U.S. v. Northern Imp. Co.

• Decision Date: 08 May 1987
• Docket Number: F-M,No. 86-5216,86-5216
• Citation: 814 F.2d 540
• Parties: , 1987-1 Trade Cases 67,492 UNITED STATES of America, Appellant, v. NORTHERN IMPROVEMENT COMPANY, William Collins, Inc.,Asphalt, Inc., S & S Construction Co., and Steve McCormick, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 540

814 F.2d 540

55 USLW 2568, 1987-1 Trade Cases 67,492

UNITED STATES of America, Appellant, v. NORTHERN IMPROVEMENT COMPANY, William Collins, Inc., F-M Asphalt, Inc., S & S Construction Co., and Steve McCormick, Appellees.

No. 86-5216.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 9, 1986.

Decided March 24, 1987.

Rehearing and Rehearing En Banc Denied May 8, 1987.

Andrea Limmer, Washington, D.C., for appellant.

David R. Melincoff, Washington, D.C., for appellees.

Before ROSS, JOHN R. GIBSON and FAGG, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

The United States appeals from the dismissal of an indictment against Northern Improvement Company, F-M Asphalt, and Steve McCormick, charging them with violation of section 1 of the Sherman Act, 15 U.S.C. Sec. 1 (1982), on the ground that it was barred by the statute of limitations. The indictment charged participation by the defendant-appellees in a collusive, noncompetitive submission of rigged bids to the cities of Fargo and West Fargo, North Dakota, and Moorhead, Minnesota for the award of municipal improvement projects; the award of various projects to the defendants; and the receipt by the defendants of payment for these projects. The district court held that the last act triggering the running of the five year statute of limitations was the submission of the rigged bids rather than the receipt of payments pursuant to the contracts awarded on the bids. We conclude that the statute did not run until receipt of the payments; we reverse the judgment of the district court dismissing the indictment and remand for trial.

The indictment alleged that the three cities invited municipal street improvement contractors to submit sealed competitive bids on various projects. After the receipt and opening of the bids at a process known as a "bid letting," the cities awarded contracts to the lowest bidder. The indictment charged that as early as 1975 and continuing at least through July 28, 1981 the defendants and others engaged in a continuing agreement to submit collusive, non-competitive, rigged bids to the cities. To effectuate the conspiracy, the indictment charged that the defendants discussed the submission of prospective bids and agreed who among them would be the low bidder with the expectation that it would be awarded the project; that they submitted intentionally high non-competitive bids on some of the projects; and that they received and accepted payments from the cities for work performed on the projects. The bill of particulars detailed the meetings and conversations among the defendants. It alleged that the conspirators agreed which one would be the low bidder on each project and that the designated low bidder provided the others with numbers to use in preparing their bids so that the other bids would be high and non-competitive. The conspiracy allegedly continued "at least" until July 28, 1981 when the City of Fargo made its final payment to Northern Improvement Company for work on one of the projects that had been let on March 3, 1980.

The indictment was filed on October 9, 1985. The defendants moved to dismiss the indictment on the ground that it was barred by the five-year statute of limitations. 18 U.S.C. Sec. 3282 (1982). When the motion to dismiss was filed, the district court defined the issue as being whether the statute of limitations was triggered by the bid offer, the contract award, or the payment. It concluded that there was no sharing of spoils after the payments on the contracts or showing of favoritism on subcontract awards and that, under the indictment and bill of particulars, the purpose of the conspiracy was accomplished when the rigged bids were submitted. The conspiracy, therefore, terminated at that time. The district court dismissed the indictment.

The government appeals, arguing that the conspiracy continued until all of its objectives were achieved and until the contemplated illicit gain was realized, i.e., Northern Improvement received payment on one of the contracts on June 28, 1981.

