United States v. Missouri Valley Construction Co.

704 F.2d 1026, 1983 U.S. App. LEXIS 28900

• Court: Court of Appeals for the Eighth Circuit
• Decided: April 12, 1983
• Docket: 82-1307
• Status: Published

Opinions

JOHN R. GIBSON, Circuit Judge.

The significant issue before us is whether the district court erred in failing to advise the representative of defendant Missouri Valley Construction Company that it was not entitled to withdraw a guilty plea, based on a recommendation of sentence under Fed.R.Crim.P. 11(e)(1)(B). The corporate defendant, in entering its guilty plea, was told that the recommendation was not binding on the court but was not advised that the plea could not be withdrawn, as required by Fed.R.Crim.P. 11(e)(2). We hold that the district court erred and reverse and remand for further proceedings.

On December 23, 1981, the United States and Missouri Valley entered into a pre-indictment plea agreement. Missouri Valley, a subsidiary of Peter Kiewit Sons’, Inc., agreed to plead guilty to a two-count indictment alleging violations of section 1 of the Sherman Act, 15 U.S.C. § 1 (1976). In return, the Government agreed not to prosecute several Kiewit companies or employees for bid rigging in Nebraska, Oklahoma, and Kansas (with a named exception) and further agreed to recommend to the district court a fine of $1,006,000 in accordance with Fed.R.Crim.P. 11(e)(1)(B). The agreement stated that the Government’s recommendation was not binding on the sentencing judge and that conviction under the two-count indictment could result in a maximum fine of $2,000,000.

On January 14,1982, Missouri Valley was indicted on two counts alleging that Missouri Valley had conspired with other contractors to rig bids and allocate highway construction contracts, in violation of the Sherman Act, 15 U.S.C. § 1 (1976). On the same date, Missouri Valley entered a plea of guilty to the two-count indictment. Before accepting appellant’s plea of guilty, the district court questioned the company’s representative, Mr. Thoendel, concerning the existence and nature of the plea agreement. The following colloquy occurred:

THE COURT: You understand, do you not, Mr. Thoendel, ... that this plea agreement calls upon the United States Attorney to make certain recommendations and you realize that those recommendations are only recommendations and that while I will listen carefully to them and give them full consideration that they are not binding upon me, that is to say, I need not accept them? You understand that?

MR. THOENDEL: Yes, Your Honor.

THE COURT: Let me explain that more carefully because I use the word accept and I shall explain that. I mean that the plea agreement calls for there to be recommendations to me. But you realize that I may or may not give to the corporation some sentence which is different from the recommendation?

MR. THOENDEL: Yes, Your Honor.

THE COURT: And I do that upon the basis of my own thinking and it may not match their recommendation.

MR. THOENDEL: Yes, Your Honor.

THE COURT: All right, sir. Very well. In that tone, then, I will accept the plea of guilty on behalf of the corporation as to Counts I and II.

On February 19, 1982, the district court rejected the sentencing recommendation of the Government, and fined Missouri Valley $1,000,000 on each count, a total of $2,000,-000.

Missouri Valley’s meritorious contention raised in its reply brief is that the district court did not comply with the requirements in Fed.R.Crim.P. 11(e)(2) when it accepted the guilty plea, in that it did not advise defendant that if the recommendation for sentencing were not accepted, the defendant would have no right to withdraw the plea.¹

There is no dispute that the plea agreement here is of the type specified in Fed.R.Crim.P. 11(e)(1)(B). Under the type (B) agreement, a prosecutor promises only to make a recommendation, or agree not to oppose the defendant’s request, for a particular sentence, with the understanding that such recommendation or request shall not be binding upon the court. It is distinguishable from other types of plea agreements in that an agreement to recommend or not to oppose is discharged when the prosecutor performs as he agreed to do. Advisory Committee Note to Fed.R.Crim.P. 11(e)(2). By contrast, the remaining types of plea agreements specified in rule 11(e)(1), types (A) and (C), provide for a particular disposition, whether it be charge dismissal or an agreed-to sentence. The distinction is significant because in a type (B) plea agreement neither the acceptance provisions of rule 11(e)(3) nor the rejection provisions of rule 11(e)(4) are applicable.² Advisory Committee Note to Fed.R.Crim.P. 11(e)(2). Thus, if a district court imposes a sentence different from that recommended in a type (B) agreement, under rule 11 it need not offer the defendant an opportunity to withdraw his plea.³

To ensure that defendants would fully understand the nature of a type (B) agreement, an amendment was added to rule 11(e)(2), effective August 1,1979. The amendment provides that “If the agreement is of the type specified in subdivision (e)(1)(B), the court shall advise the defendant that if the court does not accept the recommendation or request the defendant nevertheless has no right to withdraw his plea”.⁴ The rationale for the amendment is summarized in the Advisory Committee Note as follows:

Because a type (B) agreement is distinguishable from the others in that it involves only a recommendation or request not binding upon the court, it is important that the defendant be aware that this is the nature of the agreement into which he has entered. The procedure contemplated by the last sentence of amended subdivision (e)(2) will establish for the record that there is such awareness.

