UNITED STATES of America, Appellee, v. Frank PEAKE, Defendant, Appellant.
No. 16-2356
United States Court of Appeals, First Circuit.
October 23, 2017
874 F.3d 65
Before Howard, Chief Judge, Selya and Lipez, Circuit Judges.
Sean Sandoloski, Attorney, Antitrust Division, United States Department of Justice, with whom Brent Snyder, Acting Assistant Attorney General, James J. Fredericks and Lisa M. Phelan, Attorneys, Antitrust Division, were on brief, for appellee.
SELYA, Circuit Judge.
Defendant-appellant Frank Peake, smarting under the double sting of his conviction for antitrust conspiracy and this court‘s affirmance of that conviction, asked the district court to wipe the slate clean and grant him a new trial based on freshly discovered evidence. The district court demurred. Peake appeals. After careful consideration, we affirm the judgment below.
I. BACKGROUND
We sketch the facts, mindful that the reader who hungers for more exegetic detail may consult our earlier opinion affirming the underlying conviction and the district court‘s thoughtful rescript denying the appellant‘s motion for a new trial. See United States v. Peake (Peake I), 804 F.3d 81 (1st Cir. 2015), cert. denied, — U.S. —, 137 S.Ct. 36, 196 L.Ed.2d 25 (2016); United States v. Peake (Peake II), No. 11-cr-512, 2016 WL 8234673 (D.P.R. Oct. 18, 2016).
The government‘s case against the appellant had its roots in “one of the largest antitrust conspiracies” in United States history. Peake I, 804 F.3d at 84. Between 2002 and 2008, Sea Star Line (Sea Star) and Horizon Lines (Horizon), both leading freight carriers, agreed to fix rates and surcharges for Puerto Rico-bound cargo in a multi-pronged effort to maintain market share and to squelch competition.1 See id. at 85. In 2003, the appellant became Sea Star‘s chief operating officer and, later, its president. During his tenure, Sea Star reaped over half-a-billion dollars in total revenue. See id. at 99-100.
While the appellant joined the conspiracy in 2005, we fast-forward to November of 2011, at which time, a federal grand jury indicted the appellant on a charge of conspiracy to violate section one of the Sherman Act, which proscribes “agreements in restraint of trade or commerce ‘among the several [s]tates.‘” Id. at 86 (quoting
The government‘s case included a trove of incriminating e-mails linking the appellant to the conspiracy. Among these e-mails was one sent by the appellant to a Horizon executive discussing prices quoted to a customer and expressing the appellant‘s desire to “avoid a price war.” Id. In other e-mails, the appellant consulted with Horizon officials before sending proposals to potential customers so that the two companies would maintain balanced market shares.
All in all, an “overwhelming amount” of evidence, including travel and telephone records, corroborated the appellant‘s leading role in orchestrating the conspiracy. Id. at 94. Indeed, the evidence showed that the appellant and Serra had more than 300 conversations, using their personal telephones, between 2003 and 2008.
In addition, Ron Reynolds, a United States Department of Agriculture (USDA) agent, testified about the conspiracy‘s impact on federal food assistance programs. Gabriel Lafitte, the purchasing director for nearly 200 Burger King restaurants in Puerto Rico, testified about the conspiracy‘s impact on the chain‘s island-wide costs and prices.
The appellant did not offer any witnesses at trial. Nor did he spend much time attacking the existence of the charged conspiracy. Instead, his counsel argued that the government had failed to prove that the appellant knowingly participated in the conspiracy. In this vein, counsel made much of the fact that William Stallings, a former Sea Star executive cooperating with the government, had recorded conversations with conspiracy participants for two months, but had never recorded any statements by the appellant.
The jury rejected the appellant‘s defense and found him guilty. The district court sentenced him to sixty months’ imprisonment, and we affirmed the conviction and sentence. See id. at 85, 100.
