Opposition Brief — United States v. Broce

| Buprema Court, U.S,

No. 87-1190 RILED

In Che Supreme Carjrbsems sven x

Of Che United State

OCTOBER TERM, 1987

UNITED STATES OF AMERICA,

PETITIONER

V.

RAY C. BROCE and

BROCE CONSTRUCTION CO., INC.

RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR RESPONDENT

IN OPPOSITION

CURT T. SCHNEIDER

Counsel of Record

SCHNEIDER & CASEBEER

215 West Eighth Street

Coffeyville, Kansas 67337

(316) 251-6530

Attorney for Respondents

SHARP TYPESETTING & GRAPHICS, INC. ¢ 507 S QUAKER © TULSA, OK 74120 © (918) 587-2052

QUESTIONS PRESENTED

1. Whether the Court of Appeals erred in holding

that under the facts and circumstances of this particular

case, a guilty plea does not in and of itself constitute

a waiver of double jeopardy protection.

2. Whether the Court of Appeals erred in affirming

the District Court’s factual determination that the two

indictments returned against respondents charged dif-

ferent aspects of the same conspiracy.

li

TABLE OF CONTENTS

ee 1

J urisdiction fn sc cccucseneccesenecsensenuseeuad 2

Constitutional Provision Involved ............... 3

ere 3

| rrr ee 10

+ 16

TABLE OF AUTHORITIES

Cases:

Blackledge v. Perry, 417 U.S. 21,

OR Ir 9,13

Buena Vista Homes, Inc. v. United States,

281 F.2d 476, 480 (10th Cir. 1960) .......... 16

Menna v. New York, 423 U.S. 61,

YS | peer ye 9, 10, 13

Ricketts v. Adamson, No. 86-6 (June 22,

in 9,13

Sawyer v. United States, 298 F.2d 333 (U.S.

CS: SS ee 16

United States of America v. Beachner

Construction Co., 555 S.Supp. 1273

i RR re ae 7, 10

United States v. Broce, 753 F.2nd 811

(10th Cir. 1985); 781 F.2d 792,

tt. 8. \aeren soe 8, 10, 13

li

United States v. Wilshire Oil Company of

Texas, 427 F.2d 969 (10th Cir.) Cert.

Denied, 400 U.S. 829 (1970)................. 8

United States v. Yellow Cab Co., 338 U.S. 338,

EEE SS I ee 16

Wagner Tractor, Inc. v. W. E. Shields,

381 F.2d 441, 445 (9th Cir. 1967) ........... 16

Constitution, satutes and rules:

U.S. Const. Amend. V (Double Jeopardy

EE re passim

Sherman Act, (15 USC Sec. 1)................ 3, 5

EEE ee 3

cence ct cece eee. 7

—

No. 87-1190

In Che Supreme Court

Of Che United States

OCTOBER TERM, 1987

UNITED STATES OF AMERICA,

PETITIONER

Vv.

RAY C. BROCE and

BROCE CONSTRUCTION CO., INC.

RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR RESPONDENT

IN OPPOSITION

OPINIONS BELOW

The order and judgment of the court of appeals af-

firming the district court’s grant of relief to respondents

(Pet. App. |a-4a) is unreported. The memorandum and

order of the district court granting respondents relief

—

(Pet. App. 5a-13a) is unreported. The prior opinion of

the en banc court of appeals reversing the district

court’s denial of relief (Pet. App. 14a-86a) is reported

at 781 F.2d 792. The prior opinion of the court of ap-

peals panel (Pet. App. 87a-111a), which was vacated on

the grant of rehearing en banc, is reported at 753 F.2d

811. The original memorandum and order of the district

court denying respondents relief (Pet. App. 112a-123a)

is unreported.

JURISDICTION

1. The order of the district court denying respon-

dents’ motion to vacate was entered on November 18,

1983. (Pet. App. 112a-123a)

2. The order of the court of appeals panel reversing

the district court’s order was entered January 9, 1985.

