Supreme Court Ruling in Booker/Fanfan Suggests Changes in Antitrust Sentencing in 2005

On January 12, 2005, the Supreme Court reversed 20 years of federal sentencing practices in two opinions that nullified the requirement that judges find facts to increase sentences after a jury verdict or guilty plea. In United States v. Booker and United States v. Fanfan, the Supreme Court held that the United States Sentencing Guidelines violated the right to trial by jury because they required judges to enhance sentences beyond the maximum sentence supported by facts found by a jury or admitted by a defendant. To remedy this infirmity, the Court severed the provisions of the United States Code that made the Guidelines mandatory for and binding upon judges. The Guidelines are now just one of several factors that a judge may consider to arrive at a final sentence. The Court further determined that as long as the final sentence is “reasonable,” the appellate courts will let it stand. To ensure the highest sentence possible, prosecutors must now allege and prove, beyond a reasonable doubt, every fact that forms the basis of the sentence.

Although it remains to be seen whether this additional burden on prosecutors will induce defendants to try cases rather than plead guilty, Booker/Fanfan could make some corporate defendants think twice before agreeing to pay fines beyond the $100 million antitrust statutory maximum. In the past 10 years, as it significantly increased its hard-core cartel enforcement efforts, the Department of Justice Antitrust Division has negotiated a number of corporate guilty pleas by applying an alternative sentencing statute, 18 U.S.C. § 3571(d), that allows fines in an amount of “twice the gain or twice the loss” attributable to the cartel. This statute, often used to sentence corporate defendants because it provides for fines larger than the $100 million antitrust statutory maximum, falls outside the Guidelines. After Booker/Fanfan, “twice the gain or twice the loss” will likely be a factor that prosecutors must allege in an indictment and prove before a jury, or negotiate in a guilty plea.

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