Plea Agreement

Date: 
Friday, April 12, 2002
Document Type: 
Plea Agreements / Rule 11 Memoranda
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MARC SIEGEL (CSBN 142071)
LISA V. TENORIO (CSBN 205955)
KESLIE STEWART (CSBN 184090)
DANA R. WAGNER (CSBN 209099)
DINA WONG (CSBN 202878)
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
Telephone: (415) 436-6660

Attorneys for the United States

Original Filed April 12, 2002

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA


UNITED STATES OF AMERICA,    

                  v.

ELF ATOCHEM S.A.,

                  Defendant.


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No. CR 02-0079 SI

PLEA AGREEMENT

The United States of America and ELF ATOCHEM S.A. ("ELF"), a corporation organized and existing under the laws of France, hereby enter into the following Plea Agreement under Rule 11(e)(1)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):

RIGHTS OF DEFENDANT

1. ELF understands its rights:

  1. To be represented by an attorney;
  2. To be charged by Indictment;
  3. To plead not guilty to any criminal charge brought against it;
  4. To have a trial by jury, at which it would be presumed not guilty of the charges and the United States would have to prove every essential element of the charged offenses beyond a reasonable doubt in order for it to be found guilty;
  5. To confront and cross-examine witnesses against it and to subpoena witnesses in its defense at trial;
  6. To be charged in the State and District where the offense occurred;
  7. As a corporation organized and existing under the laws of France, to decline to accept service of the Summons in this case, and to contest the jurisdiction of the United States to prosecute this case against it in United States District Court;
  8. To appeal its conviction if it is found guilty at trial; and
  9. To appeal the imposition of sentence against it.

WAIVER OF RIGHTS AND OFFENSES CHARGED

2. ELF waives the rights set out in Paragraph 1(b)-(h). ELF also waives the right to appeal the imposition of the sentences against it so long as the sentences imposed are consistent with the recommendation in Paragraph 9. Under Rule 7(b), Fed. R. Crim. P., ELF will waive indictment. It will plead guilty to a two-count Information filed in the United States District Court for the Northern District of California. Count I of the Information will charge ELF with participating in a conspiracy to suppress and eliminate competition by fixing the prices and allocating market shares of monochloroacetic acid and sodium monochloroacetate (collectively referred to as "MCAA") to be sold in the United States and elsewhere, beginning in or about September 1995 and continuing until in or about August 1999, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. Count II of the Information will charge ELF with participating in a conspiracy to suppress and eliminate competition by fixing the prices of organic peroxides ("OP"), specifically t-butyl perbenzoate and t- butyl peracetate dedicated to styrene polymerization (ELF brands Luperox P and Luperox 7M50) ("the Specified OP Products") to be sold in the United States and elsewhere, beginning in or about August 1997 and continuing until in or about, March 1998, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.

3. Under the terms of this Plea Agreement, ELF will plead guilty to the criminal charges described in Paragraph 2 and will make a factual admission of guilt to the Court in accordance with Rule 11, Fed. R. Crim. P., as set forth in Paragraphs 4 and 5.

FACTUAL BASIS FOR OFFENSES CHARGED

4. Had this case gone to trial, the United States would have presented evidence to prove the following facts in support of Count I of the Information:

  1. For purposes of this Plea Agreement, the "Relevant Period" with respect to Count I of the Information begins in or about September 1995 and continues until in or about August 1999. During the Relevant Period, ELF was a corporation organized and existing under the laws of France. ELF has its principal place of business in Puteaux, France. On April 17, 2000, as a result of the merger of TOTALFINA and Elf Aquitaine, ELF's corporate name was changed to ATOFINA. ATOFINA is organized and exists under the laws of France with its principal place of business in Puteaux, France. During the Relevant Period, ELF was a producer of MCAA and exported MCAA into the United States and elsewhere. MCAA is a reactive compound that is used to form a number of intermediate chemicals. Markets for MCAA and derivatives include plastic additives, herbicides, and cosmetics;
  2. During the Relevant Period, ELF, through several of its officers or employees, participated in a conspiracy among major MCAA producers, the primary terms of which were to fix the prices and allocate the market shares of MCAA to be sold in the United States and elsewhere. In furtherance of the conspiracy, ELF, through several of its officers or employees, engaged in discussions and attended meetings with representatives of other major MCAA producers. During these discussions and meetings, agreements were reached to fix the prices and allocate the market shares for MCAA to be sold in the United States and elsewhere; and
  3. During the Relevant Period, MCAA sold by one or more of the conspirator firms, and equipment and supplies necessary to the production and distribution of MCAA, as well as payments for MCAA, traveled in interstate and foreign commerce. The business activities of ELF and its coconspirators in connection with the production and sale of MCAA affected by this conspiracy substantially affected interstate and foreign trade and commerce, and the MCAA affected by this conspiracy was within the flow of interstate and foreign trade and commerce.

