BOWNES, Senior Circuit Judge.
This is a guidelines sentencing appeal. Defendants-appellants Arnold Sussman and Pilgrim Market Corporation pled guilty to eight counts encompassing selling, storing and transporting adulterated meat and poultry products. The indictment charged violations of 21 U.S.C. §§ 453(g)(3), 458(a)(2), 454(c), and 461(a); 21 U.S.C. §§ 601(m)(3), 610(c), 661(c) and 676(a). The indictment counts against each defendant were identical; defendant Sussman was the owner and treasurer of the Pilgrim Market Corporation, a retail meat and poultry store in Boston.
Defendant Sussman was sentenced to twelve months imprisonment on each of the eight counts, the sentences to be served concurrently. Sussman was also fined $10,000. The court determined Sussman's sentence as follows. It divided the indictment counts into four groups: counts 3, 5, 6 and 7 comprised one groups: count 9 alone formed the second group; count 11 was the third group and counts 12 and 13 formed the fourth group. This grouping resulted in a base offense level of 10. The court added two levels for obstruction of justice, gave a two-level downward adjustment for acceptance of responsibility and added two levels for abuse of trust. The total offense level was 12. The criminal history category was 1. These computations brought Sussman within a guideline range of 10 to 16 months imprisonment.
The court fined the corporate defendant $25,000 on each count for an aggregate fine of $200,000. It also levied a special assessment of $200 on each count against the corporation for a total assessment of $1,600.
Sussman appeals the court's grouping of the indictment counts and its enhancement of the sentence for obstruction of justice and abuse of trust.
The corporate defendant appeals the fine levied against it as being excessive and, as such, in violation of the eighth amendment; it also claims that the district court violated 18 U.S.C. § 3572 in its sentencing procedure.
I. THE GROUPING OF THE INDICTMENT COUNTS
Defendant Sussman argues that all of the counts should have been treated as one
A. Standard of Review
We start with the explicit command of the statute governing review of a sentence:
18 U.S.C. § 3742(e).
In United States v. Cousens, 942 F.2d 800 (1st Cir.1991), we held: "The determination of whether and how to group counts under the multiple count provisions of the Guidelines more closely resembles an application of the Guidelines to the facts than a finding of fact. Accordingly, we give `due deference' to the grouping determinations of the district court." at 806. After reviewing the cases in this and other circuits and noting that some other circuits had applied a de novo standard of review to groupings of indictment counts we concluded "that we should uphold the district court's groupings even under de novo review." at 807. As we noted in Cousens the First Circuit cases indicate that the standard of review for grouping is usually clearly erroneous. at 806.
In United States v. Rosado-Sierra, 938 F.2d 1 (1st Cir.1991), we held that the clearly erroneous standard applied to the district court's determination of the defendant's role in the offense. at 1, 2. In United States v. Preakos, 907 F.2d 7, 8 (1st Cir.1990), we held that the "due deference" language of the statute required that we review the district court's fact-based application of the guidelines only for clear error. Preakos did not involve grouping; it was an appeal from sentence enhancement under sections 2D1.1(b)(1) and 3B1.1(a) of the Guidelines. In United States v. Ruiz, 905 F.2d 499 (1st Cir.1990), also a sentence enhancement case, we followed the standards of review mandated by the statute: clearly erroneous for the district court's findings of fact and due deference for its application of the guidelines to the facts. Id. at 507.
United States v. Gerante, 891 F.2d 364 (1st Cir.1989), did involve grouping and we applied the clearly erroneous standard of review. Id. at 368. In United States v. Paulino, 887 F.2d 358 (1st Cir.1989), a sentence enhancement appeal involving § 2D1.1(b)(1) of the Guidelines, we applied the standards of review set forth in 18 U.S.C. § 3742(e), clearly erroneous and due deference. Id. at 359.
In United States v. Wright, 873 F.2d 437 (1st Cir.1989), we explored in depth the standard of review for "application of the Guidelines to the particular facts of each case." Id. at 443. We noted that mixed questions of law and fact "are often reviewed de novo, like pure questions of law." Id. We pointed out that "[t]he statute providing for appellate review of sentencing foresees that strict appellate review of Guidelines application questions may not be appropriate." Id. We then stated:
Id. at 444. We then applied the clearly erroneous standard to the district court's decision that defendant was neither a "minor" or "minimal" participant. Id.
