United States v. Ward Baking Company

PETITIONER:United States
RESPONDENT:Ward Baking Company
LOCATION:United States District Court for the Eastern District of Louisiana

DOCKET NO.: 101
DECIDED BY: Warren Court (1962-1965)
LOWER COURT:

CITATION: 376 US 327 (1964)
ARGUED: Feb 18, 1964
DECIDED: Mar 09, 1964

Facts of the case

Question

Audio Transcription for Oral Argument – February 18, 1964 in United States v. Ward Baking Company

Earl Warren:

United States, Appellant, versus Ward Baking Company, et al.

Mr. Orrick.

Orrick:

Mr. Chief Justice, may it please the Court.

This case, a civil antitrust case, is here on appeal from the United States District Court for the Middle District of Florida.

The jurisdiction of this Court is conferred by Section 2 of the Expediting Act.

The question presented by this case is a simple one.

After consent decree negotiations between the Government and appellees had reached an impasse, appellees requested the District Court to enter an injunction which was narrower than that sought by the Government.

The difference between these two decrees turned on factual issues without a trial of any kind on those issues or indeed, on any of the issues framed by the pleadings and without the consent of the Government, the District Court entered the injunction proposed by the appellees.

The question simply stated is whether the District Court erred and so doing.

The underlying facts are very briefly these, on March 6, 1961, two indictments were filed in the court below charging certain bakery companies with conduct which violated Section 1 of the Sherman Act.

In one indictment, all five appellees here were charged with combining and conspiring to allocate among themselves the business of supplying bread and rolls to federal naval installations in Jackson, Florida and submitting non-competitive and rigged bids and price quotations.

In the second indictment, four of the five appellees here plus two other companies were charged with combining and conspiring to fix and maintain the prices in which they sold bakery products to nongovernment wholesale accounts which are defined as grocery stores, supermarkets, hotels, restaurants and similar large purchasers.

All of the defendants in both criminal cases were convicted on their pleas of nolo contendere and fines were imposed.

Now, the case at bar, a civil action, was brought against all five of the defendants who had been convicted of fixing prices in connection with the sales to the Government.

Four of whom, as I’ve previously stated, were also convicted of fixing prices on the nongovernment sales.

The complaint asked for both damages and injunctive relief pertaining to the violations on sales to the Government and in addition, a request for whatever more general injunctive relief might be deemed appropriate after a trial.

Answers containing general denials were filed in due course and thereafter, consent decree negotiations were initiated by appellees with Government counsel.

These negotiations followed the normal course.

The parties first negotiated a settlement of a count for damages and they have reached an agreement pursuant to which the parties paid — agreed to pay the Government $44,000.

At that time, the — the appellees offered to take an injunction limited to the specific prayers set forth in the complaint.

The Government, this was not satisfactory to the Government, and the Government proposed a broader injunction enjoining the defendants from price fixing with regard to sales to third parties and forbidding certain attempts to set the price on resale of the appellees’ bakery products.

Counsel for the appellees refused to accept the Government’s proposal and he then submitted a — another proposal which was broader in scope than his first one and went beyond the scope of the prayers for relief in the complaint.

Further attempts to negotiate, and they were a good many, which I won’t detail, were fruitless and the negotiations reached an impasse.

And just briefly, the Government wished two provisions to which the appellees would not agree.

First, that they be enjoined from price fixing with regard to sales to third parties and second, that they be enjoined from setting the price on resale of their bakery products.

Appellees then filed a motion in the court below for entry of their first judgment.

The Court issued an order to show cause why the judgment shouldn’t be entered.

Appellees then amended the motion to have the Court enter their broader proposal and a hearing was held on this motion.

At the hearing, the Court was advised by counsel for both sides of the nature of the impasse.

And he was advised by counsel for the Government that at the trial and at the hearing on relief, the Government would bring in evidence to support its broader decree.

Orrick:

Now, the understanding of the Court and counsel for the appellees seemed to be that if the Court entered appellees’ proposed decree, the Government did not have a right to go to trial.

But if the Court decided to enter the Government’s proposed decree, then the appellees would have the right to go to trial.

I’d — I would call the Court’s attention to this unusual situations, which is in the Government’s brief reproduced in a footnote at page 33, and I just briefly summarize it.

The Court says, “Let me say this now, that I’m going to enter your decree or the Government’s decree.”

One say, “I’m going to enter a decree here.

I’m not just going to enter an order after this 30-day expires saying we’d better go on to a trial.

Is that understood?”

Counsel for both side said, “No, sir.”

And then the counsel for the appellees went on and he said, “We did not agree that we were foreclosed from a right to go to trial if you decided to enter the Government’s decree.”

Now, I — I agree that the appellees were correct in asking for their day in Court and that’s just what we’re asking here.

The Court then, on December 10 of 1962, entered as a final judgment in this case.

The defendant second proposed judgment was modified in certain respects at the hearing.

And I — the judgment on its face recites that it was entered and I quote, “Without trial or adjudication of any of the issues of factory law and before the taking of any testimony”, and upon the appellees’ motion.

And so the Government, in a suit brought by the Attorney General, to vindicate public rights, winds up with a decree which it doesn’t like even though it is neither consented to the entry of that decree nor been provided with a litigants’ basic right to make the record.

And now, as the Court please —

Arthur J. Goldberg:

(Inaudible)

Orrick:

— is —

Arthur J. Goldberg:

(Inaudible)

Orrick:

We — we would — we would like in — in admission of adjudication, Mr. Justice, and on the issue of relief, I think that District Court, where there’s any factual issue, cannot fashion a proper decree without taking evidence.

Arthur J. Goldberg:

(Inaudible)

Orrick:

Well, there’s a factual issue on the scope of the relief, Mr. Justice, yes, sir, because the scope of the relief very often and particularly in antitrust litigation, it must go beyond the — the facts that are pleaded in the complaint.

This Court recognized this in the U.S. Gypsum case.

But the Government here, I want to make clear, doesn’t ask the Court to order entry of its proposed judgment.

And indeed, the Government’s complaint is that it has no record on which to base such a request.

That’s the striking feature of this case.

Instead, the Government asked that the District Court’s judgment be vacated and the case be remanded for trial.

Now the issue here is of great practical importance in the administration of the antitrust law.

Can I ask you a question?

Orrick:

Yes sir.

Supposing the scope for the relief had not been called in question, in other words, that the broadened relief that the Government wanted had been consented to oppose.

And there — then the only issue was whether or not the — the presumption following from a decree after trial that’s available in a treble damage suit was the issue, would the Government then have had a right to insist under trial to give effect to that presumptive effect of the decree after trial?

Orrick:

The — the adjudication?

I — I think Mr. Justice, the Government is entitled to an adjudication.

The — we make that point in a footnote in our brief where we discussed the Brunswick case and I think we’re entitled to an adjudication.

It often makes a — a difference in the scope or the —

And I’m wondering whether the real issue here isn’t that question rather than the scope of the relief.

Orrick:

No — I think, if you please, sir, we think it is the scope of the relief.

Although it’s perfectly clear here, we didn’t even get an adjudication.

No, I realize that.

