Filed: Oct. 14, 2015
Latest Update: Mar. 02, 2020
Summary: United States v. Walker, 665 F.3d 212, 223 (1st Cir.Peake pushed for perfectly legal strategies that would negatively, affect the stability of the Florida 50/50 arrangement the name, given to the strategy of allocating equal market shares between, Horizon Lines and Sea Star.from Puerto Rico;
United States Court of Appeals
For the First Circuit
No. 14-1088
UNITED STATES OF AMERICA,
Appellee,
v.
FRANK PEAKE,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Daniel R. Domínguez, U.S. District Judge]
Before
Torruella, Lynch, and Thompson,
Circuit Judges.
David Oscar Markus, with whom Mona E. Markus, A. Margot Moss,
and Markus & Markus, PLLC, were on brief, for appellant.
Shana M. Wallace, Attorney, U.S. Department of Justice,
Antitrust Division, with whom William J. Baer, Assistant Attorney
General, Brent Snyder, Deputy Assistant Attorney General, Craig Y.
Lee and James J. Fredricks, Attorneys, U.S. Department of Justice,
Antitrust Division, were on brief, for appellee.
October 14, 2015
TORRUELLA, Circuit Judge. As a result of his conviction
for participating in one of the largest antitrust conspiracies in
the history of the United States, Defendant-Appellant Frank Peake
("Peake") raises a number of claimed errors with respect to his
trial and sentencing for a serious price-fixing offense in
violation of Section 1 of the Sherman Act, 15 U.S.C. § 1
("Section 1"). Peake challenges: (1) the validity of his
indictment; (2) the scope of the search warrant executed by the
government; (3) the district court's denial of his pre-trial motion
to change venue; (4) improper remarks made by the prosecutor during
trial; (5) the district court's ruling permitting prejudicial
testimony; (6) the district court's denial of his request for a
theory-of-defense instruction; (7) the district court's denial of
his request for a mistrial during jury deliberations, and (8) the
length of his sentence, which was based on the amount of commerce
affected by the charged conspiracy, and which Peake contends the
court incorrectly computed. Finding no errors and concluding that
the district court marshaled this trial in a commendable manner, we
affirm. After a brief overview of the factual background, we will
take each of the issues one by one.
I. Background
We recount the facts in the light most favorable to the
jury verdict, as supported by the record. See United States v.
Andrade, 94 F.3d 9, 10 (1st Cir. 1996). Since 2002, waterborne
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cabotage between Puerto Rico and the mainland has been dominated by
four freight carriers: Horizon Lines, Sea Star, Crowley, and
Trailer Bridge. See In re Puerto Rican Cabotage Antitrust Litig.,
815 F. Supp. 2d 448, 454 n.3 (D.P.R. 2011). And, because of Puerto
Rico's geographical situation, Puerto Rico's consumers rely on
these carriers to transport most goods imported to the island. See
Merchant Marine Act of 1920, Pub. L. No. 66-261, 41 Stat. 988, 999
(1920) (codified as amended at 46 U.S.C. §§ 55101, et seq.).
Seeking to maximize revenues, Horizon Lines and Sea Star agreed not
to undercut each other in price and allocated precise market share
quotas through an extensive conspiracy that included bid rigging
and careful planning, coordination, and the kinds of day-to-day
self-enforcement common of illegal agreements.
This behavior constituted an agreement in restraint of
trade forbidden by Section 1. Peake, the former President and
Chief Operating Officer ("COO") of Sea Star, played a managing role
in the conspiracy, coordinating with competitors through meetings,
phone calls, and emails, and attending to pricing or consumer-
allocation disputes that his subordinates could not resolve on
their own.
For example, during a meeting in Orlando in 2006, Peake
coordinated with Horizon Lines executives to resolve existing
disputes by agreeing to keep the market shares at their current
levels, rather than reinstating the split in effect prior to his
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joining the conspiracy in 2005. Later that year, the market
allocation became imbalanced when Walgreens, a major importer of
consumer goods to Puerto Rico, decided not to divide freight
contracts between Horizon Lines and Sea Star, and instead allocated
all of its freight to Horizon Lines. Peake quickly agreed with an
executive from Horizon Lines that the company would compensate by
shifting cargo to Sea Star vessels or using Transportation Service
Agreements, whereby Horizon Lines would pay Sea Star to carry its
cargo even though it had capacity to transport it in its own
vessels.
While the conspiracy was in full swing, a Sea Star senior
executive working with Peake became a government informant. Based
on his description of the conspiracy, the government initiated an
extensive investigation that included an FBI search of Sea Star's
headquarters in 2008. Four of Peake's co-conspirators were charged
with antitrust violations and pleaded guilty before the U.S.
District Court for the Middle District of Florida, Jacksonville
Division. Following these events, a grand jury in San Juan, Puerto
Rico, returned an indictment against Peake in November 2011 on one
charge of conspiracy to suppress and eliminate competition by
agreeing to fix rates and surcharges for freight services in
interstate commerce between the United States and Puerto Rico.
Peake's co-conspirators testified against him at trial,
revealing his involvement in the conspiracy and their discussions
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about setting surcharges, fees, and market share allocations. One
such incident involved an email exchange between Peake and a
competitor regarding prices offered to a client in an attempt to
"avoid a price war."
After a nine-day trial, which took place over the course
of three weeks, the jury found Peake guilty of participating in a
conspiracy to fix the prices of Puerto Rico freight services, in
violation of Section 1. The district court sentenced Peake to
sixty months' imprisonment.
This appeal ensued.
II. The Indictment
Before addressing the main issues in this appeal, we
briefly address an issue that, although Peake is raising on appeal
for the first time, he claims would foreclose our jurisdiction on
this matter.1 Peake argues that Puerto Rico is not a state, yet
the indictment charges Peake under Section 1, which prohibits
agreements in restraint of trade or commerce "among the several
1
"[J]urisdictional challenges to an indictment may be raised at
any time," United States v. Rosa-Ortiz, 348 F.3d 33, 36 (1st Cir.
2003), but all other motions regarding a defective indictment, such
as failure to state an offense, must be made before trial, Fed. R.
Crim. P. 12(b)(3)(B), and thus can only be reviewed for plain error
if raised for the first time on appeal, see United States v.
Turner,
684 F.3d 244, 255 (1st Cir. 2012). Here, it matters not
whether we treat Peake's argument as a jurisdictional challenge, or
as an untimely-made failure-to-state-a-claim argument to be
reviewed for plain error, because, as we explain, Peake was
correctly charged under Section 1, so there was no error at all.
