U.S. v. Smith Grading and Paving, Inc.

• Decision Date: 22 April 1985
• Docket Number: Nos. 84-5130,84-5131,s. 84-5130
• Citation: 760 F.2d 527
• Parties: 1985-1 Trade Cases 66,573, 17 Fed. R. Evid. Serv. 1168 UNITED STATES of America, Appellee, v. SMITH GRADING AND PAVING, INC. and Herbert P. Lee, III, Appellants. UNITED STATES of America, Appellee, v. DELLINGER, INC. and Theodore C. Dellinger, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 527

760 F.2d 527

1985-1 Trade Cases 66,573, 17 Fed. R. Evid. Serv. 1168

UNITED STATES of America, Appellee, v. SMITH GRADING AND PAVING, INC. and Herbert P. Lee, III, Appellants.

UNITED STATES of America, Appellee, v. DELLINGER, INC. and Theodore C. Dellinger, Appellants.

Nos. 84-5130, 84-5131.

United States Court of Appeals, Fourth Circuit.

Argued Feb. 8, 1985.

Decided April 22, 1985.

E. LeRoy Nettles, Sr., Lake City, S.C. (Marian D. Nettles, Nettles, Floyd, Turbeville, & Reddeck, Lake City, S.C., on brief), for appellants in No. 84-5130.

William Reynolds Williams, Florence, S.C. (Mark W. Buyck, Jr., Willcox, Hardee, McLeod, Buyck & Baker, Florence, S.C., on brief), for appellants in No. 84-5131.

(Richard S. Clark, Clark & Griffin, Monroe, N.C., on brief), for appellant.

Robert J. Wiggers, Robert B. Nicholson, J. Paul McGrath, Asst. Atty. Gen., Charles F. Rule, Deputy Asst. Atty. Gen., Carl W. Mullis, III, Katherine A. Schlech, Bargery G. Williams, Dept. of Justice, Washington, D.C., on brief), for appellee.

Before PHILLIPS, and WILKINSON, Circuit Judges, and RICHARD L. WILLIAMS, District Judge, Sitting by Designation.

RICHARD L. WILLIAMS, District Judge:

This case involves a six count indictment brought against four defendants for bid rigging a sewer construction project in Lancaster County, South Carolina. The Farmers Home Administration funded the four part sewer project.

Defendant Herbert P. Lee, III is an employee of defendant Smith Grading and Paving Inc. [Smith Grading] and is responsible for the company's bids on all utility-related projects. Defendant Theodore C. Dellinger is the president of defendant Dellinger, Inc. and is responsible for his company's bids. All four defendants were charged, in Count 1 of the indictment, with conspiring with unnamed co-conspirators to rig bids on the Lancaster County, South Carolina sewer project in violation of Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1. Counts 2 and 3 charged Dellinger and Dellinger, Inc. with submitting false statements in their bids in violation of 18 U.S.C. Sec. 1001. Counts 4, 5 and 6 charged Lee and Smith Grading with filing false statements.

At trial the jury found the defendants guilty on all counts. On appeal defendants claim eleven reversible errors.

FACTS

Viewing the evidence in the light most favorable to the government, the prosecutor's case at trial established the following facts. On December 19, 1978 eleven companies submitted bids on one or more of the four parts of the Lancaster County sewer project. Frank Carpenter, representing Dickerson, Inc., was the low bidder on part 1, while B.S. Zeigler, representing Boozer and Wharton, Inc., successfully bid on part 2. Defendants Dellinger Inc. and Smith Grading were, respectively, the low bidders on parts 3 and 4 of the construction project.

Carpenter and Zeigler turned states evidence and testified as to the bid rigging scheme. According to their testimony, all four successful bidders stayed at the Carriage Inn in Lancaster County the night before the bid submission. After dinner, the four met in Zeigler's room, at which time Carpenter proposed that they rig the sewer construction project. Each man was to be the low bidder on one of the four parts of the job. According to both Carpenter and Zeigler, defendants Lee and Dellinger concurred with the plan. The men exchanged figures and contacted other potential bidders. Telephone records and the amount of the bids corroborated the testimony.

DISCUSSION

Defendants' most significant claim on appeal involves the admissibility of extrinsic evidence of defendant Dellinger's prior bid rigging activities. On cross-examination the prosecutor asked Dellinger if he previously rigged a project in Kensington, South Carolina. Dellinger denied the allegation. The district court then allowed the government to present a rebuttal witness who testified that Dellinger participated in the Kensington bid rigging scheme. On appeal defendants argue that the trial court violated Federal Rule of Evidence 608(b) when it admitted the rebuttal evidence. Rule 608(b) prohibits a party from offering extrinsic evidence to prove specific instances of conduct for the purpose of attacking or supporting a witness's credibility. ¹

In response, the government argues that the trial court properly admitted the evidence of Dellinger's past misconduct under Federal Rule of Evidence 404(b). ² Rule 404(b) allows a trial court to admit evidence of other crimes or wrongs if (1) it is offered for a purpose other than to prove a defendant's criminal character or propensity to commit the crime charged, and (2) the probative value of the evidence outweighs its prejudicial effect. United States v. Tate, 715 F.2d 864 (4th Cir.1983). In this case, the government argues that the rebuttal evidence of Dellinger's participation in the Kensington bid rigging scheme is relevant to the defendant's intent to enter a conspiracy to rig bids as well as his understanding of the nature of the scheme. It further argues that the disputed evidence is more probative than prejudicial.

