United States v. Portsmouth Paving Corporation and R. Curtis Saunders, Jr.

694 F.2d 312
CourtCourt of Appeals for the Fourth Circuit
DecidedJanuary 27, 1983
Docket81-5157
StatusPublished
Cited by131 cases

This text of 694 F.2d 312 (United States v. Portsmouth Paving Corporation and R. Curtis Saunders, Jr.) 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. Portsmouth Paving Corporation and R. Curtis Saunders, Jr., 694 F.2d 312 (4th Cir. 1983).

Opinions

DONALD RUSSELL, Circuit Judge:

On November 25, 1980, the appellants, Portsmouth Paving Corporation and its president R. Curtis Saunders, Jr., were indicted, together with three other corporations and eight other individuals, for conspiracy to allocate contracts and to rig bids in violation of section 1 of the Sherman Act, 15 U.S.C. § 1. After several plea agreements, the Government brought to trial two corporate and five individual defendants, including the appellants. Following an eight-day trial beginning on February 23, 1981, the jury was unable to agree on a verdict and the district court declared a mistrial. Subsequent to a ten-day second trial that began on April 20, 1981, the jury returned guilty verdicts against Portsmouth Paving, Saunders, and three other defendants, not parties to this appeal; two individual defendants were acquitted. Portsmouth Paving and Saunders were fined [316]*316$400,000 and $30,000, respectively, and Saunders was also sentenced to imprisonment for a period of time not exceeding 120 days with probation for three years following release. They then filed this appeal.

The appellants were charged with combining and conspiring “[t]o allocate ... roadway construction and surface paving contracts” and “[t]o refrain from bidding or to submit collusive, non-competitive and rigged bids ... in connection with the roadway construction and surface paving contracts let in the Tidewater area” of Virginia by federal, state, and local authorities. The Tidewater area was defined in the indictment to include the cities of Chesapeake, Norfolk, Portsmouth and Virginia Beach.1 The indictment also alleged that the defendants conspired “[b]eginning sometime in or about 1963, and continuing thereafter, the exact dates being unknown to the grand jury.” The purported agreement covered two types of projects: Annually scheduled resurfacing work in each of the four Tidewater cities and other nonscheduled projects throughout the Tidewater region. According to the Government’s theory, the conspirators would trade projects among themselves by agreeing to withhold bids or to submit artificially high “complementary” bids on certain projects.2 Citing several sources of error, however, the appellants contend that their convictions should be reversed.

I

Portsmouth Paving and Saunders argue at considerable length that the evidence presented against them at both trials was insufficient as a matter of law to sustain the jury’s verdict.3 In determining whether the evidence was sufficient to prove the offense charged,4 we must con[317]*317sider whether any rational trier of fact could find guilt beyond a reasonable doubt when the evidence is viewed in the light most favorable to the Government. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Shaver, 651 F.2d 236, 238 (4th Cir.1981). Application of that standard in this case compels the conclusion that the evidence was more than sufficient.

As a necessary predicate to defining the essential elements of the crime, we note that the contract allocation and bid rigging scheme alleged in the indictment is illegal per se under section 1 of the Sherman Act. See United States v. Koppers Co., Inc., 652 F.2d 290, 293 (2d Cir.), cert. denied, 454 U.S. 1083, 102 S.Ct. 639, 70 L.Ed.2d 617 (1981) (bid rigging, territorial allocation in Connecticut highway maintenance); United States v. Azzarelli Construction Co., 612 F.2d 292, 294 (7th Cir. 1979), cert. denied, 447 U.S. 920, 100 S.Ct. 3010, 65 L.Ed.2d 1112 (1980) (bid rigging on Illinois highway projects); United States v. Flom, 558 F.2d 1179, 1183 (5th Cir.1977) (bid rigging on sales of reinforcing steel bars). Section 1 proscribes “[ejvery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or com merce.” Early in the history of the statute, the Supreme Court read section 1 to prohibit only those agreements resulting in unreasonable restraints of trade. See Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 244, 62 L.Ed. 683 (1918). Notwithstanding the unreasonableness requirement, certain business agreements, because of their inherent tendency to eliminate competition, are presumed unreasonable and are therefore illegal per se. See Northern Pacific Railway Co. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958); Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348, 1356 (9th Cir.1982). Under such circumstances, the Government is not required to prove unreasonableness.

Price fixing agreements are typical of those agreements per se violative of the Sherman Act. See United States v. McKesson & Robbins, Inc., 351 U.S. 305, 309-10, 76 S.Ct. 937, 940, 100 L.Ed. 1209 (1956); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218, 60 S.Ct. 811, 842, 84 L.Ed. 1129 (1940); National Electrical Contractors Association v. National Constructors Association, 678 F.2d 492 (4th Cir.1982); United States v. Society of Independent Gasoline Marketers, 624 F.2d 461, 465 (4th Cir.1979), cert. denied, 449 U.S. 1078, 101 S.Ct. 859, 66 L.Ed.2d 801 (1981). Even more egregiously contrary to vital competition among businesses, however, is the contract allocation agreement charged in the instant case. Such an accord eliminates not only price competition, but also competition in service and product quality. 1 R. Callmann, The Law of Unfair Competition, Trademarks and Monopolies § 4.35, at 221 (4th ed.1981). Moreover, the collusive bid rigging dimension of the conspiracy charged makes the arrangement little less than a cartel,5 which is “never legally nor economically justifiable.” Id. § 4.20, at 109. The undisputed effect is to force the contracting government entities to pay more for the goods and services sought than they would “ ‘had there been free competition in the open market.’ ” United States ex rel. Marcus v. Hess, 317 U.S. 537, 539 n. 1, 63 S.Ct. 379, 382 n. 1, 87 L.Ed. 443 (1943) (circuit court’s description of “collusive bidding scheme” to defraud the United States); see United [318]*318States v. Bensinger Co., 430 F.2d 584, 589 (8th Cir.1970) (bid rigging agreement is “price-fixing agreement of the simplest kind”). As a result, we do not hesitate to conclude that the Government was not required to establish the unreasonableness of the conspiracy charged.

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Bluebook (online)
694 F.2d 312, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-portsmouth-paving-corporation-and-r-curtis-saunders-jr-ca4-1983.