Orrick:

But the — the issue is very, very important in antitrust administration because more than 80% of our cases in fiscal year 1963, civil cases were settled by this — by consent decrees.

And the disposition of cases by these decrees has — and the Court is well aware, it saves large expenditures of time, energy and money including the time and energy of the courts.

And the possible savings are often a factor in determining what relief by way of consent decree the Government may accept.

And I have no doubt that use by the courts of consent decree negotiations as a basis for entering a decree without a trial and without the consent of the Government would quickly tend to inhibit our negotiations in future cases.

Our position briefly summarized is this.

First, that when relief turns upon disputed questions of fact, those facts must be resolved in a trial record made.

And secondly —

(Inaudible)

Orrick:

Yes, sir, the sales of the — to the public here in question.

We offered at the hearing.

We stated to the judge there several times in the course of our hearing that we were prepared to present to the Court facts on the scope of relief which would show that relief enjoining these defendants from fixing sales to the — fixing prices on sales to the public was proper.

And both page 90 in the record and at 94, we’ve — our counsel pointed that out to the Court.

Byron R. White:

Would you offer to prove them in connection with the — with the action that the Court took or did you offer to prove them only if a trial took place?

Orrick:

We — we said that we had, Mr. Justice, and I think the — the record —

Byron R. White:

(Voice Overlap) —

Orrick:

— on page 90 is the best that our counsel said.

Third, if the case were to be tried, the Government would be afforded the opportunity, both at the trial and at the hearing on relief, to offer evidence in support of its claim for injunctive relief broader than that offered by defendants proposed judgment.

And also over again on page — I said 94 —

Byron R. White:

Well, that says that — that says it would (Voice Overlap) —

Orrick:

— both 94 and 95.

Byron R. White:

It says it would be afforded the opportunity.

Byron R. White:

That doesn’t say that it has facts and it doesn’t — isn’t an offer to — and — and didn’t the Government — did the Government refuse in connection with the Court’s action to submit the facts that it had prior to trial?

Orrick:

No, sir.

The record is barren of any request at all by the Court to the Government asking it to produce facts and —

Byron R. White:

(Inaudible) — by the Government to give these facts to the Court to show that the Court’s proposed action was incorrect?

Orrick:

The — the Government — what the Government did as I’d — has set out here, if you please, sir, on page 90 and then 94 and 95.

But I want to point out, Mr. Justice, that that is not an issue in this case because Judge Bryan Simpson, in his order said — and I call the Court’s attention to his order on page 128 of the transcript, that his judgment was based upon this Court’s knowledge of the facts involved in 11677-Crim-J.

And this record, this proposed judgment provides all the relief to which the defendants are entitled to.

And bear in mind if you would, sir, that this is the very same judge for whom both indictments were returned and before whom all defendants were convicted on their pleas of nolo contendere in the criminal cases.

Potter Stewart:

He relied —

Orrick:

So —

Potter Stewart:

— in fact — he relied in fact upon his knowledge gained from those previous proceedings in — in entering this decree, did he not?

Orrick:

Yes, sir, he did.

And — and with — based on his personal knowledge and —

Potter Stewart:

Right.

Orrick:

— of course, this is without any judicial sanction that I know of where the — can dispose of a litigated case without making findings of fact under Rule 52 (a).

Potter Stewart:

Wasn’t the real — wasn’t the real argument here of — based upon — my Brother Harlan has suggested Section 5 (a) of the Clayton Act as to the effect of this decree in subsequent civil litigation?

Orrick:

I — I think that — Mr. Justice, that that is the only real —

Potter Stewart:

The background —

Orrick:

— ground urged by — by the appellees.

And I could — I’ll briefly come to that in a moment if I may but I — I just want to —

Potter Stewart:

In your own time.

Orrick:

In summarizing our position, then our position is, first, that when the relief turns upon the disputed questions of fact, these questions must be resolved in the record made.

And second, that the District Court’s procedure impinges upon the discretion which is vested in the executive branch of the Government.

And then the third, that there’s nothing in Section 5 (a) that authorizes the procedures followed by the District Court.

When —

Tom C. Clark:

(Inaudible)

Orrick:

Well that — the question of the — the scope of the relief, Mr. Justice, the —

Tom C. Clark:

What (Inaudible)?

Orrick:

What — the Government wanted to — items of relief that the appellees did not want to agree to.

Tom C. Clark:

I understand that.

Orrick:

Yes.

Tom C. Clark:

That was the issue, (Inaudible) by the Government — to the Government —

Orrick:

Yes — yes sir.

Tom C. Clark:

— is that right?

Orrick:

That’s correct in the — in the complaint.

Tom C. Clark:

Well, all the facts were admitted I suppose.

Orrick:

The — there was no adjudication here of guilt in this — in the liability in the civil suit.

Tom C. Clark:

The only thing they didn’t wish was to have the injunctive features of the relief vested against them as — insofar as public sales was concerned.

Orrick:

That’s correct, yes, sir.

And they objected —

Tom C. Clark:

(Voice Overlap)

Orrick:

— to the (Inaudible) — they then had the choice of going to a trial.

They did not have a double privilege of rejecting the consent judgment proffered by the Government and at the same time, avoid an — an adjudication on the merits of the Government’s compliant.

Tom C. Clark:

To go into trial and we’d assume that you only prove your allegations, that is sales against — sales to the Government.

It’s your position that you’d been entitled to the broader injunction nevertheless.

Orrick:

If — if — our position would be to — in the nature of the antitrust enforcement but we would at least then have an adjudication and that would be the proper way to decide that.

But in fashioning a consent decree, we thought we were of the view and are of the view that the broader relief is proper particularly since four or the five appellees here had been actually convicted of the sales to the price fixing sale to the Government.

Tom C. Clark:

A strange procedure but I wanted if it — couldn’t be entered?

Now just to perhaps to summary judgment or something, a kind of motion.

You don’t have any conflictive facts from what you say, I gather.

All you’re claiming is rigged sales to the Government.

They come in, they say, “Yes, we rigged sales to the Government.”

So they filed a motion and they say they want a summary judgment I suppose.

They don’t say that in their motion but they say they want their decree entered.

Orrick:

Mr. Justice, there very definitely is and is here a disputed question of — of facts with respect to the type of relief that should be entered.

Byron R. White:

Well what kind of — what (Inaudible) is that?

I mean what — what are the facts that — that you’re really disputing in connection with relief?

Orrick:

Well, the — the Government claims and intended to prove, and I think indeed, did prove in the criminal case that four out of the five defendants here were guilty of the charge of fixing prices to the public.

Now, based on that, the Government thought that it was entitled in a consent decree —

Byron R. White:

(Inaudible)

Orrick:

— that it was proper for any due —

Byron R. White:

No dispute about those basic facts.

Orrick:

Pardon me?

Byron R. White:

There’s no dispute about those basic facts which you’ve just recited.

Orrick:

Well the — the district judge here doesn’t advert to them in the —

Byron R. White:

Well the (Voice Overlap) —

Orrick:

— order.

He doesn’t give the Court an opportunity to hear what these facts are as they relate to the civil complaint.

