Source: https://supreme.justia.com/cases/federal/us/380/157/
Timestamp: 2019-04-25 14:21:30+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 380 › United State v. Boston & Maine R.
Appellees, a railroad and three of its officers, were indicted under §10 of the Clayton Act for participating in the noncompetitive sale of equipment to another corporation in which the officers had a "substantial interest," described in a bill of particulars as an agreement for substantial payment to the individual appellees for effecting the sale. Holding that § 10 applies to a "then present legal interest," and not one dependent on the outcome of an illegal plan, the District Court dismissed the indictment.
1. Under the strict construction applicable to a criminal statute, the words "substantial interest" in § 10 presuppose not bribery (which the indictment here in effect charges) under a conflict of interest law, but either an existing investment in the purchaser, the creation of the purchaser for the use of those acting for the seller, or a joint venture or continued course of dealings for profit sharing with the purchaser, each of which would be within the concept of this antitrust statute. Pp. 380 U. S. 160-162.
2. Since an amended bill of particulars may be filed under Rule 7(f) of the Federal Rules of Criminal Procedure, the case is vacated and remanded. P. 380 U. S. 162.
225 F.Supp. 577, vacated and remanded.
"No common carrier engaged in commerce shall have any dealings in securities, supplies, or other articles of commerce, or shall make or have any contracts for construction or maintenance of any kind, to the amount of more than $50,000, in the aggregate, in any one year, with another corporation, firm, partnership, or association when the said common carrier shall have upon its board of directors or as its president, manager, or as its purchasing or selling officer, or agent in the particular transaction, any person who is at the same time a director, manager, or purchasing or selling officer of, or who has any substantial interest in, such other corporation, firm, partnership, or association, unless and except such purchases shall be made from, or such dealings shall be with, the bidder whose bid is the most favorable to such common carrier, to be ascertained by competitive bidding under regulations to be prescribed by rule or otherwise by the Interstate Commerce Commission. . . ."
"The substantial interest of defendants McGinnis and Glacy in defendant International consisted of an understanding, agreement, relationship, arrangement and concert of action among the said defendants McGinnis, Glacy, and International, and others, for, among other things, the purpose of producing profits for International from dealings by it in property acquired from the B&M through the intervention, direction or assistance of defendants McGinnis, Glacy, and Benson, and pursuant to which defendants McGinnis, Glacy, and Benson were to and did receive substantial monies."
"The statute is limited to one who has a then present legal interest in the buying corporation, and does not include one whose only interest is in the outcome of what may have been an illegal and illicit plan to siphon off for his personal benefit property of the Boston and Maine Railroad through the medium of International."
"The rule that penal laws are to be construed strictly, is, perhaps, not much less old than construction itself. It is founded on the tenderness of the law for the rights of individuals; and on the plain principle that the power of punishment is vested in the legislative, not in the judicial department."
Id., p. 95. The fact that a particular activity may be within the same general classification and policy of those covered does not necessarily bring it within the ambit of the criminal prohibition. United States v. Weitzel, 246 U. S. 533.
What is the reach of § 10? It is not strictly a conflict of interest statute such as we dealt with in United States v. Mississippi Valley Co., 364 U. S. 520. In Minneapolis & St. Louis R. Co. v. United States, 361 U. S. 173, 361 U. S. 190, we described § 10 as "an antitrust law."
". . . It not only prevents corporations which are interlocked by officers and directors, but it says: 'Or who has any substantial interest in such of them.'"
"The Senator will recall all we had before us, the ease by which interlocking directorates could be gotten around; in other words, you could have your son, or your cousin, or your lawyer, or your agent upon the corporation and accomplish the same thing as if you were on the board yourself. . . ."
". . . They can not dodge it by having a supply company, and even though they have discarded the form of interlocking directors, if there be the interest of the railroad or the common carrier in the supply company, as the Senator chooses to call it, then it is prohibited."
N.H. & H. R. Co., 31 I.C.C. 32. [Footnote 2] But we are confined by the words that Congress used in § 10. If the rule of strict construction is to be followed, the words "substantial interest in," as used in § 10, presuppose either an existing investment of some kind in International or the creation of International by the three individual appellees for their use, or a joint venture or continued course of dealings, licit or illicit, with International for profitsharing. But it is doubtful that this indictment, as illuminated by the bill of particulars, alleges anything more in substance than a bribe. Bribery might well be in the family of offenses covered under a conflict of interest statute. But it is more remote from an antitrust frame of reference. While history shows a rather wide pattern of railroad misconduct leading to § 10, that section is a rather narrow prohibition applicable to activity that is conceptually within the antitrust philosophy. We cannot broaden it to include the present case unless we attribute to Congress a purpose to make it a more general panacea for conflict of interest activities; but neither do we take the same narrow view of the statute as the District Court.
Since the Government may choose to file, and the District Court may choose to allow, an amended bill of particulars, [Footnote 3] we vacate and remand the case, leaving open all questions except our construction of the statute.
This case was decided below and argued here on the assumption that, although the indictment itself was sufficient against a motion to dismiss, it became insufficient for that purpose by reason of the bill of particulars. We have held, however, that "the bill of particulars . . . forms no part of the record for the purposes of the demurrer." United States v. Comyns, 248 U. S. 349, 248 U. S. 353 (emphasis supplied); Dunlop v. United States, 165 U. S. 486. Since the parties have made no attempt to invoke this rule at any stage in this proceeding, we are not required to express any view as to whether this rule for demurrers is applicable on motions to dismiss under Rule 12, Fed.Rules Crim.Proc.
"Purchases of cars and coal are two large expenditures that railroads make. The New Haven purchased cars almost exclusively from James B. Brady, without competition and to the extent of some $37,000,000. Mr. Brady, as a witness, made no secret of his generosity to the officials with whom he had business. His methods were justified by him on the ground that the officers of the New Haven were old friends."
Rule 7(f) of the Rules of Criminal Procedure provides, "A bill of particulars may be amended at any time subject to such conditions as justice requires."

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