US v. Lov-It Creamery, Inc.
| Decision Date | 18 January 1989 |
| Docket Number | No. 88-CR-93.,88-CR-93. |
| Citation | 704 F. Supp. 1532 |
| Parties | UNITED STATES of America, Plaintiff, v. LOV-IT CREAMERY, INC., Roger L. Jahnke, and David M. Jahnke, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Mel S. Johnson, James L. Santelle, Asst. U.S. Attys., Milwaukee, Wis., for plaintiff.
Joan F. Kessler, Foley & Lardner, Milwaukee, Wis., for defendant Lov-It Creamery, Inc.
Stephen M. Glynn, Shellow, Shellow & Glynn, S.C., Milwaukee, Wis., for defendant Roger L. Jahnke.
Donald R. Zuidmulder, Zuidmulder, Gazeley & Appel, S.C., Green Bay, Wis., for defendant David Jahnke.
DECISION AND ORDER
Defendants Lov-It Creamery, Inc., Roger L. Jahnke and David M. Jahnke1 were charged in a one-count Indictment returned July 19, 1988, with conspiring, from May 1, 1979, through June 30, 1985, to steal, remove and convert butter owned by the Commodity Credit Corporation of the United States, in violation of 15 U.S.C. § 714m(d).
Section 714m(d) provides:
Section 714m(c) provides, in part:
The Indictment in this case listed 42 overt acts in furtherance of the conspiracy, including instances where scales used to weigh butter were altered, where employees of Lov-It Creamery took blocks of butter owned by the Commodity Credit Corporation out of their boxes and placed the blocks into Lov-It Creamery boxes, and where Lov-It made payments to Roger and David Jahnke in amounts totaling more than $1.5 million.
On July 29, 1988, each of the defendants were arraigned and entered pleas of not guilty. Pursuant to a pretrial scheduling order, the parties filed various pretrial motions.
On December 19, 1988, United States Magistrate Robert L. Bittner issued a Magistrate's Recommendation to the Honorable Robert W. Warren and Order, wherein he:
(1) recommended that this Court grant Lov-It Creamery's motion for determination of maximum sentence and subsequent leave to change its plea to nolo contendere;
(2) recommended that this Court deny the motions of all three defendants to dismiss or, in the alternative, to suppress;
(3) recommended that this Court deny Lov-It Creamery's motion to dismiss for failure to allege a conspiracy by a corporation;
(4) recommended that this Court deny the motions of all three defendants to dismiss the Indictment because of impermissible vagueness in the corporate conspiracy charge and failure to identify co-conspirators;
(5) recommended that this Court grant Lov-It Creamery's motion for severance;
(6) recommended that this Court grant David Jahnke's motion for severance;
(7) issued an order granting in part and denying in part the motions of all defendants for a bill of particulars and leave to file additional motions;
(8) issued an order denying the motions in limine of all defendants regarding employee testimony;
(9) issued an order denying the motions of all defendants to strike prejudicial surplusage in the Indictment;
(10) issued an order denying the motions of all defendants to inspect grand jury minutes and for extension of time to move to dismiss; and
(11) issued an order denying the motion of all defendants for discovery and to compel production of exculpatory evidence.
The recommendation on the motion for determination of a maximum sentence determined that the maximum penalty faced by Lov-It Creamery was a fine of $10,000.
Following the issuance of the Magistrate's decision, the United States ("government") filed written objections to his recommendations on Lov-It Creamery's motion for determination of the maximum sentence and subsequent leave to change its plea and the motions for severance.
Lov-It Creamery filed written objections to the Magistrate's recommendations on: the motion to dismiss or, in the alternative, to suppress evidence; the motion to dismiss the Indictment for failure to allege a conspiracy by a corporation; the motion to dismiss the Indictment because of impermissible vagueness in the corporate conspiracy charge and failure to identify co-conspirators; and the motion to strike prejudicial surplusage in the Indictment. Lov-It Creamery also appeals the Magistrate's order denying the motion to compel production of exculpatory evidence. In a letter to the Court accompanying a brief on these motions, counsel for Lov-It informed the Court that the objections were contingent on the Court's determination of whether to accept the Magistrate's recommendation on the maximum sentence and leave to change its plea. The letter states that if the Court accepts the Magistrate's recommendation, Lov-It Creamery would change its plea, which would moot the objections.
Roger Jahnke filed written objections to the Magistrate's recommendations on the motion to dismiss or, in the alternative, to suppress evidence and on the motion to dismiss because of impermissible vagueness in the corporate conspiracy charge and failure to identify co-conspirators. Roger Jahnke also appealed the Magistrate's orders denying the motion to strike prejudicial surplusage in the Indictment and denying the motion for discovery and to compel production of exculpatory evidence. In addition, Roger Jahnke incorporated the objections and arguments of Lov-It Creamery.
In a letter to the Court dated December 29, 1988, counsel for David Jahnke joined in the objections of the other two defendants.
Lov-It Creamery timely filed a response to the objections of the United States. No other responsive filings were made.
The Court now turns to merits of the pending objections and appeals.
Appeals of the Magistrate's orders on non-dispositive motions are covered under 28 U.S.C. § 636(b)(1)(A) and Local Rule 13.02(b) (E.D.Wis.). Under Rule 13.02(b), a party must specify the basis for the appeal.
... The judge assigned to the case shall consider the appeal and set aside any portion of the magistrate's order found to be clearly erroneous or contrary to law. The judge may also consider any matter sua sponte.
Rule 13.03(c). The district court's duty to make a de novo determination does not arise unless the objecting party makes specific reference to the portion of the magistrate's decision that the party is attacking. United States v. Molinaro, 683 F.Supp. 205, 211 (E.D.Wis.1988).
Lov-It Creamery, through its motion for determination of maximum sentence and for subsequent leave to change its plea, sought to have the Court determine that Lov-It Creamery's maximum penalty is $10,000. Lov-It then sought leave to plead nolo contendere so as to avoid the cost, business disruption, and uncertainty of defending this case. Magistrate Bittner recommended that the Court grant both parts of the motion. His recommendation on the maximum sentence was based on several factors. First, he determined that a corporation, as a legal fiction, cannot be sentenced to imprisonment, leaving available as a penalty only the $10,000 fine. Second, he found that the limiting language of section 714m prevented the United States from seeking an alternative fine under 18 U.S.C. § 3623. Finally, he found that an alternative fine under section 3623 or probation, including restitution, under 18 U.S. C. § 3651 were no longer available because they were repealed by the Sentencing Reform Act of 1984, which became effective November 1, 1987.
The Court finds that the Magistrate misconstrued the provisions of section 714m and the ramifications of the Sentencing Reform Act. For these reasons, as more fully set forth below, the Court declines to adopt the Magistrate's recommendation.
Section 714m(d) puts the penalty for conspiring to commit an offense under that section at the same level as the underlying offense. Section 714m(c), the underlying offense for the case at hand, sets the penalty for an offense involving property worth more than $500 at a fine of $10,000 or imprisonment for not more than five years, or both. Section 714m(e), however, adds the following language.
General statutes applicable.
All the general penal statutes relating to crimes and offenses against the United States shall apply with respect to the Commodity Credit Corporation, its property, money, contracts and agreements, employees and operations: Provided, That such general penal statutes shall not apply to the extent that they relate to crimes...
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...a prosecutor to wade through all government files in search of potentially exculpatory evidence." United States v. Lov-it Creamery, Inc., 704 F. Supp. 1532, 1552 (E.D. Wis. 1989) (citations ¶ 16. Therefore, the court of appeals in the instant case misstated the law when it held that "the St......
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