                                                                                [PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS
                                                                            FILED
                           FOR THE ELEVENTH CIRCUIT                U.S. COURT OF APPEALS
                            ________________________                 ELEVENTH CIRCUIT
                                                                        AUGUST 15, 2001
                                    No. 99-12788                      THOMAS K. KAHN
                                                                           CLERK
                              ________________________

                         D. C. Docket No. 97-00853-CR-DMM

UNITED STATES OF AMERICA,

                                                         Plaintiff-Appellee,

                                           versus

ANTHONY J. GIORDANO, SR.,
ANTHONY J. GIORDANO, JR.,
RANDOLPH J. WEIL,
ATLAS IRON PROCESSORS, INC.,
DAVID GIORDANO,

                                                         Defendants-Appellants.

                              ________________________

                     Appeals from the United States District Court
                         for the Southern District of Florida
                           _________________________
                                  (August 15, 2001)

Before EDMONDSON, BLACK and MCKAY*, Circuit Judges

BLACK, Circuit Judge:


       *
        Honorable Monroe G. McKay, U.S. Circuit Judge for the Tenth Circuit, sitting by
designation.
       On November 13, 1997, Appellants Anthony Giordano, Sr. (Anthony, Sr.),

Anthony Giordano, Jr. (Anthony, Jr.), David Giordano (David), Randolph Weil

(Weil), and Atlas Iron Processors, Inc. (Atlas), were indicted in an antitrust

conspiracy.1 Appellants were charged with conspiring to restrain competition in

the scrap metal industry for a one-month period between October 24 and

November 23, 1992, in violation of the Sherman Act, 15 U.S.C. § 1. The

indictment alleged that the owners and operators of two south Florida scrap metal

companies–Atlas and Sunshine Metal Processing, Inc. (Sunshine)–had, in the wake

of Hurricane Andrew,2 fixed the prices of scrap metal and allocated suppliers of

scrap metal. A jury found all Appellants guilty as charged. Appellants appeal their

convictions and sentences, raising the following issues: (1) the Government failed

to properly plead and prove jurisdiction; (2) the Government presented insufficient

evidence to sustain Appellant Weil’s conviction; (3) certain evidence admitted

under Fed. R. Evid. 404(b) should not have been admitted; (4) the jury should have

been allowed to consider the reasonableness of Appellants’ alleged price-fixing




       1
         Sunshine Metal Processing, Inc., was also charged in the indictment, but it is not a party
to this appeal.
       2
        On the morning of August 24, 1992, Hurricane Andrew caused massive destruction and
property damage in South Florida.

                                                 2
agreement; and (5) the district court erred in applying the Sentencing Guidelines.3

We affirm Appellants’ convictions and sentences for the reasons stated below.

                                      I. BACKGROUND

       On appeal, we must consider the evidence in the light most favorable to the

verdict, drawing all reasonable inferences and making all credibility determinations

in favor of the jury’s decision. United States v. Aquafredda, 834 F.2d 915, 916-17

(11th Cir. 1987). Viewed in this light, the evidence at trial established the

following.

       Atlas, a Cleveland-based scrap metal company owned by the Giordano

family, operated Miami River Recycling, a scrap facility located in Miami.

Anthony, Sr. was an owner of Atlas who also served as the chairman of its board.

Anthony, Jr. was an owner of Atlas and also served as its president and chief

executive officer. David was an owner of Atlas and served as its treasurer.

Sunshine was a scrap metal recycling company located in Opa Locka, Florida.




       3
          Appellants also raise the following issues on appeal: (1) the Government constructively
amended the indictment; (2) the district court abused its discretion in denying Appellants’
motion for a bill of particulars; (3) the Government failed to disclose certain material as required
under Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194 (1963); (4) the Government's closing
argument was inflammatory and prejudiced Appellants' ability to receive a fair trial; and (5) the
district court abused its discretion in excluding the results of polygraph tests conducted by
Appellants. We affirm on these issues without discussion. See 11th Cir. R. 36-1.

                                                 3
Weil was an owner of Sunshine, and he also served as its president and chief

executive officer.

      In mid-1992, Atlas transferred scrap buyer Sheila McConnell (McConnell)

from its Cleveland facility to Atlas-Miami River in Miami. In McConnell’s view,

Sunshine was Atlas’ primary competition in South Florida. In order to procure a

steady supply of scrap for Atlas-Miami River, McConnell routinely offered scrap

metal suppliers prices that were higher than those offered by Sunshine. As a result,

Atlas-Miami River and Sunshine became engaged in a “price war” soon after

McConnell’s arrival in Miami.

      On October 24, 1992, Anthony, Jr. summoned McConnell and told her they

would be attending a meeting with representatives of Sunshine, including Weil, “to

see what we can do about these prices.” Anthony, Jr. said he, Anthony, Sr., and

Weil had “grave reservations” about McConnell attending the meeting because she

was not a principal of either company. Anthony, Jr. felt she needed to be there,

however, because she understood prices in the Miami market, and he did not.

McConnell testified that she told Anthony, Jr. that it was illegal to have a meeting

to discuss prices with one’s competitors, but Anthony, Jr. “just laughed.”