And he enters this judgment out of hand without the consent of the Government and without a trial.

Byron R. White:

Oh, I understand that.

But the disputed fact is what I’m really concerned about.

Didn’t the appellee — the defendant didn’t dispute those facts about the price fixing, did it?

Orrick:

Did he —

Byron R. White:

Or the fact that it has been found guilty if the —

Orrick:

That they — and the appellees would — would not — we don’t know what they’d had done have the case been tried, Mr. Justice.

They wouldn’t take the broader injunctive relief.

Byron R. White:

Was there any —

Orrick:

And I didn’t — that’s —

Byron R. White:

Was there any —

Orrick:

— the dispute as I know it.

Byron R. White:

Was there an answer in this case?

Orrick:

Yes, sir, general denial.

Byron R. White:

Did he — did — a general denial?

Orrick:

Yes, sir.

Byron R. White:

And in the pretrial proceedings, they didn’t admit anything?

Orrick:

Not — not to — on the — and the answers, what’s in the record, I don’t have any recollection of — that they’ve been —

William J. Brennan, Jr.:

Well Mr. Orrick, I don’t quite understand.

Had the Government proved this case on the merits, —

Orrick:

Yes, sir.

William J. Brennan, Jr.:

— the alleged violation.

William J. Brennan, Jr.:

Would its proofs have included not only rigging prices for the Government but also rigging prices to the public?

Orrick:

It could very well have, Mr. Justice and —

William J. Brennan, Jr.:

And between the — within this pleading, could that have been to that proof?

Orrick:

We could have amended the pleading to conform the proof.

And we would surely on a hearing on relief where as I pointed out previously, this Court has recognized that you very often have to have — the scope of relief has to be broader than the specific violations.

There isn’t any question, we ought to have shown it, and this judge knew it.

That’s the extraordinary thing.

But if this — the procedure impinges on the discretion that the Attorney General has to determine what the acceptable scope of relief is.

And very often, in determining whether or not to enter a consent decree, an admission or an adjudication is an effective sanction which operates as a part of the remedy and bears upon the sufficiency of other relief.

Arthur J. Goldberg:

(Inaudible)

Orrick:

No, sir.

And it’s not our judgment, if you please, sir.

Arthur J. Goldberg:

(Inaudible)

Orrick:

No, sir.

Arthur J. Goldberg:

(Inaudible)

Orrick:

But it — may I — I come — I’d — I said I’d — with reference to Mr. Stewart’s question, I’d come to Section —

Arthur J. Goldberg:

(Inaudible)

Orrick:

— 5 (a) and at this point, let me take that up.

Section 5 (a) was added to it, was in the Clayton Act in 1914.

And it is designed to assist in the administration of the antitrust laws and the section of the statute is set out at page 2 of our brief and briefly summarized.

Section (a) says that a final judgment or decree rendered in any civil or criminal proceedings brought by the United States under the antitrust laws to the effect that a defendant had violated said laws, shall be prima facie evidence against such defendant in any action or proceeding brought by any other party.

That’s clear enough.

Now then the proviso, which appellees, I think erroneously construe, provides that this section shall not apply to consent judgments or decrees entered before any testimony has been taken.

Now, appellees cite this section as — they call it on page 16 of their brief, a sanctuary for antitrust violators, if you please.

And this, in the light of the legislative history, where this section was added to — by an aroused — at — at the instance of an aroused President Wilson and an aroused Congress to get more effective enforcement of the antitrust laws.

There’s nothing, I submit, in the legislative history to support any such assertion.

But as I pointed out, it doesn’t give them the double privilege, surely, of rejecting the pretrial consent judgment which is proffered by the Government and then at the same time avoid an adjudication on the merits.

Now, I will tell you conscientiously that we have tried to ascertain the basic — the reasoning behind this.

And I’d simply can do and perhaps Mr. Dunlap is better qualify than I do, do that.

Earl Warren:

(Inaudible)

Davisson F. Dunlap:

Mr. Chief Justice, may it please the Court.

I would like to make a few statements in regard to the facts before, if I may, before we get into the law.

I take issue with my friend, Mr. Orrick, on what — how this got before the Court.

It’s very clear that after there was a pretrial hearing, at which this dispute between the Government and the private parties was outlined and the affidavit was filed outlining these procedures to give the Court the factual background.

At that hearing, the Government tendered a proposed judgment and so did the appellees.

And at that hearing, the Government — the Court issued a rule nisi which told in effect to the Government, “If you’ve got any proof, if you’ve got any legal — any points about that I don’t have power, bring them in.”

And what did the Government do?

The Government absolutely did not file anything showing that they had any facts.

As a matter of fact, although Mr. Orrick said they didn’t refuse to in effect they did.

And they took this position, and I call this to your attention, it was in the brief filed after the last hearing in June, in the record on page 122 in their brief filed in July of 1962, and this is a position they took.

The defendants here argued, if the Government had admissible evidence going beyond the facts plead, showing a legal need for broader relief then it should have set this out specifically in answer to the rule nisi.

But the simple answer to this argument is that the Government was under no duty to reveal all of its evidence and answer to the rule nisi.

It didn’t reveal any evidence that it had any.

They’ve consistently taken the position that the Court didn’t have power to act.

And as I see it, and I’ll go into this a little bit later, that if you follow their position to its logical extreme, you have here the Government saying, “You don’t have power to act to see if your actions are arbitrary because you don’t have a record.

And we’re not going to give you the facts to give you the record, therefore, you don’t have power to act”, which I think is an erosion of the District Court’s judicial power to determine whether or not the action is arbitrary.

We didn’t ask them to show all the facts.

All they wanted to show was facts that would show there was a triable issue on this question of relief.

Potter Stewart:

You think this, what was entered here was a consent decree?

Davisson F. Dunlap:

Justice Stewart, the Brunswick-Balke case which preceded this, which I’m sure the Court is familiar, deleted the word “consent”.

I don’t conceive of it as a consent decree.

I think Judge Goldberg’s point is well taken.

That’s hard to see how you have a consent without the consent of both parties.

But the fact is that, this is a decree that we say is entered under the equity power of the Court and also permitted under Rule 83 of the Federal Rules of Civil Procedure.

But if you go back to the strict definition of consent decree, I would not say so.

Potter Stewart:

Now what’s — what’s Rule 83 say (Voice Overlap)?

Davisson F. Dunlap:

That says that the District Court can make rules if they — as long as they’re not inconsistent with the other rules and the Federal Rules of Civil Procedure.

I’ll tell you Mr. Dabney in 63 Columbia Law Review in his article published last year on this very case, went into that point very thoroughly and that was a position he took at that time which I think is a sound position.

Arthur J. Goldberg:

Mr. Dunlap, (Inaudible) —

Davisson F. Dunlap:

No, I think here they are.

Davisson F. Dunlap:

I — I think they are.

Arthur J. Goldberg:

(Inaudible)

Davisson F. Dunlap:

Well, it also provides, Justice Goldberg, it applies to judgments entered before evidence is taken.

Now, there’s some controversy as to whether the — the additional language what it modifies.

