Before SWAN, WATERMAN and MOORE, Circuit Judges.
SWAN, Circuit Judge: The appellants were convicted on both counts of a two count indictment returned on January 31, 1957, charging violations of sections 1 and 2 of the Sherman Act, as amended, 15 U.S.C.A. §§ 1, 2. After pleading not guilty, the sixteen defendants waived trial by jury. Trial began before Judge Palmieri on January 20, 1958 and the Government rested on March 12. The defendants then moved for acquittal. Their motions being denied, they rested without introducing any evidence. On June 16, 1958 the trial judge filed findings of fact and conclusions of law which denied the motions for acquittal and found all the defendants guilty. Fines aggregating $451,000 were imposed, and four individual defendants were given short prison sentences and were ordered to pay the costs of the prosecution. Each defendant duly appealed from the judgment against him. Thereafter, on November 20, 1959, all defendants moved for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure. Their motions, submitted on affidavits, were argued in January 1960 and were denied on April 25, 1960. From this order the defendants have also appealed.
The record covering both appeals presents many questions. Various legal points are common to several appellants, and the court wishes to express to counsel its appreciation of their skill in having so organized their briefs and arguments as to avoid unnecessary repetition.
The defendants-appellants are eight corporations engaged in the linen supply business in New York and/or New Jersey (herein referred to as "linen supplier defendants"), two incorporated trade associations referred to respectively as "New York Institute" and "New Jersey Council" and six individuals, of whom four are officers of one or more of the linen supplier defendants and the other two are respectively the secretary of the New York Institute and the secretary of the New Jersey Council.
The linen supply business consists of periodically delivering to customers, such as hotels, restaurants, barbershops and doctors' offices, supplies of clean linen and picking up soiled linen to be laundered and returned to the customer clean. Frequently the linen supplied to a customer is owned by the linen supplier and when this is the case it may involve a substantial investment by the linen supplier.
Count one of the indictment charged that beginning in or about 1943 and continuing thereafter to the date of the return of the indictment the defendants and unnamed co-conspirators engaged in an unlawful conspiracy to restrain interstate commerce in linen supplies in violation of section 1 of the Sherman Act, as amended, and agreed to allocate customers among themselves, to refrain from competing with each other for customers so allocated, to impede, injure, obstruct, or buy out competing non-member linen suppliers in order to compel them to join the conspiracy or to exclude them from the industry, and to impose penalties upon members of the defendant trade associations who failed to conform to the terms of the conspiracy.
Count two incorporated the allegations of count one and charged that the defendants and co-conspirators engaged in an unlawful conspiracy "to monopolize the aforesaid interstate trade and commerce in linen supplies" in violation of section 2 of the Sherman Act, as amended.
The first matter to be considered is denial of the defendants' motion for a new trial. Their motion was based primarily on the discovery after trial of 43 unnumbered documents in the Government's files which they argue were material to the conduct of their defense.*fn1 They contend that they were denied due process by reason of the Government's failure to make available to them during the trial the contents of the "Owen File."*fn2
For an understanding of the matters in dispute on the new trial motion some preliminary statement is necessary as to the contents of the Owen File, how the 43 documents contained therein came into the Government's possession, and their relevance to testimony given at the trial by the prosecution's witness Paul Ullman. The documents were papers which belonged to Ullman or his corporation New Sanitary Towel Supply, Inc., of which he was president. In order to prepare its case for trial the Government by use of subpoenas took possession of many documents belonging to Ullman or New Sanitary. No receipts were given for the material so taken. Before trial the prosecution was ordered by Judge Dimock to turn over to defense counsel all documents "furnished to or obtained by the Government, by any means" which were "material to the proof of the issues in this case or to the preparation of the defense of any of the defendants." At the trial Ullman testified that New Sanitary had competed with defendants and had taken customers away from them. Thereupon, he continued, New Sanitary had been subjected to retaliatory economic attacks by defendants acting in concert, which resulted in his being forced to sell New Sanitary to defendants at a sacrifice price. Although the Government's proof included evidence of alleged wrongs by defendants not directed against New Sanitary, Ullman was at least, in the words of the trial judge, "an important Government witness who gave extensive testimony at the trial." A large part of the trial transcript concerns the Ullman story. During Ullman's examination at trial the trial court directed the Government to permit defense counsel to inspect all documents relating to Ullman's story, which by then had become evident to be crucial testimony on behalf of the prosecution.In supposed compliance with the orders, the Government did turn over for inspection certain files relating to the case. But these did not include the papers subsequently found in the "Owen File."*fn3
Of these papers one falls in a class apart from the other 42 documents. This is a letter from Ullman to the New York Telephone Company on the subject of discontinuance of New Sanitary's telephone service. This "telephone letter" was held in Mr. Owen's hand and referred to by him during his redirect examination of Ullman.*fn4 It is the only paper in the Owen File which the Government concedes it knowingly possessed during the trial.
On July 2, 1958, which was only slightly more than two weeks after the trial court found the defendants guilty, the Anti Trust Division showed the Owen File to Ullman, his lawyer and his accountant, who were preparing to bring a treble damage action against the defendants. At that date, and also on December 4, 1958, when the Anti Trust Division showed the Owen File to defense lawyers, the File contained the telephone letter used by Owen during the trial as well as the 42 documents which the appellants claim were illegally suppressed.
1. Location of the Owen File and its contents during the trial .
The brief of the United States contends that the movants for a new trial failed to prove that the Owen File was in the Government's possession during the trial. In his opinion ...