5. Had this case gone to trial, the United States would have presented evidence to prove the following facts in support of Count II of the Information:

  1. For purposes of this Plea Agreement, the "Relevant Period" with respect to Count II of the Information begins in or about August 1997 and continues until in or about, March 1998. During the Relevant Period, ELF was a corporation organized and existing under the laws of France. ELF has its principal place of business in Puteaux, France. On April 17, 2000, as a result of the merger of TOTALFINA and Elf Aquitaine, ELF's corporate name was changed to ATOFINA. ATOFINA is organized and exists under the laws of France with its principal place of business in Puteaux, France. During the Relevant Period, ELF, through its affiliates, manufactured and sold the Specified OP Products in the United States. The Specified OP Products are essential chemical inputs used in the manufacture of certain polystyrene products, including containers and packaging materials;
  2. During the Relevant Period, ELF, through several of its officers or employees, participated in a conspiracy between ELF and major OP producers, the primary terms of which were to fix the prices of the Specified OP Products to be sold in the United States and elsewhere. In furtherance of the conspiracy, ELF, through several of its officers or employees, engaged in discussions and attended meetings with representatives of major OP producers. During these discussions and meetings, agreements were reached to fix the prices of the Specified OP Products to be sold in the United States and elsewhere; and
  3. During the Relevant Period, the Specified OP Products sold by one or more of the conspirator firms, and equipment and supplies necessary to the production and distribution of the Specified OP Products, as well as payments for the Specified OP Products, traveled in interstate and foreign commerce. The business activities of ELF and its coconspirators in connection with the production and sale of the Specified OP Products affected by this conspiracy substantially affected interstate and foreign trade and commerce, and the Specified OP Products affected by this conspiracy were within the flow of interstate and foreign trade and commerce.

POSSIBLE MAXIMUM SENTENCES

6. ELF understands that the maximum penalty that may be imposed against it upon conviction for each violation of the Sherman Antitrust Act is a fine equal to the largest of:

  1. $10 million (15 U.S.C. § 1);
  2. Twice the gross pecuniary gain the conspirators derived from the crime; or
  3. Twice the gross pecuniary loss caused to the victims of the crime (18 U.S.C. § 3571(d)).

7. In addition, ELF understands that for each violation:

  1. Under § 8B1.1(a)(2) of the United States Sentencing Commission Guidelines ("U.S.S.G."), the Court may order it to pay restitution to the victims of the offense;
  2. Under 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, the Court is required to order ELF to pay a $400 special assessment upon conviction for the charged crime; and
  3. Under 18 U.S.C. § 3561(c)(1), the Court may impose a term of probation of at least one year, but not more than five years.

SENTENCING GUIDELINES

8. Sentencing for the offenses to be charged will be conducted based on the U.S.S.G. Manual in effect on the day of sentencing. Under U.S.S.G. § 1B1.8, self-incriminating information provided to the United States under this Plea Agreement will not be used to increase the volume of affected commerce attributable to ELF or in determining the applicable Guidelines range, except to the extent provided for in U.S.S.G. § 1B1.8(b).