      Anthony, Jr. drove McConnell to the Sea Ranch condominium complex in

Ft. Lauderdale, Florida, where they met Anthony, Sr., Weil, and Henry “Skip”


                                          4
Kovinsky (Kovinsky), a part owner and secretary/treasurer of Sunshine. At trial,

McConnell and Kovinsky testified about the meeting, and the extensive notes

McConnell took at the meeting were introduced into evidence. According to

McConnell, Anthony, Jr. began the meeting by stating, “We all know why we are

here. We need to get these prices down. We are competing with one another. The

only one making any money is the auto wrecker and we need to get these prices in

line.” Weil then proceeded to read prices from a computer print-out of a price list.

At Anthony, Jr.’s instruction, McConnell wrote these prices in her notebook. Weil

announced prices for several geographic areas. He then discussed maximum

buying prices for individual suppliers.

      After fixing prices for flattened and whole cars, the participants in the

meeting addressed Weil’s demand that McConnell stop quoting prices to certain

dealers located near Sunshine. Anthony, Jr. stated that Atlas-Miami River needed

more scrap, and Atlas-Miami River, unlike Sunshine, was not conveniently located

near several auto wrecking yards. Anthony, Jr. agreed to keep McConnell away

from the dealers near Sunshine in exchange for “some cars that [Weil] had

accumulated in the Bahamas.” Subsequently, Atlas-Miami River did in fact

receive a shipment of cars from the Bahamas pursuant to the Sea Ranch

Agreement.


                                          5
      On the way back to Miami after the Sea Ranch meeting, McConnell

complained to Anthony, Jr. that the agreement would prevent her from competing

with Sunshine, that the agreement was illegal, and that Weil could not be trusted.

Anthony, Jr. told McConnell to “drop the prices” and “just see what happens, just

see how it goes.” When they arrived in Miami, Anthony, Jr. met with his brother,

David, who had not attended the Sea Ranch meeting. After he spoke with

Anthony, Jr., David ordered McConnell to “drop the prices.” David also gave

Weil’s phone number to McConnell and told her to call Weil if she had questions

about the agreement.

      Kovinsky testified that Weil said he thought the Sea Ranch Agreement was

“worthwhile” because Hurricane Andrew had created a surplus of scrap metal.

Weil thought it should be possible to purchase the hurricane scrap at low prices,

and he wanted to “see how far [the Sea Ranch Agreement] runs for the moment.”

      McConnell testified that she lowered her prices in accordance with the Sea

Ranch Agreement, and that Weil lowered Sunshine’s prices. Receipts showed that

Atlas-Miami River’s and Sunshine’s prices decreased in a manner consistent with

the prices McConnell recorded in her notebook at the Sea Ranch meeting.

McConnell was concerned about the agreement not only because it was illegal, but

also because she thought it would cause Atlas to lose customers. These concerns


                                         6
led McConnell to cheat on the agreement to some extent; she quoted prices as

“picked up” instead of “delivered,” even though Appellants had agreed that prices

should be quoted as “delivered.” McConnell explained, “I quoted the number that

was agreed upon, but I quoted it picked up, which gave me the advantage.” Weil

discovered that McConnell was cheating, and he complained to Anthony, Jr., who

in turn asked McConnell if she was following the agreement. She “basically lied

to him” and said she was.

      On November 23, 1992, Anthony, Jr., Anthony, Sr., David, Weil, and

Kovinsky met at a steakhouse in Hialeah, Florida. Kovinsky testified that at this

meeting, the Giordanos accused Weil of cheating on the Sea Ranch Agreement.

After the meeting, the Giordanos told McConnell they thought Weil was cheating

on the Sea Ranch Agreement. Atlas-Miami River was having trouble purchasing

the scrap it needed, and Anthony, Jr. instructed McConnell to raise prices to two

large scrap dealers in order to regain their business. The Giordanos, however, were

apparently not ready to abandon the Sea Ranch Agreement entirely, because they

would not allow McConnell to raise her prices to other suppliers. Sunshine and

Atlas pricing documents established that some of their prices followed the Sea

Ranch Agreement until at least December 31, 1992.




                                         7
                                       II. DISCUSSION

A. Jurisdiction

       Appellants argue that the indictment failed to plead and the Government

failed to prove the jurisdictional element of the Sherman Act. This jurisdictional

element may be pleaded and proven under either of the following two theories:

(1) the offending activities took place in the flow of interstate commerce (flow

theory); or (2) the defendants’ general business activities had or were likely to have

a substantial effect on interstate commerce (effects theory). United States v.

Fitapelli, 786 F.2d 1461, 1462 (11th Cir. 1986).

       In this case, the jury was charged under both the flow theory and the effects

theory. We must therefore first examine the indictment to determine whether both

theories have been sufficiently pleaded.4 If we conclude the indictment properly

pleaded both theories, we must then examine whether the Government sufficiently

proved either theory at trial. See id. at 1463-64.

       Looking first at the issue of proper pleading, Appellants claim the

indictment failed to plead the flow theory. The flow theory focuses directly on the


       4
        If the indictment failed to properly plead both the flow theory and the effects theory, it
would be fatally defective because the district court, in instructing the jury on both theories,
would have “instructed the jury on a theory of jurisdiction which had not been charged by the
grand jury,” destroying Appellants’ “right to be tried only on the charges against them.”
Fitapelli, 786 F.2d at 1463-64.

