their briefs on the motion addressed to Count I.
Section 2 of the Sherman Act, upon which Counts II and III of the indictment are based, proscribes monopolization, attempts to monopolize and conspiracies to monopolize any part of interstate commerce, and prescribes penalties for violation of the section.
The combination and conspiracy to monopolize charged against these moving defendants as violative of § 2 of the Act is described in Count II of the indictment as consisting of a continuing agreement, understanding and concert of action among those defendants and coconspirators with them to raise, fix, stabilize and maintain tank wagon prices and retail prices of gasoline, and to substantially restrict the supply of gasoline available to distributors and dealers engaged in the sale of private brand gasoline in the trading area. These defendants are charged with having done, in the defined trading area, the very things which they conspired to do, namely, fixed tank wagon and retail prices and restricted the supply of gasoline available to distributors and dealers. The effects of the conspiracy are those alleged in paragraph 16, incorporated by reference in the Second Count, namely, tank wagon and retail prices of gasoline have been raised, fixed, stabilized and maintained; price competition between dealers has been suppressed; competition from distributors and dealers in private brand gasoline has been restrained and suppressed, and the opportunity of purchasing gasoline in a free and competitive market has been denied to distributors, dealers and the public. Cf. United States v. United States Steel Corporation, S.D.N.Y. 1964, 233 F. Supp. 148.
The defendants attack the second and third counts for failure to allege the existence of a specific intent to accomplish monopolization. They cite, inter alia, Swift & Co. v. United States, 1905, 196 U.S. 375, 49 L. Ed. 518, 25 S. Ct. 276 and United States v. International Boxing Club of New York, D.C.N.Y. 1957, 150 F. Supp. 397, affd. 1959, 358 U.S. 242, 3 L. Ed. 2d 270, 79 S. Ct. 245. In Times-Picayune Publishing v. United States, 1953, 345 U.S. 594 at 626, 97 L. Ed. 1277, 73 S. Ct. 872, the Court states: "While the completed offense of monopolization under § 2 demands only a general intent to do the act, 'for no monopolist monopolizes unconscious of what he is doing,' a specific intent to destroy competition or build monopoly is essential to guilt for the mere attempt . . . charged." The accused defendants insist that an essential element of a § 2 violation is that they engage in stated activities with the specific intent, not merely to accomplish the acts performed, but also, the specific intent to obtain and to exercise monopoly power in the relevant trade area. They say that no allegation is made to that effect. They argue therefore that the criteria for a charge of unlawful monopolization are not satisfied by the mere allegation that defendants conspired to raise, fix, maintain or stabilize prices or to restrict private brand gasoline supply. It is essential that an indictment must allege all of the material facts and circumstances embraced in the statutory definition of the offense, and if any essential element of the crime is omitted such omission may not be supplied by intendment or implication. The charge must be made directly and not inferentially or by way of recital. Pettibone v. United States, 1893, 148 U.S. 197, 37 L. Ed. 419, 13 S. Ct. 542. Applied to the present indictment, the rule requires that it state the act or acts upon which the required intent to offend the statute may be found. See Standard Oil Co. of New Jersey v. United States, 1911, 221 U.S. 1, 75, 55 L. Ed. 619, 31 S. Ct. 502; Montrose Lumber Co. v. United States, 10 Cir. 1941, 124 F.2d 573. In Montrose, as in the case at bar, allegations of one count, which charged a section 1 violation, were incorporated by reference in another count, which charged a conspiracy to monopolize. It was held that the means, methods and acts which were set forth in the Section 1 Count constituted a particularization sufficient to support the spelling out of intent to violate Section 2. The indictment in Montrose charged that the various defendants "undertook to control and dominate sales in the market area [so] as to restrict them to recognized retail lumber dealers, and to preclude non-recognized retail lumber dealers from buying such products in a free market." In United States v. Chas. Pfizer & Co., S.D.N.Y. 1963, 217 F. Supp. 199, the Court held, on motion attacking the indictment, that one of the counts of the indictment which charged the substantive crime of monopolization contained sufficient allegations to disclose an intent on the part of the defendant because of the incorporation in the monopolization count of things done by the conspirators in the other counts as steps toward the monopolization charged. The acts enumerated and so realleged in Pfizer were construed to disclose a deliberate course of conduct from which an intent to monopolize was the only possible reasonable inference. As the Pfizer opinion states, at page 203: "[The] acts relied on as evidence of monopolization are the very acts relied on as evidencing the conspiracy. If they are sufficient overt acts to sustain a charge of conspiracy and that it was afoot, they must of necessity be sufficient to charge acting in concert or joint action for the monopoly charge. Whether the Government will be able to establish that defendants were participants in a plan to achieve or maintain a monopoly is a matter for the trial and not for consideration at this time."
