Court Opinion

ID: 9308743
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:22:04.4815+00
Date Added: 2024-06-11T17:14:03.288948
License: Public Domain

POINTER, Judge,
concurring in part, dissenting in part.
As noted in my dissent in Citronelle-Mo-bile Gathering, Inc. v. Edwards1 and echoed by my vote for rehearing en banc of United States v. Exxon Corp.2 I believe that this court distorts the principles of restitution authorized by the statute when it permits a search for worthy beneficiaries of an award of unjust enrichment. However, as this court has rejected that position, I do not dissent on that basis and, rather, write under the constraint that the case sub judice is properly treated as one for restitution subject to broad equitable powers of the trial court.
In this light, I agree that the trial court did not err in denying the defendants a trial by jury and selecting suitable persons to receive the defendants’ ill-gotten gains. I also concur, in general, with those portions of the majority’s opinion upholding the trial court on such matters as (1) the validity of the statute and regulations; (2) the admission of evidence (other than grand jury materials);3 the finding of gross miscertifications by the defendants; (4) the imposition of individual liability on Robert Sutton,4 not limited to his “excess” compensation; (5) the rejection of defenses based on double jeopardy, statute of limitations, and “unclean hands”; and (6) the allowance of prejudgment interest.
In two respects, however, I must dissent. In my view, the case should be remanded for further consideration of the amount of the award.

Grand Jury Documents

As discussed in the majority opinion, the government utilized in this case a large number of documents obtained in violation *1065of FecLR.Crim.P. 6(e) as construed in United States v. Sells Engineering Inc.5 A few of these documents — affecting approximately 2% of the transactions in dispute— were suppressed at the trial, a ruling which this court is affirming as correct. The other documents were, however, admitted in evidence and indeed relied upon to determine the amount of the award, a ruling which this court is also affirming as correct.
The basic rationale for this distinction in treatment is sound and, indeed, not challenged by the appellants: the government should not be precluded in a civil action from using information that was presented in evidence at the prior criminal trial, even though it obtained that information in violation of Fed.R.Crim.P. 6(e). Exhibits 27 and 53 became matters of public record when they were received without qualification in the criminal trial of Robert Sutton, and the trial court properly refused to suppress the information derived from those documents when offered in the present case. Approximately 40% of the unlawful profits found by the trial court was based on those documents and accordingly should be affirmed.
I do disagree, however, about certain of the documents on which approximately 58% of the award is based. Specific data— namely, the number of barrels bought and sold and their certifications — were extracted from these documents and incorporated into summary exhibits 80 and 81, which were then admitted in evidence under Fed. R.Evid. 1006 at the criminal trial.6 However, the documents themselves were not introduced or otherwise made public in the criminal trial, nor were items of information contained in those documents that are critical to the restitution award — namely, the prices of various transactions.7
In holding that these documents were no longer subject to the restrictions of Fed.R. Crim.P. 6(e), the majority explains that the documents had been made available to Sutton and his counsel for examination both before and during the criminal trial. This fact, however, provides no sound basis for disregarding the proscriptions of Rule 6(e). Indeed, in the Sells case, as is often the situation, the documents in question were the defendants’ own records, of which they presumably had copies. Nor can it be said that these documents became a matter of public record and inspection merely be being produced in the courtroom at the criminal trial for Sutton’s examination and use.
I would remand the case for a recalculation of the restitution award, eliminating from consideration information derived from documents obtained in violation of Rule 6(e) except to the extent that information was publicly revealed during the prior criminal trial.8

*1066
Methodology of Calculation

In calculating the liability of the defendants, the trial court determined an average profit-per-barrel, ascertained by considering both profitable and unprofitable sales, and multiplied that figure by the number of miscertified barrels. The government on cross-appeal asserts that only the particular transactions involving unlawful profits should have been used, raising the amount before interest from approximately $211 million to approximately $700 million. I agree with the majority that — given the defendants’ scheme of selling at an averaged price, resulting in some losses which reduced their overall profits — the trial court’s basic approach for determining the amount of unjust enrichment was supported by the evidence and within its equitable discretion. I therefore concur in denying the cross-appeal on this issue.
In one respect, however, the methodology used by the trial court was internally inconsistent, and the position on this issue advanced by the government on cross-appeal is correct. Having determined because of the nature of the scheme practiced by the defendants that all of the transactions, both profitable and unprofitable, should be taken into account in determining the average profit per barrel, the trial court should have multiplied this amount by all of the barrels sold, not just those which had been upwardly miscertified. This adjustment — in view of the affirmance by the majority of the trial court’s exclusion under Rule 6(e) of only 2% of the documents — would raise the amount of the award, before adding interest, from $210,-736,732.92 to $227,254,951.01. I would, of course, call for this upward adjustment to be made after suppressing substantially more documents under Rule 6(e).

Conclusion

I would remand the case for recalculation of the amount of the award, suppressing additional documents obtained in violation of Rule 6(e) but taking into account under the trial court’s formula all sales supported by the remaining evidence. In other respects I join with the majority in affirming the trial court.

. 669 F.2d 717, 723 (TECA), cert. denied, 459 U.S. 877, 103 S.Ct. 172, 74 L.Ed.2d 141 (1982).

. 773 F.2d 1240 (TECA 1985), cert. denied, — U.S. —, 106 S.Ct. 892, 88 L.Ed.2d 926 (1986), reh’g denied, — U.S. —, 106 S.Ct. 1526, 89 L.Ed.2d 923 (1986).

. I would not cite Federal Rule of Evidence 803(24) as a basis for upholding the admission of PX1, because the government did not satisfy 803(24)(B) or give the advance notice required by the last sentence of that Rule. The exhibit was, however, admissible under Rule 803(6) for the reasons given in the majority’s opinion. It should be noted that the third-party "interrogatories” which provided the foundation for the source documents were, by agreement of counsel, used in lieu of (and with the same effect as) depositions on written questions.

. Although I do not believe that liability may be imposed on Sutton under the statute premised upon "his own tortious conduct," I agree that liability was properly imposed on him under the statute by "piercing the corporate veil(s)."

. 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 (1983).

. Exhibits 80 and 81 were simply charts that aggregated for 1979 and 1980, respectively, the total number of barrels bought and sold in those years, subdivided into the categories of “old," "new,” and “stripper (foreign & other)."

. The majority opinion recites that the summaries "reflected and summed up the contents of all of these documents." A more accurate statement would be that the summaries "reflected and summed up certain items of information from all of these documents” — and it should be emphasized that information critical to the present case was not reflected in those summaries.

. The majority opinion recites that the documents "were the subject of extensive cross-examination”, a point made by the government (Appellee’s brief,' p. 78). The portion of the criminal transcript cited — some 14 pages — reflects, however, not cross examination using or respecting the documents, but rather cross examination of the prosecution’s witness involving some monthly worksheets that had been used as an intermediate step in preparing the summaries. The worksheets were not introduced in evidence and only on two occasions during this examination was any mention made about prices — once when the witness stated he was unable to testify whether Sutton’s company ever received "stripper” prices for stripper oil, and later when the witness acknowledged that Sutton’s company had been charged as high as $45 a barrel for oil. No sound argument can be made that the proscriptions of Rule 6(e) were somehow waived or abrogated by this cross examination.