A conspiracy is a "partnership in criminal purposes." United States v. Kissel, 218 U.S. 601, 608, 31 S.Ct. 124, 126, 54 L.Ed. 1168 (1910). "[T]he crucial question in determining whether the statute of limitations has run is the scope of the conspiratorial agreement, for it is that which determines * * * the duration of the conspiracy * * *." Grunewald v. United States, 353 U.S. 391, 397, 77 S.Ct. 963, 970, 1 L.Ed.2d 931 (1957). While a Sherman Act conspiracy is technically ripe when the agreement to restrain competition is formed, "it remains actionable until its purpose has been achieved or abandoned." United States v. Inryco, 642 F.2d 290, 293 (9th Cir.1981) (citing Kissel, 218 U.S. at 607-08, 31 S.Ct. at 125-26, cert. dismissed, 454 U.S. 1167, 102 S.Ct. at 1045, 71 L.Ed.2d 324 (1982)). As this court said some years ago: "[A] criminal conspiracy once formed continues until the object of it has been accomplished unless abandoned short of an overt act, or broken up by the arrest of the participants." McDonald v. United States, 89 F.2d 128, 133 (8th Cir.), cert. denied, 301 U.S. 697, 57 S.Ct. 925, 81 L.Ed. 1352 (1937). We have no difficulty in concluding that the conspiracy charged in the indictment continued until Northern Improvement received payment and, accordingly, the five-year statute of limitations had not run against the defendants.

The defendants contend that the only substantive term of the conspiracy was the agreement to submit the rigged bids. This agreement and the submission of the rigged bids are, the defendants argue, the only acts charged against the defendants as being in furtherance of the conspiracy. The indictment and bill of particulars, however, plainly charge the defendants with having entered their bid-rigging agreement "with the expectation that [the agreed upon] low bidder would be awarded the project and paid by the city awarding the project for the construction of the project * * *." Designated Record at 8. They are also charged with "receiving and accepting * * * payments for work performed on * * * municipal street improvement projects." Id. at 9. As indictments are to be read in a common sense, nontechnical manner, United States v. Pleasant, 469 F.2d 1121, 1125 (8th Cir.1972), we do not doubt that this indictment is broad enough to encompass the event--receipt of payment--on which the government relies to bring the defendants' activities within the statute of limitations.

The district court nonetheless concluded that the "purpose" of the conspiracy terminated at the time the bids were submitted, as that was the moment when the "terms and conditions of the illegal contract were completed." United States v. Northern Improvement Co., 632 F.Supp. 1576, 1581 (D.N.D.1986). No conspirator owed any right or obligation to any other conspirator beyond that point. After the bids were submitted, "only the interest of each individual bidder, as an individual and not as a co-conspirator, remained." Id. at 1581. We do not agree.

The purpose of entering the conspiracy, and the purpose of submitting the rigged bids, was not merely to restrain competition for the satisfaction of violating the Sherman Act. We do not deal here with criminal behavior that is an end in itself. Common sense tells us that the conspirators' purpose was to reap the benefit of the conspiracy: to be awarded public improvement contracts at anti-competitively high prices and to be paid for those contracts. As we stated in the different but analogous context of a conspiracy to transport a kidnapped person held for ransom across state lines,

What was the object to be attained by the capture and detention of Brenner? Clearly, it was not for the mere pleasure of his company at the "hide-out" over in Illinois, or in moonlight joy rides back and forward across the Illinois, Wisconsin, and Minnesota boundaries. But as in almost all cases which fall under the ban of the statute, the seizure and detention of Bremer was for the purpose, therefore with the object of illicit gain.

McDonald, 89 F.2d at 133.

As in McDonald, the object and purpose of this illegal agreement was "illicit gain," the receipt of payments, and we conclude that the district court erred in holding that the purpose of the conspiracy terminated the moment the bids were submitted.

Our conclusion that the scope and purpose of the conspiracy included the receipt of payments on the contracts awarded pursuant to collusive, non-competitive bids does not answer the defendants'...