(Pet. App. 87a-111a)

3. The order of the en banc court of appeals

remanding was entered January 2, 1986. (Pet. App.

14a-86a)

4. The factual determination made by district court

was entered June 30, 1986. (Pet. App. 5a-13a)

5. The order of the court of appeals panel sustain-

ing the district court’s factual determination and deny-

ing reconsideration of the court’s January 2, 1986 en

banc disposition was entered on August 18, 1987. (Pet.

App. la-4a)

— we

6. A petition for rehearing and suggestion for

rehearing en banc was denied on November 13, 1987.

(Pet. App. 124a-125a)

The jurisdiction of this court is invoked under 28

U.S.C. 1254 (1).

CONSTITUTIONAL PROVISION INVOLVED

The Double Jeopardy Clause of the Fifth Amend-

ment provides: ‘‘nor shall any person be subject for the

same offence to be twice put in jeopardy of life or limb.”’

STATEMENT

Respondents Ray C. Broce and Broce Construction

Co., Inc. represent a Kansas Corporation and it’s owner

engaged in the highway construction business with it’s

principal office at Dodge City, Kansas.

On November 17, 1981, a two-count indictment was

returned against respondents and others charging a

violation of Sec. 1 of the Sherman Act (15 U.S.C. 1) and

mail fraud in violation of 18 USC 1341. (‘‘Broce 1’’) (U.S.

v. Broce Construction Co., Inc. et al., Criminal No. 81-

20119-01 (D. Kans). Respondent Ray Broce, President

of Broce Construction was identified by the Government

as a co-conspirator in Broce I. (Pet. App. 143a-151a)

In Count I of Broce I Indictment, it was charged that

_ the respondents had engaged in a combination and con-

spiracy to submit colusive, noncompetitive and rigged

=

bids on project No. 23-60-RS-1080 (9) let by the State

of Kansas on April 25, 1978. In Count II it was charged

that the respondents engaged in a scheme and artifice

to defraud the State of Kansas and the United States

by causing a warrant to be delivered by the United

States mail in payment of the project referred to in

Count I. (Indictment, Crim. No. 81-20119-01, Count I,

Par. 11-13, Count II, Par. 3-4). (Pet. App. 143a-151a)

By a letter of January 11, 1982, petitioner notified

respondents and their attorneys just before trial of the

first indictment that the petitioner was going to seek

an additional indictment. This was consistent with peti-

tioner’s position in all prosecutions of alleged bid rigging

in the State of Kansas wherein they would notify the

respondents prior to trial that in essence that if the

respondents did not enter a plea of guilty then petitioner

would seek another indictment on some other project.

The petitioner was notified that the respondents Ray

Broce and Broce Construction wished to enter a plea

of guilty to the first indictment. The respondents were

in the position of entering a plea of guilty or facing

multiple indictments and trials. On January 27, 1982,

the respondents entered into a plea agreement with peti-

tioner. Petitioner required that respondents be convicted

of two anti-trust violations carrying a potential One

Million Dollar fine for respondent Broce Construction

and One Hundred Thousand Dollars for respondent Ray

Broce. Respondent Ray Broce plead guilty to both

=o

Counts I and II in the first indictment and was fined

and imprisoned on each count. Respondent Ray Broce

also was required to plead guilty to the one count in the

second indictment. Respondent Broce Construction

plead guilty to the first count of the first indictment

and was fined Seven Hundred Fifty Thousand Dollars.

Under the terms of the plea agreement Count II of the

second indictment was dismissed. This eliminated re-

spondent Broce Construction Co. from a potential One

Thousand Dollar fine. The petitioner also agreed not to

prosecute respondents further in Kansas even though

they could not legally do so nor prosecute them in

Oklahoma where no charges had ever been filed. Peti-

tioner further agreed to recommend a fine of One and

one-half Million Dollars against the corporation on the

Sherman Act charges when the maximum legal fine was

One Million Dollars. (Pet. App. 127a-128a, 134a-135a)

