United States v. Sargent Electric Co., Lord Electric Co., Inc., W v. Pangborne and Co., Inc., J.A. Bruce Pinney

STAPLETON, Circuit Judge,

concurring.

Since I agree that the record will support only a finding of site-by-site conspiracies, I join the disposition of the court.

I begin with the uncontested facts that (1) there was an agreement among bidders at Western Works, including Sargent and Lord, to rig bids at that site, (2) there was an agreement among bidders at Fairless, including Sargent, Lord, and Pangborne, to rig bids at that site, and (3) there was an agreement among bidders at Gulf, including Pangborne, to fix bids at that site.

To reach the legal conclusion that it did, the trial court necessarily found as a fact that the defendants had not simply made site-by-site decisions to cooperate in rigging bids, but also that each had committed itself to rig bids at a universe of sites including Western Works, Fairless, and Gulf. Since there was no evidence, economic or otherwise, which would meaningfully distinguish any subset of sites that included Western Works, Fairless, and Gulf from the total universe of sites at which rigging was known to have occurred, the trial court concluded that each of the defendants and their competitors had committed itself to rig bids whenever and wherever the conspirators (whether or not presently known to it) might find themselves bidding against one another on a restricted list.

Recognizing that the crucial issue is whether there was ad hoc, site-by-site decision-making or a commitment by each conspirator to rig bids across a potentially limitless universe of sites, it is helpful in determining what inferences may rationally be drawn from the circumstantial evidence. Experience teaches that one seeking to maximize his risk/benefit ratio will generally prefer to make ad hoc decisions that can take into account the facts of each situation bearing on benefit and risk unless *1132 there is some substantial benefit attainable from a broader commitment which is unobtainable through ad hoc decision-making. Because this record is barren of any suggestion of a substantial benefit available from an “overarching” conspiracy that was not available through ad hoc, site-by-site decision-making and because all of the circumstantial evidence either strongly favors or is consistent with a finding of multiple conspiracies, I conclude that the district court’s finding of an overarching conspiracy is clearly erroneous.

■ Neither the trial court nor the dissent suggests that a single site conspiracy to rig bids could not be successful without an overarching conspiracy. 1 -Nor do I understand either to say that an overarching conspiracy was shown to have been safer or to have had the potential for generating greater rewards than a series of site specific conspiracies. Each finds it significant, however, that the bidders who were able to trust one another at one site would be able to trust one . another at a second site. While this is true, it is beside the point. No one would dispute that to a firm interested in bid rigging, knowledge as to the identity and trustworthiness of others willing to do the same is of great value. But on this record, such knowledge was as available and as valuable to a firm making site-by-site decisions on whether to rig bids as it would have been to a member of a grander conspiracy. In short, the “trust factor” provided no motivation for a prospective conspirator to forego the natural preference for site-by-site decision-making.

The trial court found or the undisputed evidence demonstrated (1) that there was a different group of bidders at each site; (2) that separate bid rigging meetings were held, 2 and separate records maintained 3 , for each site; (3) that precautions taken against discovery varied 4 ; (4) that the allocation of business at Western Works, Fair-less, Gulf and virtually all other sites was made exclusively on a site-by-site basis despite the feasibility of trade-offs between sites as demonstrated by those which occurred between Western Works and Jones' & Laughlin Steel 5 ; (5) that the method for designating the low bidder varied 6 ; (6) that some firms qualified to bid at more than one site did not rig bids at all of them 7 ; (7) that not all of the conspiring personnel knew one another; (8) that several of the purported “core” conspirators did not know that bid rigging was going on elsewhere *1133 than at their particular location 8 ; (9) that the bid rigging commenced at each site at a different time 9 ; and (10) that the bid rigging ended at each facility at different times and for different reasons. 10 These findings of historical fact and this undisputed testimony, in the absence of unambiguous evidence suggesting an overarching conspiracy, cumulatively compel a conclusion that those rigging bids were making ad hoe decisions on whether to rig at each site.

The few facts relied upon by the trial court in reaching a contrary conclusion are equally consistent with a finding of multiple conspiracies and, accordingly, do not provide unambiguous evidence of an overarching conspiracy. The district court specifically looked to Tri-City’s withdrawal both from the Fairless and the Western Works schemes [193a, 179a, 494a-95a] as evidence that the schemes were so interdependent that “[i]f they could not work together and agree at one facility, they could not work together anywhere.” However, this withdrawal is no more probative of a single than of several agreements. If an individual who is involved in more than one illegal conspiracy resolves to discontinue his illegitimate activities, his departure from both does not unify otherwise unrelated schemes.

