Dеfendant, Koppers Company, Inc. (“Koppers”), appeals from a judgment of conviction entered on August 28, 1980, by Judge Ellen Bree Burns of the United States District Court for the District of Connecticut after a jury had found Koppers guilty of a felony violation of § 1 of the Sherman Act, 15 U.S.C. § l. 1 The indictment under which Koppers was convicted charged that “[bjeginning sometime prior to January 1970 and continuing until at least March 1975” Koppers and Dosch-King Company, Inc. (“Dosch-King”), had engaged in a conspiracy to rig bids and allocate territories in the sale of road tar to the State of Connecticut аnd its subdivisions. Dosch-King pleaded nolo contendere, cooperated with the government, and was fined $40,000; Koppers stood trial, was convicted, and was fined $400,000. 2
We affirm. Since the jury was justified in finding that Koppers’ conspiratorial conduct constituted a per se violation of § 1 of the Sherman Act, there was no requirement that the jury go on to find that that conduct also resulted in an unreasonable restraint of trade.
In each year of the early 1970s the State of Connecticut solicited bids on an annual
Arthur Schuck, Koppers’ manager of its eastern road materials district, made a proposal to Dosch-King in 1967 that the two firms divide the state between them so that Dosch-King would be the low bidder in the western part of Connecticut, where its activities were concentrated, and Koppers would be the low bidder in the eastern part, where its storage facility and distribution point were located. To accomplish this, Koppers would communicate its plant-side price and its estimated application cost to Dosch-King prior to the bidding deadline, so that both companies could use these confidential figures as the basis for their bids. Since the two firms were based at opposite ends of the state, the use of a common base price and application cost would have the effect of making each company the low bidder in its half of the state, because of the increasing transportation costs each would incur as they bid on deliveries further and further from home. The companies would, however, continue to submit bids in all 169 Connecticut towns and all four maintenance districts, which would give the impression that they were in direct competition for the state’s business even though they would know in advance which of their bids would be successful. After examining Schuck’s proposal to make sure that it would in fact result in the approximately even division of the state’s road tar business which Schuck had promised, Dosch-King agreed to the proposal. 4
With minor variations not relevant here, the two parties followed the same basic pattern in making bids each year from 1968 to 1975. Each January Schuck would meet with Dosch-King officials to give them Kop-pers’ plant-side base price and to assure them that Koppers was planning to adhere to the conspiracy. On the day before bids were due, Schuck would meet with Dosch-King personnel in Hartford. At these meetings, Schuck would give Dosch-King the bids which Koppers was going to make on the four maintenance districts, as well as the application rate which Koppers would be using in its town bids. With these figures in hand, Dosch-King was able to calculate exactly how much Koppers would be bidding in each town and maintenance district. In 1968, Dosch-King’s bids were
In January, 1975, the companies once again submitted their bids in the normal manner but the State of Connecticut rejected them and called for a second round of bidding. When Dosch-King personnel contacted Schuck prior to the second round in order to get Koppers’ base price, Schuck gave it to them, but informed them that the price would also be made available to the public. When Schuck was asked by Dosсh-King whether this meant that “the deal we have had is over,” he confirmed that it did. This second round of bidding, untainted by the Koppers/Dosch-King conspiracy, resulted in a notably different pattern of awards: Koppers ended up winning no awards at all, while Dosch-King’s bids were somewhat lower than the ones it had submitted in January.
DISCUSSION
On this appeal Koppers’ principal challenge is to the charge given by Judge Burns on the question of per se violations of the Sherman Act:
“The Sherman Act is violated only by ‘unreasonable’ restraints of trade. Not all restraints of trade are unreasonable; however, certain types of conduct are rеgarded as unreasonable per se. This means that the mere doing of the act itself constitutes an unreasonable restraint on commerce and it is not necessary to consider why the acts were committed or what effect it had on the industry. Agreements among competitors to rig bids or allocate customers are such per se unreasonable restraints of trade and illegal.
