Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.

Help support the publication of case reports on MoreLaw

Date: 11-22-2021

Case Style:

United States of America v. LUCIANO VEGA-MARTÍNEZ, aka Lucio; RENÉ GARAY-RODRÍGUEZ, aka Gary

Case Number: 18-1189

Judge: William J. Kayatta, Jr.

Court: United States Court of Appeals For the First Circuit

Plaintiff's Attorney: Steven J. Mintz, Attorney, U.S. Department of Justice,
Antitrust Division, with whom Makan Delrahim, Assistant Attorney
General, Andrew C. Finch, Principal Deputy Assistant Attorney
General, Richard A. Powers, Deputy Assistant Attorney General,
Michael F. Murray, Deputy Assistant Attorney General, Stratton C.
Strand, Attorney, Antitrust Division, Robert B. Nicholson,
Attorney, Antitrust Division, Mark C. Grundvig, Attorney,
Antitrust Division, Emma M. Burnham, Attorney, Antitrust Division,
and Samson Asiyanbi, Attorney, Antitrust Division

Defendant's Attorney:

Boston, MA - Best Criminal Defense Lawyer Directory


Boston, MA - Criminal defense lawyer represented defendants with charged with mail fraud and violations of section 1 of the Sherman Act.

In 2013, Vega-Martínez, Garay-Rodríguez, and their codefendants owned competing bus companies that sought to provide
busing for low-income students from Caguas to public schools in
the area. That year, the municipality announced that it would
hold an auction for four-year school-bus-transportation contracts.
Rather than submitting competing bids, the conspirators met and
agreed to divide up the routes among themselves. For each route,
a "winner" was pre-designated, and that "winner" was assured that,
- 4 -
at most, only one other bidder would bid on the route (to make it
look like there was competition). The other bid, if any, would be
a high bid (to allow plenty of room for the winner's noncompetitive "low" bid).
After the meeting, bids were submitted. The
municipality rejected all of the bids and instead negotiated
contracts with each of the low bidders without the benefit of
knowing that the low bids were undisciplined by fair competition.
The municipality then sent award letters to the successful
defendants in the mail. Over a year later, news of the bid rigging
leaked. Worse yet for the defendants, it turned out that one of
the bus-company owners, Raquel Aldea-Rodríguez, had taped the
meeting at which the scheme was put together. In May 2015, the
defendants were charged in an indictment alleging conspiracy to
restrain trade (15 U.S.C. § 1), conspiracy to commit mail fraud
(18 U.S.C. § 1349), and substantive mail fraud counts (18 U.S.C.
§ 1341). After a seven-day trial, all of the defendants were
convicted on all of the charged counts. The defendants made Rule
29 motions, which were all denied. They were each sentenced to a
prison term of one year and one day, plus a year of supervised
The district court then allowed the parties to
separately brief the issue of restitution. To calculate the amount
of restitution due from each defendant, the court ultimately
- 5 -
compared the price paid for each route under the 2014 contracts
with the prices paid for the same routes in 2017 following a
competitive auction in 2016. Defendants Garay-Rodríguez and VegaMartínez now appeal. Garay-Rodríguez challenges several aspects
of his conviction, and both challenge the restitution amounts set
by the district court.
The Sherman Act reaches only activities in the flow of
interstate commerce or that, "while wholly local in nature," would
substantially affect interstate commerce if successful. McLain v.
Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 241–42 (1980);
see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 330–32
(1991). When confronted with horizontal agreements to fix prices
within a single state, the Supreme Court has based jurisdiction
"on a general conclusion that the defendants' agreement 'almost
surely' had a market[-]wide impact and therefore an effect on
interstate commerce." Summit Health, 500 U.S. at 331 (quoting
Burke v. Ford, 389 U.S. 320, 322 (1967)); see also Goldfarb v. Va.
State Bar, 421 U.S. 773, 784–85 (1975) (finding an effect on
interstate commerce where the "volume of commerce involved" was
"substantial" and it was "inseparab[le] . . . from the interstate
aspects of [related] transactions").
- 6 -
Garay-Rodríguez nevertheless contends that his bid
rigging was beyond the reach of the Sherman Act for three reasons:
either the indictment failed to allege a sufficient nexus to
interstate commerce, or the proof fell short, or the jury was not
instructed that it was required to find such a nexus. For the
following reasons, we find that the indictment alleged that the
defendants' conduct flowed in and had an effect on interstate
commerce, that the evidence at trial supported those allegations,
