UNITED STATES OF AMERICA, PETITIONER V. BEN M. HOGAN COMPANY, INC. No. 85-1067 In the Supreme Court of the United States October Term, 1985 The Solicitor General, on behalf of the United States, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eighth Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit TABLE OF CONTENTS Question Presented Opinion below Jurisdiction Statement Reasons for granting the petition Conclusion Appendix A Appendix B OPINION BELOW The opinion of the court of appeals (App., infra, 1a-23a) is reported at 769 F.2d 1293. JURISDICTION The judgment of the court of appeals was entered on July 25, 1985. A petition for rehearing was denied on September 20, 1985 (App., infra, 25a). On November 14, 1985, Justice Blackmun extended the time within which to file a petition for a writ of certiorari to and including December 19, 1985. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTION PRESENTED Whether a jury instruction containing an erroneous presumption with respect to the interstate commerce element of a Sherman Act charge may constitute harmless error. STATEMENT Following a jury trial in the United States District Court for the Eastern District of Arkansas, respondent Ben M. Hogan Co., Inc., was convicted of conspiring to fix bids in the award of Arkansas State Highway and Transportation Department (Highway Department) highway construction projects in central Arkansas, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. Respondent was fined $800,000 on this count (App., infra, 1a). The court of appeals reversed. /1/ 1. a. The government's proof of the bid-rigging conspiracy was presented largely through the testimony of the government's principal witness, Leonard Thompson, president of A.P.T. Construction Co. (A.P.T.) and one of the co-conspirators. /2/ According to Thompson, William Moore, vice-president of respondent, approached him in May 1979 and asked that A.P.T. submit a complementary bid (i.e., a higher bid than respondent's) on highway project 60173 (App., infra, 2a; Tr. (Thompson) 21). /3/ In exchange for A.P.T.'s complementary bid, Moore promised to return the favor at a later date (App., infra, 2a). Thompson agreed to Moore's request and submitted a bid that was higher than respondent's (id. at 21a). Only respondent and A.P.T. submitted bids, and respondent was awarded the construction contract (App., infra, 2a; GX 1). In July 1980, Thompson asked Moore to submit a complementary bid on project 60179, and in September 1980 he again asked Moore to submit another complementary bid, this time on project 60234 (App., infra, 2a-3a; Tr. (Thompson) 28-29, 40-41). /4/ In both instances, Moore agreed to, and did, submit complementary bids (id. at 29-30, 41). /5/ A.P.T. was the low bidder on both projects and was awarded the construction work (App., infra, 3a; GX 4; Tr. (Thompson) 39, 46-47). b. The government also presented evidence to prove that the co-conspirators' activities were in or affected interstate commerce. Specifically, the government proved that element of the offense in three separate ways. First, federal revenue sharing funds had been used to pay for the three highway projects described above (2 Tr. 134-140; GX 1, 4, 7). Second, A.P.T. had purchased heavy equipment used on the highway projects that was manufactured out-of-state and then shipped to Arkansas (2 Tr. 149-151; 3 Tr. 160-162; Tr. (Thompson) 13-14; GX 14, 15, 16, 17). And third, the projects involved work on highways that are part of the interstate highway system (1 Tr. 77-78; GX 19). c. Respondent's defense at trial was that there was no agreement to rig the bids on the three highway construction projects (see App., infra, 3a-4a). Respondent conceded that Moore and Thompson had spoken about Highway Projects 60173 and 60234, but denied that they had conspired to rig bids. As defense counsel explained in his opening and closing statements to the jury, Moore solicited a complementary bid from Thompson for the sole purpose of having more than one bid submitted to the state Highway Department, which preferred to have more than one bid on a job (1 Tr. 28-29; 6 Tr. 449-450, 457-459; see App., infra, 2a n.w). At no time during trial did respondent challenge the government's proof of the interstate commerce element of the Sherman Act charge. For instance, respondent's counsel did not claim in their opening and closing statements to the jury or in their motion for a new trial that the requisite effect on interstate commerce would not be or was not proved (1 Tr. 24-38; 6 Tr. 440-462; R. 223-25, 227-286). Although respondent briefly argued to the district court at two points that the government's allegation or proof of an effect on commerce was legally insufficient, /6/ it did not present that argument to the jury as a basis for acquittal. In sum, the fact that the highway projects were in or affected interstate commerce was simply not a contested issue before the jury. 2. At the conclusion of the trial, the district court instructed the jury concerning the interstate commerce element of a Sherman Act violation. Among other things, the jury was instructed that the government was required to prove beyond a reasonable doubt "that the conspiracy * * * either affected interstate commerce or occurred within the flow of interstate commerce" and that "(t)he Sherman Act is not applicable unless it is first established that there is a restraint or attempted restraint of interstate commerce" (App., infra, 22a). After instructing the jury on the interstate commerce element of the offense, the court then instructed the jury concerning the type of conduct prohibited by the Sherman Act. Specifically, the court defined conduct that is a per se violation of the Sherman Act by giving the following standard jury instruction (App., infra, 4a-5a; 6 Tr. 492): /7/ Certain types of conduct are regarded as unreasonable per se. This means that the mere doing of the act itself constitutes an unreasonable restraint on interstate commerce, and it is not necessary to consider why the acts were committed, or their effect on the industry, or any other explanatory matters. Conduct regarded as unreasonable per se includes price fixing, division of markets and bid rigging. Although respondent had not argued to the jury that the government's proof with respect to the interstate commerce element of the offense was insufficient, it objected to this instruction on the ground that it created an impermissible presumption of an effect on interstate commerce. The district court overruled respondent's objection (App., infra, 5a n.5). 