"confession and avoidance" plea in a civil case under the old
common law pleadings.
I am assuming since the government does not oppose the
acceptance of the plea, and in fact agrees that the Court should
accept such a plea, that its position is that there is
justification for the acceptance of such a plea and that there is
no harm to the public. But, on the other hand, we might
conjecture that there will be a tremendous advantage to the
defendant by the Court accepting its nolo contendere plea.
In view of the statements of counsel for the government made
both orally and in written briefs and in view of the
interpretation that the Court places on the government's position
in not opposing such a plea that no public harm would ensue in
accepting the nolo contendere plea and in spite of this Court's
disfavor of such a plea, I did accept the plea of nolo contendere
of this defendant. The record so shows.
Each party to this cause submitted material relating to
sentencing ex parte in camera on December 3, 1965, for this Court
to consider in imposing a penalty on this defendant for violating
the Sherman Anti-Trust laws of the United States.
For all purposes so far as penalties are concerned, a plea of
nolo contendere is in effect a plea of guilty before this Court.
The fact that the Court has agreed to accept a nolo contendere
plea does not mean that the defendant can expect to receive any
less or any more consideration than it would have received had
the plea been that of guilty. For all intents and purposes the
defendant stands before this Court convicted by its own plea.
The grand jury for the Eastern District of Illinois returned a
nine count indictment. The defendant has plead nolo contendere to
Counts 1, 2, 3, 4 and 7 and thereby recognizes that by tendering
pleas of nolo contendere to the foregoing counts of the
indictment, it is admitting its guilt to those counts for
purposes of this criminal case. I have been informed that the
government will dismiss Counts 5, 6, 8 and 9.
The grand jury returned an indictment containing many similar
charges with respect to each of the three industries which 3M
undertook to dominate, namely, (1) pressure sensitive tape, (2)
magnetic recording media and (3) aluminum presensitized
lithographic plates, by employing or attempting to employ in each
of them a system of coercing competitors into accepting highly
restrictive license agreements.
With regard to the tape industry — Count 1 charges an attempt
to monopolize; Count 2, conspiracy to restrain trade; and Count
3, conspiracy to monopolize.
With regard to the magnetic recording media (concerning which
this Court has some knowledge, having heard Armour Research
Foundation of Illinois Institute of Technology v. C.K. Williams &
Co., 170 F. Supp. 871) — Count 4 charges an attempt to monopolize.
With regard to the lithographic plates — Count 7 charges an
attempt to monopolize.
Defendant states that all of the charges in the five counts to
which it pleaded nolo contendere are repetitious. The charges of
necessity would have to be repetitious if the defendant was
repetitious in violating the law. One of the basic charges in
each of the three separate industries is "attempt to monopolize"
such industry (they being Counts 1, 4 and 7). Each such industry
is an important factor of our economy. It is not reasonable that
the three attempt counts should be considered but one count.
There were three attempts to monopolize the business of three
basic industries in our economy and they will be dealt with as
Counts 2 and 3 allege variations of the attempts to take over
the pressure sensitive tape industry. Since Counts 2 and 3 are
variations of Count 1, they will be dealt with as such.
Defendant says that 3M has never before been indicted or
criminally with any violations of the anti-trust laws in any of
its multitudinous product lines. Normally, when companies are
formed and while they are in their infancy, they usually do not
become overbearing. It is only after they have attained status
that they sometimes lose their sense of equilibrium and attempt
to get rid of the little fellow with a number of squeeze plays.
Defendant's course of conduct of which complaint is made began in
the early 30's. It gained momentum and seems to have continued to
approximately the date of the indictment. By its plea the
defendant admits that there was one continuous act of law
violation beginning in the early 30's. What difference does it
make if there are several law violations within those years or if
there is a continuous one extending over several decades. There
is no difference. The books are replete with cases filed wherein
3M is party plaintiff. If it did not get its way, it immediately
filed suit — sometimes several suits against the same defendant.
3M's position seems to have been one of rule or ruin. If there
was a business that was interfering with 3M's operations,
meetings were set up and if 3M could not get its way through
persuasion, then threats, coercion and intimidation were used. If
these were to no avail, a suit would be filed and in some
instances the defendant would capitulate. This meant that the
defendant either became subservient to 3M or else quit business.
In other instances the threats to the customers, salesmen,
distributors, etc. of a marked company would so frighten them
that they would cease handling or selling the product to the
detriment, injury and damage of such marked company.
It is the opinion of this Court that the activities of 3M
should be watched by the Justice Department for some time to come
relative its trade practices.
We hope there was no arrangement or agreement between the
government and 3M in this case which caused it to take the turn
that it did after the indictment was returned.
This Court in Armour Research Foundation of Illinois Institute
of Technology v. C.K. Williams & Co., 170 F. Supp. 871, 887, said:
"The Court has examined the record and all other
evidence presented during the course of the extended
trial, concerning the alleged violation of the
Anti-Trust Laws of the United States by and between
the plaintiffs, and determines that the charges of
Anti-Trust violation have not been substantiated.
However, the fisherman was at the water's edge, had
made his cast, but no fish took the bait."
It isn't difficult to read between the lines of that decision and
determine the Court's feelings relative possible anti-trust
violations irrespective of the final holding.
Able and competent counsel for both sides have presented to
this Court their respective Pre-Sentence Memoranda couched in
terms most suitable to their side of the case. After all of the
statements are considered and digested and stripped of their
unilateral interpretations the bare and basic fact remains that
the defendant violated the Sherman Act and that such violation
continued throughout a term of years.
The defendant has advanced a number of theories as to why this
Court should be lenient even after admitting that the violation
of law continued over a number of years.
Congress in its wisdom saw fit to amend the Sherman Anti-Trust
Act in 1955 by increasing the criminal penalties from $5,000 to
$50,000 and to permit the courts in their discretion to impose a
penalty up to the maximum.
This Court is not bound by any of the recommendations or
suggestions made by either party as to what the penalty should
be. But they are helpful in that it gives to the Court the ideas
of the parties who have lived with this case for many years, know
most of the facts and have given to this Court their considerate
opinion as to what the penalty should be, based upon such facts.
It is, therefore, the judgment of this Court that the
defendant, Minnesota Mining and Manufacturing Company, be and it
is hereby fined the sum of Fifty Thousand Dollars ($50,000) on
each of Counts 1, 4 and 7 and that it be and it is hereby fined
the sum of Twenty Thousand Dollars ($20,000) on each of Counts 2
and 3, or in the aggregate the sum of One Hundred Ninety Thousand
Dollars ($190,000) and costs, payable forthwith.
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