You are on page 1of 7

+(,121/,1(

Citation:
Alan B. Morrison, Sentencing in Criminal Antitrust
Cases, 46 Antitrust L.J. 528, 533 (1977)

Content downloaded/printed from HeinOnline

Wed Sep 13 20:32:10 2017

-- Your use of this HeinOnline PDF indicates your acceptance


of HeinOnline's Terms and Conditions of the license
agreement available at http://heinonline.org/HOL/License

-- The search text of this PDF is generated from


uncorrected OCR text.

-- To obtain permission to use this article beyond the scope


of your HeinOnline license, please use:

Copyright Information

Use QR Code reader to send PDF to


your smartphone or tablet device
SENTENCING IN CRIMINAL
ANTITRUST CASES
By ALAN B. MORRISON
Member of the New York
and
District of Columbia Bars

Let me begin with a disclaimer, first about my cold or allergies or whatever


it is; and second about my qualifications or perhaps lack of them. Let me
say that I have never prosecuted a criminal antitrust case; I have never
defended an antitrust criminal case; I have never sentenced a criminal
defendant in an antitrust case; and, fortunately, I have never been sentenced
as a defendant.
For those of you who say that I am unqualified, I can only reply that
I am unencumbered by prior prejudices in the matter. The only other thing
I can say in my defense is that I have thought about the question of white-
collar crime and antitrust crime, and perhaps I can give you some new
ideas today.
We are going to focus on the individual this afternoon rather than the
corporation, so let me begin briefly with fines and alternative sentences
and then talk about imprisonment.

As to fines, I find them largely unsatisfactory because they have effects


on different people in such different ways that even with a range of zero
to $100,000 we find enormous disparity in the effects which are often very
difficult to measure.
Fines, it seems to me, produce extreme difficulty in obtaining the right
combination of certainty, deterrence and fairness to the individual. More
importantly, as you probably know better than I, there is enormous opportu-
nity for fines somehow to be repaid by corporations during the course of
future service, a matter which, even if the government had three times as
many investigators and attorneys in the Antitrust Division, it probably could
not detect.
What about behavioral sanctions? Well, I first agree with Blair White
that after a relatively short period of time they wear kind of thin. I am
not talking about behavioral sanctions in areas such as coal mine safety,
for example, where I would strongly urge that someone who has willfully
not taken into account the safety laws should be made to go down and
work in the mines for a few days and see how the situation is down there.
ALAN B. MORRISON

Or an oil company executive might profitably spend a few weekends cleaning


up the beaches at Santa Barbara. Or perhaps a store which has been found
guilty of violating the health regulations could be made to post signs where
all the customers come in the door, advising them of this fact, instead of
having it buried. down in the legal notices someplace.

Judge Renfrew's sentences1 disturbed me because I find them to be proba-


bly rather ineffective, as well as presenting enormous problems of supervision.
And, I might say, from the defendant's point of view, they raise certain
rather serious First Amendment questions not unlike those raised in the
Tornillo2 case a couple of years ago. The idea of a federal district judge
announcing to defendants that they can avoid going to jail on the condition
that they say things which the defendants may or may not agree with seems
to me to at least raise some First Amendment questions regardless of what
else it does.
I would also suggest that, if the government is dissatisfied with the sen-
tences being given in these alternate sentencing cases, it could seriously
think about taking appeals. Contrary to what Blair White said, it is my
view that when Judge Mvecke said he was not going to sentence anybody
for six months, you do not have to pay attention to what he said, you
can look at what he did. It seems to me it was very clear that at that
time he imposed a sentence of whatever he said he was going to impose,
put them on probation for six months provided that they did a, b, and
c, and they wouldn't get sentenced. I think that is pretty clear, and if the
sentence is illegal under the law, then it seems to me that that is a matter
that should be properly taken up. And indeed, if the Justice Department
feels the way I think they ought to about those sentences, it ought to
be taking them up.
To begin the discussion of the appropriateness of a penalty, I think it
is worthwhile to look at the nature of the crime of price fixing. It is basically
a cold-blooded, calculated crime, not one committed in an act of passion
or due to poverty. However, it is, unlike other crimes involving economic
matters, not one committed for enormous personal gain. While it is true
that the gain could come through rising up the corporate ladder, there
is a very different kind of personal gain from, for instance, the heroin dealer
who sells narcotics either because he's an addict, which obviously does not
apply here or, because of the enormous profit available to the individual.