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States," and that his conviction must therefore be vacated.2 There
are at least two insurmountable problems with this argument.
First, it is well-settled that, for purposes of the Sherman Act,
Puerto Rico is "to be treated like a state and not like a
territory," therefore, Section 1 fully applies to Puerto Rico.
Córdova & Simonpietri Ins. Agency Inc. v. Chase Manhattan Bank
N.A., 649 F.2d 36, 38, 44 (1st Cir. 1981). Second, the evidence in
the record shows that part of the freight carried by the companies
in the conspiracy originated in one state before being transported
to a port in a second state to be shipped to Puerto Rico.
Therefore, the commerce affected by the conspiracy was not only
between a state and Puerto Rico, but also among the states. Thus,
Peake was correctly charged, and the indictment is not defective.
We now move on to Peake's appeal of the district court's
denial of his motion to suppress, and then address his other trial-
related claims, before finally turning to the appeal of his
sentence.
2
Peake argues that he should instead have been charged under
Section 3 of the Sherman Act, which contains the same prohibitions,
but applies to territories. 15 U.S.C. § 3(a) ("Every . . .
conspiracy[] in restraint of trade or commerce . . . between any
such Territory and another, or between any such Territory or
Territories and any State or States . . . is declared illegal.").
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III. Motion to Suppress
Peake appeals the district court's denial of his motion
to suppress the government's search of his personal electronics.
For the following reasons, we affirm the denial.
A. Standard of Review
In reviewing a challenge to the district court's denial
of a motion to suppress, "we view the facts in the light most
favorable to the district court's ruling," and "review the district
court's findings of fact and credibility determinations for clear
error." United States v. Camacho, 661 F.3d 718, 723 (1st Cir.
2011) (citation and internal quotation marks omitted). However, we
review the lower court's legal conclusions, including its
determination of whether the government exceeded the scope of the
warrant, de novo. United States v. Fagan,
577 F.3d 10, 12-13 (1st
Cir. 2009).
A search warrant must "describ[e] the place to be
searched" and the "things to be seized." U.S. Const. amend. IV.
The authority conferred by the warrant "is circumscribed by the
particular places delineated in the warrant and does not extend to
other or different places." Fagan, 577 F.3d at 13. Search
warrants also have a specificity requirement, meaning "that
warrants shall particularly describe the things to be seized,"
which "prevents the seizure of one thing under a warrant describing
another." Marron v. United States,
275 U.S. 192, 196 (1927). Even
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though search warrants are limited to the particular places and
things described in them, there is some breathing room in our
analysis, since "search warrants and affidavits should be
considered in a common sense manner, and hypertechnical readings
should be avoided." United States v. Bonner, 808 F.2d 864, 868
(1st Cir. 1986) (citing Spinelli v. United States,
393 U.S. 410,
419 (1969)).
A draft warrant presented to a magistrate judge may be
altered or modified by the judicial officer or at his direction.
See United States v. Hang Le-Thy Tran, 433 F.3d 472, 481 (6th Cir.
2006); United States v. Katoa,
379 F.3d 1203, 1208 (10th Cir.
2004); United States v. Arenal,
768 F.2d 263, 267 (8th Cir. 1985).
When part of a warrant is considered invalid, "evidence seized
under the valid portion may be admitted." United States v. George,
975 F.2d 72, 79 (2d Cir. 1992). Furthermore, when a warrant is
limited to authorize the seizure of only certain objects,
"container[s] situated within residential premises which are the
subject of a validly-issued warrant may be searched if it is
reasonable to believe that the container could conceal items of the
kind portrayed in the warrant." United States v. Rogers,
521 F.3d
5, 9-10 (1st Cir. 2008).
B. The Search Warrants
In this case, a magistrate judge was presented with a
draft warrant for his consideration. Upon reviewing it, he crossed
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out a paragraph under Attachment A, which described the premises to
be searched. The stricken paragraph allowed the search of
"briefcases, laptop computers, hand-held computers, cell phones,
Blackberries, and other movable document containers found on the
premises described."3 In Attachment B, the magistrate judge also
struck the following text from the description of the property to
be seized: "memory calculators, pagers, personal digital assistants
such as Palm Pilot hand-held computers." The magistrate judge left
standing, however, other references to electronically stored
documents and records. As amended, Attachment B described the
property to be seized as follows:
As used above, the terms records, documents, programs,
documentation, applications or materials include but are
not limited to records, documents, programs, applications
or materials created, modified or stored in any form,
including any optical, electrical, electronic, or
magnetic form (such as any information on an optical,
electrical, electronic or magnetic storage device),
including floppy disks, hard disks, ZIP disks, CD-ROMs,
3
The full text of the paragraph struck stated:
In order to minimize the prospect of the removal and
subsequent destruction of any of the documents and
records identified in Exhibit B to the Search Warrant,
the search will include the briefcases, laptop computers,
hand-held computers, cell phones, Blackberries, and other
movable document containers found on the premises
described above, and in the possession of, or readily
identifiable as belonging to SEA STAR management,
pricing, and sales personnel including, but not limited
to, FRANK PEAKE, PETER A. BACI, CARL FOX, NED LAGOY, NEIL
PERLMUTTER, ALEX CHISHOLM, MIKE NICHOLSON, EDWARD PRETRE,
and WILLIAM BYRNES.
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optical disks, backup tapes, printer buffers or other
device memory buffers, smart cards . . . email servers,
as well as opened and unopened e-mail messages and any
printouts or readouts from any optical, electrical,
electronic, or magnetic storage device . . . .
Additionally, the magistrate judge added two handwritten passages
to the portion of the draft warrant governing the seizure of
computers and other electronic devices, and ordered that any
seized computers or electronic devices within the scope of the
warrant be returned within thirty days of seizure. Specifically,
the following language was inserted:
In the event that computer equipment and other electrical
storage devices must be transported to the appropriate
laboratory, rather than searched on the premises, the
search of computer equipment and other electronic storage
devices must be completed within 30 days of seizure.
and
If no evidence is found in the computer equipment and
electronic storage devices by the end of the 30 day
period, or if any electronically stored information is
outside of the scope of the warrant, such shall be
returned promptly.
Following the guidance provided in the warrant, the FBI
raided Sea Star's headquarters on April 17, 2008, and seized
Peake's personal laptop and Blackberry. The items were imaged
(the data was copied) and returned to Peake on-site the same day.
