U.S. v. Pippin, 89-4002

• Decision Date: 25 June 1990
• Docket Number: No. 89-4002,89-4002
• Citation: 903 F.2d 1478
• Parties: 1990-1 Trade Cases 69,068, 4 Fed.Sent.R. 6 UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Jerry R. PIPPIN, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1478

903 F.2d 1478

1990-1 Trade Cases 69,068, 4 Fed.Sent.R. 6

UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Jerry R. PIPPIN, Defendant-Appellant, Cross-Appellee.

No. 89-4002.

United States Court of Appeals Eleventh Circuit.

June 25, 1990.

Claude H. Tison, Jr., MacFarlane, Ferguson, Allison & Kelly, Tampa, Fla., for defendant-appellant, cross-appellee.

John J. Powers, III, U.S. Dept. of Justice, Antitrust Div., Washington, D.C., for plaintiff-appellee, cross-appellant.

Appeals from the United States District Court for the Northern District of Florida.

Before JOHNSON, Circuit Judge, HILL ^* and HENLEY ^**, Senior Circuit Judges.

HENLEY, Senior Circuit Judge:

Both the defendant, Jerry Pippin, and the government appeal the sentence given Mr. Pippin for rigging bids in violation of section one of the Sherman Act, 15 U.S.C. Sec. 1 (1988). The parties agree that the district court erroneously applied the Sentencing Guidelines but disagree on what sentences can be imposed under the Guidelines on remand. The defendant also questions whether the Guidelines are applicable to this case, arguing that his bid-rigging activity ended before the Guidelines went into effect. We uphold the district court's ruling that the Guidelines govern Mr. Pippin's sentencing, but vacate his sentence and remand for resentencing consistent with this opinion.

I.

From the early 1970s until 1988, dairies in the Florida panhandle conspired to rig bids for school milk contracts. Mr. Pippin participated in this scheme when he was general manager of the Tallahassee plant of Borden Milk Company in 1982-1985 and after he became general manager of the Borden Pensacola plant in 1986. As general manager of the Pensacola plant, the defendant joined with competitors to rig bids for 1987-1988 school-year contracts. Late in the summer of 1987, he learned that another dairy had underbid his plant for a contract Borden was supposed to have won under the bid-rigging agreement. Mr. Pippin then informed his competitors that he would not participate in any future bid rigging. According to the defendant, he reiterated his decision not to engage in additional bid rigging on several occasions when competitors contacted him in the fall of 1987. However, Mr. Pippin acknowledges that he continued to honor his prior commitment not to compete for the 1987-1988 contracts for which bids had not already been submitted. Also, he does not deny that until July 1988 the Pensacola plant performed and received payment under bid-rigged contracts.

Pursuant to a plea agreement prepared under Federal Rule of Criminal Procedure 11(e)(1)(B), Mr. Pippin pled guilty to an information charging him with one count of violating section one of the Sherman Act. In return for the defendant's assistance in its ongoing investigation, the government agreed to recommend a sentence of four months imprisonment in a federal prison camp with no personal fine. The district court accepted the plea and held that the Guidelines were to be used in sentencing. Subsequently the government filed a motion under Guideline Sec. 5K1.1 requesting that the district court depart from the Guidelines in order to impose no personal fine because of Mr. Pippin's cooperation with the government's investigation. The government argued that the motion for departure was for only the fine portion of the sentence and that "no departure from the jail sentence portion of the Guidelines sentence [was] being sought."

At the sentencing hearing, the district court strongly disagreed with the government's position that the 5K1.1 motion could be limited to the fine portion of the sentence. It appears that ultimately the district court decided not to depart from the Guidelines for either the fine or incarceration imposed. Commenting that its sentence was "within the Guidelines," the district court imposed a punishment of four months of community confinement followed by one year of supervised release; and payment of any costs incident to the confinement and supervision of release, a $25,000.00 fine, and a $50.00 special assessment.

II.

On appeal both parties agree that the district court did not sentence within the Guidelines but disagree on what sentence should have been imposed. The sharply conflicting views held by the government, the defendant, the probation officer who prepared the presentence report, and the district court, all demonstrate the " 'horripilating confusion' " ¹ that the Guidelines have wrought. However, we need not waste time disentangling a snarly rope if the Guidelines may not be used. Thus, we first address the defendant's argument that the Guidelines are inapplicable here.

A.