'United States v. H.S. Crocker Co., 4 TRADE REG. REP. (CCH) 45,074, at 53,563-3-564
(N.D. Cal. 1974).
2
Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974).
SENTENCING CRIMINAL ANTITRUST DEFENDANTS

It seems to me that these two facts make it possible, at least theoretically,


that antitrust crimes can be deterred. It is not necessary, of course, that
we bring out the big guns. I suppose that if we put into effect the death
penalty for parking violations, we would probably stop most of the illegal
parking in Washington. But nobody is suggesting that. It seems to me that
given the state of the jails we ought not to be suggesting that people go
to jail for very long periods of time, since it seems that for most of the
defendants, the length of the jail term is not what makes a difference.

In disctssing price fixing, what we are talking about is a crime which


is essentially a crime of stealing: taking away from competitors or from
consumers money that really does not belong to the antitrust violators. We
are talking about the willful crime of stealing in an antitrust criminal con-
text.

Well, everybody says these people are not really criminals. I suggest to
you that's wrong, except in one sense: and that is if you mean that they
don't look like criminals, they don't act like criminals, they don't dress like
the kind of criminals that you and I think of when we go down to the
local court system. Then in that sense you're right. They are a different
kind of criminal; yet they have committed larceny and they know it.

Now the problem in sentencing arises from the fact that these individuals
who come before the federal district court judges do not seem like criminals.
And it is easy to see why their sentences are different from sentences given
to purse snatchers or burglars. It is a little less clear why they should be
treated so differently, for instance, from tax fraud violators or securities
fraud violators. Yet the record is clear that that is what in fact has happened.

From 1972 to 1976 an average of five individuals who were sentenced


for antitrust violations spent a single day-or perhaps I should say a night-
in jail. The figures for fiscal 1976 are about the same. The average sentence
for conviction for securities fraud was a sentence of 45.7 months per defendant.
For tax fraud, for those who went to jail, it was 15.4 months. For antitrust
violation, the sum total for all antitrust violators for time spent in jail was
2-1/2 months.
Now why should that be so different? Well, I suppose at least in part
it's because all the defendants are businessmen. I was going to say busi-
nesspeople, but I think that women generally have not risen high enough
in the corporate hierarchy to be given positions in which they could fix
prices and be put in jail for it, at least not yet. Nevertheless, representatives
of the business community are, in many respects, the kind of people that
ALAN B. MORRISON

you normally don't think about sending to jail. They are all from impeccable
backgrounds; they have all performed community services; they all have
wonderful families who are standing before the district judge in the court-
room. And we are always beset with the same claims: that the conviction
has already ruined their career; that the conviction alone or the indictment
alone is enough punishment; that they have already lost the respect of their
family and their friends; and they will never recover. Yet, in spite of that
fact, everyday price 'fixing is going on, and individuals in the business
community are simply not being deterred by fear of punishment.
The heart of the problem, it seems to me, is that many of these judges
have defended antitrust defendants, perhaps not the very ones that are before
them but others very similar. They have not only defended but they have
befriended them, either at the local country club or at the local Rotary
Club or someplace else in town. They empathize with the problems of the
business community, and when they come face to face, eyeball to eyeball
with the family standing in the background, they find it, as Blair White
said, distasteful to sentence anyone, particularly an upstanding member of
the business community.
I believe that the solution to the problem is to eliminate the discretion
of the district court judge in the matter of sentencing antitrust violators.
It is my view that as soon as possible by statute or immediately by practice
in each district court, a rule ought to be adopted under which a minimum,
mandatory sentence of 30 days ought to be imposed on any antitrust viola-
tors. This would not, of course, suit the views of many who believe that
each sentence should be tailor made to the individual to produce precisely
the right kind of fairness. It would be, in my view, more of a mass-produced
sentence under which we start off with the absolute minimum under which
everyone goes to jail for 30 days. There are no probations, no suspended
sentences, no soft jail places. They go where everyone else goes for a period
of 30 days.
The principal value, it seems to me, of this kind of sentence is its certainty.
Thirty days means thirty days of very distasteful life. Prisons are not fun,
and I think that everyone who has been near them can attest to that fact.

