# Petition — Henry S. Branscome, Inc. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0558%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1983 - **Citation:** 464 U.S. 1008 ## Text i! ss ~ a x a 5 re Office-Sunrema Sourt, US. >"“096 3 kiLED ~ OCT 4 1983 ALEXANDER L. STEVAS, IN THE CLERK Supreme Court of the United States OCTOBER TERM, 1983 HENRY S. BRANSCOME, INC. and HENRY S. BRANSCOME, Petitioners, V. UNITED STATES OF AMERICA, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT VINCENT J. FULLER Counsel of Record BARRY S. SIMON WILLIAM J. MURPHY LINDA C, RAY 839 - 17th Street, N.W. Washington, D.C. 20006 (202) 331-5000 Attorneys for Petitioners Of Counsel: WILLIAMS & CONNOLLY 839 - 17th Street, N.W. Washington, D.C. 23006 — —— = WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 QUESTIONS PRESENTED * 1. Whether under this Court’s decision in McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232 (1980), the government in a criminal Sherman Act case may prove an effect on interstate commerce through evidence concerning the alleged conspirators’ total annual pur- chases of interstate products rather than through evi- dence related only to the quantity of those products used in the activities infected by the alleged conspiracy. The Court of Appeals in this case affirmed a conviction which, under the reading of McLain adopted by a majority of the Courts of Appeals, should have been reversed for lack of any evidence on the interstate commerce element of a Sherman Act offense. 2. Whether under this Court’s decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974), the gov- ernment in a criminal Sherman Act case may prove an effect on interstate commerce through evidence that local roads resurfaced by the alleged conspirators are part of a “network” that ultimately is connected with interstate highways. 3. Whether under this Court’s decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974), a trial court may instruct a jury in a criminal Sherman Act case that it should consider whether “the highways, sec- ondary roads and streets involved in the case were part of our network of interstate travel and commerce” in determining whether an alleged conspiracy to rig bids for resurfacing those roads constituted a “restraint of trade or commerce among the several States.” * The parties to the proceeding below included a co-defendant at trial, the Basic Construction Company. The appeals of Petitioners and Basic were consolidated, but totally distinct points of error were raised by Basic. Basic also has filed with this Court a Petition for Writ of Certiorari, seeking review of the judgment of the Court of Appeals. No. 83-272 (August 19, 1983). Petitioner Henry S. Branscome, Inc. is a Virginia corporation solely owned by Petitioner Henry S. Branscome and his wife. Branscome, Inc. has no parent company, subsidiaries or affiliates within the meaning of this Court’s Rule 28.1. (i) TABLE OF CONTENTS EE EE EE EEE og iy 4 e610), | STATEMENT OF THE CASE .......................0................ SS EE B. Statement of Essential Facts ..............00...00000.. C. The District Court’s Rulings on the Questions Neen ussadaesasopeneasbes REASONS FOR GRANTING THE WRIT .0....ccc00000-- A. Under the Reading of McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232 (1980), Adopted By a Majority of the Courts of Ap- peals, No Evidence Was Presented at Trial To Prove an Effect on Interstate Commeree .......... B. Under This Court’s Decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S, 186 (1974), the Government’s Evidence Concerning the Fact that the Roads in Issue Are Part of a Network That Ultimately Connects With Interstate High- ways Was Irrelevant, As a Matter of Law, to the Interstate Commerce Element of a Sherman es msmessececctovesscs C. The District Court’s Instructions Improperly Permitted the Jury to Find the Essential Inter- state Commerce Element of a Sherman Act Offense Based on Evidence Concerning the Fact that the Roads in Question Are Part of an Interstate Network of Highways ................ I ice saicrcecdoticesesneseivenerreveseseonsecceeseveovseseececes 10 19 24 27 iv TABLE OF AUTHORITIES CASES: Pie Bunker Ramo Corp. v. United Business Forms, Inc., F.2d ——, 1983-2 Trade Cas. {| 65,515 6 Bf A REE eee Olona 15 Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center (two opinions), 552 F. Supp. 1170, 586 F. Supp. 1065 (E.D. Pa. 1982) ............ 15 Construction Aggregate Transport, Inc, v. Florida Rock Industries, Inc., 710 F.2d 752 (11th Cir. TEED cscher cisions ontcoummice Mievcavusszeonnnsyennsieienmamanaiaion 14, 27 Cordova & Simonpietri Insurance Agency, Inc. V. Chase Manhattan Bank, 649 F.2d 36 (1st Cir. AeA at MIRC Re AP AOE Minh i se ee oe 15 Crane V. Intermountain Health Care, Inc., 637 F.2d op RE ft Se Rae ee ieee nel Onn mio 14 Englert v. City of McKeesport, 564 F. Supp. 375 CO a ea esc tit en sictinedeteeepaeuhaicechadnaseebes 15 Feldman v. Jackson Memorial Hospital, 509 F. Me ke Oe : | eee ea 14 Furlong v. Long Island College Hospital, 710 F.2d BR OE I FD ciscdecdebicnckcncstessansecstniiemoctioesiees . 14-15 Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 oe, GROAN TREY RRM Rene wee Mea renied ma te so. 9 & 8, 19, 21-27 Heart of Atlanta Motel, Inc. v. United States, 379 BE. SEI ROMIIID |‘ scusicnbeccicechecnccntinnsildeeenaeethcbameanebatonines 23 Heille v. City of St. Paul, 512 F. Supp. 810 (D. Minn. 1981), aff'd, 671 F.2d 1134 (8th Cir. NY | scnsctskLscsaiciseptiniciniectinineteee denlinGiedsdateadibiene basoals 23 James R. Snyder Co, v. Associated General Con- tractors, 677 F.2d 1111 (6th Cir. 1982) ............. 15 Katzenbach v. McClung, 379 U.S. 294 (1964)........ 23 Lease Lights, Inc. v. Public Service Co., 701 F.2d Re Ce re I aise eictesesthcnsiesters tarts 15 McElhinney Vv. Medical Protective Co., 549 F. Supp. Be RL A MEINE Sectctccictsiiesiceonncsesctcneeiitaieeisasteleacal 14 McLain v. Real Estate Bd. of New Orleans, 444 8 Es RSET Sh 7, 9-10, 12-19 Malini v. Singleton & Associates, 516 F. Supp. 440 Cas 7k Rs IED bien hd bicisunninssncanentecdutteealinns 15 Miller v. Indiana Hospital, 562 F. Supp. 1259 (W.D, Pa, 1983) 14 v TABLE OF AUTHORITIES—Continued Page Mishler v. St. Anthony’s Hospital Systems, 694 F.2d Ie I MI IED onc sconsasnicessncibeocecbbensateeneneads 15 Pao v. Holy Redeemer Hospital, 547 F. Supp. 484 eae ladiecsiniieamnts 15 Pontius vy. Children’s Hospital, 552 F. Supp. 1852 fig a. TSRNASENS ESS Sa eae en 15 Power East Ltd. v. Transamerica Delaval Inc., 558 ye) OR a ASS ap | ee 15 Ronwin v. State Bar of Arizona, 686 F.2d 692 (9th Cir. 1981), cert. granted sub nom. Hoover v. Ronwin, No. 82-1474, 103 S. Ct. 2084 (1983).... 13 Schnabel v. Building & Construction Trades Coun- cil, 563 F. Supp. 1080 (E.D. Pa. 1983) ................ 15 Stone v. William Beaumont Hospital, 1983-1 Trade Cas, 7 65,848 (E.D. Mich. 1981) ........................ 15 Stromberg v. California, 283 U.S. 359 = (1981)........ 27 Thornhill Publishing Co. v. General Telephone & Electronics Corp., 594 F.2d 730 (9th Cir. 1979) .. 28, 27 United States v. Foley, 598 F.2d 1323 (4th Cir. 1979), cert. denied, 444 U.S, 1043 (1980) ........... 9 United States v. H & M, Inc., 562 F. Supp. 651 I I Miia S since ccnmcdicaaasipelanioe 14 United States v. Socony-Vacuum Oil Co., 310 U.S. RRR er Rees ea eh AG SiN ort 9 University Emergency Physicians v. Richmond County Hospital Authority, 1982-83 Trade Cas. TE Is FI RIED. Sascceserceienicansenitnnnsitindmmsigns 14 Western Waste Service Systems v. Universal Waste Control, 616 F.2d 1094 (9th Cir.), cert. denied, BT SN IID iss sesintsscssnesinsoccesonapuahsmtuguekaiend 13-14, 17 Yates v. United States, 354 U.S. 298 (1957) .......... 27 STATUTES: Section 1 of the Sherman Act, 15 U.S.C. §1........... passim OTHER AUTHORITIES: ABA Section of Antitrust Law, Jury Instructions in Criminal Antitrust Cases 1964-1976 (1978).. 9 vi TABLE OF AUTHORITIES—Continued Kissam, Webber, Bigus & Holzgraefe, Antitrust and Hospital Privileges: Testing the Conven- tional Wisdom, 70 Calif. L. Rev. 595 (1982)... Comment, Expanding Federal Antitrust Jurisdic- tion: A Close Look at McLain v. Real Estate Board, Inc., 19 Hous. L. Rev. 143 (1981) ............ Note, “Affecting Commerce” Under the Sherman Act—How Local the Squeeze, 31 Drake L. Rev. 155 (1981-82) ................ divktiicieceepeien ines Note, The Interstate Commerce Test for Jurisdic- tion in Sherman Act Cases and Its Substantive Applications, 15 Ga. L. Rev. 714 (1981) .000000.... Page 16-17 15-16 16 IN THE Supreme Court of the United States OCTOBER TERM, 1983 No. HENRY S. BRANSCOME, INC. and HENRY S. BRANSCOME, Petitioners, Vv. UNITED STATES OF AMERICA, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT Petitioners Henry 8. Branscome, Inc. and Henry S. Branscome pray that a writ of certiorari issue to review the judgment of the United States Court of Appeals for the Fourth Circuit entered in this case. OPINIONS BELOW The Court of Appeals, in a per curiam opinion, affirmed Petitioners’ convictions of one count of conspiring in re- straint of trade in violation of the Sherman Act, 15 U.S.C. § 1. The Court of Appeals’ opinion is reported at 711 F.2d 570, and is set forth in the Appendix at la. The Court of Appeals denied a timely Petition for Re- hearing and Suggestion for Rehearing En Banc in an Order reproduced in the Appendix at 10a. The questions presented in this Petition were raised during trial and in post-trial motions filed with the Dis- trict Court. The District Court denied those motions in an unpublished “Memorandum Order” reproduced in the Appendix at 1la. 2 On August 12, 1983, Petitioners filed with this Court an Application for Stay of the Mandate of the United States Court of Appeals for the Fourth Circuit. No. A-108. On that same date, Justice Brennan, to whom the Application had been referred, entered an Order tempo- rarily staying the mandate of the Court of Appeals pend- ing further order of this Court. Justice Brennan’s Order is reproduced in the Appendix at 14a.’ JURISDICTION The judgment of the Court of Appeals was entered on June 27, 1983. A timely Petition for Rehearing and Sug- gestion for Rehearing En Banc was denied in an Order dated August 5, 1983. This petition is filed within sixty days of the entry of that Order. This Court has juris- diction pursuant to 28 U.S.C. § 1254(1). STATUTORY PROVISIONS Section 1 of the Sherman Act, 15 U.S.C. § 1, provides as follows: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combina- tion or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding one million dollars if a corporation, or, if any other per- son, one hundred thousand dollars, or by imprison- ment not exceeding three years, or by both said pun- ishments, in the discretion of the court. 