding by the Commission after thorough investigation just because nobody protested.

What it would mean, Your Honor, would be that if the matter were one in which nobody protested and there are plenty of potential or possible protest.

Every other station in Philadelphia could have protested if this were monopolization or if this were improper or if NBC were predatory.

Bernard G. Segal:

There’s not a scintilla predatory practices charged in this case.

Now, if that had happened, then the FCC would have decided if they couldn’t grant the permit, the license, Your Honor, they couldn’t grant the license if there was a violation of the antitrust laws.

Earl Warren:

You — you don’t think there is any distinction between the case of this kind and — and a comparative proceeding where the issue, antitrust issue is raised before the Commission and decided by it.

Bernard G. Segal:

Oh, it was raised here, Mr. — Commissioner Doerfer went into at length in his opinion.

Earl Warren:

Well, it was not in my —

Bernard G. Segal:

Well, and Your Honor —

Earl Warren:

— by a party, was it?

Bernard G. Segal:

Well, we have a stipulation.

Earl Warren:

Was it raised by a party?

Bernard G. Segal:

Well, I don’t think that it’s very important.

The adverse party there was the Broadcast Bureau, the investigating arm of the Federal Communications Commission.

This is how Congress wanted it.

And — and we have a stipulation here that every antitrust issue in the complaint was considered by the Federal Communications Commission.

This isn’t a case where a new issue has risen or a new fact.

This is to me an ipso facto case.

We can imagine more difficult ones but they’re not present in this situation, Mr. Chief Justice.

Now —

Hugo L. Black:

Did I — did I understand you to say, should — did I understand you to say that if the Government had filed a suit for violating the Antitrust Act, while this was pending, they could not have tried it?

Bernard G. Segal:

Oh, sure, that’s Your Honors decision.

That’s Your Honors decision in Far East and in Cunard, starting way back in Abilene.

They’ve got to wait to see what the administrative agency does.

Hugo L. Black:

Well, suppose they wanted to try just this antitrust case.

Bernard G. Segal:

The general antitrust case?

Hugo L. Black:

Yes.

Bernard G. Segal:

Oh, sure.

That I wanted to come to —

But they couldn’t — they couldn’t include any allegation about that?

Bernard G. Segal:

Oh, I think they could include allegations about it.

Let me — let me just say to Your Honor what 313 means because it’s been referred to, and that is the provision which gives the Department of Justice the right to go to a court to ask for an injunction or to ask for an order that the license be revoked.

Now, the Solicitor General has said in view of — in view of that Section 313 and I refer to the provision that Mr. Justice Harlan went into with the Solicitor General, whenever in any antitrust suit a licensee is involved, the Court has the right to — as one of the penalties, an additional — additional penalty to ask for revocation.

Bernard G. Segal:

For that, it seems to me not at all out of line with what is involved in this case.

Suppose for example, the NBC had entered into an agreement with General Motors, that if General Motors would use no other media for advertising, NBC would not permit Ford and Chrysler to use the NBC Philadelphia station.

And suppose the Government brought an antitrust suit not a doubt in the world, it can revoke this license under Section 313.

But in ordering the revocation of the license, it’s not doing it.

It’s not ordering it on the basis that a transaction which the FCC approved on no new facts was invalid.

There’s nothing here which gives NBC an immunity or an exemption from the antitrust laws.

All we have is and all our narrow issue is that once the Commission has approved a specific transaction, the Government can’t come along and ask that that transaction be declared null and void and particularly whereas here, it’s on the same questions.

But if NBC misuses its license, then the Government can certainly come along and ask for its revocation.

Now, I want to get into —

Suppose your —

Bernard G. Segal:

— Mr. Justice Black’s —

— you’re stating as broadly enough so that what you’re saying here would apply to any administrative commission assuming comparable facts where an antitrust law or an antitrust consideration with the fact here on the administrative determination.

Bernard G. Segal:

Yes.

You’ll go as far as that?

Bernard G. Segal:

I go as far as saying — well I — I — it’s a little difficult, Mr. Justice Harlan but I would say if the facts were the same, yes, the conclusion would be the same.

I — I have put that in my question here.

Hugo L. Black:

(Voice Overlap)

Bernard G. Segal:

Now, I’d like to answer Mr. Justice Black.