“In this case, members of the jury, if you find beyond a reasonable doubt that the defendant was a competitor of Dosch-King Company in the submission of bids to the State of Connecticut for road tar and became party to the conspiracy charged in the indictment, then you do not have to decide whether such conspiracy was reasonable or unreasonable because as I have just explained, an agreement among competitors to allocate customers and territories and not to compete for customers by submitting collusive bids is a per se violation of the Sherman Act.”
Koppers argues that this charge improperly withdrew the question of reasonableness from the jury by the use of a conclusive presumption, namely, that bid rigging and custоmer allocation are unreasonable
per se.
This argument asks us in effect to overrule the Supreme Court’s decisions in
United States v. Socony-Vacuum Oil Co.,
In
Socony-Vacuum,
which was a criminal case, the Court held that an agreement among competitors to purchase surplus gasoline on the spot market in order to check the then current rapid decline in prices violated § 1 of the Sherman Act, 15 U.S.C. § 1, which, without using the term “unreasonable,” declares unlawful “[ejvery contract, combination ... or conspiracy, in restraint of trade or commerce.” Although the Supreme Court had earlier interpreted this language as limited by the rule of reason,
Standard Oil Co. v. United States,
“Ruinous competition, financial disaster, evils of price cutting and the like appear throughout our history as ostensible justifications for price-fixing. If the so-called competitive abuses were to be appraised here, the reasonableness of prices would necessarily become an issue in every price-fixing case. In that event the Sherman Act would soon be emasculated; its philosophy would be supplanted by one which is wholly alien to a system of free competition; it would not be the charter of freedom which its frаmers intended.
“The reasonableness of prices has no constancy due to the dynamic quality of business facts underlying price structures. Those who fixed reasonable prices today would perpetuate unreasonable prices tomorrow, since those prices would not be subject to continuous administrative supervision and readjustment in light of changed conditions. Those who controlled the prices would control or effectively dominate the market. And those who were in that strategic position would have it in their power to destroy or drastically impair the сompetitive system.”310 U.S. at 221 ,60 S.Ct. at 843 .
Thus the Supreme Court declared what must automatically be treated as unreasonable within the meaning of its earlier judicially-created rule of reason. As Professor Bork has written:
“Behavior is illegal per se when the plaintiff need prove only that it occurred in order to win his case, there being no other elements to the offense and no allowable defense.” R. Bork, The Antitrust Paradox 18 (1978).
In United States v. Topco Associates, Inc., supra, the per se rule was held applicable to allocation of market territories between horizontal competitors in order to minimize competition between them, as occurred here between Kopрers and Dosch-King from 1967 to 1973. The Court stated:
“One of the classic examples of a per se violation of § 1 is an agreement between competitors at the same level of the market structure to allocate territories in order to minimize competition. Such concerted action is usually termed a ‘horizontal’ restraint, in contradistinction to combinations of persons at different levels of the market structure, e. g., manufacturers and distributors, which are termed ‘vertical’ restraints. This Court has reiterated time and time again that ‘[h]ori-zontal territorial limitations ... are naked restraints of trade with no purpose except stifling of сompetition.’ White Motor Co. v. United States,372 U.S. 253 , 263 [83 S.Ct. 696 , 702,9 L.Ed.2d 738 ] (1963). Such limitations are per se violations of the Sherman Act.”405 U.S. at 608 ,92 S.Ct. at 1133 .
In cases involving behavior such as bid rigging, which has been classified by courts as a
per se
violation, the Sherman Act will be read as simply saying: “ ‘An agreement among competitors to rig bids is illegal.’ ”
United States v. Brighton Building & Maintenance Co.,
The decisions relied upon by Koppers are clearly distinguishable from
Socony-Vacu-um
and the present case.
United States
v.
United States Gypsum Co., supra,
grew out of an indictment charging six major manufacturers of gypsum board with fixing prices by exchanging price information in violation of the Sherman Act. The defendants argued that their actions were undertaken for the purpose of complying with the “meeting competition” provision of the Robinson-Patman Act. 15 U.S.C. § 13. The jury was not required by the district court to find that the defendants intended to fix prices. The jury was simply instructed that it could convict the defendants if it found that “ ‘the
effect
of the exchanges of pricing information [had been] to raise, fix, maintain, and stabilize prices.’ ”
Id.