To round out our review of first circuit cases we note that at least three "grouping" cases have not expressly articulated a standard of review in upholding the district court. See United States v. Shmuel David, 940 F.2d 722, 741-742 (1st Cir.1991);
Based on the statute and First Circuit precedent we reject a de novo standard of review in this case. Central to the district court's decision to group the counts was a finding of fact that defendant's offenses did not constitute a single ongoing plan to sell, store or transport adulterated meat and poultry. Because this was a finding of fact, the statute requires the "clearly erroneous" standard of review. We think that under First Circuit precedent the "due deference mandate" of the statute to the district court's application of the guidelines to the facts translates into a "clearly erroneous" standard of review. This is not a situation where the court has committed pure legal error by misinterpreting the words of the guideline.
B. The District Court's Determination
Section 3D1.2 of the Guidelines provides:
Following this mandate is a list of offenses "to be grouped under this subsection." This is followed by another list of offenses "[s]pecifically excluded from the operation of this subsection." None of the charged counts covered offenses on either list. The district court, therefore, had to follow the next paragraph of § 3D1.2:
Appellant argues that under subsection (b) the district court should have put all the counts into "a single group" because they involved the same victim and were connected by a common criminal objective or constituted part of a common scheme or plan. The district court rejected this approach. It divided the counts into four groups, which we examine in some detail.
Group one was comprised of counts 3, 5, 6 and 7. The indictment charged in pertinent part as to these counts as follows:
Count 3 charged that between January 1, 1989, and February 2, 1989, Pilgrim Market and Sussman sold in commerce poultry products, specifically 360 pounds of fresh, whole turkeys, which were adulterated because the poultry product consisted in
Count 5 charged that between January 31, 1989, and February 2, 1989, Pilgrim Market and Sussman sold in commerce meat products, specifically 144 pounds of meat franks, which were adulterated because the meat food product consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
Count 6 charged that prior to February 2, 1989, Pilgrim Market and Sussman committed acts which had the effect of causing various meat products, such as pork sausage, smoked liver sausage, sweet Italian sausage, beef hearts and diced pork to become adulterated because the meat food product was held under insanitary conditions whereby it may have become contaminated and consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
Count 7 charged that on or about February 2, 1989, Pilgrim Market and Sussman offered for sale in commerce meat food products, such as pork sausage, smoked liver sausage, sweet Italian sausage, beef hearts and diced pork, which were adulterated because the meat food product was held under insanitary conditions whereby it may have become contaminated and consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
The district court explained that it grouped these counts together because they consisted of a "single composite harm." It found "that these various goods were adulterated or offered for sale on or about the same time to the retailing public generally."
The next group consisted solely of count nine. It charged that on or about February 21, 1989, Pilgrim Market and Sussman transported in commerce meat products, specifically 150 pounds of pork spareribs, which were adulterated because the meat food product consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
Count 11 alone comprised the third group. It charged that on or about December 28, 1989, Pilgrim Market and Sussman sold in commerce poultry products, specifically approximately 200 pounds of poultry products, which were adulterated because the poultry food product consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
The fourth group consisted of counts 12 and 13. Count 12 charged that on about May 29, 1990, Pilgrim Market and Sussman committed acts which had the effect of causing various meat food products, such as approximately 65 pounds of salt pork and 510 pounds of pork spareribs, to become adulterated because the meat food product was held under insanitary conditions whereby it may have become contaminated and consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food. Count 13 charged that on or about May 29, 1990, Pilgrim Market and Sussman offered for sale in commerce meat products, specifically bacon and salt pork, which were adulterated because the meat food product was held under insanitary conditions whereby it may have become contaminated and because it consisted in whole and in part of filthy, putrid and decomposed substances and was unsound, unhealthful, unwholesome and otherwise unfit for human food.