Hugo L. Black:

Well, in connection with that question, you wouldn’t say would you that if an action is pending before the Federal Trade Commission, the Court — the Government would be barred from going into federal court to prosecute, would you?

Bernard G. Segal:

If their purpose was to —

Hugo L. Black:

The same.

Bernard G. Segal:

Undo this transaction?

Hugo L. Black:

The same.

Bernard G. Segal:

I’d say no other government agency can undo what —

Hugo L. Black:

I’m not talking about undoing, I’m talking about filling at the same time.

Bernard G. Segal:

Well, it would depend what the purpose was, the FCC —

Hugo L. Black:

But suppose the FCC — the Federal Trade Commission was — they charge them with violating the antitrust action, in fact in a certain way and they file a lawsuit which charge them in violating in the same way with the fact that the proceeding started and the Federal Trade Commission barred the Government from that prosecution.

Bernard G. Segal:

It wouldn’t bar the Government from bringing any lawsuit involving NBC in any antitrust violation if the purpose of the lawsuit were not to have declared null and void what the Federal Communications Commission had advertently authorized.

Hugo L. Black:

You mean after they’ve acted?

You — I had understood you to say that the argument troubled the situation where this suit was merely pending before the agency.

Bernard G. Segal:

No I — I had said, Mr. Justice Black that in the case of a suit to prevent the granting of this license or to prevent the acquisition of this station by NBC that primary jurisdiction rules would have required that that be sent to the Federal Communications Commission.

The rules of this Court I take it are very clear on that.

Hugo L. Black:

Well I — I’m — I wasn’t thinking — I had understood you to go on the basis that because it was being tried, that issue was being tried before the agency, the Government couldn’t file a suit of its own to violate the Antitrust Act.

Now, I thought we’d —

Bernard G. Segal:

No.

Hugo L. Black:

— gone differently with reference to the Federal Trade Commission.

Bernard G. Segal:

That is correct, where the remedy is not the remedy sought in the communications.

Hugo L. Black:

The remedies here are different, I think.

Bernard G. Segal:

Well, the remedies are different then the suit would not be barred.

Now I’d like to address myself, Mr. Justice Black —

Hugo L. Black:

Well, when would it —

Bernard G. Segal:

— the paragraph —

Earl Warren:

When would it first be barred then?

Bernard G. Segal:

It would be —

Earl Warren:

I — because I understood you the other way, I — I understood you —

Bernard G. Segal:

It depends on what they are saying —

Earl Warren:

I understood you to say that if this action — if this proceeding was pending before the Commission, that the Government could not bring an antitrust action against the company for — for the same kind of conduct.

Bernard G. Segal:

Oh, well the same kind of conduct is too broad, Your Honor.

If the purpose of the suit was as it is here, to force them to divest themselves of this station, the validity of the acquisition of which was before the Federal Communications Commission.

Then the Federal Communications Commission had primary jurisdiction over the Court under the decisions of this Court.

Hugo L. Black:

Well, that would just be a partial defense wouldn’t it, that the remedy wouldn’t be a reason for dismissing the suit.

Bernard G. Segal:

Well —

Hugo L. Black:

Would it?

I — I’ve missed to ask you that.

Bernard G. Segal:

Well, it’s just the same as the dual rate case, Your Honor.

They ask that the dual rate be declared illegal.

And they said, “Oh no, you’ve got to first have the Interstate Commerce Commission decide whether the dual rate is or isn’t illegal.”

Hugo L. Black:

You’re saying here that this can’t be as barred because the remedy is the same but there’s just one remedy, there could be other remedies, couldn’t it?

Bernard G. Segal:

Well, there are no other remedies asked here except one that I’d like to get to before my time is up because it adverts to a very important question Your Honor asked me.

You asked about paragraph 18 or 19 — and 19.

Hugo L. Black:

Yes.

Bernard G. Segal:

Now, I’d like to talk more about that but I must be brief because I have just a few minutes.

Paragraph 18 and 19 in effect say that there is a conspiracy by NBC now having as — as from the broadcasting system has.

The — I said I’m going to answer very briefly, Mr. Justice Black —

Hugo L. Black:

I was just talking about —

Earl Warren:

Well, Mr. Segal, we — we’ve taken a lot of your time.