For the same reasons appellant’s reliance on
Morissette
v.
United States, supra
(holding that intent is an essential element of the crime of embezzlement, 18 U.S.C. § 641, which must be charged to the jury) and
Sandstrom v. Montana, supra
(declaring erroneous, where intent was an essential element, an instruction that “[t]he law presumes that a person intends the ordinary consequences of his voluntary acts”) is misplaced. Here the jury was properly instructеd that to convict it must find an intent to rig prices. Since an agreement to fix prices is by its very nature a restraint on competition within the meaning of § 1 of the Sherman Act and lacks “any redeeming virtue,”
Northern Pacific Railway v. United States,
In addition to arguing that the charge given by the district court improperly withdrew the issue of reasonableness from the jury by the use of a conclusive presumption, Koppers also contends that the charge denied the jury the opportunity to find that the conspiracy in which Koppers was involved was not a horizontal conspiracy to rig bids or allocate customers but was instead a vertical allocation of territories or customers, which would propеrly be subject to the rule of reason. In making this argument, Koppers points to the fact that by 1973 Dosch-King was buying all of its road tar from Koppers, and that therefore their relationship was a vertical one, similar to the manufacturer-distributor relationship found to be subject to the rule of reason in
Continental T.V., Inc. v. GTE Sylvania, Inc.,
The issue posed in the
Continental T.V.
case was whether a manufacturer’s policy of limiting the number of franchises granted and requiring each franchisee to sell its products only from the location at which it was franchised constituted a
per se
violation of the Sherman Act. After noting that vertical restrictions of this type can oftеn be expected to increase both intrabrand and interbrand competition, the Court concluded that a blanket
per se
rule applicable to all vertical restraints should not be laid down, because such restraints have not been shown to have the consistently “pernicious effect on competition” which previous decisions of the Court have required as a predicate for the imposition of a
per se
rule.
Id.
at 58,
“There may be occasional problems in differentiating vertical restrictions from horizontal restrictions originating in agreements among the retailers. There is no doubt that restrictions in the latter category would be illegal per se, see, e. g., United States v. General Motors Corp.,384 U.S. 127 [86 S.Ct. 1321 ,16 L.Ed.2d 415 ] (1966); United States v. Topco Associates, Inc., supra, but we do not regard the problems of proof as sufficiently great to justify a per se rule.”433 U.S. at 58 n.28,97 S.Ct. at 2561 n.28.
There was no foundation in the evidence in this case to support Koppers’ theory that its behavior was the sort that
Continental T.V.
sought to protect. The district court did not, therefore, err in refusing to give the requested charge based on
Continental T.V.
The decision in
Continental T.V.
not to impose a
per se
rule was based on the Court’s determination that the kind of vertical restraint under consideration there held оut at least some possibility of increased competition, both intraband and in-terbrand. No such possibility exists here. Koppers’ obvious and only motive for maintaining Dosch-King as a supplier and bidder in Connecticut was not to promote competition but to raise prices and deceive state and local officials into the belief that Kop-
The historical development of the relationship between Koppers and Dosсh-King lends further support to the conclusion that a
per se
approach was properly applied below. The basic bid rigging agreement between Koppers and Dosch-King arrived at in late 1967 and early 1968 was clearly unlawful as a
per se
violation, since at that time the two firms were indisputably horizontal competitors.
United States v. Socony-Vacuum, supra; United States v. Topco Associates, Inc., supra.
The terms of the agreement and the strategy for its implementation remained essentially unchanged from 1968 until the conspiracy’s dissolution in 1975. While it is true that in 1973 Dosch-King began buying all of its road tar frоm Koppers, there is no evidence whatsoever that this change in supply patterns had any effect on the basic non-competitive relationship between the companies. The theme of
Continental T.V.
is that economic realities, including the possibility of pro-competitive activities, rather than legal formalisms should control.
