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445 F.3d 105
Page 1
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
UNITED STATES of America, Plaintiff-Appellee,
v.
Daniel T. ROSE, Defendant-Appellant.
No. 05-10447.
May 10, 2006.
, Circuit Judge:
competition by fixing the price, rigging bids, and allocating customers for choline chloride sold
I
were responsible for more than 90% of choline chloride sales in the United States. The
445 F.3d 105
Page 2
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
other than the act of conspiring.” Moreover, conspiracies to “submit collusive, noncompetitive,
rigged bids,” allocate customers, and fix prices are per se violations of the Sherman Act. To
show that Rose actually intended to enter into the conspiracy, “the government was required to
show that [he] knowingly joined or participated in [it].”
(internal quotations and citations omitted).
chloride, which was the price announced in various trade journals and used as a reference
point in determining the price for particular customers. The companies allocated customers
by deciding which company would offer the lowest price for choline chloride to a particular
customer at the next bidding opportunity. This agreement was aimed at stabilizing the market
and keeping the price of choline chloride higher than it would otherwise be.
1987 and was actively involved in the conspiracy. He testified that, before Rose succeeded
him, he met with Rose to explain the business to him. *631 Hilling believed he was openly
discussing the conspiracy with Rose, although he did not use terms such as “conspiracy,” “bid
rigging,” or “allocating customers.” Hilling had prepared handwritten notes prior to the meeting
to guide the discussion, and they included phrases such as “Settle Market Share Issues.” He
agreement with Rose in the latter part of September 1997 when the two were on a business
trip in Europe. Fischer testified that he and Rose discussed the recent instability of the
market. Fischer felt that Rose needed to know about the agreement so that they could
develop a strategy “to manage the market going forward.” According to Fischer, once the two
returned from Europe, they developed a strategy “to draw a line in the sand” and “show that
445 F.3d 105
Page 3
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
reallocate product to [bring] the market back into equilibrium [,] so that prices could be
stabilized and margins increased.”
meeting, which was held off-site at a small café to avoid arousing suspicion, Rose was
introduced to the competitors, and Sigler demanded that DuCoa return the Tyson account.
DuCoa refused. No agreements were reached during this meeting.
Fischer arranged for another meeting to be held the following month, in February 1998. To
prepare, he and Felix, a DuCoa vice president, “put together particular accounts that [they] felt
testified that Chinook agreed to give one of its accounts, Cagle's, to Bioproducts to make up
for the loss of Tyson and equalize shares between the competitors. DuCoa also agreed that
its customer Roche “would be moved to [Bioproducts].” The competitors further agreed to
raise prices effective April 1, 1998 and how that would be announced in a trade publication and
letters to customers. Felix, from DuCoa, had prepared a price proposal for the group to
terms of whether or not he was still going to support the price increase in April, and to try to
see if there were some potential ways [they] could work together.” Sigler confirmed that it had
put the price increase in place, and DuCoa and Bioproducts shared the prices they intended to
offer to some of their respective customers. Sigler also wanted Tyson restored as a customer,
but Rose refused and pointed out that Cagle's was a good compromise. Sigler relented and
Department of Justice. Rose and Kennedy were unaware of this development, but were
aware that Bioproducts became more aggressive in the marketplace during and after July.
Rose and Kennedy continued to communicate and attempted, unsuccessfully, to contact
Sigler. Rose and Kennedy planned to meet at the end of September 1998, but cancelled this
plan after the FBI executed search warrants on DuCoa's and Chinook's offices. Felix, Fischer,
445 F.3d 105
Page 4
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
and Kennedy ultimately pled guilty to a conspiracy to violate section one of the Sherman Act,
and Sigler was not prosecuted.
Rose contends that although a conspiracy existed before he became president of DuCoa, it no
longer existed at the time he assumed that position because of the competitors' excessive
of evidence, and there was evidence that bidding to win the Tyson account was intended to
strengthen DuCoa's position in enforcing the conspirators' agreement. In any event, there is
substantial evidence of a conspiracy to fix prices and allocate customers during Rose's tenure
and of his knowledge of and participation in that conspiracy. The evidence presented at trial
was sufficient to support the jury's verdict that Rose conspired to restrain trade in violation of
Rose next challenges the district court's three-level enhancement to his sentence for his
alleged role as a manager or supervisor, pursuant to . At the sentencing hearing, the district
court concluded that the PSR's findings regarding Rose's role in the offense were “correct
under a preponderance of the evidence standard” and overruled Rose's objection to the
enhancement. “We review the trial court's determination that [Rose] was a manager or
evidence or otherwise demonstrate that the information in the PSR is unreliable.”
