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United States v. Beaver

United States Court of Appeals for the Seventh Circuit

October 22, 2007, Argued; February 4, 2008, Decided

No. 07-1381

Opinion

 [*732] KANNE, Circuit Judge. A federal jury found Christopher Beaver guilty of participating in a price-fixing conspiracy, 15 U.S.C. § 1, and making false statements to a federal law enforcement agent who was investigating that conspiracy, 18 U.S.C. § 1001(a)(1). Beaver challenges his convictions on appeal, arguing that the government failed to prove at trial that a price-fixing conspiracy existed, that he joined the conspiracy, or that he made false statements. We affirm.

I. HISTORY

In October 2003, Gary Matney, a manager at the Indianapolis office of Prairie Material Ready-Mix Concrete,  [**2] approached the Federal Bureau of Investigation to report the existence of a price-fixing conspiracy involving several of Prairie Material's competitors. According to Matney, Prairie Material was being pressured to join the conspiracy, a claim that led the FBI to investigate the pricing activities of five ready-made concrete producers in the Indianapolis metropolitan area: (1) Shelby Materials, Inc.; (2) Builder's Concrete & Supply Co., Inc.; (3) Irving Materials, Inc.; (4) Hughey, Inc.;  [*733]  and (5) Ma-Ri-Al, which does business as Beaver Materials Corp. The investigation reached a turning point on May 25, 2004, when FBI agents executed search warrants on the five companies, and interviewed the companies' corporate officers and employees regarding the existence of the conspiracy. Information recovered at that time substantiated many of Matney's claims, and set into motion a chain of events that would mark the demise of the price-fixing scheme. Shelby Materials's Vice-President, Richard Haehl, immediately admitted his criminal conduct and offered to help the government investigate the cartel; the government, in turn, granted Haehl amnesty conditioned on his continued cooperation and, if  [**3] required, truthful testimony at trial. Shortly thereafter, the government obtained indictments against Builder's Concrete, Irving Materials, and Hughey, Inc., and their respective corporate officers, Gus "Butch" Nuckols, Price Irving, and Scott Hughey. Nuckols, Irving, and Hughey eventually admitted their roles in the conspiracy and entered into plea agreements, in which they, too, offered to help the government investigate the cartel and testify truthfully at trial if called. Upon enlisting the cooperation of Haehl, Nuckols, Irving, and Hughey, the government sought an indictment against Beaver Materials and its corporate officers. The government's efforts paid off in April 2006, when a federal grand jury returned a four-count indictment against Beaver Materials, Ricky Beaver--the company's Commercial Sales Manager--and Christopher Beaver--the Operations Manager. Two of the counts were directed at Christopher. First, the indictment charged Christopher with participating in a price-fixing conspiracy in violation of § 1 of the Sherman Antitrust Act. Specifically, the indictment alleged that he met with competitors at "a horse barn owned by Gus B. Nuckols, III a/k/a Butch Nuckols, president  [**4] of Builder's Concrete and Supply Co.," at which they agreed to increase prices, limit discounts, and implement surcharges; carried out and enforced their agreement; and attempted to conceal the conspiracy. See 15 U.S.C. § 1. The indictment also charged Christopher with making false statements regarding his participation in the conspiracy to an FBI agent who investigated it. See 18 U.S.C. § 1001(a)(1). Unlike their alleged cohorts, Christopher, Ricky, and Beaver Materials eschewed plea agreements and instead exercised their rights to a jury trial, at which the three were tried jointly. 1 The evidence introduced at trial, which we review in a light most favorable to the government, see United States v. Andreas, 216 F.3d 645, 670 (7th Cir. 2000), was as follows:

The government presented the testimony of Haehl, Nuckols, Irving, and Hughey, who each provided details as to the origins of the price-fixing conspiracy and Christopher Beaver's role within the scheme. The men explained that, at the turn of the century, the ready-made-concrete market in the Indianapolis area was extremely competitive. The market was primarily occupied by eight concrete producers that often vied for the same customers  [**5] by bidding on their construction projects. The companies' bidding and pricing processes were largely uniform. At the beginning of  [*734]  construction season in the spring of each year, the producers would send price lists to potential clients to inform them of the lowest possible rates at which they could provide concrete. The price lists usually featured five dollar amounts that went into the calculation of the quoted price. First, there was the base price--or, as it was called, the gross price--of the desired amount of a particular mix of concrete. Next, the price list provided the available discount off the gross price for promptly submitting payment; the price list then deducted this discount, which yielded the net price. But the producers' net prices were identical more often than not, so to distinguish themselves and undercut their competition the producers would include a fourth dollar amount on the price list: an additional discount from the net price. The producers would then calculate and quote to potential clients the resulting discounted net price as the lowest price at which they could provide the concrete. But as the competition for customers grew over the years, the producers  [**6] offered increasingly larger net-price discounts that, in turn, depressed the market value of concrete, and, consequently, reduced the producers' overall profits.

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515 F.3d 730 *; 2008 U.S. App. LEXIS 2419 **; 2008-1 Trade Cas. (CCH) P76,037

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. CHRISTOPHER A. BEAVER, Defendant-Appellant.

Prior History:  [**1] Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 06 CR 61--Larry J. McKinney, Judge.

Disposition: We AFFIRM Beaver's price-fixing-conspiracy conviction under 15 U.S.C. § 1, and his false-statements conviction under 18 U.S.C. § 1001(a)(1).

CORE TERMS

conspiracy, concrete, discount, producers, pricing, cheating, false statement, price-fixing, cartel, attended, barn, horse, competitors, meetings, participated, motion for judgment, district court, net price, net-price-discount, net-price, make a false statement, fail to prove, false-statements, coconspirators, confronted, indictment, price list, price-fixing-conspiracy, investigate, Antitrust

Criminal Law & Procedure, Trials, Motions for Acquittal, Evidence, Weight & Sufficiency, Standards of Review, De Novo Review, Sufficiency of Evidence, Substantial Evidence, Antitrust & Trade Law, Regulated Practices, Price Fixing & Restraints of Trade, General Overview, Fraud Against the Government, False Statements, Elements, Constitutional Law, Fundamental Rights, Criminal Process, Right to Jury Trial, Juries & Jurors, Province of Court & Jury, Factual Issues, Plain Error, Evidence, Burdens of Proof, Governments, Courts