Earl Warren: Number 56, Sam Fox Publishing Company, Incorporated, et al., Appellants, versus United States et al. Mr. Horsky.
Charles A. Horsky: Mr. Chief Justice, may it please the Court. This case is a direct appeal from a decision by the District Court for the Southern District of New York denying the appellants' motion to intervene in a proceeding pending before that Court. At the last term, this Court postponed the question of its jurisdiction to this hearing on the merits, and I will perforce discuss the question of jurisdiction at the outset. I trust, however, the Court will grant me a few minutes to set the question of jurisdiction in its perspective by a recitation of the facts upon which this case arises in the nature of the proceeding and of the motion that was made. The proceeding in which intervention was sought was an antitrust action brought against the American Society of Composers, Authors and Publishers, its officers and directors and its members. ASCAP, which is the common shorthand for that long name, is a -- an unincorporated association composed of music writers, lyric writers and music publishers who assigned to it licenses for the public performance of their works and who received from it, a distribution of the license fees which it collects. The appellants, I should add, are three publisher members of ASCAP. The antitrust action against ASCAP was commenced about 20 years ago in February 1941. The complaint in the case alleged two areas in which the actions of the Society and its members were alleged to contravene Section 1 of the Sherman Act. One of the areas concern the relationships between the Society and its membership with its licensees or prospective licensees. That area is not involved in this proceeding. I think all parties are agreed that we can put that aspect of the antitrust case to one side. The other area which was alleged in the original complaint concerned the relationships, the competitive relationships arising as between the members of ASCAP and among the members of ASCAP itself. The complaint alleges that the directors had the power to control the operations of the Society. The articles of association of the Society gave this self-perpetuating Board of Directors, the power to determine, in effect, the competitive standings and relationships among the members by virtue of its practically unlimited power to determine how the fees of the Society should be distributed to the man. About a week after the complaint was filed in 1941, a consent decree was entered. In respect of the matters with which we are concerned here, it did two things. It first provided that the directors should be elected by the membership of the Society. It also laid down certain general standards which were to govern the manner in which the distributions of the license fees were to be made to the Society's membership. These generalized admonitions in the 1941 decree against the actions of the dominating Board of Directors soon to prove to be quite inadequate. And in 1950, on the motion of the Department of Justice, but again by consent, a second decree was entered in the suit, known as the 1950 decree. This decree made somewhat more specific, the basis upon which the revenues of the Society where it would be distributed. It recited that it was one of the purposes of the action to ensure a democratic administration of the Society, and it therefore required certain somewhat more detailed requirements in the articles of association regarding the manner in which the directors where to be elected. Within a few years, the continuing course of complaints from the general membership of the society caused the Department of Justice again to look into the operations of the Society and the manner in which the directors had succeeded in continuing their position of domination over it. The investigation began in 1956 and by 1958, the Department of Justice had concluded that notwithstanding two consent decrees, the antitrust purposes of the action had not been achieved. Indeed, the plaintiff, the smaller publisher members of the Society, was such that the small business committee of the House of Representatives also conducted an investigation of the Society. The 700 odd page record of those hearings and the committee reports are referred to in our brief. The 1950 decree, the 1950 consent decree, in addition to the usual retention of jurisdiction provisions, common in antitrust consent decrees, expressly reserved to the Department of Justice the right at any time after 1955 to move in the District Court in New York for a modification of the 1950 decree in any respect. By 1958, the information which the Department had itself get, as its counsel told the Court and the information which had been unearthed by the congressional investigation had brought the Department to the conclusion that it should move for further modifications. I think it will be helpful to further give you an -- an understanding what follows if I quote one short paragraph of the report made by the Department of Justice to the District Court at the time that the proposed amendments which, I will come to in a moment, were represented to it. This is the situation as of 1959. I am reading from page 140 at the bottom of the page. "ASCAP's Board of Directors, as here and before stated, has established a distribution system which has the effect of favoring certain members at the expense of others, and at the same time, ASCAP has waited the votes of its members so as to provide that those members who received the greatest share of its revenues shall also have the largest number of votes." The vice of the system is that it gives those members in ASCAP who received the largest share of ASCAP's revenues, the power to elect the directors of the Society who in turn have the power to establish the rules governing the Society's system of distribution which in turn determines which member shall receive the largest share of the Society's income.
William O. Douglas: Is that a finding --
Charles A. Horsky: No, sir. This is a memorandum submitted by the Department of Justice to the District Court at the time that the proposed modifications were submitted for its approval. The circumstances, I will come to in, if I may, in a moment. You will also notice on that same page 140 that -- that same report advised the Court that at the -- under this 1950 decree which sought to democratize the affairs of the Society, the directors had succeeded in providing a system under which 99% of the total publisher membership of the society did not have the combine power to elect a single director, and this after two consent decrees. Now, instead of pursuing its original -- instead of pursuing its original --
Potter Stewart: Did the -- did the --
Charles A. Horsky: I'm sorry sir. I --
Potter Stewart: Were -- was the membership divided among as to publishers and writers and lyrics and writers and music and that each one of those have representatives on the Board of Directors?
Charles A. Horsky: Yes, the Board of Directors is, really, two boards, 12 members elected by the publishers and 12 members elected by the writers. The -- the report points out 95% of the writers could not elect a writer director, 99% of the publishers could not elect a publisher director. Now, instead of pursuing its original intention to move in the District Court for a modification of the consent decree, the Department in 1958 acceded to a request that it enter into negotiations with the Society, so its Board of Directors and counsel selected by term for still another consent decree. By mid-1959, approximately June 1959, the Department had reached what its counsel told the lower court was a compromise.
Felix Frankfurter: What is that date, Mr. Horsky?
Charles A. Horsky: June 1959.
Felix Frankfurter: That preceded this memorandum for which you quoted to follow, was later.
Charles A. Horsky: The memorandum was submitted in October with the -- at the time of the hearing to which I'm about to come. The -- the compromise which the Department agreed was also -- it also advised the District Court was the farthest limit to which it believed that ASCAP could be persuaded to go by negotiation. This compromise arrangement was embodied in proposed amendments to the 1950 consent decree and was presented to the Court in June. At that time, the Court issued a rule ordering the parties to show cause why it should approve the proposed amendments. Now, on the return day, which was in October --
Felix Frankfurter: To whom did that rule go?
Charles A. Horsky: That rule was issued to the parties but it also --
Felix Frankfurter: The nominal parties -- the litigating parties --
Charles A. Horsky: The litigating parties --
Felix Frankfurter: -- but not the --
Charles A. Horsky: But it also -- it also provided --
Felix Frankfurter: -- individual members of ASCAP.
Charles A. Horsky: -- it also provided that wide publicity should be given to the -- proposals copy should be mailed to all of the members, and it further provided that anyone who wish to appear and show cause why the -- why the proposals did not carry out the antitrust purposes of the suit should come in on October, I think it was 29 in any event.
John M. Harlan II: You mean as amicus or --
Charles A. Horsky: Well, that was open, Your Honor. We were advised that it was opened so that in order to be sure of our position before the return day, we filed on behalf of the appellants a motion to intervene under Rule 24 (a) (2). In order to present proof that the proposals would not carry out the antitrust purposes of the suit and to urge changes in them which we believe were necessary to protect the smaller publisher members of the Society against the domination of the large publishing group which it was the purpose of the suit to occur in accordance with the --
Felix Frankfurter: I -- I may have missed something. Was there before the Court or had that there been published the kind of consent decree that again would be suggested or agreed to?
Charles A. Horsky: Yes.
Felix Frankfurter: Was that before your present appellant?
Charles A. Horsky: That the -- the -- in June, sir, the Court was handed the proposed amended consent decree which was amendments to the 1950 decree, and he directed and there was in fact distributed to appellants as well as to all other members of the Society.
Felix Frankfurter: The actual terms of the proposal.
Charles A. Horsky: The actual terms of the proposal.
Felix Frankfurter: Proposed consent degree.
Charles A. Horsky: Yes. Now, in accordance with Rule 24 (a) (2), appellants alleged and offered to prove that they were not adequately represented either by the Board of Directors of the Society or by the Department of Justice, and that they would in fact be bound as members of the Society by the decree if the Court were to enter it. The claims that appellant made were embodied in a pleading pursuant to Rule 24 (c), and they were supported by two memorandums. Now, on the return day in October 1959, without argument, without findings and without opinion, the District Court denied the motion to intervene. Its later formal order to that effect entered a couple of weeks afterwards, recites basically three grounds for its action. First, that appellants were represented by the Directors of the Society because they were members of the Society, and they had consented theretofore be represented by the directors. Second, that it was -- they were represented by the Department of Justice and third, a reason that I am not wholly clear about with the languages that appellants --
Hugo L. Black: What page is that, Mr. Horsky?
Charles A. Horsky: This is page 489, Mr. Justice. That appellants have permitted this cause to proceed to judgment -- prevent this cause in which they are not named as parties to proceed the judgment. Now, this is the order from which this appeal has taken. Before dealing with either the substance of this 1960 proposal or what subsequently transpired in the District Court, let me take a moment to discuss the problem of the jurisdiction of this Court to review this order.
Felix Frankfurter: But before you do that, will you or -- or Mr. Friedman return to the third ground that applicants have permitted this cause in which they are not named as parties to proceed to judgment? I understood from your recital, Mr. Horsky, that after this -- after this agreed to propose consented decree, which doubtless was preceded by negotiation, etcetera, that that was made public, is that right?
Charles A. Horsky: Well, we had three decrees, Your Honor, which --
Felix Frankfurter: No, I mean the 1959 one, the proposed 1959 decree.
Charles A. Horsky: Yes, sir.
Felix Frankfurter: That that was --
Charles A. Horsky: It was made --
Felix Frankfurter: -- made public after -- in June, is that right?
Charles A. Horsky: That's right, as a proposal.
Felix Frankfurter: Now, how assume that of -- before this agreed -- this proposed consent decree, certainly the thing hadn't -- one didn't know whether the Government would or would not consent, that's correct, isn't it?
