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United Staes v. Beaver

February 4, 2008; as amended February 26, 2008


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 06 CR 61-Larry J. McKinney, Judge.

The opinion of the court was delivered by: Kanne, Circuit Judge.


Before KANNE, EVANS, and WILLIAMS, Circuit Judges.

A federal jury found Christopher Beaver guilty of participating in a price-fixing conspiracy, 15 U.S.C. § 1, and making false statements to a federal law enforcement agent who was investigating that conspiracy, 18 U.S.C. § 1001(a)(1). Beaver challenges his convictions on appeal, arguing that the government failed to prove at trial that a price-fixing conspiracy existed, that he joined the conspiracy, or that he made false statements. We affirm.


In October 2003, Gary Matney, a manager at the Indianapolis office of Prairie Material Ready-Mix Concrete, approached the Federal Bureau of Investigation to report the existence of a price-fixing conspiracy involving several of Prairie Material's competitors. According to Matney, Prairie Material was being pressured to join the conspiracy, a claim that led the FBI to investigate the pricing activities of five ready-made concrete producers in the Indianapolis metropolitan area: (1) Shelby Materials, Inc.; (2) Builder's Concrete & Supply Co., Inc.; (3) Irving Materials, Inc.; (4) Hughey, Inc.; and (5) Ma-Ri-Al, which does business as Beaver Materials Corp. The investigation reached a turning point on May 25, 2004, when FBI agents executed search warrants on the five companies, and interviewed the companies' corporate officers and employees regarding the existence of the conspiracy. Information recovered at that time substantiated many of Matney's claims, and set into motion a chain of events that would mark the demise of the price-fixing scheme. Shelby Materials's Vice-President, Richard Haehl, immediately admitted his criminal conduct and offered to help the government investigate the cartel; the government, in turn, granted Haehl amnesty conditioned on his continued cooperation and, if required, truthful testimony at trial. Shortly thereafter, the government charged Builder's Concrete, Irving Materials, and Hughey, Inc., and their respective corporate officers, Gus "Butch" Nuckols, Price Irving, and Scott Hughey with participating in the scheme. Nuckols, Irving, and Hughey eventually admitted their roles in the conspiracy and entered into plea agreements, in which they, too, offered to help the government investigate the cartel and testify truthfully at trial if called.

Upon enlisting the cooperation of Haehl, Nuckols, Irving, and Hughey, the government sought an indictment against Beaver Materials and its corporate officers. The government's efforts paid off in April 2006, when a federal grand jury returned a four-count indictment against Beaver Materials, Ricky Beaver-the company's Commercial Sales Manager-and Christopher Beaver-the Operations Manager. Two of the counts were directed at Christopher. First, the indictment charged Christopher with participating in a price-fixing conspiracy in violation of § 1 of the Sherman Antitrust Act. Specifically, the indictment alleged that he met with competitors at "a horse barn owned by Gus B. Nuckols, III a/k/a Butch Nuckols, president of Builder's Concrete and Supply Co.," at which they agreed to increase prices, limit discounts, and implement surcharges; carried out and enforced their agreement; and attempted to conceal the conspiracy. See 15 U.S.C. § 1. The indictment also charged Christopher with making false statements regarding his participation in the conspiracy to an FBI agent who investigated it. See 18 U.S.C. § 1001(a)(1). Unlike their alleged cohorts, Christopher, Ricky, and Beaver Materials eschewed plea agreements and instead exercised their rights to a jury trial, at which the three were tried jointly.*fn1 The evidence introduced at trial, which we review in a light most favorable to the government, see United States v. Andreas, 216 F.3d 645, 670 (7th Cir. 2000), was as follows:

The government presented the testimony of Haehl, Nuckols, Irving, and Hughey, who each provided details as to the origins of the price-fixing conspiracy and Christopher Beaver's role within the scheme. The men explained that, at the turn of the century, the ready-made-concrete market in the Indianapolis area was extremely competitive. The market was primarily occupied by eight concrete producers that often vied for the same customers by bidding on their construction projects. The companies' bidding and pricing processes were largely uniform. At the beginning of construction season in the spring of each year, the producers would send price lists to potential clients to inform them of the lowest possible rates at which they could provide concrete. The price lists usually featured five dollar amounts that went into the calculation of the quoted price. First, there was the base price-or, as it was called, the gross price-of the desired amount of a particular mix of concrete. Next, the price list provided the available discount off the gross price for promptly submitting payment; the price list then deducted this discount, which yielded the net price. But the producers' net prices were identical more often than not, so to distinguish themselves and undercut their competition the producers would include a fourth dollar amount on the price list: an additional discount from the net price. The producers would then calculate and quote to potential clientsthe resulting discounted net price as the lowest price at which they could provide the concrete. But as the competition for customers grew over the years, the producers offered increasingly larger net-price discounts that, in turn, depressed the market value of concrete, and, consequently, reduced the producers' overall profits.