This evidence was not immediately reviewed, as the FBI was under
the impression that Sea Star's servers stored copies of all seized
information relevant to the investigation. Images of Peake's
computer and Blackberry were eventually sent to the Department of
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Justice in Washington, D.C. More than four years passed before
the government sought and obtained another search warrant from a
magistrate judge in Washington, D.C., authorizing a search of
these data copies. Their review revealed emails tying Peake to
the conspiracy, which the government submitted as evidence at
trial.
C. Appeal of the Suppression Ruling
Peake argues that the information collected from his
personal computer and Blackberry should be suppressed because the
two items were outside the scope of the initial warrant, and
therefore illegally seized. He contends that when the magistrate
judge struck the paragraph in Attachment A specifying computers
and Blackberries as places that could be searched, doing so
specifically disallowed any search and seizure of said items. A
good faith exception to the purported violation of the initial
warrant, Peake continues, cannot apply in the present case where
the property seized was expressly disallowed by the issuing
magistrate judge.
Peake also argues that the government did not have
authority to image the seized electronics, and that the second
warrant from the magistrate judge in Washington, D.C., did not
cure the violation because it could not authorize a search of
material outside the scope of the original warrant, especially
after the thirty days permitted by the first warrant had passed.
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1. The First Warrant
Applying de novo review, we conclude that the information
collected from the computer and Blackberry was within the scope of
the original search warrant. We think Peake is mistaken in his
reliance on the stricken paragraph; other, intact passages in the
warrant expressly demonstrate that the magistrate judge approved
searching for all documents and records that pertained to the
conspiracy stored in "an electronic or digital format." That the
warrant listed documents stored in electronic form on an
electronic storage device, including email messages, and referred
in Attachment B to Blackberry address books, confirms the legality
of the FBI's search.
This case is analogous to United States v. Rogers, where
we held that the government's seizure of a videotape was valid,
even though videotapes were not listed in the warrant, because the
warrant mentioned "photos," and a videotape was a plausible
repository for a photo. 521 F.3d at 10. Or United States v.
Giannetta,
909 F.2d 571, 577 (1st Cir. 1990), where we held that
the officers could look in movable containers and wherever they
had reasonable suspicion to think "documents could be hidden,
which would include pockets in clothing, boxes, file cabinets and
files," because "[a]s to document searches especially, the easily
concealed nature of the evidence means that quite broad searches
are permitted."
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Here, given that Peake's personal electronic devices were
on the premises to be searched, and the warrant specifically
mentioned electronically-stored documents, the FBI acted within the
scope of the warrant when it searched Peake's devices. And the
fact that the issuing magistrate judge had hand-written on the
warrant that computers and electronic devices must be returned
within thirty days is evidence enough that the scope of the warrant
included these objected-to items. Futhermore, the government's
imaging of the computer and Blackberry did not constitute a
warrantless seizure because doing so was contemplated by the
original warrant, which explicitly authorized the government to
seize electronically-stored emails and documents.
Nor does the fact that the magistrate judge crossed out
language in the warrant affect our conclusion. The warrant
authorized a search of the "premises" of Sea Star's headquarters;
thus, as the district court held in denying the motion to suppress,
the magistrate judge could have reasonably crossed out the items
mentioned in Attachment A, "briefcases, laptop computers, hand-held
computers, cell phones, Blackberries and other movable document
containers," in order to indicate that the government should not be
limited to searching solely in those places for records documenting
the conspiracy, but should be permitted to search the entire
premises. See, e.g., United States v. Bradley, 644 F.3d 1213, 1266
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(11th Cir. 2011) (observing that warrant to search "premises"
permitted search of the entire building).
As to the magistrate judge's crossing out of "personal
digital assistant" in Attachment B, we conclude that the crossed-
out text should simply be treated as nonexistent.4 Peake does not
point us to any case law establishing that eliminating a part of
the text from a draft warrant necessarily means that the crossed-
out statements have continued significance. Cf. United States v.
Thomas, 489 F.2d 664, 672-73 (5th Cir. 1973) (stating that where a
magistrate judge crossed out "in the daytime" while leaving the
phrase "at any time in the day or night," the warrant "could be
served at any time, day or night"). Thus, the agents would have
been permitted to seize Peake's Blackberry, so long as the
remaining text of the warrant was valid and authorized them to do
so. As we explained above, the seizure and search of the
Blackberry was authorized by the intact paragraphs of the warrant.
We therefore conclude that the Blackberry was also lawfully seized
and searched.
4
Alternatively, the magistrate judge may have intended to
eliminate personal items from the search, and limit the agents to
seizing company property only. See Bivens v. Six Unknown Named
Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 395 n.7 (1971)
("[T]he Fourth Amendment confines an officer executing a search
warrant strictly within the bounds set by the warrant." (quoting
Marron, 275 U.S. at 196)). But Peake does not appear to argue that
the information from his computer and Blackberry should have been
suppressed because they were personal, and not company property, so
we will not go down this road.
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2. The Second Warrant
Peake correctly argues that if his computer and
Blackberry had been illegally seized, the government should not
have been permitted to later obtain a more expansive warrant from
an arguably friendlier forum in order to search previously-excluded
items, as doing so would weaken important Fourth Amendment
protections. But here, we have concluded that the seized and
imaged evidence Peake seeks suppressed was within the scope of the
first warrant. We do not find that the government used the second
warrant to unlawfully sidestep the first one, and we need not
consider whether the second warrant was invalid. Nor do we need to
reach the question whether the good faith exception applies. In
sum, the suppression motion was properly denied. We turn now to
Peake's pre-trial motion for change of venue.
IV. Motion for Change of Venue
Because Peake was indicted in Puerto Rico -- while his
co-conspirators' cases were brought in Jacksonville, Florida --
Peake filed a pre-trial motion for change of venue under Federal
Rule of Criminal Procedure 21(b) "for the convenience of the
parties, any victim, and the witnesses, and in the interest of
justice." Fed. R. Crim. P. 21(b). In his motion, Peake discussed
the factors considered in Platt v. Minnesota Mining & Manufacturing
Co., 376 U.S. 240, 243-45 (1964), stressing that it was
impracticable to hold a trial in Puerto Rico, since most persons
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involved in the conspiracy and the investigation were in
Jacksonville. See also United States v. Quiles-Olivo, 684 F.3d
177, 184 (1st Cir. 2012) (applying the Platt factors in a criminal
case). Peake later filed supplemental briefing, arguing that
change of venue was also proper under Federal Rule of Criminal
Procedure 21(a) because it would be impossible to obtain a fair and
impartial jury composed of Puerto Rican consumers.