and that there was no plain error in the jury instructions.
Before trial, Garay-Rodríguez and his co-defendants
moved to dismiss the Sherman Act count for failure to allege a
nexus between the scheme and interstate commerce.1 The district
court denied the motion. We review de novo the sufficiency of an
indictment. United States v. Stepanets, 879 F.3d 367, 369 (1st
Cir. 2018); United States v. Guerrier, 669 F.3d 1, 3 (1st Cir.
2011). In so doing, we do not evaluate the sufficiency of the
evidence that the government might have to back up the indictment.
Guerrier, 669 F.3d at 4–5. Rather, we will find an indictment
sufficient if it "apprise[s] the defendant of the charged offense
so that the defendant can prepare a defense and plead double
1 They also argued that Puerto Rico was not a state for
purposes of the Sherman Act, but the district court roundly
rejected that argument, and it is not raised on appeal.
- 7 -
jeopardy in any future prosecution for the same offense." United
States v. Rodríguez-Rivera, 918 F.3d 32, 34 (1st Cir. 2019)
(internal citations omitted) (quoting Stepanets, 879 F.3d at 372);
see also Fed. R. Crim. P. 7(c)(1) ("The indictment or the
information must be a plain, concise and definite written statement
of the essential facts constituting the offense charged."). It
may "parrot 'the statutory language to describe the offense, but
it must also be accompanied by such a statement of facts and
circumstances as to inform the accused of the specific offense
with which he is charged.'" United States v. Parigian, 824 F.3d
5, 9 (1st Cir. 2016) (quoting United States v. Savarese, 686 F.3d
1, 6 (1st Cir. 2012)).
Here, the indictment did more than was necessary. It
plainly set forth the elements of the charged offenses, including
that the defendants' activities "were within the flow of, and
substantially affected, interstate trade and commerce." It
further alleged that the bus contracts were funded or supported at
least in part by federal funds, and that the buses used by the
defendants had all been shipped via interstate commerce. Whether
the evidence was sufficient to back up these assertions was a
matter for trial. See Rodríguez-Rivera, 918 F.3d at 34; Guerrier,
669 F.3d at 4–5.
- 8 -
At trial, the government's burden increased. It had to
submit evidence sufficient to establish an interstate nexus beyond
a reasonable doubt. Cf. United States v. DiSanto, 86 F.3d 1238,
1246 (1st Cir. 1996) (requiring interstate-commerce element to be
proven beyond a reasonable doubt in the context of a Commerce
Clause challenge). The government carried this burden. It proved,
for example, that the funds used to pay the defendants were
provided by the federal government under the No Child Left Behind
Act. Raymond Rivera-Pacheco, a CPA hired by the Puerto Rico
Department of Education, testified that Caguas used $436,566.32 in
federal funds from the No Child Left Behind Act to pay for school
transportation in 2013–2014. The conspiracy's grab of those
federal funds is likely sufficient by itself to establish an
interstate nexus, given that the funds flowed in interstate
commerce. See Goldfarb, 421 U.S. at 783–84 (deeming intrastate
price fixing by lawyers for title work on federally guaranteed
real estate purchases to have an interstate nexus); Englert v.
City of McKeesport, 736 F.2d 96, 98 n.4 (3d Cir. 1984) (federal
financing of construction projects "would be sufficient to meet
the jurisdictional requirement" of the Sherman Act); United States
v. Davis, 707 F.2d 880, 884 (6th Cir. 1983) (federal funding of
sheriff's office was sufficient to put sheriff's alleged
racketeering within the flow of interstate commerce in Hobbs Act
- 9 -
context); United States v. Am. Soc'y of Anesthesiologists, Inc.,
473 F. Supp. 147, 151, 156–57 (S.D.N.Y. 1979) (insurance payments,
including some federal and state funds, flowed in interstate
commerce); DeGregorio v. Segal, 443 F. Supp. 1257, 1267 (E.D. Pa.
1978) (federal nursing home reimbursements flowed in interstate
commerce via the state of Pennsylvania's Medicaid program). But
see Loan Store, Inc. v. Indep. Food Stamps Assocs., Inc., 671 F.
Supp. 844, 848, 848 n.5 (D. Mass. 1987) (federal funding of the
food-stamp program was "far too speculative" a basis for Sherman
Act jurisdiction where the complaint "d[id] not allege [an effect
on] the flow of food stamps").
Here we have more than the federal funds alone. The
defendants' bid packages identified by vin number the specific
buses that they planned to use for each route. Those buses were
all purchased in Florida, meaning that they flowed in interstate
commerce. As the government points out, if prices increased
substantially, demand would likely fall. For example, Caguas might
have responded by merging bus routes or reducing the bus services