You may take five minutes more.(Voice Overlap) —

Bernard G. Segal:

Well, I thank Your Honors, that’s very gracious.

That will enable me to cover the point a —

Hugo L. Black:

Yes.

Bernard G. Segal:

— little more thoroughly.

And Mr. Justice Black asked in paragraphs 18 and 19 where it is charged that there was a combination or conspiracy as a continuing agreement and concert of action.

To do what?

The continuing conspiracy is to obtain VHF Television station ownership in five of the eight primary markets.

Now, we now have them in four.

And therefore, what the Commission says is that there’s a continuing conspiracy for us to better the Washington station to see if we can’t get in the fifth or sixth or seventh or eighth market instead of Washington.

Well, I leave the question of whether to Washingtonians that would seem to be a desirable change as Commissioner Doerfer says mere sales volume isn’t the only consideration.But assuming it were, what could happen?

What could happen if the NBC decided that it wanted to acquire another station, it would have to go to the Federal Communications Commission and file an application.

And when it filed its application, if the Department of Justice thought there was anything predatory about its acquisition, it could do there what it could have done here.

There isn’t anything and what relief by the way does the Department of Justice asked for this so-called conspiracy to get another better station than Washington?

They can’t have more than five under the Federal Communications Regulations.

So if they give up — if they acquire one, they got to give up Washington.

Now, suppose that happens, what does the Department say?

The Department wants the United States District Court in spite of this extensive system that has been setup by the Congress for the regulation and licensing of its industry to issue a decree that before NBC could acquire a station in this other city, it must get the authority of the FCC now.

It must get the authority of the United States District Court for the Eastern District of Pennsylvania.

If it wants to get a station in San Francisco, if it wants to get one in Boston or Detroit, which are the cities involved.Does it go to the FCC?

Oh no.

That authority as you said if the Government has its way, it goes to the United States District Court.

And it says to the United States District Court, “Won’t you please approve my acquisition in San Francisco?”

Well, I state to Your Honors with full deference that the statement of the remedy which is sought in the complaint is as much of an indictment as a statement of the complaint itself.

Bernard G. Segal:

This is all part and parcel of what was before the Federal Communications Commission.

The Federal Communications Commission investigation related to whether there was such an attempt by NBC to better its position in two markets.

Whether the Philadelphia acquisition was part of that program and they said, “No, there is no such predatory motive.

There is no such predatory practice and we therefore approve the acquisition of the Philadelphia station.”

And under those circumstances, it seems to me if Your Honors please, that not only is the first purpose of the Department of Justice which is to have the United States District Court strike down as invalid what the FCC has advertently approved with no new evidence, no new facts, no new issues, no new anti-trust issues.

But it’s second objective which is to have this Court see it as a kind of super economic tribunal in place of the FCC could decide whether they shall acquire is even more shocking than the first objective.

Hugo L. Black:

Where is that prayer?

Bernard G. Segal:

The prayer —

Hugo L. Black:

The prayer you’re talking about, effective one.

Bernard G. Segal:

Well Your Honor, if you will —

Hugo L. Black:

I’m looking at the prayer.

Bernard G. Segal:

If you will just look at page 10 of the brief of the Government Your Honor.

They have in their depositions in their interrogatories enlarged what they mean by other relief.

And it’s here on page 10 at the top, the Government’s brief, the bottom of page 9 says, “The relief requested was –” and then they have — that you — you have it Your Honor?

Hugo L. Black:

Yes.

Bernard G. Segal:

“Require NBC to divest, revoke the license met justifully and require judicial approval of any further –” it says, “Acquisitions” but it can’t mean that because there can only be one acquisition.

Because both Columbia Broadcasting and NBC have stations in the first, second and third and fourth markets.

So this involves —

That’s an argument that might be made a little later on if you have the antitrust suit that the pre-court can go against you.

This is just a case of a little over enthusiastic drawing to prepare for a release.

Bernard G. Segal:

Well I think it’s over enthusiastic drawing with the complaint if I may suggest it Your Honor.

Now, I want to say to Your Honors on the one point, incidentally, all 313 does is that here’s an additional penalty in an ordinary antitrust suit that creates no new right, it creates no new cause of action.

It says that if a broadcasting company is involved, then the Government can impose an additional penalty.

