Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-03113/USCOURTS-ca10-89-03113-0/pdf.json

Parties Involved:
Suntar Roofing, Inc.
Appellant
United States of America
Appellee

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

_. FILED 

Umted.S.taces (mur of Appeals 

femh Circui: 

~"[fj 2 7 19~0 

ROBERT L. l-IOECKER 

Clerk 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Nos. 89-3113 

89-3114 

SUNTAR ROOFING, INC.; and 

DAVID KEVIN PRATT, 

Defendants-Appellants. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

(D.C. Nos. 88-20084-01 and 88-20084-03) 

Laura Heiser, Department .of Justice, Washington D.C. (James F. 

Rill, Assistant Attorney General, and Judy L. Whalley, Deputy Assistant Attorney General, Department of Justice, Washington, D.C.; 

Diane C. Lotko-Baker, Ann M. Gales, and Kent Brown, Department of 

Justice, Chicago, Illinois, with her on the brief) for PlaintiffAppellee. 

J. Lawrence Louk, of Fox & Partee (Byron Neal Fox, P.C., and 

Ronald E. Partee, P.C., on the brief), Kansas City, Missouri, for 

Defendants-Appellaijts. 

Before, LOGAN, TACHA, and BRORBY, Circuit Judges. 

BRORBY, Circuit Judge. 

Appellants Suntar Roofing, Inc. (Suntar), and David Kevin 

Pratt (Pratt), president and part-owner of Suntar, appeal their 

Appellate Case: 89-3113 Document: 010110191650 Date Filed: 02/27/1990 Page: 1 
convictions for unreasonably restraining interstate trade and 

commerce in violation of§ 1 of the Sherman Act (15 u.s.c. § 1). 

Appellants were indicted along with fellow defendants Ronan's 

Roofing, Inc. (Ronan's Roofing), and its president, Michael T. 

Ronan (Ronan). Additionally, in its bill of particulars the 

government identified three unindicted co-conspirators: (1) Tom 

Keaton (Keaton), a part-owner of Suntar and another roofing 

company, Keaton Brothers Roofing and Siding, Inc.; (2) Andy Boxley 

(Boxley), a Suntar employee during the alleged conspiracy; and (3) 

Samuel K. "Bud" Fleenor (Fleenor), an employee of Ronan's Roofing. 

At all relevant times, Suntar and Ronan's Roofing were Kansas 

corporations engaged in· the business of constructing and 

installing cedar shake (shingle) roofs on single and mul~~-family. 

homes in and around Kansas City, Kansas. 

The indictment charged that the defendants and coconspirators engaged in a continuing agreement, understanding and 

concert of action to. allocate and divide among themselves 

customers for the construction and installation of roofs on new 

single and multi-family homes in the Kansas City, Kansas 

metropolitan area. The indictment further charged that commencing 

in or about June 1985 and continuing through mid-1986, the 

defendants and co-conspirators met to discuss prices, individual 

roofing projects, and the means to allocate specific customers 

between the two companies. The government alleged that they 

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agreed to stop competing and refrained from competing for the 

business of each company's established customers. 

The jury returned a verdict of not guilty as to defendants 

Ronan's Roofing and Ronan and a verdict of guilty as to defendants 

Suntar and Pratt. Appellants now challenge their convictions on 

the following bases: (1) that the trial judge erroneously treated 

the alleged activity as a "per se'' violation of the Sherman Act; 

(2) that the jury instructions erroneously described the elements 

of the offense charged and that there was insufficient evidence to 

establish each element; (3) that the trial judge improperly 

admitted evidence of similar acts under Fed. R. Evid. 404(b); and 

(4) that the trial judge violated appellants' Sixth Amendment 

right to effective counsel by failing to require Suntar's counsel 

to withdraw because of a conflict of interest. We affirm. 

ANALYSIS 

A. Per Se Violation of the Sherman Act 

Appellants contend that the trial court erred when it 

sustained the government's pre-trial motion to prevent the 

defendants from offering evidence of the reasonableness and/or 

economic justification for the alleged activities or evidence of 

the defendants' lack of intent to violate the law or to restrain 

trade. Thus, appellants allege that they were deprived of any 

opportunity to present evidence that the conduct charged was 

permissible under "rule of reason'' analysis and that the jury was 

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deprived of its factfinding function to determine whether the 

charged conduct unreasonably restrained competition. 