The court stated that its "basic rationale" for the second, third and fourth grouping was that "each evidences a separate culpable harm not proven to be part of a single ongoing plan of misconduct and so we have four separate harms."
Sussman argues that § 3D1.2(b) mandates a single grouping because the counts "involve the same victim," the consuming
Applying the due deference standard we have no difficulty in upholding the grouping made by the district court. We turn to the PSR for the facts.
On February 2, 1989, United States Department of Agriculture compliance officers inspected the retail display case of Pilgrim Market. They saw and took photographs of meat and poultry food products which were rodent-infested. "The products were gnawed and chewed and the display case contained rodent fecal matter." When asked by the probation officer about this rodent contamination, Sussman stated that "it was only found in a showcase once and it was only one dropping found on the meat." The photos taken February 2, 1989, showed a variety of meats with rodent gnaw marks and feces on them. Subsequent photos taken on February 6, 1989, showed meats in the display case and the rear storage area with similar rodent gnaw marks and fecal droppings. Photographs taken on May 29, 1990, and February 3, 1991, showed the same type of rodent contamination. In a signed statement dated February 2, 1989, Sussman acknowledged that his meat products contained rodent feces, and that there was evidence that the rodents had eaten through the plastic covers on the meat and into the meat itself.
Unless Sussman had some Pied Piper arrangement we hardly think that selling rodent-contaminated food products could be part of a common scheme or plan.
The only evidence that could be construed as part of a common plan or scheme is Sussman's admission that for two years he had purchased his food product whenever his wholesalers had a deal. The two other corporations and three other individuals charged in the indictment, supra n. 1, were food wholesalers. This would explain the sale of sour, rancid and putrid food products by Sussman. There was, however, evidence of contamination from sources other than food bought at a deal. In addition to the rodent infestation, the Department of Agriculture inspectors found food products — whole lamb carcasses — hanging "about 2 [inches] over standing sewerage water which leaked from a pipe."
Finally, the difference in dates between the first group and the other groups negates the finding of a common scheme or plan. The counts in the first group cover offenses between January 1, 1989, and February 12, 1989. The second group has a date of February 21, 1989. The third group's charging date is December 28, 1989. And the fourth group consists of two counts with May 29, 1990, as the charging date on both.
Giving "due deference to the district court's application of the guidelines to the facts," 18 U.S.C. § 3742(e), we cannot say that it erred in finding that Sussman's sale of food products with such disparate sources of contamination and variations in dates of sale was not part of a common scheme or plan. We affirm the district court's determination that § 3D1.2(b) of the Guidelines did not mandate a single grouping of Sussman's offenses.
Sussman next argues that the counts should have been treated as a single group under § 3D1.2(d) which provides in pertinent part: "Counts involve substantially the same harm within the meaning of this rule: ... if the offense behavior is ongoing or continuous in nature and the
An examination of some of the guidelines for pollution crimes, which under comment 6(7) to § 3D1.2 are to be grouped, sheds light on the meaning of the "and" clause. The guidelines covering offenses involving pollution of the environment specifically take into account ongoing or continuous behavior by providing upward adjustments for repetitious behavior. See e.g., § 2Q1.2(b)(1)(A) (if repetitive release of toxic substance, increase by 6 levels); § 2Q1.3(b)(1)(A) (similar); 2Q1.4(b)(3) (if repetitive release of contaminant into a public water system, increase by two levels). In contrast, the guideline applicable to defendant's offenses, § 2N2.1, simply provides a base offense level of 6. It has no built-in adjustment increasing the offense level for repeated criminal acts. Pollution guidelines specifically provide upward adjustments for repeated behavior while food adulteration ones do not. This explains why grouping is mandatory for pollution offenses but not for food adulteration offenses.
Moreover, defendant's argument for mandatory grouping defies common sense. Under defendant's approach the worse the behavior, the lower the offense level and the lighter the punishment. That is because the more frequently a person sells adulterated food the more his criminal activity appears to be "ongoing and continuous in nature." On the other hand, a food retailer who sold adulterated products twice in a year and passed inspection in the interim could not be deemed to have exhibited behavior that was ongoing and continuous. Under defendant's logic the offenses of the two-time violator would not be grouped, but more frequent violations would be. We refuse to read § 3D1.2(d) so as to confer a benefit upon the frequent violator of the adulterated food laws.
