United States v. Wise/Concurrence Harlan

by John Marshall Harlan II

United States Supreme Court

370 U.S. 405

UNITED STATES of America, Appellant,  v.  Raymond J. WISE.

 Argued: April 16, 1962. --- Decided: June 25, 1962

Mr. Justice HARLAN, concurring.

I join in the opinion of THE CHIEF JUSTICE with some additional observations, believed warranted by the circumstance that the holding below has since been followed by five District Courts, with only two others to the contrary. ^[1]

The language of § 1 of the Sherman Act, providing a penalty for 'every person' who engages in a conspiracy or makes a contract in restraint of trade, of course presents a serious obstacle to appellee's contention that he cannot be prosecuted thereunder. I agree with the Court that § 8, defining 'person' to include corporations and associations, does not imply the exclusion of natural persons. Moreover, the fiction of corporate entity, operative to protect officers from contract liability, had never been applied as a shield against criminal prosecutions when the Sherman Act was passed. In fact I think there can have been no serious doubt even as early as 1890 that officers could be punished for crimes committed for their corporations. Until well into the nineteenth century the corporation itself could not be convicted; the individuals who acted in its name of course could be. See the anonymous note of Holt, C.J., 12 Mod. 559, Case 935, 88 Eng.Rep. 1518 (K.B. 1701); Rex v. Medley, 6 Car. & P. 292, 297, 299, 172 Eng.Rep. 1246, 1249-1250 (K.B. 1834); State v. Great Works Milling & Mfg. Co., 20 Me. 41, 44 (1841); Ballantine, Corporations (rev. ed. 1946), § 113. However, it was recognized that corporate officers could be convicted for 'representative' crimes even after the corporation's immunity was worn away, Regina v. Great North of England R. Co., (1846) 9 Q.B. 315, 325-327, 115 Eng.Rep. 1294, 1298; State v. Morris & E.R. Co., 23 N.J.L. 360, 369 (1852); State v. Patton, 26 N.C. 16 (1843), in line with the rule stated in 1 Bishop, Criminal Law (7th ed. 1882), § 892, that an agent might be punished for crimes committed for his principal. Cf. United States v. Mills, 7 Pet. 138, 142, 8 L.Ed. 636. A substantial volume of convictions of individuals for corporate crimes had accumulated by 1890. ^[2] Congress legislated against this background; it used words sufficiently broad that representative crimes fell within their ordinary meaning; and the normal inference would be that Congress intended to punish those responsible for acts which it declared unlawful.

The legislative history discloses no intention on the part of Congress to exempt the representative offenses of corporate officers. The Sherman bill, S. 1, 50th Cong., 1st Sess., was reported to the Senate with criminal penalties expressly extending to corporate officers and agents, but Senator Sherman soon omitted the criminal provisions altogether. 21 Cong.Rec. 1765, 2455. Senator Reagan then offered a substitute bill which, among other things, reinstated the criminal provisions, again expressly naming corporate agents in slightly different language. Id., at 2456. Appellee relies on statements made by Senator Sherman in the debate:

'Whether this law should extend to mere clerks, as was proposed in the third section (as reported by the Committee), is a matter of grave doubt. * * * To restrain and prevent the illegal tendency of a corporation is the proper duty of a court of equity. To punish the criminal intention of an officer is a much more difficult process and might be well left to the future. * * * These corporations do not care about your criminal statutes aimed at their servants. * * *' Id., at 2456, 2457, 2569.

However, the issue before the Senate at that time was not whether to exempt corporate officers from criminal prosecution but whether to omit criminal sanctions entirely. The objections raised that the addition of criminal penalties would result in strict construction in favor of legality and would inflict punishment for violations of vague and uncertain provisions-applied as well to persons acting for their own account, admittedly included within the Act as passed, as to those acting for corporations. Moreover, Senator Sherman was promptly overruled by a vote of 34-12, adopting the Reagan amendment as an amendment to the Sherman bill. Id., at 2611. A number of additional amendments rendered the bill quite unwieldy, see id., at 2655 (Senator Sherman), and it was submitted to the Committee on the Judiciary for tailoring, id., at 2731. The bill was redrafted in committee to its approximate present form and passed by a 52-1 vote, id., at 2901, 3145, 3153.