it used in other ways, resulting in fewer buses purchased by local
companies from the continental United States. Cf. Katzenbach v.
McClung, 379 U.S. 294, 299 (1964) (explaining that race
discrimination at restaurants would reduce those restaurants'
demand for food stuffs from outside the state: "The fewer
- 10 -
customers a restaurant enjoys the less food it sells and
consequently the less it buys.").
Given the evidence that the contracts were funded in at
least substantial part by federal funding that had flowed through
interstate commerce and that the contracts were carried out by use
of goods that flowed through interstate commerce, as well as the
resulting inference that the effect of the conspiracy could have
been to reduce demand for those goods, the evidence in total was
sufficient to establish a nexus with interstate commerce.
Next, Garay-Rodríguez argues for the first time on
appeal that the district court's instructions to the jury on
interstate commerce were incorrect. While we ordinarily review
the legal correctness of jury instructions de novo, and issues of
"phrasing and emphasis" for abuse of discretion, United States v.
Allen, 670 F.3d 12, 15 (1st Cir. 2012), we review forfeited
challenges like this one only for plain error, see Ramírez-Burgos
v. United States, 313 F.3d 23, 28 (1st Cir. 2002).
Garay-Rodríguez argues that the district court failed to
fully explain the requirement that an effect on interstate commerce
be "substantial." The district court explained that
A conspiracy may have an effect on interstate
commerce even though some or all of the
conspirators do not themselves engage in
interstate commerce and have confined their
activities within a single state. The precise
- 11 -
amount, quantity, or value of interstate
commerce involved is unimportant so long as
you find that the restraint charged in the
indictment or the activities of the parties to
the conspiracy had some non-substantial effect
upon interstate commerce. The government may
establish that there was an effect on
interstate commerce in many different ways,
and you should take into account all the
evidence in determining whether there was, in
fact, a substantial effect on interstate
Trial Tr., Dkt. 235 at 184:3–16, United States v. Rivera-Herrera
et al., No. 15-cr-00361 (D.P.R. Feb. 1, 2017) (emphasis added).
The district court's statement that the conspiracy needed to have
"some non-substantial effect" was obviously incorrect, despite
government counsel's sketchy attempt to rewrite the record in its
briefing on appeal. See Gov. Br., Appellate Dkt. 60 at 41–42
(quoting the district court as stating that "some no[t]
[in]substantial effect" was required (alterations in original)).
While it does seem likely to us that the court meant to cite the
Supreme Court's statement in McLain that the effect need only be
"not insubstantial," the district court plainly stated the
opposite. McLain, 444 U.S. at 246 (emphasis added). Nevertheless,
in the very same instruction, and at several other points, the
district court repeatedly explained that the effect needed to be
substantial. Likely for the same reason that no defense counsel
objected to the instruction contemporaneously, a reasonable jury
would not have been confused by the district court's isolated and
- 12 -
likely apparent mistake considering its numerous correct
explanations. On plain-error review, we find no sufficient showing
of prejudice.
Garay-Rodríguez also argues that the court should have
reiterated the "substantial effect" requirement throughout its
jury instructions on interstate commerce. But the court was clear
enough. A substantial effect is only one possible way to show a
nexus with interstate commerce; activity occurring in the flow of
interstate commerce is another. See Summit Health, 500 U.S. at
337 (citing Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S.
207, 213 (1959)). The court explained both theories, and when it
explained the "substantial effect" test it was always clear that
the effect needed to be substantial (with the exception of the
slight mistake discussed above); it was not required to repeat the
word "substantial" in every single instruction -- especially not
in instructions explaining the "flow" theory. Garay-Rodríguez has
thus failed to show plain error on the interstate-commerce
Garay-Rodríguez next argues that the government and the
district court allowed him and his co-defendants to be convicted
for price fixing even though the charges they faced were for bid
rigging and market allocation only. He argues both that this was
a prejudicial variance from and that it was a constructive
- 13 -
amendment to the indictment. We review these claims de novo. See
United States v. Godfrey, 787 F.3d 72, 78 (1st Cir. 2015). "A
