US v. Dynalectric Co.

• Citation: 674 F. Supp. 240
• Decision Date: 01 December 1987
• Docket Number: Crim. A. No. 87-00008-O(CS).
• Parties: UNITED STATES of America, Plaintiff, v. DYNALECTRIC COMPANY, G.W. Walther Ewalt and Kenneth W. Seales, Defendants.
• Court: U.S. District Court — Western District of Kentucky

674 F. Supp. 240

UNITED STATES of America, Plaintiff, v. DYNALECTRIC COMPANY, G.W. Walther Ewalt and Kenneth W. Seales, Defendants.

Crim. A. No. 87-00008-O(CS).

United States District Court, W.D. Kentucky, Owensboro Division.

December 1, 1987.

John Schmoll, David A. Blotner, Nancy J. Hertel, U.S. Dept. of Justice, Antitrust Div., Washington, D.C., for U.S.

Rodney O. Thorson, Skadden, Arps, Slate, Meagher & Flom, Washington, D.C., K. Gregory Haynes, Wyatt, Tarrant & Combs, Louisville, Ky., for Dynalectric Co.

James H. Kelley, McGuire, Woods, Battle & Boothe, Washington, D.C., K. Gregory Haynes, Wyatt, Tarrant & Combs, Louisville, Ky., for G.W. Walther Ewalt.

Maurice M. McDermott, Andrew M. Lawler, New York City, Frank E. Haddad, Jr., Louisville, Ky., for Kenneth W. Seales.

MEMORANDUM OPINION AND ORDER

SIMPSON, District Judge.

This matter is before the Court on motion by defendants, Dynalectric Company (hereinafter "Dynalectric") and G.W. Walther Ewalt, for permission to plead nolo contendere to the charges against them in this indictment pursuant to Rule 11(b), Fed.R.Crim.P.

In the alternative, Dynalectric and Ewalt would have this Court sever them from trial with nonmoving codefendant, Kenneth W. Seales, pursuant to Rule 14, Fed.R. Crim.P.

In considering whether to allow the moving defendants to plead nolo contendere, the Court must consider whether acceptance of such pleas is, in a general and all-encompassing sense, in the public interest. United States v. American Bakeries Company, 284 F.Supp. 864 (W.D.Mich. 1968). In so doing, the Court may consider a number of factors which have been set forth in decisions by numerous other Federal District Courts. United States v. American Bakeries Company, 284 F.Supp. 871 (W.D.Mich.1968); United States v. H & M, Inc., 565 F.Supp. 1 (M.D. Pa.1982).

This Court believes that rigid adherence to any laundry list of factors is unwise. Each case and motion must be considered in its own particular context. See United States v. Brighton Bldg. & Maintenance Co., 431 F.Supp. 1118, 1121 (N.D.Ill.1977) (statistics regarding the acceptance or rejection of nolo contendere pleas by other Federal Courts should not be considered). Of course, considerations of the Court's own docket and the projected length of trial are irrelevant, except, perhaps, as they might impact the factors considered in United States v. American Bakeries Company, 284 F.Supp. 864 (W.D.Mich.1968).

In this case, the Court notes from the pleadings that the alleged violation is singular to the extent that it revolves around a single meeting between electrical contractors alleged to have occurred in New York at LaGuardia Airport in April, 1982. However, this Court is more impressed by the severity of the offense charged than the number of violations committed. Albeit the indictment charges a single instance of bid rigging in connection with a contract for the installation of electrical systems at the D.B. Wilson Power Plant, bid rigging is a per se violation of the Sherman Act that goes to the heart of antitrust law. See H & M, Inc., 565 F.Supp. at 2.

Defendants' contention that bid rigging activities have ceased in the last five years must be measured against defendants' involvement in illegal activity prior to cessation and the reasons for the cessation. Id. at 2, 3. The instant indictment charges involvement by Dynalectric and Ewalt in an ongoing conspiracy for a period of three years. Although the actual making of the alleged conspiratorial agreement may have occurred in less than a day, any cessation of future agreements did not cease at the impetus of these defendants. Rather, it ended, if at all, due to the investigative efforts of the United States. Although Dynalectric and Ewalt have already suffered economic setbacks due to the indictment, this Court cannot say that no deterrent effect would be served by a trial of this action. That both defendants were convicted of antitrust violations only last year would mitigate against allowance of nolo contendere pleas on the basis of there being no future deterrent effect.

Although the economic impact of the alleged scheme is uncertain at this juncture, the alleged conspiracies involve sizeable amounts of money. The bid in question by Dynalectric Company to Big Rivers Electric Corporation was in excess of $15,000,000.00. In addition, the Court also notes that...