Charles A. Horsky: Well, no. One knew that the Government would consent. It was presented to the Court, there -- the transcripts of the two earlier hearings in June are in the --
Felix Frankfurter: Yes.
Charles A. Horsky: -- record, but I can summarize them for you.
Felix Frankfurter: But I don't care about the earlier one, I mean the 1959 one?
Charles A. Horsky: That's what I'm talking about.
Felix Frankfurter: Isn't that in -- what was the incipiency of that?
Charles A. Horsky: The -- in -- in June 1959, the record shows, Your Honor, that the counsel for the Department of Justice and counsel representing ASCAP approached the District Court in New York with a proposal or an amendment to the 1950 decree which they said had been consented to by both parties. The District Court said, at that time, "Well, we ought to give this wide publicity, and I don't think that we ought to have anything done about it until there's been a return date which you can show cause." After a certain amount of -- of colloquy, that was fixed to be in October.
Felix Frankfurter: But I -- I don't want to take undue amount of time in -- in excessive display of my ignorance, but is that -- you couldn't have intervene before.
Charles A. Horsky: No, no, no. That's right.
Felix Frankfurter: Alright.
Charles A. Horsky: That's right.
Felix Frankfurter: So that at the times -- beginning -- beginning of the time in which you can be charged with anything is this submission in June.
Charles A. Horsky: No, I think it's actually the submission in October.
Felix Frankfurter: Well, but it could be earlier than June.
Charles A. Horsky: It could -- it could be earlier than June, that's right.
Felix Frankfurter: Alright. How soon after June which had a return day for October, how soon thereafter? Did you ask to come on the 24th?
Charles A. Horsky: We -- we filed our motion for leave sometime about 10 days before the return day, Your Honor, in October.
Felix Frankfurter: In all event, before the Court took any action or before anybody would take any action.
Charles A. Horsky: That's right, that's right. There's no charge here by anyone that we were not timely in filing our petition.
Felix Frankfurter: Well, I don't -- yes but --
Charles A. Horsky: I don't --
Felix Frankfurter: (Voice Overlap) this means, permitted this cause in which the amount him to proceed the judgment, what does that mean?
Charles A. Horsky: Well, that's -- Your Honor, I am not sure I can understand.
Felix Frankfurter: Alright. And that stated November 16 of this order.
Charles A. Horsky: That's -- that's right. That was the formal entry of the order which was actually --
Felix Frankfurter: You couldn't have done anything prior to June. The Court in June announced the return day in October. Before the return day came, you duly ask to intervene and --
Charles A. Horsky: That's right. It was forthwith denied.
Felix Frankfurter: And on -- and on November 16, you were told that -- that you allowed this go to judgment, is that right?
Charles A. Horsky: That's right.
Felix Frankfurter: I don't understand it.
Charles A. Horsky: I don't -- frankly, I don't either, sir. Now, let me take to -- but a moment on the matter of jurisdiction because I think it really doesn't worth more than that. I maybe misinterpreting the Court's order but if so, I will permit the Court to correct me.
John M. Harlan II: Would you mind, may I ask you one question?
Charles A. Horsky: Surely.
John M. Harlan II: From the original conception of this action, what years ago --
Charles A. Horsky: In 1941.
John M. Harlan II: -- whenever it -- whenever it was, had there been any intervenors allowed in?
Charles A. Horsky: There had been at least three attempts by people, not these appellants, to intervene. I can't be sure that I can recite the dates accurately, but they had all been -- been refute.
John M. Harlan II: All been denied.
Charles A. Horsky: They had all been denied. The last one prior to this raised one of the questions, which I think is quite or perhaps worth a moment. An attempt was made to intervene in 1956 by some people who were interested in the manner in which they thought the Departments were -- were premising the directors to avoid and evade the 1950 decree. The Court at that time said, "As far as I can see, the Department has advised me if it's investigating, if there is need for action, it will take it and therefore, I don't see any reason why you need to come in." That was the -- the sort of a context in which the last petition to intervene was refused. Now, a moment on the jurisdiction. In view of the fact that the Department of Justice has reconsidered the position which it took in its motion to dismiss this appeal at the last term and now concurs with appellants that the Court does have jurisdiction, I think, I can, perhaps, abbreviate what I might otherwise say. But anyway, let me summarize it. We and the Department are now both of the opinion that when intervention is claimed as a right under Rule 24 (a), as distinguished from intervention claimed permissively under Rule 24 (b), the order of the lower court denying intervention is an appealable order.s We are further in accord that under those circumstances, the question of jurisdiction and the question on the merits, in effect, colorless, that is, if the Court were to decide that the order of the lower court denying intervention was a proper order, it would dismiss the appeal rather than affirm the judgment. On the other hand, if it were to conclude that the order of the lower court was erroneous, it would have jurisdiction to reverse the judgment. An example of the formal situation is the Sutphen Estates case in 342 U.S. Examples of the latter cases are the Brotherhood of Railway Trainmen in the 322 U.S. and the Missouri-Kansas Pipe Line Company case in the 312 U.S. In the former case, the appeal was dismissed upon the conclusion that the intervention was properly denied. In the latter two cases, the decision below was reversed upon the conclusion of this Court that intervention was improperly denied. Now, I believe that is a fair reading of this -- of the opinions of this Court.And with due difference, I will proceed to the question on the merits.
Felix Frankfurter: Is there anything -- anything in between 24 (a) and (b), in other words, (a) is -- as of right and (b) is permissive in the exercise of dis -- of discretion? Is there such a thing as an abusive discretion which would've amount to a right?
Charles A. Horsky: Under 24 (a) -- well, under 24 (b), I suppose there could be.
Felix Frankfurter: Would -- would an abuse under 24 (b) in effect be -- come under (a)?
Charles A. Horsky: I suppose it -- well, I'm -- I'm sure that you could have a situation in which there would be abuse of 24 (b) by refusing intervention whether under the decisions of this Court, Mr. Justice Frankfurter, that would make that appealable as of -- as if it were a 24 (a) --
Felix Frankfurter: Yes.
Charles A. Horsky: -- denial or not, I -- I have frankly not look at the decision with that in mind.
John M. Harlan II: Is there indication that it would in the Trainmen's case?
Charles A. Horsky: There are some indications, but there may be a contrary or elsewhere that I don't have in mind.
Felix Frankfurter: In other words, you may have clear cases in 312 if you found it to be clearly of -- as of right --
Charles A. Horsky: Yes.
Felix Frankfurter: -- as a very turn of the original decree. It maybe not that and yet under the circumstances be such --
Charles A. Horsky: That it --
Felix Frankfurter: -- in all good fairness, you ought to be allowed to come in.
Charles A. Horsky: Yes. And I suppose that if you take the rationale of the cases and say that the reason that you postponed the question in the 24 (b) cases is because you have to have the whole context. If it's so clear that it's an abusive discretion, it might well be possible that you would hear it promptly and decide it. Now, one -- before I come to the merits, one -- one more preliminary word. As I said, the District Court decided the case without making any findings of fact on the allegations and offers of proof made by the appellants in our moving papers and in our supporting memorandum. As I understand the question that was before the District Court and indeed as I understand the question is -- which is before this Court, the issue is as a matter of law, where those allegations adequate to warrant intervention? Now, the first of the requirements of the rule, obviously, is that the representation of the applicants' interest by the existing parties is or maybe inadequate. The existing parties within the terms of the rule were the Board of Directors of ASCAP and the Department of Justice, the considerations which -- which bear upon whether the representation by either of those parties was adequate or obviously different with the Court's permission, I would proceed first to discuss the question of the directors. Appellant's basic position as to the adequacy of representation by the Board of Directors is very simple. They alleged in their pleadings and offer to prove that the Society's Board of Directors was dominated by the very group of large publisher members which it was the purpose of the antitrust suit to curve and bring under control. The directors were the representatives of the very group that appellants sought to prove should be restrained much more than the proposed decree proposed to be restraint. On the phase of it, appellants' interests and the interests of the directors were directly antagonistic. And consequently, we submitted that they could not properly be said to representatives. Now, in this Court, it is argued by counsel for ASCAP that the Board of Directors did in fact represent the appellants because in a membership vote taken under the direction of the District Court following the proceedings in the Court, a majority of the members of the Society ratified or voted yes on the proposals to amend the decree. Let me give you a word of background before I approach that argument. Following the hearing -- I should say that at the return date, there was a hearing. The District Judge himself said he'd like to have it -- he like a town meeting with himself as the town boss. But there was a hearing. And at the conclusion of the hearing, the Court ordered that a -- ballots be submitted to each member of ASCAP, publisher as well as writer, on which he could mark either yes or no to the question, "Do you approve the proposed amendments?" Each member was entitled to one vote on this ballot, although there was a weighted ballot also taken at the same time to comply with the Society's articles of association. In this non-weighted vote, a majority of the writers and the majority of the publishers voted to accept the proposals. There was, however, a very substantial minority vote. 40% of the voting publishers voted no, 30% of the voting writers voted no, indeed of the eligible publishers only 47% voted yes. Now, I should like --
Earl Warren: About how many -- about how many voted?
Charles A. Horsky: There -- there were about, at the time, 1300 publisher members and about 3200 writer members. And I think the proportion of voting was around 75% to 80%, Your Honor. I will ask my associate to check and --
Earl Warren: That's close enough.
Charles A. Horsky: -- give me the --
Earl Warren: That's close enough, right.
Charles A. Horsky: There are 1000 publisher voters in any event, it's a good cross section.
Earl Warren: Yes.
