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United States v. Pennsylvania Refuse Removal Association

decided: March 14, 1966.


McLaughlin, Circuit Judge.

Author: Mclaughlin

McLAUGHLIN, Circuit Judge:

Appellants-defendants were found guilty of violating Section 1 of the Sherman Antitrust Act.*fn1

Defendant Pennsylvania Refuse Removal Association is a non profit corporation comprised of persons and firms engaged in the refuse removal business in the Philadelphia area which includes the counties of Philadelphia, Bucks, Delaware and Montgomery. It is the result of a merger of the original Delaware Valley Refuse Removal Association which had been formed in 1960 and a similar South Philadelphia group. Its principal office is in Philadelphia. The individual defendants, Graziano, Graf and Vile, were officers or directors or both practically from the beginning and throughout the indictment period except Graf whose official position as Secretary-Treasurer ended in January 1963. Coren became President and a Director in 1962 when his South Philadelphia group joined with the Delaware Valley Association to form the present corporation. Graziano is Vice-President.

The indictment charged the defendants with engaging in a conspiracy in restraint of trade in refuse removal in violation of Section 1 of the Sherman Act. Refuse removal was defined as "the collection, removal, hauling and disposal of refuse;". Remover is defined as "any person or company engaged in waste removal;".

It was alleged in the indictment that the named removers and all those removers who were members of the Association during all or part of the critical period or of other co-conspirator companies or trade associations and other persons not made defendants, participated as co-conspirators in the charged offense and performed acts and made statements in furtherance of said offense.

At the trial there was substantial evidence that the Association through its members, including the individual defendants, agreed to fix prices, allocate customers, rig bids and coerce other refuse removers to join the conspiracy. There is evidence that the Association through its members agreed to raise prices by 25 to 50 per cent. In connection with this there is evidence of further agreement of the Association by its members to coerce nonmembers who were able to take business away from the Association group because of the latter's price rise. Proof was introduced that there was an agreement that the Association members were not to compete with each other and not to interfere with other members accounts. Sanctions were imposed on any member for so doing. Competition was eliminated between members on bidding for work.

At the oral argument it was conceded on behalf of appellants that the Government had presented sufficient trial evidence to support the convictions of appellants if the essential jurisdictional element of interstate commerce was present. The brief on behalf of appellants states:

"For the purpose of this appeal, it has been assumed that the Government's evidence was sufficient to justify a finding by the jury that the defendants engaged in practices amounting to efforts to allocate customers and to refrain from competing for particular customers, and to maintain prices for refuse removal. Thus a verdict establishing violation of the Sherman Act would have been justified, provided that the essential jurisdiction element of interstate commerce was present."

Whether appellants' activities were in restraint of interstate commerce and whether the judge inadvertently withdrew that question from the jury in his charge are admittedly the sole issues before us.

Appellants' main effort is concentrated on their attempt to split up their refuse business into two parts. They assert the claim that they were merely engaged in local operations of collecting or removing refuse in the Philadelphia area. It was clearly established by testimony that refuse is disposed of as soon as a truck is loaded and in no event later than twenty-four hours after collection. A major undisputed reason for this is that the truck must be emptied before it is ready for another load. It is also uncontradicted that the hauling away from the customers premises of the trash and the proper disposal of it is an important part of the one charge for the service.

The Government presented thorough proof that during the critical period at least fourteen members of the Association disposed of all or part of their collected refuse by trucking it over to New Jersey and dumping it in that state. In connection with this the statement of the case in appellants' brief contains the following:

"Another alternative was to cross over the bridge to New Jersey and dump at a private dump there. Fourteen removers dumped some or all of the refuse which they collected in Philadelphia at a private dump or landfill in New Jersey during the indictment period."

The totals of those operations were not constant but in 1962 alone (highest year) the charges for that service totaled approximately $299,860. Appellants contend that the refuse is valueless and therefore not the subject of interstate commerce. From the record we are satisfied that the factual holding of the trial judge that "* * * the hauling and disposal of the refuse was an integral part of the refuse removal business" is entirely correct. In that situation the refuse transported from Pennsylvania to New Jersey and disposed of in the latter state as a vital element of the one business operation was plainly a proper subject of interstate commerce. Hoke v. United States, 227 U.S. 308, 320, 57 L. Ed. 523, 33 S. Ct. 281 (1913). This is true despite appellants' claim that the refuse was their property. United States v. Hill, 248 U.S. 420, 63 L. Ed. 337, 39 S. Ct. 143 (1919). The contention of appellants ...

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