Section 1 of the Sherman Act prohibits "[e]very contract, 

combination .•. , or conspiracy, in restraint of trade or 

commerce." Generally, courts apply a "rule of reason" analysis to 

determine whether particular practices or conduct come within the 

ambit of the statute. Under "rule of reason" analysis, the 

factfinder weighs all of the circumstances of a case to decide 

whether a restrictive practice should be prohibited as imposing an 

unreasonable restraint on competition. Continental T.V., Inc. v. 

GTE Sylvania, Inc., 433 U.S. 36, 49 (1977). 

However, since the passage of the Sherman Act, the courts 

have formulated and applied a ~ se rule of illegality for 

certain restrictive practices that are deemed to be ma'nifestly 

anticompetitive. Id. at 50. As the Supreme Court explained in 

Northern Pac. R. Co. v. United States, 356 U.S. 1, 5 (1958), 

"there are certain agreements or practices which because of their 

pernicious effect on competition and lack of any redeeming virtue 

are conclusively presumed to be unreasonable and therefore illegal 

without elaborate inquiry as to the precise harm they have caused 

or the business .excuse for their use." Here, appellants argue 

that the indictment in this case did not justify the trial court's 

application of ~ se analysis in that the restraint charged is 

not clearly "pernicious" as a matter of law. 

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In its pre-trial motion, the government argued that the 

conduct charged in the indictment, a "horizontal" customer 

allocation agreement, 1 represented conduct which is illegal ~ 

se. Prior to trial, the trial court ruled that the indictment did 

in fact allege a~ se violation of the Sherman Act, and that, 

assuming the government could present evidence establishing the 

violation charged in the indictment, the defendants would 

therefore be precluded from introducing evidence of reasonableness 

or justification at trial. At trial, the court concluded that the 

government had established the violation charged and therefore 

precluded defendants' additional evidence. 

Consistent with the analysis of the Supreme Court and 

previou9 holdings of this court and of other circuits, we concur 

with th~ determination of the trial court and hold that the 

activity alleged in the indictment in this case, an agreement to 

allocate or divide customers between competitors within the same 

horizontal market, constitutes a~ se violation of§ 1 of the 

Sherman Act. See United States v. Topco Assocs., Inc., 405 U.S. 

596, 608 (1972) ("[o]ne of the classic examples of a~ se 

violation of§ 1 is an agreement between competitors at the same 

level of the market structure to allocate territories in order to 

minimize competition"); United States v. Goooman, 850 F.2d 1473, 

1 "[A]n agreement between competitors at the same level of the 

market structure to allocate territories in order to minimize 

competition .•• is usually termed a 'horizontal' restraint, in 

contradistinction to combinations of persons at different levels 

of the market structure, ~, manufacturers and distributors, 

which are termed 'vertical' restraints." United States v. Topco 

Assocs., 405 U.S. 596, 608 (1972). 

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1476 (11th Cir. 1988) ("customer allocation agreement alone is a 

~ se violation of 15 U.S.C. § l"} (citing United States v. 

Cadillac Overall Supply Co., 568 F.2d 1078, 1090 (5th Cir.), cert. 

denied, 437 U.S. 903, (1978)); United States v. Cooperative 

Theatres of Ohio, Inc., 845 F.2d 1367, 1372 (6th Cir. 1988) 

("customer allocation ... is the type of 'naked restraint' which· 

triggers application of the~ se rule of illegality"}; Mid-West 

Underground Storage, Inc. v. Porter, 717 F.2d 493, 497-98 n.2 

(10th Cir. 1983) ("[t]he essence of~ market allocation violation 

••• is that competitors apportion the market among themselves and 

cease competing in another's territory or for another's 

customers"}; United States v. Koppers Co., 652 F.2d 290, 293 (2d 

Cir.), cert. denied, 454 U.S. 1083 (1981). 

B. The Instructions and Sufficiency of the Evidence 

Appellants next challenge the couit's instructions to the 

jury as to each element of the violation charged and contend that 

the government failed to present sufficient evidence to establish 

each element. When examining a challenge to jury instructions, we 

review the record as a whole to determine whether the instructions 

state the law that governs and provided the jury with an ample 

understanding of the issues and standards applicable. Big Horn 

Coal Co. v. Commonwealfh Edison Co., 852 F.2d 1259, 1271 (10th 

Cir. 1988). Additionally, so long as the charge as a whole 

adequately states the law, the refusal to give a particular 

requested instruction is not an abuse of discretion. United 

States v. Hines, 696 F.2d 722, 733 (10th Cir. 1982). 

