UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
filed as amended october 30 1989.: October 11, 1989.
UNITED STATES OF AMERICA
ATLANTIC DISPOSAL SERVICE, INC., APPELLANT; UNITED STATES OF AMERICA V. ALVIN H. WHITE II, APPELLANT; UNITED STATES OF AMERICA V. CHARLES J. CARITE, APPELLANT
Appeal from the United States District Court for the District of New Jersey, (D.C. Criminal Nos. 87-00076-01/03).
Becker, Stapleton and Garth, Circuit Judges.
Opinion OF THE COURT
Becker, Circuit Judge
Alvin H. White II, Charles J. Carite, and Atlantic Disposal Service, Inc. ("ADS"), a trash collection company that White and Carite control, appeal the sentences imposed upon them after they pled guilty to a scheme to defraud the United States by submitting rigged bids for trash collection at Fort Dix, New Jersey. The negotiated pleas, entered on December 8, 1987, after six days of trial in the district court for the district of New Jersey, were to two counts of conspiracy to restrain trade in violation of the Sherman Antitrust Act, 15 U.S.C. § 1 (1982). The first count, contained in indictment No. 87-77, involved a scheme to rig bids in 1983 and 1984; the second count, contained in indictment No. 87-76, involved a scheme to rig bids in 1986.*fn1 The district court spared White and Carite prison terms, but fined each man $350,000 and ordered both to perform community service.*fn2 ADS was fined a total of $2,000,000. The district court also determined, pursuant to section 2 of the Criminal Fine Enforcement Act of 1984 ("CFEA"), Pub.L. No. 98-596, § 2, 98 Stat. 3134, 3134 (1984) (codified at 18 U.S.C. § 3565(b)(2) (Supp. V 1987)), that the defendants were required to pay interest on the $100,000 fine imposed for the 1986 bid rigging scheme, indictment No. 87-76. No interest was assessed on the fine imposed in No. 87-77 because, as explained below, section 2 of the CFEA applies only to crimes committed after December 31, 1984.*fn3
We find the defendants' principal contentions on appeal -- that the sentences violated the eighth amendment's proportionality requirement as expounded in Solem v. Helm, 463 U.S. 277, 77 L. Ed. 2d 637, 103 S. Ct. 3001 (1983), and that the district court abused its discretion in denying their Rule 35 motion for reduction of sentence -- to be legally frivolous.*fn4 The more difficult question, which we will address in this opinion, is whether the district court erred in imposing interest on the fines arising out of the 1986 bid rigging scheme.
Plaintiffs contend that the CFEA interest provision (section 2) is inapplicable to them because it was repealed as of November 1, 1987 by the Sentencing Reform Act ("SRA"). For the reasons that follow, we hold that section 2 of the CFEA has not been repealed in full by the SRA but continues to apply to all crimes committed between December 31, 1984 (the effective date of section 2 of the CFEA) and November 1, 1987 (the effective date of the SRA). Because the criminal scheme with respect to which interest was imposed here took place between those two dates, we will affirm the judgment of the district court imposing interest. As we explain below, however, and at the suggestion of the government, we will remand with instructions to vacate fines erroneously imposed against White and Carite on the count involving the 1983 and 1984 contracts (No. 87-77) because those fines were imposed pursuant to a statutory provision that was not operative during the time the crimes were committed on those counts.
I. Statutory History
On October 12, 1984, Congress enacted the SRA. While the Act is best known for its attention to disparity in sentencing, it was a product of extensive research that revealed numerous inadequacies in the federal criminal justice system, one of which was the criminal fine collection system. Prior to the SRA there was no provision for collecting interest on criminal fines. The relevant fine provision in effect at that time read as follows:
[In] all criminal cases in which judgment or sentence is rendered, imposing the payment of a fine or penalty, whether alone or with any other kind of punishment, such judgment, so far as the fine or penalty is concerned, may be enforced by execution against the property of the defendant in like manner as judgments in civil cases. Where the judgment directs imprisonment until the fine or penalty imposed is paid, the issue of execution on the judgment shall not discharge the defendant from imprisonment until the amount of the judgment is paid.
18 U.S.C. § 3565 (1982) [hereafter "old section 3565"].
In drafting the SRA, Congress tried to bolster federal fine collection mechanisms. The most significant innovations were contained in section 212 of the SRA, 98 Stat. at 1987, codified at 18 U.S.C. § 3612(f) (1987), which provides for interest on criminal fines. Section 235(a)(1) of the Act established November 1, 1986 as the effective date for the SRA as a whole. This date was subsequently changed to November 1, 1987 by section 4 of the Sentencing Reform Amendments Act of 1985, Pub.L. No. 99-217, § 4, 99 Stat. 1728, 1728 (1985). Thus, section 212 of the SRA went into effect on November 1, 1987 and is currently the law. If one is convicted of a crime today, the fine imposed will be governed pursuant to section 212 of the SRA, and interest will be imposed accordingly.