1 Petitioners have been informed by the Clerk’s Office that the Ap- plication thereafter was referred by Justice Brennan to the Court for final determination. The Application included appendices re- producing the opinions belww, portions of the briefs in the Court of Appeals, and all portions of the trial record relevant to the ques- tions presented in this Petition. 8 STATEMENT OF THE CASE A. Proceedings Below On October 18, 1981, Petitioners Henry S. Branscome, Inc. and its President, Henry S. Branscome, were indicted on a single count of conspiracy in restraint of trade or commerce among the States, in violation of the Sherman Act, 15 U.S.C. $1. The indictment charged Petitioners, and alleged co-conspirators, with rigging highway resur- facing bids on “certain sections of the plant mix schedule work contracts let [by the Commonwealth of Virginia] in the Peninsula area in April, 1978.” J.A. 22.2 The in- dictment named as co-defendants the Basic Construction Company (petitioner in No. 83-272) and one of its em- ployees, David M. Howell. The unindicted co-conspirators were Rea Construction Company, Blakemore Construction Company, and officers of those companies. Following pre-trial proceedings, the case was tried to a jury before United States District Judge John A. Mac- Kenzie. Trial commenced on February 22, 1982, and the jury returned a verdict of guilty as to all three defend- ants on February 26, 1982. Following the verdict, Peti- tioners timely filed Motions for a New Trial and Motions in Arrest of Judgment pursuant to Rules 33 and 34 of the Federal Rules of Criminal Procedure. J.A. 54-59. Those motions, which raised the questions presented here- in and which renewed trial motions for judgments of ac- quittal, were denied by the District Court in its Memo- randum Order dated June 21, 1982. App. 1la-138a. 2 The Joint Appendix filed in the Court of Appeals will be des- ignated herein as “J.A.” The Appendix to this Petition will be referred to as “App.” References to the trial transcript will be designated “Tr.” 8 Howell’s trial was severed from that of the remaining defend- ants at the request of defendant Basic. Following a jury trial, on December 9, 1981, Howell was found guilty of participating in the alleged conspiracy. He did not appeal from that conviction. 4 On June 22, 1982, judgments of conviction were en- tered. Henry S. Branscome, Inc. was fined $225,000. The company president, Henry S. Branscome, was fined $18,000, and he was sentenced to a term of imprisonment of one year, all but 120 days of which were suspended, and a three year period of probation. J.A. 64-65. Those judgments of conviction and the conviction of co-defendant Basic were affirmed in a judgment of the Court of Ap- _ peals entered on June 27, 1983. The questions presented in this Petition, which were the principal issues addressed in Petitioners’ brief in the Court of Appeals, and the only issues raised by Petitioners’ counsel during oral argu- ment, were not mentioned in the Court of Appeals’ per curiam opinion. See App. 7a-8a.‘ Because the Court of Appeals’ judgment, in affirming the rulings of the District Court, created clear conflicts with prior decisions of this Court and other Courts of Appeals, Petitioners’renewed their efforts to have the Court of Appeals address the questions presented herein. A timely Petition for Rehearing and Suggestion for Re- hearing En Banc that again presented these questions to the Court of Appeals was denied, however, without opin- ion. App. 10a. B. Statement of Essential Facts The record facts pertinent to the questions presented may be summarized succinctly.’ The indictment returned in this case alleged a simple conspiracy among four as- phalt paving companies to divide among themselves cer- tain “plant mix schedule work’’—more commonly referred to as highway resurfacing contracts—in the Peninsula *In a section of the opinion addressing an argument raised by appellant Basic, the Court of Appeals did state: “We have con- sidered the appellant’s [sic] remaining assignments of error and find them to be without merit.” App. 9a. 5A more detailed statement of the evidence presented at trial on the interstate commerce element of the offense is contained within the Reasons for Granting the Writ. 5 area of Virginia.® These contracts were let for bid by the Commonwealth of Virginia in April, 1978. The indict- ment did not allege that the defendants had engaged in similar bid-rigging conspiracies in other years or in other parts of Virginia, or that they had rigged bids with re- spect to any other type of highway construction or main- tenance work, or any other private or public paving work. J.A. 22-23. According to the evidence adduced at trial, the Com- monwealth of Virginia is divided into eight highway dis- tricts. Each year the Virginia Highway Department de- termines that certain segments of the highways in each district need to be resurfaced. A schedule of resurfacing work is then prepared for each district, and the schedules are advertised for bid to asphalt paving contractors. Each contract to be awarded is an “item” on a district schedule. Tr. 153-56; 205. The government’s allegations and proof at trial focused exclusively on four schedule items in two highway dis- tricts let for bid by the Commonwealth on April 4, 1978. All four of the alleged conspirators submitted bids on Suffolk District item 5-D-8,’ which called for repaving approximately eight miles of Routes 5, 31 and 199 in James City County. Henry S. Branscome, Inc. was the low bidder on that item and received the contract for a bid of $341,695. The government offered testimony from officials of the other three firms that bid on item 5-D-8— * The Peninsula area was defined by the indictment to be the area in and around the cities of Hampton, Newport News, and Williams- burg, including the counties of James City, York, Gloucester, Middlesex, and Mathews. See J.A. at 19. 7 The contract items are designated by numbers and letters that refer to their location and the date of the letting. Each highway district has a number. The two districts at issue here are numbers 5 and 6, Suffolk and Fredericksburg. Thus, Job 5-D-8 refers to the Suffolk District schedule, item D on that schedule, and the year 1978. See Tr. at 207-08. 6 Blakemore, Rea and Basic—that they were informed what Branscome’s bid would be, and that they agreed to make Branscome the low bidder. The government offered further evidence that employ- ees of Rea and Basic had decided among themselves that Rea would receive schedule item 6-H-8, which involved the resurfacing of approximately seven miles of Routes 33, 227 and 602 in Gloucester and Middlesex Counties, and that Basic would receive schedule items 6-I-8 and 6-J-8, which together involved the resurfacing of approximately six miles of Routes 17, 614, 621 and 642 in Gloucester and Mathews Counties. Basic and Rea were the only bidders on those three items. The government’s witnesses testified, however, that in order for Basic and Rea to be assured that their arrangement would succeed, they needed to obtain agreements with other potential bidders on these Fredericksburg District items, principally Brans- come and Blakemore. J.A. 131-34; 142-47. The trial testimony, viewed from the light most favor- able to the government, established that Henry Branscome agreed not to bid on items 6-H-8, 6-I-8, and 6-J-8 in ex- change for a guarantee from Basic and Rea that he would be the low bidder on item 5-D-8. The testimony further established that Branscome agreed to pay John Blake- more, the president of Blakemore Construction Company, $18,000 if Blakemore would agree to submit a bid on the 5-D-8 job that was higher than Branscome’s bid. Blake- more testified that this payment was made over one year later when Branscome overpaid Blakemore by approxi- mately $18,000 for equipment that the Branscome Com- pany had rented from Blakemore. J.A. 197-211.* 8 Henry Branscome testified at trial that he never agreed to pay Blakemore any money to submit a “complementary bid” on the 5-D-8 job and that he had no interest in the Fredericksburg District items that Basic and Rea had divided among themselves. He testi- fied further that the bid his company submitted on the 5-D-8 job was a competitive bid, developed in advance of the bid letting and never wis revised to take advantage of the alleged collusive agree- \e 7 C. The District Court’s Rulings on the Questions Presented Throughout the trial proceedings, Petitioners asserted that under McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232 (1980), the government had to prove an effect on interstate commerce through those activities in- fected by the alleged conspiracy, and not through the de- fendants’ general business activities. Thus, Petitioners asserted that the interstate commerce questions presented by this Petition had to be resolved in a narrow factual context—a single-count indictment involving an alleged collusive agreement among four asphalt paving contrac- tors to divide among themselves twenty miles of state highway resurfacing work. But despite the narrow scope of the indictment, the evidence concerning the interstate commerce element of the offense that was offered by the government at trial, and admitted over repeated objec- tions by Petitioners’ counsel, had nothing to do with this alleged restraint of trade. In apparent reliance on an interpretation of McLain accepted by a minority of the Courts of Appeals, the government offered testimony and exhibits showing the total yearly purchases by the alleged conspirators of the one ingredient of asphalt that was produced vutside of Virginia and used by these companies in every aspect of their businesses. Thus, it was the gov- ernment’s position that an effect on interstate commerce could be proved by evidence relating to the interstate aspects of the general business activities of the alleged conspirators, rather than the activities “infected” by the alleged conspiracy. Moreover, the government urged upon the District Court and the jury the erroneous theory that because ment. Finally, although Branscome admitted paying Blakemore money to which he was not entitled in May, 1979, Branscome do nied that this payment was made pursuant to an agreement reached in connection with the bidding on the 5-D-8 job a year earlier. J.A. 333-39. 