U.S. v. Inryco, Inc.

• Decision Date: 13 April 1981
• Docket Number: No. 80-1326,80-1326
• Citation: 642 F.2d 290
• Parties: 1981-1 Trade Cases 63,952 UNITED STATES of America, Plaintiff-Appellant, v. INRYCO, INC., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 290

642 F.2d 290

1981-1 Trade Cases 63,952

UNITED STATES of America, Plaintiff-Appellant, v. INRYCO, INC., Defendants-Appellees.

No. 80-1326.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 1, 1980.

Decided April 13, 1981.

Margaret G. Halpern, Dept. of Justice, Washington, D.C., for plaintiff-appellant.

Robert F. Finke, Chicago, Ill., on brief; E. C. Heininger, Mayer, Brown & Platt, Chicago, Ill., argued, for defendants-appellees.

On Appeal from the United States District Court for the Central District of California.

Before GIBSON, ^* SKOPIL and POOLE, Circuit Judges.

POOLE, Circuit Judge:

The Government appeals the district court's dismissal of its indictment as time barred. The indictment charged Inryco, Inc. and Western Concrete Structures Co., Inc. (Western) ¹ with a conspiracy to restrain trade in the post-tension concrete construction of the Byron, Braidwood and Bellefonte nuclear construction projects. The essence of the conspiratorial agreement was that Western would submit complementary bids ² on these projects to favor Inryco, and in exchange Inryco, as successful bidder, would award to Western subcontracts, purchase orders and monetary payments generated by those projects. All bids were submitted by July 31, 1974.

After reviewing the pleadings, the district court ruled as a matter of law that the conspiracy had terminated when the last bids were submitted and that the awards thereafter made to Western therefore were not during and in furtherance of the conspiracy. The government contends that the awards constituted a prime objective of the conspiracy to restrain trade and that the efforts to accomplish them resulted in continuing the conspiracy until the payments were made to Western.

We do not agree with the district court's conclusion that as a pleading matter the conspiracy terminated as a matter of law upon receipt of the last bid. Accordingly we reverse.

I

On January 16, 1980 an indictment was returned against appellee, Inryco, and Western charging a conspiracy to restrain trade in the post-tension concrete construction (post-tensioning) of "certain" nuclear construction projects in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Post-tensioning, for the purpose of this case, is a construction process used to strengthen the concrete nuclear containment vessels that enclose the heating elements of a nuclear reactor.

The indictment charged the existence of an agreement entered into prior to January 1974 and continuing through December of 1975 whereby Western would submit complementary bids on "certain" post-tension projects for which Inryco would later reward Western. In their response to a request for a Bill of Particulars ³ the government identified the rigged bids as those submitted on the Byron and Braidwood projects bid January 17, 1974 and the Bellefonte Project bid March 8, 1974 and rebid July 31, 1974. The response further identified the reward payments, hereafter referred to as subcontract work, as "all equipment, goods and services purchased by Inryco from Western for use on or relating to the three projects; all subcontracts awarded and purchase orders for labor and materials issued to Western relating to the project and a $300,000 royalty payment for 'engineering and systems development.' "

After the government's reply to the Bill of Particulars Western and Inryco moved to dismiss the indictment as barred by the statute of limitations. ⁴ They claimed that the objective of the conspiracy, rigging the bids to eliminate Western as a competitor, was accomplished once the Bellefonte bids were resubmitted on July 31, 1974. ⁵

The government, opposing the motion, argued that the meetings between Western and Inryco, after the submission of the bids, for the purpose of determining Western's share of the subcontract work continued the conspiracy into the applicable limitations period.

The district court compared the situation to a bank robbery and analogized the payments to Western to the division of the proceeds from a bank robbery. On this premise the court ruled that for purposes of the statute of limitations the conspired terminated when the last bids were submitted and could not be extended by activities incident to the conspirators' subsequent division of the spoils.

On the same reasoning the court denied the government's motion for reconsideration. Alternatively the district judge stated that the indictment was inadequate in failing to have charged that the division of the subcontract work was part of the conspiracy. The sufficiency of the indictment is before us by virtue of the government's timely notice of appeal.

II

While a Sherman Act conspiracy is technically ripe when the agreement to restrain competition is formed, it remains actionable until its purpose has been achieved or abandoned, and the statute of limitations does not run so long as the co-conspirators engage in overt acts designed to accomplish its objectives. U. S. v. Kissel, 218 U.S. 601, 607-608, 31 S.Ct. 124, 125-126, 54 L.Ed. 1168 (1910). ⁶ Thus our inquiry must begin with an analysis of the object of the conspiracy as charged in the indictment.

The district court construed the indictment as charging that the object of the conspiracy was the elimination of Western as a competitor for the projects. It relied strongly on the literal language of the government's response to Request Nos. 1 and 2 of the Bill of Particulars which contained the statement:

While defendant Western Concrete Structure Co. submitted bids for these projects, its bids were rigged so as to eliminate it as an actual competitor as of the date the bids were submitted.

In ruling that the restraint on trade ceased once the bids eliminating Western were submitted the court recognized that the circumstances of the award of the subcontract work to Western may have spawned additional anticompetitive effects, but it held that such consequences had not been alleged with sufficient particularity in the indictment.

Under the district court's analysis, the elimination of Western as a competitor carried with it the lifting of all restraints on trade fostered by the conspiracy. But at least at the pleading stage, this does not precisely follow since a conspiracy will continue as long as its members continue to commit acts in furtherance of the agreement which tend to suppress or restrain competition. The district court adopted a very narrow construction of the nature and purpose of the illegal agreement viewing it as if the elimination of Western as a competitor via the submission of rigged bids defined its entire scope. Such a view ignores the language of the indictment and the reasonable inferences to be drawn therefrom.

An indictment should be considered in its entirety. U. S. v. Anderson, 532 F.2d 1218, 1222 (9th Cir. 1976). It must be read to include facts which are necessarily implied and construed according to common sense with an appreciation of existing realities. Id. at 1222. The Supreme Court in Russell v. United States, 369 U.S. 749, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962), held that a legally sufficient indictment must state the elements of the offense charged with sufficient clarity to apprise the defendant of what he must defend against and accurately record the crime for which the individual may be convicted or acquitted to avoid a second jeopardy of the same offense. Id. at 763-764, 82 S.Ct. at 1046-1047.

The essential elements of a continuing Sherman Act violation are the agreement to restrain trade, anti-competitive effect and an overt act committed in furtherance of the conspiracy. In the instant case the alleged agreement consisted of three parts: (1) the elimination of Western as a competitor; (2) the submission of rigged bids; and (3) rewarding Western with subcontracts, purchase orders and monetary payments generated by the projects. The effect of the charged conspiracy as stated in the indictment was to restrain competition in the post-tension construction of the three projects and to deny the owners of the nuclear reactors the benefits of free competition in contracting for the post-tensioning construction. The overt acts committed included meetings where bidding information was exchanged, submission of rigged bids and the awarding of subcontracts, purchase orders and money to Western with only the awards to Western alleged to have occurred during the limitations period.

Although not a pleading model, the indictment was adequate. Inryco knew the offense which which it was charged and the methods by which the illegal restraints on trade were made to occur. The language of the indictment makes clear that the scope of the conspiracy encompassed more than the naked submission of rigged bids.

First, the conspiracy is pleaded as having continued through at least December of 1975, long after the final bids had been submitted. The clear implication of such allegation is that the conduct of Western and Inryco subsequent to the bidding was to further and accomplish the...