The opinion of the court was delivered by: Harlington Wood, Jr., District Judge.
MEMORANDUM, FINDINGS OF FACT, AND CONCLUSIONS OF LAW
In a preliminary way, this case involves an internal dispute of
a private association, the American Angus Association, a not for
profit organization. Plaintiffs, successful purebred Black
Aberdeen Angus breeders, are indefinitely suspended members for
allegedly failing to obey an Association rule relating to blood
typing, and of one of its animals in particular. The Plaintiffs
have in effect been put out of business by the Association's
action, a group boycott. But there is more to this story.
The function of this Court is limited as it does not intend to
sit generally as a Court of Review as to the merits of the
Association's actions nor to substitute its judgment as to the
merits of the allegations. That is purely Association business.
That does not mean, however, in circumstances as will be seen
to exist in this case, that this Association is free from all
judicial interference in its treatment of its own members.
It must be recognized that this Association, dedicated to the
development of purebred cattle of a particular, valuable and
outstanding type, performs an important service not only to its
members, but it also involves strong elements of public interest.
Similar associations for other breeds of animals have likewise
helped to advance the quality of American livestock.
Some of the associations have competing associations, but the
American Angus Association does not. It is a complete and
absolute monopoly. Purebred Black Aberdeen Angus is big business,
but a person is not in the purebred Black Aberdeen Angus business
in any degree unless he is a member in good standing of this
Association. This Association holds the reputations and the
livelihood of its members within its absolute grasp. Such an
Association admittedly must have the power to police itself and
its members to accomplish its legitimate purposes. Therefore, the
Association argues that, "If it cannot enforce its rules, the
Association cannot serve its purposes and might as well fold up."
That is true as far as it goes, but there is more to it than that
as can be seen in the circumstances of this case. This is not a
local social club, but an association of immense power and
With that power and prestige, which the Association has
developed over the years and no doubt deserves, goes an equal
responsibility to clearly define and to use that power fairly and
in accordance with at least the minimum requirements of due
This does not imply that the same technical judicial standards
as exist in Court trials must be applied to Association rules and
hearings, but it does mean that associations of this size and
power must adhere to certain basic principles of fairness and due
process which laymen can understand and administer. As has been
said in other contexts, what affects the rights of one of its
members affects all the members. This Association will be
strengthened, not harmed, by a judicial requirement that the
Association's rules, such as it determines to best serve its
purposes, be clear, fair and adequate, and, secondly, that they
be enforced with openness and fairness and with procedural due
No wrongdoing attributable to personal malice is intended to be
found against any of the individual Defendants involved. That is
to be distinguished, however, from fault, negligence and a lack
of understanding of their own powers and responsibilities. The
Association officers must recognize in particular the gravity of
any but the most considered and judicial use of their powers.
Old, ad hoc, informal and pro forma committee procedures
bordering on the arbitrary, without the opportunity for the
challenged member to know exactly what the full charge is and to
test and to meet it if he can in a full, fair, and
open hearing before the decision is reached are outmoded and
dangerous. Those who conduct the hearings and make the decisions
must be unbiased and maintain open minds until they have heard
the whole story in open hearings with the challenged member, who
has been given adequate notice and time to prepare. This Court
differs with the view of Defendants as to what standards are now
required for such an Association in such matters in the light of
current and expanding concepts of due process. It is time for
such associations to re-evaluate their practices so that the
pursuit of their worthy goals will be furthered by reasonable,
fair and just rules and procedures.
In this particular case, all parties agreed the narrow issue to
be decided had to do only with whether and under what
circumstances an Association rule about blood typing had
allegedly been violated by Plaintiffs as determined by
Association hearings resulting in Plaintiffs' indefinite
suspension. But underlying all the actions and circumstances made
known to this Court runs the strong underlying and coloring
current, sometimes openly, that Plaintiffs had two bulls, one
with pure blood and one without, and the one without was the
prize winner taken to shows and the other was the one used to
pass the prior blood tests. This Court is not going to pass on
whether any rule was in fact broken by the Plaintiffs, and
certainly will not now attempt to resolve any question about the
existence or identity of two bulls. It will confine itself only
to the adequateness and fairness of the rules and the due process
aspects of the hearings. However, as a practical matter, this
underlying current, even though unsubstantiated in this record,
cannot be entirely overlooked. This Court sees the resolution of
those substantive matters to be only for Association
determination, provided "due process" is followed. That the
Association may have in fact arrived at a correct determination
and have fully adequate reasons for its actions is not
controlling here. Silver v. New York Stock Exchange,
373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963).
In this difficult practical situation, the Court is earnestly
endeavoring only to apply a little horse sense to this bull
Against this brief general background, the case is now
considered in more detail.
This opinion will constitute the Court's findings of fact and
conclusions of law for the purposes of Federal Rules Civil
1. The Defendant, American Angus Association, is an Illinois
not for profit corporation engaged in interstate commerce and
maintaining offices in St. Joseph, Missouri.
2. This Association is the sole entity in the United States for
the registration of pedigrees of purebred Black Aberdeen Angus
cattle. By the fact of such registration, Black Aberdeen Angus
cattle are most desirable and the value of the animals is
significantly increased thereby.
3. The Association has a total monopoly on the registration of
pedigrees of purebred Black Aberdeen Angus cattle in the United
States. If one desires to engage in the business of breeding,
raising, showing, and selling registered purebred Black Aberdeen
Angus cattle, he must be a member of the American Angus
4. Plaintiffs are an Illinois partnership, McCreery Angus
Farms, formed in 1971, and engaged in the business of breeding,
registering, raising, exhibiting, purchasing, and selling
registered purebred Black Aberdeen Angus cattle. John McCreery is
the managing partner.