8 the alleged conspiracy involved the resurfacing of roads, and because those roads ultimately were connected to in- terstate hizhways, the actions of the alleged conspirators necessarily were both in the flow of interstate commerce, and substantially affected that commerce. In support of this theory, previously rejected by this Court in Gulf Oil Corp. v. Copp Paving Co., 419 U.S, 186 (1974), the gov- ernment offered expert testimony and a highway traffic study concerning traffic patterns on Interstate 64 and Interstate 95 (interstate highways that were not the sub- ject of the resurfacing contracts), and the combined miles traveled by vehicles bearing out-of-state license plates on all roads in the Peninsula area. By contrast, the trial record shows that the government offered no evidence concerning the quantity of interstate products purchased by the alleged conspirators for com- pleting the twenty miles of road resurfacing contracts at issue. The government likewise offered no evidence con- cerning out-of-state vehicular traffic patterns on those small segments of rural roadway that were resurfaced pursuant to the alleged collusive bidding agreement. The District Court admitted the government’s ir- relevant and prejudicial evidence and presented the gov- ernment’s erroneous legal theories to the jury. Even though the government conceded on appeal that its “in the flow of commerce” theory was untenable, and even though there is a clear conflict among the federal Courts of Appeals concerning the government’s “effect on com- merce” theory, the Court of Appeals failed even to ad- dress the questions presented herein. If it had addressed these issues, and resolved them in accordance with this Court’s precedents and the majority position espoused by the Courts of Appeals for the First, Second and Tenth Circuits, the Court of Appeals in this case would have reversed Petitioners’ convictions and remanded for entry of judgments of acquittal. Instead, the Court of Appeals simply ignored the District Court’s errors, and affirmed Petitioners’ convictions. 9 REASONS FOR GRANTING THE WRIT One essential element of a Sherman Act offense is that the alleged anti-competitive conduct must constitute a “restraint of trade or commerce among the several States.” 15 U.S.C. § 1. Thus, the government must offer sufficient proof at trial that the restraint involved inter- state commerce, and the jury must be instructed on the government’s burden to establish this element of the of- fense. See United States v. Foley, 598 F.2d 1828, 1328 n.2 (4th Cir. 1979), cert. denied, 444 U.S. 1043 (1980). See generally United States v. Socony-Vacuum Oil Co., 810 U.S. 150, 210 (1940); ABA Section of Antitrust Law, Jury Instructions in Criminal Antitrust Cases 1964- (976, at 169-75 (1978). Under this Court’s decisions interpreting the Sherman Act, the interstate commerce element of the offense may be sustained on proof that either (1) the challenged ac- tivities of the defendants were themselves “in the flow of” interstate commerce; or (2) the defendants’ local ac- tivities nonetheless had “as a matter of practical eco- nomics” a “substantial” or “not insubstantial” effect on some identified aspect of interstate commerce. McLain v. Real Estate Bd. of New Orleans, 444 U.S. 282, 241-42, 246 (1980). In this case, the principal legal issues ad- dressed by the Petitioners prior to trial, during trial, in post-trial motions and on appeal all involved the suffi- ciency of the government’s evidence and the propriety of the District Court’s instructions under this two-pronged test of interstate commerce. The questions presented by this Petition have engen- dered significant controversy and conflicts among the fed- eral Courts of Appeals, and those conflicts concerning the jurisdictional reach of the Sherman Act are constantly recurring—both in civil and in criminal antitrust litiga- tion around the country. The conflicting lower court de- cisions on these questions demonstrate a need for this Court’s definitive guidance. Moreover, these questions are 10 particularly appropriate for resolution in this criminal Sherman Act setting, where the trial record is complete, clear and concise, and where this Court’s decision may re- sult in the reversal of erroneous convictions, the removal of a sentence of imprisonment, and the entry of judg- ments of acquittal. A. Under the Reading of McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232 (1980), Adopted By a Majority of the Courts of Appeals, No Evidence Was Presented at Trial to Prove an Effect on Interstate Commerce This case squarely raises the question whether an effect on interstate commerce under §1 of the Sherman Act may be proved by examining the interstate aspects of the defendants’ businesses in their entirety, or whether proof of such an effect must be limited to the interstate aspects of those activities that were “infected’’ by the alleged conspiracy. This question has created substantial, re- curring conflicts among the federal courts based on di- vergent interpretations of this Court’s decision in McLain v. Real Estate Bd. of New Orleans, 444 U.S, 282 (1980). See pages 12-18, infra. The trial record establishes that the asphalt paving material used by the alleged conspirators to resurface the local roads in question was manufactured in Virginia, but was made from a combination of locally-mined sand and aggregates and a petroleum by-product refined out- side of Virginia. The petroleum by-product, known as liquid asphalt cement or AC-20, was purchased by the alleged conspirators from Texaco, Ine. and Chevron, U.S.A., Inc. Employees of those companies testified at trial and they introduced into evidence Government Ex- hibits 60 and 61, which summarized the yearly sales of AC-20 by those two oil companies to the alleged conspira- tors during the period between 1977 and 1979. J.A. 80- 90; 121-26; 381-82. Counsel for Petitioners objected to 11 the introduction of these exhibits because the sales records that they summarized bore no relationship to the quanti- ties of AC-20 purchased and used by the companies in- volved to manufacture the asphalt paving material needed to resurface the twenty miles of roadway placed in issue by the indictment. The District Court overruled these objections without explanation. J.A. 86, 124. On cross-examination, these witnesses conceded that they had no knowledge concerning the uses to which the alleged conspirators put the AC-20 that they purchased, and that the exhibits did not show the quantities of AC- 20 purchased for use in resurfacing the roads in question. In fact, several of the alleged conspirators had asphalt plants outside the Peninsula area, and the government’s exhibits did not even break out the quantities of AC-20 delivered to the specific plants that manufactured the asphalt used on these jobs. J.A. 88 89; 126. The effect of the District Court’s ruling admitting this evidence was to permit the government to argue to the jury convincingly that the alleged conspirators purchased sufficient quantities of AC-20 to have a substantial effect on the interstate market for that product. For example, Exhibits 60 and 61 show that in 1978 the alleged con- spirators purchased over $3 million worth of AC-20. J.A. 381-82. But those substantial quantities of AC-20 were purchased to manufacture asphalt used in the construc- tion and repair of highways, parking lots and driveways all over Virginia, not only for the State Department of Highways, but also for federal contracting authorities and for private firms and individuals. By contrast, the government offered no evidence, and none appears in the record, concerning the quantities of AC-20 required and purchased to perform the contracts that were obtained pursuant to the alleged bid-rigging conspiracy. For that reason, Petitioners moved for judgments of acquittal at the close of the prosecution’s case. This motion, renewed in post-trial briefs, was denied by the District Court, again without explanation. J.A. 214-15. 12 The District Court’s rulings admitting the govern- ment’s evidence on purchases of AC-20 and denying Pe- titioners’ motion for judgments of acquittal, clearly pre- sent for resolution by this Court the question of the proper interpretation of McLain, which has embroiled the federal courts in continuing conflict. In McLain, the Court was confronted with a claim that a civil complaint alleging a price-fixing conspiracy among real estate brokers in New Orleans did not allege adequately an effect on interstate commerce. The Court observed that although real estate brokerage, like road resurfacing, may be a local activity, the plaintiffs could establish federal jurisdiction by demonstrating ‘a sub- stantial effect on interstate commerce generated by [de- fendants’] brokerage activity.” 444 U.S. at 242. The Court made this statement in the context of rejecting the defendants’ claim that the plaintiffs were required to allege and prove that the conspiracy to fix commission rates itself had adversely affected interstate commerce. Id. at 242-43, Some courts and commentators have misconstrued this passage from McLain to mean that it is always per- missible for the plaintiff in a Sherman Act case to sat- isfy his burden of proof on interstate commerce by show- ing that the defendant’s business as a whole has a sub- stantial effect on interstate commerce. That was not the holding of McLain, nor does this interpretation of Mc- Lain follow from the Court’s language. In McLain, the alleged agreement in establishing commission rates “in- fected”’ all of the defendants’ brokerage activities. Thus, the Court observed that plaintiffs could satisfy their bur- den by focusing on the substantial effects on specified as- pects of interstate commerce that were generated by the defendants’ “brokerage activity.” 444 U.S. at 242. In a later passage of the McLain opinion the Court made it clear that it is not sufficient for plaintiffs in Sherman Act cases to establish an effect on interstate 13 commerce by proof concerning the defendants’ general business activities if those activities are not implicated by the alleged offenses. In remanding the McLain case for trial, this Court stated: To establish federal jurisdiction in this case, there remains only the requirement that [defendants’] ac- tivities which allegedly have been infected by a price- fixing conspiracy be shown “as a matter of practical economics” to have a not insubstantial effect on the interstate commerce involved. 444 U.S. at 246 (citations omitted) (emphasis added). The government tried this case on the theory that it need not show a practical economic effect on the inter- state market for AC-20 caused by the “activities which allegedly [had] been infected by [the] conspiracy.” Id. Rather, all of the government’s proof concerning the al- leged conspirators’ purchases of AC-20 was directed to their business activities as a whole, and not just to the road resurfacing activities that were “infected” by the alleged bid rigging. Although the government’s theory was contrary to the language of McLain and past hold- ings of this Court, it derived support for its position from the decision in Western Waste Service Systems Vv. Universal Waste Control, 616 F.2d 1094, 1096-97 (9th Cir.), cert. denied, 449 U.S. 869 (1980). In that deci- sion, and others since, the Court of Appeals for the Ninth Circuit has misread McLain to mean that “a party need only show that a defendant’s general business .. . af- fected interstate commerce in order to meet the jurisdic- tional requirement.” Ronwin v. State Bar of Arizona, 686 F.2d 692, 699 n.7 (9th Cir. 1981), cert. granted sub nom. Hoover v. Ronwin, No. 82-1474, 103 S. Ct. 2084 (1983) .