Also, with that certainty we are then in a position to have an absolute


guarantee of having people go to jail for a period of 30 days, so that when
we get the aggravated cases, where people should go to jail for longer periods
of time, there are bench marks against which we can measure this. If nobody
is going to jail, then the ones who ought to go to jail for a very long time
are not going to seem very bad by comparison. It is my feeling that the
SENTENCING CRIMINAL ANTITRUST DEFENDANTS

new Justice Department Guidelines3 are not likely to get off the ground,
and are not likely to be in the real world of sentencing until we have a
situation in which people who are convicted are going to jail.
Now what do we do about cooperating witnesses? It seems to me this
is a very good incentive for cooperating witnesses; that is, to tell the witness
"you get on board now, before we indict anybody, because once you're
indicted we don't have any choice-the decision you have to make, you
have to make it now." Now that starts a man, or perhaps a woman, thinking
about what to do with the situation and the government.
For those of you who are familiar with mandatory sentences in the narcot-
ics area, and are familiar with what is probably a very poor record of them
there, I suggest to you that is not a very good analogy. They are involved
in most cases with people who are addicts, for whom deterrence is an irratio-
nal matter, something of no effect for somebody who needs a "fix" of a
narcotic. And, for those who are the major suppliers in the matter, the
money is so enormous and the risk of being caught is so small that the
certainty ofjail sentences do not affect anyone.
It seems to me at the very least that it is worth the experiment with
mandatory, minimum sentences of thirty days.
Now let me just mention a couple of other matters on the sentencing
that I would like to see brought about. In the first place, I believe that
the Justice Department should include in every indictment in a criminal
antitrust case an individual. Corporations do not commit crimes by them-
selves. And since the Justice Department cannot now prevent-although
perhaps it should be able to prevent-corporations from entering pleas of
nolo, there hardly seems to be a reason to bring a criminal antitrust action
with no individual defendants, regardless of the fact that corporations can
have larger fines imposed against them. It would be far better for the Justice
Department to allocate its resources in other directions when they are not
prepared to charge any individuals with a crime.

I would also suggest that efforts be made to go after the lower-level


employees in the conspiracy. These employees are in a position to know
what was going on, they are necessary parties to the conspiracy, and they
can often implicate others at the top; particularly with the mandatory sen-
tences it would be very appealing to start at that point.

-See U.S. Department ofJustice Guidelines for Sentencing Recommendations in Felony Cases
Under the Sherman Act, reprinted in 803 ANTITRUST & TRADE REG. REP. (BNA) at F-1 (Mar.
1, 1977).
ALAN B. MORRISON

Last, I think it would be useful to have another look at the question


about deductibility of legal fees, from a legislative point of view. The Su-
preme Court has said, in the Tellier4 case, that the Internal Revenue Service
cannot refuse to allow deductions for legal fees in a criminal case. Well,
obviously that is a very different matter when it comes to the Congress.
This is a matter of special importance for the individual, and at the same
time I think it would be useful to look again at the question of indemnity
and insurance whereby corporations are often paying for the individual.
When the matter becomes serious enough and the individual is really put
into the bind, we may then start to see some real deterrence from the antitrust
enforcement point of view.
Now of course if everything I have said here today were enacted tomorrow,
I do not for a minute suggest that there would be no more price fixing.
All I can suggest to you is that there would probably be a little less of
it. Thank you.
MR. CRANE: Our final speaker this afternoon is Vic Kramer. He is
also from Washington, and also went to Yale Law School, as did Alan
Morrison. He has been with the Antitrust Division, where he was for many
years Chief of the General Litigation Section. He's been a partner at Arnold
& Porter. He is now Director of the Institute for Public Interest Repre-
sentation and a professor of antitrust law and professional responsibility
at Georgetown Law Center. He.is a public member of the Administrative
Conference of the United States. Vic, would you like to address yourself
now to the question of sentencing antitrust violators?

4
Commissioner v. Tellier, 363 U.S. 687 (1966).