I haven’t had much time Your Honors to talk about the equitable considerations.

It seems to me apparent that the strong arm of the Government should not be permitted to be raised with a view to striking down what another branch of the Government has expressly approved than all the more in this case where it has conceded that they had full notice, full opportunity and that there are no new facts, no new issues, no new consideration of any kind.

The answer to the question one of the Justices asked as to whether there are cases where the Government has been held to be accountable to follow the equitable considerations of other litigants is in the affirmative and by the dozens.

When the Government invokes the aide of an equity court, as Justice Holmes or Wells said, “It so forth takes the position of a private suitor, is to be bound by the same rules of equity and equitable consideration as the private suitor.”

I — I say with full deference to the Department of Justice Your Honors, that one of the great functions of our Courts is to protect the citizens against excesses of Government and the overzealousness of its officials.

And I believe that this Court has held and will hold that this is true not only when the issue is the sacred civil rights of individuals, but I think it’s true too where the simplest fundamentals of fair play to corporate enterprise is involved.

I thank Your Honors for the additional time.

Earl Warren:

Mr. Solicitor — Solicitor General, we took a bit of your time too, you may have five minutes.

J. Lee Rankin:

May it please the Court.

I would like to call attention first to the remarks of Senator Dill on page 29 of the Government’s brief.

Senator Dill had charged of this Federal Communications Act when it was passed and he was asked because of the great interest of the Congress in what effect this might have on the antitrust laws, what kind of a function the Federal Communications Commission would have in regard to it.

He was in charge of the bill which is the best kind of legislative history and this is what he said, “There is anything in the bill providing in the case the applicant for a permit is found to be acting in violation of the Sherman Antitrust Law or controls a monopoly that the Commission may pass upon the question.”

Senator Dill replied.

That although the bill provided for denial of a license to anybody proved, “has been convicted under the Sherman Antitrust Law or any other law relating to monopoly.”

And that relates to conviction.

It “does not attempt to make the Commission the judge as to whether or not certain conditions constitute a monopoly.

It rather leaves that to the Court.”

Now, this is a blow to the whole enforcement of the antitrust laws of this country if this proceeding is upheld.

And it’s found that the District Court was right because the whole concept of Congress here is that the Courts should enforce this laws and Senator Dill told the Congress when he was asked that very question about this bill that it wasn’t for them to decide this very question that they’re trying to tell you was decided in this case against the Government.

Now, let us turn again in 52 to see what the legislative history was on page 31 in the footnote.

And it’s a rather long footnote and I commend it all to you, but I want to call attention to the portion beginning more over about the second full — the second sentence of the third sentence or the second full — the first full paragraph.

“Moreover, such an argument is particularly pertinent in connection with alleged violation to the antitrust statutes which are the particular problems of the Department of Justice and do not, by any other law, come within the jurisdiction of any independent quasi-judicial agency of government.

So that the emphasis throughout is placed upon the fact that 313 preserves the antitrust enforcement through the Courts.

Now, this conspiracy, we don’t say the conspiracy occurred when the Commission ruled on this license or this application for transfer.

The conspiracy occurred when they made their agreement to use the power of their network to try to make Westinghouse give the station up, that’s when it occurred.

And we say that it was broader than this one transaction, they decided to get two stations away from somebody else and they certainly have the right to use their network affiliation to contract with the station, we don’t question that.

But they had no right to abuse it and use it to force somebody else to give up the station that they have by reason of the power.

And when they could take and threaten Westinghouse with laws of not only Philadelphia, but Boston and — and not getting one at Pittsburgh.

You can see what it would mean to any little operator that only had one station and his very economic existence will depend upon.

Supposing you had brought a complaint that it simply said that the action of the Commission in authorizing this exchange constituted a monopoly in violation with this Sherman Act, period.

No antecedent conspiracy whatnot.

Could you maintain that action?

J. Lee Rankin:

I wouldn’t claim that we could.

I — I would say that the action of the Commission is a action under the statute which is based upon the public interest and the statutory concept.

And if there was any action where there was a conspiracy or a contract in restraint of trade that would be the basis and not the licensing.

And I — I take the position that the Government had the right, properly to ask for divestiture here and also ask a court to restrain these people from carrying out the rest of their conspiracy, not that they couldn’t go and get a license.