° ® The petition for a writ of certiorari in Ronwin did not present this question, and thus resolution of that case does not promise to eliminate the substantial lower court confusion over the meaning of McLain. 14 The misinterpretation of McLain set forth in Western Waste Service Systems has been adopted by several fed- eral district courts, and recently was cited with apparent approval by the Court of Appeals for the Eleventh Cir- cuit. See Construction Aggregate Transport, Inc. V. Florida Rock Industries, Inc., 710 F.2d 752, 766-69 & nn.30-31 (11th Cir. 1983); Miller v. Indiana Hospital, 562 F. Supp. 1259, 1283-85 (W.D. Pa. 1983); United States v. H & M, Inc., 562 F. Supp. 651, 657 (M.D. Pa. 1983); University Emergency Physicians v. Richmond County Hospital Authority, 1982-83 Trade Cas. © 65,097, at p. 71,151 (S.D. Ga. 1982); McElhinney v. Medical Protective Co., 549 F. Supp. 121, 127 (E.D. Ky. 1982) ; Feldman v. Jackson Memorial Hospital, 509 F. Supp. 815, 821 (S.D. Fla. 1981). The clear majority of the Courts of Appeals, however, have recognized the Ninth Circuit’s misreading of Mc- Lain and have rejected the “general business activities test” of Sherman Act jurisdiction. The Court of Appeals for the Tenth Circuit, sitt'ng en banc, specifically rejected a Sherman Act plaintiff's reliance on McLain for the proposition that jurisdiction may be established “if inter- state commerce is substantially affected by the defend- ants’ general or overall business.”’ Crane v. Intermoun- tain Health Care, Inc., 637 F.2d 715, 721 (10th Cir. 1980). In so holding, the Court declined to adopt the reasoning of Western Waste Service Systems, because the acceptance of a “general business” test would work a substantial departure from this Court’s precedents, and from the very language of McLain itself. See 637 F.2d at 721-24. Crane’s interpretation of McLain—that only those ac- tivities infected by the alleged conspiracy can be con- sidered in demonstrating an effect on interstate com- merce-—has been twice reaffirmed by the Tenth Circuit, and also has been adopted by the Courts of Appeals for the First and Second Circuits. See Furlong v. Long Island 15 College Hospital, 710 F.2d 922, 925-26 (2d Cir. 1983) ; Lease Lights, Inc. v. Public Service Co., 701 F.2d 794, 799-800 (10th Cir. 1983); Mishler v. St. Anthony’s Hos- pital Systems, 694 F.2d 1225, 1227-28 (10th Cir. 1981) ; Cordova & Simonpietri Insurance Agency, Inc. v. Chase Manhattan Bank, 649 F.2d 36, 45 (1st Cir. 1981). More- over, Crane and its progeny have been followed by many federal district courts outside those Circuits. See, e.g., Englert v. City of McKeesport, 564 F. Supp. 375, 376 (W.D. Pa. 1983); Power East Ltd. v. Transamerica Delaval Inc., 558 F. Supp. 47, 49 (S.D.N.Y. 1983); Pontius v. Children’s Hospital, 552 F. Supp. 1352, 1361 (W.D. Pa. 1982); Cardio-Medical Associates, Ltd. v. Crozer-Chester Medical Center (two opinions), 552 F. Supp. 1170, 536 F. Supp. 1065, 1072-85 (E.D. Pa. 1982) ; Pao v. Holy Redeemer Hospital, 547 F. Supp. 484, 488- 90 (E.D. Pa. 1982) ; Stone v. William Beaumont Hospital, 1983-1 Trade Cas. § 65,348, at p. 70,070 (E.D. Mich. 1981); Malini v. Singleton & Associates, 516 F. Supp. 440, 442 (S.D. Tex. 1981)."" This significant conflict among the federal courts over the meaning of McLain also has engendered substantial controversy among legal commentators." Petitioners sub- 10 Examination of the cases suggests that within Pennsylvania alone two United States District Court Judges have adopted the Ninth Circuit’s reading of McLain, while four Judges have rejected that interpretation. A seventh Judge has declined to enter the fray. See Schnabel v. Building & Construction Trades Council, 563 F. Supp. 1030, 1044 (E.D. Pa. 1983). The conflict among the fed- eral courts also has been recognized, but not resolved, by the Courts of Appeals for the Sixth and Seventh Circuits. See Bunker Ramo Corp. Vv. United Business Forms, Inc., —— F.2d , 1983-2 Trade Cas. § 65,515, at p. 68,526 (7th Cir. 1983) ; James R. Snyder Co. vy. Associated General Contractors, 677 F.2d 1111, 1113-15 (6th Cir. 1982). 11In three law review notes, McLain has been read erroneously to expand Sherman Act jurisdiction to those cases in which the de- fendants’ general business activities may be proved to have a sub- stantial effect on interstate commerce. The Houston Law Review 16 mit that the correct reading of McLain, and an expla- nation for the confusion, is set forth in the following passage from a recent law review article: Further confusion about the interstate commerce test has been introduced by the Supreme Court’s most recent decision on this issue. In McLain v. Real Es- tate Board of New Orleans, the Court held that ac- tivities of real estate brokers in New Orleans that were “infected” by the brokers’ price-fixing activities could have an effect upon interstate commerce suffi- cient to establish Sherman Act jurisdiction. This holding rejected the narrower view that the alleged violation itself must have an effect upon interstate commerce, with the Court reasoning that an alleged violation may not have any effect and thus could not be reached under the Sherman Act if only the viola- tion’s effects were considered on the jurisdictional issue. Unfortunately, there also is language in Mc- Lain which suggests that a plaintiff need only show that a defendant’s total activities, independent of the alleged violation, have a substantial effect upon interstate commerce—if that language is read out- side the context of the full opinion. This reading of McLain, which has been followed by some lower courts, would in essence eliminate the interstate com- merce test from antitrust law, since the total activi- ties of virtually any defendant, no matter how loca! its business, are likely to have some effects upon in- terstate commerce. Yet this reading is based upon an suggests that this expansion of federal jurisdiction is unwarranted and unwise, and that this Court should reconsider McLain. The Drake Law Review favors the broad reading of McLain. The Georgia Law Review warns of the serious repercussions that would result from an application of a general business activities test to nonjurisdictional issues arising under the Sherman Act. See Comment, Expanding Federal Antitrust Jurisdiction: A Close Look at McClain v. Real Estate Board, Inc., 19 Hous. L. Rev. 143 (1981) ; Note, “Affecting Commerce” Under the Sherman Act—How Local the Squeeze, 31 Drake L. Rev. 155 (1981-82); Note, The Interstate Commerce Test for Jurisdiction in Sherman Act Cases and Its Substantive Applications, 15 Ga. L. Rev. 714 (1981). 17 abstraction of language from its rightful context, and is unnecessary to justify McLain or any other Supreme Court decision on this issue. This sugges- tive language should thus be viewed as casual dicta at worst or simply an inadvertent expression that has been wrongly torn from its context by other law- yers and judges. Kissam, Webber, Bigus & Holzgraefe, Antitrust and Hospital Privileges: Testing the Conventional Wisdom, 70 Calif. L. Rev. 595, 632-33 (1982) (footnotes omitted) (emphasis added). The judgment of the Court of Appeals affirming Peti- tioners’ convictions necessarily had the effect of ac- cepting the District Court’s evidentiary rulings and the government’s explicit reliance on the Western Waste Service Systems line of decisions. See Brief for Appel- lee at 29-30 (“the government was only required to prove a substantial effect on interstate commerce generated by {Petitioners’] construction business’’).'* Moreover, be- cause the government presented no evidence tending to show an effect on the interstate market for AC-20 caused by the activities “infected” by the alleged conspiracy, Petitioners were entitled to a judgment of acquittal, un- less the Ninth Circuit’s reading of McLain is correct.” 12 In opposing Petitioners’ application for a stay, No. A-108, the government argued that this case is not an appropriate vehicle for resolving the conflict among the Circuits because the District Court’s instructions incorporated Petitioners’ interpretation of McLain. Memorandum for the United States in Opposition, at 3-4. See App. at 16a. It should be noted that the trial court accepted Petitioners’ proposed instructions on this point over the govern- ment’s specific objection. More importantly, the fact that the jury received an instruction that correctly interpreted McLain is irrele- vant given the fact that there was no evidence from which the jury could have found an effect on the interstate market for AC-20 caused by the activities placed in issue by the indictment. Under the majority view of McClain, this case never should have gone to the jury at all. 1 On appeal, the government argued in a footnote that the jury could have found an effect on the market for AC-20 caused by the 18 This case thus squarely presents for resolution by this Court the substantial conflict among the Circuits con- cerning the meaning of McLain, even though the Court of Appeals did not choose to address that conflict in its opinion. This case is a particularly appropriate vehicle for the resolution of the conflict. Most of the decisions cited above that have addressed the meaning of McLain have construed the “effect on interstate commerce” test in terms of the sufficiency of the allegations of a Sherman Act complaint. When the lower courts find that those allegations are insufficient, the plaintiff is given an op- portunity to amend and to correct the deficiencies of his pleadings. Appeals from such decisions, when they are taken, are interlocutory in nature, and inappropriate for this Court’s review. In this case, on the other hand, the judgments of conviction are final, and the trial record is complete. Moreover, the record facts are remarkably manageable. Al/ the evidence concerning the alleged con- spirators’ purchases of AC-20 is contained in the testi- mony of two witnesses covering a mere 16 pages of the trial transcript, and two single-page exhibits. J.A. 80- 90; 121-26; 381-82. Finally, Petitioner Henry S. Brans- come will serve a sentence of imprisonment unless the Court selects this case as the vehicle to resolve the inter- activities infected by the alleged conspiracy by reasoning that the bid-rigging conspiracy increased the price paid by the Common- wealth for these contracts, thereby reducing the available state funds for other road resurfacing contracts, and concomitantly reducing the demand for AC-20. Brief for Appellee at 29, n.32. This argument never was presented to the jury by the prosecution or by the District Court in its charge, and for good reason. The government simply presented no evidence at trial concerning the Commonwealth's budget for road resurfacing projects that would have permitted an inference that an increase in the cost of the contracts at issue would have resulted in less road resurfacing work being let for bid. The government repeated this argument, based on presumed facts dehors the record, in its response to Petitioners’ stay application. No. A-108, Memorandum in Opposition, at 5 n.6. 