Long after the jury had rendered its verdict, the appellant learned that Stallings (whom neither party had called as a witness) had filed a qui tam action pursuant to the False Claims Act (FCA),
On April 18, 2014, the appellant moved for a new trial in his criminal case pursuant to
II. ANALYSIS
In this venue, the appellant advances two assignments of error. First, he renews his contention that the government‘s nondisclosure of Stallings‘s qui tam action demanded a new trial, and he therefore faults the district court for denying his Rule 33 motion. Second, he contends for the first time that relief under Rule 33 is warranted because Puerto Rico should not
A. The Nondisclosure Claim.
This formulation is somewhat different if a movant colorably asserts that the government violated Brady. Under Brady, the government offends due process if it causes prejudice to the defendant by “either willfully or inadvertently” suppressing “exculpatory or impeaching” evidence in its custody or control that is “favorable to the accused.” United States v. Connolly, 504 F.3d 206, 212 (1st Cir. 2007) (citing Strickler v. Greene, 527 U.S. 263, 281-82, 119 S.Ct. 1936, 144 L.Ed.2d 286 (1999)). A defendant who seeks to premise his motion for a new trial on a Brady violation must satisfy the first (unavailability) and second (due diligence) elements of the conventional test. See id. at 212-13. But the third and fourth elements (materiality and prejudice, respectively) are merged and “replaced with the unitary requirement” that the defendant need demonstrate only “‘a reasonable probability that, had the evidence been disclosed to the defense’ in a timely manner, ‘the result of the proceeding would have been different.‘” Id. at 213 (quoting United States v. Bagley, 473 U.S. 667, 682, 105 S.Ct. 3375, 87 L.Ed.2d 481 (1985) (opinion of Blackmun, J.)); see Kyles v. Whitley, 514 U.S. 419, 434, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995).
This alteration in the
In applying these principles, we do not write on a pristine page. Rather, our review of a decision denying a Rule 33 motion must take into account that the district court “has a special sense of the ebb and flow of the ... trial.” Id. (internal quotation marks omitted). Consequently, we afford substantial deference to the district court‘s views regarding the likely impact of belatedly disclosed evidence and review its denial of a Rule 33 motion solely for abuse of discretion. See id.; Connolly, 504 F.3d at 211.
Here, the district court conducted a searching appraisal of the record and found no hint of cognizable prejudice stemming from the government‘s failure to disclose Stallings‘s filing of the qui tam action. See Peake II, 2016 WL 8234673, at *11. We explain briefly why this determination was well within the encincture of the district court‘s discretion.
It is uncontroverted that, at the time of trial, the appellant was unaware of Stallings‘s plan to file a qui tam action. Nor
The appellant insists that, had he been aware of the qui tam action, he would have called Stallings to testify and would have elicited testimony regarding three data points: that a different Sea Star executive (Leonard Shapiro) consummated Sea Star‘s conspiratorial agreement with Horizon in 2002; that Baci (the appellant‘s subordinate) played a central role in the conspiracy; and that the appellant was not a participant in any of the seventeen conversations that Stallings recorded while acting under the government‘s auspices. None of these data points, though, had anything to do with the qui tam action. Moreover, none of them was controversial. The government never disputed that it was Shapiro who forged the fifty-fifty arrangement with Horizon in 2002 (indeed, the government itself introduced trial testimony to that effect). So, too, Baci testified at the trial as a government witness and made clear that he managed the day-to-day details touching upon Sea Star‘s anticompetitive arrangement with Horizon. Last—but far from least—the government produced Stallings‘s seventeen recordings in discovery, and the appellant‘s counsel harped upon the appellant‘s absence from the recordings in his opening statement.
The short of it is that the appellant—who could have called Stallings as a trial witness but chose not to do so—fails to offer any coherent explanation as to why the existence of the qui tam action would have led him to reevaluate this decision. Put another way, the appellant has not articulated “any plausible strategic option” that the failure to reveal the existence of the qui tam action either “hampered or foreclosed.” Mathur, 624 F.3d at 506. For aught that appears, knowledge of the qui tam action would not have benefited the defense in any meaningful way.
The appellant resists the district court‘s conclusion to this effect, mustering a litany of other possible uses that he might have made of the qui tam action (had he known about it). These are, however, shots in the dark—and none of them comes close to hitting the mark.
To begin, the appellant submits that he would have introduced the qui tam complaint into evidence. The complaint would have been useful, he suggests in hindsight, because of what it does not say (that is, it hardly refers to the appellant). But this is whistling past the graveyard: the qui tam complaint contains two highly incriminating references to the appellant, which would have buttressed the government‘s theory that he was a moving force in the conspiracy.4 Thus, introduction of the qui tam complaint into evidence would have tended to weaken, not strengthen, the appellant‘s lack-of-knowledge defense.