Charles A. Horsky: Let me make, however, three observations on the argument that this plebiscite is enough to demonstrate that the directors of the Society were representing appellants' interests. First, I would like to point out. Now, I think this is very important that the ballot -- the balloting was subject to the fatal deficiency that all of the facts were not available on which to exercise a judgment. Because these appellants had not permitted to intervene, they had been unable to make a record on which a meaningful vote would have been really possible because they were not parties, they were unable to call witnesses, they were unable to attend their documentary evidence, and even more important, they were unable to lay before the Court evidence which has parties. They could have elicited from the Society and from others by means of discovery and interrogations. They were not able to present the evidence which would have shown the value and the practicability of the alternatives which they were espousing. Well, it certainly is unusual, to say at least, to have a plebiscite on whether proposals to curve antitrust violators are adequate or inadequate particularly a proposal in which the violators and the victims both participated. Now, we think it would really be a monstrous doctrine to say that it should be given the conclusive effect that counsel here suggests for it, unless the people who were voting had the opportunity to know all the facts about all the issues.
Felix Frankfurter: Your argument implied, does is not, that voting confidence in the directors implies agreement with the proposed decree?
Charles A. Horsky: Well, it's the other way around, sir. It is --
Felix Frankfurter: But --
Charles A. Horsky: -- they will ask to vote on the decree.
Felix Frankfurter: At this point, you're -- you're attacking the suggestion that the directors appropriately or adequately represented the appellant members.
Charles A. Horsky: That's correct. I --
Felix Frankfurter: Now, people very often vote for representatives, although they meant to disagree as to some of the views they entertained.
Charles A. Horsky: That's quite true. And I suppose that it can be said that there is no necessary correlation between whether you want these proposals and whether your interests were adequately represented at all. I think that is a valid comment which should -- could be made on. My point here is though that even accepting that premise, the basis upon which the voting was taken was inadequate basis to really record a definitive expression of the membership.
Felix Frankfurter: Of course, it doesn't imply that the members -- that the voting members had before them appropriate basis for judging the adequacy of the directors.
Charles A. Horsky: Well, that is what I'm suggesting. They did not have because we have not been able to have the opportunity to present that to the Court. Now, the other aspect of this which I think is important is that the voting was on a take it or leave it basis. Appellants' papers, petition for intervention did not suggest that all provisions of the proposed amendments were bad. There were provisions in the proposals which might well have commended themselves to members as a distinct improvement. No one can know. In other words, how many members voted yes on the premise that even a little bit of improvement is better than conditions which have become empowered. Moreover, there is one other aspect of this take it or leave it which I think is important. Due to what I am quite sure was a misapprehension by the District Court of his powers under the 1950 decree, the District Judge stated during the hearing on several occasions that the alternatives to an approval of these proposals was a litigation of the 1941 complaint which would put the entire Society in jeopardy of it's dissolution. Needless to say, the directors and officers of the Society in campaigning for an affirmative vote in favor of their proposals made good use of the judges' remarks. My third comment on this plebiscite is that there was in fact a very substantial minority vote. The appellants, the proposed intervenors don't stand before you as three descendants in a society of 5000 people. There were a very substantial number, presumably those who had no part in the negotiation of this decree who would rather have suffered on under the conditions existing, and they were taken this judgment. Now, let me turn to the other half of this first requirement of the rule, the representation by the Department of Justice. Obviously here, the factors are quite different. I think I can dispose some of them rather quickly. There is no dispute, of course, here that the Department of Justice by law and by tradition represents the interests -- the public interests in United States litigation whether it be antitrust or anything else. The dispute on that issue rather is with the conclusion which the appellees seek to draw from it, and that is that Rule 24 (a) (2) simply has no application in government litigation. I think that that is a misinterpretation of the decisions of this Court and of the lower courts, and I think the true issue here is when such intervention is (Inaudible).
Felix Frankfurter: May I ask whether at anytime your clients made informal or loyal representations to the Department as submitted considerations?
Charles A. Horsky: Prior to the formulation of the proposals?
Felix Frankfurter: Either prior to the formulation or prior A prior or B between June and October.
Charles A. Horsky: Prior, yes, Your Honor. I think that the Department of Justice was receptive to suggestions from the membership. And I believe that my particular clients in fact submitted suggestions to the Department with respect to what should be in the decree. Between June and October, I am quite confident that they did not. At that time, the matter appeared to be frozen. Now, the second question which is not involved in this litigation is the matter of intervention by what I would like to sort of lump together as strangers to an antitrust case if this is not a case where a customer or a licensee or a competitor of an antitrust defendant is attempting to intervene. The simple answer to most of those people is that they can't meet the formal requirement -- the less formal requirement of Rule 24 (a) (2) that they both will or maybe bound by the provisions of the judgment. The present case is really an unusual situation. Not only as intervention sought by representatives of a quite small and definite group who are the victims of the Sherman Act conspiracy which is sought to be curved.
Felix Frankfurter: I thought it's a large group.
Charles A. Horsky: No, it's a small group of dominant publishers alleged to dominate the Society's directors.
Felix Frankfurter: You mean the -- I'm sorry.
Charles A. Horsky: I'm sorry.
Felix Frankfurter: I thought those were affected, they were a large group.
Charles A. Horsky: The group that is affected -- well --
Felix Frankfurter: It's not used of 95%.
Charles A. Horsky: Large or small, I'm talking of numbers. It may be as many as 1200 publishers.
Felix Frankfurter: Yes, but you -- mean with the reference to the enterprise --
Charles A. Horsky: The purpose of the enterprise, it is the vast majority, that's right, perhaps 99%.
Felix Frankfurter: Yes.
Charles A. Horsky: And as members, moreover, they are bound by the judgment when it is entered and approved by the Court. Now, that's what's involved here. There -- also, another thing that's involved here. There wasn't any doubt in this case as to what the Department of Justice might do. Here, we had presented to the Court what the Department of Justice had proposed to do, and the issue was the adequacy of the proposals which had been formulated and presented to the Court.
Felix Frankfurter: I take it, you made in your -- in your moving papers for intervention, you made a detailed criticism, from your point of view, the inadequacy --
Charles A. Horsky: That's right, sir.
Felix Frankfurter: -- of what the Government is concerned to do.
Charles A. Horsky: That's right. And I proposed to come to that in a moment, but we did do that, sir. Now, what we sought to do by its reading was to persuade the Court that it did not -- that it should not approve this proposed amended consent decree because it would still leave the appellants and the other members of ASCAP, the general membership of ASCAP without protection from the conspiracy alleged.
Charles E. Whittaker: May I --
Charles A. Horsky: It would not carry out the purposes of the suit. Yes.
Charles E. Whittaker: May I ask you, Mr. Horsky? If you had been an intervenor at that time, then would not your assent have been necessary to a consent revision of the judgment?
Charles A. Horsky: To a consent revision, surely. If we had been parties, I suppose it requires the consent of all parties.
Charles E. Whittaker: So then to permit intervention in the government suit by third parties, would -- if that third party were dissident prevent the Attorney General from arriving at a consent judgment, wouldn't he?
Charles A. Horsky: Well, it would -- it seems to me, Mr. Justice Whittaker, that if you -- if you would start with the assumption, which we are now starting with, that these people are bound by the provisions of the judgment. That is -- its res judicata as to them, and if they come in and say, "It isn't a fair judgment, Your Honor, for us that there isn't any reason in the world why the Court should say just because the Attorney General has reached an agreement with somebody else that you can't tell me why you think I shouldn't enter this judgment against you." That's what this comes down to. It certainly would prevent the -- if we were permitted to intervene, it would prevent the entry of a consent judgment because the parties would not have consented to it. It seems to me, however, perfectly fair and perfectly probable that that be the result in the circumstances of this case. And as I said before, I want to emphasize that we're not talking about a stranger to the litigation. We're talking about a person who can meet all three of the requirements of Rule 24 (a) (2) including most importantly that he would be bound by the judgment.
Felix Frankfurter: Does the Government agree that you would be -- you are bound (Voice Overlap) --
Charles A. Horsky: The Government's position on that, Your Honor, is -- well, yes and no. The Government says this was a class suit. And as I read their brief they also say that in a class suit under the Ben Hur case and others, if it is a class suit, the members of the class are bound. What they say, however, is that in this particular judgment, the judgment sets only minimum standards for the conduct of the dominant group in the Society and therefore that we, as members, could institute a separate action and insist upon a higher standard being applied than is required by this judgment. Our answer to that, if I may interpose this for the moment, our answer to that is that they are simply wrong on the facts. I can't give you the illustrations now because it requires a little more background to make it, but there are provisions in this judgment which you will see upon it's -- examining it which do set precisely what ASCAP must do, not what it may do and certainly what it must do if he elects one course of conduct or another. And therefore, we say that we are bound. And the argument between us and the Government on that issue revolves around an interpretation, really, of whether the -- whether the judgment is a set of minimum standards or whether it is a set of absolute standard.
Felix Frankfurter: But even apart --
Charles A. Horsky: I believe a reading of it will demonstrate that we are substantially accurate in many respects.
Felix Frankfurter: But even apart from that, perhaps, in the freedom in the lawsuit advert to a difficulty I have, if you are not bound, then the consent agreement arrangement between the Government and the parties is definitive and you have Sherman or consent decree subsequently opened up to further litigation insofar as you are open to challenges.
