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United States v. Schaefer

decided: October 22, 1982.

UNITED STATES OF AMERICA, APPELLEE
v.
MICHAEL SCHAEFER AND CLAIRTON SLAG, INC., APPELLANTS



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Criminal No. 79-215).

Garth and Becker, Circuit Judges and John P. Fullam, District Judge.*fn*

Author: Fullam

Opinion OF THE COURT

FULLAM, J.

The defendants, Clairton Slag, Inc., and its president, Michael Schaefer, were convicted in the Western District of Pennsylvania of making false statements to a federal agency by misrepresenting the quantities of paving materials delivered to a federally funded highway project, in violation of 18 U.S.C. § 1020, and Schaefer was convicted of conspiring to do so, 18 U.S.C. § 371. Their initial appeal to this Court resulted in a remand for an evidentiary hearing on their motion to suppress certain evidence introduced by the Government at trial. U.S. v. Schaefer, et al., 637 F.2d 200 (3d Cir. 1980).

Following the remand, the district court held an evidentiary hearing and, on November 9, 1981, reaffirmed its previous order denying defendants' motion for a new trial. The district court concluded that the evidence in question was obtained with the consent of the defendants and that, in any event, its admission was harmless beyond any reasonable doubt. This appeal followed. We reverse and remand for a new trial.

I.

The defendants operated a batch plant supplying bituminous material to the Pennsylvania Department of Transportation ("PennDOT") for road construction purposes, pursuant to various contracts. One such contract related to a federally funded project in Washington County, Pennsylvania, which was being constructed during the summer and fall of 1977. The defendant Clairton Slag, Inc., which is wholly owned by the defendant Schaefer, was being paid a specified price per ton of material delivered to the construction site. The district attorney of Washington County received an anonymous tip that the job was being short-weighted. He thereupon instructed a county detective and the State Police to conduct an investigation.

Defendants' trucks (owned by Schaefer and leased to Clairton) were loaded from an overhead bin. The amount of bituminous material in the bin for discharge to the vehicles was controlled by levers and related devices operated by one of defendants' employees. Each operation was supposed to discharge a "batch" containing 4,000 pounds of material. Twelve such "batches," or 48,000 pounds, constituted a normal load for each vehicle. As each truck was loaded, the operator filled out a yellow weight-slip and gave it to the driver. A PennDOT inspector was stationed at the loading site to ensure maintenance of proper quality standards, and also to verify the weights. He was required to fill out a white weight slip, which was also given to the driver of the truck. Upon arrival at the construction site, the driver presented both copies to a PennDOT inspector; these documents constituted the basis upon which payments to Clairton under the contract were calculated.

The evidence at trial established that, while the white and yellow weight slips corresponded with each other in every instance, the amount of material actually loaded and delivered frequently was substantially less than that reflected on the weight slips. There was evidence that the loading device could be, and regularly was, manipulated so as to release less than a standard 4,000-pound batch. Thus, while the correct number of batches were loaded onto each truck, so that a PennDOT inspector who was merely counting the number of batches would be unaware of any wrongdoing, when the inspector's attention was diverted the loaders could cheat by manipulating the device.

The development of the Government's case against these defendants may be summarized as follows: A State Police officer (one Stetor) set up a portable scale along a level stretch of highway between the batch plant and the construction site, on October 21, 1977. Without obtaining a search warrant, he stopped and weighed five of defendants' loaded trucks, and obtained from the drivers both the white and yellow weight slips,*fn1 which were immediately photocopied and returned to the drivers. He then permitted the vehicles to proceed to their destination.

At that point, the officer knew the gross weight of each loaded vehicle, and what the weight slips reflected as the weight of the cargo. But in order to determine the actual weight of the bituminous material being delivered, it was necessary to ascertain the weights of the empty trucks ("tare weights"). Accordingly, three days later, the officer visited the Clairton plant, explained to the defendant Schaefer the purpose of his investigation, and sought to obtain the tare weights of the respective vehicles which he had weighed on October 21. Schaefer expressed a willingness to cooperate, and arranged by radio to have the empty vehicles returned to the plant so that they could be weighed.

When the tare weight of each vehicle was subtracted from the previously determined loaded weight, it became apparent that each of the five trucks contained substantially less bituminous material than was reflected on the weight slips.

The State Police reported their findings to federal authorities, who then continued the investigation. On December 19, 1977, the FBI interviewed Noah Smith, a Clairton Slag employee in charge of loading asphalt into the company's trucks. Smith denied any knowledge of short-weighting. After Smith was given immunity from prosecution, however, he testified before a federal grand jury on April 4, 1978, that his immediate supervisor, plant superintendent Richard T. Perlick, had instructed him to short weight the trucks, and that he frequently did so. Between October 1978 and March 1979, the FBI interviewed other Clairton Slag employees as well as the PennDOT plant inspector. As a result of the FBI's investigation, Perlick was indicted and convicted. Thereafter, as part of an agreement with the ...


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