; see also (“Post-, we continue to apply the same standard of review to claims of erroneous
fact-finding ....”).
(internal citations and quotations omitted).
Having reviewed the record in its entirety, we are not “left with the definite and firm conviction
would be part of the conspiracy once he knew of the agreement to fix prices and allocate
customers. Kennedy, an officer of Chinook, testified, “If Dan [Rose] had said ... he was not
going to be part of the agreement, or if he said that we can't discuss this, it was illegal, in my
445 F.3d 105
Page 5
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
reason to have any discussions.” The evidence reasonably supports the conclusion that
Rose, as president of DuCoa, had the authority to decide what bids would be submitted to
customers and in fact exercised that control in successfully competing for the Tyson account.
At a minimum, Rose “exercised management responsibility over the property, assets, or
activities of a criminal organization.”
a leadership enhancement is appropriate. Although Rose did not recruit others into the
conspiracy, the trial testimony demonstrates that he spoke for DuCoa at the meetings,
exercised supervisory control over Fischer and Felix, and made decisions for DuCoa. The
district court did not clearly err by adopting the findings and recommendation in the PSR to
apply the three-level manager enhancement.
sales of choline chloride products that were affected by the conspiracy during the defendant's
involvement, from August 1997 through September 1998.” Rose asserts on appeal, as he did
at the sentencing hearing, that the evidence shows that his involvement, if any, in the
conspiracy began at the meeting in February 1998.
provides for a five-level enhancement for a volume of commerce over $15 million, while
conspiracy openly with Rose. However, there is no evidence that Rose knowingly joined or
participated in the conspiracy at that time. It was not until the end of September 1997 at the
earliest, when, according to Fischer's testimony, Fischer told Rose of his involvement in the
conspiracy. Rose and Fischer thereafter developed a strategy to strengthen DuCoa's position
with its competitors in order to enforce the agreement that had been made in restraint of trade.
conspiracy. The government relies on an Eighth Circuit decision, , in support of its position.
445 F.3d 105
Page 6
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
445 F.3d 105
Page 2
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
other than the act of conspiring.” Moreover, conspiracies to “submit collusive, noncompetitive,
rigged bids,” allocate customers, and fix prices are per se violations of the Sherman Act. To
show that Rose actually intended to enter into the conspiracy, “the government was required to
show that [he] knowingly joined or participated in [it].”
(internal quotations and citations omitted).
chloride, which was the price announced in various trade journals and used as a reference
point in determining the price for particular customers. The companies allocated customers
by deciding which company would offer the lowest price for choline chloride to a particular
customer at the next bidding opportunity. This agreement was aimed at stabilizing the market
and keeping the price of choline chloride higher than it would otherwise be.
1987 and was actively involved in the conspiracy. He testified that, before Rose succeeded
him, he met with Rose to explain the business to him. *631 Hilling believed he was openly
discussing the conspiracy with Rose, although he did not use terms such as “conspiracy,” “bid
rigging,” or “allocating customers.” Hilling had prepared handwritten notes prior to the meeting
to guide the discussion, and they included phrases such as “Settle Market Share Issues.” He
agreement with Rose in the latter part of September 1997 when the two were on a business
trip in Europe. Fischer testified that he and Rose discussed the recent instability of the
market. Fischer felt that Rose needed to know about the agreement so that they could
develop a strategy “to manage the market going forward.” According to Fischer, once the two
returned from Europe, they developed a strategy “to draw a line in the sand” and “show that
445 F.3d 105
Page 3
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
reallocate product to [bring] the market back into equilibrium [,] so that prices could be
stabilized and margins increased.”
meeting, which was held off-site at a small café to avoid arousing suspicion, Rose was
introduced to the competitors, and Sigler demanded that DuCoa return the Tyson account.
DuCoa refused. No agreements were reached during this meeting.