constructive amendment 'occurs where the crime charged has been
altered, either literally or in effect, after the grand jury last
passed upon it.'" Id. at 79 (quoting United States v. Mubayyid,
658 F.3d 35, 49 (1st Cir. 2011)). A variance -- or a change in a
charge that "le[aves] the substance of the charge unaffected" --
is permitted unless "it affect[s] the defendant's 'substantial
rights[,]' . . . i.e., the right[] to have . . . knowledge of the
charge [sufficient] to prepare an effective defense and avoid
surprise at trial, and [the right] to prevent a second prosecution
for the same offense." Id. (first alteration in original) (quoting
United States v. Dowdell, 595 F.3d 50, 67–68 (1st Cir. 2010);
United States v. Fisher, 3 F.3d 456, 463 (1st Cir. 1993)).
The crux of these claims is Garay-Rodríguez's argument
that the government submitted evidence of price fixing even though
the indictment referred to "bid-rigging" and did not expressly
allege price fixing. But the fact that price fixing might be
mentioned in a bid-rigging case strikes us as perfectly
appropriate. Most bid-rigging schemes will necessarily include
discussions of price. Here, for example, the scheme involved
explicitly deciding which companies would submit the high and low
bids on each route. To disallow evidence of those conversations
would be nonsensical and would prevent the government from making
- 14 -
its bid-rigging case. That evidence was probative of bid rigging,
and it was clearly set out in the indictment. See United States
v. Reeder, 170 F.3d 93, 105 (1st Cir. 1999). Moreover, bid rigging
of the type at issue here is simply one pernicious form of price
fixing. Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An
Analysis of Antitrust Principles and Their Application ¶ 2005b (3d
ed. 2012) ("Bid-rigging schemes are commonly thought to be more
harmful than ordinary price fixing because bid-rigging is much
easier for cartel members to enforce."). And even if that were
not the case, the district court was clear with the jury that it
could not convict on bid rigging based solely on evidence of price
fixing alone. Despite Garay-Rodríguez's claim, then, a reasonable
jury would not have believed that it could convict on evidence of
price fixing without more. There was no variance from or
constructive amendment to the indictment.
Next, Garay-Rodríguez argues that the district court
erred in not allowing him to present evidence on the price
negotiations that took place between the "low" bidders and the
municipality after the auction. Specifically, he points to
limitations imposed on his cross-examination of Luz Ortíz-Peña,
the auxiliary director of the Caguas Purchasing and Auctions
Department. Before trial, the district court granted the
government's motion in limine to exclude evidence or arguments
- 15 -
that the defendants' "agreements to rig bids and allocate the
market for public school bus transportation were reasonable, or
that such agreements had economic, business, or personal
justifications." During Garay-Rodríguez's cross-examination of
Ortíz-Peña, Garay-Rodríguez asked multiple questions about the
process of renegotiating the bids after the auction. His attorney
finally asked whether Ortíz-Peña had told an FBI agent that in
some cases it was more "cost-effective" to merge two routes. She
answered, "That is correct," and when Garay-Rodríguez tried to
follow up the court told him to "move on."
Essentially, Garay-Rodríguez is arguing that he should
have been permitted to show that the final prices decided postnegotiation with the low bidders were not that bad, even
reasonable. But Garay-Rodríguez and his co-defendants were
charged with bid rigging and market allocation, both per se
violations of the Sherman Act. See N. Pac. Ry. Co. v. United
States, 356 U.S. 1, 5 (1958) ("Among the practices which the courts
have heretofore deemed to be unlawful in and of themselves are
price fixing, division of markets, group boycotts, and tying
arrangements." (internal citations omitted)); Stop & Shop
Supermkt. Co. v. Blue Cross & Blue Shield of R.I., 373 F.3d 57, 62
(1st Cir. 2004) (explaining that horizontal bid rigging is a per
se violation of antitrust laws). Determining the defendants'
liability for that conduct did not require the jury to assess its
- 16 -
supposed reasonableness. See United States v. Peake, 804 F.3d 81,
93 n.10 (1st Cir. 2015) ("A per se Section 1 violation is not
excused by a showing that the supra-competitive prices were somehow
still reasonable."). Garay-Rodríguez did not proffer any other
reason why the ultimate cost-effectiveness of the final route
allocations was relevant. So, it was well within the district
court's discretion under Federal Rule of Evidence 403 to exclude
evidence at trial about whether the defendants' conduct really
