U.S. v. Krasn

Decision Date10 March 1980
Docket NumberNo. 78-2950,78-2950
Citation614 F.2d 1229
Parties1980-1 Trade Cases 63,276, 6 Fed. R. Evid. Serv. 221 UNITED STATES of America, Plaintiff-Appellee, v. Reuben KRASN, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Stephen D. Miller, Beverly Hills, Cal., on brief, David D. Hinden, Miller, Glassman & Browning, Beverly Hills, Cal., argued, for defendant-appellant.

Frederic Freilicher, U. S. Dept. of Justice, Washington, D. C., argued, John J. Powers, III, Washington, D. C., on brief, for plaintiff-appellee.

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

Before CHOY, ANDERSON and HUG, Circuit Judges.

J. BLAINE ANDERSON, Circuit Judge:

This is a criminal antitrust case. Krasn, the defendant below and the appellant in this court, thirteen meat-packing corporations, nine individuals, and one trade association, were charged with a conspiracy to fix, raise, and stabilize the price of carcass beef in the Los Angeles area. Krasn was the only defendant who proceeded to trial. After an eleven-day jury trial, Krasn was found guilty on one count of violating Sherman Act Section One. He then took this appeal, raising five assignments of error. Krasn claims that his conviction should be reversed because of: (1) the government's breach of a plea bargain agreement; (2) the pre-indictment delay; (3) the instructions on conspiracy; (4) insufficient evidence of the effect of the conspiracy on prices; and (5) the introduction of summary charts into evidence. After a thorough review of the record and Krasn's arguments, we conclude that there was no reversible error and affirm his conviction.

I. FACTS

What follows is a brief description of the background of the conspiracy. Other factual matters are discussed as they become necessary to our consideration of the arguments raised by Krasn.

Krasn was the president of Globe Packing Company. His company, along with the other original defendants, was a member of Meat Packers, Inc., a nonprofit trade association for meat packers (referred to as trade association).

In the 1960's, the members began to have weekly meetings every Wednesday morning at the trade association offices. Various matters were discussed, but the meetings generally focused on the price at which they would sell their carcass beef.

Safeway, the largest purchaser of beef in the area, made its weekly purchase of beef on Wednesdays. The meat packers submitted telephone bids to Safeway up to 11:30 a. m. on Wednesdays. Safeway would then announce its purchases later in the day. The Safeway price set the standard which was followed by other retailers as the fair market price for carcass beef during the following week.

At the Wednesday morning meetings the packers would discuss and arrive at a consensus price for their bids to Safeway. There was some dispute as to how binding the consensus price was to the packers, but nonetheless an agreement would be reached.

The Wednesday morning meetings and the packers' discussions about the Safeway price were interrupted by the nationwide price freeze which began on March 29, 1973. During this time the packers initially were forced to close down because of the ceiling on their prices which did not consider the rising cost of livestock to them. The retailers then began purchasing the livestock and contracting with the packers to have them custom slaughtered for them.

Following the end of the price freeze in February of 1974, the Wednesday morning meetings were resumed. The government stipulated that the conspiracy covered in the indictment did not continue after August of 1974. Krasn was eventually indicted for price fixing. The present appeal is taken from his conviction for violating the Sherman Act. 1

II. DISCUSSION
1. The Plea Bargain

Krasn plead guilty to other criminal charges which also arose from the same investigation of the Los Angeles meat packing industry as the present antitrust charge. Krasn argues that the plea bargain which was negotiated on the other charges was supposed to include all other possible criminal charges. After an evidentiary hearing, the district court rejected Krasn's argument.

On March 27, 1974, Krasn was indicted for the bribery of a U. S. Department of Agriculture meat grader in violation of 18 U.S.C. § 201(b)(1). After his acquittal on the bribery charges, on December 4, 1974, Krasn was indicted on twenty-five counts of the payment of gratuities to government meat graders in violation of 18 U.S.C. § 201(f).

After the gratuities charges were filed, Katz, Krasn's attorney, engaged in plea negotiations with an Assistant U. S. Attorney named Bonner who handled both the bribery-gratuities cases and the initial stages of the antitrust investigation. These negotiations eventually led to Krasn entering a guilty plea to four of the gratuities counts on April 1, 1975.