Fischer arranged for another meeting to be held the following month, in February 1998. To
prepare, he and Felix, a DuCoa vice president, “put together particular accounts that [they] felt
testified that Chinook agreed to give one of its accounts, Cagle's, to Bioproducts to make up
for the loss of Tyson and equalize shares between the competitors. DuCoa also agreed that
its customer Roche “would be moved to [Bioproducts].” The competitors further agreed to
raise prices effective April 1, 1998 and how that would be announced in a trade publication and
letters to customers. Felix, from DuCoa, had prepared a price proposal for the group to
terms of whether or not he was still going to support the price increase in April, and to try to
see if there were some potential ways [they] could work together.” Sigler confirmed that it had
put the price increase in place, and DuCoa and Bioproducts shared the prices they intended to
offer to some of their respective customers. Sigler also wanted Tyson restored as a customer,
but Rose refused and pointed out that Cagle's was a good compromise. Sigler relented and
Department of Justice. Rose and Kennedy were unaware of this development, but were
aware that Bioproducts became more aggressive in the marketplace during and after July.
Rose and Kennedy continued to communicate and attempted, unsuccessfully, to contact
Sigler. Rose and Kennedy planned to meet at the end of September 1998, but cancelled this
plan after the FBI executed search warrants on DuCoa's and Chinook's offices. Felix, Fischer,
445 F.3d 105
Page 4
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
and Kennedy ultimately pled guilty to a conspiracy to violate section one of the Sherman Act,
and Sigler was not prosecuted.
Rose contends that although a conspiracy existed before he became president of DuCoa, it no
longer existed at the time he assumed that position because of the competitors' excessive
of evidence, and there was evidence that bidding to win the Tyson account was intended to
strengthen DuCoa's position in enforcing the conspirators' agreement. In any event, there is
substantial evidence of a conspiracy to fix prices and allocate customers during Rose's tenure
and of his knowledge of and participation in that conspiracy. The evidence presented at trial
was sufficient to support the jury's verdict that Rose conspired to restrain trade in violation of
Rose next challenges the district court's three-level enhancement to his sentence for his
alleged role as a manager or supervisor, pursuant to . At the sentencing hearing, the district
court concluded that the PSR's findings regarding Rose's role in the offense were “correct
under a preponderance of the evidence standard” and overruled Rose's objection to the
enhancement. “We review the trial court's determination that [Rose] was a manager or
evidence or otherwise demonstrate that the information in the PSR is unreliable.”
; see also (“Post-, we continue to apply the same standard of review to claims of erroneous
fact-finding ....”).
(internal citations and quotations omitted).
Having reviewed the record in its entirety, we are not “left with the definite and firm conviction
would be part of the conspiracy once he knew of the agreement to fix prices and allocate
customers. Kennedy, an officer of Chinook, testified, “If Dan [Rose] had said ... he was not
going to be part of the agreement, or if he said that we can't discuss this, it was illegal, in my
445 F.3d 105
Page 5
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
reason to have any discussions.” The evidence reasonably supports the conclusion that
Rose, as president of DuCoa, had the authority to decide what bids would be submitted to
customers and in fact exercised that control in successfully competing for the Tyson account.
At a minimum, Rose “exercised management responsibility over the property, assets, or
activities of a criminal organization.”
a leadership enhancement is appropriate. Although Rose did not recruit others into the
conspiracy, the trial testimony demonstrates that he spoke for DuCoa at the meetings,
exercised supervisory control over Fischer and Felix, and made decisions for DuCoa. The
district court did not clearly err by adopting the findings and recommendation in the PSR to
apply the three-level manager enhancement.
sales of choline chloride products that were affected by the conspiracy during the defendant's
involvement, from August 1997 through September 1998.” Rose asserts on appeal, as he did
at the sentencing hearing, that the evidence shows that his involvement, if any, in the
conspiracy began at the meeting in February 1998.
provides for a five-level enhancement for a volume of commerce over $15 million, while
conspiracy openly with Rose. However, there is no evidence that Rose knowingly joined or
participated in the conspiracy at that time. It was not until the end of September 1997 at the
earliest, when, according to Fischer's testimony, Fischer told Rose of his involvement in the
conspiracy. Rose and Fischer thereafter developed a strategy to strengthen DuCoa's position
with its competitors in order to enforce the agreement that had been made in restraint of trade.
conspiracy. The government relies on an Eighth Circuit decision, , in support of its position.
445 F.3d 105
Page 6
445 F.3d 105, Fed. Sec. L. Rep. P 93,741
(Cite as: 445 F.3d 105)
