As noted in earlier blog posts, three defendants convicted of bid rigging at public real estate foreclosure auctions have filed a cert petition in the Supreme Court challenging the per se rule in criminal cases.  The essence of the argument is that by instructing the jury that bid rigging/price fixing is a per se violation of the Sherman Act, the court unconstitutionally removes from the jury the question of whether the agreement was a restraint of trade.  The defendants filed a cert petition in August 2019.  The United States filed its brief in opposition on November 25th.

I’d summarize the per se rule is unconstitutional argument like this.  If the government charges a defendant with vertical price fixing, then the Court instructs the jury that it must decide whether the agreement was a restraint trade, i.e do the pro-competitive benefits outweigh the anticompetitive harms.  [This is a recent development.  Courts used to instruct juries that vertical price fixing was also a per se violation.]  But, in an indictment for horizontal price fixing (or bid rigging) the government determines the conduct is a per se violation, and if the Court agrees, this element of the offense is taken away from the jury. The jury is instructed that the charged agreement is a per se violation.  For the very same statute, very same language, in one case (the vertical price fixing case as an example) the jury decides whether the agreement (if one is established) is a restraint of trade.  In the criminal case, however, the Court, not the jury decides that element of the offense.  This, the argument goes, is inconsistent with the constitutional requirement that the government prove every element of a charged crime beyond a reasonable doubt.

In its opposition brief, the United States urges the Supreme Court not to take cert arguing that “the per se rule is an interpretation of the Sherman Act, not an evidentiary presumption, and that it can be constitutionally applied in a criminal antirust protection.”  The government’s brief recounts the history of major Supreme Court per se rule cases and concludes:

“As those decisions illustrate, the per se rule is an interpretation of the Sherman Act; it provides that certain anticompetitive conduct falls “within the purview of ” Section 1 as a matter of law because it categorically constitutes an unreasonable restraint of trade. Standard Oil, 221 U.S. at 65; see id. at 59-60 (interpreting the “language of ” Section 1 in light of the common law).”

If you’re interested in reading the pleadings, they are:

  1. Defendants’ Cert Petition (here) (filed August 30, 2019)
  2. Brief in Support of the Cert Petition filed by the Due Process Institute (here) (filed October 24, 2019)
  3. Brief in Support of the Cert Petition filed by the National Association of Criminal Denese Lawyers (here)(filed October 24, 2019)
  4. Brief in Opposition Filed by the United States (here) (filed November 25, 2019)

I have written a longer draft article, “The End is Near For the Per Se Rule in Criminal Cases” explaining my view that the per se rule is unconstitutional in criminal cases.  I’m going to review that in light of these excellent briefs.

It seems unlikely the Supreme Court will grant cert since there is no split in the circuits, but from defendants’ point of view it raises a serious constitutional question–one the Supreme Court has tackled in a number of different contexts recently–is the defendant denied the right to have the jury decide each element of the offense?–in this case, whether the agreement was a restraint of trade.

Bob Connolly

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