But Mr. —

Arthur J. Goldberg:

(Inaudible)

Davisson F. Dunlap:

Judge Goldberg, 5 (a) provides in relevant part that a final judgment or decree to the effect that the defendant of — of — has violated the antitrust law shall be prima facie evidence.

And therefore, since it contains no adjudication and it’s violated the antitrust laws, therefore, we feel it falls within that — that language.

That’s the point I was reading from Columbia Law Review of Mr. Dabney’s point.

So, we say that this presents a very serious question.

Yes, sir?

Byron R. White:

(Inaudible) and the trial court concede the violation of the antitrust laws or not?

Davisson F. Dunlap:

Yes, sir, our motion and the judge also, in his order, says that I am entering this decree as if the defendants had pleaded pro confesso to the allegations of the complaint.

Now, out of fairness in that, Justice White, I must say, the only disputed issue I know that would remain with the pose would be the adjudication of guilt.

But all of the factual issues other than the adjudication of guilt for the purposes of relief, it was entered as if that there were pro confesso in determining the scope of the relief.

Byron R. White:

But you think there’s some area between consent judgment and a — and an adjudication which the Court may impose upon the Government and yet not — not the prima facie evidence in civil — in private actions?

Davisson F. Dunlap:

I think so, Your — Your Honor.

That was the very question that the Government and the Court faced in the Brunswick-Balke case.

If you recall there the — the facts were that —

Byron R. White:

And that was somehow never appealed, wasn’t it?

Davisson F. Dunlap:

No, sir, I — I think that they may have found — thought they found a — a better target in our case.

But we —

Earl Warren:

(Inaudible)

Davisson F. Dunlap:

Yes, sir.

Earl Warren:

Would you have been bound by it?

Davisson F. Dunlap:

Would we have been bound, we would have gone —

Earl Warren:

(Voice Overlap)

Davisson F. Dunlap:

We would have had to go to trial.

He had the alternative of either entering this proposed judgment or is denying it, in which case we would have gone to trial.

Earl Warren:

Why — why wouldn’t the Government have the same right to go to trial that you do?

Davisson F. Dunlap:

Well, Your Honor, I think it goes back to whether the action by the Government, if the Court contest whether that action is arbitrary.

And that’s exactly what happened here.

The Court —

Earl Warren:

Well, if the Court — if a Court wasn’t arbitrary in deciding in favor of the Government, why would you be entitled to a — to trial by the same reasoning?

Davisson F. Dunlap:

Your Honor, I feel that — in other words, if we — if I get your question correctly, we were arbitrary in refusing to enter the —

Earl Warren:

No —

Davisson F. Dunlap:

— consent decree with the Government.

Earl Warren:

No, I say, if in this proceeding, as it in the posture it was before —

Davisson F. Dunlap:

Yes.

Earl Warren:

— the District Court —

Davisson F. Dunlap:

Yes, sir.

Earl Warren:

— but the District Court had decided against you and had — had offered to sign the — had signed the decree of the Government, would you be here now saying they didn’t — he didn’t have a right to do that?

Davisson F. Dunlap:

No, sir, I think it — we would’ve insisted on our right to go trial, and that’s what —

Earl Warren:

Yes.

Well, now, my only question is this, if you have a right to go to trial, if — if the Court decides it against you, why doesn’t the Government have a right to go trial if he decides it for you?

Davisson F. Dunlap:

Oh, I — I think that’s when the Government is arbitrary.

I think, the Court can —

Earl Warren:

Beg you pardon?

Davisson F. Dunlap:

(Inaudible) — if the Court decides that the Government is arbitrary in insisting on this provision and they proffer no evidence showing a triable issue, then actually, the summary judgment procedure that we have covered in our brief says that — and the cases say that if there is no triable issue, then the Court can enter a judgment.

Now, if — if in the — in the question Your Honor —

Byron R. White:

That’s an adjudication.

Davisson F. Dunlap:

Sir?

Byron R. White:

Adjudication (Inaudible) in circumstances, I mean, you weren’t — you weren’t ready to come in here and say judge, you enter an adjudication against us on the fact.

We consent to all the facts.

You enter a — you entered a judgment against us concluding that we violated the antitrust laws and then entered a narrow injunction.

You weren’t willing to do that?

Davisson F. Dunlap:

We were not willing to have the adjudication of guilt.

We were willing to have —

Byron R. White:

That’s right.

Davisson F. Dunlap:

— considered — all the facts conceded for the purpose of relief.

William J. Brennan, Jr.:

Well, is this — is this then — was treated in your view, this is like a non-vote plea in a criminal case?

Davisson F. Dunlap:

I’m not familiar with that plea.

I don’t practice —

William J. Brennan, Jr.:

Well, that’s —

Davisson F. Dunlap:

— much criminal law but I think it’s something like —

William J. Brennan, Jr.:

Well, perhaps you don’t have it in Florida, but I thought — I think generally — no, they did in my state and they could do in the federal system, one comes in and he doesn’t plea guilty to the offense charged but he pleads non-vote, which is only to say, he would contest the —

Davisson F. Dunlap:

Unless be nolo contendere.

William J. Brennan, Jr.:

— the charge.

Davisson F. Dunlap:

We — we would go —

William J. Brennan, Jr.:

Well, I — I’d call it nolo contendere —

Davisson F. Dunlap:

Yes, sir.

William J. Brennan, Jr.:

— whatever it is.

Is that what you’re suggesting is what in fact, you did?

Davisson F. Dunlap:

I think that if you’d want to capsule it, Your Honor, you have a nolo plea contendere in the criminal law and we are saying, when the Government is arbitrary, there can be a similar plea in — on a plea and adjudication in a civil case.

I think that’s true.

William J. Brennan, Jr.:

Yes, but ordinarily —

Davisson F. Dunlap:

I think you’d come up —

William J. Brennan, Jr.:

Ordinarily, a nolo contendere, maybe I’m wrong about this, I thought that it wasn’t for the judge to decide whether that should be accepted.

Doesn’t the Government has a — have a voice whether it should or shouldn’t be accepted?

Davisson F. Dunlap:

It has a voice but the — the recent case of Commonwealth Edison versus Allis-Chalmers which is on certiorari to this Court from the Seventh Circuit and the — they make the very point.

Then in a nolo contendere plea in a — in the antitrust laws, that the Court, in balancing the two objectives, the congressional objectives of — of 5 (a), the one to help private litigants by the prima facie effect and the other to encourage litigants to come in and plea.

William J. Brennan, Jr.:

Well what you’re telling me is that if these were a criminal antitrust prosecution, the judge could —

Davisson F. Dunlap:

Yes.

William J. Brennan, Jr.:

— notwithstanding Government opposition —

Davisson F. Dunlap:

That is correct.

William J. Brennan, Jr.:

— accept it.

Davisson F. Dunlap:

That’s correct.

William J. Brennan, Jr.:

And you’re suggesting the same rule by analogy at least those do apply in a civil charge, is that —

Davisson F. Dunlap:

I say that’s correct, Your Honor.

Tom C. Clark:

It can’t be tantamount of a guilty plea?

Davisson F. Dunlap:

It would — not — not under the special provisions of 5 (a).