SENTENCING AGREEMENT

9. Under Rule 11(e)(1)(C), Fed. R. Crim. P., the United States and ELF agree that the appropriate dispositions of Counts I and II are, and agree jointly to recommend that the Court impose, under 18 U.S.C. § 3571(d), the following sentences ("Agreed-Upon Sentences"):

  1. On Count I, a sentence requiring ELF to pay to the United States a fine of five million dollars ($5,000,000), payable in full before the fifteenth day after the date of judgment, with no term of probation. ELF understands that the Court will order it to pay a $400 special assessment, under 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, in addition to any fine imposed;
  2. On Count II, a sentence requiring ELF to pay to the United States a fine of three million, five hundred thousand dollars ($3,500,000), payable in full before the fifteenth day after the date of judgment, with no term of probation. ELF understands that the Court will order it to pay a $400 special assessment, under 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, in addition to any fine imposed;
  3. The United States and ELF understand that the payment of the Agreed-Upon Sentences as set out in Paragraphs 9(a) and 9(b) will be made by ATOFINA; and
  4. The United States and ELF also understand that the Court retains complete discretion to accept or reject the Agreed-Upon Sentences in this Plea Agreement. If the Court does not accept the Agreed-Upon Sentences, this Plea Agreement will be void and ELF will be free to withdraw its guilty pleas (Fed. R. Crim. P. 11(e)(4)). If ELF does withdraw its pleas of guilty, this Plea Agreement, the guilty pleas, and any statements made in connection with or in furtherance of the pleas or this Plea Agreement, or in the course of discussions leading to the pleas or this Plea Agreement, shall not be admissible against ELF in any criminal or civil proceeding (Fed. R. Crim. P. 11(e)(6)).

10. Section 5K2.0 of the U.S.S.G. provides for a sentence above the range established by the applicable guideline if there exists an aggravating circumstance not adequately taken into consideration in formulating the Guidelines. The United States will make a motion pursuant to U.S.S.G. § 5K2.0 requesting that the Court make an upward departure from the sentence calculated pursuant to the Guidelines for Count II and impose the agreed-upon sentence set out above. Defendant and coconspirators agreed to fix the prices of the Specified OP Products as a first step toward their larger goal of fixing U.S. prices for a broader range of organic peroxide products used in the polystyrene end-use market. Because the defendant and coconspirators succeeded in charging only certain customers the fixed prices of those two products, they never implemented their larger goal of fixing the prices of additional organic peroxide products in that end-use market. Thus, the applicable Guidelines range in Count II does not adequately reflect the full scope, seriousness, and intended impact of the conspiracy. On this basis, the United States and defendant agree that an upward departure is appropriate in this case.

11. The United States and ELF jointly submit that this Plea Agreement, together with the record that will be created by the United States and ELF at the plea and sentencing hearings, and the further disclosure described in Paragraph 12, will provide sufficient information concerning ELF, the offenses charged in this case, and ELF's role in the offenses to enable the meaningful exercise of sentencing authority by the Court under 18 U.S.C. § 3553. The United States will not object to ELF's request that the Court accept ELF's pleas of guilty and impose the sentences on an expedited schedule as early as the date of arraignment, based upon the record provided by ELF and the United States, under the provisions of Rule 32(b)(1), Fed. R. Crim. P., U.S.S.G. § 6A1.1, and Rule 32-1(b) of the Criminal Local Rules. The Court's denial of the request to impose the sentences on an expedited schedule will not void this Plea Agreement.

12. Subject to the ongoing, full, and truthful cooperation of ELF described in Paragraph 14, and before sentencing in the case, the United States will fully advise the Court of the fact, manner, and extent of ELF's ongoing cooperation with the United States' investigations and prosecutions, all material facts relating to ELF's involvement in the charged offenses, and all other relevant conduct.

13. In light of the availability of civil causes of actions, which potentially provide for a recovery of a multiple of actual damages, and at least one of which has already been filed, see Crompton Corp. v. Clariant Corp., et al., No. 01-84-B-M2 (M.D. La. filed Jan. 24, 2001), the United States agrees that it will not seek a restitution order for the offenses charged in the Information.