On February 4, 1982, a second indictment was re-

turned against respondent Broce Construction and

respondent Ray Broce. It contained one count for alleged

violation of the Sherman Act (15 U.S.C. Sec 1) The in-

dictment in Broce II is identical in all respects to the

indictment in Broce I except Jerry Gumm, General

Manager of Broce Construction, was eliminated as a

defendant; different project numbers are set out with

the first indictment referring to a period beginning April

19, 1978 and continuing thereafter and the second in-

dictment beginning on or about July 19, 1978, and con-

tinuing thereafter; a substitution of terminology where

the first indictment refers to ‘‘Federal Aid Highway Pro-

ject’ and the second indictment refers to ‘Public

Highway Construction Project’’ and a paragraph

numbering change. (Pet. App. 136a-142a) The

respondents and their attorney appeared for a plea on

February 8, 1982. Just prior to the plea the respondents

and their attorney were handed the second indictment.

At that time, neither respondent was advised of their

double jeopardy rights. Mr. Crockett, counsel for the

respondents at that time, filed a sworn affidavit with

the Court that defense counsel did not consider the issue

of double jeopardy nor was the issue of double jeopardy

discussed with the respondents. The record clearly

demonstrates that the Court advised the respondents

of numerous constitutional rights but never at any time

discussed the issue of double jeopardy or advised

respondents of their double jeopardy rights.

On March 15, 1982, sentence was pronounced in

both Broce I and Broce II. In Broce I respondent cor-

poration was fined Seven Hundred Fifty Thousand

Dollars and the mail fraud count was dismissed. In

Broce II respondent corporation was fined Seven Hun-

dred Fifty Thousand Dollars. Respondent Ray Broce

received a fine of Fifty Thousand Dollars and two years

imprisonment for each anti-trust charge, the sentences

to run concurrent. Respondent Ray Broce was fined the

sum of One Thousand Dollars and sentenced to two

ata

years on Count II of Broce I. The sentence of imprison-

ment was concurrent with the previous sentences. The

total fine against respondent corporation was One and

one-half Million Dollars and the total fine against

respondent Ray Broce was One Hundred and one Thou-

sand Dollars.

On February 22, 1983, respondents, pursuant to

F. R. Crim. P. 35 (A) filed a motion to vacate the judg-

ment and sentence in Broce II, claiming that the judg-

ment and sentence in Broce II was illegal in that it

violated the double jeopardy clause of the Fifth Amend-

ment of the United States Constitution. The motion was

made after a decision filed January 31, 1983, in a similar

case in the State of Kansas involving other indicted cor-

porations and defendants for bid rigging. In United

States of America v. Beachner Construction Co., Inc.,

555 S.Supp. 1273 (D Kan. 1983) which was affirmed by

the court of appeals (729 F.2nd 1278 (1984)), District

Judge Saffels found after an evidentiary hearing that

the conspiracy to rig bids on Kansas highway construc-

tion projects was a continuing conspiracy and that

subsequent prosecutions of an acquitted corporation

constituted double jeopardy. The district court denied

the motion of respondents by concluding that respon-

dents had waived their right to the double jeopardy

claim and their right to challenge the sentence on that

basis by pleading guilty. The district court did not ad-

= =

dress the question of whether there was one or multiple

conspiracies. (Pet. App. 112a-123a)

The court of appeals reversed in United States v.

Broce, 753 F.2nd 811 (10th Cir. 1985) and petitioner re-

quested a new hearing en banc. This Court sitting en

banc concluded from the facts that the plea of guilty

did not waive the defense of double jeopardy under the

circumstances of this case. United States v. Broce, 781

F.2d 792, (10th Cir. 1986). The Court remanded the case

for a determination on the evidence as to the existence

of a single or separate conspiracy. Petitioner had previ-

ously stipulated that the record in the Beachner evi-

dentiary hearing be used as part of the factual record.