                                                 8
challenged anti-competitive conduct, rather than on the defendants’ general

business activities. See id. at 1462. Appellants argue that the indictment in this

case was fatally defective because it alleged only that Appellants’ general business

activities, not specifically the anti-competitive activities at issue in this case, were

within the flow of interstate commerce. The indictment contains the following

language:

       The business activities of the defendants and co-conspirators that are
       the subject of this Indictment were within the flow of, and
       substantially affected, interstate and foreign trade and commerce.

(emphasis added).

By stating that the business activities “that are the subject of this Indictment were

within the flow of, and substantially affected, interstate and foreign trade and

commerce,”5 the indictment sufficiently alleged jurisdiction under both the flow

theory and the effects theory.6 The phrase “the business activities . . . that are the


       5
         We note that this sentence is grammatically awkward, as it is not immediately clear
whether the phrase “that are the subject of this Indictment” modifies “business activities” or
“defendants and co-conspirators.” Upon further examination, however, it becomes clear that the
phrase cannot modify “defendants and co-conspirators.” The word “defendants” refers to all
parties who are “the subject of this Indictment.” The word “co-conspirators” must then refer to
unindicted co-conspirators (such as McConnell and Kovinsky). The phrase in question must
therefore modify “business activities.”
       6
         Appellants also argue that the indictment failed to plead the effects theory. They
concede that under the effects theory, this circuit requires only that the defendant’s general
business activities, not the specific anti-competitive conduct in question, have a substantial effect
on interstate commerce. See Shahawy v. Harrison, 778 F.2d 636, 640 (11th Cir. 1985).
Appellants argue, however, that Shahawy was wrongly decided and is likely to be overturned by

                                                 9
subject of” the indictment refers to the specific anti-competitive conduct

challenged in the indictment, not merely to Appellants’ general business activities.

       Appellants also argue the Government failed to prove either jurisdictional

theory at trial.7 We conclude the Government proved jurisdiction under the effects

theory. The record reveals that scrap metal subject to Appellants’ price-fixing

agreement was exported to India and Korea and was shipped interstate to Alabama,

Georgia, and Indiana. Furthermore, Sunshine directed a shipment of auto scrap

from the Bahamas to Atlas pursuant to the agreement. “As a matter of practical

economics, a substantial relationship with interstate markets has been established

and, therefore, jurisdiction has been proven under the effect[s] theory.” Fitapelli,

786 F.2d at 1465. Having concluded that jurisdiction was proven under the effects

theory, we need not address whether it was proven under the flow theory. United

States v. Cargo Serv. Stations, Inc., 657 F.2d 676, 679, 680 n.2 (5th Cir. Unit B

1981).8


this Court sitting en banc or by the Supreme Court. As we are bound by circuit precedent, we
will not address this argument here, but we will note that even under Appellants’ argument, the
indictment properly pleads the effects theory for the same reason it properly pleads the flow
theory.
       7
         Appellants claim the Government relied exclusively on the flow theory at trial, but failed
to prove it. According to Appellants, the fact that Atlas and Sunshine exported processed scrap
did not satisfy the Government’s burden of proof under the flow theory.
       8
        In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior

                                                10
B. Sufficiency of the Evidence

       Appellant Weil challenges the sufficiency of the evidence to support his

conviction. According to Weil, the evidence showed at most that he intended to

use his superior knowledge of the scrap metal market to take advantage of the

pricing information collected from Atlas. Weil claims he only intended to “play

along” with Atlas and use the Atlas pricing information to his own advantage; he

intended to unilaterally set Sunshine’s prices based on his knowledge of the market

and his knowledge of Atlas’ prices.

       Whether the evidence is sufficient to support Weil’s conviction is a question

of law subject to de novo review. United States v. Majors, 196 F.3d 1206, 1210

(11th Cir. 1999), cert. denied, 529 U.S. 1137, 120 S. Ct. 2022 (2000). In

reviewing the sufficiency of the evidence, we view the evidence in the light most

favorable to the Government, making all inferences and credibility choices in the

Government’s favor. Id. We must affirm the conviction if a reasonable fact-finder

could have concluded Weil was guilty beyond a reasonable doubt. Id.

       Viewing the evidence in the light most favorable to the Government, the

evidence is sufficient to sustain Weil’s conviction. McConnell and Kovinsky

testified that Weil attended the Sea Ranch meeting, where Appellants agreed to


to close of business on September 30, 1981.

                                              11
specific prices for various grades of scrap. According to the testimony, Weil

dictated the prices, and McConnell copied them into her notebook. Weil contacted

Anthony, Jr. on at least one occasion to complain that McConnell was cheating on

the Sea Ranch agreement. In addition, Weil agreed to send Atlas the shipment of

cars from the Bahamas in exchange for Anthony, Jr.’s promise to keep McConnell

away from the car dealerships located near Sunshine. Furthermore, Weil originally

objected to McConnell’s attendance at the Sea Ranch meeting because she was not

a principal of Atlas or Sunshine. This objection suggests that Weil knew and

understood that the meeting was illegal. This evidence is sufficient to sustain

Weil’s conviction.

C. Rule 404(b) Evidence

       Appellants argue that certain evidence admitted pursuant to Fed. R. Evid.