The Guidelines went into effect on November 1, 1987, and only apply to criminal offenses "committed after" that date. See Sentencing Act of 1987, Pub.L. No. 100-182, Sec. 2(a), 101 Stat. 1266 (1987). While the legislative history may not be entirely clear, we conclude that Congress intended for the Guidelines to be used both for offenses commenced after November 1, 1987 and offenses begun before but not completed until after that date. ² The bid- rigging conspiracy in this case began before November 1, 1987, and continued until at least July, 1988; thus, the Guidelines should be used to sentence Mr. Pippin unless thereby his constitutional rights would be violated. The defendant contends that application of the Guidelines to his sentence would violate his rights under the ex post facto clause, U.S. Const. art. I, Sec. 9, cl. 3.

Some courts have concluded that the ex post facto clause does not bar application of the Guidelines to conspiracies that began before and continued after November 1, 1987. ³ See, e.g., United States v. Watford, 894 F.2d 665 (4th Cir.1990); United States v. Lee, 886 F.2d 998, 1003 (8th Cir.1989). However, if an alleged conspirator can meet his burden of proving withdrawal from the conspiracy before November 1, 1987, then the ex post facto clause may bar application of the Guidelines, notwithstanding the fact that the conspiracy may have continued beyond this date. See Watford, 894 F.2d at 670-71 (finding Guidelines applicable because defendant had not met burden of proving withdrawal before November 1, 1987); Lee, 886 F.2d at 1003 (finding Guidelines applicable because at no time before November 1, 1987 had defendant "affirmatively disavowed the conspiracy").

The alleged conspirator demonstrates withdrawal by proving that he (1) "undertook affirmative steps, inconsistent with the objects of the conspiracy, to disavow or to defeat the conspiratorial objectives," and (2) "either communicated those acts in a manner reasonably calculated to reach his coconspirators or disclosed the illegal scheme to law enforcement authorities." United States v. Finestone, 816 F.2d 583, 589 (11th Cir.), cert. denied, 484 U.S. 948, 108 S.Ct. 338, 98 L.Ed.2d 365 (1987). Merely ending one's activity in a conspiracy may not constitute withdrawal. Id.

Mr. Pippin contends that he withdrew from the conspiracy when he told his coconspirators late in the summer of 1987 that he would no longer engage in bid rigging. As evidence of withdrawal, the defendant notes that when competitors approached him in the fall of 1987, he continued to refuse to join in any other bid-rigging agreements.

Although it is arguable that the defendant's communication to his coconspirators satisfied part two of the Finestone test, he has not met his burden of showing adequate affirmative steps to disavow or defeat the conspiratorial objectives, as required by part one of the test. In order to determine the objectives of a bid-rigging conspiracy, we look to the conspiratorial agreement, the "relevant contours" of which are charged in the indictment or information. See United States v. Dynalectric Co., 859 F.2d 1559, 1564 (11th Cir.1988), cert. denied, --- U.S. ----, ----, 109 S.Ct. 1641, 1642, 104 L.Ed.2d 157 (1989). Paragraph three of the indictment alleges that "the substantial terms" of the conspiracy agreement included "to refrain from submitting bids ... to certain school boards for the supply of milk" and "to have defendant's employer supply milk to certain school boards at artificial and noncompetitive prices." Paragraph four alleges that conspiratorial acts included "refraining from bidding ... for the supply of milk to certain school boards" and "having defendant's employer supply milk to certain school boards and receive compensation therefor." Mr. Pippin has admitted that he honored his prior agreement not to bid for the school milk contracts that remained after he informed his coconspirators that he would no longer participate in bid rigging. Also, the defendant managed the Pensacola plant while it performed and received compensation under the bid-rigged contracts throughout the 1987-1988 school year. These actions taken by Mr. Pippin are conclusive evidence that he had not effectively withdrawn from the bid-rigging conspiracy by November 1, 1987, notwithstanding his communication to coconspirators before this date that he would not participate in future bid rigging.

As part of his ex post facto position, the defendant also appears to argue relatedly that in order for the Guidelines to be constitutionally applied to his sentencing, the government must establish that he committed an overt act in furtherance of the conspiracy after November 1, 1987. This contention appears to be foreclosed, however, by United States v. Wells Fargo Armored Service Corp., 587 F.2d 782, 783 (5th Cir.1979) (per curiam), which rejected a similar argument. See id. (affirming a conviction of conspiracy under section one of the Sherman Act after a plea of nolo contendere, even though defendant argued that his conviction violated the ex post facto clause "in that the indictment purported to charge a felony without alleging that overt acts occurred during the time period after December 21, 1974, when the offense was made a felony"); see also Wa...