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UNITED STATES v. FRUEHAUF ET AL.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK. No. 91.
Argued January 11, 1961.
Decided February 20, 1961.
Several employers were indicted in substantially the language of the statute for violating 302 of the Labor Management Relations Act, 1947, by paying and delivering a sum of money to the president of a labor organization representing some of their employees who were engaged in an industry affecting commerce; and the president of the labor organization was indicted, substantially in the language of the statute, for having received and accepted the sum of money from the employers. The District Judge ruled that a trial memorandum filed by the Government constituted a judicial admission that the transaction was a loan, and he dismissed the indictment on the ground that the statute did not apply to a loan. The Government appealed directly to this Court under 18 U.S.C. 3731, and the sole question presented in its jurisdictional statement was "whether a loan of money comes within the . . . prohibitions" of 302. After argument, the Solicitor General made representations to the Court which indicated that he considered the Government free, in the event of remand, to prove under the indictment that the transaction came within the statute by virtue of its particular facts, from which it might have been found that it lacked various characteristics of a bona fide loan. Held: Inasmuch as the record before this Court presents only an abstract question, the ruling dismissing the indictment is set aside and the case is remanded for trial upon the indictment. Pp. 147-159.
Judgment set aside and case remanded.
S. Hazard Gillespie, Jr. argued the cause for the United States. On the brief were Solicitor General Rankin, Assistant Attorney General Wilkey, Beatrice Rosenberg and Eugene L. Grimm.
Louis Nizer argued the cause for appellees. With him on the briefs were Charles Seligson, Cyrus R. Vance, [365 U.S. 146, 147] Mortimer A. Sullivan, Albert C. Bickford, Charles S. Burdell, Donald McL. Davidson, James D. Walsh, Albert I. Schmalholz and Melvin Lloyd Robbins.
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
On June 17, 1959, an indictment in two counts was filed in the United States District Court for the Southern District of New York against appellees Roy Fruehauf, Fruehauf Trailer Co., Burge Seymour, Associated Transport, Inc., and Brown Equipment and Manufacturing Co. (hereinafter referred to collectively as the Fruehauf-Seymour group) 1 and appellee Dave Beck. The first count, based on 302 (a) of the Labor Management Relations Act, 1947, 61 Stat. 157, 29 U.S.C. 186 (a), which makes it unlawful "for any employer to pay or deliver, or to agree to pay or deliver, any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce," 2 charged that on or about June 21, 1954, each of the appellees of the Fruehauf-Seymour group, employers of employees engaged in an industry affecting commerce,
Having read this portion of the Government's memorandum for the purpose of making known to the appellees "the government's position, at least on the matter of the loan," the district judge ruled that "in my view that statement by the government is a judicial admission that the transaction was a loan. As a matter of fact, to verify that belief, the government later argues in its brief that the use of the money was a thing of value. So at least, so far as I am concerned, there can be no dispute that the government's position is that this was a loan, and we are now resolved to the question of whether a loan under these circumstances was illegal under the statute . . . ."