II. OBSTRUCTION OF JUSTICE
The standard of review for an obstruction of justice sentence enhancement is clearly erroneous. United States v. Wheelwright, 918 F.2d at 228. The sentencing guideline covering this offense is § 3C1.1 which provides: "If the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the investigation, prosecution, or sentencing of the instant offense, increase the offense level by 2 levels." Comment 3(d) states in pertinent part: "The following is a non-exhaustive list of examples of the types of conduct to which this enhancement applies: ... (d) destroying or concealing or directing or procuring another person to destroy or conceal evidence that is material to an official investigation...."
Defendant contends that the district court erred in interpreting the guideline because his conduct of obstructing justice did not occur during the investigation or prosecution. Under the facts as set forth in the PSR, which Sussman did not contest, this position is untenable.
The PSR states:
Hiding rotten poultry and meat products in the freezer so that Agriculture Department inspectors would not find them and selling them after the danger of detection had passed is a flagrant example of concealing evidence material to an official investigation. There is no factual basis for defendant's claim that there was no obstruction of justice during an official investigation. We affirm the district court's adding two levels for obstruction of justice.
III. ABUSE OF TRUST
Defendant objects to the two-level increase for abuse of trust on the following grounds: that he did not occupy a position of trust; that, if he did occupy a position of trust, he did not abuse this position in a manner that significantly facilitated the commission or concealment of the offense; and that because abuse of trust was a characteristic of the offense an upward adjustment under guideline § 3B1.3 was inappropriate.
These are interesting issues, particularly the third one relative to the characteristic of the offense. The problem is that defendant did not raise them below. The court specifically asked defense counsel if he wanted to be heard on the two-level upward adjustment for abuse of trust. Counsel replied:
We read this to mean either that defendant agreed that he had abused his trust or that he was not contesting the PSR recommendation that two levels be added for abuse of trust. Certainly none of the arguments raised before us were even faintly suggested below. Under the circumstances we have no recourse but to find that any challenge to the abuse of trust sentence enhancement was waived. In United States v. Fox, 889 F.2d 357 (1st Cir.1989), we stated in words directly applicable here:
Id. at 359. See also United States v. Visman, 919 F.2d 1390, 1393-94 (9th Cir.1990).
IV. THE FINE AGAINST THE CORPORATION
The court fined the Pilgrim Market Corporation, which is owned, controlled and
We note at the outset of our discussion that the sentencing guidelines do not, yet, apply to corporate criminal defendants. We will assume for purposes of our discussion that the eighth amendment proscription against excessive fines applies to corporations, although this is a very tenuous assumption. Simply put, we do not find the fine to be excessive. It is less than half the statutory maximum of $500,000, 18 U.S.C. § 3571(c)(3), and one half of the government's recommendation. We are not impressed with Pilgrim Market's contention that the district court intended to put it out of business. The following colloquy took place between counsel for Pilgrim Market and the court at the sentencing hearing:
A fine, like a sentence of incarceration, serves two purposes: punishment and deterrence to others. We do not think that a fine of $200,000 for repeatedly selling rotten poultry and meat products to the public is excessive punishment. And it would also serve as a significant deterrent to others who might be tempted to follow the same practice. We next consider the alleged statutory violations.
18 U.S.C. § 3572(a) provides:
There was no objection to the factual statements in the PSR about Pilgrim Market. These included income statements for the years 1989 and 1990 showing gross receipts of $739,500 in 1989 and $961,651 in 1990. Balance sheets for 1989 and 1990 were also included in the PSR. The record of the sentencing hearing shows that the district court was fully cognizant of the financial condition of the corporation as set forth in the PSR. It specifically inquired
Although the district court did not follow the script of 18 U.S.C. § 3572(a), we find that it did consider all the pertinent factors enumerated therein before it determined the amount of the fine to be assessed against the defendant corporation.
The sentences of defendants Sussman and Pilgrim Market Corporation are: