409 F.3d 325 (6th Cir. 2005), 03-6592, United States v. Gibson

Docket Nº:Bobby GIBSON (03-6592/6595; 04-5031), Andrew S. Hickerson (03-6595; 04-5037), William R. Mallicoat (03-6593/6595; 04-5033), Kenneth Tucker (03-6595; 04-5035/5036), and KenAmerican Resources, Inc. (03-6594/6595; 04-5034), Defendants-Appellants/Cross-Appellees.
Citation:409 F.3d 325
Party Name:UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v.
Case Date:May 24, 2005
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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409 F.3d 325 (6th Cir. 2005)

UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant,

v.

Bobby GIBSON (03-6592/6595; 04-5031), Andrew S. Hickerson (03-6595; 04-5037), William R. Mallicoat (03-6593/6595; 04-5033), Kenneth Tucker (03-6595; 04-5035/5036), and KenAmerican Resources, Inc. (03-6594/6595; 04-5034), Defendants-Appellants/Cross-Appellees.

Nos. 03-6592, 03-6593, 03-6594, 03-6595, 04-5031, 04-5033, 04-5034, 04-5035, 04-5036, 04-5037.

United States Court of Appeals, Sixth Circuit.

May 24, 2005

        Argued: April 20, 2005.

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        R. Kent Westberry, Landrum & Shouse, Louisville, Kentucky, Allen W. Holbrook, Sullivan, Mountjoy, Stainback & Miller, Owensboro, Kentucky, R. Kenyon Meyer, Dinsmore & Shohl, Louisville, Kentucky, Charles E. Ricketts, Jr., Ricketts & Platt, Louisville, Kentucky, for Defendants.

        Terry M. Cushing, Assistant United States Attorney, Louisville, Kentucky, for Plaintiff.

        R. Kent Westberry, Caroline P. Clark, Landrum & Shouse, Louisville, Kentucky, Allen W. Holbrook, Sullivan, Mountjoy, Stainback & Miller, Owensboro, Kentucky, R. Kenyon Meyer, Dinsmore & Shohl, Louisville, Kentucky, Charles E. Ricketts, Jr., Ricketts & Platt, Louisville, Kentucky, John E. Jevicky, Dinsmore & Shohl, Cincinnati, Ohio, for Defendants.

        Terry M. Cushing, Randy W. Ream, Assistant United States Attorneys, Louisville, Kentucky, for Plaintiff.

        Before: SUHRHEINRICH and GILMAN, Circuit Judges; ACKERMAN, District Judge.[*]

        OPINION

        GILMAN, Circuit Judge.

        KenAmerican Resources, Inc. (the operator of a Kentucky coal mine), mine superintendents Bobby Gibson and William Mallicoat, and mine foremen Andrew Hickerson and Kenneth Tucker were indicted for conspiracy, making false statements to a federal agency, concealing material

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facts from a federal agency, and violating the Mine Safety and Health Act (MSHA), 30 U.S.C. §§ 801-25. After they were convicted by a jury, the district court imposed varying sentences on the five defendants. It also granted the defendants' motions to arrest judgment and for judgment of acquittal on Count 28 and part of Count 1, but rejected a number of other challenges to both the convictions and the sentences. For the reasons set forth below, we AFFIRM the judgment of the district court.

        I. BACKGROUND

        In May of 2002, a grand jury returned a 28-count indictment against KenAmerican for improper ventilation practices and the illegal use of two continuous mining machines (CMMs) at its Paradise No. 9 coal mine in Muhlenberg County, Kentucky. The indictment also named mine superintendents Gibson and Mallicoat, as well as mine foremen Hickerson and Tucker. Specifically, the indictment charged the defendants with conspiracy, making false statements to a federal agency, concealing material facts from a federal agency, and violating the MSHA.

        A jury convicted the defendants on all counts relevant to this appeal. After trial, the defendants filed motions to arrest judgment, for a new trial, and for a judgment of acquittal. The district court granted the defendants' motions to arrest judgment and for acquittal on Count 28, which charged the defendants with concealing "the existence of willful violations of the MSHA." It also granted the defendants' motions for a judgment of acquittal on "that portion of Count 1 which charges Defendants with conspiracy to commit the crime of concealing a material fact by trick, scheme, or device."

        At sentencing, the government requested a number of upward adjustments for each of the defendants. First, it asked the district court to increase KenAmerican's culpability score and Gibson's offense level because the crime involved "the conscious or reckless risk of death or serious bodily injury." United States Sentencing Commission, Guidelines Manual (USSG), § 2B1.1(b)(11). The court, however, refused to do so, reasoning that the defendants had not intended to place the miners at risk of death or serious bodily injury.