Subsection (c) of Rule 7 of the Federal Rules of Criminal Procedure requires that an indictment should be a plain, concise and definite written statement of essential facts constituting the offense charged. The object of the rule was to achieve a simplification and avoidance of unnecessary phraseology of an indictment, while preserving the defendants' constitutional rights under the Fifth and Sixth Amendments to the Federal Constitution. In appraising the sufficiency of an indictment in the light of the provisions of the Rule and the Constitutional requirements, the entire indictment must be examined and considered. The rule itself provides that "allegations made in one count may be incorporated by reference in another count" and "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." We have already summarized the indictment for the purpose of appraising the sufficiency of Count I thereof. Counts II and III expressly incorporate by reference certain critical allegations of Count I. Among the allegations so incorporated by reference are the following. Gasoline is defined generally as a product refined from crude oil and suitable for use as a fuel in propelling automobiles. Private brand gasoline means gasoline sold by a dealer without the use of a brand name, trademark or trade name owned or controlled by any defendant or other company engaged in or affiliated with a company engaged in the business of producing gasoline. Counts II and III are, by their terms, limited to accusations against four of the named defendants viz. Atlantic, Cities, Cities Service and Gulf. Those corporations are described in paragraphs 1 and 2 of the indictment, also incorporated by reference in Counts II and III, and they, together with the allegations contained in paragraphs 5 through 12, are similarly incorporated by reference. Atlantic, Cities and Gulf were engaged, during the indictment period and within the relevant market, in the selling of gasoline. All defendants, including those charged in Counts II and III, sold in the year 1960, in excess of 3,600,000,000 gallons of gasoline, representing a retail total value in excess of $720,000,000, and accounting for approximately 67% of all gasoline sold in the trading area. Of this total the gallonage sold by Atlantic, Cities and Gulf exceeded 1,500,000,000 gallons which represented a retail dollar value in excess of $300,000,000 and approximately 28% of all gasoline sold in the trading area. In 1960 dealers in the trading area sold 340,000,000 gallons of private brand gasoline, representing a retail dollar value of $60,000,000. These sales accounted for approximately 6.4% of all gasoline sold in the area. Of the 340,000,000 gallons of private brand gasoline sold in the trading area in 1960, Cities, through its distributors, supplied 90,000,000 gallons, representing 26% of the private brand gasoline sold by dealers in the area. During the indictment period the retail prices of private brand gasoline were consistently below the retail prices of gasoline sold under the brand names, trademarks or trade names of the defendants.
The foregoing allegations disclose the market positions of the defendants charged in the Second and Third Counts, and their capacity to monopolize the business in the part of interstate commerce in gasoline in the marketing area. The indictment charges that, as early as 1955, and continuously up to and including the date upon which the indictment was returned, Atlantic, Cities, Cities Service and Gulf have been engaged in a conspiracy to monopolize interstate trade in gasoline within the market area in violation of Section 2 of the Sherman Act. In Count III also, against the same background allegations, the indictment charges that, beginning at least as early as 1955, up to and including the return date of the indictment, Atlantic, Cities, Cities Service and Gulf, in the position and with the power in the relevant market disclosed, have engaged in an attempt to monopolize interstate trading in gasoline in violation of Section 2 of the Sherman Act. Paragraph 28 of Count III states that in furtherance of the attempt of those defendants to monopolize, and for the purpose of raising, fixing, stabilizing and maintaining tank wagon prices and retail prices of gasoline in the trading area, those defendants did certain things which are set forth in detail in paragraphs 22 and 23 of the indictment and are incorporated by reference in paragraph 28. Thus the Government charges that the defendants conspired to raise, fix, stabilize and maintain tank wagon and retail prices of gasoline in the area, and to restrict the amount of gasoline available to distributors and dealers engaged in the sale of gasoline therein. The effects of what these defendants are charged with having done are detailed in paragraph 16 of the indictment which is also incorporated by reference in the Second and Third Counts thereof. Those effects are charged to have been as follows: tank wagon prices of gasoline in the area have been raised, fixed, stabilized and maintained; retail prices of gasoline in the area have been raised, fixed, stabilized and maintained; price competition between dealers in the trading area has been suppressed; competition from distributors and dealers engaged in the sale of private brand gasoline has been restrained and suppressed; and distributors, dealers and the public in the trading area have been denied the opportunity of purchasing gasoline in a free and competitive market.
The answer to defendants' contention that the indictment lacks allegations charging the defendants with intent to monopolize or to attempt to monopolize is to be found in paragraph 28 read in conjunction with paragraphs 22 and 23. These paragraphs charge a continuing agreement, understanding and concert of action to fix, stabilize and maintain tank wagon prices and retail prices of gasoline in the trading area, and to substantially restrict the amount of gasoline available to distributors and dealers engaged in the sale of private brand gasoline in the area. In furtherance of such concert of action, the defendants are charged with having actually raised, fixed, stabilized and maintained such prices, and have substantially restricted the amount of gasoline available to such distributors and dealers. Intent to achieve the monopolization, and the consequences thereof proscribed by the statute is glaringly apparent from the language employed in the accusations made. Equally apparent from the allegations of the two counts demurred to is the charge that the accused conspirators possessed, or could achieve upon the effectuation of the objects of the conspiracy, within the defined trading area, the monopoly power recognized as an essential element of the offenses alleged. The totality of the allegations of the indictment clearly discloses a combination of power with a purpose or intent to monopolize. These elements are the essentials of the offenses charged in the Second and Third Counts of the indictment under consideration. Monopoly power is the power to control prices or to unreasonably restrict or exclude competition, and the intent to exercise the power. United States v. E. I. DuPont de Nemours & Co., 1956, 351 U.S. 377, 100 L. Ed. 1264, 76 S. Ct. 994; American Tobacco Co. v. United States, 1946, 328 U.S. 781, 90 L. Ed. 1575, 66 S. Ct. 1125. "It is . . . not always necessary to find a specific intent to restrain trade or to build a monopoly in order to find that the anti-trust laws have been violated. It is sufficient that a restraint of trade or monopoly results as the consequence of a defendant's conduct or business arrangements. * * * Specific intent in the sense in which the common law used the term is necessary only where the acts fall short of the results condemned by the Act." United States v. Griffith, 1948, 334 U.S. 100, 105, 92 L. Ed. 1236, 68 S. Ct. 941.
I find and conclude that, when fairly construed, the allegations contained and incorporated by reference in Counts II and III of the indictment in this case fully comply with the criteria prescribed by the provisions of Rule 7(c) of the Federal Rules of Criminal Procedure. Therefore, the motions to dismiss Counts II and III of that indictment are denied. The Government is requested to present a draft of appropriate order.