U.S.A. v. True

• Citation: 250 F.3d 410
• Decision Date: 28 April 2000
• Docket Number: No. 99-5111,99-5111
• Parties: (6th Cir. 2001) United States of America, Plaintiff-Appellee, v. David P. True, Defendant-Appellant. Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 410

250 F.3d 410 (6th Cir. 2001)

United States of America, Plaintiff-Appellee, v. David P. True, Defendant-Appellant.

No. 99-5111

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: April 28, 2000

Decided and Filed: May 17, 2001

Appeal from the United States District Court for the Western District of Kentucky at Owensboro. No. 97-00011, Joseph H. McKinley, Jr., District Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] John J. Powers, III, Nancy C. Garrison, Katherine A. Schlech, UNITED STATES DEPARTMENT OF JUSTICE, ANTITRUST DIVISION, Washington, D.C., for Appellee.

Allen W. Holbrook, Sullivan, Mountjoy, Stainback & Miller, Owensboro, KY, Leslie W. Jacobs, Thomas F. Zych, Geoffrey S. Mearns, Kenneth G. Cole, THOMPSON, HINE & FLORY, Cleveland, Ohio, for Appellant.

Before: GUY, BOGGS, and SUHRHEINRICH, Circuit Judges.

OPINION

SUHRHEINRICH, Circuit Judge.

The Hyde Amendment authorizes reasonable attorney fees and litigation expenses to a prevailing party in a criminal case if a court finds that the government's position was "vexatious, frivolous, or in bad faith." Pub. L. No. 105-109, § 617, 111 Stat. 2519 (1997), reprinted in 18 U.S.C. § 3006A, Historical and Statutory Notes (hereinafter "18 U.S.C. § 3006A, Statutory Notes")¹. Defendant David P. True ("True") appeals from the denial of his application for attorney's fees and expenses under the Hyde Amendment, following his acquittal by a jury of price-fixing conspiracy charges in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. True claims he is entitled to fees and expenses under the Hyde Amendment because the Government prosecuted him outside the applicable statute of limitations, lacked sufficient proof of the charges against him to proceed with the prosecution, and engaged in a variety of misconduct during trial. The Government responds that this appeal is barred because True failed to comply with all the requirements under the Equal Access to Justice Act, 28 U.S.C. § 2412 et seq. ("EAJA"), which the Hyde Amendment incorporates, asserting that these requirements are jurisdictional. Also at issue is the proper standard of review for decisions on Hyde Amendment applications.

For the following reasons, we AFFIRM.

I. Background

In December 1992, the Government began investigating alleged antitrust violations in the commercial explosives industry. The antitrust violations began in 1988 with a conspiracy to fix prices and rig bids. The investigation involved manufacturers and distributors of commercial explosives serving the areas of western Kentucky, southern Indiana, and southern Illinois (the "Western Kentucky Region"). By late September 1996, four corporate conspirators and several of fifteen individual conspirators had waived indictment and had pleaded guilty to informations charging conspiracy. However, the Government waited until September 3, 1997, to indict True, a vice president of one of the corporate conspirators, on one count of conspiring to unreasonably restrain interstate trade and commerce in violation of § 1 of the Sherman Act. There is a five-year statute of limitations for such charges. See 18 U.S.C. § 3282.

The Indictment alleged True engaged in a conspiracy beginning "sometime in the Fall 1988 and continuing at least until sometime in 1993." The Indictment stated that the conspiracy involved a single, continuing agreement to (1) rig bids for the sale of commercial explosives, (2) fix prices for explosives products, (3) allocate customers in the Western Kentucky Region, and (4) receive payments for these sales. The district court, at True's request, ordered the Government to provide True with a Bill of Particulars identifying the specific bids, prices, products, and customers that were the basis for the allegations in the Indictment. The Bill of Particulars' allegations regarding increases in annual price lists alleged that the price-fixing conspiracy extended into 1993, and that the conspiracy as to price increases for ammonium nitrate combined with fuel oil ("ANFO") extended into late 1992.