DEFENDANT'S COOPERATION

14. ELF and its related entities (for purposes of this Plea Agreement, "Related Entities" means collectively ELF's parents; its successors; and its subsidiaries that have engaged in the sale or production of MCAA or the sale or production of OP) will fully and truthfully cooperate with the United States in the prosecution of this case, the current federal investigations of violations of federal antitrust and related criminal laws in the MCAA industry and the OP industry, any other federal investigation resulting from these current investigations, and any litigation or other proceedings arising or resulting from any such investigations to which the United States is a party ("Federal Proceeding"). This cooperation shall include, but not be limited to:

  1. Producing to the United States all non-privileged documents, information, and other materials, wherever located, in the possession, custody, or control of ELF, or any of ELF's Related Entities, requested by the United States in connection with any Federal Proceeding; and
  2. Using its best efforts to secure the ongoing, full, and truthful cooperation, as defined in Paragraph 15, of the current or former directors, officers, or employees of ELF or any of ELF's Related Entities (excluding Patrick Stainton and Jacques Jourdan), including making these persons available in the United States and at other mutually agreed-upon locations, at ELF's expense, for interviews and testimony in grand jury, trial, and other judicial proceedings in connection with any Federal Proceeding.

15. The ongoing, full and truthful cooperation of each person described in Paragraph 14(b) will be subject to the procedures and protections of this paragraph, and shall include, but not be limited to:

  1. Producing in the United States and at other mutually agreed-upon locations all non-privileged documents, including claimed personal documents, and other materials requested by the United States;
  2. Making himself or herself available for interviews in the United States and at other mutually agreed-upon locations, upon the request of the United States;
  3. Responding fully and truthfully to all inquiries of the United States in connection with any Federal Proceeding, without falsely implicating any person or intentionally withholding any non-privileged information, subject to the penalties of making false statements or declarations (18 U.S.C. § 1001) or obstruction of justice (18 U.S.C. § 1503);
  4. Otherwise voluntarily providing the United States with any materials or information not requested in (a) - (c) of this paragraph that he or she may have that is related to any Federal Proceeding; and
  5. When called upon to do so by the United States in connection with any Federal Proceeding, testifying in grand jury, trial, and other judicial proceedings in the United States fully, truthfully, and under oath, subject to the penalties of perjury (18 U.S.C. § 1621), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), and contempt (18 U.S.C. §§ 401-402).

GOVERNMENT'S AGREEMENT

16. The United States agrees to the following:

  1. Upon acceptance of the guilty pleas called for by this Plea Agreement and imposition of the Agreed-Upon Sentences, and subject to the exceptions noted in Paragraph 16(c), the United States will not bring criminal charges against any current or former director, officer, or employee of ELF or ELF's Related Entities (excluding Patrick Stainton and Jacques Jourdan) for any act or offense committed before the Court's acceptance of this Plea Agreement and while that person was acting as a director, officer, or employee of ELF or ELF's Related Entities that was undertaken in furtherance of any attempted or completed antitrust conspiracy involving the manufacture or sale of MCAA or OP ("Relevant Offense");
  2. Should the United States determine that any current or former director, officer, or employee of ELF or ELF's Related Entities has information relevant to any Federal Proceeding, the United States may request that person's cooperation under the terms of this Plea Agreement by written request delivered to counsel for the individual (with a copy to the undersigned counsel for ELF) or, if the individual is not known by the United States to be represented, to the undersigned counsel for ELF;
  3. If any person requested to provide cooperation under Paragraph 16(b) fails to comply with his or her obligations under Paragraph 15, then the terms of this Plea Agreement as they pertain to that person, and the agreement not to prosecute that person in this Plea Agreement, shall be rendered void;
  4. Except as provided in Paragraph 16(e), information provided by a person described in Paragraph 16(b) to the United States under the terms of this Plea Agreement pertaining to any Relevant Offense, or any information directly or indirectly derived from that information, may not be used in a criminal case against that person, except in a prosecution for perjury (18 U.S.C. § 1621), making a false statement or declaration (18 U.S.C. §§ 1001, 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402);
  5. If any person who provides information to the United States under this Plea Agreement fails to comply fully with his or her obligations under Paragraph 15 of this Plea Agreement, the agreement in Paragraph 16(d) not to use that information or any information directly or indirectly derived from it against that person in a criminal case shall be rendered void;
  6. The non-prosecution terms of this paragraph do not apply to any civil liability to the United States, to any violation of the federal tax or securities laws, or to any crime of violence; and
  7. Documents provided under Paragraphs 14(a) and 15(a) shall be deemed responsive to outstanding grand jury subpoenas issued to ELF or any of its Related Entities.