It would in the ordinary criminal law, Justice Clark.

But under the special provisions of 5 (a), it would not be tantamount to — to a guilty plea as far as the later use of it is evidence.

This —

Tom C. Clark:

(Voice Overlap) treble damage suit.

Davisson F. Dunlap:

Yes, sir, in a treble damage situation.

Hugo L. Black:

(Inaudible) to have the judgment rendered against you available for use under 5 (a)?

Davisson F. Dunlap:

Your Honor, here, that’s one of the things —

Hugo L. Black:

Arbitrary —

Davisson F. Dunlap:

— but here, there was —

Hugo L. Black:

Is – is not that the basic objection you have?

Davisson F. Dunlap:

Well, that’s one of the basic objection.

But here, Justice Black, the point is there were no private litigants under this complaint that could’ve been helped by that.

Hugo L. Black:

Yes, I understand that.

But are you calling it arbitrary then for the Government, to come in and say, “Well, the Government is also interested in 5 (a), it’s a part of the system setup but enforcement of the antitrust act, we insist that we be allowed to obtain an adjudication.”

And you say, they shall not.

Davisson F. Dunlap:

That’s correct.

Hugo L. Black:

That’s in fact what it is, is it?

Davisson F. Dunlap:

Yes.

Hugo L. Black:

And it depends on — and you say it’s arbitrary for the Government to take position that in the interest of the general enforcement of antitrust laws, it has a right to have an adjudication so that 5 (a) will be available to other people.

Davisson F. Dunlap:

In — in this particular case, Your Honor, now, it may not be in other cases.

This —

Hugo L. Black:

Why — why would there be any difference in this one and others?

Davisson F. Dunlap:

Well, the — the point is that — that was raised in the Brunswick-Balke case which we —

Hugo L. Black:

I’m not talking about — I’m talking about this one.

Davisson F. Dunlap:

Well, I’m — I’m trying to relate that —

Hugo L. Black:

Yes.

Davisson F. Dunlap:

— and then come into it.

In the Brunswick-Balke case, what happened was the Government and the private party substantially agreed on all the terms of the relief and then the Government, for the first time in 50 years —

Hugo L. Black:

But what that — what difference does that make, if they have a right to do it?

Davisson F. Dunlap:

None, Your Honor.

If they have — if the right is there, I agree with you, but they came in and said, “You’ve got to, in effect, waive your privileges of the prima — of the protection of 5 (a).”

Hugo L. Black:

Waive it?

Davisson F. Dunlap:

Yes, Your Honor.

Hugo L. Black:

But what — now what — what the Government is insisting on, as I understand it, I had a little difficulty in trying to reaching it but I think is the issue and what’s behind it.

The Government wants a judgment that on which, private litigants can depend in case they sue for civil damages.

Davisson F. Dunlap:

That’s one of the things.

Hugo L. Black:

You don’t want them to have it.

Davisson F. Dunlap:

That’s one of things, Your Honor.

Hugo L. Black:

And the Government — it’s arbitrary in your view for the Government to take the position that it wants a judgment, wants to go far enough to get a judgment that will adjudicate guilt.

And you take the position that you do not want to go far enough to adjudicate guilt and you say, you have a right to do that and it’s arbitrary for the Government to insist the other way.

Davisson F. Dunlap:

We say under the congressional purposes and the — the adjudicated cases of Twin Ports Oil versus Pure Oil and the Commonwealth Edison case which is the last year of the Seventh Circuit, that that would thwart the intent of Congress in encouraging private litigants to come in and say, “Alright, we’ll agree to our consent judgment.”

And in effect, the — Mr. Bicks, the Attorney General, when he proposed this, said he would only use it in a limited number of cases because he admitted that if they did this on all the cases, that it would practically wipeout their consent decree plan and — that they used in settling these cases.

Hugo L. Black:

It seems to me like it had precisely the opposite effects.

I don’t quite understand that argument.

What you’re saying is that a litigant if it — enjoined to the Court with the Government say, “We’re not going to let you hear this case.

We confess everything but we won’t have an adjudication against this of guilt.

And we thereby defeat the purpose of Congress to make judgments available for the use of private litigants.”

Davisson F. Dunlap:

Your — your — the point is Justice Black, there are two purposes of Congress.

Hugo L. Black:

Well, that’s one of them, isn’t it?

Davisson F. Dunlap:

That’s one.

And in this pose, the Government trying to get an adjudication of guilt in this case could not possibly have helped any third party because —

Hugo L. Black:

Well then, why do you object to it?

Davisson F. Dunlap:

Well, we object to it, Your Honor, because number one, it wasn’t proposed down below, the point was —

Hugo L. Black:

Now, would it hurt your company?

Davisson F. Dunlap:

Sir?

Hugo L. Black:

Would it hurt your company?

Davisson F. Dunlap:

Possibly, it can.

Hugo L. Black:

Why?

Davisson F. Dunlap:

But we are waiving — we are waiving our right under 5 (a), if it’s a true consent situation and we come in, we are waiving whatever privilege there is of the — that Congress gave us in 5 (a) to come in and do that.

Davisson F. Dunlap:

Now —

Hugo L. Black:

Yes, but you are — you are saying about a consent judgment, the Government doesn’t want it.

The Government insists that it wants an adjudication.

Now, it — do you get any further than this — than this, you claim and maybe right, you claim that this exempts from 5 (a), consent judgment which are adjudications of guilt.

Davisson F. Dunlap:

I — an adjudication — entered this — this adjudication we claim falls within the provisions of 5 (a), yes, Your Honor.

Hugo L. Black:

Under the provision of 5 (a)?

Davisson F. Dunlap:

Yes sir.

Hugo L. Black:

You claim the right to go in there and get a judgment entered against you in such a way that 5 (a) will not be applicable and the Government says it doesn’t think you have that right.

Davisson F. Dunlap:

That’s correct.

Hugo L. Black:

That’s the whole issue, isn’t it?

Davisson F. Dunlap:

No, sir, that’s — that’s not the whole issue.

Hugo L. Black:

But what’s the other —

Davisson F. Dunlap:

(Voice Overlap) the other issue is this, we say that they are using this as a lever.

We go back —

Hugo L. Black:

Suppose they are.

If they have a right to do it, what’s wrong with it?

Davisson F. Dunlap:

Well, we say that they can’t do — use it arbitrarily.

Hugo L. Black:

But what —

Davisson F. Dunlap:

Now, in other words —

Hugo L. Black:

Does the statute —

Davisson F. Dunlap:

— they don’t have —

Hugo L. Black:

— say anything about arbitrary?

Davisson F. Dunlap:

Sir?

Hugo L. Black:

Does the statute use that term?

What way is it arbitrary for the Government to do this if it has a right to do it?

Davisson F. Dunlap:

Your Honor, we say we — they’re using this as a lever on the relief.

In other words, the — the relief that they wanted was completely outside of the pleadings, —

Hugo L. Black:

Well, the Court —

Davisson F. Dunlap:

— (Voice Overlap) pleading.

Hugo L. Black:

— didn’t have to let them use it was a lever and —

Davisson F. Dunlap:

And that —

Hugo L. Black:

— (Voice Overlap) more than the other half?

