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UNITED STATES v. GREYHOUND CORPORATION

January 22, 1974

UNITED STATES OF AMERICA, AND INTERSTATE COMMERCE COMMISSION, PETITIONERS,
v.
THE GREYHOUND CORPORATION ET AL., RESPONDENTS. UNITED STATES OF AMERICA, AND INTERSTATE COMMERCE COMMISSION, PETITIONERS, V. THE GREYHOUND CORPORATION, AND GREYHOUND LINES, INC., RESPONDENTS.



The opinion of the court was delivered by: Robson, Chief Judge.

 
   MEMORANDUM AND ORDER ON ISSUE OF SANCTIONS FOR CRIMINAL AND
                         CIVIL CONTEMPT

On June 27, 1973 this court issued its memorandum and order finding the corporate respondents in criminal contempt for violation of paragraphs 1, 3, 4, 5, and 6 of the three-judge court order dated February 5, 1970.*fn1 This court also found the corporate and individual respondents in civil contempt for continuing violations of paragraphs 3, 4, and 5. The court found neither criminal nor civil contempt as to paragraphs 2, 8, and 9. Having made its findings on the issue of contempt, the court must now direct its attention to the issue of appropriate criminal and civil sanctions.

I. SANCTIONS FOR CRIMINAL CONTEMPT

The purpose of a criminal contempt proceeding is to vindicate the authority and dignity of the court. While there is no precise limit upon the amount of fine a district court may impose in punishment for criminal contempt, Brown v. United States, 359 U.S. 41, 79 S.Ct. 539, 3 L.Ed.2d 609 (1958), the Supreme Court has elaborated standards to guide district judges in determining the amount of monetary penalty which is appropriate. In accordance with those guidelines the court hereby fines the Greyhound Corporation $100,000 and Greyhound Lines, Inc., $500,000 for their criminal contempt.

In United States v. United Mine Workers, 330 U.S. 258, at 303-304, 67 S.Ct. 677, 701, 91 L.Ed. 884 (1947), the Court stated:

  "In imposing a fine for criminal contempt, the
  trial judge may properly take into consideration
  the extent of the willful and deliberate defiance
  of the court's order, the seriousness of the
  consequences of the contumacious behavior, the
  necessity of effectively terminating the
  defendant's defiance as required by the public
  interest, and the importance of deterring such
  acts in the future. Because of the nature of
  these standards, great reliance must be placed
  upon the discretion of the trial judge.
  "It is a corollary of the above principles that a
  court which has returned a conviction for
  contempt must, in fixing the amount of a fine to
  be imposed as a punishment or as a means of
  securing future compliance, consider the amount
  of defendant's financial resources and the
  consequent seriousness of the burden to that
  particular defendant."

As noted in this court's lengthy Memorandum and Order of June 27, 1973, Greyhound displayed a contemptuous reluctance to even commence compliance with the order of February, 1970. Much of Greyhound's real compliance did not occur until months after the contempt petitions were filed, and with respect to some paragraphs Greyhound had not complied even by June, 1973. In light of the fact that the three-judge court had ordered respondents to do substantially the same things which they had been ordered to do by the ICC in late 1968, there was absolutely no reason why compliance could not be effected soon after Greyhound had exhausted its right of judicial review of the ICC order. Once that avenue of relief was closed, Greyhound had an affirmative duty to immediately comply with the injunction of the three-judge court. This court's Memorandum of June 27, 1973 abundantly illustrates that Greyhound failed to fulfill its obligations to this court in a timely and expeditious manner. Rather than immediately comply with all elements of the order, Greyhound either tried to smoke-screen its non-compliance, or it acted under narrow interpretations of the order, or it simply did nothing. However, the law is clear that a corporation may be found guilty of criminal contempt for reckless indifference to achievement of compliance, for unconscionable delay, and for acting under twisted interpretations of an order, even though it may avoid the appearance of direct defiance, United States v. Gamewell Co., 95 F. Supp. 9, 13 (D.Mass. 1951), United States v. Custer Channel Wing Corp., 247 F. Supp. 481, 496 (D.Md. 1965), aff'd. 376 F.2d 675 (4th Cir. 1967)

In determining the extent of Greyhound's willful defiance of the order, the court recognizes Greyhound's record of purposeful non-action, protracted resistance, and emasculating interpretations of the order. The court also notes Greyhound's "paper compliance" program and the reluctance with which Greyhound's top management became actively involved in securing compliance with the order. All of this suggests that Greyhound's failure to comply with certain parts of the order was deliberate. Top level executives could not remain aloof and expect lower-echelon employees to comply with the order. This is particularly true when many of those employees were not even made aware of the existence of the order until after the filing of the contempt petitions.

Under Mine Workers, the second factor the court must consider is the seriousness of the consequences of Greyhound's contumacious conduct. Two direct consequences flowed from Greyhound's contempt: first, Greyhound's only competitor in the Pacific Northwest was threatened with destruction and, second, the evidence reveals that efficient bus service in the Pacific Northwest was disrupted by Greyhound's conduct. There is no doubt that large numbers of bus travelers were inconvienced by Greyhound's contempt.*fn2

The third factor under Mine Workers relates to the element of deterrence. Materials submitted by Greyhound to date indicate that a large fine is not needed to terminate Greyhound's contempt. It appears that Greyhound has taken substantial steps toward achieving full compliance with the order.*fn3 However, the court must also consider the deterrent effect its fine might have on other corporations which may be tempted to flout a federal court order. Litigants must know that there is no profit to be made in defying court orders and that in the long-run compliance will cost less than defiance. Thus, the court is constrained to impose a substantial fine — one that will have more than an "inconsequential effect" — upon Greyhound. Cf. United States v. R.L. Polk, 438 F.2d 377 (6th Cir. 1971).

This court is of the opinion that a total fine of $600,000 is not beyond the ability of the corporate respondents to pay. The Greyhound Corporation's total earnings in 1970, 1971, and 1972 approximates $192,886,440. Greyhound Lines, Inc., the bus operating subsidiary, earned approximately $105,772,840 over the same period.*fn4 While Greyhound's size and profits were irrelevant in determining its guilt or innocence, the extent of its financial resources is relevant not only in determining its ability to pay, but also in estimating the amount of fine which will be sufficient to deter Greyhound, or a company of similar size, from committing future acts of criminal contempt.

Greyhound contends that its violations of the order were not willful in the sense that it knew its actions were in violation of the order. Rather, Greyhound argues that it was found to be in criminal contempt for pursuing plausible, but mistaken courses of action. In light of the history of ...


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