United States v. Mmr Corp. And James B. Rutland

954 F.2d 1040, 1992 U.S. App. LEXIS 2201, 1992 WL 27045
CourtCourt of Appeals for the Fifth Circuit
DecidedFebruary 19, 1992
Docket91-3108
StatusPublished
Cited by88 cases

This text of 954 F.2d 1040 (United States v. Mmr Corp. And James B. Rutland) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth 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. Mmr Corp. And James B. Rutland, 954 F.2d 1040, 1992 U.S. App. LEXIS 2201, 1992 WL 27045 (5th Cir. 1992).

Opinion

GARWOOD, Circuit Judge:

A year and a half after their convictions for participating in a conspiracy to rig bids on an electric utility project, MMR Corporation (LA) (MMR) and its president James B. Rutland (Rutland) filed motions for a new trial based on newly discovered evidence in the form of an alleged recantation by one of the government’s primary witnesses. The district court denied their motion. MMR and Rutland bring this appeal challenging the district judge’s refusal to re-cuse himself, the denial of their request for an evidentiary hearing, and the denial of their request for a new trial. We affirm.

Facts and Proceedings Below

MMR’s and Rutland’s convictions arose from the bidding on and performance of a construction contract for an electrical generating plant operated by Cajun Electric Power Cooperative (Cajun Electric) in New Roads, Louisiana. In 1980, Cajun Electric was soliciting bids for the construction of the third unit of the project, known as the Big Cajun No. 2 Power Station. MMR was among the seven companies invited to submit bids for the prime electrical contract in September 1980, but was not among the four companies that ended up submitting bids on January 16, 1981. The low bidder was Fischbach & Moore, Inc. (F & M), which was awarded the contract for $21.3 million. MMR received a $4.3 million subcontract from F & M.

On November 3, 1988, a four-count indictment was returned against MMR and Rutland, charging them with joining and aiding and abetting a conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and of joining and aiding and abetting a scheme to defraud Cajun Electric in violation of the mail fraud statute, 18 U.S.C. § 1341. The most damaging testimony at MMR and Rutland’s trial came from two F & M officers, Paul Murphy (Murphy), who was in charge of the southeast region for F & M, and J.R. Sturgill (Sturgill), the New Orleans area branch manager. Murphy testified that in December 1980, shortly after F & M had received the plans and specifications for the Big Cajun job in order to prepare its bid, the president of F & M’s holding company called him and said that none of the other national companies on the bid list were interested in the Big Cajun job, and that Murphy should try to work something out with the one local company on the list, MMR. The national companies had been conspiring for several years by sharing bid information and dividing large projects among themselves.

Accordingly, Murphy arranged a lunch at the City Club in Baton Rouge on December 19, 1980 that included himself and Sturgill from F & M, and Rutland and MMR’s chairman Robert McCracken (McCracken) from MMR. Murphy testified that he told Rutland and McCracken that all of the other bidders were willing to support F & M by submitting higher bids, so that he lacked only MMR’s cooperation. Rutland and McCracken tried to convince Murphy that F & M should accept MMR as a partner on the job, but Murphy was opposed. Murphy testified that with negotiations stalled at that point, he and Rutland went to the men’s room, where they reached an agreement that MMR would receive a subcontract from F & M marked up at the same level as the overall contract.

Murphy further testified that several days before the January 16, 1981 bid date, he met with Rutland and McCracken in F & M’s New Orleans office to compare estimates, and that they agreed that the realistic cost for the job was just under $17 million. Murphy then went into his office and telephoned representatives from the other bidders with that number. One of them was adamant that MMR be made the high bidder on the job, because he was concerned that if MMR put in the second lowest bid, MMR might be awarded the job because of its close relationship with Cajun Electric, and after receiving a contract of that magnitude might become a competi *1043 tive threat to the national contractors. When Murphy told Rutland and McCracken that they had to put in the highest bid, they resisted because they felt that it could damage their reputation with Cajun Electric. Murphy testified that when the meeting broke up, he believed that Rutland and McCracken were unhappy about the arrangement, but were still going to comply. MMR ended up not putting in a bid at all, but Murphy testified that he still felt obligated to follow through on the subcontract deal. Sturgill handled the subcontract with MMR.

At trial Sturgill offered testimony consistent with that of Murphy regarding the City Club meeting, and elaborated on the MMR subcontract. Sturgill stated that he attended the City Club lunch, that Murphy informed Rutland and McCracken that he needed MMR’s cooperation on the upcoming bid, and that Murphy and Rutland announced upon returning from the men’s room that they had a deal (although Stur-gill could not recall if he learned the details of the deal at that time or later). He further testified that he negotiated the subcontract with Rutland. The government produced a sheet of calculations on Rut-land’s stationery and in his handwriting showing that they had calculated total costs for the subcontract work at $2,853,-487 and had added a “fee” of $1,500,000, resulting in a total subcontract for MMR of $4,353,487. Sturgill testified that he argued to Murphy that this markup was excessive, because he understood that they had agreed to give MMR 30 percent above actual cost. Murphy replied that the $1.5 million reflected the deal he had made, and he felt committed to it.

Sturgill also testified, as was borne out by the handwritten calculations, that he and Rutland agreed not to include the full amount in the subcontract initially, because F & M was required to report all subcontracts to Cajun Electric on a Rural Electrification Administration (REA) form, and Sturgill was concerned that Cajun Electric might become suspicious that the higher number was excessive for the work specified in the subcontract. He and Rutland therefore agreed that F & M would include $1 million of the agreed price through a change order on or before May 1, 1983. A change order is an adjustment to a contract that typically reflects additional and unforeseen labor or material costs. In August 1981, F & M and MMR executed a subcontract for $3,353,487, and in November 1981 they executed a $1,120,000 change order. 1

The jury convicted MMR and Rutland on all counts. MMR was fined $1,000,000 on the antitrust count and $1,000 on each of the mail fraud counts, and Rutland was fined $103,000 and sentenced to six months’ imprisonment. This Court affirmed the convictions on July 23, 1990. United States v. MMR Corp. (LA), 907 F.2d 489 (5th Cir.1990), cert. denied sub nom. Rutland v. United States, — U.S. —, 111 S.Ct. 1388, 113 L.Ed.2d 445 (1991). Rutland’s and MMR’s petitions for rehearing were denied on October 9, 1990.

On November 26, 1990, Sturgill came to Rutland’s attorney’s office and gave a sworn statement that Rutland and MMR claim recants critical trial testimony.

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Bluebook (online)
954 F.2d 1040, 1992 U.S. App. LEXIS 2201, 1992 WL 27045, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-mmr-corp-and-james-b-rutland-ca5-1992.