Source: http://www.justice.gov/atr/cases/f226300/226336.htm
Timestamp: 2015-03-29 09:24:19
Document Index: 296861213

Matched Legal Cases: ['§ 1', '§ 1', '§ 2', '§ 8', '§ 8', '§ 37', '§ 1']

Government's Proposed Conclusions of Law : US v. Stolt-Nielsen S.A., et al.
formats: this web page (for browsing content), PDF (comparable to original document formatting), and WordPerfect. To view the PDF you will need Acrobat Reader, which may be downloaded from the Adobe site. For an official signed copy, please contact the Antitrust Documents Group. IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA, v. STOLT-NIELSEN S.A., et al. |
| CRIMINAL ACTION NO. 06-cr-466 Filed: August 20, 2007 GOVERNMENT'S PROPOSED CONCLUSIONS OF LAW ANTONIA R. HILL WENDY BOSTWICK NORMAN KIMBERLY A. JUSTICE RICHARD S. ROSENBERG LAURA HEISER JEFFREY C. PARKER Attorneys, Antitrust Division U.S. Department of Justice Philadelphia Office The Curtis Center, Suite 650 West 170 S. Independence Mall West Philadelphia, PA 10106 Tel. No.: (215) 597-7401 Dated: August 20, 2007 TABLE OF CONTENTS I. INTRODUCTION Third Circuit Directive
Standard and Burden of Proof II. THE COURT'S ROLE AS FACT-FINDER Witness Credibility and Weight of Evidence Inferences III. THE CONDITIONAL LENIENCY AGREEMENT Construed According to Principles of Contract Law Stolt's Required Performance Under the Conditional Agreement Prompt and effective action to terminate upon discovery Full, continuing and complete cooperation Antitrust Division's Required Performance Under the Conditional Agreement Not to prosecute Right to verify Right to declare void and revoke conditional acceptance into Corporate Leniency Program Conditional Agreement Did Not Grant Stolt Leniency Leniency to the date of the Agreement granted only if Stolt first strictly complied with its obligations If leniency granted, granted to date of certain legal withdrawal Stolt's Directors, Officers and Employees Integration Clause IV. STOLT BREACHED THE AGREEMENT'S CONDITION PRECEDENT OF PROMPT AND EFFECTIVE ACTION TO TERMINATE The Anticompetitive Activity Being Reported: Worldwide Customer Allocation Scheme The Date of Discovery: When O'Brien Found and Read the Jansen Memo in January 2002
Actions Stolt Took Were Not Prompt and Effective Action to Terminate Its Part in the Anticompetitive Activity Meaning of prompt and effective action to terminate Stolt failed to take prompt and effective action to terminate because Wingfield and Jansen continued to conspire Wingfield and Jansen continued to have conspiratorial meetings and discussions with Jo Tankers and Odfjell until November 2002 Stolt's revised antitrust policy did not effectively terminate its participation in the conspiracy Stolt is responsible for the conspiratorial conduct of Wingfield and Jansen V. STOLT BREACHED THE AGREEMENT'S COOPERATION PROVISION VI. THE ANTITRUST DIVISION PROPERLY REVOKED THE AGREEMENT Conditional Agreement Is Void upon Stolt's Breach
Stolt's Breach Was Material Government Did Not Receive the Benefit of Its Bargain Although Not Required, Defendants Received Sufficient Opportunity to Cure