The district court denied the motion, reasoning that any
inconvenience suffered by Peake was outweighed by the interest of
having the case heard in the jurisdiction most seriously affected
by the conspiracy. It also explained that under Rule 21(a),
transfer is a mandatory remedy if the court finds "an unacceptable
level of prejudice," such as where "pervasive pretrial publicity
has inflamed passions in the host community past the breaking
point." United States v. Walker, 665 F.3d 212, 223 (1st Cir. 2011)
(citing United States v. Angiulo,
497 F.2d 440, 440-42 (1st Cir.
1974) (per curiam)). The district court concluded that there was
no pervasive pre-trial publicity inflaming the passions in the
community to the point that Peake could not have a fair and
impartial trial in Puerto Rico, and thus the court allowed the
government to exercise its right to choose the venue at its
prosecutorial discretion.
A district court's denial of the request for a change of
venue is reviewed for abuse of discretion. Quiles-Olivo, 684 F.3d
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at 181. We find no such abuse in the district court's denial.
Peake did not allege any outside influence or publicity that could
have affected, from the outset of trial, the jury's consideration
of the evidence presented. Thus, we affirm the district court's
ruling on the motion to change venue.
V. Trial
Peake's next set of issues on this appeal pertains to
matters that arose at trial, and can be boiled down into four
claims: the first is Peake's claim that he should have been granted
a new trial on the basis of prosecutorial misconduct, the second is
that the district court erred in permitting prejudicial testimony,
the third is that the district court erred in denying his request
for a jury instruction regarding his theory of defense, and the
fourth is that the district court should have declared a mistrial
when, during deliberations, the jury sent the judge a note stating
that it could not come to a verdict. As we will explain, we find
no error in the district court's handling of each of these matters,
but first, we begin by providing some additional background on what
happened during the trial.
Peake's trial was held in San Juan, Puerto Rico, in
January 2013, and lasted nine days. In its opening argument on the
second day of trial, the government made references to multiple
national retail chains and franchises whose businesses purportedly
experienced artificially higher shipping costs as a result of the
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antitrust conspiracy, and stated that even the cost of school
lunches had been affected by the conspiracy. Peake objected to
these comments, which we will describe in more detail later, and
filed a motion for mistrial. In his motion, he argued that the
government had communicated to the jury that higher prices were
being passed on to them as directly affected consumers, and
reasoned that if jurors felt their personal financial interests
were affected by the conspiracy, their judgment would be clouded.
The district court took note of the motion on the morning of the
third day of the trial, and granted the government three days to
file its response.
As the trial continued, the government called Peake's co-
conspirators, Gabriel Serra, Gregory Glova, and Peter Baci, to the
stand to provide testimony that established the existence of a
conspiracy. On cross-examination, Peake also elicited testimony
from the co-conspirators that he argues was exculpatory, but
contends that, because the jurors at this point believed themselves
to be "affected consumers," they were unable to fairly consider
this purported exculpatory testimony that was critical to his
defense.5
5
For example, Baci testified that, during part of the conspiracy,
Peake pushed for perfectly legal strategies that would negatively
affect the stability of the "Florida 50/50" arrangement -- the name
given to the strategy of allocating equal market shares between
Horizon Lines and Sea Star. One such pro-competition strategy that
Peake had advocated for was for a third ship to serve the Puerto
Rico-Jacksonville route; another was a "slap strategy" whereby Sea
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On the fourth day of trial, the district judge had a
discussion with the parties regarding the remarks made by the
government during the opening statements when Peake raised an
objection to the government calling witnesses whose retail and
consumer business operations in Puerto Rico were affected by the
higher shipping rates generated by the conspiracy. Peake argued
that the effect on market prices for consumers had nothing to do
with whether there was an agreement amongst competitors to fix
their prices. That is, Peake contended that the issue before the
jury should be limited to the agreement, regardless of its effects,
and argued that allowing the testimony of witnesses from affected
businesses was in line with the government's inappropriate remarks
during opening statements that the conspiracy affected Puerto Rican
consumers. The government argued that the witnesses' testimony was
necessary to demonstrate the antitrust harm to direct consumers of
the shipping companies (and not to imply that members of the public
who patronized those businesses, or indirect consumers, were
affected),6 because the government needed to establish that the
Star would pursue the business of any company that tried to steal
their clients. In his testimony, Serra confirmed Baci's statement
that Peake wanted to add a third ship. He also testified that
Peake authorized competitive shipping rates and that their meetings
were strictly legal. In addition, on the stand, Glova could not
identify any direct references to Peake in his records of
communications made in furtherance of the conspiracy.
6
Generally, there is a distinction between direct and indirect
consumers in antitrust cases. See Hanover Shoe, Inc. v. United
Shoe Mach. Corp., 392 U.S. 481, 492-94 (1968). The harm to be
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conspiracy affected interstate commerce, a required element of the
charged offense.
The district judge agreed that testimony regarding the
effect on the witnesses' companies showed that the conspiracy had
impacted interstate commerce, which was an element of the offense,
and thus ruled that testimony to that effect would be allowed.
However, the district court warned the prosecutors against
eliciting testimony beyond that scope, and noted that the
implication in the government's opening that school lunch programs,
and therefore children, had been affected by the conspiracy was
"really way out of bounds." The district judge also offered,
notwithstanding the yet-undetermined outcome of the motion for
mistrial, to give a curative instruction to the jury that day that
would address Peake's concerns about the prosecutor's opening
statement and clarify that jurors should not take into account the
impact of the conspiracy on Puerto Rico's citizens. At the court's
invitation, the parties submitted proposed curative instructions,
and the district judge gave a version of the curative instruction
to the jury that day.7
considered is only that to direct consumers. See Ill. Brick Co. v.
Illinois, 431 U.S. 720, 752 (1977) ("Limiting defendants' liability
to the loss of profits suffered by direct purchasers would thus
allow the antitrust offender to avoid having to pay the full social
cost of his illegal conduct in many cases in which indirect
purchasers failed to bring suit.").
7
Near the end of trial, the court issued a memorandum opinion and
order denying Peake's motion for a new trial, finding no misconduct
-20-
Over Peake's objections, the government then called to
the stand Gabriel Lafitte, who worked for the operator of Burger
King restaurants in Puerto Rico, who testified that the conspiracy
affected the costs paid by Burger King for products it sold on the
island. Later in the trial, Ron Reynolds, a U.S. Department of
Agriculture representative, testified to being offered
"take-it-or-leave-it" rates for shipping services for food for
school lunch programs in Puerto Rico.