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When reviewing the sufficiency of evidence underlying a 

verdict in a criminal case, we must affirm if, viewing all the 

direct and circumstantial evidence in the light most favorable to 

the government, a reasonable trier of fact would find the 

essential elements of the crime beyond a reasonable doubt. United 

States v. Culpepper, 834 F.2d 879, 881 (10th Cir. 1987) (citing 

Jackson v. Virginia, 443 U.S. 307, 318-19 (1979)). 

l. Conspiracy 

a. The instructions. Appellants first challenge the charge 

to the jury as to the conspiracy element of the Sherman Act 

violation, cont~nding that the instructions failed to properly 

instruct the jury that a corporation cannot "conspire" with its 

owners, officers or employees. Appellants correctly poin~ out 

that the law will not recognize a conspiracy when the only 

possible "conspirators" are a company and its employee, officer or 

owner( see Copperweld Corp. v. Independence Tube Corp., 467 U.S. 

752, 769 (1984); Holter v. Moore & Co., 702 F.2d 854, 855 (10th 

Cir.), cert. denied, 464 U.S. 937 (1983). Thus, in the instant 

case, Pratt could not be convicted of conspiracy if his only possible fellow conspirator was Suntar. 

However, instruction No. 15 adequately addresses this aspect 

of the law concerning conspiracy. The instruction stated that 

"[a] conspiracy to allocate customers is an agreement or 

understanding between competitors not to compete for the business 

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of a particular customer or customers" (emphasis added). 

Additionally in this case, there was no evidence suggesting to the 

jury that Suntar was in competition with its president and partowner, Pratt. Insofar as appellants contend that there was 

insufficient evidence for the jury to find that Suntar and Pratt 

conspired with any of the other alleged co-conspirators (see 

section l.b. below), instruction 15 adequately instructed the jury 

that they could not properly base a guilty verdict upon a 

"conspiracy" between $untar and_ Pratt. 2 

Appellants also contend that the trial court failed to 

properly educate the jury as to what constitutes an "agreement." 

In instructions 15 and 17, the trial court stated: 

~efore the jury may find that a defendant ••• has 

become a member of a conspiracy, the evidence in a case 

must show beyond a reasonable doubt that the conspiracy 

was knowingly formed,. and that the defendant knowingly 

participated in the unlawful plan, with the intent to 

advance or further some object or purpose of the 

conspiracy. 

While a conspiracy involves an agreement to violate 

the law, it is not necessary that the persons charged 

meet each other and enter into an express or formal 

agreement, or that they stated in words or writing what 

the scheme was or how it was to be effected. It is 

sufficient to show that they tacitly came to a mutual 

understanding to allocate customers. 

The agreement may be shown by a concert of action 

by members who participate with knowledge of the common 

purpose. Direct proof of a conspiracy may not be 

2 This court will not "impute to a jury the inability to 

understand correctly the totality of the trial court's 

instructions, even in a complicated case, nor will [we] impute 

nonfeasance, in the form of disregard of the trial court's 

instructions, to a jury." Rasmussen Drilling Inc. v. Kerr-McGee 

Nuclear Corp., 571 F.2d 1144, 1149 (10th Ci~.), cert. denied, 439 

U.S. 862 (1978). 

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available, and the common purpose and plan may be 

disclosed only by the circumstances and acts of the 

members, such as their course of dealings. 

These two instructions adequately set forth the law of this 

circuit as found in United States v. Metropolitan Enters., Inc., 

728 F.2d 444, 450~51 (10th Cir. 1984) (citing Blumenthal v. United 

States, 332 U.S. 539, 557 (1947); Iannelli v. United States, 420 

U.S. 770, 777 (1975)). 

The trial court also instructed the jury properly as to 

membership in the. conspiracy. Instruction 18 reads as follows: 

To be a member of the conspiracy a defendant need 

not know all of the other members, nor all of the 

details of the conspiracy, nor the means by which the 

objects were to be accomplished. Each member of the 

conspiracy may perform separate and distinct acts. It 

is necessary, however, that the Government prove beyond 

a reasonable doubt that a defendant was aware of the 

common purpose, and was a willing participant, with the 

intent to advance the purpose of the conspiracy. 

Again, this instruction properly sets forth the law of this 

circuit. In Metropolitan Enters., we stated, "[t]he evidence must 

show circumstances to warrant a jury finding that the conspirators 

had a unity of purpose or a common design and understanding." 728 

F.2d at 450-51 (citing American Tobacco Co. v. United States, 328 

U.S. 781, 810 (1946)). 

Finally, in instruction No. 20 the court instructed the jury 

as to the absence of a conspiracy under certain circumstances: 

In the absence of an agreement on a course of 

action that is designed to eliminate competition, it is 

hot unlawful for competitors to meet and exchange 

information necessary to preparation of a bid or discuss 

common aims or objectives or exchange information on 

independently derived prices. 