Government Revoked the Conditional Agreement Because of Information It Learned Only after the Agreement was Signed VII. NEITHER COOPERMAN NOR WINGFIELD IS ENTITLED TO LENIENCY Cooperman and Wingfield Have No Rights as Third-Party Beneficiaries Because the Conditional Agreement Is Void Cooperman and Wingfield Are Not Entitled to Leniency Because Stolt Failed to Cooperate Fully Neither Cooperman nor Wingfield Can Claim Detrimental Reliance Wingfield Independently Breached the Agreement By Failing to Cooperate Fully VIII. CONCLUSION TABLE OF AUTHORITIES FEDERAL CASES American Tobacco Co. v. United States, 147 F.2d 93 (6th Cir. 1944) Bein v. Heath, 47 U.S. 228 (1848) Bourjaily v. United States, 483 U.S. 171 (1987) Calvert v. Doctor Pet Ctr, Inc., No. Civ. A. 93-4956, 1995 WL 541826,
at *1 (E.D. Pa. Sept. 11, 1995) Central Pa. Teamsters Pension Fund v. McCormick Dray Line, Inc.,
85 F.3d 1098 (3d Cir. 1996) Champion Papers, Inc. v. N.L.R.B., 393 F.2d 388 (6th Cir. 1968) CTF Hotel Holdings, Inc. v. Marriott Int'l, Inc., 381 F.3d 131 (3d Cir. 2004) Drysdale v. Woerth, 153 F. Supp. 2d 678 (E.D. Pa. 2001) Government of Virgin Islands v. Testamark, 570 F.2d. 1162 (3d Cir. 1978) H.C. Lawton, Jr., Inc. v. Truck Drivers, 755 F.2d 324 (3d Cir. 1985) Hoffa v. United States, 385 U.S. 293 (1966) Hyde v. United States, 225 U.S. 347 (1912) In re Flat Glass Antitrust Litig., 385 F.3d 350 (3d Cir. 2004) In Re New Valley Corp., 181 F.3d 517 (3d Cir. 1999) In re Tops Appliance City, Inc., 372 F.3d 510 (3d Cir. 2004) Johnson v. United States, 291 F.2d 150 (8th Cir. 1961) Joseph A. ex rel. Wolfe v. Ingram, 275 F.3d 1253 (10th Cir. 2002) Livingstone v. North Belle Vernon Borough, 91 F.3d 515 (3d Cir. 1996) McClanahan v. United States, 230 F.2d 919 (5th Cir. 1956) Monsanto Co. v. Rohm & Haas, Co., 456 F.2d 592 (3d Cir. 1972) New Wrinkle, Inc. v. John L. Armitage & Co., 238 F.2d 753 (3d Cir. 1956) Pinkerton v. United States, 328 U.S. 640 (1946) Piraino v. Int'l Orientation Resources, Inc., 137 F.3d 987 (7th Cir. 1998) Portuondo v. Agard, 529 U.S. 61 (2000) Reagan v. United States, 157 U.S. 301 (1895) Rock v. Nat'l R.R. Passenger Corp., No. Civ. A. 04-1434, 2005
WL 1899503, at *8 (E.D. Pa. Aug. 9, 2005) Safarik v. United States, 62 F.2d 892 (8th Cir. 1933) Sprynczynatyk v. General Motors Corp., 771 F.2d 1112 (8th Cir. 1985) Stolt-Nielsen S.A. v. United States, 442 F.3d 177 (3d Cir. 2006) United States v. American Radiator & Standard Sanitary Corp.,
433 F.2d 174 (3d Cir. 1970) United States v. Antar, 53 F.3d 568 (3d Cir. 1995) United States v. Armour & Co., 168 F.2d 342 (3d Cir. 1948) United States v. Automated Med. Labs., Inc., 770 F.2d 399 (4th Cir. 1985) United States v. Baird, 218 F.3d 221 (3d Cir. 2000) United States v. Baldacchino, 762 F.2d 170 (1st Cir. 1985) United States v. Boone, 279 F.3d 163 (3d Cir. 2002) United States v. Butch, 256 F.3d 171 (3d Cir. 2001) United States v. Carrara, 49 F.3d 105 (3d Cir. 1995) United States v. Castaneda, 162 F.3d 832 (5th Cir. 1998) United States v. Chaney, 446 F.2d 571 (3d Cir. 1971) United States v. Davis, 393 F.3d 540 (5th Cir. 2004) United States v. DeLarosa, 450 F.2d 1057 (3d Cir. 1971) United States v. DePeri, 778 F.2d 963 (3d Cir. 1985) United States v. Drozdowski, 313 F.3d 819 (3d Cir. 2002) United States v. Flores, 454 F.3d 