Federal Judge Reverses Course, Will Consider Volume Of Commerce In Sentencing For Criminal Antitrust Convictions
05/15/2018On May 7, 2018, Judge Charles Breyer of the United States District Court for the Northern District of California affirmed that volume of commerce (“VOC”) is a necessary factor in determining the appropriate sentence for criminal antitrust convictions. This represents a reversal from his earlier comments at an April 26, 2018 hearing, where Judge Breyer said he would ignore the VOC in sentencing 23 individuals for their roles in a conspiracy to rig bids at public real estate foreclosure auctions.
Judge Breyer’s initial comments generated significant interest and commentary. They appeared to represent a stark departure from traditional criminal sentencing for antitrust violations, where VOC has long been treated as a critical variable that can result in significantly higher sentences. Under the U.S. Sentencing Guidelines, the “offense level” for a conviction based on participating in an antitrust conspiracy is determined with reference to the VOC “done by [the defendant] or his principal in goods or services that were affected by the violation.” U.S. Sentencing Guidelines Manual (2016) §2R1.1(b)(2). VOC is not a defined term and there is no guidance on how it should be computed. The Guidelines are not binding, but federal judges are required to consider them when imposing sentences.
In the foreclosure auction sentencing hearings, the Antitrust Division of the Department of Justice argued that “total price” is the appropriate measure of the VOC. This “total price” included the price of the homes and the payoffs made as part of the collusion. By contrast, the defendants (who had not agreed to a specific VOC as part of the plea agreements) argued that the VOC should consider only the amount of commerce “affected” by illegal activity—i.e., the payoffs. Unsurprisingly, the government and the defendants thus diverged significantly in their calculations of the VOC, with the government’s methodology resulting in considerably higher offense levels and correspondingly higher sentencing ranges.
In the late April hearing, Judge Breyer stated that a proper VOC figure would be too difficult to calculate and that he could determine appropriate sentences without reference to VOC.But in reversing course on May 7, he acknowledged that his previous reasoning was “incorrect” and that VOC was unavoidable if he wanted to make use of the sentencing range provided by the Guidelines.