On this record, the question put to the Court for our direct review under 18 U.S.C. 3731 is left unclear. An indictment cast in statutory language has been dismissed for failure to charge an offense within the meaning of the legislation whose words it employs, on the ground (as expressed in the ruling of the District Court) that the Government's trial memorandum constituted a "judicial admission that the transaction was a loan." The portions of the trial memorandum upon which this ruling rests establish, at most, that approximately a year after the Fruehauf-Seymour group transferred $200,000 to Beck, Beck transferred $200,000 back to the Fruehauf-Seymour group, with $4,000 "interest," "approximately half of the interest due." On the basis of such facts, putting aside of course all questions of variance between indictment and proof that might emerge at a trial, seemingly the Government might have attempted to make out violations of 302 on any of a number of alternative theories: (1) that the "loan" was a sham, a mere ruse and covering device intended to pass from Fruehauf and Seymour to Beck a gift or bribe of money; (2) that irrespective of intention, the acceptance by the Fruehauf-Seymour group of $200,000 plus $4,000 interest in satisfaction of Beck's obligation to repay the "loan" with twice [365 U.S. 146, 156] that amount of interest constituted a forbidden delivery of the unpaid interest to Beck; (3) that irrespective of the terms of Beck's note, the loan of a large sum of money at a rate of interest significantly lower than the going commercial rate effected a delivery to Beck of the difference between the interest payable at a commercial rate and the interest agreed on; (4) that irrespective of the interest rate, the transaction - by which Fruehauf and Seymour made available a large, unsecured loan which Beck could not have gotten through normal financing channels - resulted in the delivery to Beck of a "thing of value," namely, the benefit of having the money in hand; (5) that irrespective of the particular incidents of this transaction, all loans, as such, violate the statute, either because the use of money is itself a "thing of value" which may not in any case be delivered by an employer to his employees' representative, even in consideration of the payment of interest, under the statute, or because every loan, qua loan, comports the "delivery" of the thing loaned, which delivery (regardless of repayment) violates 302. 6 However, the District Court's ruling that, by admission of the Government, the transaction was a "loan," appears to mean that, in light of its trial memorandum, the Government is foreclosed from pursuing some, probably most, of these theories. Which among them the court thus viewed as closed remains uncertain. On the other hand, in a representation to this Court, the Solicitor General does not leave it unequivocally clear, so as to preclude controversy in the lower court were the case to be allowed to go to trial, which (if not all) of the theories he would regard as still open. The only issue [365 U.S. 146, 157] which we can be sure that the District Court decided as a matter of construction of the statute (as distinguished from those issues which the District Court held could not be proved under the indictment consistently with the Government's "judicial admission") is the issue posed by the fifth theory above - the issue posed, in its most evidently abstract form, by the question presented here in the Government's Jurisdictional Statement - "whether a loan of money," every loan of money, as such, "comes within the [statute's] . . . prohibitions."
We do not reach that question on this appeal. For we cannot but regard it - abstracted as it has become, in the course of these proceedings, from the immediate considerations which should determine the disposition of appellees' motions to dismiss an indictment incontestably valid on its face - as other than a request for an advisory opinion. Such opinions, such advance expressions of legal judgment upon issues which remain unfocused because they are not pressed before the Court with that clear concreteness provided when a question emerges precisely framed and necessary for decision from a clash of adversary argument exploring every aspect of a multi-faced situation embracing conflicting and demanding interests, we have consistently refused to give. See Parker v. Los Angeles County, 338 U.S. 327 ; Rescue Army v. Municipal Court, 331 U.S. 549 ; United Public Workers v. Mitchell, 330 U.S. 75 ; Alabama State Federation of Labor v. McAdory, 325 U.S. 450 ; Arizona v. California, 283 U.S. 423 .
Nor does the record raise questions concerning the sufficiency of the indictment which would require, in an appropriate case, that the case be sent to the Court of Appeals, pursuant to 18 U.S.C. 3731. For this is not a case in which the District Court has construed the allegations of an indictment, or limited the scope of the Government's presentation by construction of a bill of [365 U.S. 146, 158] particulars or the prosecutor's opening statement. In the present case we cannot know with reference to what supposed factual circumstances the District Court attributed to the Government the admission that the Beck-Fruehauf-Seymour transaction constituted a "loan." Without spelling out in detail the diverse argumentative possibilities that underlie the judge's attribution of a "loan" as an unequivocally defined concept to the Government, it suffices to say that experience in instances of similar unclarity under the Criminal Appeals Act counsels the wisdom of abstaining from reviewing construction of a criminal statute on so cloudy a record as is now before the Court. Compare United States v. Colgate & Co., 250 U.S. 300 , with United States v. A. Schrader's Son, Inc., 252 U.S. 85 .
