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UNITED STATES v. AMOCO

January 26, 1966

United States
v.
The American Oil Company et al., Defendants


Wortendyke, District Judge.


The opinion of the court was delivered by: WORTENDYKE

Defendants have brought three motions to dismiss the indictment in this case. Motion number 1 was dealt with in this Court's opinion filed December 30, 1965. 249 F. Supp. 130. This opinion relates to motions number 2 and 3.

 As to Motion Number 2

 By what they designate as their motion No. 2 addressed to the indictment, defendants urge that count 1 thereof be dismissed "on the ground that it fails to state the essential facts constituting the offense charged therein with the definiteness, certainty and clarity required" by the Fifth and Sixth Amendments to the United States Constitution, and Rule 7(c) of the Federal Rules of Criminal Procedure.

 In Count I the indictment sets forth the names of each of the defendants, the State of its incorporation and the place where it does business. It alleges that within the period of time covered by the charged conspiracy these defendants or their predecessors, other than Cities Service, were engaged in the business of selling gasoline.

 Cities Service (Cities Service Company) is alleged to own and control Cities (Cities Service Oil Company), which succeeded to the business formerly carried on by Cities Service Oil Company which was merged into Arkansas (Arkansas Fuel Corporation), a corporation of the State of Delaware by an agreement of merger dated January 1, 1961. By this merger Arkansas became the surviving corporation and changed its name to Cities Service Oil Company, a corporation of the State of Delaware. From January 1, 1961 to December 31, 1962, Cities Service Oil Company (Delaware) carried on the business of Cities Service Oil Company (Pennsylvania), and by agreement of merger, dated December 31, 1962, Cities Service Oil Company (Delaware) was merged into Cities Service Petroleum Company, a corporation of the same State. Of this merger, Cities Service Petroleum became the surviving corporation, and changed its name to Cities Service Oil Company (Delaware).

 The defendant Humble Oil and Refining Company (hereinafter Humble) is alleged to be the successor of Esso Standard Oil Company, a Delaware corporation, which was merged into Humble Oil & Refining Company (Delaware) by an agreement of merger dated December 15, 1959. Humble became the surviving corporation of that merger, and from the effective date thereof to the date of the indictment in this case, Humble carried on the business formerly carried on by Esso Standard Oil Company, a Delaware corporation.

 Among other corporations participating with the named defendants, as coconspirators in the offense charged in the first count of the indictment, are named California Oil Company, Sun Oil Company, Texaco, Inc. and Tidewater Oil Company, but they were not made parties defendant in the indictment.

 The first count contains definitions of terms used in the indictment, and sets forth that gasoline, as defined therein, and sold by the defendants in the described trading area, *fn1" was either produced in that trading area from crude oil continuously shipped in interstate commerce to refineries located therein, or was produced outside of the area and continuously shipped into the area in interstate commerce. The marketing in which the defendants engaged within the area described, during the period of time stated, involved the sale by defendants to distributors and dealers, by distributors to dealers, and by dealers to the public.

 It is further alleged that in 1960 gasoline sold by all defendants in the trading area exceeded three billion six hundred million gallons, with a total dollar value exceeding $720,000,000.00 and that this gallonage accounted for approximately 67% of all gasoline sold in the trading area. That sold by Atlantic, Cities and Gulf (Gulf Oil Corporation) exceeded 1,500,000,000 gallons, with a retail dollar value exceeding $300,000,000.00, and accounted for approximately 28% of all gasoline sold in the trading area. Most of the gasoline sales in the area during the period covered by the indictment was resold by dealers under the brand names, trade marks or trade names of the defendant. During the same year (1960) dealers in the area sold approximately 340,000,000 gallons of gasoline as private brand gasoline, having a retail dollar value of approximately $60,000,000.00 and accounting for approximately 6.4% of all gasoline sold in the area. In the same year, Cities, through its distributors, supplied 90,000,000 gallons or 26% of the private brand gasoline sold by dealers in the area. The retail prices of private brand gasoline during the period covered by the indictment were consistently below retail prices of gasoline sold under the brand names, trade marks or trade names of the defendants.

 Against the foregoing historical and statistical background averments the indictment proceeds, commencing with paragraph 13 thereof, to charge the offense alleged against the defendants, i.e., that from 1955 continuously up to and including the return of the indictment, the named defendants and their coconspirators "have been engaged in a combination and conspiracy in unreasonable restraint of the aforesaid interstate trade and commerce in gasoline, in violation of Section 1 of the Act of Congress of July 2, 1890, as amended, (15 U.S.C. Section 1) commonly known as the Sherman Act." Thus the first count specifically charges that the defendant corporations, over a specific period of time, engaged in a combination and conspiracy which unreasonably restrained interstate trade and commerce in gasoline in the sale and distribution of which the defendants were engaged, and that such conspiracy was in violation of Section 1 of the Sherman Act. The section itself provides that every combination or conspiracy in restraint of trade or commerce among the several States is illegal. The substance of the foregoing allegations is what the statute declares to be illegal per se ; United States v. Socony-Vacuum Oil Co., 1940, 310 U.S. 150, 223, 84 L. Ed. 1129, 60 S. Ct. 811, but the indictment does not confine the charge of the offense to the language of the statute invoked. Paragraph 14, which immediately follows, explicitly states that the combination and conspiracy, which the statute declares to be illegal, consisted of a continuing agreement, understanding and concert of action among the defendants and coconspirators "to raise, fix, stabilize and maintain tank wagon prices and retail prices of gasoline in the trading area." Next follows a statement of what the defendants and coconspirators did in the pursuit of the object of the conspiracy. These acts are categorized as (1) raising, fixing, stabilizing and maintaining tank wagon prices and retail prices of gasoline in the trading area, and (2) substantially restricting the amount of gasoline available to distributors and dealers engaged in the sale of private brand gasoline in the trading area. After that particularization appears a statement of the effects of the conspiracy, and of the acts done in furtherance thereof. These effects are enumerated as follows: "(a) tank wagon prices of gasoline in the trading area have been raised, fixed, stabilized and maintained; (b) retail prices of gasoline in the trading area have been raised, fixed, stabilized and maintained; (c) price competition between dealers in the trading area has been suppressed; (d) competition from distributors and dealers engaged in the sale of private brand gasoline in the trading area has been restrained and suppressed; (e) distributors, dealers and the public in the trading area have been denied the opportunity of purchasing gasoline in a free and competitive market."

 The first count concludes with the statement that the charged offense was carried out in part within the District of New Jersey and within five years preceding the return of the indictment.

 The form and content of a Federal criminal indictment is prescribed by F.R. Cr. P. 7(c) in the following language:

 
"The indictment . . . shall be a plain, concise and definite written statement of the essential facts constituting the offense charged . . . It need not contain a formal commencement, a formal conclusion or any other matter not necessary to such statement. Allegations made in one count may be incorporated by reference in another count. It may be alleged in a single count that the means by which the defendant committed the offense are unknown or that he committed it by one or more specified means. The indictment or information shall state for each count the ...

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