State of Colo. ex rel. Colorado Atty. Gen. v. Western Paving Const. Co., s. 86-1363

• Decision Date: 16 November 1987
• Docket Number: 86-1420,Nos. 86-1363,s. 86-1363
• Citation: 833 F.2d 867
• Parties: , 1987-2 Trade Cases 67,765, 1987-2 Trade Cases 67,823 STATE OF COLORADO ex rel. COLORADO ATTORNEY GENERAL, Duane Woodard, Plaintiff- Appellant and Cross-Appellee, v. WESTERN PAVING CONSTRUCTION CO., Defendant-Appellee and Cross-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 867

833 F.2d 867

56 USLW 2310, 1987-2 Trade Cases 67,765,

1987-2 Trade Cases 67,823

STATE OF COLORADO ex rel. COLORADO ATTORNEY GENERAL, Duane Woodard, Plaintiff- Appellant and Cross-Appellee, v. WESTERN PAVING CONSTRUCTION CO., Defendant-Appellee and Cross-Appellant.

Nos. 86-1363, 86-1420.

United States Court of Appeals Tenth Circuit.

Nov. 16, 1987.

Rehearing Granted Dec. 31, 1987. ^*

Stephen H. Anderson, Circuit Judge, concurred and filed opinion.

David S. Harmon, Asst. Atty. Gen., Antitrust Section (Thomas P. McMahon, First Asst. Atty. Gen., Chief, Antitrust Section, Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., and Richard H. Forman, Sol. Gen., with him on the briefs), for plaintiff-appellant and cross-appellee.

John Bodner, Jr., Howrey & Simon, Washington, D.C. (Marcia Press Kaplan of Howrey & Simon, Washington, D.C., and B. Lawrence Theis of Walters & Theis, Denver, Colo., with him on the brief), for defendant-appellee and cross-appellant.

Before McKAY, SEYMOUR and ANDERSON, Circuit Judges.

McKAY, Circuit Judge.

On July 19, 1984, plaintiff, State of Colorado, filed a private antitrust claim under section one of the Sherman Antitrust Act, 15 U.S.C. Sec. 1 (1982), against defendant, Western Paving Construction Company. Plaintiff accuses defendant of engaging in a conspiracy to rig bids on Colorado highway construction projects from "as early as January of 1971" and extending "at least to some time in 1978." Amended Complaint, record, vol. 1, doc. 2, at 3. Because plaintiff did not allege that its cause of action arose on or after July 20, 1980, the "critical date" for purposes of the antitrust statute of limitation, 15 U.S.C. Sec. 15b (1982), it claimed that the statute should be tolled because defendant fraudulently concealed the alleged violations.

After both parties conducted discovery on the fraudulent concealment issue, defendant filed two motions. First, it filed a motion for summary judgment, claiming that plaintiff had not shown fraudulent concealment and, therefore, the action should be dismissed under the statute of limitations. Second, defendant filed a motion to dismiss and to grant attorney's fees under Fed.R.Civ.P. 11, contending that plaintiff's action was frivolous and that its investigation was inadequate. Plaintiff responded by filing a motion for partial summary judgment on the statute of limitations issue.

The district court granted defendant's motion for summary judgment, finding that plaintiff had not shown affirmative acts of concealment and that a self-concealing conspiracy alone would not toll the antitrust statute of limitations, 630 F.Supp. 206. The court also denied defendant's motion for attorney's fees, finding plaintiff's action was not frivolous and its investigation was adequate.

Plaintiff appeals, arguing that it has shown either that defendant engaged in a self-concealing conspiracy or that defendant or its coconspirators committed affirmative acts of concealment. Either of these propositions, plaintiff claims, entitles plaintiff to toll the statute of limitations under the fraudulent concealment doctrine. Defendant cross-appeals, claiming that the district court erred in refusing to grant it attorney's fees.

I. Background

Plaintiff's most reliable evidence of fraudulent concealment arises from events surrounding three specific construction projects: (1) the 1971 Newcastle-Easterly project; (2) the 1972 Lamar-East project; and (3) the 1974 Parker Road project. Evidence on these events is derived from the deposition testimony of Larry Wallace Corn and Donald G. Popejoy.

Mr. Corn, an employee of one of defendant's alleged coconspirators, testified extensively on his involvement in bidrigging on the Newcastle project. Prior to giving any testimony, Mr. Corn entered a settlement agreement with plaintiff concerning his and his employer's bidrigging activities in Colorado. As a part of that agreement, Mr. Corn agreed to fully cooperate in plaintiff's efforts to investigate and prosecute other alleged bidriggers. While Mr. Corn admitted participation in thirteen bidrigging schemes, the Newcastle project is the only project in which he mentions defendant as one of the conspirators.