The Government alleged that four companies were part of the conspiracy:

True's employer, Austin Powder Company (Austin), an explosives manufacturer; ICI Explosives USA, Inc. (ICI), and Dyno Nobel, Inc. (Dyno) (formerly IRECO), also manufacturers; and Mine Equipment & Mill Supply, Inc. (MEMSCO), a distributor. All four corporate conspirators waived indictment and pleaded guilty. The ICI, Dyno, and MEMSCO plea agreements were filed in August and September 1995. The Austin plea agreement was not filed until September 1996, almost one year prior to True's Indictment on September 3, 1997. The plea agreements with ICI, Dyno, and MEMSCO stated that the conspiracy lasted "from late 1988 until mid-1992." These companies pleaded guilty to a conspiracy involving price-fixing of commercial explosives. Austin's plea agreement similarly indicated the conspiracy involved price-fixing of commercial explosives, but stated that the conspiracy lasted "from Fall 1988 until at least mid-1992."

Although some of the individual co-conspirators were given immunity in exchange for their cooperation and testimony, several of them pleaded guilty to the antitrust conspiracy, including Thomas Mechtenberg, one of True's subordinates at Austin. Mechtenberg's plea agreement indicated that the conspiracy lasted "from Fall 1988 until mid-1992." The Mechtenberg plea agreement, like the Austin plea agreement, was filed in late September 1996, almost one year prior to True's Indictment. Shortly after Mechtenberg signed his plea agreement, the Government filed an information against him that alleged the conspiracy continued "at least into mid 1992."

The Government also entered into tolling agreements regarding the statute of limitations with two of the individual co-conspirators, Donald J. Westmaas and Frederick C. Drury, who were associated with Econex, an explosives distributor. ² Both of these agreements tolled the period May 21, 1997 through June 20, 1997. The Government ultimately did not charge Drury, who was granted immunity for his testimony. Westmaas, on the other hand, entered into a plea agreement in which he waived indictment and agreed to plead guilty to an information charging only a conspiracy involving rigging a bid for the sale of explosives. The Westmaas plea agreement was filed July 30, 1997. Ultimately, only True went to trial.

Evidence at trial showed that prices for commercial explosives in the Western Kentucky Region were depressed because of a price war between two brothers who owned competing companies in the industry. After the brothers sold their companies, some of the remaining competitors agreed to fix prices and rig bids in order to boost prices. This agreement was memorialized in December 1988, when Marty Vincent, a salesman at Econex, took a telephone message for his supervisor from David Childs, at Midland Powder Company, a competitor. The message indicated that Childs had spoken with a "connection" at Austin and West Kentucky Explosives ("WKE"), and that they were willing to agree for three months that: "[a]nything we price to a non customer while trying to get prices increased we will be giving a highball price. We will try to give a $5 to $10 higher price on Anfo per ton." The message also included information about what certain distributors were going to bid for various products at specific accounts and asked for a return call advising of Econex's intentions.

Regarding this initial three-month agreement, John Bussey, of WKE, testified that in December 1988 his supervisor, Joseph Y. Longmire, said that he had spoken with Childs and that Childs indicated they needed to raise prices. Bussey also testified that Longmire said Withers Waller Caldwell, the vice president of WKE's parent company, ICI, "could take care of True" at Austin. Bussey indicated that Longmire later said that Austin had been "taken care of." Bussey thought that this meant Caldwell spoke with True, but he admitted that he had no personal knowledge whether the conversation took place³.

Childs testified regarding the initial agreement and stated that he spoke with Bussey and Mechtenberg in December 1988. He indicated that they discussed specific bids and price increases at specific accounts and that he then attempted to contact Econex, leaving the message with Vincent. However, Childs indicated that, to his knowledge, True was never part of the original three-month agreement.

Mechtenberg, on the other hand, implicated True in the initial agreement by testifying that he spoke with True in December 1988 after Childs initially contacted him, that he told True that Childs shared bid prices with him, and that True indicated they should bid higher. Their company ultimately submitted a higher bid than Childs' company. Childs' company won the ANFO portion of the bid, while Austin won another portion of the bid. On cross-examination, Mechtenberg acknowledged that he could not remember when he spoke with True about these matters. He testified on re-direct examination, however, that he had previously stated, in a document prepared for sentencing purposes in his own case, that True asked him to contact Childs in December 1988 to find out what Childs would bid on a particular account. Yet, on re-cross examination, Mechtenberg acknowledged that during the Department of Justice (DOJ) investigation he had repeatedly denied True was involved and admitted that he only implicated True when it became apparent that he would face imprisonment unless he could help the Government make a case against someone else. He also acknowledged that his plea agreement contained a unique clause requiring him to testify consistently with the information he provided to the Government prior to executing the plea agreement or face prosecution for his role in the conspiracy, perjury, or other offenses.

The various distributors largely retained their current customers...