UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK
December 3, 1997
UNITED STATES OF AMERICA,
SKW METALS & ALLOYS, INC. and CHARLES ZAK, Defendants.
The opinion of the court was delivered by: SKRETNY
DECISION AND ORDER
WILLIAM M. SKRETNY
Presently before this Court are Defendants' objections to the interpretation of the 1990 Antitrust Sentencing Guideline (U.S.S.G. § 2R1.1) contained in the Presentence Investigation Reports. Specifically, Defendants object to the Probation Officer's conclusion that where the Antitrust Guideline refers to "the volume of commerce done by him or his principal in goods or services that were affected by the violation" (U.S.S.G. § 2R1.1(b)(2)), sentencing pursuant to the Guideline should take into account the total sales of the product involved in the conspiracy made by the Defendant, rather than those sales that can be directly connected to the price-fixing conspiracy.
On March 17, 1997, upon a jury verdict, Defendants Charles Zak and SKW Metal & Alloys, Inc. ("SKW") were convicted on Count One of a two-count Indictment for conspiring to fix prices of commodity ferrosilicon in violation of the Sherman Act, 15 U.S.C. § 1. Presentence Investigation Reports were prepared by U.S. Probation Officer Michael Quarantillo regarding Defendants Zak ("Zak PSR") and SKW ("SKW PSR").
On September 23, 1997, counsel for parties appeared before this Court for a status conference regarding sentencing of Defendants. It became clear from the proceedings at this status conference, and from the parties' submissions, that sentencing in this matter should be delayed pending the Court's decision on the proper interpretation of the "volume of commerce" as used in the Antitrust Sentencing Guideline. U.S.S.G. § 2R1.1.
Defendants contend that "volume of commerce" should be interpreted narrowly, so that it includes only those sales of ferrosilicon that could be directly attributed to the price-fixing conspiracy, that is, the sales that were made at or above the illegally-fixed target price. The Government contends that "volume of commerce" should be interpreted broadly, so that it includes SKW's total sales of ferrosilicon products over the entire duration of the conspiracy.
For the reasons set forth below, this Court agrees with the Defendants that under the Antitrust Guideline, the term "volume of commerce" refers only to those sales that can be directly connected to the price-fixing conspiracy, that is, those sales made by Defendant SKW for which the conspirators successfully achieved their illegally-fixed target price.
1. The Antitrust Guideline
The 1990 version of the Antitrust Guideline, U.S.S.G. § 2R1.1,
entitled "Bid Rigging, Price-Fixing or Market Allocation agreements Among Competitors" provides:
(a) Base Offense Level: 9
(b) Specific Offense Characteristics
(1) If the conduct involved participation in an agreement to submit non-competitive bids, increase by 1 level.
(2) If the volume of commerce attributable to the defendant was less than $ 1,000,000 or more than $ 4,000,000, adjust the offense level as follows:
Volume of Commerce(Apply the Greatest) Offense Level
(A) Less than $ 1,000,000 subtract 1
(B) $ 1,000,000 - $ 4,000,000 no adjustment
(C) More than $ 4,000,000 add 1
(D) More than $ 15,000,000 add 2
(E) More than $ 50,000,000 add 3
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