cost Caguas much money.
Garay-Rodríguez argues that the district court abused
its discretion by admitting a summary chart depicting the total
number and duration of calls and attempted calls between the
defendants' telephone numbers daily during the two months within
which they were alleged to have planned and implemented the bid
rigging. Garay-Rodríguez claims that the chart should have been
excluded under Rule 403, which allows exclusion of relevant
evidence "if its probative value is substantially outweighed by a
danger of . . . unfair prejudice, confusing the issues, misleading
the jury, undue delay, wasting time, or needlessly presenting
cumulative evidence." Fed. R. Evid. 403. We review this
evidentiary decision for an abuse of discretion and "usually defer
to the district court's balancing." United States v. Whitney, 524
- 17 -
F.3d 134, 141 (1st Cir. 2008) (quoting United States v. Smith, 292
F.3d 90, 99 (1st Cir. 2002)).
There was nothing unfairly prejudicial about the chart.
To be sure, it supported an inference that the defendants
conspired. But that simply means that the evidence was probative.
And to the extent defendants claim that the jurors might have
thought the evidence to be more incriminating than that, any such
risk was eliminated by the trial judge's instruction pointing out
the chart's limitations in not showing who actually was on the
calls or what they said.
Garay-Rodríguez's next set of arguments revolves around
the overlap between the mail fraud and Sherman Act counts. GarayRodríguez did not make these arguments below, so we review them
for plain error. United States v. Prieto, 812 F.3d 6, 17 (1st
Cir. 2016).
First, Garay-Rodríguez seems to argue that the district
court should have instructed the jury that it had to find a mailfraud scheme that was separate and distinct from the Sherman Act
conspiracy. That is incorrect. Assuming the jury found that the
mail fraud was committed in the process of bid rigging or market
allocation, it was free to find that the defendants' conduct both
violated the Sherman Act and constituted mail fraud. Cf. United
States v. Valdés-Ayala, 900 F.3d 20, 30–34 (1st Cir. 2018)
- 18 -
(upholding convictions of both bankruptcy fraud and wire fraud for
the same underlying conduct).
Second, Garay-Rodríguez argues that there was not
sufficient evidence to convict him for mail fraud. Sufficiency
challenges like this one that are not preserved through a Rule 29
motion after trial are reviewed under "a particularly exacting
variant of plain error review." United States v. Foley, 783 F.3d
7, 12–13 (1st Cir. 2015).
Here the government presented evidence to establish both
elements of a mail-fraud conviction: that the defendant "devised
or intend[ed] to devise a scheme to defraud (or to perform
specified fraudulent acts), and . . . use of the mail for the
purpose of executing, or attempting to execute, the fraud (or
specified fraudulent acts)." Schmuck v. United States, 489 U.S.
705, 721 (1989). The government presented clear evidence of a
scheme to defraud through the testimony of Aldea-Rodríguez and
documentary evidence of the bids, including the defendants'
certifications that their bids were "fair and free of collusion or
fraud," a statement that the jury obviously decided was false.
The government then showed that the scheme required a relevant and
foreseeable use of the mail because the defendants received the
object of the conspiracy -- their contract award letters -- by
certified mail.
- 19 -
Proof of mail fraud does not require proof of an actual
mailing by the specific defendant. United States v. Hebshie, 549
F.3d 30, 36 (1st Cir. 2008) (requiring only that the defendants
"cause[d] the use of the mails, which includes reasonably
foreseeable mailings" and "use[d] the mails for the purpose, or in
furtherance, of executing the scheme to defraud" (emphasis
omitted)). Garay-Rodríguez cites United States v. Berroa, 856
F.3d 141 (1st Cir. 2017), for a more restrictive view of the
causation requirement. Id. at 148–52 (explaining that the
defendants' submission of falsified test scores did not
sufficiently cause the mailing of their resulting medical
licenses, which were not a property interest of the governing
board). Berroa does not control here, however, where the awarding
of the contracts themselves was an alleged financial loss to the
municipality and gain to the defendants. See id. at 152
(explaining that the defendants in Berroa did not profit from their
fraud until "in the ensuing years after becoming licensed, [they]
practiced medicine for profit"). The district court thus did not
plainly err in allowing conviction on this evidence.
Finally, the same evidence described above also supports
the defendants' convictions for conspiracy to commit mail fraud,