404(b) and relating to an earlier price-fixing conspiracy involving Atlas in

Cleveland became a dominant feature of the trial, and they contend their

convictions are based on the Rule 404(b) evidence rather than on the evidence

relating to this case.9 In this circuit, there is a three-part test for evaluating the

admissibility of evidence of uncharged misconduct under Rule 404(b). United

       9
        "Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a
person in order to show action in conformity therewith. It may, however, be admissible for other
purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or
absence of mistake or accident. . . ." Fed. R. Evid. 404(b).

                                                12
States v. Miller, 959 F.2d 1535, 1538 (11th Cir. 1992) (en banc). "First, the

evidence must be relevant to an issue other than the defendant's character. Second,

as part of the relevance analysis, there must be sufficient proof so that a jury could

find that the defendant committed the extrinsic act. Third, the evidence must

possess probative value that is not substantially outweighed by its undue prejudice,

and the evidence must meet the other requirements of Rule 403." Id. (footnote and

internal citations omitted); see also Huddleston v. United States, 485 U.S. 681,

689, 108 S. Ct. 1496, 1501 (1988); United States v. Beechum, 582 F.2d 898, 910-

11 (5th Cir. 1978) (en banc).

      We review the district court’s decisions on the admissibility of evidence of

uncharged misconduct under Rule 404(b) for abuse of discretion. United States v.

Calderon, 127 F.3d 1314, 1331 (11th Cir. 1997). After conducting an extensive

review of the record, we conclude the district court did not abuse its discretion in

admitting the evidence in question.

      The Government introduced evidence of a Cleveland price-fixing conspiracy

involving Atlas. Appellants complain that the Cleveland evidence became the

focus of the trial and that the jury was allowed to consider the Cleveland evidence

against all defendants, even though it only applied to some of them. McConnell

testified about several Cleveland incidents involving Atlas and Anthony, Jr., and


                                          13
Benedetto Tripodo testified about an incident involving Atlas and Anthony, Sr.10

The district court allowed this evidence as proof of intent and lack of mistake

under Rule 404(b). We will first address the arguments of Atlas, Anthony, Jr., and

Anthony, Sr. regarding the Rule 404(b) evidence of uncharged misconduct in

which they were involved. We will next address the separate arguments of David,

Weil, and Anthony, Sr. regarding the Rule 404(b) evidence of uncharged

misconduct in which they were not involved.

        Anthony, Jr. and Anthony, Sr. argue that the Rule 404(b) evidence was such

a focal point of the trial that there is a substantial danger that they were convicted

on the basis of the Cleveland events instead of on the basis of the south Florida

events. They argue that the pricing information was exchanged during joint

venture negotiations, and that they did not intend to fix prices. The evidence that

Anthony, Jr. and Anthony, Sr. had engaged in price-fixing conduct on behalf of

Atlas, when added to the evidence that there was no joint venture in south Florida

and the evidence that prices in fact decreased in the manner prescribed by the

agreement, strongly suggests that Atlas, Anthony, Jr., and Anthony, Sr. had the


       10
          Tripodo, who worked for a competitor of Atlas in Cleveland, testified that he attended a
meeting at which both Anthony, Jr. and Anthony, Sr. were present. Tripodo claimed Anthony,
Sr. stated that he had an "understanding" with Tripodo's employer under which Tripodo should
"stay away" from scrap accounts that belonged to Atlas. [R20 at 1430-32] Tripodo did not
recall any specific comments made by Anthony, Jr. [Id.]

                                               14
intent to fix prices. The district court therefore did not abuse its discretion under

the first prong of the Miller test. Given the strong probative value as to intent, we

conclude under the third prong that the probative value of the 404(b) evidence was

not substantially outweighed by undue prejudice to these three Appellants, to the

extent that the district court admitted evidence of uncharged misconduct in which

they were involved. As to the second prong, we agree with the district court that

there was ample evidence that the Cleveland price-fixing activities actually

occurred.

      David and Weil complain most loudly about the Rule 404(b) evidence,

arguing that they were not involved in any of the Cleveland incidents. Anthony,

Sr. also complains about the admission of McConnell's testimony involving only

Atlas and Anthony, Jr. These Appellants contend the jury was not sufficiently

cautioned that it could consider the evidence of the Cleveland activities against

only the defendants who were involved in the activities. These Appellants are

correct that the Rule 404(b) evidence relating to uncharged misconduct in which

they did not participate should not have been considered against them. They are

incorrect, however, in asserting that the jury was not sufficiently aware of this fact.

The district court cautioned the jury as to the proper use of the Rule 404(b)

evidence on several occasions. The district court told the jury that "with respect to


                                           15
the evidence elicited from Mr. Tripodo, you can't consider that evidence with

respect to Mr. Weil, David Giordano or Tony Giordano, Junior." As for

McConnell's testimony regarding the Cleveland activities, the court gave the

following instruction:11

            During the course of the trial, as you know from instructions I
      gave you then, you heard evidence of acts of a defendant which may
      be similar to those charged in the indictment, but which were
      committed on other occasions.

            You must not consider any of this evidence in deciding if a
      defendant committed the acts charged in the indictment. However,
      you may consider this evidence for other very limited purposes.

             If you find beyond a reasonable doubt from other evidence in
      this case that a defendant did commit the acts charged in the
      indictment, then you may consider evidence of the similar acts
      allegedly committed on other occasions to determine whether a
      defendant had the state of mind or intent necessary to commit the
      crime charged in the indictment, whether the defendant acted
      according to a plan or in preparation for commission of a plan, or
      whether a defendant committed the acts for which the defendant is on
      trial by innocence or mistake.