I am not persuaded, as argued by the appellee, that the greater margin of support for the final bill than for the Reagan bill indicates that the criminal liability of corporate officers was narrowed. Opposition to the Reagan bill was based in part on its specification of unlawful purposes that would render a combination a trust, id., at 2469 (Senator Reagan), 2561 (Senator Teller), which was omitted by the Committee, and in part on the inclusion of any criminal penalties at all, a feature common to the Reagan and the final bills which was accepted at the end in a spirit of compromise, as it was by Senator Sherman himself, id., at 2604, 2655. No Senator ever suggested, so far as can be found, that criminal penalties should be provided for corporations and for self-employed or 'ultra vires' individuals alone. Thirty-four Senators-a majority of the whole body-voted to include, via the Reagan bill, sanctions against officers acting for the corporation. The Committee's reduction of the explicit, but cumbersome, language of the Reagan bill to the simple and on its face equally all-encompassing 'every person' appears to have been simply a part of the general streamlining of the bill that took place in the Committee, with no intention of changing substance.

These and the further considerations dealt with in the opinion of THE CHIEF JUSTICE ^[3] lead to the conclusion that the indictment in this case must be sustained.

Notes

1. The opinion below is reported at 196 F.Supp. 155 (W.D.Mo.1961). In accord are United States v. A. P. Woodson Co., 198 F.Supp. 582 (D.D.C.1961), appeal pending, No. 1019, O.T.1961; United States v. Milk Distributors Assn., 200 F.Supp. 792 (D.Md.1961); United States v. American Optical Co., 1961 Trade Cases, par. 70,156 (E.D.Wis.1961), reversed sub nom. United States v. Kniss, 370 U.S., 719, 82 S.Ct. 1572; United States v. General Motors Corp., 1962 Trade Cases, par. 70,203 (S.D.Cal.1962), reversed sub nom. United States v. Staley, 370 U.S., 719, 82 S.Ct. 1572; and United States v. Engelhard-Hanovia, Inc., 204 F.Supp. 407 (S.D.N.Y.1962), appeal pending sub nom. United States v. Brown, No. 983, O.T.1961.
2. Moore v. States, 48 Miss. 147 (1873); Elsberry v. State, 52 Ala. 8, 10 (1875); Ex parte Schmidt, 2 Tex.App. 196 (1877); Cowley v. People, 83 N.Y. 464, 469 (1881); State v. Parsons, 12 Mo.App. 205 (1882); City of Wyandotte v. Corrigan, 35 Kan. 21, 26, 10 P. 99, 102 (1886). The only decision found to the contrary is Commonwealth v. Demuth, 12 S. & R. 389, 392 (Pa.1825), in which a particular statute was read not to impose a duty on individual officers. That this did not state a general rule even in Pennsylvania was made clear by the Supreme Court of that State in Commonwealth to Use of Lawson v. Ohio & P.R. Co., 1 Grant Cas. 329, 350 (1856) (dictum).
3. I find little support, however, for our conclusion in United States v. MacAndrews & Forbes Co., 149 F. 823 (C.C.S.D.N.Y.1906), or United States v. Winslow, 195 F. 578 (D.Mass.1912), despite some of the language in those opinions. Neither case squarely upholds criminal responsibility in a 'representative' capacity. Among other things the court in MacAndrews & Forbes declared it possible to infer from the indictment that the corporations were 'doing one thing and the individuals another at or about the same time, which things were utterly different * * *. It is conceivable that the evidence may show that the individual defendants were not free agents, but acted under a species of corporate coercion, for which they should not be held personally responsible; but it is impossible to arrive at this conclusion on demurrer.' 149 F., at 832. In Winslow, the indictment charged the officers with controlling the industry 'by the device and means of and through and in the names of' certain corporations. 195 F., at 591. Thus all that was held in MacAndrews & Forbes, and all that needed to be held in Winslow, was that corporate officers are not shielded from criminal responsibility when they act on their own individual account or when they use a sham corporation as a means of furthering their personal ends.

Nor do I find much weight in the decisions since 1914 upholding the applicability of the Sherman Act to representative crimes of corporate officers; while the penalties for violating the two statutes were identical there was little incentive to argue to the contrary. The most that can be said of the decisions since 1890 is that they have suggested no doubt of the applicability of the Sherman Act to corporate officers acting only in a representative capacity.