After closing arguments, the jury began deliberations on
the afternoon of Friday, January 25, 2013. While deliberating on
the following Monday -- January 28 -- the jury sent the district
judge two notes, in which it stated that it could not reach a
unanimous agreement. The second note, delivered on Monday evening
after ten hours of deliberation, stated that each juror had reached
a personal verdict, but that the jury as a whole was unable to
reach unanimity. After the second note, Peake asked for a mistrial
and the government asked for an Allen charge,8 both of which the
district court denied. Instead, the court asked the jury to
"return [the next day] to continue deliberations." On Tuesday, the
on the basis of the prosecutor's opening statement, but, even
assuming misconduct, concluding that any prejudice was cured by the
fact that the remarks were isolated, the jury was given a detailed
curative instruction, and the objected-to statements did not bear
on any elements of the charged offense.
8
An Allen charge is "[a] supplemental jury instruction given by
the court to encourage a deadlocked jury, after prolonged
deliberations, to reach a verdict." Black's Law Dictionary (10th
ed. 2014); see Allen v. United States, 164 U.S. 492 (1896).
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jury deliberated for another three hours and finally reached a
unanimous guilty verdict.
After the verdict, Peake filed a Motion for New Trial and
a Motion for Judgment of Acquittal under Federal Rules of Criminal
Procedure 33 and 29 respectively, arguing, inter alia, that the
district court erred in allowing the government to appeal to jury
bias and prejudice, in refusing to give a theory-of-defense jury
instruction, and in ordering the jury to continue deliberations.9
The district court denied the motions. We turn now to Peake's
appeal of the district court's various trial-related rulings.
A. Prosecutorial Misconduct
We address first Peake's argument that the district court
should have granted him a new trial on grounds that the
government's opening statement implied the conspiracy had impacted
consumers, and therefore the jurors themselves, thus "poisoning the
well."10
9
Peake does not appeal the district court's rulings on the other
issues raised in the Rule 33 and 29 motions, which challenged the
district court's denials of: (1) Peake's request to submit hearsay
evidence from one of the co-conspirators; (2) Peake's objection to
the admissibility of financial disclosures; and (3) Peake's request
for a new trial on grounds that the government had failed to
disclose exculpatory evidence in violation of Brady v. Maryland,
373 U.S. 83 (1963).
10
Peake additionally claims that he was incorrectly prohibited
from diminishing the negative effects of those statements because
the government moved successfully to prohibit him from arguing that
-- despite the antitrust conspiracy -- shipping costs remained
reasonable and fair. But whether the agreed-upon prices charged by
the conspirators were nonetheless fair or reasonable does not
affect our conclusion. A per se Section 1 violation is not excused
-22-
In its opening statements, the government told the jury
that "most consumer goods travel to Puerto Rico from the shipping
lanes" affected by the conspiracy; that the conspiracy "was so
significant that it affected billions of dollars of freight to and
from Puerto Rico"; and that "[b]usinesses like Burger King, Office
Max and Walgreens, businesses that have stores all over Puerto
Rico, they were all paying more than they should have to ship
freight to Puerto Rico because Sea Star and Horizon were
conspiring, not competing." The government also told the jury that
Burger King's shipping costs affected the price of hamburgers sold
to customers, and that the federal government had incurred higher
costs for the school lunch program, leaving it with "less money .
. . to buy food for school children." The government added that
the antitrust laws under which Peake was charged had been enacted
out of the "concern[] that consumers need to buy things to feed and
clothe their families."
Improper remarks by prosecutors are reviewed de novo.
United States v. Rodríguez, 675 F.3d 48, 61 (1st Cir. 2012) (citing
United States v. Ayala-García,
574 F.3d 5, 16 (1st Cir. 2009)).
Even if misconduct occurred, we would still need to consider
whether it was harmless. United States v. González-Pérez, 778 F.3d
by a showing that the supra-competitive prices were somehow still
reasonable. United States v. Socony-Vacuum Oil Co.,
310 U.S. 150,
212-13 (1940); see also United States v. Topco Assoc., Inc.,
405
U.S. 596, 610 (1972) ("[N]aked restraints of trade are [not] to be
tolerated because they are well intended or because they are
allegedly developed to increase competition.").
-23-
3, 19 (1st Cir. 2015), cert. denied, 135 S. Ct. 1911 (2015). In
doing so, we determine whether the misconduct "so poisoned the well
that the trial's outcome was likely affected, thus warranting a new
trial."
Id. (quoting Rodríguez, 675 F.3d at 62). "In making this
determination, we focus on (1) the severity of the misconduct,
including whether it was isolated and/or deliberate; (2) whether
curative instructions were given; and (3) the strength of the
evidence against the defendant."
Id. at 19 (citing
Rodríguez, 675
F.3d at 62).
Here, we agree that the prosecutor's remarks were
improper. We therefore direct our inquiry at whether these
statements were nonetheless harmless. As we explain, because of
the extent and the level of detail the district court included in
its curative instruction; the fact that the district judge
intervened repeatedly in the examination of witnesses to avoid any
reference to end consumers; and the overwhelming amount of
corroborating documentary evidence that tied Peake to the
conspiracy, we conclude that the effects of the prosecutorial
misconduct did not so poison the well that a new trial would be
warranted.
First, the day after Peake filed his motion for a
mistrial, the district court gave the jury the following
comprehensive and detailed curative instruction:
The fact that Puerto Rico may have potentially been
affected or consumers and/or prices and/or business is
not to be considered by [you] in your judgment as to the
-24-
innocence or guilt of the defendant. The effect on
prices or consumers in Puerto Rico is not per se an
element of the [offense].
You are not to decide this case based on pity and
sympathy to Puerto Rican businesses, to Puerto Rico, or
to Puerto Rican consumers.
The effect on Puerto Rico only is material as to
potentially establishing an effect on interstate
commerce. This case is about a potential conspiracy in
violation of the antitrust law, and whether or not the
defendant, Mr. Frank Peake, joined the conspiracy.
Sympathy to Puerto Rico is, therefore, to play absolutely
no role in your consideration of this case. Any
statement that may have implied or that you may have
understood that this is a case relating to the effect on
Puerto Rico is an erroneous interpretation, and I don't
want you to have that interpretation. So, therefore, any
effect on Puerto Rico is not to be considered at all.
The court's instruction was arguably more detailed than the
proposed instruction Peake submitted.11 In addition, the district
judge intervened in the questioning of the government's witnesses
to prevent undue reference to the conspiracy's effect on Puerto
11
Peake's proposed curative instruction read as follows:
I would like to instruct you that this case is not about
pricing effects in Puerto Rico or whether prices in
Puerto Rico have gone up or down. The only questions for
you are whether there was a conspiracy as alleged in the
indictment and whether Frank Peake knowingly and
intentionally joined that conspiracy. I also instruct
you that the prosecutor mentioned in opening statement
that this case affected Puerto Rico and Puerto Ricans.