3. A divided panel of the court of appeals reversed respondent's conviction on the Sherman Act count on the ground that the jury instructions contained an unlawful conclusive presumption that the agreement to rig bids on the construction projects affected interstate commerce, in violation of Sandstrom v. Montana, 442 U.S. 510 (1979) (App., infra, 4a-8a). Although the jury had been separately and clearly instructed that the government was required to prove as an element of the offense, beyond a reasonable doubt, that the conspiracy was in or affected interstate commerce, the majority found that the challenged instruction "could have been understood by the jury to include an unconstititonal conclusive presumption of an effect on interstate commerce" (id. at 6a). Turning to the question whether the error was harmless, the panel majority observed (id. at 7a): If ever there could be a case where the giving of a jury instruction that included a conclusive presumption concerning an element of the crime amounted to harmless error, this would be the case, for in the record before us there appears to be ample evidence from which the jury could have found -- and perhaps did find -- that the element was proved. However, the panel majority construed Connecticut v. Johnson, 460 U.S. 73 (1983) (plurality opinion), as requiring a new trial whenever a jury instruction includes a conclusive presumption on an element of the offense -- even where, as in this case, the error would otherwise be harmless (App., infra, 7a). /8/ REASONS FOR GRANTING THE PETITION This case presents an important, unsettled, and frequently recurring question concerning the application of the harmless error rule to a jury instruction containing a presumption with respect to an element of the offense. In Sandstrom v. Montana, 442 U.S. 510 (1979), this Court held that an instruction containing an improper presumption concerning an essential element of the offense was unconstitutional. /9/ However, Sandstrom did not address the question whether such an instruction could be harmless (442 U.S. at 526-527), and this Court has not finally resolved the issue. See Francis v. Franklin, No. 83-1590 (Apr. 29, 1985), slip op. 17; Engle v. Koehler, 466 U.S. 1 (1984) (equally-divided Court); compare Connecticut v. Johnson, 460 U.S. 73, 83-88 (1983) (plurality opinion), with id. at 94-99 (Powell, J., dissenting). The court of appeals, ruling in this case that an erroneous presumption always requires reversal of a conviction conflicts with the decisions of every other federal court of appeals and most state courts that have addressed the issue. /10/ This case therefore clearly presents an issue warranting review by this Court. However, we do not request plenary review at this time. The question presented here is whether a jury instruction containing an erroneous presumption on an element of the charged offense automatically requires reversal even where, as in this case, the defendant does not contest that element of the offense and it can be said beyond a reasonable doubt that the jury would have or did find the element without regard to the defective instruction. This issue is not materially different from the one that is already before the Court in Rose v. Clark, cert. granted, No. 84-1974 (Oct. 7, 1985), in which the jury instructions contained a rebuttable presumption of malice aforethought. The court of appeals acknowledged that the error here was harmless and that reversal would not be warranted if a harmless error inquiry were permissible (App., infra, 7a). That conclusion is plainly correct. There was ample proof of the element involved in the challenged jury instruction, as the court of appeals stated (ibid.). /11/ In fact, respondent did not argue to the jury that the government's proof of this element of the offense was insufficient; nor did it challenge the compelling character of the government's proof on appeal. Moreover, the instruction could not have prejudiced respondent's defense that Moore and Thompson did not conspire to rig the bids on the highway construction projects, because the instruction was irrelevant to that claim. Beyond that, the jury instructions in this case plainly did not amount to a directed verdict on the interstate commerce element of the offense. The jury was expressly instructed that it was the sole judge of the facts (6 Tr. 470), that the government was required to prove every element of the charged offenses beyond a reasonable doubt (6 Tr. 475-476), and that the question whether the alleged conspiracy was in or affected interstate commerce was for it to decide (6 Tr. 484, 491-492). At no time was the jury told that it was compelled to find that the alleged conspiracy was in or affected interstate commerce, that the government had proven this element of the offense, or that the issue was not for its consideration. In fact, as Judge Bright pointed out in his dissent (App., infra, 21a-22a; see 6 Tr. 484, 491-492), the district court expressly told the jury that one of the "(t)hree elements * * * required to