             The case of each defendant and the evidence pertaining to each
      defendant should be considered separately and individually. The fact
      that you may find any one of the defendants guilty or not guilty
      should not affect your verdict as to any other defendant.

             I caution you, members of the jury, that you are here to
      determine from the evidence in this case whether each defendant is
      guilty or not guilty. Each defendant is on trial only for the specific


      11
           The court also gave a similar instruction during McConnell's testimony.

                                                 16
      offense charged, alleged in the indictment.

      We cannot say the district court abused its discretion in declining to mention

each Appellant individually and detail which evidence applied to him. The above

instruction was sufficient to alert the jury that it was to consider the Rule 404(b)

evidence only in relation to those Appellants who were involved in the specific

Cleveland activities that the testimony concerned.

D. Reasonableness of the Price-Fixing Agreement

      Appellants claim the district court erred in not requiring the Government to

prove that the price-fixing agreement was unreasonable. According to Appellants,

the Sea Ranch meeting was necessary because McConnell had unilaterally created

a "price war" that was "driving both companies out of business." Atlas Br. at 58-

59. Appellants claim they met to discuss lowering prices back to competitive

levels or negotiating a merger or joint venture. In other words, their argument is

that this price-fixing agreement was reasonable because it was meant "to restore

competition, not to eliminate it." Id. at 59.

      The Sherman Act makes illegal "[e]very contract, combination . . . or

conspiracy in restraint of trade or commerce." 15 U.S.C. § 1. The Supreme Court

has stated that this language is limited by the "rule of reason." Standard Oil Co. v.

United States, 221 U.S. 1, 61-62, 31 S. Ct. 502, 516 (1911). The Court has also


                                          17
stated, however, that some types of conduct, including price-fixing, are so

manifestly anticompetitive that proof of unreasonableness in each case is not

required:

            Although the Sherman Act, by its terms, prohibits every
      agreement "in restraint of trade," this Court has long recognized that
      Congress intended to outlaw only unreasonable restraints. As a
      consequence, most antitrust claims are analyzed under a "rule of
      reason," according to which the finder of fact must decide whether the
      questioned practice imposes an unreasonable restraint on competition,
      taking into account a variety of factors, including specific information
      about the relevant business, its condition before and after the restraint
      was imposed, and the restraint's history, nature, and effect.

             Some types of restraints, however, have such predictable and
      pernicious anticompetitive effect, and such limited potential for
      procompetitive benefit, that they are deemed unlawful per se. Per se
      treatment is appropriate once experience with a particular kind of
      restraint enables the Court to predict with confidence that the rule of
      reason will condemn it.

State Oil Co. v. Kahn, 522 U.S. 3, 10, 118 S. Ct. 275, 279 (1997) (internal

citations, alteration, and quotation marks omitted).

      The district court followed the long-established rule that a horizontal price-

fixing agreement, such as the one involved in this case, is per se illegal. See, e.g.,

United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218, 60 S. Ct. 811, 842

(1940) ("[F]or over forty years this Court has consistently and without deviation

adhered to the principle that price-fixing agreements are unlawful per se under the

Sherman Act and that no showing of so-called competitive abuses or evils which

                                          18
those agreements were designed to eliminate or alleviate may be interposed as a

defense").

      In United States v. United States Gypsum Co., 438 U.S. 422, 98 S. Ct. 2864

(1978), the Supreme Court made the following statement:

      [A] defendant's state of mind or intent is an element of a criminal
      antitrust offense which must be established by evidence and
      inferences drawn therefrom and cannot be taken by the trier of fact
      through reliance on a legal presumption of wrongful intent from proof
      of an effect on prices.

Id. at 435, 98 S. Ct. at 2872 (citing Morissette v. United States, 342 U.S. 246, 274-

75, 72 S. Ct. 240, 255).

      Gypsum was a rule of reason case. The issue was whether the defendants'

exchange of pricing information for purposes of compliance with the Robinson-

Patman Act, 15 U.S.C. § 13, violated the Sherman Act. The defendants had not

agreed to fix prices; they had exchanged information on current and past prices, but

they had not exchanged information regarding future prices. The district court had

instructed the jury that "if the effect of the exchanges of pricing information was to

raise, fix, maintain, and stabilize prices, then the parties to them are presumed, as a

matter of law, to have intended that result." Id. at 430, 98 S. Ct. at 2869.

Exchange of pricing information is analyzed under the rule of reason. Id. at 441

n.16, 98 S. Ct. at 2875 n.16. The Court therefore "concluded that intent is a


                                          19
necessary element of a criminal antitrust violation." Id. at 443, 98 S. Ct. at 2876.

       This holding inspired several antitrust defendants in price-fixing cases to

mount unsuccessful challenges to the per se rule that was applied to them. See,

e.g., United States v. Cargo Serv. Stations, Inc., 657 F.2d 676, 683 (5th Cir. Unit

B. 1981); United States v. Gillen, 599 F.2d 541, 545 (3d Cir. 1979); United States

v. Brighton Bldg. & Maint. Co., 598 F.2d 1101, 1106 (7th Cir. 1979). In Cargo

Service Stations, the former Fifth concluded that Gypsum did not change Socony-

Vacuum's rule that price fixing is per se illegal: "[P]rice fixing is an unreasonable

restraint prohibited by the antitrust laws. . . . [I]t follows that if price fixing is

inevitably an unreasonable restraint of trade, the intent to fix prices is equivalent to

the intent to unreasonably restrain trade."12 657 F.2d at 683; see also Gillen, 599

F.2d at 545; Brighton, 598 F.2d at 1106. The intent requirement was met in those

cases because “the district court equated the intent to fix prices with the requisite

intent to unreasonably restrain commerce." Cargo Serv. Stations, 657 F.2d at 683.