Charles A. Horsky: That's right. Well, the -- the Department of Justice, to come back to the -- the point that I was on with Justice -- Mr. Justice Whittaker, takes the position in the brief -- in its briefs here, and I don't think I paraphrased this unfairly, that when that it is no business of the District Court to determine whether a consent decree adequately carries out the purposes of the antitrust laws or not. The Department says that's its business, and it is no concern of the District Court, and it is not proper for the District Court to intervene in those determinations. Therefore, it says, "There is no warrant for intervention. There is no need to have further facts because there's nothing for the Court to decide." Now, I suggest that that is a rather startling contention. I also suggest that it is pretty clearly contrary to what this Court said not more than a couple of months ago in System Federation against Wright, System Federation Number 91 against Wright where the Court had occasion to examine the question of the duty of the District Court on consent decrees and specifically on modification of consent decrees. For present purposes, the significant part of that decision is that in which this Court made it clear that the authority of the District Courts to approve a consent decree comes not at all from the agreement of the parties. It may infrequently does approve the decrees but the authority comes from it and the responsibility is measured by the statute which the decree is entitled -- is intended to enforce. Now, that to me means that the District Court does have a responsibility which it was obliged to discharge in this case. That responsibility, moreover, was measured by the antitrust laws, not by the agreement reached between the Department of Justice and the directors of the Society. And in this case, the allegations of the appellants showed that the proposed decree felt so far short of adequate relief that it demonstrated that the Department of Justice did not adequately represented the interests of these appellants. Now, in our pleadings and in our supporting memorandum in the District Court, we specified the -- the matters in which the decree in our judgment were inadequate to accomplish the antitrust purposes of the suit. In our brief in this Court, we have discussed two of those matters at some length. They aren't unfortunately simple, and they are very difficult to summarize. But let me illustrate, and I think this will be a fair illustration with the voting provisions, Section 4 of the proposed order, which is at 674 of the record, deals with the voting right. The Court will recall that I've stated earlier that under the 1950 decree, the directors had established a system of weighted voting under which the publisher that received the most money got the most votes, and the more money he could get for himself, the more he would be able to vote. The more the Society's revenues at these largest publishers were able to choral, the better they could solidify their control of the Society. And at the time of the modifications proposed in 1959, the dominant publisher group, the group whose activities it was the purpose of the suit occur, had achieved for themselves about 63% of the weighted publisher vote. Less than 1% of the entire publisher membership of the Society elected all the directors. And as the Department of Justice itself said, this frustrated one of the antitrust purposes of the suit, the purpose to prevent the dominant publishers from using the Society to obtain an unfair competitive advantage over their other members. Now, faced with this situation of admitted control and this situation of admitted frustration of the antitrust purposes of the suit, what does the proposed modification do? By a series of provisions that permits this group, a dominant publisher group, to maintain 37% of the total publisher weighted vote, calculated on the basis of the figures then available as supplied by the directors of ASCAP, it permits in another provision that percentage to go up by 10% to 41% if the publishers properly adjust the affairs of their affiliates or if they can choral that much more of the Society's revenues. It ignores the fact which the appellants offered to prove in their papers that affiliated or allied with this dominant publisher group are the two largest publishers of series of music which adds a couple of additional percentage points to the total percentage of the weighted vote which the dominant group is able to muster. And it further ignores the fact, as we also offered to prove, that you never get 100% voting by the publishers. Indeed, we had concluded in our offers of proof that the decree would actually give the dominant group approximately would leave the dominant group which it was the purpose of the suit to -- to occur approximately half of the usual publisher vote. And it doesn't require very much argument to demonstrate that even if they had only 41% or even only 37% with the other votes widely scattered among 1300 small publishers, their control was not very seriously affected by the proposed decree. In summary, the Department of Justice urged the District Court to accept the proposal which is no more significant in practical effect than if they urged that the percentage of the vote be reduced from 63% to 53%. And I submit that when the Department clearly leaves the appellants and the ASCAP's general membership at the mercy of the dominant group, as they do by this proposal, then the Department is not adequately representing the appellants' interests. Now, the Department says, "Perhaps, this isn't very important because other provisions of the proposed decree prevent the directors from really doing much." We really pretty well curved their power even though they still may be in control. I suggest that the -- that the figure with which the dominant group has fought for the control which it has suggest that there is more to the matter of controlling the affairs of ASCAP and perhaps the Department is willing to acknowledge. But let me illustrate by one other area of the decree, a portion of the decree which illustrates what the directors can do. This is the area called the survey of performance. Under the 1950 judgment, the directors are required to make a survey of performances and based the distribution of the -- of the revenues on that survey. This information -- the survey consists of two steps. First, the collection of the information as to what is performed and then the application to a certain mathematical formula and -- to come out to a proper result. The memorandum submitted by the Department of Justice to the court below was properly very critical of the manner in which this survey had been conducted. The proposed order, however, does know more or little more than adjust the mathematical formula and the -- the calculations in order to bring the more in line with current random sampling field. It doesn't do anything to curve the judgment and the power of the dominant group who control the Board of Directors to affect the information as to performances which are fed in to these mathematical surveys. Let me give you a -- a quick illustration. The survey contemplates that a team will go out and take a tape recording of two hours of music on a local radio station. This tape was then mailed to New York where the ASCAP staff tries to figure out from all the hundreds of thousands of pieces of music that there are, who wrote and who published, not just the themes that are in there, but the background music, the theme music, the bridge music and cue music and all the other kinds of music that are involved in those two hours. There are innumerable questions of judgment that are involved in determining what kind of music it was, how it was used and how long it was played and the like. All these questions are left to a staff responsible to the Board of Directors. And this proposed decree does nothing to curve the power of the Board to control the activities and to affect the judgments of these people. We proposed to show that the only way you could avoid this obvious conflict of interest situation which now exists is to have this survey made by an outside organization, and we offer to prove that it could be probably be done for less than ASCAP itself was paying to do it. Now, I think my time is rushing. I hope that I have touched enough on the third part of the rule, the requirement that we must be bound. I believe it is fair to say, in a very quick summary, that this is a class suit that in a class suit, res judicata applies to the members of the class and that an examination of this judgment will reveal to you that there are many aspects of it where it is not permissive, where it is mandatory that ASCAP performed in this fashion. And as to those places, it is, I think without question, binding upon us, as appellants, unable to be relitigated in any other suit and consequently sufficient to comply with the rule. I would prefer to reserve the remainder of my time if I may, sir.
Earl Warren: You may. Mr. -- Mr. Friedman.
Daniel M. Friedman: Mr. Chief Justice, may it please the Court. I want to make it very explicit at the outset that the Government is not contending, as it has been suggested, that merely because a consent judgment is entered into between the Government and the defendant in an antitrust case that automatically that requires approval of that decree and entry by the District Court. The District Court in this case at the every outset was quite explicit in stating several times that Judge Ryan stated he would not approve this decree unless he was satisfied that it would carry out the antitrust purposes of the suit. And at the very end of the opinion with little -- a little opinion with Judge Ryan rendered an oral opinion summarizing the decree and indicating why he approved it at page 666 of the record. He said that although the decree is not a panacea for all the alleged evils besetting the Society, the decree does represent definite improvement over existing procedures, and that it will serve to advance the antitrust purposes of the government suit and of the prior decree. In other words, Judge Ryan did not approve this decree unless and until he was satisfied that it was a significant step in improving the situation carrying out the antitrust purposes. Now, before Judge Ryan reached that conclusion, he had the benefit of two days of hearings in which he permitted all of the people who wish to speak in opposition or in favor of the decree to be heard including these very appellants' counsel heard at length. Most of the people opposed the decree significantly at least two opposite, not on the ground that it didn't do enough, but it went too far. It was taken too much away from the existing rights. In addition to that, before the membership voted on this decree, they had the benefit of two series of meetings. A meeting was first held in New York and in -- on the West Coast of all the ASCAP members at which the decree was explained to them before the hearing in October. Following that meeting and after the hearing when the judge directed that it be again submitted to the membership, further meetings were held. At each of these meetings, counsel for ASCAP explained the decree, summarized the objections to it and stated the reasons why ASCAP believed it was appropriate. And if --
Felix Frankfurter: May I ask you, Mr. Friedman, whether, at that hearing before Judge Ryan, counsel on behalf of the present appellants set forth reasons why in order to make effective their -- criticism of the proposed decree, they must have the compulsory powers of a party?
Daniel M. Friedman: I don't think he put it -- Mr. -- Mr. Horsky put it in --
Felix Frankfurter: They could do it their motion papers, couldn't they?
Daniel M. Friedman: Well, they alleged that they would be prepared to prove --
Felix Frankfurter: Yes.
Daniel M. Friedman: -- certain things.
Felix Frankfurter: Yes. I mean if they were parties, they have powers, they would have powers.
Daniel M. Friedman: They would have power.
Felix Frankfurter: Now, what I want to know is that that -- that need canvas before Judge Ryan and that the Department make answer thereto, and you will make anthem in the course of your argument.
Daniel M. Friedman: Yes. The -- the basic allegation, the basic reasons given by these appellants for the disapproval of the consent judgment, I want to make it quite explicit that what they asked in their pleading and intervention, the conclusion of their pleading as intervention, is that the Court reject this proposed consent settlement. That is what they asked, were it reject this proposed consent settlement and not approve anything that did not contain in the --
Felix Frankfurter: You don't have to be a party, is all it has.
Daniel M. Friedman: They --
Felix Frankfurter: There's no reason for rejecting everything they asked.
Daniel M. Friedman: But, Mr. Justice, in the context to this litigation as far as what was before Judge Ryan, the only thing he could do is either approve or disapprove this proposed consent judgment.
Felix Frankfurter: You mean as -- as the -- as the litigate -- as the proceedings shift themselves before here.
Daniel M. Friedman: That is correct.
Felix Frankfurter: But if he granted into the -- the pleading the -- the petition for intervention, that might have opened up the avenues of inquiring that weren't opened up.
Daniel M. Friedman: That -- that might have opened up at that time if they were permitted to intervene, they could urge further modification. But, I might point out that ASCAP stated at the hearing that if any testimony were taken, they would immediately withdraw their consent to the judgment.
Felix Frankfurter: Well, and so what?
Daniel M. Friedman: Well, this goes to the -- the -- our basic argument, our basic argument in the case that a private party does not have the right to come in on the side of the Government in effect to urge that the Government is not adequately representing the public interest.
Felix Frankfurter: You don't need to make that universal statement, do you?
Daniel M. Friedman: Well, we don't have -- we --
Felix Frankfurter: Well, that's get done the exactly what Mr. Horsky said, that means if the -- that in a litigation where -- in which the Government is a party, it cannot be -- no claim can be made that the Government doesn't adequately represent everybody on the same -- in the same general directory which it is seeking to go.
Daniel M. Friedman: I -- I think that is so, Mr. Justice.
Felix Frankfurter: That's your proposition, is it?