Mr. Corn organized the bidrigging on the Newcastle project. To carry out his scheme, he first consulted the plan holders list published by plaintiff and asked the state engineer which contractors had actually looked at the project. He then compiled a list of potential bidders, their telephone numbers and, in those cases in which he knew, the party to contact. Once the list was completed, Mr. Corn began contacting the potential bidders.

In making his contacts, Mr. Corn started with the bidders he felt would be the most serious competitors. Once these companies had agreed to cooperate, he continued down his list until he had contacted all potential bidders. While defendant was allegedly on Mr. Corn's list, it was not one of the serious competitors.

Mr. Corn testified that he made most contacts by telephone from a hotel room in Denver in which he stayed during the bidletting on the Newcastle project. Mr. Corn testified that when he called a potential bidder, he first obtained a commitment to participate in the bidrigging scheme and then revealed the approximate amount of Corn Construction's bid on the project. After Mr. Corn obtained a commitment to participate in the scheme, he added the name of the person with whom he spoke to his list of bidders.

Mr. Corn had difficulty remembering the details of these contacts. When asked about details of the conversations, he replied:

There isn't any way I can sit here today and tell you exactly what I told those people thirteen, fourteen years ago. I can tell you I got the job rigged and I talked to these people and gave them our bid or very close to that figure so they would have an idea of where to bid.

Deposition of Larry Wallace Corn, record, vol. 2, at 46. Mr. Corn also had difficulty remembering which parties he had actually contacted and how many times he may have called particular persons. However, he maintained that each party he contacted agreed to participate in the bidrigging scheme and agreed to submit a complementary bid.

After all contacts were made, Mr. Corn was ready to attend the bidletting ceremony. Just prior to attending, or immediately after the ceremony, Mr. Corn destroyed his list of potential bidders. He testified that this was done to avoid discovery of the list and to cover up the bidrigging scheme. At the bidletting ceremony, Corn Construction, Mr. Corn's employer, was the successful bidder. As was required by plaintiff, Mr. Corn executed an affidavit stating that neither he nor Corn Construction had colluded in arriving at the bid amount. Mr. Corn testified that he executed this affidavit even though he knew it was false.

Mr. Corn remembered specific contacts with defendant. He testified that he initially called Alvin Walters and asked "if they would allow us to be the successful bidder on the job and he told me that I'd have to talk to Harold Stillman." Id. at 22. At the time, Mr. Stillman was responsible for all defendant's bids on projects outside the Denver metropolitan area. Mr. Walters denied any conversation with Mr. Corn.

Mr. Corn claimed that he spoke to Mr. Stillman, who agreed to cooperate and to submit a complementary bid. Specifically, Mr. Corn testified that he gave Corn Construction's bid amount to Mr. Stillman, id at 47, and that he called Mr. Stillman from his hotel room. Id. at 55. When asked about a specific recollection of the conversation, Mr. Corn stated:

I can tell you the gist of it. I told him we were interested on the job in New Castle, we were set up in the pit and we were wondering if they'd go along with us. I can't remember what his immediate reply was. The end result was that they said they would, but we owed them a job.

Id. at 63. On cross-examination, Mr. Corn reiterated:

I just asked him if he would go along with us on it and that we were interested in the job, that we were set up there and would be willing to give him a future job. And he agreed and just said that we owed him one or something to that effect.

....

I knew after I talked to him that he was willing to go along with us and we owed him a future job. I don't remember exactly how that was arrived at.

Id. at 117. Despite this testimony, Mr. Corn admitted that defendant never received a complementary bid from Corn Construction. He testified that Newcastle is the only project about which he talked to defendant.

Defendant did not present any testimony to counter Mr. Corn's testimony as to conversations with Mr. Stillman because none is available. Mr. Stillman died long before plaintiff filed this suit; thus, he was never able to give his testimony concerning the events surrounding the Newcastle project. Defendant's other employees denied any knowledge of a bidrigging scheme, and Mr. Corn admitted that he has no evidence that Mr. Stillman revealed the scheme to any other employee.

Plaintiff does have a bid tabulation showing that defendant submitted a bid on the Newcastle project. However, there is no other evidence to prove or disprove Mr. Corn's testimony. With the exception of the bid tabulation, both defendant and plaintiff have destroyed all documents relating to the Newcastle project, and Mr. Stillman's testimony is unavailable. Thus, the district court had the testimony of only one man to determine whether defendant actually participated in any scheme to rig the bid on the Newcastle project.

Plaintiff contends, however, that Mr. Corn's testimony was supported by Mr. Popejoy's deposition testimony concerning the Lamar and Parker Road projects. Mr. Popejoy is an employee of Popejoy Construction Company, Inc., another of defendant's alleged coconspirators. Like Mr. Corn and Corn Construction, Mr. Popejoy and his employer entered a settlement agreement with plaintiff and federal...