17. Upon acceptance of the guilty pleas called for by this Plea Agreement and imposition of the Agreed-Upon Sentences, and subject to the cooperation requirements of Paragraph 14, the United States agrees that it will not bring further criminal charges against ELF nor will it bring any criminal charges against any of its Related Entities for any Relevant Offense committed before the Court's acceptance of this Plea Agreement. The non-prosecution terms of this paragraph do not apply to any civil liability to the United States, to any violation of the federal tax or securities laws, or to any crime of violence.

18. The United States agrees that, when any person travels to the United States for interviews, grand jury appearances, or court appearances under this Plea Agreement, the United States will take no action, based upon any offenses subject to this Plea Agreement, to subject that person to arrest, service of process, or prevention from departing the United States. This paragraph does not apply to an individual's commission of perjury (18 U.S.C. § 1621), making false statements or declarations (18 U.S.C. § 1001), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402) in connection with any testimony provided under this Plea Agreement in trial, grand jury or other judicial proceedings in the United States.

19. ELF understands that it may be subject to administrative action by federal or state agencies other than the United States Department of Justice, Antitrust Division, based upon convictions resulting from this Plea Agreement, and that this Plea Agreement in no way controls whatever action, if any, other agencies may take. However, the United States agrees that, if requested, it will advise the appropriate officials of any governmental agency considering administrative action against ELF based upon any conviction resulting from this Plea Agreement of the fact, manner, and extent of the cooperation of ELF and its Related Entities as a matter for that agency to consider before determining what administrative action, if any, to take.

REPRESENTATION BY COUNSEL

20. ELF has been represented by counsel and is fully satisfied that its attorneys have provided competent legal representation. ELF has thoroughly reviewed this Plea Agreement and acknowledges that counsel has advised it of the nature of the charges, any possible defenses to the charges, and the nature and range of possible sentences.

VOLUNTARY PLEAS

21. ELF's decision to enter into this Plea Agreement and to tender pleas of guilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or representations other than the representations contained in this Plea Agreement. The United States has made no promises or representations to ELF as to whether the Court will accept or reject this Plea Agreement.

VIOLATION OF PLEA AGREEMENT

22. ELF agrees that, should the United States determine in good faith, during the period any Federal Proceeding is pending, that ELF has failed to provide full cooperation, as described in Paragraph 14, or otherwise has violated any other provision of this Plea Agreement, the United States may notify counsel for ELF in writing by personal or overnight delivery or facsimile transmission of its intention to void its obligations under this Plea Agreement (except its obligations under this paragraph). ELF may seek court review of any determination made by the United States under this paragraph.

ENTIRETY OF AGREEMENT

23. This Plea Agreement constitutes the entire agreement between the United States and ELF concerning the disposition of the criminal charges in this case. This Plea Agreement cannot be modified except in writing, signed by the United States and ELF.

24. The undersigned is authorized to enter this Plea Agreement on behalf of ELF as evidenced by the Resolution of Legal Powers by the President of ATOFINA attached to, and incorporated by reference in, this Plea Agreement.

25. A facsimile signature shall be deemed an original signature for the purpose of executing this Plea Agreement.

DATED: 03/27/02

ATOFINA

BY: _______________/s/________________
Jean-Pierre Lacroux
Directeur Juridique
ATOFINA S.A.
Respectfully submitted,

U.S. DEPARTMENT OF JUSTICE
ANTITRUST DIVISION

BY: _______________/s/________________
Marc Siegel
Lisa V. Tenorio
Keslie Stewart
Dana R. Wagner
Dina Wong
Attorneys

450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, California 94102
(415) 436-6660

COUNSEL FOR ATOFINA

BY: _______________/s/________________
Donald C. Klawiter
Morgan, Lewis & Bockius, LLP
1111 Pennsylvania Ave., N.W.
Washington, D.C. 20004
(202) 739-5222

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Updated June 30, 2015