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United States v. John Scher Presents Inc.

October 11, 1984

UNITED STATES OF AMERICA, APPELLANT
v.
JOHN SCHER PRESENTS, INC., MONARCH ENTERTAINMENT BUREAU, INC., JOHN SCHER AND CEDRICK KUSHNER, JOHN SCHER PRESENTS, INC. AND MONARCH ENTERTAINMENT BUREAU, INC., APPELLEES



On Appeal from the United States District Court for the District of New Jersey

Author: Becker

Before: ADAMS, BECKER, Circuit Judges, and O'NEILL, District Judge*fn*

Opinion OF THE COURT

BECKER, Circuit Judge.

This is an appeal by the government in a criminal antitrust case in which the district court suspended imposition of sentence on two corporations and placed them on probation provided that they donate $100,000 to charities approved by the court's probation department. The case presents the question whether the Probation Act, 18 U.S.C. § 3651,authorizes a district court to require, as a special condition of probation, that a defendant pay money to charitable organizations in no way aggrieved by the defendant's offense. We hold that it does not. Accordingly, we vacate the sentence imposed by the district court on appellees John Scher Presents, Inc., and Monarch Entertainment Bureau, Inc., and remand for resentencing.

I.

Appellees are wholly owned by John Scher, who was a codefendant in the district court. The appellees and a fourth co-defendant, Cedric Kushner, are promoters of live musical performances. Scher's companies promote concerts in northern New Jersey and upstate New York; Kushner promotes concerts in upstate New York.*fn1 On June 23, 1983, a federal grand jury in the District of New Jersey returned a one count felony indictment charging Scher, Kushner, and the corporations with violating the Sherman Act, 15 U.S.C. § 1, by conspiring, beginning in February 1980 and continuing at least until December 1981, to reduce or eliminate competition in the promotion of musical performances in the cities of Rochester, Syracuse, Albany, Utica, Binghamton, and Glens Falls, New York. Specifically, the defendants were charged with having allocated exclusive markets among themselves.

On August 25, 1983, Kushner moved the court for leave to change his plea from not guilty to nolo contendere, and on October 5, 1983, a similar motion was filed on behalf of the other three defendants. The district court granted these motions on November 7, 1983.The court then ordered a presentence investigation and asked for sentencing memoranda from the parties, including recommendations as to sentence. The government recommended that Monarch be fined $80,000 and John Scher Presents by fined $5,000. The corporate defendants suggested that the imposition of sentence be suspended and a three-year term of probation be imposed, on the special condition that the corporations contribute their "services and talents" to the extent that they "shall have raised and donated the sum of $100,000 to charities approved by the Probation Department." Joint Appendix at 68.

On February 3, 1984, over the government's objection, district court suspended sentence and placed the corporate defendants on supervised probation for a period of three years and six months, on the special condition that together they contribute their "services and talents in concern promotion for charitable purposes to the extent and end that Monarch and John Scher Presents, Inc. shall have raised and donated the sum of $100,000.00 to charities approved by the Probation Department." The court directed that the term of probation would terminate earlier if and when the $100,000 was donated. The government filed a notice of appeal from this sentence or, in the alternative, a petition for a writ of mandamus.*fn2

II.

The power of federal courts to suspend sentences and place defendants on probation is not inherent; rather, it arises from statute. United States v. Missouri Valley Construction Co., 741 F.2d 1542, slip op. at 6 (8th Cir. 1984) (en banc); United States v. Cohen, 617 F.2d 56, 58 (4th Cir.), cert. denied, 449 U.S. 845, 101 S. Ct. 130, 66 L. Ed. 2d 55 (1980). The statutory source of this power is the Probation Act, 18 U.S.C. § 3651, which grants trial courts broad discretion to design probationary conditions appropriate for each particular case. The act provides, in part, that a trial court

when satisfied that the ends of justice and the best interest of the public as well as the defendant will be served thereby, may suspend the imposition or execution of sentence and place the defendant on probation for such period and upon such terms as the court deems best.

18 U.S.C. § 3651.

Notwithstanding this general grant of power, the statute goes on to outline several specific conditions that a district court may impose. Three ...


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