The core of the difficulty in the present case is that the record does not preclude the Government from attempting to prove that the transaction in question came within the statutory ban by reason of any or all possible theories. Of course, an undertaking by counsel here, however honorable its impulse, cannot bind the Government in the future. And the District Court's ruling, insofar as it purports to close any avenues open to the Government under the indictment - not in view of specifications made in a bill of particulars or an opening statement, but on the basis of a "judicial admission" culled from a pretrial memorandum - was impermissible and constitutes an insufficient basis to justify the exercise of this Court's jurisdiction on direct appeal.
We do not think, however, that the purpose of Rule 15 of this Court, under which the Government filed the Jurisdictional Statement which brought the case here, requires us to penalize the Government by dismissing this appeal, simpliciter. This Court has the power, expressly provided in 28 U.S.C. 2106, to "vacate, set aside or [365 U.S. 146, 159] reverse any judgment, decree, or order of a court lawfully brought before it for review, and . . . remand the cause and . . . require such further proceedings to be had as may be just under the circumstances." The exercise of that authority is appropriate here. The ruling dismissing the indictment is set aside and the case is remanded for trial upon this valid indictment.
[ Footnote 2 ] Section 505 of the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 537, enacted September 14, 1959, amended this section to read, in pertinent part:
[ Footnote 3 ] Count Two of the indictment charged that "On or about the 21st day of June, 1954, . . . Dave Beck, . . . a representative of employees who were engaged in an industry affecting commerce . . . did unlawfully, wilfully and knowingly receive and accept and agree to receive and accept from [the several appellees of the Fruehauf-Seymour group], employers of the aforesaid employees, a thing of value, to wit, money, in the amount of $200,000." Section 302 (b), as it was in effect at the time of the transaction alleged, provided: "It shall be unlawful for any representative of any employees who are employed in an industry affecting commerce to receive or accept, or to agree to receive or accept, from the employer of such employees any money or other thing of value." The Labor-Management Reporting and Disclosure Act of 1959, 505, amended the section to cause it to parallel the amended version of 302 (a), note 2, supra.
[ Footnote 4 ] The memorandum has not been made a part of the record in this Court. As read into the record, in part, by the district judge, it appears to have been prefixed by the statement:
[ Footnote 5 ] This statement of the question differs from that in the Government's Notice of Appeal, which stated the issue to be "Whether the payment of money by an employer (of employees in an industry affecting commerce) to a representative of his employees, intending repayment of said money with interest, is within the proscriptions of Section 302 (a) and (b) of the Labor Management Relations Act, 1947 . . . ."
[ Footnote 6 ] Subsection (c) of 302 excepts five enumerated situations from the section's broad ban on delivery or receipt of any thing of value: e. g., 302 (c) (3) provides that the section shall not be applicable "with respect to the sale or purchase of an article or commodity at the prevailing market price in the regular course of business."
MR. JUSTICE STEWART, dissenting.
The dismissal of the indictment in this case was placed squarely upon the district court's construction of a criminal statute. Specifically, the court ruled that a loan of money did not fall within the prohibition of 302 of the Labor Management Relations Act of 1947 (before its amendment in 1959). In bringing the appeal directly here, the Government eliminated from the case any possible questions other than the correctness of the district court's construction of the underlying statute - to which this Court's jurisdiction is limited under the Criminal Appeals Act. 18 U.S.C. 3731. United States v. Keitel, 211 U.S. 370, 397 -398; United States v. Patten, 226 U.S. 525, 535 , 540; United States v. Colgate & Co., 250 U.S. 300, 301 , 306; United States v. Borden Co., 308 U.S. 188, 192 -194. "[I]n reviewing a direct appeal from a District Court under the Criminal Appeals Act, supra, our review is limited to the validity or construction of the contested statute. For `The Government's appeal does not open the whole case.'" United States v. Petrillo, 332 U.S. 1, 5 .
I think the issue whether a loan of money came within the proscriptions of the statute is before us now and should be decided. I further think this is the only issue properly before us. However, since the Court thinks otherwise, I am persuaded that an expression of my views on the subject would not be appropriate. [365 U.S. 146, 160]