19 circuit conflict over McLain’s meaning. Thus, this case presents both an ideal and a compelling context for the issuance of the requested writ. B. Under This Court’s Decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974), the Government’s Evi- dence Concerning the Fact that the Roads in Issue Are Part of a Network That Ultimately Connects With Interstate Highways Was Irrelevant, As a Mat- ter of Law, to the Interstate Commerce Element of a Sherman Act Offense In addition to the evidence concerning purchases of AC-20, the government attempted to satisfy its burden of proof on the interstate commerce element of the offense under a theory rejected by this Court in Gu/f Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974). This theory was presented through a single witness, a Virginia High- way Department traffic engineer, who introduced into evidence Government Exhibit 11, a publication summa- rizing average daily traffic volume during the year 1978 on interstate, arterial and primary routes located in Vir- ginia, J.A. 90-121; 373-76. Given the nature of the rural roads resurfaced pursuant to the alleged conspiracy, it is not surprising that the evidence introduced by the gov- ernment through this witness involved statistics relating to everything but the volume of traffic on the segments of the roads actually at issue. All this evidence was ad- mitted by the District Court over continuing defense objections. See J.A. 92, 94, 97-98, 99, 127-30. The government’s expert testified that some of the roads resurfaced pursuant to the alleged conspiracy are ‘“‘con- nected” to Interstate 64, which was not itself one of the roads involved. J.A. 93-94. He went on to testify, based on Exhibit 11, concerning the number of “interstate ve- hicles” traveling on various segments of /nterstate 64 during a given day. The study was based on the num- ber of vehicles counted on those segments of Interstate 64 on an average day that bore out-of-state license 20 plates. J.A. 98. Thereafter, the expert testified con- cerning the total number of miles traveled by vehicles bearing out-of-state tags on all the roads in the five counties of Virginia that constitute the Peninsula area. J.A. 98-100. The witness further testified that out-of- state vehicles traveling in the Suffolk and Fredericksburg Highway Districts accounted for approximately 35% of the total miles traveled in Virginia by out-of-state ve- hicles. J.A. 100-01. Finally, the witness testified that it was his opinion that the highway system in this country forms a network, that the interstate highways in the Peninsula area are major “collectors and distributors” of traffic within that network, and that the local roads placed in issue by the indictment are part o/ this inter- connected highway nework. J.A. 101-04. On cross-examination, the government’s highway ex- pert conceded that his testimony concerning the national interstate highway network was “premised essentially on the notion that every road in the country is some- how connected to every other road.” J.A. 107. He further conceded that his testimony was not based on the “inter- state character” of the roads resurfaced by the alleged conspirators, since he had no idea which segments of those roads were let for bid in April, 1978. Jd. The expert testified that the Commonwealth did not even measure out-of-state vehicle mileage on the secondary roads that were placed in issue by this indictment. J.A. 108-09. As for the computation of the out-of-state mileage figures in Exhibit 11, he conceded that those figures were based solely on counts of vehicles bearing out-of-state tags and that the exhibit did not purport to be an “origin and destination” study that actually surveyed the number of interstate trips. J.A. 110-11. Finally, with respect to several of the road segments actually at issue, the ex- pert used Exhibit 11 to determine approximately the relatively small number of vehicles bearing out-of-state tags that traveled on those roads during an average day. J.A. 115-18. 21 Petitioners’ principal objection to the admission of this witness’s direct testimony and Government Exhibit 11 was that the use of the roads in question by vehicles bearing out-of-state license tags is irrelevant, as a mat- ter of law, to the interstate commerce inquiry. This ob- jection was based explicitly on this Court’s decision in Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974). J.A. 129. On appeal the government argued that the Copp Pav- ing decision is inapplicable to the “effect on commerce” test available to a plaintiff under the Sherman Act, and that Exhibit 11 was offered as proof under the “effect” test. See Brief for Appellee at 31, 36-38. This Court’s decision in Copp Paving, however, precludes the govern- ment’s reliance on the highway traffic study under either the “in the flow of commerce” test that it relied upon at trial, or the “effect on commerce” test to which it retreated on appeal. The plaintiff in Copp Paving, an asphalt paving con- tractor with operations analogous to those of the Peti- tioners, claimed that the oil companies which produced AC-20 had fixed prices, had divided markets, and had engaged in price discrimination, tying practices, and attempts to monopolize, all in violation of the Sherman, Clayton and Robinson-Patman Acts. The District Court concluded that the plaintiff’s jurisdictional showing un- der all three Acts “rested solely on the fact that some of the streets and roads in the Los Angeles area are seg- ments of the federal interstate highway system, and on a stipulation that a greater than de minimis amount of asphaltic concrete is used in their construction and re- pair.” 419 U.S. at 191 (emphasis added). The Dis- trict Court held that showing to be insufficient to sup- port federal jurisdiction, but the Ninth Circuit reversed, holding that “ ‘the production of asphalt for use in inter- state highways rendered the preducers “instrumental- ities” of interstate commerce and place them “in” that 22 commerce as a matter of law.’” Jd. at 192, quoting 487 F.2d at 204. This holding led the Court of Appeals to conclude that jurisdiction properly attached to all of Copp’s claims under the Sherman, Clayton and Robinson- Patman Acts. This Court granted certiorari limited solely to the “in commerce” questions presented under the Clayton and Robinson-Patman Acts. Jd. at 193. How- ever, the Court’s decision also addressed the “effect on commerce” questions that had been presented by Copp’s complaint and that are at issue in this Sherman Act case. After this Court held that Copp could not establish jurisdiction under the “in commerce” theory applicable to the Clayton Act by proof that the defendants sup- plied materials that were used in the construction and repair of intrumentalities of commerce, i.e., interstate highways, 419 U.S. at 197-98, it turned to Copp’s al- ternative contention that the Clayton Act should be read broadly to incorporate the ‘effect on commerce” test ap- plicable to the Sherman Act. This Court declined the invitation to redefine the jurisdictional reach of the Clayton Act because of the total inadequacy of Copp’s evidentiary showing. Justice Powell stated: ‘‘[Copp] pre- sented no evidence of effect on interstate commerce. Instead it argued merely that such effects could be pre- sumed from the use of asphaltic concrete in interstate highways.” Jd. at 202. Copp’s “arguments” and “pre- sumed effects’ did not constitute the requisite evidence that “apparently local acts in fact have adverse conse- quences on interstate markets and the interstate flow of goods [needed] to invoke federal antitrust prohibitions.” Id. The government has argued that its evidence in this case was more substantial than the proof offered under the “effect” test by Copp, because it attempted to quantify the use by out-of-state vehicles of the “interstate” high- way network in the Peninsula area. Brief for Appellee, at 32. In fact, however, the government’s evidence in 23 this case was far less substantial than the plaintiff's showing in Copp Paving. Copp at least proved that products manufactured by the defendants actually were used to construct segments of the federal interstate highway system. Here, the government showed only that the alleged conspirators resurfaced segments of local roads that ultimately were connected, like every other road is connected, to the federal interstate highway system." Thus, the government’s proof in this case stretched the “interstate highway nexus” theory spe- ' cifically rejected by this Court in Copp Paving to new and even more “nebulous” limits. See 419 U.S. at 198. The District Court ruled in this case that the holding of Copp Paving was not applicable to Sherman Act cases. App. at 12a-13a. The Court of Appeals implicitly adopted this narrow reading of Copp Paving, which has been re- jected by the Court of Appeals for the Ninth Circuit. See Thornhill Publishing Co. v. General Telephone & Elec- tronics Corp., 594 F.2d 730, 737 (9th Cir. 1979). Such 4In the Court of Appeals, the government relied on decisions construing Congress’ power under the Commerce Clause in support of its argument that proof of interstate highway traffic may estab- lish the requisite effect on interstate commerce in a Sherman Act case. See Brief for Appellee at 26, n.30 (citing Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964) and Katzenbach v. McClung, 379 U.S. 294 (1964)). The government’s evidence in this case did not establish any effect on interstate highway travelers caused by the activities infected by the alleged conspiracy. More- over, in Copp Paving itself, this Court recognized that “[{t]he jurisdictional inquiry under general prohibitions like... §1 of the Sherman Act, turning as it does on the circumstances presented in each case and requiring a particularized judicial determination, differs significantly from that required when Congress itself has defined the specific persons and activities that affect commerce and therefore require federal regulation.” 419 U.S. at 197 n.12. See also Heille vy. City of St. Paul, 512 F. Supp. 810, 813 n.4 (D. Minn. 1981), aff'd, 671 F.2d 1134 (8th Cir. 1982) (application of the analysis of Commerce Clause decisions to cases arising under the Sherman Act “would read the interstate commerce requirement out of the... Act’). 