This was improper. This case is not to be decided based
on those factors. Therefore, I instruct you to disregard
those comments. You should judge this case only on the
evidence and not an appeal to sympathy or bias. Any such
attempts by the prosecution in its opening statement or
in the questioning of its witnesses should be
disregarded.
-25-
Rican consumers, and the instructions given to the jury after
closing arguments again stressed these points. For example, they
emphasized that the jury "must not be influenced by any personal
likes or dislikes, prejudices or sympathy." The sixth instruction
clarified that "[a]rguments and statements by lawyers are not
evidence. The lawyers are not witnesses. What they say in their
opening statements . . . and at other times . . . is not evidence."
And the twenty-first instruction, labeled "What Not to Consider,"
contained the exact same curative instruction given to the jury on
the fourth day of trial, with one important addition: instead of
telling the jurors that the court did not want them to "have" an
"erroneous interpretation" about statements implying that this case
related to the effect on Puerto Rico, the court instructed, "I
sternly order you not to take such statements into consideration."
We have stated that there is no miscarriage of justice
requiring a new trial when there are curative instructions and the
evidence does not "preponderate[] heavily against the verdict."
United States v. Mangual-García, 505 F.3d 1, 14 (1st Cir. 2007)
(quoting United States v. Mooney,
315 F.3d 54, 61 (1st Cir. 2002)).
The degree of consideration and effort on the part of the district
court to respond to the defendant's valid concern over the
prosecutors' appeal to the jury's personal interests allows us to
conclude that it cured any prejudice. Indeed, curative
instructions are "ordinarily an appropriate method of preempting a
mistrial." United States v. Trinidad-Acosta,
773 F.3d 298, 308
-26-
(1st Cir. 2014) (quoting United States v. Sotomayor-Vázquez, 249
F.3d 1, 18 (1st Cir. 2001)). We presume that juries follow
instructions, United States v. Gonzalez-Vázquez,
219 F.3d 37, 48
(1st Cir. 2000), and there is nothing in the record to suggest that
the instruction regarding the government's remarks was disregarded
by the jury.
The strength of the government's corroborating evidence
against Peake also supports our conclusion in this matter. See
Mangual-García, 505 F.3d at 14 ("Nor can we say that the cumulative
effect of the alleged errors, given the curative instructions that
were given and the strength of the other evidence, constitutes a
miscarriage of justice."); Mooney, 315 F.3d at 60 ("[W]e note that
any lingering prejudicial effect from the remarks pales in
comparison with the overwhelming strength of the government's
evidence against the defendant."). Here, the government's case was
robust. The testimony of co-conspirators and direct customers of
the shipping companies established that there was a conspiracy to
fix prices, that Peake knowingly participated, that the conspiracy
had the effect of increasing shipping rates and surcharges, and
that this affected interstate commerce. The government also
introduced numerous exhibits, including emails sent by Peake
himself from his company email, establishing the existence of a
conspiracy. For example, in one email from July 11, 2005, Peake
told Baci, his co-conspirator and subordinate, that he had learned
that Horizon Lines had told Sea Star's clients that Horizon Lines
-27-
was willing to "work with them," and instructed Baci to come up
with a "slap." Baci sent Horizon Lines an email the next day,
expressing concern about the "level of distrust" building between
Sea Star and Horizon Lines.
In another exchange between Peake and Serra from March
22, 2008, Peake complained to Serra that Horizon Lines had been
"hurting" him by negotiating with Sea Star clients "Flexi, Goya,
Atek and BK." Peake added a warning: "If you're swinging at
Crowley[, one of the other freight carriers,] you are missing and
hitting me." Serra responded with detailed information about
Horizon Lines targeting certain clients and mentioned where he
thought Sea Star would set prices. He concluded, "I'll have to go
with the best info I have. Not sure communication and availability
is working as well as it used to." Peake responded:
BK I am not all that concerned about (we don't have much
of that).
I am the only one that will lose on ATEC, If I lose it
(10 loads a week) I will have to fire back.
Agree that things aren't working as well as they were.
Pete [Baci] has similar complaints.
Flexi is about fuel and you gave them a BSC discount.
Tisk tisk.
Goya is about you not charging for the overweight
permits. Again tisk tisk. Same as cutting the rate in my
book.
Serra wrote back, "I'll check them all . . . you are certainly not
the target."
Given this fairly direct evidence of the conspiracy's
existence, aims, and objectives, we find that the evidence
presented at trial did not preponderate against the verdict. To
-28-
the contrary, the strength of the government's case weighs in favor
of finding that the misconduct was harmless.12 Thus, while we are
concerned by the impropriety of the prosecutors' remarks, we are
confident that the district court acted timely and decisively to
instruct the jury in great detail to disregard the offending
statements. And we are conscious that we should "not set guilty
persons free simply to punish prosecutorial misconduct." United
States v. Vázquez-Botet, 532 F.3d 37, 59 (1st Cir. 2008). The
government's remarks did not so poison the well as to necessitate
a new trial, and we affirm the district court's denial of a
mistrial on grounds of prosecutorial misconduct.
B. Irrelevant and Unfairly Prejudicial Evidence
Peake argues that the district court also erred in
permitting the testimony from witnesses involved in businesses
harmed by the conspiracy because the testimony implied that the
conspiracy impacted Puerto Rican consumers, therefore again causing
the jurors to consider themselves victims of the charged
conspiracy. Peake claims the testimony should have been excluded
under Federal Rules of Evidence 402 and 403 either as irrelevant or
because it caused "unfair prejudice" and had an "undue tendency to
12
On this final point, we cannot ignore that a per se violation
of Section 1 only requires that "an antitrust plaintiff [present]
either direct or circumstantial evidence of defendants' 'conscious
commitment to a common scheme designed to achieve an unlawful
objective.'" Evergreen Partnering Grp., Inc. v. Pactiv Corp., 720
F.3d 33, 43 (1st Cir. 2013) (quoting Monsanto Co. v. Spray Rite
Serv. Corp.,
465 U.S. 752, 764 (1984)).
-29-
suggest decision on an improper basis, commonly, though not
necessarily, an emotional one." Fed. R. Evid. 403 advisory
committee's note to 1972 proposed rules; see also Fed. R. Evid. 402
("Irrelevant evidence is not admissible."); Fed. R. Evid. 403 ("The
court may exclude relevant evidence if its probative value is
substantially outweighed by a danger of . . . unfair
prejudice . . . .").
