U.S. v. Missouri Valley Const. Co., 83-2188
| Decision Date | 22 August 1984 |
| Docket Number | No. 83-2188,83-2188 |
| Citation | 741 F.2d 1542 |
| Parties | 1984-2 Trade Cases 66,160 UNITED STATES of America, Appellant, v. MISSOURI VALLEY CONSTRUCTION COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
William F. Baxter, Asst. Atty. Gen., John J. Powers, III, Stephen F. Ross, Attys., Dept. of Justice, Washington, D.C., for appellant.
Robert B. Crosby, Donn E. Davis, Scott J. Norby of Crosby, Guenzel, Davis, Kessner & Kuester, Lincoln, Neb., and Jill Jelinek, Peter Kiewit Sons, Inc., Omaha, Neb., for appellee.
Before LAY, Chief Judge, HEANEY, BRIGHT, McMILLIAN, ARNOLD, JOHN R. GIBSON, FAGG and BOWMAN, Circuit Judges. En Banc
This case presents the narrow question whether a federal district court may impose on a willing corporation as a condition of probation, in lieu of a fine, the requirement that it contribute money to a charitable organization that has not suffered actual damages or loss from the corporation's criminal offense. We conclude that the district courts lack authority to impose such conditions of probation. We overrule the decision of a panel of this court in United States v. William Anderson Co., 698 F.2d 911 (8th Cir.1982), insofar as it authorizes the district courts to direct a defendant, as a condition of probation, to pay money to entities that did not suffer actual damages or loss resulting from the defendant's offense.
This case has a complicated procedural history. On December 23, 1981, the United States entered a preindictment plea agreement with Peter Kiewit Sons', Inc. and its subsidiary, Missouri Valley Construction Company. Under the agreement, Missouri Valley was to plead guilty to a two-count indictment alleging violations of section 1 of the Sherman Act, 15 U.S.C. Sec. 1, arising out of Missouri Valley's alleged conspiracy with other contractors to rig bids and allocate highway construction contracts. Two corporate employees were also to plead guilty to criminal violations of the Sherman Act. 1 In return for the plea, the Government agreed not to bring any other charges against Kiewit or its subsidiaries, affiliates, or employees in connection with highway construction bid-rigging in Nebraska, Oklahoma, or Kansas. The Government also agreed to recommend that the sentencing court impose a total fine of $1,000,000 on Missouri Valley.
Pursuant to the agreement, Missouri Valley on January 14, 1982 entered a plea of guilty to the two-count indictment. On February 19, 1982, the district court sentenced Missouri Valley, rejecting the Government's recommendation of a $1,000,000 total fine and imposing instead a fine of $1,000,000 on each count, the statutory maximum. On appeal, this court vacated that sentence because the district court failed to advise the defendant, before sentencing, as required by Fed.R.Crim.P. 11(e)(2), that the defendant would have no right to withdraw its guilty plea if the district court rejected the Government's sentencing recommendation. United States v. Missouri Valley Const. Co., 704 F.2d 1026 (8th Cir.1983).
Between the time the district court initially sentenced Missouri Valley and the time this court vacated the sentence and remanded the case, Missouri Valley made two motions to the district court for reduction of sentence. The first, a motion under Fed.R.Crim.P. 35 contending that the fine imposed was substantially higher than that imposed by other courts in bid-rigging cases, was denied on the ground that the circumstances of this case justified the maximum statutory penalty.
The second motion requested the district court to consider imposing an "alternative sentence" on Missouri Valley, in lieu of the $2,000,000 fine. Missouri Valley proposed that its fine be reduced to $100,000, and that, as a condition of probation, it contribute $1,400,000 to the University of Nebraska Foundation, either (1) to endow a professorship in ethics or (2) to fund the construction of an addition to the University's College of Engineering and to establish a permanent program of seminars on ethics in business and engineering. Missouri Valley explained that the Kiewit organization had a long and close association with the University of Nebraska, many of its leading figures having been educated there, and the University having received substantial contributions from Kiewit and its executives over the years. Missouri Valley also observed in its motion that the district court had recently approved "alternative sentences" for a number of other corporate defendants.