24 a narrow reading of Copp Paving is inexplicable in view of this Court’s specific rejection of the “interstate high- way nexus” theory in the context of the “effect on com- merce” test of Sherman Act jurisdiction. Moreover, even assuming that highway traffic studies might be admis- sible in some Sherman Act cases to show an effect on commerce, the courts below clearly erred in permitting the government to introduce evidence concerning interstate highways not placed in issue by the indictment and total out-of-state vehicular mileage in county-wide areas. This Court should issue the requested writ because the District Court decided this important question of federal law in a manner that cannot be reconciled with this Court’s decision in Copp Paving, and the Court of Ap- peals failed to correct that fundamental error. C. The District Court’s Instructions Improperly Per- mitted the Jury to Find the Essential Interstate Com- merce Element of a Sherman Act Offense Based on Evidence Concerning the Fact that the Roads in Question Are Part of an Interstate Network of High- ways At trial, Petitioners proposed instructions to the Dis- trict Court that: a) would have told the jury expressly that the activities of the defendants were not “in” inter- state commerce, but that they could find the interstate commerce element of the offense based on the effects on commerce caused by defendants’ local activities; and b) would have withheld from the jury’s consideration the government’s evidence concerning highway traffic pat- terns in the Peninsula area. J.A. 36-38. The government opposed Petitioners’ proposed instructions, and the Dis- trict Court charged the jury that they should consider whether “the highways, secondary roads and streets in- volved in the case were part of our network of interstate travel and commerce.” App. at 16a. The Court did not make it clear to the jury whether this strand of the government’s evidence was to be considered as an effect 25 on interstate commerce, or instead as placing the defend- ants’ activities in resurfacing the roads within the flow of that commerce. In fact, although the District Court explained to the jury that there are two alternative “tests” of interstate commerce, it never informed them that one of those tests was not applicable to this case. See App. at 15a." In post-trial motions, Petitioners urged the District Court to grant them a new trial because the instructions permitted the jury to find that the interstate commerce element of the offense had been satisfied by proof con- cerning the interstate character of “our network” of highways. Petitioners argued that this instruction was based on the notion that highway resurfacing neces- sarily was “in the flow of interstate commerce,” and that this theory of jurisdiction specifically had been rejected by this Court in Copp Paving. The District Court then ruled, for the first time, that the challenged instruc- tion was “concerned with the facts from which the jury could infer a substantial effect on interstate commerce.” App. at 13a. On appeal, the government adopted as its own the District Court’s post hoc rationalization of its instructions. Brief for Appellee, at 26. For the reasons stated in Part B, supra, the govern- ment’s evidence concerning the highway traffic study was not sufficient proof of an effect on interstate commerce such that the jury should have been charged on that theory. Moreover, a reasonable jury would have con- strued the District Court’s instructions on this point, to In this regard, the District Court apparently accepted the government’s stated trial position that the traffic study was relevant evidence under both prongs of the interstate commerce test. See Government’s Consolidated Response and Opposition to Defendants’ Pretrial Motions, filed Nov. 24, 1981, at 7-11; J.A. 27-28 (govern- ment’s proposed instructions); J.A. 344-46 (government’s closing argument). 26 the extent those instructions were comprehensible at all,'* to permit them to return a verdict of guilt simply be- cause the roads in question “were part of our network of interstate travel and commerce.” App. at 16a. This theory of interstate commerce, which presumes that those who repair an instrumentality of interstate commerce are thereby placed “in” that commerce as a matter of law, was squarely rejected in Copp Paving. As Justice Powell concluded for the Court: Copp’s “in commerce” argument rests essentially on a purely formal “nexus” to commerce: the high- ways are instrumentalities of interstate commerce; therefore any conduct of petitioners with respect to an ingredient of a highway is per se “in commerce.” Copp thus would have us expand the concept of the flow of commerce by incorporating categories of ac- tivities that are perceptibly connected to its instru- mentalities, . . . The chain of connection has no logical endpoint. The universe of arguably included activities would be broad and its limits nebulous in the extreme. . . . More importantly, to the extent that those limits could be defined at all, the defini- tion would in no way be anchored in the economic realities of interstate markets, the intensely practical concerns that underlie the purposes of the antitrust laws. 419 U.S, at 198 (citations omitted) (emphasis added). Given the record in this case, the District Court’s rul- ing that the challenged instruction was designed to present to the jury evidence concerning an effect on commerce is not entirely convincing. Other courts have recognized that the “instrumentalities” theory of interstate com- 16 The District Court’s charge to the jury on interstate commerce was drawn in equal parts from the diametrically opposed instruc- tions proposed by Petitioners and the government. As a result, the instructions failed to give the jury any meaningful guidance on this complex issue. See J.A. 865-66 (Petitioners’ objections to the charge). 27 merce is an offspring of the “in the flow of commerce” test, and not the “effect on commerce” test. See Con- struction Aggregate Transport, Inc. Vv. Florida Rock In- dustries, Inc., 710 F.2d 752, 770 n.33 (11th Cir. 1983) ; Thornhill Publishing Co. v. General Telephone & Elec- tronics Corp., 594 F.2d 730, 737 (9th Cir. 1979). In any event, this Court’s decision in Copp Paving should have precluded the District Court from instructing the jury at all concerning the government’s nebulous theory that the roads in question were part of “our network of interstate travel and commerce.” Because the jury may have concluded that the government satisfied its burden of proof on the interstate commerce element of the of- fense solely by virtue of this evidence concerning pur- ported interstate traffic moving on highways in the Penin- sula area, the convictions of Petitioners must be reversed, even if the evidence concerning purchases of AC-20 was adequate to sustain the convictions. See Yates v. United States, 354 U.S. 298, 312 (1957); Stromberg v. Cali- fornia, 283 U.S. 359, 367-68 (1931). The Court of Ap- peals’ affirmance of Petitioners’ convictions thus was in conflict not only with this Court’s decision in Copp Paving, but with the principles of Yates and Stromberg as well. CONCLUSION This case affords the Court an opportunity to resolve a frequently-recurring and growing conflict among the Courts of Appeals concerning how an effect on inter- state commerce may be proved in cases arising under the Sherman Act. The questions presented are important be- cause they arise during the pleading and proof stages of all Sherman Act cases, both treble damage actions by private parties and criminal prosecutions by the gov- ernment. Moreover, the questions raised herein are pre- sented on a trial record that is remarkably manageable and clear. Finally, if Petitioners are correct in their interpretations of this Court’s controlling precedents, 28 their criminal convictions must be reversed and the case remanded for entry of judgments of acquittal. For all the reasons set forth herein, a writ of certiorari should issue to review the judgment and opinion of the Court of Appeals for the Fourth Circuit. Respectfully submitted, VINCENT J. FULLER Counsel of Record Barry S. SIMON WILLIAM J. MURPHY LINDA C, RAY &39 - 17th Street, N.W. Washington, D.C, 20006 (202) 331-5000 Attorneys for Petitioners Of Counsel: WILLIAMS & CONNOLLY 839 - 17th Street, N.W. Washington, D.C, 20006 Dated: October 4, 1983 APPENDIX la APPENDIX UNITED STATES COURT OF APPEALS FOR THE FOURTH DISTRICT Nos. 82-5200 82-5207 82-5208 UNITED STATES OF AMERICA, Appellee Vv. BASIC CONSTRUCTION COMPANY, HENRY S. BRANSCOME, HENRY S. BRANSCOME, INC., Appellants Appeal from the United States District Court for the Eastern District of Virginia, at Newport News John A. MacKenzie, District Judge Argued February 9, 1983 Decided June 27, 1983 Before: BUTZNER, Senior Circuit Judge, and RUSSELL and WIDENER, Circuit Judges. 2a Lewis T. Booker (L. Neal Ellis, Jr.. Hunton & Williams, on brief) and William J. Murphy (Vincent J. Fuller, Barry S. Simon, Linda C. Ray, Williams & Connolly; William F. Miller, Rideout & Miller, on brief) for Appel- lants; Margaret G. Halpern, Department of Justice ( Wil- liam F. Baxter, Assistant Attorney General; John J. Powers, III, Department of Justice; Theresa H. Clinton, Diane R. Kilbourne, on brief) for Appellee. PER CURIAM: This is an appeal from a conviction for violation of section 1 of the Sherman Act, 15 U.S.C. § 1. The defend- ants, Basic Construction Co., Henry S. Branscome, Inc., and Henry Branscome, were charged with conspiring in April of 1978 to rig the bidding for state road paving contracts. A jury found the defendants guilty, and both Basic and Branscome' appeal. We affirm. I, Basic’s principal contention is that the district court gave erroneous jury instructions regarding the criminal liability of a corporation for acts of its employees. With regard to corporate liability, the court instructed the jury as follows: A corporation is legally bound by the acts or state- ments of its agents done or made within the scope of their employment, and within their apparent au- thority, acts done within the scope of employment and acts done on behalf of or to the benefit of a corporation, and directly related to the performance of the type duties the employee has general authority to perform. 1 Henry S. Branscome, Inc., and its owner, Henry Branscome, filed a joint appeal. Together they will be referred to as “Brans- come,” 8a When the act of an agent is within the scope of his employment or within the scope of his apparent authority, the corporation is held legally responsible for it. This is true even though the agent’s acts may be unlawful, and contrary to the corporations [sic] actual instructions. A corporation may be responsible for the action of its agents done or made within the scope of their authority, even though the conduct of the agents may be contrary to the corporation’s actual instructions, or contrary to the corporation’s stated position. However, the existence of such instructions and policies, if any be shown, may be considered by you in determining whether the agents, in fact, were acting to benefit the corporation. At trial, Basic introduced evidence which would have tended to prove that it had a longstanding, well known, and strictly enforced policy against bid rigging. Such evidence tended to show that the bid rigging activities for which it was charged were perpetrated by two rela- tively minor officials and were done without the knowl- edge of high level corporate officers. Basic argues that, in light of this evidence, the district court should have instructed the jury that it could consider the evidence of Basic’s antitrust compliance policy in deciding whether the company had the requisite intent to violate the Sher- man Act. Basic rests its argument primarily on United States v. United States Gypsum Co., 438 U.S. 422 (1978). Gyp- sum involved a criminal antitrust prosecution in which the district court had instructed the jury that, if it found that the practice of competing producers giving to other producers on request, the price of gypsum board that was currently offered to a specific customer had the effect of fixing or raising prices, then they should presume as a da matter of law that the parties intended such a result. 