United States v. Brighton Bldg. & Maintenance Co.

• Decision Date: 06 May 1977
• Docket Number: No. 77 CR 192.,77 CR 192.
• Citation: 431 F. Supp. 1118
• Court: U.S. District Court — Northern District of Illinois
• Parties: UNITED STATES of America v. BRIGHTON BUILDING & MAINTENANCE CO. et al.

431 F. Supp. 1118

UNITED STATES of America v. BRIGHTON BUILDING & MAINTENANCE CO. et al.

No. 77 CR 192.

United States District Court, N. D. Illinois, E. D.

May 6, 1977.

John E. Sarbaugh, John L. Burley, Asst. Chief, Dept. of Justice, Antitrust Div., Samuel J. Skinner, U. S. Atty., Chicago, Ill., for plaintiff.

George D. Crowley, Warren R. Fuller, Crowley & Goschi, Albert E. Jenner, Alan L. Metz, Carol R. Thigpen, Jenner & Block, Barnabus F. Sears, Lawrence M. Gavin, Boodell, Sears, Sugrue, Giambalvo & Crowley, Chicago, Ill., Louis R. Bertani, Herschbach, Tracy, Johnson, Bertani & Wilson, Joliet, Ill., Gary L. Griffin, Dent, Hampton & McNeela, Raymond J. Smith, Irwin I. Zatz, Chicago, Ill., for defendants.

MEMORANDUM OPINION

FLAUM, District Judge:

Before the court is the renewed motion of defendants Thomas J. Bowler and George B. Krug, Sr. to enter pleas of nolo contendere in this cause pursuant to a plea agreement between these defendants and the Government. On April 15, 1977, this court declined, without prejudice, to accept tendered pleas of nolo contendere from defendants Bowler and Krug and, after consideration of the supplemental pleadings and arguments presented by all parties, this court remains of the opinion that "the interest of the public in the effective administration of justice . . ." will not be served by the acceptance of the tendered pleas of nolo contendere. Fed.R.Crim.P. 11(b).

In the April 15, 1977 rejection of the proffered pleas of nolo contendere by these defendants, several factors were mentioned as guides to the proper exercise of judicial discretion in accepting or rejecting pleas of nolo contendere.

In exercising its discretion . . . the court takes into account any mitigating circumstances, the culpability of the defendant tendering a nolo plea relative to codefendants, the deterrent effect of a nolo as compared to a guilty plea, the pragmatic considerations of avoiding an expensive and time-consuming trial, and similar factors.

8 J. Moore, Federal Practice § 11.073, at 11-110 to 11 (1976). While the Government and defendants urge that these considerations mandate the acceptance of the tendered nolo contendere pleas, this court, after an independent balancing of all interests involved in this cause, is compelled to reach the contrary conclusion.

First, the alleged relative culpability of these moving defendants to their codefendants and to others involved in this indictment has not been made clear to this court. Defendants Bowler and Krug maintain that other unindicted individuals involved in the alleged bid-rigging scheme which is the subject of the indictment before this court, and other unindicted persons involved in the alleged bid-rigging schemes in indictments 77 CR 190 and 77 CR 191, are allegedly equally or more culpable than the movants.¹ The Government in their memorandum, however, does not accept or affirm this characterization of the alleged relative culpability of defendants Bowler and Krug. Indeed the Government has stated to the court that in the context of this case the issue of culpability is ". . . not susceptible to presentation." Thus, the court is effectively precluded by the failure of the parties to reach substantial agreement on this issue from assessing the alleged relative culpability of the defendants Bowler and Krug.

Second, this court is of the view that there will be the appearance, if not the actual undermining, of the deterrent effect of the antitrust laws of the United States if the tendered pleas are accepted. While the parties contend that the purpose of these laws will be served since, pursuant to the plea agreements, defendants Bowler and Krug would plead guilty to various antitrust violations in indictments 77 CR 190 and 77 CR 191,² it is noted that of these three matters the indictment pending before this court describes the most substantial alleged violation of the antitrust laws, both as to the alleged involvement of and benefit to defendants Bowler and Krug.³

Additionally and significantly in light of the potential deterrent effect of the antitrust laws which provide for civil actions to recover damages from antitrust violators, the court notes the absence of any indication from the Government as to their position on the possibility of such subsequent proceedings by the United States against the individual defendants Bowler and Krug.⁴ Pursuant to 15 U.S.C. § 15, private civil actions are authorized by Congress which allow individuals to obtain treble damages for violations of the antitrust statutes, and in an attempt to further deter potential antitrust violations, 15 U.S.C. § 16 provides that

(a) A final judgment or decree . . rendered in any ... civil or criminal proceeding brought by ... the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said antitrust laws . . ..

Id. These two provisions working in conjunction create a strong deterrent to potential antitrust violations since once it is established by a plea of guilty or proof beyond a reasonable doubt that a defendant has broken the criminal antitrust laws, the defendant is susceptible not only to penalties attendant a conviction but, in addition, to civil damage judgments.

However, as the Seventh Circuit recognized in Commonwealth Edison Co. v. Allis-Chalmers Mfg. Co., 323 F.2d 412 (7th Cir. 1963), cert. denied, 376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659 (1964), a plea of nolo contendere by a criminal antitrust defendant does not activate the provisions of section 16 and does not give private litigants the distinct advantage of having their cases established by the Government, an entity uniquely capable of litigating complex antitrust cases. See also Lindy Bros. Builders v. American Radiator and Standard Sanitary Corp., 487 F.2d 161 (3rd Cir. 1973). This legal effect of a nolo contendere plea, coupled with the Government's silence on the question of any possible civil antitrust action brought by the United States against defendants Bowler and Krug, could substantially lessen the prospect of effectuating the potential deterrent effect of the civil treble damage provisions of 15 U.S.C. §§ 15, 16.⁵

The court's review of this aspect of the deterrence issue should not in any respect suggest that a "vindication" of the public interest can and must only be achieved by such civil suits. In declining to accept these nolo contendere pleas this court is not and should not be concerned with either exposing or insulating defendants Bowler and Krug from the prospect of subsequent civil actions in the event of possible convictions. Rather the court concludes that the acceptance of the nolo contendere pleas in a case of this potential magnitude where the Government has not stated its intentions with regard to further civil actions presents a situation not conducive to implementing the deterrent effect of the antitrust laws.

Third, this court is not convinced that there...