United States v. Basic Construction Co.

711 F.2d 570, 1983 U.S. App. LEXIS 26348
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 27, 1983
DocketNos. 82-5200, 82-5207 and 82-5208
StatusPublished
Cited by14 cases

This text of 711 F.2d 570 (United States v. Basic Construction Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Basic Construction Co., 711 F.2d 570, 1983 U.S. App. LEXIS 26348 (4th Cir. 1983).

Opinions

PER CURIAM:

This is an appeal from a conviction for violation of section 1 of the Sherman Act, 15 U.S.C. § 1. The defendants, Basic Construction Co., Henry S. Branscome, Inc., and Henry Branscome, were charged with conspiring in April of 1978 to rig the bidding for state road paving contracts. A jury found the defendants guilty, and both Basic and Branscome1 appeal. We affirm.

I.

Basic’s principal contention is that the district court gave erroneous jury instructions regarding the criminal liability of a corporation for acts of its employees. With regard to corporate liability, the court instructed the jury as follows:

A corporation is legally bound by the acts or statements of its agents done or made within the scope of their employment, and within their apparent authority, acts done within the scope of employment and acts done on behalf of or to the benefit of a corporation, and directly related to the performance of the type duties the employee has general authority to perform.
When the act of an agent is within the scope of his employment or within the scope of his apparent authority, the corporation is held legally responsible for it. This is true even though the agent’s acts may be unlawful, and contrary to the corporations [sic] actual instructions.
A corporation may be responsible for the action of its agents done or made within the scope of their authority, even though the conduct of the agents may be contrary to the corporation’s actual instructions, or contrary to the corporation’s stated position.
However, the existence of such instructions and policies, if any be shown, may be considered by you in determining whether the agents, in fact, were acting to benefit the corporation.

At trial, Basic introduced evidence which would have tended to prove that it had a longstanding, well known, and strictly enforced policy against bid rigging. Such evidence tended to show that the bid rigging activities for which it was charged were perpetrated by two relatively minor officials and were done without the knowledge of high level corporate officers. Basic argues that, in light of this evidence, the district court should have instructed the jury that it could consider the evidence of Basic’s antitrust compliance policy in deciding whether the company had the requisite intent to violate the Sherman Act.

Basic rests its argument primarily on United States v. United States Gypsum Co., 438 U.S. 422, 98 S.Ct. 2864, 57 L.Ed.2d 854 (1978). Gypsum involved a criminal antitrust prosecution in which the district court had instructed the jury that, if it found that the practice of competing producers giving to other producers on request, the price of gypsum board that was currently offered to a specific customer had the effect of fixing or raising prices, then they should presume as a matter of law that the parties intended such a result. Id. at 434, 98 S.Ct. at 2871. The Supreme Court held that these instructions were erroneous. The Court said that intent is an element that must be proved, and cannot be presumed, in a criminal antitrust prosecution. Id. at 434-36, 98 S.Ct. at 2871-73. Basic argues that the instructions given by the district court in the instant case run counter to the holding in Gypsum because they fix absolute criminal liability on a corporation for acts done by its em[573]*573ployees, although such acts may have been in violation of corporate policies and express instructions. Gypsum, Basic argues, requires that the government prove that the corporation, presumably as represented by its upper level officers and managers, had an intent separate from that of its lower level employees to violate the antitrust laws. Consequently, Basic asserts that the jury should have been instructed to consider corporate antitrust compliance policies in determining whether Basic had the requisite intent.

We do not think that Gypsum requires so much. Rather, the case, on the point at issue, holds that intent to violate the antitrust laws must be proved in a criminal antitrust prosecution, and it defines the required intent. The Court there was not confronted with, and did not decide, the issue of corporate liability for the acts of employees. The instructions given by the district court in the instant case are amply supported by case law. See United States v. Koppers Co., 652 F.2d 290, 298 (2d Cir.), cert. denied, 454 U.S. 1083,102 S.Ct. 639, 70 L.Ed.2d 617 (1981); United States v. Hilton Hotels Corp., 467 F.2d 1000, 1004-07 (9th Cir.1972), cert. denied, 409 U.S. 1125, 93 S.Ct. 938, 35 L.Ed.2d 256 (1973); United States v. American Radiator & Standard Sanitary Corp., 433 F.2d 174, 204-05 (3d Cir.1970), cert. denied, 401 U.S. 948, 91 S.Ct. 928, 28 L.Ed.2d 231 (1971). These cases hold that a corporation may be held criminally responsible for antitrust violations committed by its employees if they were acting within the scope of their authority, or apparent authority, and for the benefit of the corporation, even if, as in Hilton Hotels and American Radiator, such acts were against corporate policy or express instructions. In United States v. Koppers Co., the Second Circuit rejected the argument, as do we, that Gypsum changes the law on corporate criminal antitrust liability for the acts of its employees. 652 F.2d at 298.

In the instant case, the district court properly allowed the jury to consider Basic’s alleged antitrust compliance policy in determining whether the employees were acting for the benefit of the corporation. It also properly instructed on the issue of intent in an antitrust prosecution, i.e., that corporate intent is shown by the actions and statements of the officers, directors, and employees who are in positions of authority or have apparent authority to make policy for the corporation.

II.

Basic also argues that the court erroneously admitted evidence of an admission by silence by one of Basic’s corporate officers, William Shaw. At trial, one of Basic’s minor officials, Colosi, testified about a meeting he had with Shaw and another minor official of Basic, Howell, regarding the bidding on another road project. Colosi testified that at the end of the meeting, as he was leaving the room, he heard Howell say to Shaw, “I’ll see if we can get anything for this work.” Colosi did not hear any reply by Shaw. Colosi further testified that he believed this referred to bid rigging and that Howell was talking about trading the job there being discussed for one in the future.

Basic contends that the district court erred in admitting this evidence because it claims there was no evidence that Shaw heard, understood, or acquiesced in Howell’s statement to him so as to render the evidence admissible as an admission under FRE 801(d)(2)(B).

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711 F.2d 570, 1983 U.S. App. LEXIS 26348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-basic-construction-co-ca4-1983.