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Although this last instruction was not required (given the scope 

of the other five instructions), it certainly addressed 

appellants' concerns that the jury be instructed that "mere 

conversation" and ''guilt by association" do not sustain a finding 

of conspiracy and that the conspirators must have a "meeting of 

minds." 

We conclude the court's instructions adequately state the law 

of con~piracy arid agreement. Accordingly, we cannot say that the 

trial court abused its discretion by failing to give any 

particular instruction suggested by appellant. 

b. The evidence. Appellants also assert that there is 

insufficient evidence to support a . finding of a conspiracy to 

allocate customers. Appellants specifically contend that· since 

Suntar cannot legally conspire with its.own president, the guilty 

verdicts against Suntar and Pratt are fatally inconsistent with 

the acquittals of appellants' only other co-defendants, Ronan's 

Roofing and Ronan. Additionally, appellants contend that the 

evidence "indicates that neither Pratt nor Suntar ... had the 

necessary meeting of the minds with anyone.from Ronan's Roofing." 

On appellants' motion for judgment of acquittal or for a new 

trial, the trial court concluded that "inconsistent verdicts" is 

no longer a viable attack on a conviction in the wake of United 

States v. Powell, 469 U.S. 57 (1984). The Powell decision 

reaffirmed the general rule that consistency in verdicts is not 

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required. Id. at 62; see also Hamling v. United States, 418 U.S. 

87, 101 (1974); Dunn v. United States, 284 U.S. 390, · 393 (1932). 

Before Powell, the courts recognized a traditional exception to 

this general rule when a single conspirator is convicted in the 

same proceeding or prosecution .in which all her alleged coconspirators are acquitted. Hartzel v. United States, 322 U.S. 

680, 682 n.3 (1944); United States v. Howard, 751 F.2d 336, 338 

(10th Cir. 1984), cert. denied, 472 U.S. 1030 (1985); Romontio v. 

United States, 400 F.2d 618, 619 (10th Cir. 1968), cert. --------

dismissed, 402 U.S. 903 (1971). 

Concluding that the traditional exception is no longer viable 

after Powell, the trial court "decline[d] to apply the traditional 

exception to set aside · the convictions of Suntar and Pratt." 

Unfortunately, the trial court's conclusion is substantially 

undercut by the fact that the Powell opinion does not discuss 

Ha·rtzel or expressly overturn the traditionally recognized 

exception. 3 

However, the facts of this case do not demand the resolution 

of any conflict between Powell and Hartzel. Either analysis 

yields the same result. In line with Hartzel, this court has 

3 Two other circuits have reached this issue and come to the 

same conclusion· as did the trial court. See United States v. 

Andrews, 850 F.2d 1557, 1561 (11th Cir. 1988)--(en bane), cert. 

denied, 109 s. Ct. 842 (1989); United States v. Valles-Valencia, 

823 F.2d 381, 383 (9th Cir.), modifying, 811 F.2d 1232 (1987). 

The Eleventh Circuit chose to distinguish Hartzel rather than 

assume Powell had overruled it -- an approach sharply disputed by 

the decision's dissenters. The Ninth Circuit failed to mention 

Hartzel. 

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consistently held that a defendant's conspiracy conviction must be 

reversed only where all the alleged co-conspirators are acquitted. 

Howard, 751 F.2d at 338; Romontio, 400 F.2d at 619. Here, the 

government identified three unindicted co-conspirators in addition 

to the four indicted co-conspirators. The jury could have found 

the existence of a conspiracy involving one or more of the 

unindicted co-conspirators. Under. the law of Howard and Romontio, 

appellants' convictions will stand if there is sufficient evidence· 

.in the record from which the jury could have concluded that a 

conspiracy existed between the appellants and any of the 

unindicted conspirators. 

The three unindicted co-conspirators were Boxley, Fleenor and 

Keaton. Boxley, of course, was only an employee of Suntar and 

hence his participation could not support a conspiracy conviction 

of his employer. Keaton was a part owner of Suntar, but also was 

part owner of a competitor roofing contractor. See infra, slip 

op. at 22 n.5. For purposes of our review and discussion, the 

evidence in the record points to Fleenor as the most likely coconspirator of Pratt and Suntar. Indeed, there is sufficient 

evidence in the record from which the jury could conclude that Bud 

Fleenor met with Kevin Pratt on several occasions to discuss 

ending the price war between the two roofing companies and that he 

in fact reached an agreement with Pratt to allocate specific 

builder customers between Suntar and Ronan's Roofing. 