(Pet. App. 22a) In that record Judge Saffels analized the

usual and common system of setting up Kansas high-

way jobs; the common language; the lack of precautions;

the continuing obligations among contractors; the ne-

' cessity of telling other contractors if everyone had

agreed ‘‘to go along’’; the common purpose and objec-

tive; and concluded that bid rigging was ‘‘a way of life

in Kansas’’. (Pet. App. 22a-23a)

Guided by the common objective test in United

States v. Wilshire Oil Company of Texas, 427 F.2d 969

(10th Cir.) Cert. Denied, 400 U.S. 829 (1970) the District

Court held that the conspiracies charged as anti-trust

violations in Broce I and Broce II were a single con-

spiracy and ordered the conviction in Broce II vacated

as to respondents. (Pet. App. 5a-13a)

a

Petitioner once again appealed arguing that the

District Court erred in finding that factually there was

one continuing conspiracy. The government also urged

the court to reconsider its en banc opinion of January 2,

1986.

The court of appeals, after considering this Court’s

most recent case in this area of the law, Ricketts v.

Adamson, No. 86-6 (June 22, 1987), wrote (Pet. App.

la-3a):

‘“‘.. . Although Ricketts invalidates the broader ra-

tionale underlying the plurality opinion in Broce,

that the double jeopardy prohibition ‘‘does not

constitute an individual right which is subject to

waiver,’ 781 F.2d at 795, it does not affect its nar-

rower holding, based on clear Supreme Court prec-

edent, that a guilty plea does not itself constitute

a waiver of double jeopardy protection. Id. at

796-97; see also Menna v. New York, 423 U.S. 61,

62-63 & n.2 (1975) (guilty plea is merely an admis-

sion of factual guilt, which does not bar a claim that

the state may not constitutionally prosecute the

defendant no matter how validly his factual guilt

is established); Blackledge v. Perry, 417 U.S. 21,

29-31 (1974). To the extent that the government’s

first arf’. ent may read as requesting reconsidera-

tion of ‘%* court’s en banc disposition, we will not

do so. 10th Cir. R. 35.6

The government next argues that the district court’s

factual finding that both indictments charged a

single conspiracy was clearly erroneous. We have ex-

amined the record carefully and we are satisfied that

the district court’s decision was not clearly errone-

~ 10 —

ous. cf. United States v. Beachner Construction Co.,

729 F.2d 1278, 1281-83 (10th Cir. 1984).”’

Petitioner’s request for rehearing was denied and

the petitioner’s suggestion for rehearing en banc was

also denied (Pet. App. 124a-125a)

ARGUMENT

WHETHER THE COURT OF APPEALS ERRED

IN HOLDING THAT UNDER THE FACTS AND

CIRCUMSTANCES OF THIS PARTICULAR CASE,

A GUILTY PLEA DOES NOT IN AND OF ITSELF

CONSTITUTE A WAIVER OF DOUBLE JEOPARDY

PROTECTION.

Petitioner argues that respondents waived the viola-

tion of their double jeopardy rights because they entered

a plea of guilty. The court specifically found that the

plea of guilty was not a bar to consideration of whether

the charge contained in the second indictment was void

because of the double jeopardy clause of the Fifth

Amendment.

Petitioner argues that respondents entered counseled

pleas of guilty to both indictments and therefore waived

their right for the court to consider double jeopardy.

Petitioner's position was specifically rejected in Menna

v. New York, 423 U.S. 61 (1975). The court of appeals

sitting en banc previously adopted the position that the

government never had the right to bring respondents

into court to face the second indictment. United States

—~ rn

of America v. Broce 781 F.2d 792 (Tenth Circuit 1986)

Petitioner argues that there was a plea agreement

requiring respondents to plead guilty to a second indict-

ment and that respondents received substantial bene-

fits. Respondent Ray Broce received no benefits as he

plead guilty to all charges in the first indictment and

the Anti-Trust Count in the second indictment. ‘He was

fined and sentenced to prison on each count. The mail

fraud count in the first indictment against Respondent

Broce Construction was dismissed. The court of appeals

rejected petitioners contention that the dismissal of one

count of mail fraud with a possible One Thousand Dollar

fine granted substantial benefits to the respondent cor-

poration so that the court should uphold it’s illegal con-

viction on a anti-trust violation which carries a One

Million Dollar fine. The petitioner further contends that

it agreed not to prosecute respondents in the State of

Kansas or Oklahoma. Since petitioner could not legally

prosecute either respondents under their conspiracy

theory for various projects in the State of Kansas, the

petitioner failed to demonstrate to the Court where any

substantial benefit was obtained by these respondents.

