United States v. Peake
2015 U.S. App. LEXIS 17868
| 1st Cir. | 2015Background
- Sea Star and Horizon Lines entered a long-running price‑fixing and market‑allocation conspiracy for Puerto Rico cabotage; Frank Peake was Sea Star's COO and was convicted for participating in the conspiracy under §1 of the Sherman Act.
- Co‑conspirators cooperated with the government; FBI searched Sea Star HQ in 2008, seized Peake's laptop and Blackberry (imaged and returned same day), and later a D.C. warrant authorized review of the images; emails and co‑conspirator testimony tied Peake to the conspiracy.
- Peake was indicted in San Juan (Nov. 2011); tried in Jan. 2013; jury convicted after nine‑day trial and the district court sentenced him to 60 months imprisonment.
- On appeal Peake raised multiple claims: defective indictment (Puerto Rico jurisdiction), improper scope of the search warrant and subsequent imaging/search, denial of change of venue, prosecutorial misconduct and prejudicial witness testimony, refusal to give a theory‑of‑defense instruction, mishandling jury deadlock, and erroneous calculation of volume of commerce for sentencing.
- The First Circuit reviewed mixed questions of fact and law (deferential fact review; de novo legal review) and affirmed in full, finding the indictment proper, the searches within the warrant scope, trial rulings non‑prejudicial, and the sentencing calculation supported by the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Indictment jurisdiction (Puerto Rico) | Peake: Puerto Rico isn't a state; §1 inapplicable so indictment defective. | Government: Puerto Rico is treated like a state for Sherman Act purposes; commerce also involved interstate movements. | Affirmed: Puerto Rico treated as a state for §1; evidence showed interstate commerce affected. |
| Scope of search warrant / imaging | Peake: Magistrate crossed out references to laptops/Blackberries so seizure/search was beyond warrant; later D.C. warrant cannot cure initial defect. | Government: Warrant still authorized seizure/search of electronically stored records; handwritten changes and other language permitted imaging and 30‑day review. | Affirmed: Intact warrant language authorized electronic searches and imaging; suppression properly denied. |
| Change of venue | Peake: Trial in Puerto Rico impracticable and juror bias likely; many witnesses in Jacksonville. | Government: Puerto Rico was the locus of harm; no pervasive pretrial publicity shown. | Affirmed: No abuse of discretion; no showing of pervasive prejudice to require transfer. |
| Prosecutorial misconduct (opening statements) | Peake: Government improperly appealed to jurors as affected consumers, poisoning jury and requiring new trial. | Government: Remarks isolated; curative instructions and trial management cured prejudice; strong evidence of guilt. | Affirmed: Remarks improper but harmless given detailed curative instructions, judicial intervention, and strong corroborating evidence. |
| Admissibility of testimony from harmed businesses | Peake: Testimony was irrelevant/unduly prejudicial (invites emotional verdict by implying jurors were victims). | Government: Testimony was relevant to the interstate‑commerce element and limited to that purpose. | Affirmed: No abuse of discretion under Rules 402/403; testimony probative of commerce effect. |
| Theory‑of‑defense instruction | Peake: Requested instruction explaining he did not knowingly join conspiracy. | Court: Given instructions conveying the same legal points in its own words. | Affirmed: No reversible error; defendant's theory substantially incorporated in instructions. |
| Jury deadlock response | Peake: After jury notes of inability to agree, court should have declared mistrial or given full Allen charge. | Government: Court properly asked jury to continue deliberations; notes came early in deliberations and instruction was non‑coercive. | Affirmed: No abuse of discretion; reply to continue deliberations was not an Allen charge and was appropriate. |
| Sentencing — volume of commerce | Peake: Court overstated commerce affected (included pre‑2005 revenue, fuel surcharges, TSAs, customers never discussed); enhancement should be lower. | Government: Guidelines permit counting overall sales during conspiracy unless defendant rebuts; evidence showed surcharges and TSAs were part of the scheme. | Affirmed: District court's >$500M finding supported by Sea Star revenues, testimony and documents; 12‑level enhancement properly applied. |
Key Cases Cited
- United States v. Rogers, 521 F.3d 5 (1st Cir. 2008) (search of containers reasonable when they plausibly could contain items described in warrant)
- United States v. Fagan, 577 F.3d 10 (1st Cir. 2009) (warrant‑scope legal conclusions reviewed de novo)
- United States v. Camacho, 661 F.3d 718 (1st Cir. 2011) (suppression‑motion fact findings reviewed for clear error)
- Córdova & Simonpietri Ins. Agency Inc. v. Chase Manhattan Bank N.A., 649 F.2d 36 (1st Cir. 1981) (Puerto Rico treated like a state for Sherman Act purposes)
- United States v. Mangual‑García, 505 F.3d 1 (1st Cir. 2007) (prosecutorial‑misconduct harmless‑error framework and weight of evidence analysis)
- United States v. Angiulo, 485 F.2d 37 (1st Cir. 1973) (requirements for a balanced Allen charge)
- Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (U.S. 1968) (distinguishing direct and indirect purchaser issues in antitrust)
- Ill. Brick Co. v. Illinois, 431 U.S. 720 (U.S. 1977) (policy on who may recover antitrust damages)
- United States v. Andreas, 216 F.3d 645 (7th Cir. 2000) (volume‑of‑commerce guideline reasoning; presumption sales during conspiracy were affected)