The situation was therefore unlike that in Gypsum, in which the district court had

equated the effect of the exchange of pricing information with the intent to fix

prices.

       Appellants argue that Cargo Service Stations is no longer good law “in light


       12
            Cargo Service Stations is binding precedent for this Court. See supra note 8.

                                                  20
of the Supreme Court’s evolving due process jurisprudence since 1940.” Atlas Br.

at 61-62, citing United States v. Gaudin, 515 U.S. 506, 115 S. Ct. 2310 (1995).

Specifically, Appellants argue that the per se rule should not be applied in criminal

cases because it creates an unconstitutional presumption in violation of the

Supreme Court's decision in Francis v. Franklin, 471 U.S. 307, 313, 105 S. Ct.

1965, 1970 (1985) ("The Due Process Clause of the Fourteenth Amendment

. . . prohibits the State from using evidentiary presumptions in a jury charge that

have the effect of relieving the State of its burden of persuasion beyond a

reasonable doubt of every essential element of a crime.").

      Appellants' argument in effect asks us to overrule Socony-Vacuum. Like

other circuits that have been asked to overrule Socony-Vacuum, we decline to do

so. See, e.g., United States v. Fischbach & Moore, Inc., 750 F.2d 1183, 1195-96

(3d Cir. 1985); United States v. Koppers Co., 652 F.2d 290, 293 (2d Cir. 1981);

United States v. Mfrs'. Ass'n of the Relocatable Bldg. Indus., 462 F.2d 49, 51 (9th

Cir. 1972). Appellants' reliance on Franklin's rule that mandatory presumptions

are unconstitutional in criminal cases is misplaced. In Franklin, the Court held

unconstitutional a jury instruction that established a rebuttable presumption of

intent from proof of other elements of the crime. Franklin, 471 U.S. at 315-16;

105 S. Ct. at 1971-72 ("The portion of the jury charge challenged in this case


                                          21
directs the jury to presume an essential element of the offense--intent to kill--upon

proof of other elements of the offense--the act of slaying another."); see also

Morissette v. United States, 342 U.S. 246, 274, 72 S. Ct. 240, 255 (1952) ("Where

intent of the accused is an ingredient of the crime charged, its existence is a

question of fact which must be submitted to the jury. ").

      Here, the jury was instructed that in order to return guilty verdicts it had to

find that Appellants "knowingly joined a conspiracy to fix prices or allocate

customers." The jury was therefore instructed that it must find that Appellants

intended to fix prices. "[T]he Sherman Act does not make 'unreasonableness' part

of the offense," so "it cannot be said that the judicially-created per se mechanism

relieves the Government of its duty of proving each element of a criminal offense

under the Act." Koppers, 652 F.2d at 294. In other words, " 'unreasonableness' is

an element of the crime only when no per se violation has occurred." Mfrs'. Ass'n,

462 F.2d at 52. Against this background, it becomes clear that "[t]he per se rule

does not establish a presumption. It is not even a rule of evidence." Id.; see also

Brighton, 598 F.2d at 1106 ("Since the per se rules define types of restraints that

are illegal without further inquiry into the competitive reasonableness, they are

substantive rules of law, not evidentiary presumptions. It is as if the Sherman Act

read: 'An agreement among competitors to [fix prices] is illegal.' ") (internal


                                          22
quotation marks omitted).

E. Sentencing Guidelines

      Appellants claim the district court erred in applying U.S.S.G. § 2R1.1, the

Antitrust Guideline. The 1999 version of the Antitrust Guideline, applicable to this

case, establishes a base offense level of 10, and it provides for an enhancement

based upon "the volume of commerce attributable to the defendant." U.S.S.G.

§ 2R1.1(b)(2). If the amount of commerce affected is between $400,000 and

$1,000,000, then the base offense level is increased by one. Id. The Guideline

states that "the volume of commerce attributable to an individual participant in a

conspiracy is 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).

      The district court applied this guideline and, accepting the Government's

submissions of the volume of commerce affected to be $636,153.66 for Atlas and

$839,043.80 for Sunshine, increased Appellants' offense levels by one. We review

the district court's findings of fact for clear error and its application of the

Sentencing Guidelines to those facts de novo. United States v. Trujillo, 146 F.3d

838, 847 (11th Cir. 1998).

       Appellants claim the volume of commerce affected by the violation was

well under $400,000. At trial, Appellants relied on United States v. SKW Metals &


                                            23
Alloys, Inc., 4 F. Supp. 2d 166 (W.D.N.Y. 1997) (SKW I), which defined the

"volume of commerce" to include only sales that were made at the targeted price.