At the evidentiary hearing in the district court there was conflicting testimony as to what was included in the plea bargain. Katz testified to a telephone conversation with Bonner which occurred on March 10, 1975. During this conversation, Katz said that he wanted the matter concluded so that there would not be any further criminal proceedings against Krasn based on his past activities. When Bonner asked what he meant, Katz said that the only things which he could think of were violations of the Internal Revenue laws. According to Katz, Bonner then agreed to include possible violations of the Internal Revenue laws. Bonner could not recall the details of the March 10 conversation. However, the government relied upon three letters which were exchanged between Bonner and Katz to memorialize the plea agreement. In a letter dated March 17, Bonner agreed to dismiss the remaining counts of the indictment, and forego prosecution on charges arising from the giving of bribes or gratuities, if Krasn pled guilty to four of the gratuities counts. 2 Katz responded in a letter dated March 20, agreeing to Bonner's letter provided that it was understood that the government would not prosecute Krasn under the Internal Revenue laws for the giving of bribes or gratuities. 3 In a letter dated March 25, Bonner replied that the charges included criminal violations of the Internal Revenue laws. 4

After the evidentiary hearing, Judge Lucas concluded that the plea bargain did not include a promise not to institute a criminal antitrust proceeding against Krasn. Judge Lucas stated that:

". . . the evidence does not show any objective basis for concluding that the plea agreements in the gratuities cases included a blanket immunity from prosecution for all suspected criminal acts. It doesn't appear to the Court from considering the evidence that the issue of blanket immunity was ever a subject of mutual consideration between the Government and the defendants in the negotiation of the plea agreements. . . ."

Reporter's Transcript (R.T.) 235-236.

Prior to our review of the district court's interpretation of the agreement, we make a few general observations. Although plea bargaining is a matter of criminal jurisprudence, a plea bargain itself is contractual in nature and "subject to contract-law standards." United States v. Arnett, --- F.2d ----, ---- (9th Cir., Nov. 26, 1979). Any dispute over the terms of the agreement is to be resolved by objective standards. Id. What the parties agreed to in the plea bargain agreement is a question of fact to be resolved by the district court. Id. Therefore, this court's review of the findings made by the court below are subject to the clearly erroneous standard. United States v. Minnesota Mining & Manufacturing Co., 551 F.2d 1106, 1109 (8th Cir. 1977); see United States v. Botero, 589 F.2d 430, 433 (9th Cir. 1978), cert. denied, 441 U.S. 944, 99 S.Ct. 2162, 60 L.Ed.2d 1045; United States v. Agosto, 502 F.2d 612, 614 (9th Cir. 1974).

We have little difficulty in concluding that the findings of Judge Lucas were not clearly erroneous. Initially, we note that Judge Lucas was the judge who accepted Krasn's guilty plea under the plea bargain. There was no evidence to support the interpretation that Krasn had been given immunity for all previous criminal acts. The terms of the agreement were quite specific as the letters between Katz and Bonner reveal. We therefore hold that the plea bargain could not in any way be interpreted as a bar to the government's later prosecution of Krasn's criminal antitrust charge.

Much more critical than his argument about the interpretation of the agreement is Krasn's allegation of bad faith by the government. At the time of the plea agreement Bonner knew about the pending antitrust investigation but he did not disclose this to Katz. Krasn argues that due process required that the prosecutor disclose the existence of the investigation.

Initially, we note that the plea bargaining phase of the criminal justice system "must be attended by safeguards to insure the defendant what is reasonably due in the circumstances." Santobello v. New York, 404 U.S. 257, 262, 92 S.Ct. 495, 499, 30 L.Ed.2d 427 (1971). One of these safeguards is a duty of good faith that we require of our prosecutors who are, after all, merely serving as representatives of the people. 5 In certain cases, this duty of good faith would encompass an obligation to inform a defendant during plea bargain negotiations of other possible criminal charges which may be filed. This however, was not such a case.

In the present case, we do not believe that the failure to disclose amounted to the type of prosecutorial misconduct which rises to the level of a denial of due process. See United States v. Butler, 567 F.2d 885 (9th Cir. 1978); Scarborough v. State of Arizona, 531 F.2d 959 (9th Cir. 1976). There are many factors which can be considered in making this determination; each case turns on its own facts. There are two considerations which we deem important to our conclusion here.

First, the gratuities charges and the...

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