If the Court said under antitrust principles, that they could go ahead, but the conspiracy was not being continued and that this was part of the fruits of it.

J. Lee Rankin:

But certainly, in all the antitrust cases in this country, the Court would have the right to pass on the question of whether this particular — these offenders were entitled to get the fruits of this unlawful act and could say after this, just like in the Paramount case, you come into this Court and show us that you’re not trying to use the power of your network to get this next station that you acquired.

In other words —

J. Lee Rankin:

That’s what we want.

— you — you really rely on your allegations that there was an antecedent conspiracy here?

J. Lee Rankin:

Yes.

We certainly do.

Would you?

J. Lee Rankin:

And we say it’s continuing and was continuing all the time and is today.

That was the whole philosophy that they were going to acquire not only one, but two and they were going to use the power of their network to do it.

That’s the allegations of the complaint.

Now, I’d like to make it plain here, that what they’re seeking is immunity from the antitrust laws and there’s no place in this country that anything so important, to the free enterprise of this country and competition should ever be lost except by the act of Congress when they should declare that whether or not there should be immunity and Congress has them.

In the Maritime case, this Court has given great thought and consideration to it and there, there’s an expressed provision that if the act isn’t unlawful as Judge Branson said, the Maritime Commission can give that immunity but they can’t go out and give it if the Congress didn’t say so.

And the Congress didn’t say so in this case.

And the same is true in the ICC cases where the consolidation, the McLean case.

It specifically provided and that’s why the Government came into those cases that Justice Stewart was asking about.

The Maritime cases and the ICC case about consolidation, the Government came in because they lose their right for the people if they don’t win and protect.

But in this situation, we don’t believe they lose those rights because the Congress has said, “These rights with the public interest must be protected in the courts of this country.”

And we have the right to continue to try to protect it.

And there is nothing to this primary jurisdiction principle in this area because always the primary jurisdiction concept deals with the thought that the body, the administrative body has peculiar expertise.

And if you look back at the ICC cases, in the Abilene case, you will recall that the reason for that was the uniformity that had to be in the rates and if that uniformity was taken away by letting independent suits, it would destroy the whole system.

And the same thing is examined in great deal by this Court in the Maritime cases, in the Far East, in Branson and in Cunard in which the — this Court went in to the fact that the whole concept was a limitation upon competition that Congress had provided for.

But here, they’re trying to impose and get an immunity that Congress expressly provided against time after time in this legislative history and it’s the destruction of the antitrust laws and the protection, one of the finest and the most imperative things to preserve in free enterprise in this country.

And I suggest to you that the — the Court of Appeals or the district examined this question in Mansfield — Mansfield case.

And they found that where there were antitrust considerations and they found the antitrust considerations were enough to borrow the license.

That there was not — that the Commissions’ function was not to decide the antitrust matter as a matter of violation of the Sherman Act.

And they said so in so many words, because its function was to decide the public interest, convenience, and necessity and the antitrust feature was for the Court.

Do you read — excuse me.

Earl Warren:

Go ahead.

— as to what —

Earl Warren:

Yes, yes.

If you will read the — these two questions.

If you will read ground three of the District Court’s holding as being a alternative ground independently of the two others, that is what we call laches here.

J. Lee Rankin:

Well, I think you heard of it as been on dependent ground.

If you were — if you were —

J. Lee Rankin:

Yes.

It seems to strike him that there was — even if he had jurisdiction as I recall the name, that he could — he would — it’s not that relief because of the equitable consideration of laches.

And the second, my — my second branch of the question is, I don’t read this as being laches, in the conventional sense.

I read this as being considerations that move the Court to deny equitable relief, if you read that line?

J. Lee Rankin:

Yes.

William O. Douglas:

Would your argument mean that private treble damages suits could also be brought?

J. Lee Rankin:

Because of the decision of the Federal Communications Commission?

William O. Douglas:

Because of the —

J. Lee Rankin:

Conspiracy?

William O. Douglas:

Conspiracy, yes.

J. Lee Rankin:

Yes.

Yes, I think that — assume that they never asked for a license at any time.

The conspiratorial act was when they made the agreement and when they entered into the contract.

We allege both of them as violations of the Act and those were actionable by independent persons, private persons that deal with the Government.