Davisson F. Dunlap:

Well, yes, sir.

We say that there are certain limits that the Government doesn’t have an unqualified right to have anything without any test of the Court of whether the — the action they are taken is arbitrary to ask for anything that they want in a consent decree.

Byron R. White:

Yes, but we would have a different issue here if the Court had entered an adjudication of guilt but then entered the narrow decree which you wanted.

We would have a completely different case here.

As a matter of fact, you wouldn’t — you’re the — be the one who was appealing from something like that.

Davisson F. Dunlap:

I — I think the issue would be different.

It would be a Brunswick-Balke situation in that case.

But I think it’s inherent in here that we see the case, Your Honor.

They come in with this broad, unwarranted relief provision.

It’s way beyond the pleadings or anything else.

They refuse to the Court to make any showing why they needed or that they have any callable evidence to support it.

And then, in order to force us into that type of relief, which is completely outside the scope of the pleadings and outside of almost the scope of the public matter —

Byron R. White:

But you maybe completely correct, you maybe completely correct in what you say up to the point that the Court is entitled, not only to enter the narrow relief but to avoid an adjudication.

I mean, there could be — it could be that you’re absolutely true that the Government was trying to get broader relief than it was entitled to.

But that’s no excuse for saying that there shouldn’t be an adjudication in the — in the case.

Davisson F. Dunlap:

Well, I think the — the congressional history supports this and if you’ll examine Judge Nordbye’s opinion in Twin Ports Oil versus Pure Oil, he clearly sets forth the twin congressional purposes.

One of which is to encourage treble damage private litigants to use advantage and the other one is to encourage private litigants to come in and agree.

And that was the very point of the Brunswick —

Hugo L. Black:

(Inaudible)

Davisson F. Dunlap:

I beg your pardon.

Hugo L. Black:

(Inaudible)

Davisson F. Dunlap:

The private litigants to come in and in effect, consent to the judgment under 5 (a) and therefore get the protection of 5 (a), Judge Black.

And this was the entire issue in Brunswick-Balke.

Exactly the issue raised in Brunswick-Balke, whether we have any rights under 5 (a) and we think, the congressional history supports that we have rights.

Now, we don’t claim we have an unqualified right because it’s qualified by the courts entering a decree which under its equity power, it feels — it takes care of the situation.

Potter Stewart:

Now, the Brunswick case involved the — an assistance by the Government that the defendant waived the protection of 5 (a) by consent in the decree, isn’t that correct?

Davisson F. Dunlap:

No, the first two did, Justice Stewart.

The first two they proposed said, in effect, “You’ve got to admit guilt and liability in any suit brought by a state agency.”

Davisson F. Dunlap:

Then in the last one, which the judgment was based on, they only gave it prima facie.

They said that — that you got to agree to give, even though it’s a consent judgment, you got to agree to give, get prima facie effect in a suit brought by the other local governments.

And that’s a good example of — of what the Government of — of — if isn’t completely has unfettered power in this — in this area, what the Government will do because they — that Judge Tehan points out that the first two decrees proposed by the Government probably would be unconstitutional, a conclusive evidence and an admission of guilt.

And this, if the legislative history’s examine, was the very reason why they changed the proposal of 5 (a) from conclusive evidence to prima facie evidence.

Before — of course, they were concerned with the constitutional issues and the doubtful constitutionality of a provision that would make it conclusive evidence against the defendant.

Potter Stewart:

Who is Mr. Seth M. Dabney, do you know?

Davisson F. Dunlap:

I — he’s a member of —

Potter Stewart:

(Voice Overlap)

Davisson F. Dunlap:

— the bar of New York.

I have no other knowledge than that.

Potter Stewart:

You know what his — you have no other knowledge?

Davisson F. Dunlap:

I have no other knowledge.

I have no other knowledge, Justice Stewart.

Potter Stewart:

I just have his article here before me but —

Davisson F. Dunlap:

We —

Byron R. White:

(Inaudible) — the Government, you could be protected against simply by going to trial, I suppose.

I mean, if you are right, you go to trial and you — you win the case or lose it.

If you lose it, then you have a problem about relief.

And if the Government asked for relief to which it wasn’t entitled, it wouldn’t get it.

Davisson F. Dunlap:

Well, Your Honor, we don’t think this answers the question.

We think that this is going really to trial on a question of principle rather than what is inherent in the case.

And we think that it would also defeat one of the purposes of 5 (a) and the intent of Congress.

And we don’t feel that the Government has an unqualified right to insist on this because we say that the Court, through its pretrial procedures, should protect people against arbitrary — the arbitrary action of the Government.

Now, this has been suggested —

Byron R. White:

Well, what if the Government simply adopted a policy of — for — say that for a year, they were going to — they were going to be no consent decrees whatsoever?

Davisson F. Dunlap:

I think that —

Byron R. White:

Would that be coming — would that — could judges force them to take a decree?

Davisson F. Dunlap:

No, sir, I think the Government would be arbitrary if they ref — I think the intent of Congress is that the — the Department of Justice will, at least, enter in the consent decrees.

We considered this before the argument and we felt that — that under 5 (a) and the antitrust laws that at least, they’ve got to — to — they would completely thwart the — the intent of Congress and people coming in and getting the benefit of 5 (a) if they refused absolutely —

William J. Brennan, Jr.:

What does Government —

Davisson F. Dunlap:

— to go into consent decree negotiation.

William J. Brennan, Jr.:

Well, did I correctly summarize your position, if I were to suggest, it goes like this, that if the Government wants to bring a lawsuit, it doesn’t have to but if it’s going to bring a lawsuit —

Davisson F. Dunlap:

Yes, sir.

William J. Brennan, Jr.:

— that Congress intended by 5 (a), that a judge within the exercise of proper equitable jurisdiction might over the objection of the Government, enter this kind of decree on these admissions of jurors without an admission of violation.

Davisson F. Dunlap:

Upon an admission of guilt, I think that’s true.

I think that’s — that’s how (Inaudible) —

William J. Brennan, Jr.:

So you — you turn this all and what Congress contemplated should govern the prosecution of such an action, once the Government brought if you came in and made these admissions, this empowered the judge to exercise equitable discussion.

Davisson F. Dunlap:

We say it gives us some rights under 5 (a), although it’s not an unqualified right, Judge Brennan.

William J. Brennan, Jr.:

Well, then I don’t — if that’s your position basically, I don’t quite follow why you put such emphasis on the arbitrariness of the Government.

Davisson F. Dunlap:

Well, Your Honor, they — they are using the — this adjudication of guilt as a weapon to get something that is — that’s an arbitrary relief which is completely outside the pleadings and unwarranted.

And if this is allowed to go on, they could completely regulate an industry.

Now (Voice Overlap) —

William J. Brennan, Jr.:

Now, if you are right —

Davisson F. Dunlap:

— cases of controversy.

William J. Brennan, Jr.:

— if you are right — if you are right that the Congress has given the trial judge this power, then the test ought to be not whether the Government’s arbitrary or not, but whether the — the judge has exercised the power properly within the powers of the — that the Congress has given it.