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First, Boxley testified that during summer 1985 Boxley, Pratt 

and Pratt's brother, Don Pratt, agreed that the 1985 "price war" 

between Suntar and Ronan's Roofing had gone "far enough." Boxley 

also testified that he called Fleenor at Ronan's Roofing to talk 

to him about "bringing an end to [the price war]." At that time, 

Fleenor refused to discuss the subject and hung up on Boxley. The 

next weekend, Boxley again called Fleenor, this time at Fleenor's 

residence, and the two agreed that "no one was winning [the price 

war] but the actual builders, and [Fleenor] told [Boxley] to have 

[Pratt] give [Ronan] a call at the office." The next Monday, 

Boxley reported his conversation to Pratt and Pratt said he would 

get hold of Ronan. Boxley also testified that Ronan then came 

over to Suntar's offices and met with Pratt. After that meeting, 

Pratt told Boxley that "the pr.ice war [is] over, that (Pratt] and 

[Ronan] had. reached an agreement" and that "Ronan's was going to 

get their builders back and that [Suntar] would be getting [their] 

builders back." Thereafter, Pratt and Boxley held two meetings 

with Fleenor in the summer of 1985: one at Suntar's office and 

one at Ronan's office. 

Next, Fleenor testified that, as a result of the discussions 

between Pratt and Fleenor, it was "understood" that Pratt would 

begin raising his prices on Don Bell Homes, a former Ronan's 

Roofing customer that had recently switched some of its 

subcontracting work to Suntar. Shortly thereafter, Ronan's 

Roofing won back the Don Bell account. Fleenor also testified 

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that he told Pratt that Ronan's Roofing would cease using threeeighths inch shakes when their current supply ran out. (Keeping 

three-eighths inch shakes in stock enabled Ronan's Roofing to win 

the business of two builders, Glanville and Rodrock, that 

preferred using three-eighths inch shakes to higher quality halfinch shakes. Glanville and Rodrock had previously done business 

with Suntar when Ronan's Roofing did not carry three-eighths inch 

shakes. Most of Ronan's steady customers preferred using halfinch shakes.) Shortly thereafter, Ronan's stopped using threeeighths inch shakes and Glanville and Rodrock returned their 

business to Suntar. 

Fleenor also testified that he told Pratt that Ronan's would 

begin raising the price of its bids to Recbfertig Homes and 

Rechfertig Taulbert, builders that previously had employed Suntar 

but that had switched to Ronan's during the price war. Ronan's 

Roofing did raise its prices to Rechfertig and Rechfertig 

Taulbert, and both builders eventually gave their business back to 

Suntar. 

Appellants maintain that "[i]t is inconsistent for the jury 

to believe that Pratt or some other agent of Suntar conspired with 

Fleenor while at the same time finding that Ronan and Ronan's 

Roofing did not conspire with Suntar." However, appellants' 

argument on this point goes no further than this flat assertion. 

Viewing the evidence in. the light most favorable to the 

government, we hold that there is sufficient evidence in the 

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record from which the jury could conclude that Pratt conspired 

with Fleenor and that Fleenor did not have the approval of Ronan 

or Ronan's Roofing to engage in such activity. 

In his testimony, Ronan gave his own account of his trip to 

Suntar's offices and of his di~cussion there with Pratt. Ronan 

testified that he never had conversations with Pratt or Boxley 

about ending the price war, and that he never entered an agreement 

with Suntar or Pratt to end the price war, split up builders or 

give back builders. He testified that he only visited Suntar's 

offices to collect a past-due bill for material sold to Suntar by 

Ronan's Roofing. 

Ronan al~o testified that Fleenor told him that Suntar was 

willing to end the price war and that Fleenor asked Ronan what he 

thought. Ronan responded that there was "no way that I was going 

to split up any builders." Ronan testified that he did not recall 

having any other conversations with Fleenor regarding "end[ing] 

the price war." He testified that he never authorized or directed 

Fleenor to enter into any such agreement. Ronan also testified 

that Fleenor was solely responsible for sales and for bidding 

contracts for Ronan's Roofing and had been since 1980 or 1981. 

Fleenor's testimony corroborated this .fact. 

Therefore, we hold that there was sufficient evidence before 

the jury to support a finding that Suntar and Pratt had conspired 

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with Bud Fleenor, an employee of Ronan's Roofing, to allocate 

builders between the two roofing companies. 