Id. at 171-72. The district court instead followed the Sixth Circuit's decision in

United States v. Hayter Oil Co., 51 F.3d 1265 (6th Cir. 1995), which defined the

volume of commerce to include "all sales of the specific types of goods or services

which were made by the defendant or his principal during the period of the

conspiracy, without regard to whether individual sales were made at the target

price." Id. at 1273. The Second Circuit later vacated the sentences imposed by the

district court in SKW I, United States v. SKW Metals & Alloys, Inc., 195 F.3d 83,

89-92, 93 (2d Cir. 1999) (SKW II), but Appellants argue the Second Circuit's

approach is still more favorable to them than the approach the district court used

here.

        The Sixth Circuit in Hayter Oil reasoned that "[i]t would be an anomaly to

declare price-fixing illegal per se, without regard to its success, . . . but to provide

for a fine only if the price-fixing were successful." 51 F.3d at 1274. In SKW II,

the Second Circuit declined to fully embrace the Sixth Circuit's approach, finding it

unnecessary to the goal of deterrence to adopt the "tenuous presumption that

commerce is affected by all sales within the period set forth in the indictment




                                           24
regardless of what effects, if any, the conspiracy may have had." Id. at 92.13

Instead, the court reasoned that "[i]f the conspiracy was a non-starter, or if during

the course of the conspiracy there were intervals when the illegal agreement was

ineffectual and had no effect or influence on prices, then sales in those intervals are

not 'affected by' the illegal agreement, and should be excluded from the volume of

commerce calculation." Id. at 91.

       Appellants appear to advocate an approach similar to that taken by the

district court in SKW I, which would include in "volume of commerce" only those

sales "for which the conspirators successfully achieved their illegally-fixed target

price." SKW I, 4 F. Supp. 2d. at 172. The Government advocates the approach

taken by the Sixth Circuit in Hayter Oil, but notes that the Second Circuit's

approach in SKW II would reach the same result in this case.

       We agree with the Second Circuit that "a conspiracy warranting conviction

can exist even if, for sentencing purposes, it does not succeed in affecting prices

throughout the entire period of the conspiracy, or at all." SKW II, 195 F.3d at 90.

In such a case, the conspiracy would have no effect on commerce. The Second




       13
       The Second Circuit also noted that individual defendants are subject to a mandatory
minimum fine of $20,000. SKW II, 195 F.3d at 92 (citing U.S.S.G. 2R1.1 (c)) (1990).

                                             25
Circuit's approach does not differ radically from the Sixth Circuit's approach.14

SKW II does not limit the volume of commerce affected to the sales made at the

target price, the approach Appellants advocate. Instead, the Second Circuit

explicitly noted that "a price-fixing conspiracy can affect prices even when it falls

short of achieving the conspirators' target price." 195 F.3d at 89-90. In discussing

the requirement of an "effect" on commerce, the SKW II court made the following

statement:

       [T]he verb "to affect" expresses a broad and open-ended range of
       influences. We therefore conclude that a conspiracy need not achieve
       its specific goals or targets in order to affect commerce for sentencing
       purposes. Sales can be "affected" by a conspiracy when the
       conspiracy merely acts upon or influences negotiations, sale prices,
       the volume of goods sold, or other transactional terms. While a price-
       fixing conspiracy is operating and has any influence on sales, it is
       reasonable to conclude that all sales made by defendants during that
       period are "affected" by the conspiracy.

SKW II, 195 F.3d at 90 (internal citations omitted). We agree that this statement

accurately reflects the purpose of the Antitrust Guidelines.

       We emphasize that this approach does not require a "sale-by-sale

accounting." In Hayter Oil, the Sixth Circuit relied on the per se rule applicable to

price-fixing cases and the fact that it "avoids the necessity of making 'a

       14
         The Second Circuit stated, "The Sixth Circuit in Hayter Oil ruled that the volume of
commerce is calculated 'without regard to whether individual sales were made at the target price.'
That ruling is generally in accordance with the analysis we adopt." SKW II, 195 F.3d at 91
(emphasis added) (internal citation omitted).

                                               26
burdensome inquiry into actual market conditions' to determine when the

conspiracy 'involves anticompetitive conduct.' " 51 F.3d at 1273 (quoting

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 15-16 & n. 25, 104 S. Ct.

1551, 1559-60 & n. 25 (1984)). We agree with the Sixth Circuit that the district

court should not undertake a "burdensome inquiry" into the volume of commerce

for sentencing purposes. It is enough for the district court to determine the periods

during which the conspiracy was effective. Once the conspiracy is found to have

been effective during a certain period, there arises a rebuttable presumption that all

sales during that period were "affected by" the conspiracy.15 See United States v.

Andreas, 216 F.3d 645, 678 (7th Cir. 2000). The defendant may rebut that

presumption by offering evidence that certain sales, even though made during a


       15
          This approach differs slightly from the approach taken by the majority in SKW II. The
majority there also noted that "a sale-by-sale accounting is not required," and stated that in
making the volume of commerce determination, "[a] court may consider the goals of the
conspiracy and the steps taken to implement it, the market share of the conspirators, and the
perceptions of the conspirators and the persons with whom they transacted business, and may
otherwise deduce the effect on commerce from the pressures brought to bear on it." 195 F.3d at
91. We believe these factors are largely irrelevant to determining a conspiracy's effect on
commerce. See id. at 94 (Newman, J., concurring). We do agree with the SKW II majority,
however, that the Government must "prove that the prices charged were 'affected by' the
conspiracy." 195 F.3d at 91. To prove that prices were "affected by" the conspiracy, the
Government must show that the conspiracy was effective to some extent (i.e. was not a non-
starter and was not completely ineffective for periods of time). Once the Government has shown
that the conspiracy was effective to at least some extent during a certain period, there arises a
rebuttable presumption that all prices during that period were "affected by" the conspiracy. The
defendant may rebut the presumption by showing that certain sales were unaffected by the
conspiracy. See id. at 94 (Newman, J., concurring).