The four men each continued that, in July 2000, Nuckols decided that it was time to address the falling market value of concrete. He accordingly organized a meeting at his horse barn in Fishers, Indiana, of corporate officers of area concrete producers so they could discuss methods of "getting the price up." The meeting was attended by, among others, Haehl, Irving, Hughey, and Beaver Materials's representative, Ricky Beaver. All those present discussed ways in which they could "stabilize the market," leading someone (it is not exactly clear who) to propose a $5.50 limit on each producers' gross-price discount for a cubic yard of concrete; the gross-price-discount limit, in turn, translated to a net-price-discount limit of $3.50 per cubic yard. Although no vote was taken on the proposal, no one in attendance objected to it, nor did anyone refuse to impose the limit; as Haehl described it, "Nobody objected, nobody disagreed, nobody walked away." Indeed, each witness testified that he left the meeting with the firm understanding that an agreement to limit net-price discounts had been reached.

However, each of the four co-conspirators stated, the members of the concrete cartel did not always abide by their agreement. This periodic cheating contributed to the continuing downward spiral of concrete market prices, despite the cartel's efforts. As a result, individual members of the cadre separately met with each other at various times and locations to shore up the plan. But when those meetings failed to raise the price of concrete, Nuckols and Hughey called a second meeting of the entire cartel in May 2002, this time at the Signature Inn in Fishers. Every company participating in the cartel was represented, and, again, Nuckols, Haehl, Irving, Hughey, and Ricky Beaver attended. The purpose of the meeting was, as Haehl described it, "to just reaffirm" the agreement to limit their net-price discounts at $3.50. Just like at the earlier meeting at Nuckols's horse barn, no one objected to imposing the limit. Moreover, those in attendance all agreed to a method of enforcing the limit: if they became aware that another cartel member was offering a net-price discount greater than $3.50, they would confront that producer about his cheating. And based, in part, on this plan, the meeting at the Signature Inn ended with Haehl, Nuckols, Irving, and Hughey each believing the attendees had reaffirmed the discount limit.

The four witnesses each continued to testify that in the days after the meeting at the Signature Inn, they attempted to enforce the net-price-discount limit by contacting those producers whom they believed were cheating on the cartel agreement. In fact, each man stated that, at one time or another they either confronted someone whom they believed was cheating, or were themselves accused of cheating. Nevertheless, their efforts to police the scheme proved incapable of reversing the downward spiral of concrete prices; as Nuckols testified, in the days following the meeting "our prices just were not doing well and they were going in the gutter." So Nuckols arranged another meeting at his horse barn in October 2003 to discuss the discount limits further. Haehl, Irving, and Hughey again attended, but this time Ricky Beaver did not; as it turned out, Ricky had not accurately conveyed the details of the agreement to the appropriate individuals at Beaver Materials. As Price and Hughey elaborated, Beaver Materials underbid Hughey, Inc., on two separate occasions after the July 2000 meeting, causing Hughey to telephone Christopher Beaver directly and ask him if Beaver Materials was cheating. Christopher, according to Hughey, denied that was the case, and stated that "he was at the discount that was established in the agreement with everyone." But, apparently, Ricky was confused about that discount, leading him to provide Christopher with the wrong information, and, in turn, causing Beaver Materials to quote prices in dereliction of the agreement. Therefore, to avoid the potential for any further confusion, Christopher took over representing Beaver Materials.

The four co-conspirators each further testified that the October 2003 began with Hughey bemoaning the fact that no one was abiding by the agreement, and urging those who did not want to follow the agreement to leave the meeting. Hughey recounted his exhortation: " 'You know, guys, this thing is not being adhered to. And we need to decide are we going to agree on this and do what we say we're going to or just walk on out of here.' " But no one walked out. Instead, Hughey's lecture spurred a discussion among all the attendees-including Christopher Beaver-during which they again reassured one another that they each would limit their discounts to $3.50 off of the net price. The discussion did not end there, however. The group also agreed to increase the net price of each cubic yard of performance-mix concrete by $2, and by $2.50 for each cubic yard of bag-mix concrete. They further agreed to add a collective $2-per-cubic-yard surcharge for all concrete produced in the winter. Moreover, those present reasserted their commitment to police the agreement by confronting apparent cheaters.

Just like at the two earlier meetings, Haehl, Nuckols, Irving, and Hughey each stated that they understood that the attendees at the October 2003 meeting agreed to limit their net-price discounts to $3.50, in addition to adopting additional pricing restraints. No one present at the meeting-Christopher Beaver included-objected to the net-price-discount limit. Even more, Hughey testified, Christopher volunteered to contact the manager at American Concrete, another Indianapolis ready-made-concrete producer that was not represented at the meeting, " 'and get him the message on what we agreed on.' "

After each of the four co-conspirators testified, the government presented the testimony of several FBI agents who recounted the agency's investigation into the concrete cartel. As relevant here, Special Agent Neil Free- man testified that when the FBI conducted its searches and interviews on May 25, 2004, he questioned Christopher Beaver regarding the existence of the conspiracy; different FBI agents simultaneously interviewed Ricky Beaver and Allyn Beaver, Christopher's father and company President. During their conversation, Christopher stated that he had been employed by Beaver Materials for 21 years, and that in the "last couple years" he had become more involved in the pricing of the company's products because he would soon be replacing his father as President. When Freeman asked Christopher if he had attended any meetings at Nuckols's horse barn, Christopher answered, "No." Christopher also stated that he did not know of any other employee of Beaver Materials having attended such a meeting. He further told Freeman that he saw Beaver Materials's competitors only when attending meetings of ...

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