U.S. v. Mobile Materials, Inc., 86-1756

• Decision Date: 28 July 1989
• Docket Number: No. 86-1756,86-1756
• Citation: 881 F.2d 866
• Parties: 1989-2 Trade Cases 68,682, 28 Fed. R. Evid. Serv. 636 UNITED STATES of America, Plaintiff-Appellee, v. MOBILE MATERIALS, INC. and Gerald O. Philpot, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 866

881 F.2d 866

1989-2 Trade Cases 68,682, 28 Fed. R. Evid. Serv. 636

UNITED STATES of America, Plaintiff-Appellee, v. MOBILE MATERIALS, INC. and Gerald O. Philpot, Defendants-Appellants.

No. 86-1756.

United States Court of Appeals, Tenth Circuit.

July 28, 1989.

Mack Muratet Braly of Mack Muratet Braly & Associates, Tulsa, Okl., for defendants-appellants.

Andrea Limmer, Atty., Dept. of Justice, Washington, D.C. (Douglas H. Ginsburg, Asst. Atty. Gen., W. Stephen Cannon, Deputy Asst. Atty. Gen., and John J. Powers, III, Atty., Dept. of Justice, Washington, D.C., with her on the brief), for plaintiff-appellee.

Before McKAY, MOORE and BALDOCK, Circuit Judges.

ON PETITION FOR REHEARING

PER CURIAM.

In our last disposition of this case, we declined to consider various points raised by appellants because we lacked relevant portions of the trial transcript. United States v. Mobile Materials, Inc. (Mobile Materials II), 871 F.2d 902, 906 n. 1, 918 (10th Cir.1989). This case illustrates the need for appellate counsel to monitor carefully the preparation, designation and transmission of the record on appeal. Three problems occurred here.

First, although a substantial portion of the trial transcript was ordered and filed ¹ at the district court, some portions of the filed transcript were not transmitted to the court of appeals. See Fed.R.App.P. 10(b)(1) (appellant must order transcript); Fed.R.App.P. 11(b) (court reporter must file transcript with the clerk of the district court & clerk must transmit complete record to court of appeals). These portions of the transcript were not transmitted to the court of appeals because they were not designated for transmission. See Appellants' Petition for Rehearing, ex. I (Designation of Record on Appeal filed Sept. 29, 1986).

The second problem in this case is that another portion of the transcript was never filed with the district court, nor was it designated for transmission. We think that these errors should have been apparent to counsel upon receipt of his copy of the district court clerk's letter of October 28, 1986, transmitting the limited record on appeal and containing the district court docket sheet as an index to the record on appeal. In the interest of justice, however, we granted appellants' motion to supplement the record with the missing volumes of transcript that had been filed with the district court. For the same reason, we also obtained a final volume of the transcript which had not been filed at the district court.

The third problem is that no statement of proceedings was prepared by appellant upon learning that a reporter was unable to locate notes of a brief exchange between the court and the jury. Fed.R.App.P. 10(c) allows for such a statement to be included as part of the record on appeal when a transcript is unavailable. The exchange in question occurred when the jury reported to the court that it was unable to reach a verdict. No steps have been taken to cure the problem of the missing notes, and the parties disagree about the characterization of the district court's brief statements.

We now consider the balance of the appeal. On rehearing, we affirm the judgments below.

I.

"Any agreement between competitors pursuant to which contract offers are to be submitted or withheld from a third party constitutes bid rigging per se violative of 15 U.S.C. section 1." United States v. Portsmouth Paving Co., 694 F.2d 312, 325 (4th Cir.1982); United States v. W.F. Brinkley & Son Constr. Co., 783 F.2d 1157, 1160-61 (4th Cir.1986). Appellants (Philpot and Mobile) contend that the case should not have been submitted to the jury on the theory of a grand conspiracy to rig bids. Appellants argue that evidence concerning jobs unrelated to appellants should not have been admitted, and they attack the sufficiency of the evidence which supports the jury's implicit finding of a single conspiracy to rig bids. The arguments of appellants focus on the admissibility of co-conspirator hearsay and whether there was a variance between the indictment and the proof at trial.

A.

Concerning the district court's decision to admit co-conspirator statements, appellants contend that those co-conspirator statements pertained to "unrelated" jobs, were hearsay, and should not have been admitted. They suggest that the trial court did not admit the statements in accord with the requirements outlined in United States v. James, 590 F.2d 575, 580-82 (5th Cir.), cert. denied, 442 U.S. 917, 99 S.Ct. 2836, 61 L.Ed.2d 283 (1979), and United States v. Petersen, 611 F.2d 1313, 1330-31 (10th Cir.1979), cert. denied, 447 U.S. 905, 100 S.Ct. 2985, 64 L.Ed.2d 854 (1980).