Davisson F. Dunlap:

We — we have stated, Your Honor, that the — the District Judge in our brief has a discretion and the question here is whether the district judge has abused that discretion.

William J. Brennan, Jr.:

Well, then why — why bother about whether the Government’s arbitrary or not?

Davisson F. Dunlap:

Well, we think that, Your Honor, that the arbitrariness of the Government comes into effect because we realized that the — the Department of Justice has to have an area in which to enforce the antitrust laws.

We — we realized that.

So in order to give them that area, you’ve got to allocate that area to them, but there’s an area of arbitrariness beyond which we say, the courts through it’s pretrial procedures can determine the question and relieve against that arbitrariness.

Tom C. Clark:

Just suppose they said no, (Inaudible) agreed to the consent decree on (Inaudible) could that be such arbitrating if the Court could require him to agree?

Davisson F. Dunlap:

That the Court could —

Tom C. Clark:

Require him to agree, even though they said, “(Inaudible) in the file.

I’m not going to enter any consent decree with you.”

Get ready for trial.

The courts turns on them and say, “You aren’t going to enter a consent decree.”

(Inaudible)

Davisson F. Dunlap:

No, I think the — the consent negotiations are necessary adjunct and a — and a prerequisite to it because I think that the — it’s incumbent on the attorney —

William J. Brennan, Jr.:

(Inaudible)

Davisson F. Dunlap:

— on the Department of Justice.

Davisson F. Dunlap:

If they’re going to use 5 (a) as a tool to use — to realize both purposes of Congress in it.

They can’t just take one purpose and not the other purpose and completely block it out.

William J. Brennan, Jr.:

The only thing is, Mr. Dunlap, this proviso on 5 (a) isn’t limited to consent judgments.

Davisson F. Dunlap:

No, it’s judge —

William J. Brennan, Jr.:

Shall not apply to consent judgments or decrees entered before any testimony has been taken and then another one.

And I gather it’s not the consent judgment feature that you suggest you come within, but within the decree entered before any testimony has been taken in.

Davisson F. Dunlap:

That’s what we say that falls within, Your Honor.

There’s some (Voice Overlap) —

Byron R. White:

Do you have any authority for that?

Davisson F. Dunlap:

No.

Other than the Brunswick-Balke case, it’s a fresh issue, as I understand before any appellate court, Justice White, and it’s never been adjudicated.

Byron R. White:

Well Brunswick-Balke is the first time the Court ever did that, isn’t it?

Davisson F. Dunlap:

Sir?

Byron R. White:

Brunswick-Balke —

Davisson F. Dunlap:

No, sir.

Byron R. White:

(Voice Overlap) — there weren’t other ones?

Davisson F. Dunlap:

Aero Mayflower which the Government didn’t appeal which was entered in 1956, and I believe the Middle District of Georgia, the same procedure was followed but it’s not unreported case except in CCH and there’s not much record to adjudge the action of the Court.

Hugo L. Black:

Let me just — let me first suggest it and by whom (Inaudible).

Davisson F. Dunlap:

Aero Mayflower was a case — was the first one that was ever used, Judge Black, that was in Georgia.

Hugo L. Black:

How long was that after the Act was passed?

Davisson F. Dunlap:

Well, that was in 1956 and the Act was passed back about 1914, I think.

So it was sometime after.

What the — the Government has never asked up to — to the — up until 1960 to in effect waived the provisions of a 5 (a).

Hugo L. Black:

Had there come up any — had there come up any issue about this?

Davisson F. Dunlap:

They had never presented the issue prior to that time that I know of, Judge Black.

Hugo L. Black:

Had any defendant ever done it?

Davisson F. Dunlap:

I beg your pardon?

Hugo L. Black:

Had any defendant ever done it

Davisson F. Dunlap:

No, sir, not other than the Aero Mayflower case, the first one in 1956.

Byron R. White:

Would you think the — that the power just like this would be as — the defendant and the Government is negotiating back — they’re no — they’re not getting back and forth on a consent decree.

Byron R. White:

And you walk out for the — in negotiations and the trial judge imposed a con — so-called “consent decree” upon you?

Davisson F. Dunlap:

Do I think, he could?

Byron R. White:

Yes.

Davisson F. Dunlap:

No sir, I’m not —

Byron R. White:

If you’re being arbitrary?

Davisson F. Dunlap:

Yes, sir, I think he could in this sense.

Byron R. White:

All he have to do is say “You’re arbitrary —

Davisson F. Dunlap:

No.

Byron R. White:

“You’re arbitrary in — in refusing this scope of relief and — and I’ve — I have the discretion to make you take this consent decree.”

Davisson F. Dunlap:

You — Your Honor, I think, if he — you consider it as a — if there are no triable — if there are no triable issues, they have done this in the cases cited in our brief.

William J. Brennan, Jr.:

But that’s the key to it, isn’t it?

Davisson F. Dunlap:

Sir?

William J. Brennan, Jr.:

You would have to do something.

It’s not only that you’d walk out of the negotiation.

Davisson F. Dunlap:

Yes, sir.

William J. Brennan, Jr.:

But you would also have to do what you did in this case which — namely, admit the facts pleaded without admitting that they add up to a violation —

Davisson F. Dunlap:

Yes, sir.

William J. Brennan, Jr.:

— before the judge would have any power to force anything (Voice Overlap) —

Davisson F. Dunlap:

That’s right.

We would have to make that — we — we’re trying to get it so there were no justiciable issue to go to trial.

And the Court used the pretrial procedures to do that.

And once he determine there were no triable issues other than as you call adjudication of guilt to triable issues but the facts of the complaint wasn’t it.

Byron R. White:

Alright, if the judge got that far and said there was no triable issues and said, you were arbitrary in refusing this kind of a consent decree, and of course, he could, I suppose, only he could invite the Government to file a motion for summary judgment —

Davisson F. Dunlap:

That’s correct.

Byron R. White:

— having a summary judgment —

Davisson F. Dunlap:

He —

Byron R. White:

— against you and —

Davisson F. Dunlap:

That’s correct.

Byron R. White:

— enter the relief he wanted to.

Davisson F. Dunlap:

That’s correct.

Davisson F. Dunlap:

I think he could and the cases that we point out in our brief, where that’s been done, where the Court through pretrial procedure has determined that there are no triable issues for trial.

And — and the law is clear and he goes in and enters his judgment.

William J. Brennan, Jr.:

Well I’d — I’d be surprised if anything like that happened, if you didn’t promptly withdraw your admissions, you could withdraw them, of the facts pleaded and make the thing go to trial.

Davisson F. Dunlap:

Well, I — I think it’s —

William J. Brennan, Jr.:

I would suppose that there has to be at least that basis of any decree under 5 (a), doesn’t it?

Davisson F. Dunlap:

Yes.

Earl Warren:

Where is the record did you admit the facts alleged in the complaint (Inaudible)?

Davisson F. Dunlap:

It’s in our motion, Your Honor, that’s at page 52, I believe.

Earl Warren:

52?

Davisson F. Dunlap:

Wait a minute.

It’s at the — at the page 56 at the bottom, Your Honor.