Apparently, Congress did not want to wait a full two (and as it turned out three) years to implement the new fine collection system. It enacted section 238 of the SRA, 98 Stat. at 2034, in order to make interim improvements. Section 238(a) added chapter 228 to the United States Code. Within this chapter was 18 U.S.C. § 3595, 98 Stat. at 2037, an interest on fines provision. In order to avoid ambiguity with the old law, Congress repealed the old criminal fine provision (which, as noted, contained no interest provision). Section 238(g)(1) stated that "[section] 3565 [quoted above] of title 18, United States Code, is repealed." 98 Stat. at 2039. Elsewhere in the SRA, Congress codified a new section 3565, but it addresses a different subject -- probation. See 98 Stat. at 1995.
SRA section 238 thus created a precursor to the fine collection system outlined in SRA section 212. It is logical to assume that Congress intended this alternative system to go into effect before the SRA's primary fine collection scheme (section 212), but Congress failed to say when, before November 1, 1986, the alternative system would go into operation.*fn5 Congress did provide for the future repeal of the alternative system in section 238(i), which stated that section 238 would be repealed as of November 1, 1986, the date on which the permanent fine collection system was to go into effect. However, that repeal is meaningless if the section never went into effect.*fn6 Given that the only explicit indication we have of when section 238 became operative is contained in section 235(a)(1), which implements the Act as a whole, we are left with a situation in which the interim fine collection prospectively repealed itself on the same day that it would have become effective.
Two weeks after the SRA was enacted, Congress attempted to remedy this problem by passing the CFEA. Section 12(a)(1) of the CFEA repealed chapter 228 of the United States Code, which was contained in section 238(a) of the SRA. Thus the temporary interest provision in Chapter 228 apparently never went into effect. See supra note 6. Section 12(a)(7) of the CFEA reprinted the text of the old section 3565 and codified it at 18 U.S.C. § 3565 (thereby creating a second statutory provision codified under that number) and section 2 of the CFEA amended the revised section 3565, with a provision requiring the payment of interest on all fines not immediately paid to the court.*fn7 The CFEA provision requires that "the interest shall be computed on the unpaid balance at the rate of 1.5 percent per month." 98 Stat. 3134, 3135 [hereafter "the interim section 3565"]. In addition, section 12(a)(9) of the CFEA expressly repealed SRA section 238(i) (which stated that section 238 would be repealed as of November 1, 1986). See 98 Stat. at 3140.
The CFEA amendments and partial repeal of the SRA just described went into effect almost immediately. Section 10 of the CFEA provided that "the amendments made by sections 2 through 9 of this Act shall apply with respect to offenses committed after December 31, 1984." 98 Stat. at 3138. These CFEA clarifications applied to SRA section 238, the interim fine collection provision. The CFEA was not meant to affect section 212 of the SRA. See 130 Cong Rec. H12,267 (daily ed. Oct. 11, 1984).
If the foregoing description borders on the dizzying, at least the legislative history surrounding the passage of the CFEA and the SRA helps clarify Congress' intent. The original version of the CFEA (House Resolution 5846) did not revive the old section 3565 or repeal section 238(i). See 130 Cong.Rec. 21,486-91 (1984). However, on October 11, 1984, one day prior to President Reagan's approval of the SRA, both the House and the Senate offered amendments adding section 12 (and thus old section 3565) to the CFEA. See 130 Cong.Rec. H12268, S14458 (daily ed. Oct. 11, 1984). Representative Boucher explained the significance of these amendments as follows:
The Senate amendments add . . . new sections to the [CFEA], . . . which are necessitated by the crime measures included in the [SRA]. . . . Section 12 of the bill reverses the effect of certain amendments to the current criminal code made by [the SRA]. Those amendments were intended to be transitional, and their effect will expire on the effective date of the new sentencing provisions of [the SRA]. They are, however, inconsistent with the provisions of the [CFEA] and considered inferior by all interested parties. Thus, this section returns current law to the status quo, so that it can be properly amended by H.R. 5846.
130 Cong.Rec. H12,267 (daily ed. Oct. 11, 1984) (emphases added). Representative Boucher's statement confirms that the SRA's interim measures (section 238) were superseded by the CFEA's interim measures (sections 2 through 9), which were in turn superseded by the final SRA provisions (section 212). The Sentencing Act of 1987 makes this even more clear by stating that the SRA (not the CFEA) applies to all crimes committed after November 1, 1987 (when the SRA went into effect), See Pub.L. No. 100-182, § 2a, 101 Stat. 1226, 1226.