        Second, the government requested an upward adjustment of Hickerson's, Mallicoat's, and Tucker's offense levels based on their role in the crimes. Again the district court refused the enhancement. The court determined that increasing the sentences for the individual defendants' aggravating roles in the offense would constitute double counting. It explained that, because only "operators" can be charged with violating mine safety laws, the base offense level already reflected the leadership roles of the individual defendants.

        Third, the government requested that the district court increase Gibson's offense level because Gibson had lied to the MSHA inspectors about the status of one of the CMMs. The court refused to do so, noting that Gibson's statements did not "significantly obstruct[ ] or impede[ ] the official investigation or prosecution of the instant offense."

        In the end, the district court sentenced Gibson and Mallicoat to two years' probation with a special condition of six months of home detention, imposed a $5,000 fine, and required them to pay the costs of electronic monitoring. Gibson was also ordered to pay the cost of the first year of supervision. The court sentenced Hickerson and Tucker to two years' probation with a special condition of four months' home detention, imposed a $3,000 fine, and

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required them to pay the costs of electronic monitoring.

        KenAmerican was ordered to a pay fine of $306,000. Against the wishes of the government, the district court decided not to base the amount of the fine on a calculation of KenAmerican's pecuniary gain resulting from its illegal conduct. The court determined that, even though KenAmerican had profited from its illegal activity, determining the precise amount of the gain would unduly complicate and prolong the sentencing process. Instead, the court imposed a fine derived from the Offense Level Fine Table promulgated in Sentencing Guidelines § 8C2.4.

        The government also requested that KenAmerican's culpability score be increased on the ground that KenAmerican had acted intentionally and obstructed justice. Although the district court declined to impose an increase on this basis, it did depart upward pursuant to Sentencing Guidelines § 8C4.2 because of KenAmerican's reckless conduct in disregarding mandatory health and safety standards. It determined that, with an offense level of 14 and a culpability score of 9, the appropriate fine was between $153,000 and $306,000. The court then sentenced KenAmerican to pay the maximum fine of $306,000.

        On appeal, the government argues that the district court erred in granting the defendants' motions to arrest judgment and for judgment of acquittal on Counts 28 and part of Count 1. It also raises a number of issues related to the defendants' sentences. The defendants cross-appeal, arguing that the district court erred in not granting their motions for judgment of acquittal and/or to dismiss on many of the remaining counts. None of the defendants, however, contest their sentences in the event that we sustain the counts on which they were convicted.

        II. ANALYSIS

        A. The district court did not err in determining that Count 28 failed to allege an offense

        The district court granted KenAmerican's, Gibson's, and Mallicoat's motions to arrest judgment on the grounds that Count 28 of the indictment did not allege an offense. Count 28 alleges that the defendants

did knowingly and willfully conceal, and cover up a material fact by trick, scheme, and device in a matter within the jurisdiction of the Executive Branch of the United States, that is, MSHA, in that the defendants alerted mine personnel on the working face of Paradise # 9 mine that MSHA inspectors had entered mine property and would be inspecting the mine face and that the defendants did thereby conceal and cover up from MSHA the existence of willful violations of the Act.

         1. Standard of review

         The sufficiency of an indictment is reviewed de novo. United States v. Gatewood, 173 F.3d 983, 986 (6th Cir. 1999). We must arrest judgment if the indictment does not charge an offense. Fed.R.Crim.P. 34(a). When a challenge to an indictment is brought for the first time after the defendant has been convicted, the indictment is "construed liberally in favor of its sufficiency." United States v. Gibson, 513 F.2d 978, 979 (6th Cir. 1975).

         2. Allegation of an offense

        Pursuant to 18 U.S.C. § 1001(a),

whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully--

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(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

(2) makes any materially false, fictitious, or fraudulent statement or representation; or

(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry [shall be fined, imprisoned, or both.]

        The district court held in this case that Count 28 did not charge an offense under § 1001 because the defendants' duty to disclose material facts does not apply to the disclosure of willful violations of the Act. Instead, it applies only to the disclosure of hazardous conditions. See 30 C.F.R. § 75.363(b) ("A record shall be made of any hazardous condition found. This record shall be kept in a book maintained for this purpose on the surface at the mine.... This record shall not be required for shifts when no hazardous conditions are found ...."). Because the indictment charged that the defendants had concealed the existence of violations of the Act rather than of hazardous conditions, the...

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