Court Opinion

ID: 9492594
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:44:51.620338+00
Date Added: 2024-06-11T17:55:23.074934
License: Public Domain

JON O. NEWMAN, Circuit Judge,
concurring in substantial part:
The narrow issue that prompts this separate concurrence is how to determine the amount of commerce “affected” by a price-fixing conspiracy for purposes of sentencing. The Sentencing Guidelines specify that the offense level for price-fixing is to be calculated according to “the volume of commerce done by [the defendant] or his principal in goods and services that were affected by the violation.” U.S.S.G. § 2Rl.l(b)(2) (emphasis added). All members of the panel agree that the District Court erred in counting only those sales made at or above the fixed price. We also agree that the Government should not be sustained in its contention that all sales made during the conspiracy period are conclusively presumed to have been affected by the conspiracy. The majority adopts a multi-factor test aimed at determining those sales “influenced” by the conspiracy. See at 195 F.3d at 90. I believe the majority’s approach is unclear, includes reliance on some irrelevant factors, and, depending on how sentencing judges interpret it, either erects (1) too high a standard, which can be met only after the sentencing judge is obliged to hold a protracted hearing, or (2) a low standard, which is fairly easy to meet but nonetheless adds some needless complexity to a sentencing hearing. In my view, the relevant guideline is faithfully and sensibly applied by using a rebuttable presumption that all sales within the conspiracy are “affected” by the price-fixing agreement, with the defendant free to prove, or at least come forward with evidence, that one or more particular sales were not so influenced.
Once a seller agrees to fix prices, he either sells at that price or (unless he is both a price-fixer and an amnesiac) at least has the fixed price in mind and uses it as a point of departure for himself in deciding what slightly different price to quote for almost every sale he makes during the period of the conspiracy. As long as the seller has the fixed price in mind when he decides by how much to depart from it when quoting a price, his final sale price has been affected by the price-fixing agreement. The whole point of punishing price-fixing agreements is to oblige sellers to respond to all the forces at work in an unrestricted market, and adding the element of a fixed price to a seller’s thought process will almost always skew the price quotation and the final sale price to some degree that the antitrust laws endeavor to prevent.
A rare instance might arise when, under unusual circumstances, a seller quotes or agrees to a price without any reference to the fixed price. For example, a defendant’s brother-in-law might call one day and ask for a product at a bargain price in order to make a quick and urgently needed resale, and the seller agrees to the bargain price motivated solely by concern to help his relative, with no thought whatever about the fixed price against which he quotes to all other customers. Since a rare circumstance of that sort would be peculiarly within the knowledge of the defendant, it is entirely appropriate to oblige him to prove it, or at least come forward with evidence of it. Criminal law sometimes imposes on a defendant a burden of proving a defense, see, e.g., 18 U.S.C. § 17(b) (“The defendant has the burden of proving the defense of insanity by clear and convincing evidence.”), or at least com*94ing forward with evidence of a defense, see, e.g., United States v. Caban, 173 F.3d 89, 94 (2d Cir.1999) (“In order to be entitled to a duress instruction, ‘[a] defendant must present some evidence on all the elements of the defense(quoting United States v. Podlog, 35 F.3d 699, 704 (2d Cir.1994)). At sentencing, a defendant must prove entitlement to downward adjustments and departures. See. e.g., United States v. Gomez, 103 F.3d 249, 255 (2d Cir.1997) (“burden at sentencing is on the defendant” to prove mitigating role in criminal activity under U.S.S.G. § 3B1.2). Obliging a defendant to prove, or at least come forward with evidence, that a particular sale was not affected by a price-fixing conspiracy is a simple and rational way to implement section 2R1.1(b)(2).
The majority’s approach, however, proceeds along a different course, the contours of which are not clear. The majority instructs the sentencing judge to consider “[1] the goals of the conspiracy, [2] and the steps taken to implement it, [3] the market share of the conspirators, [4] and the perceptions of the conspirators and [5] the persons with whom they transacted business, and may otherwise deduce the effect on commerce from [6] the pressures brought to bear on it.” at 91. The first factor seems pointless since it is difficult to imagine a price-fixing conspiracy that did not have as its goal selling at prices above those to be obtained in an unrestricted market. The second factor seems irrelevant to sentencing since it is difficult to see why the price-fixers who hire comparison shoppers to see how faithfully their co-conspirators are adhering to the fixed price should receive extra punishment, while those who take no such steps in the justified confidence that their co-conspirators can be trusted should draw lesser sentences. Market share also seems irrelevant since price-fixers should not draw lesser sentences simply because they modestly try to extract extra profits from only a small segment of the market.1 The perceptions of the conspirators is an unclear factor, since we are not told what the relevant perceptions concern. If they concern the degree of success of the conspiracy, such perceptions might have some arguable relevance to the fact of success, but it is difficult to see why those who are less sure of the success of their conspiracy should receive less punishment. The perceptions of the customers seem irrelevant since no lesser punishment should be imposed just because a customer is unaware that the quoted price has been set at, or at least in relation to, a fixed price; the price is artificial, whether or not the customer knows it. The final factor of “the pressures brought to bear on” commerce appears to be only another way of describing the second factor, the steps taken to implement the conspiracy.
Fortunately, the majority has not required sentencing judges to ascertain the hypothetical price that would obtain in an unrestricted market. That inquiry would oblige the sentencing judge to conduct a far-ranging and complex inquiry, more suitable to the damage phase of a civil case than the sentencing phase of a criminal case. And the majority sensibly eschews any requirement of “a sale-by-sale accounting, or an econometric analysis, or expert testimony.” at 91. But the resulting multi-factor approach will, I fear, leave district judges unclear whether they are to conduct an elaborate inquiry in an effort to gauge the “influence” of the conspiracy, or find the requisite “influence” simply from such normally available factors as the goals of the conspiracy and some steps to enforce it, for example, one or more meetings after the initial meeting where the price-fixing agreement was made. Such uncertainty is not warranted.
*95The majority’s approach is also vulnerable because it creates a needless circuit variation from the only reported case on this subject. The Sixth Circuit has ruled that all of a defendant’s sales within the conspiracy period count in determining that defendant’s affected volume of commerce for purposes of sentencing. See United States v. Hayter Oil Co., 51 F.3d 1265, 1273 (6th Cir.1995). In the four years since that decision, the Sentencing Commission has given no indication that the Sixth Circuit’s approach did not faithfully implement section 2R1.1(b)(2) on the facts of Hayter Oil. That case did not involve the rare circumstance I have posited of a sale that is demonstrably uninfluenced at all by the price-fixing agreement. I would not count such a sale, and I suspect that the Sixth Circuit also would not do so. Indeed, I suspect that the only reason the Commission used the phrase “volume of commerce ... affected by the violation” instead of “volume of commerce during the conspiracy” is to recognize the possibility that such an exception might be warranted on extreme facts.
For all of these reasons, I concur in the result and in all aspects of Judge Jacobs’ opinion except the portion governing the sentencing judge’s task on remand. As to that, I can only express the hope that sensible sentencing judges will resolve the ambiguities in the Court’s opinion in favor of a simple approach that relies on readily provable factors and thereby punishes price-fixers for substantially all of the sales they make during the period of their criminal conspiracy.

. Of course, conspirators with a small market share might find that some of the customers from whom they hoped to extract extra profits will purchase elsewhere in the market, but normally the price to any customers that remain will be quoted with reference to the fixed price and, to that extent, influenced by the fixed price.