7d. at 434. The Supreme Court held that these instructions were erroneous. The Court said that intent is an element that must be ; roved, and cannot be presumed, in a criminal antitrust prosecution. Jd. at 434-36. Basic argues that the instructions given by the district court in the instant case run counter to the holding in Gypsum because they fix absolute criminal liability on a corpora- tion for acts done by its employees, although such acts may have been in violation of corporate policies and ex- press instructions. Gypsum, Basic argues, requires that the government prove that the corporation, presumably as represented by its upper level officers and managers, had an intent separate from that of its lower level em- ployees to violate the antitrust laws. Consequently, Basic asserts that the jury should have been instructed to con- sider corporate antitrust compliance policies in deter- mining whether Basic had the requisite intent. We do not think that Gypsum requires so much. Rather, the case, on the point at issue, holds that intent to violate the antitrust laws must be proved in a criminal antitrust prosecution, and it defines the required intent. The Court there was not confronted with, and did not decide, the issue of corporate liability for the acts of employees. The instructions given by the district court in the instant case are amply supported by case law. See United States v. Koppers Co., 652 F.2d 290, 298 (2d Cir.), cert. denied, 454 U.S. 1083 (1981); United States v. Hilton Hotels Corp., 467 F.2d 1000, 1004-07 (9th Cir. 1972), cert. denied, 409 U.S. 1125 (1973) ; United States v. American Radiator & Standard Sanitary Corp., 433 F.2d 174, 204-05 (8d Cir. 1970), cert. denied, 410 U.S. 948 (1971). These cases hold that a corporation may be held criminally responsible for antitrust violations com- mitted by its employees if they were acting within the scope of their authority, or apparent authority, and for the benefit of the corporation, even if, as in Hilton Hotels and American Radiator, such acts were against corporate ‘sc 5a policy or express instructions. In United States v. Kop- pers Co., the Second Circuit rejected the argument, as do we, that Gypsum changes the law on corporate crim- inal antitrust liability for the acts of its employees. 652 F.2d at 298. In the instant case, the district court properly allowed the jury to consider Basic’s alleged antitrust compliance policy in determining whether the employees were acting for the benefit of the corporation. It also properly in- structed on the issue of intent in an antitrust prosecu- tion, i.e, that corporate intent is shown by the actions and statements of the officers, directors, and employees who are in positions of authority or have apparent au- thority to make policy for the corporation. II. Basic also argues that the court erroneously admitted evidence of an admission by silence by one of Basic’s cor- porate officers, William Shaw. At trial, one of Basic’s minor officials, Colosi, testified about a meeting he had with Shaw and another minor official of Basic, Howell, regarding the bidding on another road project. Colosi testified that at the end of the meeting, as he was leaving the room, he heard Howell say to Shaw, “I'll see if we can get anything for this work.” Colosi did not hear any reply by Shaw. Colosi further testified that he believed this referred to bid rigging and that Howell was talking about trading the job there being discussed for one in the future. Basic contends that the district court erred in admit- ting this evidence because it claims there was no evidence that Shaw heard, understood, or acquiesced in Howell’s statement to him so as to render the evidence admissible as an admission under FRE 801(d) (2) (B). Howell, Colosi, and Shaw were all present in the same room when the conversation took place, and we think 6a there was credible evidence to support the government’s position that Shaw heard, understood, and acquiesced in Howell’s statement, thus meeting the requirements of FRE 801(d) (2) (B). See United States v. Moore, 522 F.2d 1068, 1075-76 (9th Cir. 1975). From the transcript, it is clear the court properly decided the relevance of the statement as going to Basic’s defense that it had a long- standing policy against bid rigging, but, of course, as the trial court recognized, it could have been used by the jury for any purpose, and there was no request to limit it. The testimony came during the government’s case in chief and was in rebuttal to a defense Basic had previ- ously articulated, that of its longstanding policy against bid rigging. Yet, at the time the evidence was admitted, the claimed defense had not been the subject of evidence offered by Basic or sought to be established by cross- examination. We think the practice of admitting evi- dence to refute a defendant’s opening statement in a criminal case is a practice to be discouraged and that rebuttal evidence ordinarily should not be permitted for that purpose during the government’s case in chief. A criminal case is far different from a civil case in which the pleaded position of a party may establish relevance, and in nearly all instances in the defense of a criminal case the defendant does not finally have to decide on the defense he will make until the government closes its case in chief. Thus, in some instances, admitting evidence to rebut a defense made by a criminal defendant only in the opening statement of his attorney may get highly preju- dicial and irrelevant evidence into the record. In this ease, the defendant followed through on its articulated defense, so any error committed in admitting the con- versation between Howell and Shaw was harmless. But this is not to say that it would be so in all cases, and, as we have said, the practice should be discouraged. Ta ITI. Branscome contends that it was reversible error for the district court to permit the introduction of evidence concerning the conviction of a codefendant, Howell. How- ell, a former Basic employee, was included in the indict- ment against Basic and Branscome, but was tried and convicted separately prior to the“trial of Branscome and Basic. At a pretrial conference, counsel for Basic said that he intended to bring out the fact that Howell was convicted, and the court ruled, over Branscome’s objec- tion, that both Basic and the government could refer to Howell’s conviction. During trial, two references were made to Howell’s conviction. The first reference was made in the govern- ment’s opening statement. The second reference was made during the direct examination of Colosi. When Colosi was asked about the result of Howell’s trial, the court interrupted the questioning and stated that Howell had been tried and convicted. The court further said that the conviction of Howell had nothing to do with the trial of the other three defendants. At the conclusion of the trial, the court again cautioned the jury that they were not to be concerned with any disposition made with respect to a codefendant not on trial in the case at bar. No other reference was made to Howell’s conviction. Branscome’s contention that the admission of this evi- dence is reversible error is controlled by United States v. Curry, 512 F.2d 1299 (4th Cir.), cert. denied, 423 U.S. 832 (1975). In Curry we held that it was not error for the court to tell the jury that certain codefendants charged in the same indictment as the defendants being tried had plead nolo contendre. Jd. at 1303. We noted that, although it might be preferable to tell the jury only that the case against the codefendants had been previ- ously disposed of, any prejudice caused by the evidence was cured by instructions that the jury could not con- sider the pleas as evidence of guilt of the defendants on 8a trial. Jd. We therefore hold that the references made to Howell’s conviction in conjunction with timely and ap- propriate cautionary instructions do not constitute re- versible error. We caution, however, that it is far better to simply tell the jury that cases of codefendants not on trial have been disposed of without saying how, and that they should not consider that matter, particularly as evi- dence of guilt. IV. Steve Colosi, a key government witness, was one of the Basic employees directly involved in the bid-rigging con- spiracy. At trial he testified as to the events surrounding the conspiracy charged and the practices and attitudes of other Basic employees regarding bid rigging. Basic at- tempted to impeach Colosi’s testimony by presenting the testimony of two witnesses as to their opinions of Colosi’s honesty and trustworthiness. According to Basic’s offer of proof, these witnesses would have testified that Colosi was neither honest nor trustworthy. The district court, however, refused to admit the evidence, stating that it had “absolutely no place in this case.” Basic asserts that the district court erred in refusing to admit this evidence, and we agree. Federal Rule of Evidence 608(a) expressly allows impeachment through opinion evidence of a witness’s character for truthful- ness. See United States v. Truslow, 530 F.2d 257, 264- 65 (4th Cir. 1975); A. Saltzburg & K. Redden, Federal Rules of Evidence Manual 346-47 (3d ed. 1982). Under the facts of this case, however, the district court’s refusal to admit the evidence did not affect substantial rights and therefore was harmless error. 