Also, the district court believed that Frazer had agreed to rig bids at Lukens without being rewarded at Lukens, implying that Frazer did this so it would be rewarded elsewhere [193a]. The alternative explanation of Frazer’s actions is consistent with the existence of multiple conspiracies, however, and seems considerably more likely. Frazer bid on a project at Lukens that it did not want to obtain so that it could remain on Lukens’ bidding lists for future work [793a-94a]. A failure to bid on current jobs might have precluded Frazer from working at Lukens in the future [802a-03a]. In fact, it is uncontradicted that Frazer did just that on at least one job at Gulf that it had no desire to obtain [783a-84a].

Finally, the court found that the bid rigging at Western Works and Fairless was interconnected partly because of a meeting called to resolve a dispute after Sargent had underbid the designated low bidder on a Fairless job [192a-93a]. However, the testimony was undisputed that the meeting only related to Fairless, and no mention was made of non-Fairless jobs. The only connection to Western Works was that the meeting took place in Pittsburgh, not Philadelphia. However, this meeting took place at the Pittsburgh airport and not at the Duquesne Club, where the Western Works conspirators met. Only those who were involved with bid rigging at Fairless were present [546a-47a; 621-22a]. 11

In sum, while there are a few record facts which are consistent with the hypoth *1134 esis of an overarching conspiracy, no one has provided a persuasive reason why the defendants would have been interested in joining one and the evidence as a whole cumulatively compels a conclusion that they did not. Accordingly, proceedings should go forward on the July 19, 1984 indictment.

. If this kind of interdependence had been shown, it would, of course, have been strong evidence of a single conspiracy.

. The Gulf meetings were held at the National Electrical Contractor’s Assoc, building in Philadelphia. Fairless meetings were held at the Philadelphia Airport Hotel, except for one held at a Pittsburgh Airport Hotel. Western Works meetings were held at the Duquesne Club in downtown Pittsburgh. [173a, 613a-14a, 439a-40a, 450a, 536a],

. The records and discussions never related to other sites. [173a].

. At Fairless, no codes or special precautions against detection were taken, and participants would enter and leave the meetings together [458a], At Western Works, meetings were called by using a code. [458]. The participants would go to and leave the Western Works meetings in secrecy. [459a, 398a-99a].

. There were no trade-offs between jobs at Gulf and any other location or between jobs at Fair-less and any other location. [552; 559; 650; 496-97; 449; 465; 548; 628; 630; 596-97; 594]. There were no trade-offs between Western Works and Fairless. [464; 496-97; 924]. However, there were trade-offs between jobs at Western Works and J & L Steel [502-03], even when bid lists were not identical between the two operations. [980-82]. The court did not credit the failure to allocate jobs on a conspiracy-wide basis because the lack of similarity between the bidders at the various locations made trade-offs "simply impractical” [192]. The court did not, however, explain why trade-offs were impractical between all the other conspiracy locations except Western Works and J & L Steel.

. A dual rotation system was employed at Gulf — one rotation for jobs under $100,000 and a second one for jobs over that amount. [753, 764]. At Fairless, the low bidder was not determined by rotation, and so could not be ascertained prior to the meeting [616], Instead, at Fairless, the decision was made ad hoc in an effort to equalize the dollar volume of the work. [447, 539]. At Western Works, the low bidder was determined by dollar volume. [396, 917].

. 180a-81a, 480a.

. For example, Geuther of Foley testified that he was unaware of bid rigging at Western Works or Lukens [627a, 634a]. Therrien of Meade testified that he was unaware of any bid rigging taking place in Philadelphia [408a-09a]. Frazer of Frazer did not know that bid rigging was going on at Sun until he started attending meetings to rig bids in 1973 [769a], Frazer also testified that he did not know that bid rigging was going on at Fairless and Western Works, and did not know that there were meetings held at the Philadelphia Airport Hotel to rig bids [770a-71a]. Gosewisch of Frazer was unaware that there was rigging going on at Fairless [654a]. Spang of Riggs Distler had no knowledge of rigging at Western Works, Fairless, Gulf, Sun, or Lukens [693a],

Arbogast of Lord did testify that, in his opinion, the Western Works and Fairless schemes were part of one whole [910a-lla]. But his testimony did not show any awareness that this scheme extended beyond U.S. Steel or included Gulf. [/<£] Arbogast did not suggest that any of the Western Works and Fairless schemes were dependent on each other. Thus Arbogast’s testimony is as consistent with multiple conspiracies as with a single conspiracy. Perrott of Lord testified that he considered the Western Works and Fairless schemes as two separate areas and two separate circumstances [464a, 496a-97a].

. 172a.

. 181a.

. The fact noted by the district court that there was some overlap in the periods of and the participants in the rigging at the various sites is similarly as consistent with multiple conspiracies as with a single one.