The established rule in this circuit is that district courts are required to act in substantial compliance with the dictates of rule 11, although “ritualistic” compliance is not required. See United States v. Scharf, 551 F.2d 1124, 1129 (8th Cir.), cert. denied, 434 U.S. 824, 98 S.Ct. 70, 54 L.Ed.2d 81 (1977); United States v. Lambros, 544 F.2d 962, 966 (8th Cir.1976), cert. denied, 430 U.S. 930, 97 S.Ct. 1550, 51 L.Ed.2d 774 (1977). If a district court, in accepting a guilty plea, fails to comply substantially with rule 11 requirements, the guilty plea should be set aside and the defendant allowed to plead anew. See United States v. Riegelsperger, 646 F.2d 1235, 1237 (8th Cir.1981); United States v. Cammisano, 599 F.2d 851, 855, 857 (8th Cir.1979).

In this case, the district court went only half way in meeting the notice requirements of rule 11(e)(2). Although the court informed the defendant that the court was not required to accept the recommendation contained in the plea agreement, it failed to go further and to advise the defendant that if the court did not accept the recommendation, the defendant would have no right to withdraw the plea. Rule 11(e)(2) clearly, precisely, and unequivocally requires that “the court shall advise the defendant that if the court does not accept the recommendation or request the defendant nevertheless has no right to withdraw his plea” (emphasis added). The district court did not comply with this mandate.

The Government argues that the defendant has shown no prejudice because it was aware that it was entering into a type (B) agreement and thus knew the risks it was taking in making that agreement. The Government points to three factors in particular: the written plea agreement itself, which states that it is a type (B) agreement; the trial court’s oral admonishments that it was not required to accept the sentence recommended in the plea agreement; and appellant’s adequate representation by retained counsel. Under McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969), we do not believe appellant is required to show prejudice to obtain relief on this direct appeal. See id. at 471, 89 S.Ct. at 1173 (“prejudice inheres in a failure to comply with Rule 11”). See generally 9 Federal Procedure, Lawyers Edition § 22:548, at 216 (1982). Even so, it is our view that the district court’s failure to give the mandated warning resulted in evident prejudice to appellant.

Because of the failure to comply with the clear mandate of rule 11(e)(2), we reverse the conviction and remand with instructions that the defendant be given an opportunity to plead anew.⁵

1 . Missouri Valley also contends (1) that the district court failed to comply with Fed.R. Crim.P. 11(e)(4) by not affording it an opportunity to withdraw its plea, and (2) that the district court abused its discretion in assessing the maximum fine under the Sherman Act, 15 U.S.C. § 1 (1976).

2 . Appellant’s contention with respect to the district court’s alleged violation of Fed.R. Crim.P. 11(e)(4) is thus rejected.

3 . Nor is there any constitutional requirement that a district court permit a defendant to withdraw a guilty plea when that court decides after the hearing not to accept a recommendation for sentencing. Cf. Lindner v. Wyrick, 644 F.2d 724, 728 (8th Cir.) (when defendant is aware that plea is not in exchange for particular sentence but hopes state trial court will follow sentence recommendation, defendant not misled so as to undermine voluntariness of plea if court rejects sentence recommendation), cert. denied, 454 U.S. 872, 102 S.Ct. 345, 70 L.Ed.2d 178 (1981).

4 . The full text of amended rule 11(e)(2) provides as follows:

(2) Notice of Such Agreement. If a plea agreement has been reached by the parties, the court shall, on the record, require the disclosure of the agreement in open court or, on a showing of good cause, in camera, at the time the plea is offered. If the agreement is of the type specified in subdivision (e)(1)(A) or (C), the court may accept or reject the agreement, or may defer its decision as to the acceptance or rejection until there has been an opportunity to consider the presentence report. If the agreement is of the type specified in subdivision (e)(1)(B), the court shall advise the defendant that if the court does not accept the recommendation or request the defendant nevertheless has no right to withdraw his plea.

Prior to the 1979 amendment, rule 11(e)(2) read as follows:

(2) Notice of Such Agreement. If a plea agreement has been reached by the parties, the court shall, on the record, require the disclosure of the agreement in open court or, on a showing of good cause, in camera, at the time the plea is offered. Thereupon the court may accept or reject the agreement, or may defer its decision as to the acceptance or rejection until there has been an opportunity to consider the presentence report.

5 . We need not reach appellant’s alternative argument that the district court abused its discretion in assessing the maximum fine under the Sherman Act, 15 U.S.C. § 1 (1976). We observe, however, that a sentence imposed by a district judge, if within statutory limits, is generally not subject to review. United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591-92, 30 L.Ed.2d 592 (1972); United States v. Ross, 666 F.2d 1163, 1165 (8th Cir.1981). We further observe that the district court gave careful consideration not only to the severity of the offense but also to arguments urged by appellant in mitigation. Finally, we note that the district court allowed the appellant to pay the fine over a five-year period so as not to bring appellant “to its knees,” and that other Kiewit corporations were protected from antitrust prosecution for bid rigging.