Daniel M. Friedman: That is our first proposition. And then we have a second proposition that in any event, on basis of the allegations that these appellants made from the basis of which they predicated their claim, that the Government was not adequately representing their interest that does not establish the ultimate conclusion. Now, I think it may be helpful to the Court if I might just briefly indicate a few more of the fact as to how ASCAP operates.ASCAP has roughly 6400 members. It grants licenses for the none -- for the public performance for profit, the playing of musical compositions. These licenses charge for a fixed sum, for a stated amount, the right to use all the music in the ASCAP catalogue, perhaps a ballroom, a radio station may pay $10,000 to ASCAP to use all its catalogue. And ASCAP received last year better than $30 million. Now, under ASCAP's organization, after the expenses are paid, half of this money is distributed to the publishers, the other half is distributed to the writers, the authors and the composers. And the problem that arise is, of course, is how do you distribute this among all of these members. On what basis do you give one member more than another? Now, we know that different songs are played but we don't know exactly, specifically which song is played, where and how often. So, what ASCAP has been doing, has been conducting a survey. This is the survey that Mr. Horsky has mentioned. They have conducted a survey in which they attempt to ascertain just how many of these songs are played and it's done on a sampling basis because you couldn't hear every particular composition that was played. And if you could, the expense of such a hearing will be such, they would be no money left over by the time they got ready to distribute it. Now, there's one other problem that arises in this case. There are two different types of used music basically, one is the so-called feature performance where song is sung, is played by an orchestra. The other is the so-called background use of music, that is, as a theme song for a program on radio, on -- or television, a musical jingle, "Pepsi-Cola Hits the Spot", that kind of thing. Now, there are so-called recognized works in the musical field. For example, if on a television program, Easter Parade is heard in the background, this, to the average viewer, connotes the idea that the scene is being set for Easter. If the Lullaby of Broadway is played, you expect to see a scene of Broadway. On the other hand, there's a lot of music that maybe very pleasant that serves the purpose but connote -- connotes no particular image to the listener. Now, the result is that ASCAP feels, and I think quite justifiably, that the recognized works, the works which connote an image to the viewer, these are entitled to something more. There are more valuable music. And as more valuable music, certain greater recognition should be given to the playing of that kind of music as background music, then is given to the playing of music that connotes no image to the list. Now, I want to make it clear, these are only in the case of the background uses of music. This is not the case of a song that is given a feature performance. Now, with this by way of background, let me turn to the precise claim for intervention that was made here. The appellants do not claim that the decree, as far as it goes, isn't a good decree. On the contrary, they concede that the decree has made improvements. That claim is basically that the decree doesn't go far enough. And the claim is that the decree doesn't go far enough in certain specific areas. There's no objection made to other areas in the decree. Indeed, I think it's highly significant that there is no objection taken to the aspect of the decree which the District Court described as the most significant change. Of course, this question of the power of the directors, which I will come to in a minute, all turns in the last analysis as to how the money of ASCAP is to be distributed. That's the basic concern, who is going to get what? And the District Judge described as the most significant change, the change that had been made in the distribution of the revenues of ASCAP. There are also other areas in which the Government had concluded that the decree was deficient. And as to those areas, there is no attack made. So what we think we come down to hear is a claim that the Government has inadequately represented the public interest in negotiating this decree because in certain areas, the relief for which the Government was willing to settle the case rather than going to litigation is less than what appellants believe was called for by the situation.
Charles E. Whittaker: Mr. Friedman, is it quite correct to say that the sole claim is that you didn't adequately represent the public interest that Mr. Horsky contend you didn't represent his interest?
Daniel M. Friedman: Well, if that -- if that is his claim, Mr. Justice, then I think he is certainly not entitled to intervention because the Government, in representing the interests of the public, necessarily has to look to a broader segment than the interest of particular appellants. I mean, the Government had to consider in negotiating this decree all members of ASCAP, not just this particular group.
Charles E. Whittaker: He didn't seek, as I understand it, to intervene for the privilege of better representing the public. He sought to intervene for the privilege of advancing his own interest.
Daniel M. Friedman: Well, if that is -- if that is so, Mr. Justice, if it -- if this is his claim, and as I take his claim really is, that we didn't adequately represent the public interest because he represents the segment of ASCAP which we were trying to protect, and we haven't done enough to help them. But if his claim is only that we have failed adequately to represent his interest, then I suggest that under sale principles, that is clearly does not entitled to intervene because I think he claims that the represent -- if he claims that the representation of his interest by the Government is inadequate, the answer to that is basically the Government is representing the whole of the public interest. And a private litigant, we don't think, can come in to a government suit in effect on the side of the Government merely because he claims that in conducting its litigation, the impact of what the Government is doing has an adverse effect on him.
Felix Frankfurter: Does it make sense to ask, what was the underlying vice against which the Government moved in 1941?
Daniel M. Friedman: In 1941, the basic vice, the primary vice was the relationship between ASCAP and its licensees. That was the primary thrust of the complaint. The secondary thrust of the complaint was the fact that ASCAP, by virtue of this controlling group, was able to, in effect, hold the membership and bondage at that point. There was no election of the Board at all. The Board perpetuated itself and therefore, you had this, in effect, price fixing conspiracy which was tightly locked in.
Felix Frankfurter: So that the interrelationship of the constituent members of ASCAP was also a violation of the Sherman law.
Daniel M. Friedman: It was -- it was alleged that -- it was alleged that the entire existence of ASCAP itself was -- had violated the Sherman Act in various particulars.
Felix Frankfurter: Yes. But one aspect was, the -- the way they -- in which they worked out interrelationship among the members, is that right --
Daniel M. Friedman: I don't --
Felix Frankfurter: -- in relation -- in relation to the power exerted by ASCAP, is that right?
Daniel M. Friedman: I'd say rather it was a means of accomplishing the illegal result. I don't think the --
Felix Frankfurter: Well, I don't care how you phrase it. At all event, that was -- that was -- that also went to the nature of the claim made by the Government in invoking the Sherman Law against ASCAP.
Daniel M. Friedman: That is correct.
Felix Frankfurter: Therefore, a proper accomodation within ASCAP, as a means of exerting its influence beyond, was a continuing aspect of -- of the vice of the violation to Sherman Law, is that right?
Daniel M. Friedman: That is right. And that is --
Felix Frankfurter: And therefore -- therefore, a -- the -- the mechanism by which funds were gathered and distributed was at the heart of this business, was it not?
Daniel M. Friedman: It wasn't the heart of this business. And of course, after the 1941 judgment, at least in the 1950 judgment, they were again prime -- primarily dealt with the relationship between ASCAP and the licensees but the present proceeding is concerned solely with the relationship among the ASCAP membership.
Felix Frankfurter: Though, whichever way you put it, I prefer your way, there is an identification between the public interest that the Department of Justice was protecting and the relation of these appellants to that public interest.
Daniel M. Friedman: Oh, surely.
Felix Frankfurter: Alright.
Daniel M. Friedman: Surely there was. But -- but our position is that you cannot predicate a claim that the department was unfairly representing the public interest merely because it shown that as to a particular segment that you created and do enough, it didn't do as much as this particular people think it should have.
Felix Frankfurter: No, but if it left, it says, good reasons for believing. I'm not suggesting remotely there is. If there is a good reason for believing that the so-called process of democratization was -- was badly -- was not adequately served, then you still go to the heart of what you claim in starting the suit in 1941.
Daniel M. Friedman: Yes, Mr. Justice, but we still maintain that even if that was so, the remedy for that is not to intervene to try to, in effect, take over the control of the government litigation. Now, we think this is --
Felix Frankfurter: Why do you say taking over the control?
Hugo L. Black: They're not asking to do that, are they?
Daniel M. Friedman: Pardon?
Felix Frankfurter: Why do you say --
Hugo L. Black: They're not asking to do that, are they?
Daniel M. Friedman: Well, they are, Mr. Justice, I think, because of this. The Government was the plaintiff in this suit. The Government, it seems to me, under normal procedures has the right to decide how it's going to settle its litigation on what terms, on what conditions. It's up to the District Court to decide whether it will approve a settlement on these terms. And what this appellant is suggesting is even though the Government has concluded after careful study, after lengthened negotiation that this matter should be settled on these terms. They come in and say, "No, give us an opportunity to show that something more than the Government --
Hugo L. Black: Well, are you --
Daniel M. Friedman: -- is asking for."
Hugo L. Black: -- (Voice Overlap) that nobody ever can do that?
Daniel M. Friedman: Well, Mr. Justice, I would hesitate to say never, but I -- but I find it very difficult to conceive of a case where someone could come in on the Government side, on a claim that the Government, in conducting government litigation, is not adequately protecting the interests of the public interest or the private interest that are affected as the result of the government litigation.
Hugo L. Black: Well, they could prove. Suppose, they could prove that.
Daniel M. Friedman: Well, I -- I think, Mr. Justice, that the very nature of government litigation is such that this is not the basis upon which intervention maybe had, even assuming that -- in other words, let me put it this way, Mr. Justice, if there were, for example, a situation were it will claim possibly that there was collision that kind of thing, if it were claimed that the interest of the Government were -- upholds to those of the intervenors, I can concede there might be situations then when you might have intervention, but there's no claim here that the --
Hugo L. Black: Suppose they just simply showed that the Government was making a mistake, just came out and evidence showed it afterwards. You'd still allow concentration of power to be in the hands of -- if you will get the most out of the concentration.
Daniel M. Friedman: I -- I don't think, Mr. Justice, the fact that the Government may have made a mistake in the terms on which it agrees to a settlement is enough to justify they are coming in.
Felix Frankfurter: It's enough to -- to require the judge to hear, I'm assuming, of course, good faith and so on. That's not an issue. What you're saying is that the case cannot be made out by somebody asking the Court to listen to evidence that the situation involved such sophistication of such technicality that with every goodwill in the world, the particular lawyers of the Government did not penetrate into the documents of the situation. That's what you're saying.
Daniel M. Friedman: That's precise. Now, I would like to point out --
John M. Harlan II: What you're saying is that it's discretionary with the Court. The Court could let him in if they wanted to.