We review a trial court's objected-to evidentiary rulings
for abuse of discretion. United States v. Romero-López, 695 F.3d
17, 22 (1st Cir. 2012); United States v. Rodríguez–Berríos,
573
F.3d 55, 60 (1st Cir. 2009). That includes a trial court's
determination under Rule 403 that evidence is more probative than
prejudicial. See United States v. Ramírez-Rivera, Nos. 13-2285,
13-2289, 13-2291, 13-2320,
2015 WL 5025225, at *26 (1st Cir. Aug.
26, 2015) (citing
Walker, 665 F.3d at 229).
Rule 403 "requires the trial court to exclude the
evidence if its probative value is substantially outweighed by 'the
danger of unfair prejudice.'" United States v. Varoudakis, 233
F.3d 113, 121 (1st Cir. 2000) (quoting Fed. R. Evid. 403). This
analysis "'is a quintessentially fact-sensitive enterprise' which
the district court is in the best position to make." United States
v. Soto, Nos. 13-2343, 13-2344, 13-2350,
2015 WL 5011456, at *17
(1st Cir. Aug. 25, 2015) (quoting United States v. Joubert,
778
F.3d 247, 255 (1st Cir. 2015), cert. denied,
135 S. Ct. 2874
(2015)). All evidence is by design prejudicial, Varoudakis, 233
-30-
F.3d at 122, but unfair prejudice refers "to the capacity of some
concededly relevant evidence to lure the factfinder into declaring
guilt on a ground different from proof specific to the offense
charged." United States v. DiRosa, 761 F.3d 144, 153 (1st Cir.
2014) (quoting Old Chief v. United States,
519 U.S. 172, 180
(1997)). One such example is when "the evidence 'invites the jury
to render a verdict on an improper emotional basis.'" United
States v. Landry,
631 F.3d 597, 604 (1st Cir. 2011) (quoting
Varoudakis, 233 F.3d at 122).
An abuse of discretion finding on a Rule 403 ruling "is
not an easy one to make" and "only in 'extraordinarily compelling
circumstances'" would we reverse the judgment of the district
court. DiRosa, 761 F.3d at 154 (quoting United States v. Doe,
741
F.3d 217, 229 (1st Cir. 2013)); see also
Landry, 631 F.3d at 604
("Rule 403 judgments are typically battlefield determinations, and
great deference is owed to the trial court's superior coign of
vantage." (quoting United States v. Shinderman, 515 F.3d 5, 17 (1st
Cir. 2008))).
Guided by the above framework, we do not find that the
district court abused its discretion in permitting the testimony of
representatives from businesses affected by the conspiracy. The
witnesses never stated that the higher costs incurred by the direct
customers of the shipping companies were indirectly transferred to
their consumers, and the defense was also allowed to strike
questions regarding the effect of the increased costs on the
-31-
businesses' bottom line. The testimony elicited by the government
properly established the effects of fixing prices and rigging bids.
After all, the conspiracy's effect on interstate commerce was an
element of the offense the government was required to establish.
See Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of
Okla., 468 U.S. 85, 104 (1984) ("Under the Sherman Act the
criterion to be used in judging the validity of a restraint on
trade is its impact on competition."). The government's
examination of the witnesses was limited to establishing that
element. Therefore, we find no abuse of discretion, and affirm the
district court's ruling permitting the witnesses' testimony.
C. Theory of Defense Instruction
Peake next argues that he is entitled to a new trial
because he was improperly denied his requested theory-of-defense
jury instruction. Specifically, Peake requested the following
instruction:
Mr. Peake does not contest that there was a conspiracy
that existed between Gabriel Serra, Kevin Gill, Gregory
Glova, and Peter Baci. Rather, he contends that he did
not knowingly and intentionally participate in this
conspiracy and did not knowingly and intentionally join
the conspiracy as a member. Mr. Peake further contends
that any discussions he had with Gabriel Serra were
legitimate and competitive discussions and not
anti-competitive conspiracy related. Mr. Peake also
contends that he was competing with Horizon, including on
market share and price.
Although this is Mr. Peake's defense, the burden always
remains on the government to prove the elements of the
offense beyond a reasonable doubt. If you do not believe
the government has proven beyond a reasonable doubt that
-32-
Mr. Peake intentionally and knowingly joined the
conspiracy, you must find him not guilty.
A defendant is "entitled to an instruction on his theory
of defense so long as the theory is a valid one and there is
evidence in the record to support it." United States v. McGill,
953 F.2d 10, 12 (1st Cir. 1992) (internal citation omitted).
However, "the defendant has no right to put words in the judge's
mouth. So long as the charge sufficiently conveys the defendant's
theory, it need not parrot the exact language that the defendant
prefers."
Id. A district court's denial of a theory of defense
instruction is reviewed de novo. United States v. Baird,
712 F.3d
623, 627-28 (1st Cir. 2013). But a trial court's refusal to give
a particular instruction constitutes reversible error only if the
requested instruction (1) was correct as a matter of law, (2) was
not substantially incorporated into the charges as rendered, and
(3) was integral to an important point in the case.
Id. at 628.
Here, regardless of whether Peake should have been
granted his instruction, there is no reversible error because the
district court offered essentially the same instruction Peake
requested, just in its own words. First, the instructions the
district court gave stated that "the Government [must prove to the
jury] that Mr. Peake is guilty of the crime with which he is
charged beyond a reasonable doubt." Second, they mentioned that
the government bears the burden of proving that Peake "knowingly
and intentionally became a member of the conspiracy" and that the
-33-
"conspiracy . . . affected interstate commerce." Third, the
instructions referenced the possibility that "competitors may have
legitimate, lawful reasons to have contact with each other," and
that "similarity of conduct . . . does not necessarily establish
the existence of a conspiracy," because "there would be no
conspiracy . . . [i]f actions were taken independently by them
solely as a matter of individual business judgment." Comparing
these passages with Peake's proposed instruction, we cannot
conclude that anything Peake asked for was excluded. There is
therefore no reversible error.
D. Jury Deliberations
The last trial-related argument Peake raises is that the
district court erred in its response to the two notes from the
jury, both received on the second day of deliberations, in which
the jury stated it was not able to reach a unanimous verdict. Both
times, the district judge sent a note back to the jury, asking the
jurors to "continue deliberation." Peake argues that the district
court should have declared a mistrial after the second note because
it was clear that the jury was at an impasse. Peake also argues
that, if the court was going to respond to the note, it was at
least required to include in its reply the three elements normally
required in an Allen charge.