28 U.S.C. § 2111; Federal Rules of Criminal Procedure 52(a). We base our conclusion that the exclusion of the evi- dence was harmless error on several considerations. First, Basic thoroughly attacked Colosi’s credibility on cross-examination. Colosi admitted l’.ng to counsel dur- ing a pre-trial interview about his bid-rigging activities, 9a to using without permission company vehicles and gaso- line for personal purposes, and to paving his driveway with materials and labor procured from Basic. Second, at least one of the witnesses willing to testify as to his opinion of Colosi’s character for honesty and trustworthi- ness was a Basic employee at the time of trial. This relationship to Basic might well have weakened the weight of that particular opinion evidence. Third, much of Colosi’s testimony related to the events surrounding the April 1978 bid-rigging conspiracy. The government, how- ever, presented the testimony of two other witnesses who were involved in the conspiracy, and their testimony re- garding the events was in agreement with that of Colosi’s testimony. Taken together, these considerations lead us to the conclusion that it is highly unlikely that the district court’s refusal to allow opinion evidence as to Colosi’s character for truthfulness would have affected the out- come of the trial. We therefore hold that the district court’s ruling was harmless error. We have considered the appellant’s remaining assign- ments of error and find them to be without merit. Accordingly, the convictions are Affirmed. Judge Russell and Judge Butzner concur in the opin- ion and in the result. Judge Widener concurs in all of the opinion except part IV. While he agrees that the failure to admit the evidence of Colosi’s bad cnaracter for truthfulness was error, he does not agree that it was harmless, and thus cannot agree in the result. He therefore respectfully igsents and would award a new trial. 10a UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT Nos. 82-5207 82-5208 UNITED STATES OF AMERICA, Appellee Vv. HENRY S. BRANSCOME, INC. and HENRY S. BRANSCOME, Appellants ORDER There having been no request for a poll of the court on the petition for rehearing en banc, it is accordingly AD- JUDGED and ORDERED that the petition shall be, and it hereby is, denied. The panel has considered the petition for rehearing and is of opinion it is without merit. It is accordingly ADJUDGED and ORDERED that the petition shall be, and it hereby is, denied. With the concurrences of Judge Russell and Judge Butzner. /s/ H. Widener, Jr. For the Court Filed: August 5, 1983 lla IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Newport News Division Criminal Action No. 81-38-NN UNITED STATES OF AMERICA vs. BASIC CONSTRUCTION Co., et al. MEMORANDUM ORDER Henry S. Branscome, Inc, and Henry Branscome indi- vidually have moved this Court to arrest the judgment of conviction returned against them, by jury, on February 26, 1982, or to grant them a new trial. Having reviewed the memoranda of the parties, and the record, the Court has concluded that no cause exists to set aside the jury verdict. Accordingly, defendants’ motions are denied. Be- cause most points now raised by defendants were raised previously, the Court will make only brief comment on selected points. Defendants make much of what they consider to be the prosecution’s mischaracterization of the Court’s role in is- suing immunity orders. Defendants claim that the Court’s imprimatur was somehow placed upon the prosecution’s case because the prosecution failed to disclose to the jury that the Court lacked discretion in the granting of im- munity when the prosecution makes an immunity request. Despite their outrage, defendants failed to refer the Court to any case in which the failure to inform the jury of the Court’s lack of discretion in immunity decisions caused < 12a the setting aside of a jury verdict. If, indeed, the prose- cution’s statement contained any error, taken in the con- text of the entire trial, it can only be considered harm- less. Defendants are persistent in their claim that the acts for which they have been prosecuted have an insufficient nexus to interstate commerce to be actionable under the Sherman Act. 15 U.S.C. §$1, 2. Principally, defendants rely upon Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974). Copp Paving Co. makes it clear that the Sherman Act reaches all conduct having an affect on in- terstate commerce. In enacting the Sherman Act, Con- gress intended to exercise its full power to regulate inter- state commerce. Jd, at 194-95. “If it is interstate com- merce that feels the pinch, it does not matter how local the operation which applies the squeeze.” Jd. at 195, quot- ing United States v. Women’s Sportswear Mfgrs. Assn., 336 U.S. 460, 464 (1949). ' Unlike the Clayton and Robinson-Patman Acts, the Sherman Act does not require a showing that the activi- ties in issue were in the flow of interstate commerce. Copp Paving Co., supra at 195. Although not necessary to a Sherman Act case, defendants contend the Court in- structed the jury: ‘That they could conclude that the de- fendants were engaged in activities that were in the flow of interstate commerce if they found ‘that a substantial amount of interstate traffic moved on the highways, sec- ondary roads and streets involved... .’” Defendants memorandum of points and authorities in support of mo- tion for new trial at 13, quoting transcript of proceedings at 1118. Defendants argue that Copp Paving Co. pre- cludes such an instruction, that the passage of interstate traffic on a roadway, without more, is insufficient basis for a finding that the defendants’ activities were in the flow of interstate commerce. See Copp Paving Co. at 197- 98. 13a Regardless of whether the building and resurfacing of roadways is in the flow of interstate commerce, and it should be noted that Copp Paving Co. involved the sup- pliers of roadbuilding materials, not the roadbuilders themselves, defendants misread the instructions. The challenged portion of the instruction does not discuss the flow of interstate commerce; it is concerned with the facts from which the jury could infer a substantial effect on interstate commerce. See transcript of proceedings at 1118. Defendants have also moved the Court to require the prosecution to produce all material in its possession con- cerning statements made by any prosecution witness for in camera review. Defendants have set forth nothing that would cause this Court to conduct an in camera review. None will be undertaken. Defendants’ newly discovered evidence also does not re- quire a new trial. The presence of a paralegal during the trial, employed by Crenshaw, Ware and Johnson, did not violate the Court’s sequestration order. Because no adequate cause exists to set aside the jury verdict, defendants’ motion for arrest of judgment and a new trial are DENIED. /s/ John A. MacKenzie United States District Judge Norfolk, Virginia June 21, 1982 l4a SUPREME COURT OF THE UNITED STATES No. A-108 HENRY S. BRANSCOME, INC. AND HENRY S. BRANSCOME, Petitioners, V. UNITED STATES ORDER UPON CONSIDERATION of the application of coun- sel for the petitioners, IT IS ORDERED that the mandate of the United States Court of Appeals for the Fourth Circuit, case Nos. 82-5207 and 82-5208, be, and the same is hereby, stayed pending the receipt of a response and further order of the undersigned or of the Court. /s/ William J. Brennan, Jr. Associate Justice of the Supreme Court of the United States Dated this 12th day of August, 1983 l5a DISTRICT COURT’S CHARGE TO THE JURY ON THE INTERSTATE COMMERCE ELEMENT OF THE OFFENSE (Reproduced from Trial Transcript pages 1116-1119 and Court of Appeals Joint Appendix pages 359-362) The fifth essential element of the offense prohibited by the Sherman Act is that the alleged bid rigging by a de- fendant must involve interstate commerce. Interstate commerce includes transactions occuring across state lines, or in the flow of interstate commerce, as well as transactions which occur entirely within a state, if they have a not insubstantial effect on interstate commerce. A conspiracy may restrain interstate commerce even though some or all of the defendants are not engaged in interstate commerce and even though some or all of the means employed may be acts that occur wholly within a state, if there is not insubstantial effect on interstate commerce. Interstate commerce, as I said, means traffic, transpor- tation, communication, or commercial dealings across state lines, or in transactions which may occur within a state which have a not insubstantial effect on interstate commerce. The Sherman Act would not be applicable to any case, a all defendants would be found not guilty, if the gov- ernment has failed to establish beyond a reasonable doubt that the defendants’ activities are in or have substan- tially affected interstate commerce—had failed to estab- lish beyond a reasonable doubt that the defendants’ ac- tivities are in or have substantially affected interstate commerce. l6a The government has attempted to prove that the de- fendants’ local activities had a not insubstantial effect on interstate commerce by showing that a not insubstantial amount of liquid asphalt used in the resurfacing work at issue here was in fact manufactured outside the State of Virginia and then shipped into the state for the use of the defendants and the other alleged conspirators in mak- ing the asphalt cement used in paving the roads. In order to find that the required effect on interstate commerce has been proved by the government in this case you should ask yourselves whether the bid rigging con- spiracy alleged in the case has been shown as a matter of practical economics to have not an insubstantial effect on the interstate commerce involved. That is, the sale of liquid asphalt by interstate producers to Virginia buyers. From the evidence presented you must determine whether the defendants’ activities did or did not have such a sub- stantial effect on interstate commerce. If you are satis- fied that the government has proved that the defendants’ activities had such a substantial effect on interstate com- merce beyond a reasonable doubt, you may then go to consider whether or not any of the defendants was a member of the conspiracy, which is an element which would, of course, have to be first proved. The government has sought to show that this element, in connection with interstate commerce, has been statis- fied in two different ways. The first by showing that the highways, secondary roads and streets involved in the case were part of our network of interstate travel and commerce. And the second effort by the government is based upon their offering evidence that a substantial amount of as- phalt used on the project was manufactured or processed outside of Virginia and that it was then shipped into the state for use on the jobsites. 17a It is not necessary that the government prove all of these things. You may find that the government has proved the interstate commerce element of the crime if you find either that a substantial amount of interstate traffic moved on the highways, secondary roads and streets involved, or that a substantial amount of asphalt or other materials was manufactured outside of the state, shipped in commerce to Virginia and then used by the paving contractors on the highways. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0558%3A1. Public record. Not legal advice.