                                               27
period when the conspiracy was effective, were not affected by the conspiracy.16

See SKW II, 195 F.3d at 93 (Newman, J., concurring) (Evidence of an unaffected

transaction "would be peculiarly within the knowledge of the defendant," so "it is

entirely appropriate to oblige him to prove it, or at least come forward with

evidence of it"); see also Andreas, 216 F.3d at 679. When a conspiracy is a non-

starter, however, or when the illegal agreement is ineffectual during a certain time

period, those sales should not be included in the volume of commerce, because

they were not "affected by" the illegal agreement. SKW II, 195 F.3d at 91; see also

Andreas, 216 F.3d at 677 ("Like the Second Circuit, we disagree with the Hayter

Oil holding in so far as it implies that all sales during the time period of the price-

fixing conspiracy should be counted for purposes of § 2R1.1 simply because they

occurred during the period of the conspiracy.").

       Appellants argue this conspiracy was a non-starter, which, if true, would

require us to vacate their sentences. The district court based its volume of

commerce calculation on sales during the period between October 24, 1992, and


       16
          We recognize there may be a "rare instance" where, "under unusual circumstances, a
seller quotes or agrees to a price without any reference to the fixed price," even during a period
when a price-fixing conspiracy is otherwise effective. Id. at 93 (Newman, J., concurring) (noting
that a defendant may agree to sell to his brother-in-law without reference to the illegally fixed
price). If a defendant comes forward with evidence that a particular sale was uninfluenced by
the illegal agreement, even though that sale occurred during a period when the agreement was
otherwise effective, that sale should not be counted in the volume of commerce affected by the
illegal agreement. Id. at 93-94 (Newman, J., concurring).

                                               28
December 31, 1992. There is ample evidence that the conspiracy was effective

during this period. The Government presented detailed pricing summaries

showing that Appellants' sales during this period were consistently at or near the

prices agreed upon at Sea Ranch. In the face of the extensive evidence of pricing

consistent with the Sea Ranch agreement, Appellants' argument that this

conspiracy was a non-starter is without merit.17 In addition, there is no evidence

that the conspiracy was ineffective for any period of time between October 24,

1992, and December 31, 1992, and there is no evidence that any particular sales

were unaffected by the illegal agreement.18 We therefore conclude the district

       17
          McConnell did testify that she cheated on the conspiracy by using the Agreement's
"delivered" prices but quoting them as "picked up." The fact that she did not completely abide
by the illegal agreement does not, however, mean that the conspiracy was a non-starter. Since
she was using the agreed-upon "delivered" prices, her prices were influenced by the agreement.
This situation simply reflects classic "cheating" on a price-fixing agreement. See, e.g., SKW II,
195 F.3d at 94 (Newman, J., concurring):

       Once a seller agrees to fix prices, he either sells at that price or (unless he is both
       a price-fixer and an amnesiac) at least has the fixed price in mind and uses it as a
       point of departure for himself in deciding what slightly different price to quote for
       almost every sale he makes during the period of the conspiracy. As long as the
       seller has the fixed price in mind when he decides by how much to depart from it
       when quoting a price, his final sale price has been affected by the price-fixing
       agreement.
Id. (Newman, J., concurring) (emphasis added).
       18
         Appellants had a meeting on November 23, 1992, at which the Giordanos accused Weil
of cheating on the agreement. Appellants argue that after this meeting, some of the prices they
charged were not affected by the agreement. The Atlas Appellants claim that after the meeting,
they were simply trying to do everything they could to obtain scrap, including adjusting their
prices. Even if they adjusted some of their prices to levels above those dictated by the Sea
Ranch agreement, there is no evidence that the prices were not at least influenced by the Sea
Ranch agreement. See supra note 17. In fact, the extensive evidence of pricing introduced by

                                                 29
court did not err in including in the volume of commerce affected all sales of the

affected products between October 24, 1992, and December 31, 1992.

Accordingly, we affirm the district court's one-level enhancement of Appellants'

sentences based on the fact that the volume of commerce affected by their

conspiracy was greater than $400,000.19

                                     III. CONCLUSION

       For the foregoing reasons, the convictions and sentences of all Appellants

are affirmed.

       AFFIRMED.




the Government shows that most sales through December were at the Sea Ranch levels.
Furthermore, there was no testimony that Appellants explicitly repudiated the conspiracy at the
November 23, 1992, meeting. The district court therefore did not err in including these sales in
the volume of commerce affected.
       19
          Appellant Weil also argues that the district court erred in enhancing his sentence by two
levels for his role in the offense, pursuant to U.S.S.G. § 3B1.1(c). The district court also
imposed the same enhancement on the Giordanos, who do not appeal the imposition of the two-
level enhancement. The district court found that each of these Appellants played an important
role in organizing and directing the activities of the conspiracy. We conclude the district court
did not err in imposing the two-level enhancement on Weil.

                                                30