2. Interstate commerce 

a. The instructions. Appellants next contend. that the trial 

court improperly instructed the jury on the jurisdictional 

prerequisite that the restraint of trade involve interstate 

commerce. Specifically, appellants argue that the trial court 

erred by failing to employ the following instruction proposed by 

appellant: 

If. you find that a defendant's illegal 

had either no impact or only a minimal 

interstate trade, then you must find 

defendant's ·activities did not involve 

commerce, and you must find the defendant not 

activities 

impact on 

that the 

interstate 

guilty. 

The trial court first instructed that the jury was required 

to find "[t]hat the conspiracy charged in the indictment either 

affected interstate commerce in goods or services or occurred 

within the flow of interstate commerce in goods or services." 

This instruction ably states the law as established in McLain v. 

Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 242 (1980): 

Although the cases demonstrate the breadth of 

Sherman Act prohibitions, jurisdiction may not be 

invoked under that statute unless the relevant aspect of 

interstate commerce is identified; it is not sufficient 

merely to rely on identification of a relevant local 

activity and to presume an interrelationship with some 

unspecified aspect of interstate commerce. To establish 

jurisdiction a plaintiff must allege the critical 

relationship in the pleadings and if these allegations 

are controverted must proceed to demonstrate by 

submission of evidence beyond the pleadings either that 

the defendants' activity is itself in interstate 

commerce or, if it is local in nature, that it has an 

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effect on some other appreciable activity demonstrably 

in interstate commerce. 

(Citations omitted.) See also, Crane v. Intermountain Health 

Care, Inc., 637 F.2d 715, 723-24 (10th Cir. 1980} ("even the. 

purely local activity of a completely local business falls within 

the Act's reach if it appreciably affects a channel of commerce 

demonstrably interstate in character."). To further delineate the 

distinction between the "in commerce" and "effect on commerce" 

theories, the trial court instructed the jury: 

An essential element of the offense prohibited by 

the Sherman Antitrust Act is that the defendants' 

alleged unreasonable restraint of trade must involve 

interstate commerce. The term "interstate commerce" 

includes transactions of commodities that are moving 

across state lines or that are in the continuous flow of 

commerce from the commencement of their journey until 

their final destination in a different state. When such 

transactions are involved, the amount of commerce 

restrained by the conspiracy is of no significance. 

The term "interstate commerce" may also include 

entirely intrastate transactions in which some or all 

the defendants are not engaged in interstate commerce 

and some or all of the acts are wholly within a state, 

if the activities substantially and directly affect 

interstate commerce. 

It is a question of fact for the jury to determine 

whether a particular defendant's conduct involves such 

interstate commerce in the light of business practices. 

In our opinion, the instructions of the trial court adequately 

state the law of this circuit and properly put before the jury the 

requirements for finding "[a] nexus, assessed in practical terms, 

between interstate commerce and the challenged activity." 

637 F.2d at 724. 

Crane, 

b. The evidence. Appellants also argue that the government 

failed to present evidence that the customer allocation agreement 

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reduced the flow of goods in interstate commerce. However, 

neither the "in commerce" nor "effect on commerce" test requires 

the government to quantify the adverse impact of the challenged 

activity. As this court noted in Crane: 

"There is no •.. concern with the specific 

magnitude of the impact on interstate commerce caused by 

the alleged conspiracy. Instead, the Court in each case 

ends its inquiry when it has satisfied itself that the 

logical and therefore probable effect of the alleged act 

is to reduce the flow of goods in interstate commerce." 

637 F.2d at 724 (quoting Doctors, Inc. v. Blue Cross of Greater 

Philadelphia, 490 F.2d 48, 53 (3rd Cir. 1973) (footnote omitted & 

emphasis added)); see also, Goldfarb v. Virginia State Bar, 421 

U.S. 773,785 (1975) ("in commerce" theory; so long as the 

challenged business activity is in commerce, "no specific 

magnitude need be proved"); McLain, 444 U.S. at 243 ("e~fect" 

test; 11 jurisdiction , [ is· not] defeated in a case relying on 

anticompetitive effects by plaintiff's failure to quantify the 

adverse impact of defendant's conduct"). 

The burden on the government is even less when ape~ se 

restraint is at issue. In Burke v. Ford, 389 U.S. 320, 321-22 

(1967) (reversing 377 F.2d 901 (10th Cir. 1967))·, the Supreme 

Court held that in the context of horizontal territorial market 

divisions (a ~ se restraint), a substantial adverse effect on 

interstate commerce results, as a matter of practical economics, 

by virtue of the restraint itself. See Hospital Bldg. Co. v. Rex 

Hosp. Trustees, 425 U.S. 738, 745 (1976); United States v. 