No charges have ever existed against either of these

respondents in the State of Oklahoma and there is no

evidence in the record that the petitioner had either the

intention or the right to instigate prosecution against

these respondents in Oklahoma. The total sum benefit

received by the respondents was that the respondent

=

corporation did not have to pay a possible maximum

One Thousand Dollar fine in Count II of the first in-

dictment. The petitioner argues that this should out-

weigh the fact that they could never legally bring the

charge set out in the second indictment.

Petitioner argues that a guilty plea is an admission

of all material facts in an indictment and that the two

indictments against respondents charged separate con-

spiracies. Petitioner contends that the double jeopardy

issue in this case was based on separate and distinct

agreements to rig bids on particular projects. This posi-

tion is directly contrary to petitioner's own argument

that bid rigging was a way of life in the State of Kansas

and specifically petitioner’s evidence presented to the

trial court that the contract let April 25, 1978, contained

as part of conspiracy an agreement to give certain future

projects to other contractors. It defies logic to adopt

a position that a number of contractors conspired to

award a given project to one contractor with no thought

of having any effect on the letting of future projects.

The argument that the face of the indictment charged

different conspiracies has been analized and specifically

rejected by the court of appeals panel (Pet. App. 87a-

1lla), reported at 781 F.2d 792. The opinion sets forth

the paragraphs of the indictment in some detail and con-

cludes that petitioner's own statement demonstrates the

conspiracy involved in project number 23-60-RS-1080

(9) concerned other projects. In examining the face of

=

the indictments, Judge Bohanon, writing for the major-

ity, stated ‘“‘indeed, nothing in either indictment is

definitely inconsistent with the view that the con-

spiracies they allege are in fact identical... "’ (Pet. App.

_ 87a-111a)

Petitioner urges this Court to review this case even

though the court of appeals ruled under the guidance

of this Court’s most recent decision in this area. After

three appeals by petitioner, the court of appeals con-

sistent with it’s previous holdings, found (Pet. App.

la-3a):

‘‘.. .The Supreme Court's recent decision in Rickets

v. Adamson, 55 U.S.L.W. 4914 (U.S. June 22, 1987),

made it clear that a criminal defendant may volun-

tarily waive his double jeopardy protection. Id. at

4916 (‘‘an agreement specifying that charges may

be reinstated given certain circumstances is...

precisely equivalent to an agreement waiving a

double jeopardy defense’’). Although Ricketts in-

validates the broader rationale underlying the

plurality opinion in Broce, that the double jeopardy

prohibition ‘‘does not constitute an individual right

which is subject to waiver,’’ 781 F.2d at 795, it does

not affect its narrower holding, based on clear

Supreme Court precedent, that a guilty plea does

not itself constitute a waiver of double jeopardy pro-

tection. Id. at 796-97; see also Menna v. New York,

423 US. 61, 62-63 & n.2 (1975) (guilty plea is merely

an admission of factual guilt, which does not bar

a claim that the state may not constitutionally pro-

secute the defendant no matter how validly his fac-

tual guilt is established); Blackledge v. Perry, 417

— =

U.S. 21, 29-31 (1974). To the extent that the govern-

ment’s first argument may be read as requesting

reconsideration of the court’s en banc disposition,

we will not do so...”’

WHETHER THE COURT OF APPEALS ERRED

IN AFFIRMING THE DISTRICT COURT'S FAC-

TUAL DETERMINATION THAT THE TWO IN-

DICTMENTS RETURNED AGAINST RESPON-

DENTS CHARGED DIFFERENT ASPECTS OF

THE SAME CONSPIRACY.