“In this case, members of thе jury, if you find beyond a reasonable doubt that the defendant was a competitor of Dosch-King Company in the submission of bids to the State of Connecticut for road tar and became party to the conspiracy charged in the indictment, then you do not have to decide whether such conspiracy was reasonable or unreasonable because as I have just explained, an agreement among competitors to allocate customers and territories and not to compete for customers by submitting collusive bids is a per se violation of the Sherman Act.” (Emрhasis supplied).
Thus, any confusion in the minds of the jury caused by the court’s prior use of the disjunctive was cured. But even if it was not, the court’s use of the disjunctive did
Koppers’ remaining assignments of error may be disposed of more briefly. We find no merit in its claim that the district court supplied the jury with the wrong standard for deciding when a company can be held criminally liable for the acts of its employees. The court charged that a corporation could be held criminally liable for the acts of its managerial agents
“done on behalf of and to the benefit of the corporation and directly related to the performance of the duties the employee has authority to perform.... By a managerial agent I mean an officer of the corporation or an agent of the corporation having duties of such responsibility that his conduct may fairly be assumed to represent the corporation.”
Koppеrs would have us find that liability can only be extended to the action of “high managerial agents,” meaning those “having duties of such responsibility that [their] conduct may fairly be assumed to represent the policy of the corporation” (emphasis supplied).
We decline the invitation. The standard for imputation of liability given by the court below is amply supported. See, e. g.,
Hydrolevel Corp. v. American Society of Mechanical Engineers, Inc.,
We also find no merit in the two evidentiary errors assignеd by Koppers. The trial court’s decision to admit evidence documenting the demise of the conspiracy between Koppers and Dosch-King and the subsequent change in bidding patterns was correct, since post-conspiracy evidence is admissible if it is probative of the existence of the conspiracy.
Anderson v. United States,
We also reject Koppers’ argument that it was error for the district court to have permitted any reference to an investigation into road tar bid procedures undertaken in early 1975 by the State of Connecticut. The government’s briеf references to the report were made only to reveal to the jury the fact that the government’s principal witnesses had perjured themselves during the early phases of the state investigation. In eliciting this testimony on direct, the government was acting within its right to anticipate attempts by defense counsel to attack its witnesses’ credibility. See, e.
g., United States v. Hasenstab,
The conviction is affirmed.
Notes
. Title 15 U.S.C. § 1 reads as follows:
“Every contraсt, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding one million dollars if a corporation, or, if any other person, one hundred thousand dollars or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.”
. Prior to December 21, 1974, violation of § 1 was a misdemeanor, 15 U.S.C. § 1 (1970); since then, it has been a felony punishable by fines of up to one million dollars. Antitrust Procedures and Penalties Act, Pub.L.No. 93-528, § 3, 88 Stat. 1706, 1708.
. During the period covered by the indictment, road tar was the substance which most towns preferred to use in repairing their roads, even though liquid asphalt, which could be used for the same purpose, was considerably cheaper. Since 1976, however, road tar has no longer been available in New England, because the dramatic increase in oil prices has made it more attractive for potential sellers of road tar to channel their product in other directions.
. The companies also agreed to split up the four state maintenance districts. However, since the use of the transportation differential would not always divide the districts evenly, Schuck agreed to provide Dosch-King with Koppers’ actual bid prices for the four districts, so that Dosch-King would bid high on the two eastern districts and low on the two western districts.
. Koppers has made it clear, both in its briefs and at oral argument, that its argument is in now way meant to contest the validity of the per se rule in civil actions brought under the Sherman Act.
. Koppers also argues that the district court’s charge on intent, which permitted the jury to convict if it found that the defendant had known the objective of the conspiracy to rig bids and had intentionally become a member of it, was in conflict with
Gypsum,
because it did not require the jury to find that Koppers had also intended that the conspiracy result in anti-competitive effects. We reject this contention for the same reason that we reject Koppers’