149 (3d Cir. 2006) United States v. Flores, 975 F. Supp. 731 (E.D. Pa. 1997) United States v. Floyd, 428 F.3d 513 (3d Cir. 2005) United States v. Gerant, 995 F.2d 505 (4th Cir. 1993) United States v. Gillen, 599 F.2d 541 (3d Cir. 1979) United States v. Gonzales-Sanchez, 825 F.2d 572 (1st Cir. 1987)	United States v. Gregory, 245 F.3d 160 (2d Cir. 2001) United States v. Hilton Hotels Corp., 467 F.2d 1000 (9th Cir. 1972) United States v. Hoffenberg, 908 F. Supp. 1265 (S.D.N.Y. 1995) United States v. Hudson, 717 F.2d 1211 (8th Cir. 1983) United States v. Isabella, 582 F. Supp. 1534 (E.D. Pa. 1984)	United States v. Jackson, 257 F.2d 41 (3d Cir. 1958) United States v. Jackson, No. 93-57-4, 1995 WL 27161, at *2 (E.D. Pa. Jan. 20, 1995) United States v. Jones, 404 F. Supp. 529 (E.D. Pa. 1975) United States v. Keller, 512 F.2d 182 (3d Cir. 1975) United States v. Kirk, 584 F.2d 773 (6th Cir. 1978) United States v. Kushner, 305 F.3d 194 (3d Cir. 2002) United States v. Leahy, 445 F.3d 634 (3d Cir. 2006) United States v. Lopez, 944 F.2d 33 (1st Cir. 1991) United States v. Martin, 525 F.2d 703 (2d Cir. 1975) United States v. McCarthy, 54 F.3d 51 (2d Cir. 1995) United States v. Perez, 280 F.3d 318 (3d Cir. 2002) United States v. Reardon, 787 F.2d 512 (10th Cir. 1986) United States v. Roman, 121 F.3d 136 (3d Cir. 1997) United States v. Rothrock, 806 F.2d 318 (1st Cir. 1986) United States v. Schilling, 142 F.3d 388 (7th Cir. 1998) United States v. Skalsky, 616 F. Supp. 676 (D.N.J. 1985) United States v. Skalsky, 621 F. Supp. 528 (D.N.J. 1985) United States v. Skalsky, 857 F.2d 172 (3d Cir. 1988) United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940)	United States v. Steele, 685 F.2d 793 (3d Cir. 1982) United States v. Trenton Potteries Co., 273 U.S. 392 (1927)	United States v. Turner, 319 F.3d 716 (5th Cir. 2003) United States v. U.S. Gypsum Co., 600 F.2d 414 (3d Cir. 1979)	United States v. Universal Rehab. Serv., Inc., 205 F.3d 657 (3d Cir. 2000) United States v. Verrusio, 803 F.2d 885 (7th Cir. 1986) United States v. W.F. Brinkley & Son Constr. Co., Inc., 783 F.2d 1157 (4th Cir. 1986) United States v. Wasserson, 418 F.3d 225 (3d Cir. 2005) United States v. Wells, M.D., 211 F.3d 988 (6th Cir. 2000) United States v. Wise, 370 U.S. 405 (1962) Williamson v. United States, 512 U.S. 594 (1994) FEDERAL STATUTES 15 U.S.C. § 1 1, 21 OTHER AUTHORITIES Fed. R. Evid. Rule 105 U.S.S.G. § 1B1.8 U.S.S.G. § 2R1.1 U.S.S.G. § 8B2.1(b)(3) U.S.S.G. § 8C2.5(f)(3)(A) 13 Samuel Williston & Richard A. Lord A Treatise on the Law of Contracts § 37:23 (4th ed. 2000) American Heritage Dictionary of the English Language (4th ed. 2000) IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA, v. STOLT-NIELSEN S.A., et al. |
| CRIMINAL ACTION NO. 06-cr-466 Filed: August 20, 2007 GOVERNMENT'S PROPOSED CONCLUSIONS OF LAW I. INTRODUCTION On September 6, 2006, a federal grand jury returned an Indictment charging Stolt-Nielsen S.A. ("SNSA"), Stolt-Nielsen Transportation Group Ltd. (Liberia), Stolt-Nielsen Transportation Group Ltd. (Bermuda) (collectively "SNTG" and together with SNSA, "Stolt"), Samuel A. Cooperman and Richard B. Wingfield with violating Section 1 of the Sherman Act. 15 U.S.C. § 1.
