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UNITED STATES v. H & M
June 15, 1982
UNITED STATES of America
H & M, INC., Jack D. Murphy, William H. Quigley, Jr.
The opinion of the court was delivered by: RAMBO
Presently before the court is the motion of defendants, H & M, Inc., William H. Quigley, Jr. and Jack D. Murphy, to change their plea from not guilty to nolo contendere. Defendants and co-conspirators are charged with conspiring to allocate customers, rig bids and fix prices on motopaving projects in a four county area of Pennsylvania in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. The United States government opposes defendants' motion. On June 11, 1982, a hearing was held, in camera, to determine the merits of the motion. For the reasons set forth below, the motion will be denied.
Rule 11(b) of the Federal Rules of Criminal Procedure provides that a defendant may plead nolo contendere only with the consent of the court after the court has considered the views of the parties and the interests of the public in the effective administration of justice. Acceptance of the plea is discretionary with the court. In exercising its discretion, this court will consider the factors outlined in United States v. Standard Ultramarine & Color Co., 137 F. Supp. 167, 170-72 (S.D.N.Y.1955), which also involved an indictment under § 1 of the Sherman Antitrust Act. These factors include:
1. the nature of the claimed violations;
2. how long the violations persisted;
3. the size and power of the defendants in the particular industry;
4. the impact of the condemned conduct upon the economy;
5. whether a greater deterrent effect will result from conviction rather than from acceptance of the plea;
6. the view of the Attorney General;
7. whether under the circumstances of the case it is in the public interest to deprive private parties of the benefits of the prima facie case under § 5 of the Clayton Act, 15 U.S.C. § 16 if the defendants should be found guilty upon trial.
Defendants addressed several of these factors at the June 11 hearing. They urged consideration of the fact that the alleged illegal activity terminated five years ago. They also argued that the business and individuals allegedly involved in the conspiracy profited little, if any, from the alleged illegal activity. Additionally, they stressed that H & M, Inc. played a small role in the motopaving industry and thus could not have had any significant impact on the alleged illegal practices or their economic effect. Defendants also argued that the impact of the alleged illegal conduct on the economy was insubstantial. They contended that even if bid rigging occurred the difference between the submitted bids amounted to pennies. They pointed out that the alleged conspiracy only covered a four county area. Defendants also contended that acceptance of their nolo plea is in the public interest and would serve the effective administration of justice. Finally they pointed out that they are presently defending against a class action civil suit. If their nolo plea is rejected, trial in the instant action could take three to six weeks. Thus, they foresee substantial legal expenses and fear that defendant H & M, Inc. may face possible bankruptcy.
The court is not convinced that defendants have presented special circumstances justifying acceptance of a nolo plea. They cite no cases supporting their argument that the court should consider the economic circumstances of individual defendants in deciding whether to accept a nolo contendere plea. Common sense dictates against consideration of this factor. Defendants who may have been in an economic position to bring about the alleged anti-competitive activity should not later be allowed to avoid the defense of such claims because of potential economic sacrifices. If defendants are unable to defend themselves for economic reasons, they may apply for relief under the Criminal Justice Act, 18 U.S.C. § 3006A.
At this point the court also wishes to address the fact that defendants apparently lost money during the period of illegal activity, which defendants identify as a factor of special circumstance. The court finds it inappropriate to consider whether a ...
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