Fischbach & Moore, Inc., 750 F.2d 1183, 1192 (3d Cir. 1984), cert. 

denied, 470 U.S. 1029 (1985); United States v. Cadillac Overall 

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Supply Co., 568 F.2d 1078, 1085-86 (5th Cir.), cert. denied, 437 

U.S. 903 (1978). The Burke court held: 

The Court of Appeals held that proof of a state-wide 

wholesalers' market division in the distribution of 

goods retailed in substantial volume within the State 

but produced entirely out of the State was not by itself 

sufficient proof of an effect on interstate commerce. 

We disagree. Horizontal territorial divisions almost 

invariably reduce competition among the participants. 

When competition is reduced, prices increase and unit 

sales decrease. The wholesalers' territorial division 

here almost surely resulted in fewer sales to retailers 

--hence fewer purchases from out-of-state distillers--

than would have occurred had free competition prevailed 

amorig the wholesalers. 

389 U.S. at 321-22 (citations omitted). 

that 

Assuming for purposes of our review that the jury concluded 

the customer allocation agreement was a purely local 

activity, we hold that there was sufficient evidence in the record 

from which the jury could infet a substantial and appreciable 

effect on interstate commerce. All of the cedar shakes purchased 

by Suntar and Ronan's Roofing were purchased from out-of-state 

companies. From June 1985 until 1986, Ronan's Roofing purchased 

approximately $400,000 worth of shakes from a company in Oregon. 

Suntar and Rdnan's Roofing combined purchased an additional 

$230,000 worth of shakes during that same time period from a 

lumber company in Oklahoma. All of these shakes were produced in 

mills in either the Northwest United States or in Canada. 

Additionally, the jury could draw certain inferences from the 

existence of the~ se restraint itself. Although the market 

division here was on a smaller scale than the state-wide divisions 

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at issue in Burke, the jury could still infer that the practical 

effect of Suntar's and Fleenor's agreement to raise prices on 

certain builders and Fleenor's agreement to stop purchasing threeeighths inch shakes was to decrease the purchases of both 

companies from their out-of-state suppliers. Given the volume of 

shakes purchased the preceding year, the jury could well conclude 

that the agreements had a substantial and appreciable effect on 

interstate commerce. 

C. Rule 404(b) Similar Acts Evidence 

Appellants next contend that the trial court erred in ruling 

prior to trial that evidence of similar acts under Fed. R. Evid. 

404(b) 4 was admissible and in allowing such evidence to be 

.presented at trial. At trial, the government presente_d evidence 

concerning similar customer allocation agreements entered into by 

the defendants before and during the time period charged_ in the 

indictment "to show that participation of defendants in the 

charged customer allocation conspiracy was part of a course of 

conduct and was knowing and intentional, rather than the result of 

accident or mistake." Appellants as~ert that this evidence should 

have been excluded for two reasons: (1) appellants' intent was 

not at issue because they denied that they had committed the acts 

4 Fed. R. Evid. 404(b) provides: 

Other crimes, wrongs, or acts. Evidence of other 

crimes, wrongs, or acts is not admissible to prove the 

character of a person in order to show action in 

conformity therewith. It may, however, be admissible 

for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, 

identity, or absence of mistake or accident. 

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charged in the indictment, and (2) the probative value of the 

evidence was far outweighed by its prejudicial effect. 

A district court has broad discretion in determining whether 

to admit evidence of other crimes under 404(b), and its decision 

to admit such evidence will not be reversed by this court absent 

an abuse of discretion. United States v. Record, 873 F.2d 1363, 

1373 (10th Cir. 1989): United States v. Cuch, 842 F.2d 1173, 1177 

(10th Cir. 1988). A defendant is protected from unfair prejudice 

if the evidence is relevant and offered for a proper .purpose, if 

the probative value is not substantially outweighed by its 

potential for unfair prejudice, and if the court, upon request, 

instructs the jury to consider the evidence only for the proper 

purpose for which it was admitted. Huddleston v. United Stat~s, 

485 U.S. 681, 691 11988); Record, 873 F.2d at 1374. When offered 

to show intent, such similar acts should 

and close in time to the offense charged. 

be reasonably similar 

Cuch, 842 F.2d at 1176. 

Similar acts evidence is admissible under 404(b) to prove 

knowledge, intent, or lack of mistake. Intent to restrain 

competition (here, by way of the customer allocation agreement) is 

an element of a criminal violation of the Sherman Act. United 

States v. Metropolitan Enters., Inc., 728 F.2d 444, 449 (10th Cir. 