On November 22, 2006, defendants filed motions to dismiss the Indictment, pursuant to Rule 12(b)(2) of the Federal Rules of Criminal Procedure, arguing that a January 15, 2003 agreement between the Antitrust Division and Stolt (the "Conditional Agreement") precluded the Antitrust Division from bringing the Indictment.
A. Third Circuit Directive In this proceeding, the Court has followed the Court of Appeals directive that: if appellees assert the Agreement as a defense after they are indicted, the District Court must consider the Agreement anew and determine the date on which Stolt-Nielsen discovered its anticompetitive conduct, the Company's and Wingfield's subsequent actions, and whether, in light of those actions, Stolt-Nielsen complied with its obligation under the Agreement to take "prompt and effective action to terminate its part in the anticompetitive activity being reported upon discovery of the activity." Stolt-Nielsen S.A. v. United States, 442 F.3d 177, 187 n.7 (3d Cir.), cert. denied, 127 S. Ct. 494 (2006). When a judgment is reversed, it is deprived of all conclusive effect. Id. (citing Joseph A. ex rel. Wolfe v. Ingram, 275 F.3d 1253, 1266 (10th Cir. 2002)). Thus, the Court gives no weight to Judge Savage's findings and conclusions in the prior civil proceeding (which were based on a two-witness hearing), to which defendants refer throughout their proposed findings of fact and conclusions of law.
The Court held an evidentiary hearing and received testimony from numerous witnesses, voluminous documentary evidence and heard argument of counsel. The Court is now prepared to answer the three critical questions posed by the Third Circuit: (1) when Stolt discovered its anticompetitive conduct, (2) what actions, if any, Stolt took and (3) whether Stolt's actions satisfied the express terms of the Conditional Agreement to take "prompt and effective action to terminate its part in the anticompetitive activity being reported upon discovery of the activity." (Stolt-Nielsen, 442 F.3d 177 at 181; see also GX-1 ¶ 1(a)).
The Court is also prepared to determine whether Stolt provided the Government with full, continuing and complete cooperation as required by the Conditional Agreement. (See GX-1 ¶ 2).
B. Standard and Burden of Proof A majority of the Circuits (including the Third Circuit) has set the standard of proof for establishing breach of a non-prosecution or plea agreement at preponderance of the evidence. Compare, e.g., United States v. Wells, M.D., 211 F.3d 988, 995 (6th Cir. 2000) (proof of breach by preponderance of evidence); United States v. Castaneda, 162 F.3d 832, 836 (5th Cir. 1998) (same); United States v. Roman, 121 F.3d 136, 142 (3d Cir. 1997) (same); United States v. Gerant, 995 F.2d 505, 508 (4th Cir. 1993) (same); with, e.g., United States v. Gregory, 245 F.3d 160, 164 (2d Cir. 2001) (whether government's decision to revoke cooperation agreement was reasonable); United States v. Gonzales-Sanchez, 825 F.2d 572, 578 (1st Cir. 1987) (proof by "adequate evidence"); United States v. Verrusio, 803 F.2d 885, 891 (7th Cir. 1986) (proof beyond a reasonable doubt is not required). Defendants mistakenly rely on the district court's decision in United States v. Skalsky, 621 F. Supp. 528, 530 (D.N.J. 1985), in asserting that the standard for establishing breach is clear and convincing evidence. In Skalsky, the Third Circuit merely held that the lower court's finding that Skalsky had materially breached his non-prosecution agreement "was not clearly erroneous," without ever addressing whether the lower court's application of a clear and convincing standard was correct. United States v. Skalsky, 857 F.2d 172, 179 (3d Cir. 1988).
