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United States v. Peake

United States Court of Appeals, First Circuit

October 23, 2017

UNITED STATES OF AMERICA, Appellee,
v.
FRANK PEAKE, Defendant, Appellant.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Daniel R. Domínguez, U.S. District Judge]

          David Oscar Markus, with whom Mona E. Markus, A. Margot Moss, and Markus/Moss PLLC were on brief, for appellant.

          Sean Sandoloski, Attorney, Antitrust Division, United States Department of Justice, with whom Brent Snyder, Acting Assistant Attorney General, James J. Fredricks and Lisa M. Phelan, Attorneys, Antitrust Division, were on brief, for appellee.

          Before Howard, Chief Judge, Selya and Lipez, Circuit Judges.

          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, 137 S.Ct. 36 (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 15 U.S.C. § 1). During the appellant's nine-day trial in 2013, the government introduced testimony from three cooperating witnesses: Gabriel Serra (a Horizon senior vice president), Greg Glova (a mid-level Horizon executive who reported to Serra), and Peter Baci (a Sea Star executive who reported to the appellant). These three witnesses consistently described the conspiracy's modus operandi and hierarchical structure. Pertinently, Baci and Glova would resolve day-to-day issues relating to pricing and market-share allocation, while the appellant and Serra would settle any lingering disputes. For instance, Serra testified that when Walgreens, a significant importer of consumer goods to Puerto Rico, decided to deal exclusively with Horizon rather than splitting shipping contracts between Horizon and Sea Star, Serra and the appellant agreed that Horizon "would compensate" Sea Star for its lost revenue "by shifting cargo to Sea Star vessels" and paying Sea Star to carry Horizon cargo. Id. at 85. This trio of witnesses also described meetings that the appellant had with Horizon officials regarding the conspiracy, including a 2006 summit meeting in Orlando at which the appellant and Serra resolved price-fixing and market-allocation issues.

         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 ...


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