be proved beyond a reasonable doubt in order to establish the offense of conspiracy charged in the indictment" was "that the conspiracy * * * either affected interstate commerce or occurred within the flow of interstate commerce." The only reason given by the court of appeals for refusing to affirm respondent's Sherman Act conviction was that the plurality opinion in Connecticut v. Johnson requires reversal in every case in which an erroneous presumption is contained in the jury charge. However, that is the issue presently before the Court in Clark. We therefore request that the Court hold the petition in this case pending its decision in Clark and dispose of this case as appropriate in light of the Court's decision in that case. CONCLUSION The petition for a writ of certiorari should be held and disposed of as appropriate in light of the Court's disposition of Rose v. Clark, cert. granted, No. 84-1974 (Oct. 7, 1985). Respectfully submitted. CHARLES FRIED Solicitor General DECEMBER 1985 /1/ Respondent was also convicted on three counts of mail fraud, in violation of 18 U.S.C. 1341, and was fined $1,000 on each count (App., infra, 1a). The court of appeals affirmed respondent's convictions on these counts (id. at 20a), and they are not involved in this petition. /2/ A.P.T. was charged in the same indictment and with the same offenses as respondent. As the result of a plea bargain agreement, A.P.T. entered a guilty plea to the Sherman Act count and to one mail fraud count prior to trial. App., infra, 2a n.1. /3/ The bidding process through which Arkansas state highway construction contracts are awarded is described in the court of appeals' opinion. App., infra, 2a n.2. /4/ Thompson's testimony was supported by respondent's bid work sheet for projects 60179 and 60234, which A.P.T. won. Both work sheets reflect handwritten changes in line item amounts -- i.e., figures were changed to increase bids for both projects (4 Tr. 288, 291; GX 21, 22). /5/ Thompson also made a similar arrangement with Jack Freshour, president of Freshour Construction Company, for project 60179. (App., infra, 3a). /6/ Respondent filed a pretrial motion to dismiss the Sherman Act count of the indictment on the ground that it failed to allege the requisite effect on interstate commerce. The district court denied the motion in a written order, holding that the indictment's allegations were sufficient (R. 143-145). In support of its motion for a judgment of acquittal at the conclusion of the government's case, counsel argued in passing that the government had failed to prove "any effect on interstate trade and commerce" (3 Tr. 164). The district court denied the motion, stating that counsel could make his arguments to the jury (3 Tr. 168). As noted in the text, respondent's counsel elected not to contest the government's proof on the interstate commerce element and never mentioned the issue to the jury. /7/ See W. LaBuy, Manual on Jury Instructions -- Criminal Section 8.01-4,36 F.R.D. 457 (1965). /8/ In a separate opinion, Judge McMillian concurred in the decision to reverse on the basis of the challenged instruction (App., infra, 20a). Judge Bright dissented (id. at 21a-23a). Emphasizing that the instructions must be read as a whole, Judge Bright noted that before the district court gave the per se instructions it had explained that, as one element of the offense, the conspiracy must be in or affect interstate commerce. The district court then had given the jury a detailed definition of interstate commerce (id. at 21a-22a). After giving these instructions, Judge Bright noted, the district court gave the challenged instruction, which "was merely part of the court's definition of an 'unreasonable restraint'" (id. at 22a). In Judge Bright's view, the "jury had to find that the defendant's business was in interstate commerce before it considered the per se instruction" (id. at 23a). /9/ In Sandstrom, the jury was instructed that "the law presumes that a person intends the ordinary consequences of his voluntary acts." 442 U.S. at 512. This instruction, the Court held, was unconstitutional because a reasonable juror could have interpreted it as either lowering the government's burden of proof or shifting the burden of proof to the accused on an element of the offense. Id. at 517-519. /10/ See generally Appendix to the Brief for the United States as Amicus Curiae, Rose v. Clark, cert. granted, No. 84-1974 (Oct. 7, 1985). We argued in our brief in Clark that an erroneous presumption does not automatically call for reversal. A copy of that brief has been provided to counsel for the respondent in this case. /11/ See, e.g., United States v. Young Brothers, Inc., 728 F.2d 682, 688-689 (5th Cir. 1984), cert. denied, No. 84-39 (Oct. 9, 1984); United States v. Georgia Waste Disposal Systems, Inc., 731 F.2d 1580, 1583 (11th Cir. 1984); United States v. Cargo Service Stations, Inc., 657 F.2d 676, 679-680 (5th Cir. 1981), cert. denied, 455 U.S. 1017 (1982); United States v. Finis P. Ernest, Inc., 509 F.2d 1256, 1258-1261 (7th Cir.), cert. denied, 423 U.S. 874 (1975). The Court has often held that the power of Congress to regulate interstate commerce is extremely broad. See, e.g., Russell v. United States, No. 84-435 (June 3, 1985); McLain v. Real Estate Board of New Orleans, Inc., 444 U.S. 232 (1980); Hospital Building Co. v. Rex Hospital Trustees, 425 U.S. 738 (1976); Perez v. United States, 402 U.S. 146 (1971). Moreover, to the extent that this jurisdictional element of the offense simply establishes that Congress has power under the Commerce Clause to regulate the conduct in question and does not implicate the culpability of the accused, the concerns discussed in Sandstrom and In re Winship, 397 U.S. 358 (1970), upon which Sandstrom was based, have considerably less force. APPENDIX