The Court sees no reason to depart from the majority and concludes that the standard of proof for establishing breach of the Conditional Agreement is preponderance of the evidence.
In this Circuit, the party alleging breach bears the burden of proof. United States v. Floyd, 428 F.3d 513, 515-16 (3d Cir. 2005); United States v. Roman, 121 F.3d at 142. The Government, however, has assumed the burden of proving by a preponderance of the evidence that Stolt breached the Conditional Agreement. II. THE COURT'S ROLE AS FACT-FINDER The Court has considered all of the evidence, including the testimony of over twenty witnesses and thousands of pages of documentary evidence. The Court has weighed the relevant evidence, drawn reasonable inferences, and has made credibility determinations as reflected in the findings of fact. These determinations were made in accordance with the following principles of law:
A. Witness Credibility and Weight of Evidence Credibility of witnesses is determined from several factors, including witness demeanor and manner while on the witness stand, relation to a party in the case, self-interest, motives and state of mind. See, e.g., Hoffa v. United States, 385 U.S. 293, 312 n.14 (1966); United States v. Universal Rehab. Serv., Inc., 205 F.3d 657, 666 (3d Cir. 2000). Among other things, in assessing the credibility of the Stolt employee witnesses, including Bjorn Jansen, the Court considered their status as employees of defendant Stolt and their motive to provide testimony helpful to defendants. In assessing the credibility of defendant Richard Wingfield, the Court considered his status as a defendant in this criminal case. When a defendant takes the stand, "his credibility may be impeached and his testimony assailed like that of any other witness." Portuondo v. Agard, 529 U.S. 61, 69 (2000) (internal quotations and citation omitted). The interests of the defendant, however, may seriously affect the credibility of the defendant's testimony and may create a motive to testify falsely. See Reagan v. United States, 157 U.S. 301, 305-6 (1895) (when witness is a defendant, fact that his interest is greater than that of any other witness affects evaluation of his credibility); United States v. Martin, 525 F.2d 703, 706 (2d Cir. 1975) (same). The Court has considered the inconsistencies, if any, in the testimony of all the witnesses ­ both the defense witnesses and the Government witnesses ­ and has given their testimony the weight it deems proper in light of all other evidence. See Piraino v. Int'l Orientation Resources, Inc., 137 F.3d 987, 991 n.2 (7th Cir. 1998) ("[I]t is within the district judge's discretion to believe or disbelieve testimony based on the overall credibility of the witness; a misleading statement does not require the judge to disbelieve everything the witness says."); Champion Papers, Inc. v. N.L.R.B., 393 F.2d 388, 394 (6th Cir. 1968) ("A factfinder ­ jury, judge or administrative agency ­ is not barred from finding elements both of truth and untruth in a witness' testimony."); see also United States v. Boone, 279 F.3d 163, 189 (3d Cir. 2002) ("witness' testimony is not insufficient to establish a point simply because he or she later contradicts or alters it"). Uncorroborated testimony of a cooperating coconspirator is sufficient to satisfy the Government's burden of proof here because such testimony may be sufficient to support a conviction, which requires a greater burden of proof. See Boone, 279 F.3d at 188 (citation omitted); United States v. Turner, 319 F.3d 716, 721 (5th Cir. 2003) ("As long as it is not factually insubstantial or incredible, the uncorroborated testimony of a co-conspirator, even one who has chosen to cooperate with the government in exchange for non-prosecution of [sic] leniency, may be constitutionally sufficient evidence to convict.") (internal quotations and citation omitted) (emphasis added); see also United States v. Perez, 280 F.3d 318, 344 (3d Cir. 2002) (following "Supreme Court in holding that uncorroborated accomplice testimony may constitutionally provide the exclusive basis for a criminal conviction.") (citing United States v. DeLarosa, 450 F.2d 1057, 1060 (3d Cir. 1971) (internal quotations omitted)).