which in addition to "intent to commit the substantive offense"
requires "intent to agree" to do so -- whether or not the
substantive offense is ultimately carried out. United States v.
- 20 -
Delgado Figueroa, 832 F.2d 691, 694–96 (1st Cir. 1987). AldeaRodríguez's testimony and tape recording of the meeting at which
the conspiracy was hatched, as well as documentation of the
defendants' phone calls and bid submissions, sufficiently supports
a finding that the defendants agreed to submit fraudulent bids and
cause the municipality to send out award letters based on that
fraudulent information.
The last set of challenges is to restitution amounts of
$114,181 for Garay-Rodríguez and $93,055 for Vega-Martínez. The
Mandatory Victims Restitution Act of 1996 ("MVRA") requires
restitution for any "offense against property . . . including any
offense committed by fraud or deceit." 18 U.S.C. § 3663A.
Restitution is "based on actual loss, not intended or expected
loss," United States v. Innarelli, 524 F.3d 286, 295 (1st Cir.
2008); see also United States v. Fair, 699 F.3d 508, 513 (D.C.
Cir. 2012) (explaining that the defendant's gain is not a
substitute measure under the MVRA in most circuits), and it is the
government's burden to establish the loss amount by a preponderance
of the evidence, 18 U.S.C. § 3664(e); United States v. Prochner,
417 F.3d 54, 65 (1st Cir. 2005). In calculating the restitution
award, "a sentencing court is not held to a standard of absolute
precision." United States v. Salas-Fernández, 620 F.3d 45, 48
(1st Cir. 2010). Instead, "the restitutionary amount [need only]
- 21 -
have a rational basis in the record." Id. Legal conclusions
underpinning restitution awards are reviewed de novo, factual
findings for clear error, and orders of restitution on the whole
for abuse of discretion. Innarelli, 524 F.3d at 293; Prochner,
417 F.3d at 65–66.
The district court based the restitution order on the
difference between the prices that Caguas paid the defendants for
their routes in 2014 after the rigged 2013 auction, and the amount
that it paid for those same routes in 2017 after a presumably fair
auction in 2016. The court then allocated the loss between the
defendants based on their routes. Garay-Rodríguez was ordered to
pay $114,181 and Vega-Martínez, $93,055.
Garay-Rodríguez -- but not Vega-Martínez -- first
challenges the restitution award under Apprendi v. New Jersey, 530
U.S. 466 (2000), arguing that the amount of restitution should
have been found by the jury instead of by a judge. This challenge
was not preserved, so we review it for plain error. Prieto, 812
F.3d at 17. This circuit has previously held, "like all of the
other circuits to consider this question," that "Booker and its
antecedents do not bar judges from finding the facts necessary to
impose a restitution order." United State v. Milkiewicz, 470 F.3d
390, 403–04 (1st Cir. 2006). Garay-Rodríguez contends that the
Supreme Court has more recently provided guidance to the contrary
- 22 -
in Southern Union Co. v. United States, 567 U.S. 343, 347–50
(2012), but that case is clearly distinguishable. There, the
Supreme Court evaluated a statute that imposed a $50,000 fine for
each day of violation and found that because each day increased
the statutory maximum fine, the jury was required to find the
number of days the defendant was in violation. Id. The MVRA,
however, has no statutory maximum amount and instead tasks the
district court with determining the factual amount of loss. 18
U.S.C. § 3663A(b). As a result, in the MVRA context "a judge
cannot find facts that would cause the amount to exceed a
prescribed statutory maximum." United States v. Bengis, 783 F.3d
407, 412 (2d Cir. 2015) (emphasis added). While this court has
not re-evaluated its reasoning in Milkiewicz since Southern Union
was decided, several other courts of appeals have already concluded
that Southern Union does not overrule their previous holdings that
Apprendi does not apply to restitution calculations.2 See United
States v. Sawyer, 825 F.3d 287, 297 (6th Cir. 2016); United States
v. Thunderhawk, 799 F.3d 1203, 1209 (8th Cir. 2015); Bengis, 783
F.3d at 412–13; United States v. Rosbottom, 763 F.3d 408, 420 (5th
Cir. 2014); United States v. Green, 722 F.3d 1146, 1149–50 (9th
Cir. 2013); United States v. Wolfe, 701 F.3d 1206, 1216–17 (7th
2 For the contrary argument, see William M. Acker, Jr., The
Mandatory Victims Restitution Act Is Unconstitutional. Will the
Courts Say So After Southern Union v. United States?, 64 Ala. L.
Rev. 803 (2013).
- 23 -
Cir. 2012); United States v. Day, 700 F.3d 713, 732 (4th Cir.
The district court's decision to follow the approach
espoused in Milkiewicz, which accords with the more recent
decisions of our sister circuits, was not plain error.
Moving on from Apprendi, both defendants challenge