Daniel M. Friedman: As a matter of discretion --
John M. Harlan II: Yes.
Daniel M. Friedman: -- they -- they sought discretionary intervention that was also denied --
John M. Harlan II: You're not suggesting that the Court has no power in this rule either in its discretionary aspect or as a right aspect, doesn't apply to Government antitrust case.
Daniel M. Friedman: Oh, no, Mr. Justice. Now, we are saying we don't think that on this kind of a claim, they establish that they can intervene as of right in the sense that the representation of their interest by the Government is inadequate.
Felix Frankfurter: When you say this kind of a claim, then you were excluding as a matter of some rigid or defined principle this kind of a claim. If you say on this evidence or these proposals or these proverbs, I follow you that when you say on this kind of a claim, then you draw a legal line that against the Government such a claim cannot be entertained by the Court unless he chooses to.
Daniel M. Friedman: Well, I -- I think, Mr. --
Felix Frankfurter: Or rather the other way around that he must -- that -- that as a matter of right, they can't make such an offer with a readiness to show, and the Court didn't -- without considerations, they haven't listened to you. This is the Government. That's what you're saying, aren't you?
Daniel M. Friedman: Yes. I think, Mr. Justice, I think, if I may put it a little differently, I think what we're saying is that where the claim is made that they have the right to intervene as of right, they are not entitled to come in merely because it is claimed that the Government is improperly conducting its litigation in the sense that it is not doing it the way they think it's appropriate.
Felix Frankfurter: Well, when you say improperly -- what you're saying is that the judge, and he gives no ear, he gives no ear that as a matter of fact, the proposal to which the Government is consenting in utmost good faith and with thorough carefulness and considering it but with all the limitation and infirmities of even excellent lawyers that the judge need -- pay no attention to it at all. They can just throw it out because it's the Government. That's what you're saying.
Daniel M. Friedman: Well, I'm saying -- saying that he doesn't have to pay -- he doesn't have to allow them in because I want to make it clear that while the judge here and while it's the usual practice in these consent cases, the judge did not permit intervention, he listened and let the opponents be heard at great length.
Felix Frankfurter: Well, that is a different story. He just --
William O. Douglas: I thought your argument was different. I thought it was that -- to allow this, as a matter of right, would be to change the whole character of the consent --
Daniel M. Friedman: That -- that --
William O. Douglas: -- proceeding.
Daniel M. Friedman: -- that is -- that is correct. That is a development which I'll try to come to in a moment. We think that --
Earl Warren: Does the Government invariably object to intervention and matters of this kind?
Daniel M. Friedman: Generally, it does, Mr. Justice.
Earl Warren: Generally, it does.
Daniel M. Friedman: Generally, it does, yes. And I would say that with almost no exceptions, with one or two exceptions, intervention and this kind of a situation has been consistently denied. Now, the Government has not objected to a presentation by the objectors to permit them fully without becoming party to make their full argument before the District Court as was done here. The -- we -- we think basically, this is inherent in the whole character of the statutory scheme of the Sherman Act. The Sherman Act, as this Court has pointed out in the Borden case, sets up two avenues for the enforcement of the Sherman Act. On the one hand, there is antitrust enforcement and suits brought by the Attorney General and on the other hand, there are the private suits. Now, these two, of course, are complimentary and each has an important avenue Sherman Act enforcement. But, we think it's quite clear that Congress did not intend that the private party could get into the government suit, and particularly we think that is so in this kind of a situation where a consent judgment is involved. I'd like to just touch on that brief --
Felix Frankfurter: Did the Sherman Law itself deal with consent judgment?
Daniel M. Friedman: The Clayton Act does --
Felix Frankfurter: I'm talking about the Sherman Law.
Daniel M. Friedman: The Sherman Act itself does not.
Felix Frankfurter: So that consent proceeding, you're talking about consent proceeding, isn't something created by legislation.
Daniel M. Friedman: But, Mr. --
Felix Frankfurter: That's just part of the general equitable procedure.
Daniel M. Friedman: Mr. Justice, under the Clayton Act, under Section 5 of Clayton Act --
Felix Frankfurter: Was this under the Clayton Act?
Daniel M. Friedman: This was under the Sherman Act but the --
Felix Frankfurter: (Voice Overlap) --
Daniel M. Friedman: -- Clayton Act is -- this aspect of the Clayton Act is applicable to the antitrust cases. Section 5 of the Clayton Act provides that a judgment entered in a suit under the antitrust laws on consent before the taking of testimony shall not be private -- prima facia evidence of violation.
Felix Frankfurter: Well, that's -- I don't think that relates to this problem at all.
Daniel M. Friedman: No, I'm just -- I'm just indicating that there is reference in the statute to consent. Now, in a consent judgment, when the Government comes to negotiate a case by consent, there are merely the factors that it has to take into account, problems of proof for example, problems of its legal theories, questions as to whether if it litigated the case, it would win the case, if it won the case, would it get all the relief that is -- that is asking for. And of course, the Government frequently will settle a case on consent for something less than it is asked for in its prayer for relief. But that, it seems to us, is clearly no basis for charging that the Government has, therefore, inadequately done its duty. Indeed, the suggestion of the appellants that upon the claim that the Government is inadequately protecting the public interest, that alone suffices to let them enter the case. That we think as a practical matter because of the facts, one, that defendants in antitrust cases are unlikely to consent if there is any testimony taken, and two, that this makes them a party to all the consent judgments. As a practical matter, this would make it very difficult if not well known possible to have this basic consent judgment program under which a very substantial number of antitrust cases are disposed of.
Felix Frankfurter: Mr. Friedman, I wouldn't put it that way at all. I wouldn't start with the right of the potentially intervenors. But in as much as this consent judgments are the judgments of the Court with the Court's responsibility of being duly advised in entering and canvassing proposed, and eventually entering a judgment or not entering or modifying with this proposed, I should say for the protection of the Court, there is a region in which the Court ought not to deny itself to the light that comes from a proper, that the proposed decree is inadequate, not that the Department is incompetent but that the Court needs age which it offered, it ought not to reject.
Daniel M. Friedman: Well, Mr. Justice --
Felix Frankfurter: What do you say to that?
Daniel M. Friedman: -- the Court, of course, in its discretion --
Felix Frankfurter: Well, I know but it can't say "In my discretion, I won't listen to something that's very relevant."
Daniel M. Friedman: The -- the --
Felix Frankfurter: I don't call that discretion. I call that shutting off light.
Daniel M. Friedman: Mr. Justice, all I could -- could say to that is that the rule under which we operate here is very specific in its terms of what this Court has indicated are the appropriate circumstances for letting them in. The Court -- I -- consistently, the Courts do listen to these people, the Court and in this very case, the Court made it quite clear that it was not going to approve the decree unless it was satisfied.
Felix Frankfurter: But you -- you know as well as anybody, perhaps, certainly better than I. That's no use of listening if you haven't got the underpinning of the claim that's made that inquiry, interrogation, discovery of suggestion, cross-examination, brings out the facts that are buried under -- under -- in near argument without facts.
Daniel M. Friedman: That, of course, is true, Mr. Justice, but there was extensive argument. There was, in effect, every argument that appellant -- that the appellants are here making was fully canvassed in the District Court. Now, I would now to turn basically, briefly to the grounds upon which the appellants sought to intervene the theory on which they claim that the representation of their interest by the Government here was inadequate. I've mentioned earlier the problem of distribution of the revenues, how the money is to be distributed. Previous to the 1960 decree, ASCAP had filed a very cumbersome system, a very involved system of distributing. I'll try to make it as brief as possible, what amounted to was -- and take, for example, the case of the writer or the publisher, after it had received the total amount to be given out to all the members of the group, it then divided into a number of funds, 20% went to one fund, 30% went to another fund. And within each of these funds, there was a different basis of distribution. And these funds were weighted so that the people who had been members of ASCAP for a longer period with greater seniority and the -- and who had more claims of their compositions tended to get a greater percentage of the takedown of the revenue. Now, in this case of the writers, for example, only 20% of the total distributed to the writers was given on the basis of the current performances of these songs. Other portions were given on the length of membership, the length of time, that certain classical songs have been played and so.In the case of the publisher, it was a little bit larger. Now, this was the Government considered one of them major defect of the system. The 1950 decree had directed that ASCAP distribute its revenues so as to get primary weight to the performances of the songs. And the Government was at a view that this judgment failed to do that, the old judgment. Now, a very significant and basic change was made in the scheme of distribution under the 1960 judgment. The change was that for the first time, the writers and the publishers were given the option of either following an old fund system but with modifications to correct some of these deficiencies or at their choice, they could now get all of their share on the basis of their current performances. This means that a new writer, one who is not old and established, was got some hints, and he's generating a lot of money can on -- for the first time, get compensation on the basis of the current performances of his song. Now, we think this is a very significant thing. Now, in addition to that, in addition to that, the various funds' themselves, the composition of them which changed and it-- furthermore, previously ASCAP had had the power to make great discrepancies in the amount of credit given to the same song used for background purposes. For example, sometimes as many as a thousand times, more credit was given to the playing of one song as a theme than another. That is all have been cut down on the basis on which they can give less than full credit to non-feature uses of this performance has been specified. Now, I would like to turn to the matter which is the principal object of complaint of the appellants here which is the system of voting. Under the old system of voting, voting was based upon the amount of income that a member got from ASCAP. Each writer was given one vote for each $20 of income. Each publisher was given one vote for each $500 of income. That has been changed by the new decree. The new decree, the voting system is based not on the income that this man received, which inevitability would tend to favor those who had been longest in the Society and the biggest people, but on the basis of the performances of their music. And this, we think, is a very significant change, a change -- substantial change for the better. Now, in addition, although the appellants attempt to minimize it, the percentage of control of the top 10 publishers, the share which they have was reduced from 63% to 37%. This was done by a system of graduated voting that the more votes you get -- the more performances you get, I'm sorry, the more votes when -- the more performances are needed for each vote, so that as you get bigger, it takes more performances to get a vote.
