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UNITED STATES v. AMERICAN SOCY. OF CIV. ENGRS.

August 4, 1977

United States
v.
American Society of Civil Engineers.



The opinion of the court was delivered by: CANNELLA

Opinion and Order

CANNELLA, D.J.: The Government's motion for an order adjudging defendant, the American Society of Civil Engineers, in contempt of a consent decree entered on June 1, 1972, is hereby granted.

Facts

 On May 1, 1972 the United States filed suit against the American Society of Civil Engineers alleging that Section 1 of the Sherman Act, 15 U.S.C. ยง 1, had been violated and requesting that ASCE be enjoined from enforcing any provision of its Code of Ethics that had as its purpose or effect the restriction of price competition among Society members. On the same day the parties executed a stipulation settling the litigation. Pursuant to this stipulation and a consent judgment entered into thereunder, the Society was, inter alia,

 enjoined and restrained from adopting any plan, program or course of action which prohibits members of the defendant from at any time submitting price quotations for engineering services.

 On February 7, 1975 Franklin Y. K. Sunn, president of Metcalf & Eddy Limited and George K. Tozer, vice president of M&E, were found guilty of violating Article 3 of the ASCE Code of Ethics and suspended from the Society for periods of three and two years, respectively. Article 3 of the Code provides that

 [it] shall be considered unprofessional and inconsistent with honorable and dignified conduct and contrary to the public interest for any member...:

 To attempt to supplant another engineer in a particular engagement after definite steps have been taken toward his employment.

 Also implicated was paragraph 1 of Article 3 of the Society's Guide to Professional Practice Under the Code of Ethics, which states that

 [a member] shall not continue to seek employment on a specific engagement after being advised that another engineer has been selected subject to approval of detailed arrangements.

 The Government contends that Messrs. Sunn and Tozer were disciplined under these "attempt to supplant" provisions for doing nothing more than submitting price quotations, an activity that is protected under the May 1, 1972 agreement and subsequent judgment. The Society defends its actions and argues that the submission of price quotations by Sunn and Tozer constitutes an "attempt to supplant," an independent violation of the Code of Ethics that is punishable notwithstanding the 1972 consent decree.

 This being the posture of the case, an examination of the events that gave rise to the disciplinary proceedings is in order. The following chronology is reconstructed from the proceedings before the ASCE Board of Direction *fn1" and other documents before the Court.

 On December 26, 1972 the Board of Directors of the Metropolitan Water Works Authority of Bangkok, Thailand established a committee and authorized it to begin negotiations with a joint venture composed of Black & Veatch International Ltd. and Camp Dresser & McKee Ltd., two engineering firms, regarding supervision of a proposed water works construction project. The joint venture was called BVI-CDM Associates. Formal negotiations began on February 7, 1973 and a tentative accord was reached on July 11, 1973. On July 19 the MWWA Board of Directors empowered the Authority to engage BVI-CDM as the engineering concern for supervision of the construction project and to issue a letter of intent to that effect. *fn2"

 After formal negotiations with BVI-CDM had commenced, but before the joint venture was actually hired by the Authority, Metcalf & Eddy received a telegram from an engineering consulting firm known as Thai Engineering Consultants Co., Ltd. advising M&E of an available "water supply construction supervision contract" in Bangkok, Thailand and inquiring if it was interested. *fn3" Sunn immediately wired back, expressing M&E's enthusiasm. *fn4" As a consequence, TEC tendered its projection of the maximum man-months required for the project and requested that M&E submit an estimate of the man/month cost per job classification. After receiving still another Telex apparently ...


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