The defendants asked the Court to enter a judgment in the present case as if all the allegations in the complaint were proven as true.

Earl Warren:

Is that a — is that an admission that all of them were true?

Davisson F. Dunlap:

Except for the — for the purposes of determining the scope of the relief, it is, Your Honor.

Earl Warren:

Well, you mean —

Davisson F. Dunlap:

That was the purpose —

Earl Warren:

— for the purpose of avoiding a judgment against you?

Davisson F. Dunlap:

That’s — well, for — on the adjudication to guilt, that’s correct, Your Honor.

We were testing here, Your Honor, whether this relief was arbitrary.

They were asking for the — the injunctive relief and that was —

Earl Warren:

(Voice Overlap)

Davisson F. Dunlap:

— the purpose of our motion.

Earl Warren:

But you can’t say there — there are no issues to be litigated in this case if you do not ad — admit all the facts, do you — can you?

Davisson F. Dunlap:

Well, judge — the Brunswick-Balke case, I see my time is up, Brunswick-Balke —

Earl Warren:

It’s alright, go ahead.

Davisson F. Dunlap:

— case said that if that were the only issue in the case left that then the Court had the power, under the congressional purpose to enter the judgment.

That was the precise point that Judge Tehan decided in the Brunswick-Balke case, Judge Warren.

Hugo L. Black:

Who was the first lawyer that suggested the — of this case?

Davisson F. Dunlap:

I have no idea but

Hugo L. Black:

— but first.

Hugo L. Black:

I’m thinking (Voice Overlap)

Davisson F. Dunlap:

I don’t know but my friend, John Miller from Savannah was in the Aero Mayflair — flower May case — Aero Mayflower case and he was also counsel in this but he had forgotten all about it until we dug it out of the books.

Arthur J. Goldberg:

(Inaudible)

Davisson F. Dunlap:

We feel that we would not be accord of the — the protection of 5 (a), that’s right, Your Honor.

Byron R. White:

One more question, I suppose the — that the — if you had wanted to know what facts the Government had about any part of the case, the discovery procedures were available to — to give those facts to you.

Davisson F. Dunlap:

Oh, yes, we — we had to —

Byron R. White:

There is no question that the — there’s no question but what the judge, if you had — if the Government had refused discovery as to facts, there’s no question there, lot’s of sanctions in the rules to either force the Government to produce the facts or have this case dismissed, is that true?

Davisson F. Dunlap:

That’s true, Your Honor, but we can’t make the judge, cannot make the Government’s record full of them.

Byron R. White:

But the Government said —

Davisson F. Dunlap:

In the other words, he was trying to get the — the Court was trying to get a record to see if there were any disputed facts.

And the Government, in effect said, there are none.

They said, “We’ve got some or else, we — we’ve got some but we won’t show them to you.”

Byron R. White:

(Inaudible)

Davisson F. Dunlap:

So as I see it they were thwarting the — the Court’s trying to see if what they were doing was arbitrary or not.

Thank you.

Earl Warren:

Mr. Orrick.

Orrick:

Mr. Chief Justice, very briefly a word, thinking about what the first defendant to — who thought of this, the — it was tried in the Hartford-Empire case back in 1944 before Judge Kloeb.

And while we are citing these district judges, I’d like to add my voice, if I may, to cite Judge Wyzanski, who — and we argued his case there on page 88 of our record in United States against Lake Asphalt where he said, “It seems to be preposterous for me to purport to act on the consent of one side over the objection of the other side without making findings.

It seems to me to be an absolute violation of every rule that I ever heard of.”

And let me again state, if I may, that Section 5 (a) was put in the Clayton Act to enforce the antitrust laws.

There was no thought or whatsoever given at that time in 1914 that this was a sanctuary for — behind which antirust violators could find — could hide behind.

Earl Warren:

Why did you say —

Orrick:

And —

Earl Warren:

— that expression was used in this case, the — the sanctuary?

Orrick:

It’s on page 16 of the appellees’ brief.

Earl Warren:

Their — their brief 16?

Orrick:

Yes, sir.

Earl Warren:

I don’t see it there.

Orrick:

It’s at the top — the very top of the page.

The first sentence is there.

Earl Warren:

Oh — oh, yes, yes.

Orrick:

And antitrust law enforcement would come to a grinding litigated halt because it’s the very importance to the defendants of being able to enter into a consent decree and avoid these treble damage suits that enables the Government to carryout a decree — sensible program of law enforcement.

Arthur J. Goldberg:

Mr. Orrick —

Orrick:

And it —

Arthur J. Goldberg:

(Inaudible) they have a right under the statute (Inaudible) violated the antitrust laws and then say, “Well, go on and litigate the violations, consider in the future to be enjoined.

And then we’ll get the sanctuary of the (Inaudible).”

Do you have a case (Inaudible)?

Orrick:

That’s — what they’re contending, they claim they have a double privilege here than —

Arthur J. Goldberg:

(Inaudible) arbitrary but the judge says, “No, we’ve got to try the issue (Inaudible) the charge, the violations (Inaudible).”

Orrick:

That’s certainly it and — but —

Arthur J. Goldberg:

And nothing was right (Inaudible).

Orrick:

That’s right.

And they — they say that a trial judge has two jobs.

His first job is to determine whether the parties’ desire to agree as honest as they call it.

He sets that out on page 22 of his brief.

And whether the Attorney General’s view as to the relief he seeks is warranted.

So that’s the first judgment that the judge must make —

Arthur J. Goldberg:

(Inaudible)

Orrick:

— and —

Arthur J. Goldberg:

(Inaudible)

Orrick:

That’s the — and then on the second judgment by the — he has a post trial judgment, that the evidence has shown the Government’s entitled to the remedy it seeks.

And if the Court please, if the Attorney General —

Arthur J. Goldberg:

(Inaudible)

Orrick:

Yes, sir.

William J. Brennan, Jr.:

(Inaudible) — am I correct, had followed it, that Congress intended this all along, that he could come in and just say, “I admit the facts but I don’t admit they add up to a violation.

You go ahead and enter a decree against me”, which then would give him in — those circumstances a protection.

I don’t agree that it’s not a sanctuary, it’s certainly some kind of sanctuary.

Orrick:

Where — that they —

William J. Brennan, Jr.:

But against — it’s used in other proceedings against him under the antitrust laws, to that extent, it’s a sanctuary.

Orrick:

Well, it —

William J. Brennan, Jr.:

Is that this argument?

Is there anything in the complaint?

Orrick:

There is — there’s nothing, Mr. Justice, if you please because the — this —

William J. Brennan, Jr.:

(Voice Overlap) in the legislative history would support?

Orrick:

Nothing in the legislative history.

The — this legislation was passed in the context of an aroused President and — and an aroused Congress that the antitrust laws weren’t being enforced.

The — President Wilson’s message is clear as to what he’d asked for in the — the purpose of it.

The legislative history is clear.

The proviso was added in the — in the conference.

And there is not a shred of evidence in any place that this was the sanctuary.

William J. Brennan, Jr.:

Either in the reports or the debates or otherwise?

Orrick:

No, sir.