For some background, when a jury is deadlocked, the trial
court may deliver an Allen charge, directing the jury to decide the
-34-
case if at all possible. Given the potential coerciveness of such
an instruction, our case law holds that such a charge must be
balanced by instructions that (1) communicate the possibility of
the majority and minority of the jury reexamining their personal
verdicts; (2) restate the government's maintenance of the burden of
proof; and (3) inform the jury that they may fail to agree
unanimously. United States v. Angiulo, 485 F.2d 37, 39 (1st Cir.
1973).
We review the district court's decision not to declare a
mistrial or to provide additional guidance to a jury for abuse of
discretion, United States v. Vanvliet, 542 F.3d 259, 266 (1st Cir.
2008), and we find there was no abuse of discretion here.
First, we note that the jury sent its notes on Monday
afternoon and evening, during its first full day of deliberations,
after having deliberated for only hours on Friday. It was thus not
an abuse of discretion for the district court to conclude that,
particularly after a nine-day trial, the jury needed more time to
consider the evidence before a mistrial might be considered.
Second, the district judge's response to the jury,
instructing it to "continue deliberations," was not an Allen
charge, and therefore did not require the supplemental balancing
instructions normally required in an Allen charge.13 In a similar
case, United States v. Figueroa-Encarnación, 343 F.3d 23, 31-32
13
Indeed, we agree that it would have been premature to give one
at this early point in the deliberations, after a nine-day trial.
-35-
(1st Cir. 2003), we held that a district judge's instruction to the
jury to go home, relax, and continue deliberations the following
day contained no coercive elements and, as such, was not an Allen
charge requiring supplemental instructions. Likewise, here, the
district court simply asked the jury to rest and come back in the
morning to continue deliberations. This was no Allen charge.
Accordingly, we find no abuse of discretion in the district court's
response to the jury's notes during deliberation.
VI. Sentencing
As a final matter, Peake argues that, even if his
conviction is not overturned, he should be resentenced. Peake
raises only one argument regarding his sentence: that the district
court incorrectly calculated the volume of commerce affected by the
conspiracy, and therefore improperly applied, among other offense-
level enhancements, a twelve-level enhancement under section 2R1.1
of the United States Sentencing Guidelines (U.S.S.G.). We deny the
appeal of the sentence, finding that the district court correctly
applied the sentencing guidelines.
We review a district court's interpretation and
application of the sentencing guidelines de novo. United States v.
Stoupis, 530 F.3d 82, 84 (1st Cir. 2008). However, "we will not
upset the sentencing court's fact-based application of the
guidelines unless it is clearly erroneous." United States v.
Santos-Batista,
239 F.3d 16, 21 (1st Cir. 2001).
-36-
For antitrust offenses affecting a volume of commerce of
more than $1 million, the sentencing guidelines provide that the
offense level should be adjusted by a certain number of levels
according to the volume of commerce that was affected by the
conspiracy, as indicated by a table provided therein. See U.S.S.G.
§ 2R1.1(b)(2). The district court found that more than $500
million in commerce was affected, and that a twelve-level
enhancement applied under § 2R1.1(b)(2)(F). Peake argues the
volume of commerce was, at most, approximately $386.2 million, and
therefore only a ten-level enhancement should have been applied
under § 2R1.1(b)(2)(E). He contends that, in calculating the
volume of affected commerce, the district court erroneously
included commercial activity that took place before 2005, which is
when the indictment charged Peake with joining the conspiracy, and
that the court also included commerce that was unaffected by the
conspiracy.
After a thorough review of the sentencing record, we find
that the district court did not err in determining that the
affected volume of commerce was more than $500 million. First, the
record shows that the district court would have reached its more-
than-$500 million number for the volume of affected commerce even
without including commerce that might have occurred before 2005,
when Peake is charged with joining the conspiracy. So we will move
on to Peake's second argument that the district court incorrectly
-37-
included in its calculation what he contends was "unaffected"
commerce.
In calculating the "volume of commerce," the district
court is to consider not just "the damage caused or profit made by
the defendant," but the overall amount of sales during the
conspiracy. Id. at § 2R1.1(b)(2) & cmt. 7 ("[T]he volume of
commerce attributable to an individual participant in a conspiracy
is the volume of commerce done by him or his principal in goods or
services that were affected by the violation."); see also United
States v. Andreas, 216 F.3d 645, 678 (7th Cir. 2000) ("[I]t is
reasonable to conclude that all sales made by defendants during
that period are 'affected.'" (quoting United States v. SKW Metals
& Alloys, Inc., 195 F.3d 83, 90 (2d Cir. 1999)) (emphasis added)).
Although there is a presumption that all sales made during the
conspiracy were affected, and should therefore be included in the
volume of commerce calculation, this is a presumption that the
defendant may rebut by offering evidence that some sales were not
affected. United States v. Giordano,
261 F.3d 1134, 1146 (11th
Cir. 2001).
In this case, the district court had before it data
produced by Sea Star indicating that its total revenue between 2005
and 2008 amounted to over $565 million, and it used this number to
conclude that the twelve-level enhancement applied. Peake argues
that this was an error because the following revenue was
"unaffected" commerce and should have been subtracted from the
-38-
total: (1) revenue from non-container freight that he contends was
not a part of the antitrust conspiracy, (2) revenue from 2,634
customers that were never discussed in the conspiracy, (3) revenue
from fuel surcharges, which Peake argues would have been charged
even if there had been no conspiracy, and (4) revenue from
Transportation Services Agreements, which Peake claims were routine
and entirely lawful, and did not affect interstate commerce.
However, in order to exclude this revenue from the volume of
affected commerce calculations, Peake was required to show that
these transactions were "completely unaffected" by the conspiracy.
Andreas, 216 F.3d at 678-79. The district court found that Peake
failed to do so.
This is essentially a factual question, and we find no
clear error in the district court's findings that the objected-to
revenue should have been included in the volume of commerce
calculation. Testimony, particularly Baci's, and documentary
evidence, including various emails, presented at trial showed that
the conspirators had colluded to fix the fuel surcharges, and that
revenue from the fuel surcharge was therefore a part of the
conspiracy. The fixed surcharges affected all cargo transported,
thus affecting all sales, including revenue from non-container
freight and from all customers, even if that freight and those
customers had never explicitly been made a part of the conspiracy.
Finally, evidence at trial showed that Transportation Services
Agreements were used in furtherance of the conspiracy. Thus,
-39-
finding no error in the district court's computation of a volume of
affected commerce in excess of $500 million, we affirm the
sentence.
VII. Conclusion
For the foregoing reasons, the conviction and sentence of
Defendant-Appellant Frank Peake is
AFFIRMED.
-40-