Next, the appellant argues that timely disclosure of the qui tam action would have enabled him to impeach Stallings regarding the latter‘s financial incentive to cooperate with the government. One flaw in this argument is that neither side called Stallings as a trial witness, so any such impeachment evidence would have been
Sounding a similar note, the appellant contends that he could have used the qui tam action to impeach Reynolds (the USDA agent) who testified for the government. Evidence of the qui tam action would have been useful to prove Reynolds‘s bias, the appellant insists, inasmuch as the appellant‘s conviction would have tended to increase the likelihood of a substantial recovery by the government in the qui tam action.
This contention borders on the frivolous. Reynolds‘s testimony was offered solely to prove that the conspiracy affected interstate commerce. See Peake I, 804 F.3d at 92, 96-97 (discussing Sherman Act‘s interstate commerce requirement). Accordingly, Reynolds‘s testimony was brief and limited to a narrow point: the impact that the conspiracy had on federal food assistance programs. Seen in this light, the impeachment value of the qui tam action vis-á-vis Reynolds would have been slim to none.
Grasping at straws, the appellant argues that knowing about the qui tam action would have propped up his unsuccessful motion to transfer the criminal case to the Middle District of Florida. This argument is hopeless. In the first place, the appellant never advanced this argument below and, as a general rule, “legal theories not raised squarely in the lower court cannot be broached for the first time on appeal.” Teamsters, Chauffeurs, Warehousemen & Helpers Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir. 1992). In the second place, the propriety of venue is not material either to guilt or punishment. Cf. United States v. Lanoue, 137 F.3d 656, 661 (1st Cir. 1998) (noting that “[v]enue is not an element of the offense“). Consequently, information that is material only to a venue decision does not implicate Brady.
To say more on the prejudice point would be supererogatory. Common sense teaches that an undisclosed piece of evidence often looms larger in the eyes of a hopeful defendant than its actual dimensions warrant. In the Brady context, though, prejudice cannot be viewed in a funhouse mirror. Instead, it is a fact-specific phenomenon that must be gauged objectively in light of the circumstances of a particular case. It is not enough that a defendant thinks (or professes to think) that somehow, some way, his theory of defense would have prevailed had he been given timely access to the allegedly withheld information.
To sum up, we conclude that the district court‘s finding that the appellant suffered no cognizable prejudice from the delayed disclosure is fully supportable. The government‘s failure to disclose the qui tam action is “manifestly insufficient to place the trial record in ‘such a different light as to undermine confidence in the verdict.‘” Mathur, 624 F.3d at 505 (quoting Kyles, 514 U.S. at 435).
A loose end remains. The appellant argues, in the alternative, that the district court should have convened an evidentiary hearing on his Rule 33 motion. This argument contains more cry than wool.
We previously have explained that “evidentiary hearings on new trial motions in criminal cases are the exception rather than the rule.” Connolly, 504 F.3d at 220. Where, as here, the trial court supportably concludes that a Rule 33 motion “is conclusively refuted ... by the files and records of the case,” such a hearing would be futile. Id. at 219-20 (internal quotation marks omitted). Given its intricate web of findings, we discern no abuse of discretion in the district court‘s declination to hold an evidentiary hearing on the appellant‘s Rule 33 motion.
The appellant has one last arrow in his quiver. He complains that his conviction is invalid due to Puerto Rico‘s status. This plaint builds on the uncontroversial premise that the statute of conviction (the Sherman Act) outlaws conspiracies “in restraint of trade or commerce among the several [s]tates.”
Even without dwelling on the fact that this claim is foreclosed because it was not raised below, see Superline Transp., 953 F.2d at 21, it is without force. Under Rule 33, a new trial motion filed more than fourteen days after the verdict—like this one—must draw its essence from “newly discovered evidence.”
In all events, the appellant‘s claim is misdirected. The record in this case makes pellucid that the conspiracy in which the appellant participated involved more than commerce between a state and Puerto Rico. As we noted in affirming the appellant‘s conviction, the trial evidence showed that “the commerce affected by the conspiracy was not only between a state and Puerto Rico, but also among the states.” Peake I, 804 F.3d at 86.
We need go no further. For the reasons elucidated above, the judgment of the district court is
Affirmed.