Felix Frankfurter: Would you say the prominent -- what phrase -- what adjective did you use, the prominent publishers or leading publishers?
Daniel M. Friedman: The -- the principle publisher.
Felix Frankfurter: Principle.
Daniel M. Friedman: Principle publisher.
Felix Frankfurter: How many in number, roughly?
Daniel M. Friedman: Well, it's -- it's hard to say. The top 10 hold 30% of the vote, the top 50 hold approximately half of the vote under the new system. But, of course, let me explain something, Mr. Justice.
Felix Frankfurter: How many publishers in the -- in ASCAP?
Daniel M. Friedman: Roughly 13 -- 1300 or 1400 members of ASCAP.
Felix Frankfurter: So that the top 10 have 30% of the vote?
Daniel M. Friedman: 30% -- 37% --
Felix Frankfurter: 37%.
Daniel M. Friedman: -- of the vote initially with a maximum of 41%. If the -- if their share increases, it's provided that there has to be reallocation so they don't get more than 10%.
Hugo L. Black: Do you think the arguments you're making now has a strict relevancy to the question -- on the question we have to decide?
Daniel M. Friedman: Yes, I think it does, Mr. Justice.
Hugo L. Black: Did the Court pass on the merits of the proposal as now and did it do it on evidence?
Daniel M. Friedman: The -- the Court did pass on the merits of the proposal but my argument --
Hugo L. Black: But I -- I mean what you are arguing is that you made an excellent settlement, which I don't deny. I don't know anything about it. You're arguing that you made an excellent settlement. They're arguing that you haven't so far as they concern that -- are the public -- I assume that you can't separate the interest of the public in cases of this kind. They're arguing that so I'm wondering if -- if the merits of the -- what should have agreed on now is really a -- as much as part to play in making a decision.
Daniel M. Friedman: Yes, I think so, Mr. Justice, because my argument is not -- is showing the fairness of the settlement, not in those terms but it's designed to show that their contention, the ground on which they alleged that they were entitled to intervene the alleged inadequacy of what the Government done. In fact, it's contradicted by the very elements that we have referred on.
Hugo L. Black: But -- but, as I understand it, the -- the decision was not made on that basis.
Daniel M. Friedman: The --
Hugo L. Black: Am I wrong?
Daniel M. Friedman: No. The decision was made basically on the decision denying intervention --
Hugo L. Black: That's right.
Daniel M. Friedman: -- was made on the basis. We think that the Government adequately represented their interest. This is one of the findings on which --
Hugo L. Black: But what they are asking, isn't it, is the right to offer evidence in connection with the -- am I wrong in that?
Daniel M. Friedman: They -- they wanted to offer evidence to show that in fact the judgment which -- to which the Government agreed did not adequately carry out the antirust purposes.
Hugo L. Black: Would you mind stating -- for my satisfaction, at least, you have said that consent judgments and -- would you make the same argument if this was not a consent judgment? Suppose you were litigating this, would you make the same argument about that right to intervene?
Daniel M. Friedman: And what -- I have to ask, Mr. Justice. What point do they seek to intervene if -- if, for example, we --
Hugo L. Black: You set up if you want to change and went for the Court, and they came in and said that they wanted to present that particular view point about it.
Daniel M. Friedman: I -- I would make the same argument, yes. Suppose for the sake of --
Hugo L. Black: No difference is there in your mind?
Daniel M. Friedman: No.
Hugo L. Black: In consent judgment and the contested judgment?
Daniel M. Friedman: I -- I -- no. Mr. Justice, I would make the same argument. I don't think there's any difference. I think if in a contested case, after we had had litigation, and let's assume it was held that the defendants had violated the antitrust laws and then the question was as to the relief to be given and particular people came in and said, "We would like to intervene to show that some other relief than that proposed by the Government is what the Court should enter," I don't think that in that situation, they are entitled to come in, in that context.
Hugo L. Black: I don't want to consume your time unnecessary to discuss things you do not want to. But I want -- like to know if why -- if why, if it would permitting them to intervene does an injury to the antitrust law in this particular case, in connection will let them decide that the Court decide or whether the evidence they offer is -- might bring about difference in what kind of decree he would consent.
Daniel M. Friedman: Well, Mr. Justice, the Court -- the question that the Court was faced with was whether to approve this particular decree. If the Court turned down this particular decree, then the only resort could be how to be the litigation under the reserve power to modify or perhaps even, conceivably, you might have to go back and try the whole antitrust that we don't know. But, we think it would interfere with the antitrust laws because as the Court himself said that this represents the substantial improvement. He said this can't be recognized this judgment isn't perfect. He said this represents a substantial improvement, the way it's open under this judgment for the Government to move at any future time under the reserved power of jurisdiction.
Hugo L. Black: I would think it'd be some argument on the side to -- to say that consent decree more than a regular finding, that you are fighting it out, that in a consent decree, that in the long run, there might be more reason to permit intervenors to come in than in one that's not in consent decree, am I wrong in that?
Daniel M. Friedman: Oh, I wouldn't -- I couldn't agree with that, Mr. Justice, because of the very nature of the whole consent decree negotiation power.
Hugo L. Black: It might defeat it sometimes. I agree -- conceding that, you might defeat it sometimes --
Daniel M. Friedman: Well, the --
Hugo L. Black: -- and maybe it should be defeated sometime.
Daniel M. Friedman: The -- the Court, of course, is always free to dis -- to reject the consent judgment.
Hugo L. Black: That's right.
Daniel M. Friedman: And the Court in this case might have rejected, of course. I like to also mention in connection with the survey that has been spoken of.
Felix Frankfurter: Before you move on from that. I'd like to ask you this. The -- the rejection of the pleading for intervention was not based -- is there any suggestion that was based under the assumption or under the belief by the judge with some familiarity and reconsider familiarity with this problem if the problem raised by ASCAP, that on the face of it, what you're proposing to prove is unimportant, isn't much of an advance on what the Government, if you -- even if you can establish it, but the Government has (Inaudible) true negotiation. You can't -- the likelihood of establishing it is very remote are none of those considerations with the rejection made, isn't that true?
Daniel M. Friedman: Well, I have to answer that in two steps, Mr. Justice.
Felix Frankfurter: Alright.
Daniel M. Friedman: Initially, I would agree that initially it would appear that the judge rejected this on the theory that this kind of a showing isn't enough to allow intervention. But after the whole --
Felix Frankfurter: Is that appeal?
Daniel M. Friedman: Pardon me, sir?
Felix Frankfurter: In the record, is -- did you say something to that effect?
Daniel M. Friedman: No. Initially, he just said, "Your application is denied." That's the first step. Then the order --
Felix Frankfurter: But you said that -- that the showing isn't important or enoughs.
Daniel M. Friedman: No. I'm -- I'm saying, Mr. Justice -- let me give the chronology. The application to intervene was filed with the various particulars. At the outset of the hearing on October 19th, the various people, the judge said, "Well, now, who wants to be heard?" and Mr. Horsky said, "I have this application to intervene." He said, "Your application is denied."
Felix Frankfurter: Just like that?
Daniel M. Friedman: Just like that. Later on, he explained in the record.
Felix Frankfurter: Had he read it before he denied it?
Daniel M. Friedman: Yes, he had.
Felix Frankfurter: I mean, it had been before. I mean --
Daniel M. Friedman: Oh, yes, it had been filed --
Felix Frankfurter: -- before.
Daniel M. Friedman: -- a week before.
Felix Frankfurter: Alright.
Daniel M. Friedman: Later on, in the course of the hearing, the Court explained the reasons why it had denied the intervention. That's at pages 381 to 382, the bottom of the page. And then the formal order from which the appeal was taken in effect recites those claims. But the point -- the reason I wanted to make and give my answer to you, Mr. Justice Frankfurter, in two parts is that at that conclusion of the hearings, after the two days of hearings were all over, the appellants again renewed their motion to intervene, and the Court again rejected, so we don't know. It maybe that at the conclusion of the hearing having heard all their presentation, the Court was of the view that nothing they had shown changes the earlier opinion.
Felix Frankfurter: Am I wrong in saying that there's no intimation by the judge that he thought on the phase of this, the claim which they were trying to press to the appropriate process of a -- of a litigation, examination of witnesses, etcetera, that there is no suggestion that he rejected it on that ground.
Daniel M. Friedman: We don't -- we really don't know, Mr. Justice.
Felix Frankfurter: Well, all I'm saying is that there's no suggestion.
Daniel M. Friedman: There's no suggestion that he did --
Felix Frankfurter: Coming from his lips that that's the ground.
Daniel M. Friedman: That's -- that is clearly correct.
Earl Warren: May I ask you this -- may I ask you this question? Suppose -- suppose we accept as true everything that is in their complaint and intervention and everything in their memorandums that a company -- do you still say that they have no right to -- to intervene?
Daniel M. Friedman: Yes, I -- I do, Mr. Chief Justice.
Earl Warren: Now -- and -- and you do that without regard to what the -- what is shown in there.
Daniel M. Friedman: No, Mr. Justice. I -- I say that because even accepting their claims, we say those claims in the particular areas, the first, the counterbalance by other things that certainly, they failed to take account. They do not criticize areas of the judgment where there are substantial improvements. And finally, even assuming all of this, even assuming that in this particular -- even if we assume arguendo that in this particular case, the Government hadn't gone as far as it should have, nevertheless, we don't think that's enough to enable them to come in to overturns.
Earl Warren: Well, may I ask you just one more? Suppose -- suppose that there was improvement in the decree but none of the improvement helped this particular people, would you still think they have no right to intervene?
Daniel M. Friedman: I -- I would think so, Mr. Justice, because the public interest concepts involved in formulating an appropriate decree under the Sherman Act necessarily was to take account and accommodate various competing interests and --
Earl Warren: Well --
Daniel M. Friedman: -- even though these people may not have been benefited, other -- would have been benefited, and the Government and the District Court --
Earl Warren: Yes.
Daniel M. Friedman: -- reach the overall conclusion that it was in the public interest and further the purposes of the suit.