1984} (citing United States v. United States Gypsum Co., 438 U.S. 

422, 443-46 (1978)). •The requisite intent can be proved by 

showing that the defendants knowingly joined and participated in 

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the conspiracy. Id. at 450. Thus, the intent of the conspirators 

was properly at issue during the trial. 

As with all similar acts evidence, the evidence presented 

here to the jury carried some danger of prejudice and confusion of 

the issues. However, the evidence as admitted contained several 

of the Huddleston safeguards against unfair prejudice. First, the 

similar acts presented were reasonably similar and close in time 

to the offense charged. 5 Second, the trial court repeatedly 

instructed the jury during trial as each piece of similar acts 

evidence was admitted that the evidence could be considered only 

for the limited purpose of proving knowledge, intent, or lack of 

mistake, and could only be considered with respect to the 

particular defendants against whom it w~s being admitted. Third, 

the court's instruction No. 25 at the close of trial properly 

stated the text of Rule 404(b) and reminded the jury of the 

limited purposes fdr which the evidence could be used. We 

therefore hold that the trial court did not abuse its discretion 

in admitting the similar acts evidence. 

5 Specifically, the evidence showed that (1) Suntar and Ronan 

reached an agreement in early 1985 to allocate Cowan Homes to 

Ronan's Roofing; (2) Suntar, through Pratt, reached customer 

allocation agreements with four other roofers, Larry Vaught 

Roofing, Russell Nugent Roofing, Keaton Bros. Roofing & Siding, 

Inc., and Cedarside Roofing at various times between 1982 and mid1985; and (3) in the spring of 1986, Pratt met with another 

roofer, Orin Jackson, to discuss entering into a customer 

allocation agreement. 

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D. Conflict of Interest 

Finally, Appellants contend that the trial court violated 

appellants' Sixth Amendment right to effective assistance of 

counsel by failing to allow Suntar's counsel to withdraw. At 

trial and on appeal, appellants maintain that because Byron Neal 

Fox (Fox) served as counsel for both Suntar and Keaton, his 

continued representation of Suntar at trial created a conflict of 

interest. (Keaton was named as an unindicted co-conspirator in 

the government's bill of particulars and he was a party to some of 

the discussions used as similar acts evidence at trial.) 

"A court confronted with and alerted to possible conflicts of 

interest must take adequate steps to ascertain whether the 

conflict warrants separate counsel." Wheat v. United States, 486 

U.S; 153, 160 (1988) (citations omitted). While we review de novo 

the district court's determination of whether an actual conflict 

existed, the court's resolution of the underlying facts giving 

rise to its conclusion is subject to a clearly erroneous standard 

of review. United States v. Soto Hernandez, 849 F.2d 1325, 1328-

29 (10th Cir. 1988). 

In Soto-Hernandez, this court stated: 

The sixth amendment entitles a criminal defendant to an 

attorney free of interests that actually conflict with 

those of the accused. This right is not limited to 

cases involving joint representation of codefendants at 

a single trial, but extends to any situation in which a 

defendant's counsel owes conflicting duties to that 

defendant and some other third person. To prevail on an 

ineffective assistance claim of this variety 'a 

defendant who raised no objection at trial must 

demonstrate that an actual conflict of interest 

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adversely affected his lawyer's performance.' Once an 

actual conflict and an adverse effect are shown, an 

accused need not show prejudice to receive relief. 

849 F.2d at 1328 (citationi omitted). 

Although the defendant raised an objection to the possible 

conflict just prior to trial, the court held a hearing on the 

issue and issued an order declining to require counsel to 

withdraw. The trial court "was not convinced that an actual 

conflict [arose] from Fox's posture" in the case, and, in its 

denial of appellants' motion for judgement of acquittal or for a 

new trial, the court observed that "the evidence at trial 

indicated that the interests of Keaton-and Suntar were parallel, 

as Keaton was the part-owner of Suntar." 

Although Keaton was also named individually as an unindicted 

co-conspirator, we fail to find any evidence in the record that 

contradicts the trial court's finding. Moreover, appellants have 

never done more than allege a possible conflict of interest; they 

have made no attempt to establish or demonstrate that an actual 

conflict of interest adversely affected Fox's performance at 

trial. Accordingly, we cannot say that the trial court's findings 

are clearly erroneous and we affirm the trial court's conclusion 

that no actual conflict existed for Suntar's attorney which 

violated appellants' right to effective counsel. 

Appellants' convictions are AFFIRMED. 

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