Indeed, while Missouri Valley's first appeal was still pending in this court, a panel of this court affirmed one of the "alternative sentences" the district court had imposed on other corporate bid-riggers. See United States v. William Anderson Co., supra, 698 F.2d 911. In Anderson, a number of individual defendants were sentenced to perform community service work and to pay fines, part or all of which sums were to go to the community organizations for which the individuals were performing service work. A number of corporate defendants also were to pay fines, part of which would be suspended if, as a condition of probation, the defendant corporations would pay the suspended amounts to the organizations for which the individual defendants were performing community service work. The Government did not seek Supreme Court review of this court's decision approving the corporate terms of probation 2 in Anderson.
Some seven months after our Anderson decision, and three months after we vacated the initial Missouri Valley sentence, the district court resentenced Missouri Valley. The court again imposed a fine of $1,000,000 on each of the two counts. In response to Missouri Valley's "alternative sentence" motion, however, the court suspended all but $325,000 of the fine, placing the corporation on probation for five years, subject to the condition that it contribute $1,475,000 to the University of Nebraska Foundation "for the purpose of permanently endowing and supporting a chair in ethics." 3 The court stipulated that the chair not be named in any way that would identify it with Missouri Valley, its parent or subsidiary corporations, or their officers or former officers. Nor would Missouri Valley, the Kiewit corporations, or their officers or former officers participate in any way in the administration of the endowment or in the appointment of a professor to the endowed chair. The contribution was to be treated as a criminal penalty for income tax purposes. 4 In addition, Missouri Valley and any other Kiewit corporations operating in the Grand Island, Nebraska area were to adopt a policy for detecting and reporting possible bid-rigging by their employees, and were to conduct an annual seminar on antitrust compliance, at which each of the corporations' bidding officers would be required to subscribe to a court-approved statement on corporate antitrust compliance policy.
The United States objected at the sentencing hearing to the imposition, as a condition of probation, of a payment to the University of Nebraska Foundation in lieu of a fine. The Government renews this challenge on appeal.
This appeal was originally set for submission to a three-judge panel of this court. Under Eighth Circuit practice, however, a case will be submitted to the full court en banc, on the court's own motion, without a poll of all the judges in regular active service, if a majority of the panel to which the case is initially assigned requests the full court to hear the case.
The panel to which this case was initially assigned requested that the case be heard en banc for a number of reasons. First, this court's decision in Anderson, supra, 698 F.2d 911, appeared to conflict with two decisions of the Tenth Circuit, United States v. Clovis Retail Liquor Dealers Trade Association, 540 F.2d 1389 (10th Cir.1976), and United States v. Prescon Corp., 695 F.2d 1236 (10th Cir.1982). Second, the panel was aware that an appeal was pending in the Fourth Circuit from a decision of the United States District Court for the District of Maryland, United States v. Wright Contracting Co., 563 F.Supp. 213 (D.Md.1983), that relied on this circuit's Anderson decision. 5 Third, the panel recognized the importance of the issue at stake, in light of the growing interest in "alternative" sentencing.
Because this appeal raised the possibility that Anderson might be overruled, and because only the court en banc can overrule precedent established by a panel in an earlier case, the three judges to whom this case was initially assigned thought it provident to refer the case to the full court. The United States had submitted a brief to the panel attempting to distinguish this case from Anderson, but was granted leave, after the case was reset for argument before the court en banc, to submit a supplemental brief urging the court to overrule Anderson.
The power of the federal courts to suspend sentences and place defendants on probation arises entirely from statute; it is not inherent in the courts. United States v. Fultz, 482 F.2d 1, 2 (8th Cir.1973); Ex parte United States, 242 U.S. 27, 37 S.Ct. 72, 61 L.Ed. 129 (1916); United States v. Cohen, 617 F.2d 56, 58 (4th Cir.), cert. denied, 449 U.S. 845, 101 S.Ct. 130, 66 L.Ed.2d 55 (1980); United States v. Atlantic Richfield Co., 465 F.2d 58, 60 (7th Cir.1972). The probation statute, 18 U.S.C. Sec. 3651, 6 gives the trial court wide discretion to fashion probationary conditions appropriate to each case. It provides that the trial court,
when satisfied that the ends of justice and the best interest of the public as well as the defendant will be served thereby, may suspend the imposition or execution of sentence and place the defendant on probation for such period and upon such terms and conditions as the court deems best.
The statute elaborates upon this general grant of discretion, however, by specifying a number of different...
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