5. During the years 1972 and 1973, McCreery Angus Farms made
great strides and developed a highly favorable reputation in the
Black Aberdeen Angus breeding business.
6. Of particular significance to the success of the show
activities of McCreery Angus Farms was its November, 1972, bull
calf, Billerose Lad 932, Tattoo 3634. Billerose Lad was
designated bull calf champion at every exhibition where he was
shown during 1973.
7. As Plaintiffs began to achieve success, rumors concerning
purity and authenticity of Plaintiffs' show herd reached the
American Angus Association's offices. To dispel such rumors,
Plaintiffs allowed for blood typing of their entire show herd in
April of 1973 under supervision agreed to by Plaintiffs and the
8. Blood samples were drawn from all 48 animals in Plaintiffs'
show herd on or about April 30, 1973, under the supervision of
Wayne Cooper, the Registrar of the Association, and Dale Baird,
the Regional Representative of the Association. The samples were
labeled by Cooper and mailed by him to the Department of Dairy
Science Laboratory of Ohio State University at Columbus, Ohio.
The Department of Dairy Science Laboratory of Ohio State
University, under the supervision of Dr. H.C. Hines, is the
Association's exclusive agency for laboratory analyses to
determine purity of breed and accuracy of recorded parentage of
blood samples from Black Aberdeen Angus cattle.
9. Following a telephone conversation between Wayne Cooper and
Dr. H.C. Hines on May 30, 1973, Hines sent Cooper a letter dated
June 1, 1973 (Pl. Ex. 1), which Cooper received on June 4, 1973.
Plaintiffs were not sent a copy of that letter. That letter, with
accompanying laboratory analysis reports, reported to Cooper the
results of the blood typing of Plaintiffs' show herd. Following
a second telephone conversation between Cooper and Hines on June
5, 1973. Hines sent the identical laboratory analysis reports to
Plaintiffs with a different covering letter dated June 7, 1973
(Pl. Ex. 2). Hines' letter to Plaintiffs omitted certain
conclusions favorable to Plaintiffs and changed the wording with
respect to certain questioned animals from a neutral to a totally
10. Out of 48 animals so blood typed, 43, including Billerose
Lad, were found to be purebred Black Aberdeen Angus. The
registration for the remaining five animals was immediately
surrendered by the Plaintiffs, and none of these played any role
in subsequent actions arising in this controversy.
11. Plaintiffs' Exhibit 31, the Association's Breeder's
Reference Guide, contains the Bylaws and Rules of the Association
as of January 1, 1973. No amendments relevant to this action were
adopted between January 1, 1973, and October 23, 1973.
12. On July 27, 1973, Wayne Cooper received an anonymous letter
dated July 25, 1973, which made certain charges concerning
misrepresentations of the purity and authenticity of Plaintiffs'
animals, specifically Billerose Lad. He came into possession of
another anonymous letter dated July 30, 1973, which contained
substantially identical information.
13. A meeting of the Executive Committee of the Board of
Directors of the Association was convened on August 4,
specifically to discuss McCreery Angus Farms and these rumors. At
this meeting, these two letters were presented to the Executive
Committee as a complaint against McCreery Angus Farms,
purportedly pursuant to Article VII of the Bylaws of the
Association. No notice of such complaints were given to
14. It was then decided to type all of the Plaintiffs' bulls,
including Billerose Lad, being shown in Louisville at the
American Angus Futurity from August 4 to August 7, at the
conclusion of the judging on August 7 with no notice to
Plaintiffs prior to that time. This action of the Executive
Committee was in violation of Article VII of the Association's
Bylaws, in that any investigation by the Executive Committee
must, by the terms of Article VII of the Association's Bylaws, be
initiated by a complaint
by a member of the Association or a party in interest.
15. On August 7, 1973, a request to blood type the animals in
question was made of Tom Miller, an employee of McCreery Angus
Farms, who refused such request by advising that he had no
authority to permit such action.
16. On August 10, 1973, the Executive Committee of the
Association met by telephone and resolved to attempt the blood
typing of Billerose Lad at the forthcoming Illinois State Fair in
Springfield. In anticipation of a similar refusal to submit to
blood typing at Springfield, a letter was drafted and dated that
same day directing John McCreery to appear before the Executive
Committee on August 25, 1973, to show cause why he had failed to
allow blood samples to be taken from Billerose Lad in Louisville,
Kentucky, and at the Illinois State Fair in Springfield. This
letter was placed in a sealed envelope and delivered to the
Association's regional representative in Illinois, Dale Baird,
who was instructed to deliver the envelope to John McCreery or
his employees at Springfield.
17. Plaintiffs John McCreery and Max Reynolds were present at
the Illinois State Fair for a total of eight hours during the
morning and afternoon of August 12, 1973. They observed Baird on
at least two occasions during that day and exchanged greetings
with him at least once during that day, but Baird said nothing to
either owner concerning his instructions to request a blood
sample from Billerose Lad, or the fact that he was in possession
of a sealed letter addressed to John McCreery.
18. On the morning of August 13, 1973, Baird approached Tom
Miller who was present at the Illinois State Fair with various
animals from the McCreery show herd including Billerose Lad.
Baird attempted to deliver the sealed envelope which unbeknownst
to both Miller and Baird, contained the notice of hearing. Miller
told Baird he had no authority to deal with him, whereupon Baird
departed to find John McCreery.
19. The sealed letter dated August 10, 1973, was delivered on
August 13 to John McCreery present at the Springfield Fair,
requesting John McCreery to appear at a hearing before the
Executive Committee to show cause why he failed to allow blood
samples to be taken from Billerose Lad in both Louisville and
20. The hearing before the Executive Committee was held on
August 25, 1973. At the beginning of the hearing on August 25,
1973, Sam Fullerton, Vice President of the Association and
Chairman of the Executive Committee, ...