In United States v. Hernandez, 829 F.2d 988 (10th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 1486, 99 L.Ed.2d 714 (1988), we recognized that after Bourjaily v. United States, 483 U.S. 171, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987), a trial court may admit statements of co-conspirators under Fed.R.Evid. 801(d)(2) after finding, by a preponderance of the evidence that: 1) a conspiracy existed, 2) the declarant and the defendant against whom the declarations are offered were members of the conspiracy, and 3) the statements were made in the course of and in furtherance of the conspiracy. Hernandez, 829 F.2d at 993. In making these determinations, the trial court may rely on both the hearsay statements and the independent evidence presented. Bourjaily, 483 U.S. at 181, 107 S.Ct. at 2782; United States v. Wolf, 839 F.2d 1387, 1393 (10th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 304, 102 L.Ed.2d 323 (1988). Thus, the trial court is not limited to independent evidence in making its preliminary factual determinations. United States v. Chestang, 849 F.2d 528, 530-31 (11th Cir.1988); United States v. Perez, 823 F.2d 854,855 (5th Cir.1987) (Bourjaily "effectively abolishes our James constraints"). When practical, the trial judge should make these factual determinations before allowing the co-conspirator statements to be heard by the jury. Hernandez, 829 F.2d at 994. However, we have recognized that the trial judge has "considerable discretion" to admit the statements conditionally, subject to their later being connected up. Id. at 994 n. 6. Regardless of the order of proof, the district court should make or reaffirm the requisite factual determinations at the conclusion of the evidence. Petersen, 611 F.2d at 1230.

In this case, the trial court admitted certain challenged statements conditionally and then determined that the requirements for admissibility had been satisfied after the testimony of the government's first immunized witness, Ken Jacobs. Jacobs testified that he participated in bid-rigging on Oklahoma highway projects when he became area manager for South Prairie Construction Co. in 1978. He testified that "that just seemed to be the way that the business was done." Rec. supp. I, vol. II at 93. Jacobs generally described how the bid-rigging process worked ² and then discussed particular jobs involving Philpot and Mobile.

According to Jacobs, "he gave some work away and also took some." Id. at 94. He explained a system of complimentary bidding. This system enabled various contractors to prearrange which contractor would submit the lowest bid. Several contractors might agree to submit complimentary bids above an amount specified by a prearranged low bidder, thereby making it quite likely that the prearranged low bidder would be awarded the project. A contractor might agree to submit a complimentary bid because he had received a similar favor in the past. Alternatively, a contractor might agree to submit a complimentary bid, or refrain from bidding entirely, because of a promise by the prearranged low bidder to let that contractor have a job in the future. By its very nature, this scheme was ongoing--future projects served both to create and to satisfy obligations.

The first jobs that Jacobs testified about were SAP-63(126) and SAP-67(83) (the Seminole projects), let by the Oklahoma Department of Transportation (ODOT) on December 21, 1978. Jacobs testified that Philpot contacted him and indicated that he was interested in these jobs. Jacobs agreed to submit complimentary bids on behalf of South Prairie which he thought would assist Mobile in being awarded SAP-67(83) and Cherokee in being awarded SAP-63(126). According to Jacobs, he had not heard from either Philpot of Mobile or Stuart Ronald of Cherokee and needed to submit his complimentary bids. Jacobs needed amounts to bid above on both projects to avoid the risk of being the low bidder. He testified that he went to a hotel room at the Lincoln Plaza Hotel and was given two numbers to bid above by Philpot and Ronald. Jacobs then turned in his complimentary bids for South Prairie.

Jacobs then testified about rigging project WR-MC-18, the Will Rogers Turnpike job, bid on July 12, 1979. Jacobs said he had been contacted by Ray Broce of Broce Constr. Co. Broce agreed that he would assist Jacobs in getting the Turnpike project by submitting a complimentary bid. In return, Jacobs agreed to submit a complimentary bid on another project near Ratliff City (Stephens-Carter Counties) which Broce wanted. Jacobs delivered a figure to representatives of Broce to enable them to prepare a complimentary bid. Jacobs also testified that he talked to Philpot about the Turnpike job before it was let. Jacobs learned that Philpot was possibly going to bid on the Turnpike job. Jacobs negotiated with Philpot and induced him to give up the Turnpike job in exchange for a complimentary bid on a future project. An upcoming project, F-236(11) (the Ada Bypass), was discussed. Jacobs then related how he withheld South Prairie's bid on the Ada Bypass project because Philpot wanted the Ada Bypass job, and Philpot had helped Jacobs obtain the Turnpike job.

The next job Jacobs testified about was F-91(15), a road-widening job between Davis and Sulphur (the Murray County job). According to the...