Petitioner for the first time argues that respondents

were not entitled to a factual determination as to

whether there was one or multiple conspiracies. Peti-

tioner previously stipulated that the court ‘‘‘consider

the record made in the evidentiary hearing’’’ held in the

Beachner case (see Pet. App. 63a). Not only did peti-

tioner so stipulate, there was no objection raised nor any

reservations placed on the stipulation. A review of peti-

tioner’s docketing statement with the court of appeals

and their previously filed briefs question the results of

the court’s factual determination but not the right to

make that determination. It appears that because peti-

tioner is dissatisfied with the result of the factual deter-

mination it attempts to raise new an issue not heretofore

presented to either the district court or the court of

appeals.

The District Court without any objection from peti-

— 15 —

tioner and relying on the stipulation of petitioner, uti-

lized the ‘‘common objective’’ test and made the follow-

ing factual findings:

ae ee the construction contractors active in the

state during that period had a ‘common objective’.”’

2. ‘‘...the separate bid riggings had been effected

through a ‘common method’.”’

3. “*...the conspiring contractors used and

understood ‘common jargon’.’’

4. ‘...none of the [contractors] expressed any fear

or concern that approaching a fellow contractor

about this illegal activity would result in their being

reported to the authorities.’’

5. ‘‘...the process of requesting and submitting

complementary bids [created] ‘mutual and inter-

dependent obligations’. ..among contractors who

participated in ‘set-up’ jobs.”’

6. ‘‘...[{the conspiracy was continuously present

and could be ‘plugged into’ at any time.’’

(Pet. App. 5a-13a)

The district court then concluded:

‘‘Because the two indictments returned against

these defendants charge simply different aspects of the

same conspiracy to restrain competition, we conclude

that the defendants’ conviction under both indictments

(even though obtained through guilty pleas) constituted

a violation of their rights under the double jeopardy

clause of the fifth amendment.” (Pet. App. 5a-13a)

The court of appeals reviewed the district courts

—=

findings and properly found that the district court’s

decision was not clearly erroneous. (Pet. App. 12-3a)

Petitioner had the burden to clearly demonstrate

error in the district court’s findings. Factual findings

of the district court are not lightly to be set aside. Where

the evidence supports a conclusion either way, the choice

between two permissible views of the weight of the

evidence is not ‘‘clearly erroneous.’’ United States v.

Yellow Cab Co., 338 U.S. 338, 342 (1949). Moreover, an

appellate court views a district court’s findings based

on sharply conflicting evidence as ‘‘conclusively bind-

ing.’’ Buena Vista Homes, Inc. v. United States, 281 F.2d

476, 480 (10th Cir. 1960).

When, as here, the district court’s findings are sup-

ported by substantial evidence, such findings cannot be

‘“‘clearly erroneous.’’ Wagner Tractor, Inc. v. W. E.

Shields, 381 F.2d 441, 445 (9th Cir. 1967). Even an “‘ade-

quate basis’’ for the findings suffices. Sawyer v. United

States, 298 F.2d 333 (U.S. App. D.C. 1962).

CONCLUSION

Petitioner argues that the court of appeals decision

in this case would ‘‘portend a nightmare for the federal

courts as well as for state and federal prosecutors’’. This

argument is meritless as this case merely requires that

petitioner comply with the law and stop their attempts

=

at making separate and multiple conspiracies out of a

single conspiracy.

The judgment of the court of appeals sitting en

banc finding no waiver of double jeopardy under the

facts in this case and the judgment of the District Court

on remand from the Court of Appeals finding that “‘. . .

the two indictments returned against these respondents

charge simply different aspects of the same conspiracy

to restrain competition. . .’’ which was affirmed by the

court of appeals should stand and the petition for writ

of certiorari should be denied.

Respectfully submitted,

Curt T. Schneider

SCHNEIDER & CASEBEER

215 West Eighth Street

Coffeyville, Kansas 67337

(316) 251-6530

Attorneys for Respondent

February, 1988