Earl Warren: Then you take -- then it is your position that no bad -- bad -- no matter how badly these people have been injured and will be injured under the new decree, they could not state a -- a cause of action that would entitle them to intervene.
Daniel M. Friedman: That -- that is correct, Mr. Justice. In this -- in this -- we -- we dispute that the pleading has but -- that far reaching an impact but assuming it does, assuming it does, we think they could not be permitted to intervene to attack the validity of the Government's conduct of this litigation, yes.
Earl Warren: No -- no matter how badly they were being treated by --
Daniel M. Friedman: Well, we -- we have to --
Earl Warren: -- by the dominant interest in ASCAP or by the --
Daniel M. Friedman: Which we have to look --
Earl Warren: -- proposed decree.
Daniel M. Friedman: -- of course, in terms of what they allege in this case. I mean if --
Earl Warren: I know, but I started with the alleging, and you said that isn't enough --
Daniel M. Friedman: I'm -- I'm --
Earl Warren: -- but then I went to the question, "Could they?" and -- and you said no. You thought they could not make a showing that would entitle them to --
Daniel M. Friedman: Well, I -- I don't -- I don't know what kind of a showing if they had made some other showing. I'm saying on the basis of the showing in the claim they have made here, they're not be entitled. Even assuming they could prove everything they alleged, assuming they could prove everything they alleged. In other words, this pleading was not sufficient to allow them to intervene. That's our position.
Felix Frankfurter: May I add -- may I ask one more question in relation to that. I -- I infer or may I infer or is there implied in what you said in answer to Chief Justice's question, that the -- assuming the ability to establish what their petition for intervention offer to establish, and assuming further -- and assuming further that by establishing that so that a decree would be responsive to what they seek to prove, they would not, in any wise, cut down the arrangement which the Government had arrived at? In other words, to yield to their proof, and therefore, the consequences of their proof would not make inroads on the good that the Government, by its on settlement, had achieved?
Daniel M. Friedman: Well --
Felix Frankfurter: I may assume that, may I not?
Daniel M. Friedman: We -- we may assume that because they don't criticize the judgment as it's enacted. But I just want to answer in that by -- answer that to point out that as a practical matter, this could achieve substantial inroads if this consent judgment were rejected, and we were forced to litigation. We don't know what would happen in the event of litigating this proposed modification.
Felix Frankfurter: Yes, I know but that is the --
Hugo L. Black: Is there anything -- anything appears in it as to what would happen if they withdrew from ASCAP (Voice Overlap) --
Daniel M. Friedman: They -- they claim, it would be very difficult because the nature -- in other words, they say that you got to be a member of the Performing Right Society. In other words, it's -- it's not feasible for an individual publisher to license all applicants and to try to police things. There is, of course, another -- two other organizations. One particularly, Broadcast Music which was organized by the radio broadcast as of 1941 which is a similar society.
Felix Frankfurter: What is the practical thing, the practical business matter when one does have to belong to this?
Daniel M. Friedman: I would assume so, and they themselves recognized the importance of such an organization.
Earl Warren: Mr. Dooling.
John F. Dooling, Jr.: Mr. Chief Justice, may it please the Court. I think, Your Honor, that from the point of view of the Society, it is important to understand in explanation of the way the court below proceeded just exactly what was for. There -- this -- the decree in existence when this started was the 1950 decree and of course, the present decree which is now less attack represents a very real amelioration of that decree from the point of view of the very interest that does the appellant here. Now, the Government desired to most stringently enforced second provisions of the 1950 decree and to have these more stringent enforcements implemented in a new and more specific decree. So that on the question of voting and on the question of objective standards for the reward, for the playing of music, something more would exist than what existed under the 1950 decree. That was -- was derived at by negotiation between the Department of Justice and ASCAP, and the matter was then presented to Chief Judge Ryan who was the Chief Judge to whom the ASCAP case had been assigned for some three or more years and who was in charge of the enforcement of the price determining terms of that decree as well as of all other portions of the decree. In other words, he was well-versed in the matters of the 1950 decree and ASCAP affairs. Now, when the decree was presented to Judge Ryan, it was presented to him as a consent decree, and he immediately realized and stated, as we think is right, that he could not alter the consents of the parties that his office was to determine whether or not such a consent decree would further implement the achievement of the antitrust purpose of the original complaint and the two earlier decrees. That was what the Judge conceived to be before him. That, I submit, is what it was before him. However, he also realized that the basic nature of the proceeding would be transmogrified if evidence were taken. He considered that point when the matter was first brought to him, if the making of the rules to show cause. The Government's counsel asked him whether he would take evidence, and he said, as would any judge, "Perhaps, I don't know. I'll think about it."
Felix Frankfurter: You mean take evidence with reference to the submitted consent decree?
John F. Dooling, Jr.: Yes. So that it wasn't just slipping right over it and passing the point without consideration. This is a very experienced judge, our Chief Judge. When the matter was finally presented to him some 10 days later, I think the judges' thinking had moved further. And certainly by the October hearing, after the decree in post form had been mailed to all of the members after the Government's press release with respect to the proceedings, had been mailed to all the members and after there had been communication of the ideas of the Sam Fox Company to the Court. The Court realized that if evidence were taken, you would no longer have a consent proceeding of the kind that would be free of menace to ASCAP because it would no longer come within the language of Section 5 of the Clayton Act as being a consent judgment in a case in which no testimony had been taken.
Felix Frankfurter: Would that apply also to the calling in the Federal Trade Commission to make comment on the proposed decree?
John F. Dooling, Jr.: On the framing of a decree?
Felix Frankfurter: Yes.
John F. Dooling, Jr.: I think, Your Honor, that -- as I recall the Section, it doesn't say anything about taking evidence to --
Felix Frankfurter: No, no, no, that's why I'm asking.
John F. Dooling, Jr.: -- seek someone's expertise.
Felix Frankfurter: No, no, no, that's just (Voice Overlap) --
John F. Dooling, Jr.: No, if someone's expertise, as I understand it --
Felix Frankfurter: So I assume, it wouldn't (Voice Overlap) --
John F. Dooling, Jr.: -- and I don't think it would hurt. I think it's the witness taking an oath and testifying to facts that is created of the Section 5 risk. If I may show it formed call of that. Now, that was the problem before the Court. The second stage of the Court's analysis was this, that if the consent decree were rejected, the Government, having manifested its dissatisfaction with the then current situation of compliance and strengthening of enforcement, would move on to seek modifications of the earlier decree. In so seeking modification of the earlier decree, it would be incumbent on the Government to prove violation, and the whole case would be wide open for proof on all premises.
Felix Frankfurter: Is that the only basis --
John F. Dooling, Jr.: In --
Felix Frankfurter: -- on which -- on which modification could be sought? I suppose the decree, the 1950 decree must have left open in modification to the future --
John F. Dooling, Jr.: I think --
Felix Frankfurter: -- not nearly by virtue of violations of the existing decree but by virtue the fact that experience had shown that the decree was inadequate.
John F. Dooling, Jr.: Inadequacy of provision from supervening circumstances, change in the Society and all that.But Judge Ryan's conception of it, and everybody was offering to brief among this point, nobody did, and I fear there isn't anymore that's controlling in any event. He was uncertain that since a consent decree can only be modified in compliance with the antitrust law, it must be rooted in something more than consent provision that must be rooted in some holding with respect to antirust violation, hence the basic problem. Now, he did not proceed in any other way than the way in which an experienced and seasoned judge would. He sought note -- a required notice, and he did seek the assistance and the advice of those competent to counsel him including Mr. Horsky who did. Now, the difficulty on the intervention point, if I may say so, Your Honor, is this, that the pleading and intervention is what establishes the fact of intervention, and the courts have indicated in the decisions in the lower courts that no affidavits, no vast showing should accompany a petition to intervene, a notice of motion and the pleading in intervention.
Felix Frankfurter: Well, the pleading must -- need not the pleading set forth with particularity why --
John F. Dooling, Jr.: Yes, sir.
Felix Frankfurter: -- you want to intervene and what you propose to show by the intervention?
John F. Dooling, Jr.: It should set forth a claim or defense which you believe will be concluded by the judgment in the action. Now, apparently, it should not set forth an argument about why you should be allowed to intervene factually. And it looks as though the presentation of the pleading of intervention establishes intervention without first requiring the proposed intervenor to adduce evidence of inadequacy of representation or of these other factors. So that once the petition to intervenors presented, it must be passed on. This one was passed on adversely in the circumstances that I have described to Your Honor, and it set forth critiques of the proposed decree phrased much as Mr. Horsky has phrased them here today and implying the availability of such evidence as he implied the availability throughout the hearing that they could be backed up with evidence of the sought that he has in substance by his argument here today epitomize to the Court. I think the Court could be confident that an experienced judge hearing this and other criticisms in a full and open hearing, if he had a court that wait to them, if he had thought, as Your Honor put the question, "Can I, in my judicial mind, demerge to this and still feel that I am right, then I will sign the decree, otherwise not." I think we must assume that that is the process that went on in Judge Ryan's mind. Now, I would like to say, Your Honor, that we do not, for our part, concede that the appeal is properly here in the presence of two distinguished experts on the law of this Court. We have its narrative to suggest that the appeal should be dismissed. This is an appeal under Section 2 of the Expediting Act. That Act suffers appeals only from the final judgment. It is intended to cut out interlocutory appeals no matter how significant or momentous. And we submit that the decisions in this Court particularly the Allen Calculators case in 322 U.S. 137 and California Canaries require that the appeal be dismissed because it is not an appeal from the final judgment and is deliberately not such an appeal. Now, we do not deny that appealable subject matter is present when intervention as a right is denied or conceivably, when an abuse of discretion is exerted in denying intervention. We think that the expression was in this Court in such a case as the Sutphen case indicating that appeal lies as a right relate to appealable subject matter and not the mode or occasion of appeal. In the Sutphen case, the appeal was from the final judgment.
Earl Warren: We'll recess now, Mr. --