As a preliminary matter, we acknowledge that the evidence at issue falls within the scope of both rules 608(b) and 404(b). The government's proof of Dellinger's participation in the earlier bid rigging scheme took the form of extrinsic evidence attacking a witness's credibility. The government did not have to accept the defendant's denial of participation. Yet, likewise, the evidence of Dellinger's prior bid rigging is relevant to his intent and knowledge of the charged conspiracy, which are material issues raised in Count 1 of the indictment. United States v. United States Gypsum Co., 438 U.S. 422, 98 S.Ct. 2864, 57 L.Ed.2d 854 (1978). Under an abuse of discretion standard, the trial court did not err when it determined that the disputed evidence was more probative than prejudicial, for the close relationship between the prior illegal activity and the charged offense is probative of Dellinger's knowledge. United States v. Marques, 600 F.2d 742, 751 (9th Cir.1979).

Given the fact that the evidence of Dellinger's earlier bid rigging falls within the scope of both rules, we must decide whether rule 404(b) takes priority over rule 608(b). All of the circuit courts presented with the conflict between the rules have held, at least implicitly, in favor of rule 404(b). These courts have allowed the admission of evidence of past bad acts, offered for a purpose other than to prove a defendant's bad character or propensity to commit a crime, despite the fact that the evidence came in after the defendant denied the misconduct on cross-examination. See United States v. Jacobson, 578 F.2d 863 (10th Cir.1978); United States v. Batts, 558 F.2d 513 (9th Cir.1977) vacated 573 F.2d 599 (9th Cir.1978), cert. denied 439 U.S. 859, 99 S.Ct. 178, 58 L.Ed.2d 168 (1979); United States v. Herzberg, 558 F.2d 1219 (5th Cir.1977).

We agree with the other circuits. Rule 608(b) should not be read so broadly as to disallow the presentation of extrinsic evidence that is probative of a material issue in a case. Undoubtedly rule 404(b) will undermine the purpose of rule 608(b) in particular circumstances, such as those presented in this case. ³ However, the ultimate goals of the rules of evidence are best served by not reading any rule in isolation. ⁴ In light of the need to introduce probative evidence of material issues and, even more importantly, in light of the goal of ascertaining the truth in judicial proceedings, we affirm the trial court's admission of rebuttal testimony of prior bad acts, over the defendant's denial, given that the testimony satisfies the requirements of rule 404(b).

One consequence of our decision is it allows the government to present rule 404(b) evidence on rebuttal. We want to make clear, however, that the better practice is for the prosecutor to introduce this type of evidence in his or her case in chief. In most instances, evidence of a defendant's past bad acts will surface prior to trial on a motion in limine. At that time, on a proffer by the government, the trial court must determine whether the evidence is relevant, is admissible under rule 404(b), and whether the evidence is more probative than prejudicial.

However, if the government attempts to introduce past bad acts through cross-examination of the defendant or on rebuttal, the trial court should also determine whether the evidence is cumulative or necessary to prove an essential element of the crime charged. If the evidence is cumulative, the trial court should more closely scrutinize its prejudicial effect. If the evidence is necessary to prove an element of the charge, the trial judge may have erred in not sustaining the defendant's motion for a directed verdict of acquittal. Moreover, a defendant may have a valid objection, under federal rule 611(b), that the government's cross-examination exceeds the scope of the direct. These added considerations are necessary not only to limit the impact of rule 404(b) on rule 608(b), but also to limit the prejudicial effect of allowing the government to have the last say through evidence of a defendant's prior misconduct.

With these guidelines, we affirm the trial court's admission of rule 404(b) evidence over the defendants' 608(b) objection and now turn to the ten other claims raised by the defendants.

Defendants next contend that the trial court improperly admitted evidence of defendant Dellinger's prior bad acts during the government's case in chief. On direct examination, government witness Carpenter testified that he and Dellinger engaged in bid rigging on three other projects, two prior to and one after the Lancaster County sewer project. Carpenter did not remember his exact conversation with Dellinger. Defendants claim that the evidence was more prejudicial than probative.

As mentioned previously, prior bad acts of a defendant are admissible under rule 404(b) as long as they are offered...