II. Statutory Construction
Defendants note that SRA section 238(g)(1) repealed the interim section 3565 on November 1, 1987, the effective date of the SRA as a whole. Consequently, defendants argue, the district court erred by applying interim section 3565 after November 1, 1987, because that provision ceased to exist after its repeal. We find no error. We hold that interim section 3565 (of the CFEA) ceased to operate on crimes committed after November 1, 1987, but that it still operates for crimes committed between December 31, 1984 and November 1, 1987. SRA section 238(g)(1) repealed interim section 3565 as of November 1, 1987 and SRA section 212 applies to all crimes committed after that date.
Defendants assert that interim section 3565 (the CFEA's interest provision) has become completely inoperative, and would have us apply the law as it stood prior to 1984. Under this theory, if defendants had been convicted between December 31, 1984, and November 1, 1987, they could be charged with interest as provided for by the CFEA. However, since they were convicted after November 1, 1987, defendants argue that they cannot be charged with interest under either statute because the crime took place before the effective date of the permanent SRA fine provision, but the conviction for that crime came after the interest provision in interim § 3565 had been repealed.
We reject defendants' view because we see no reason to believe that Congress intended a convicted defendant's punishment to depend on the fortuitous date of his or her prosecution. Congress could not have intended to implement both interim and final provisions for interest on criminal fines, but leave a window of time in the middle during which neither provision might apply. This scenario is even more implausible when one realizes that the availability of such a window would not depend on anything the convicted defendant had done, but only on the happenstance of when the government brought the prosecution.
For the foregoing reasons, we conclude that interim section 3565, although repealed by the SRA, continues to apply to crimes committed between December 31, 1984 and November 1, 1987. Consequently, the district court correctly ordered interest to be paid on the portion of the appellants' fines pertaining to the 1986 conspiracy.
III. The Fines on No. 87-77
Although the point was not raised by appellants, the government concedes that the district court inadvertently reversed the counts when it imposed the fines on White and Carite. The court thereby erroneously imposed a $250,000 fine on No. 87-77, the count dealing with the 1983-84 bid riggings, even though those events occurred before the statute authorizing such a fine became effective.*fn8 Concomitantly, the court imposed the $100,000 statutory fine on No. 87-76, which dealt with the 1986 bid riggings, although it could have imposed a $250,000 fine on that count. See supra n.8. The government notes that this result is contrary to the understanding evinced by the district court in the guilty plea colloquy, at which time the court indicated that a $250,000 fine could (or would) be imposed on No. 87-76.
The government's concession is as follows :
[The] United States has recently discovered that the district court made an inadvertent error when he imposed an alternative fine pursuant to 18 U.S.C. 3623(a) on appellants White and Carite. Section 18 U.S.C. § 3623(a), which has been replaced by 18 U.S.C. § 3571, authorized a district court to impose an alternative fine of either $250,000, or twice the gain to defendants or loss to the victims. Like interim Section 3565 previously discussed, Section 3623(a) applies to offenses committed after December 31, 1984 but before November 1, 1987 (Pub.L. No. 98-596, §§ 10, 98 Stat. 3138).
In this case, indictment No. 87-76 charged an offense that occurred after December 31, 1984 but before November 1, 1987 and the district court plainly intended to rely on the alternative fine provision of 3623(a) when he sentenced appellants White and Carite on this indictment. But while the district court intended to impose a fine pursuant to 3623(a) (see Supp.App. 10-11), it mistakenly referred to indictment No. 87-77 rather than indictment No. 87-76 (App. 104a). Indictment No. 87-77 does not charge an offense that occurred between the relevant dates when Section 3623(a) was effective. Appellants have never contended that their total fines were outside permissible statutory limits, or that the alternative fine provision was inapplicable to indictment No. 87-76. Indeed, everyone understood that to be the case, and no mention of this inadvertent error has ever been made in any of appellants' voluminous sentencing pleadings, at any of the hearings before the district court or in appellants' briefs in this Court.
Appellee's Br. at 37-38.
The government is correct. Under the circumstances, we will remand the case to the district court with the direction that it vacate the portion of its judgments that the government concedes is erroneous, i.e. the fines imposed on White and Carite on No. 87-77. The district court should also consider the matter of resentencing.*fn9 Cf. United States v. Busic, 639 F.2d 940, 953 (3d Cir.), cert. denied, 452 U.S. 918, 69 L. Ed. 2d 422, 101 S. Ct. 3055 (1981). In all other respects, the judgment of the district court will be affirmed. The mandate shall issue forthwith.