whether it was reasonable for the district court to use the
ostensibly fair prices from the 2016-2017 auction as a benchmark
for what fair prices would have been in the 2013-2014 auction.
Vega-Martínez makes two primary arguments on that point. First,
he argues that there were no losses because after the renegotiation
process the municipality ultimately did not pay more than it had
initially budgeted for the routes. This first argument falls flat.
The fact that the municipality might have been able to afford
higher prices than it paid in 2014, even if true, does not preclude
the likelihood that it would have paid less had there been a fair
auction, which is the relevant question. Along those same lines,
Vega-Martínez also argues that he "[h]ad been servicing the same
route for around 27 years for basically the same price" that was
reached in 2014. But that is not the proper measure either. The
municipality presumably opened up the auction in the hope that it
could get lower prices, as it was entitled to do and as it did for
2017. Prices from previous years thus are not a legally
- 24 -
dispositive benchmark -- especially when those previous years'
prices were not decided by auction.
Second, Vega-Martínez argues that the government failed
to present any evidence to show that there were other companies
and drivers available and willing to provide the services for less
in 2014. This second argument is better but ultimately not
persuasive. As Vega-Martínez points out, neither of the two
cooperating witnesses testified that they would have bid on the
routes in question but for the agreement reached at the bid-rigging
meeting. There was thus no express evidence to establish that
market conditions were equivalent between 2013 and 2016. To back
up this point, Garay-Rodríguez points to a provision in the MVRA
that allows courts not to award restitution where determining the
loss amount would "complicate or prolong the sentencing process to
a degree that the need to provide restitution to any victim is
outweighed by the burden on the sentencing process." 18 U.S.C.
§ 3663A(c)(3)(B). Although the government interprets this
provision to suggest that district courts should not concern
themselves with complex facts when awarding restitution, it
actually suggests that restitution should not be awarded when it
is too difficult to estimate accurately. That is, where the facts
are too difficult to discern, the sentencing court's option is to
- 25 -
forgo restitution, not to fall back on a factually unsupported
calculation method.3
That being said, "calculation of restitution is not held
to standards of scientific precision." United States v. SánchezMaldonado, 737 F.3d 826, 828 (1st Cir. 2013). Absent evidence to
the contrary, it was permissible for the court to assume that
market conditions were roughly equivalent between 2013 and 2016.
Only three years passed between the two auctions, and the
defendants point to no intervening events that would have seriously
disrupted the supply of or demand for bus servicing in that span
of time.4
Vega-Martínez also argued below that "[t]he routes that
were served by [his company] are currently served differently."
In particular, he contended that a provider who obtained a route
for 2017 used a different number of buses and picked up a different
number of students than he had. But Vega-Martínez provided no
3 See Jennifer Gerarda Brown, Robbing the Rich to Feed the
Poor, 3 Buff. Crim. L. Rev. 261, 275–81 (1999); see, e.g., United
States v. Fountain, 768 F.2d 790, 802 (7th Cir. 1985) (Posner, J.)
(applying the Victim and Witness Protection Act's parallel
complexity exception to reverse a grant of lost future earnings to
a murdered prison guard's family because "projecting lost future
earnings has no place in criminal sentencing if the amount or
present value of those earnings is in dispute" and such an
"elaborate damage calculation requiring expert testimony" was too
complicated for the sentencing context (emphasis omitted)).
4 Hurricane Maria did not land on the island until September
2017, for example.
- 26 -
direct evidence of those contentions. While he did include
affidavits from community members about their experiences with the
busing services post-2017, the affidavits failed to include any
detailed information about the routes.
Absent an evidence-supported argument from the
defendants that the routes auctioned for 2017 were materially
different than those for 2014, the district court was entitled to
presume that the two auctions were for approximately the same
services in pretty much the same market

Outcome: For the reasons explained above, the defendants'
convictions and restitution requirements are affirmed.

Plaintiff's Experts:

Defendant's Experts:


Find a Lawyer


Find a Case