Calculating the Fine for Organizations

• Pages: 153-173

153

CHAPTER VII

CALCULATING THE FINE FOR ORGANIZATIONS

A. Introduction

When a corporation pleads guilty or is found guilty after trial, the

court must consider Chapter Eight of the United States Sentencing

Guidelines (Sentencing Guidelines)1 in determining the appropriate

disposition of the matter. This Chapter outlines the process of calculating

a corporate fine and discusses the factors that influence upward and

downward adjustments, as well as the other potential elements of

criminal sanctions for Sherman Act violations.

The application of the Sentencing Guidelines to organizations can

have a significant impact on the amount of the fine. The maximum fine

of $100 million under the Sherman Act is, of course, itself significant.2

That fine can be increased dramatically because of the applicability of

the alternative fine provision of the Criminal Fine Improvements Act3—

which provides for fines of up to twice the gross gain received from or

twice the gross loss resulting from the offense. Over the past twenty

years, fines well in excess of the Sherman Act maximum have not been

uncommon.4

The calculation of an antitrust organizational fine begins in section

2R1.1 of the Sentencing Guidelines with a “base fine.”5 As discussed

1. See U.S. SENT’G GUIDELINES MANUAL § 8, introductory cmt (U.S.

SENT’G COMM’N 2021) [hereinafter U.S.S.G.] (“The guidelines and

policy statements in this chapter apply when the convicted defendant is

an organization.”). Current and past editions of the Sentencing Guidelines

are available at https://www.ussc.gov/guidelines.

2. 15 U.S.C. § 1.

3. See section H of this chapter for a more in-depth discussion of the

alternative fine provision.

4. Antitrust Div., U.S. Dep’t of Just., Sherman Act V iolations Resulting in

Criminal Fines & Penalties of $10 Million or More, available at

https://www.justice.gov/atr/sherman-act-violations-yielding-corporate-

fine-10-million-or-more (last updated Jan. 8, 2021).

5. U.S.S.G. §§ 8A1.2(b)(2)(C), 8C2.4(a)-(b), 2R1.1(d)(1) (providing that, in

lieu of pecuniary loss, an antitrust base fine shall be calculated based on

20 percent of the volume of affected commerce); see also id. § 8C2.1(a )

154 Antitrust Cartel Leniency and Sentencing Handbook

below, the base fine in criminal antitrust cases is determined by the

“volume of commerce” done by that corporation in the line of business at

issue.6 Once the base fine is determined, a maximum and minimum

“multiplier” is applied against the base fine.7 The multipliers are

established by calculating a “culpability score.”8 Applying the multipliers

to the base fine produces a fine range.9 Once the fine range is established,

Chapter Eight provides another set of sentencing factors to be considered

to determine the fine to be imposed within that range.10 The Sentencing

Guidelines then permit potential upward or downward departures from

the guideline fine, which are set forth in a series of policy statements.11

The court may also apply a variance, up or down, based on factors listed

in 18 U.S.C. § 3553(a).12 After considering the Sentencing Guidelines

calculation and any potential variance, the court may not impose a fine

that exceeds the maximum fine authorized by statute.13

B. The Base Fine

The first step in calculating a corporate fine is to calculate the “base

fine.” The Sentencing Guidelines provide that the base fine shall be the

greatest of: (1) an amount derived from a table in subsection 8C2.4(d),

which provides for escalating base fines based on the offense level of the

crime; (2) the pecuniary gain realized by the organization from the

offense; or (3) the pecuniary loss caused by the organization, if the loss

was caused intentionally, knowingly, or recklessly.14 Subsection

8C2.4(b) also provides that if the pertinent Chapter Two offense

guideline “includes a special instruction for organizational fines, that

(organizational fine guidelines apply when offense level is calculated

under certain guidelines, including U.S.S.G. § 2R1.1).

6. Id. § 2R1.1(d)(1).

7. Id. §§ 8A1.2(b)(2)(D)-(F), 8C2.6 (providing for calculation of the

minimum and maximum multiplier based on the culpability score),

8C2.7; see also id. § 2R1.1(d)(2) (requiring that minimum and maximum

multipliers must be at least .75 for antitrust fines).

8. Id. §§ 8A1.2(b)(2)(D)-(E), 8C2.5.

9. Id. §§ 8A1.2(b)(2)(F), 8C2.7.

10. Id. §§ 8A1.2(b)(2)(G), 8C2.8 (p.s.).

11. Id. § 8 A1.2(b)(4); see also id. §§ 8C4.1 (p.s.)-8C4.11 (p.s.) (policy

statements providing grounds for departure).

12. See generally Gall v. United States, 552 U.S. 38, 49-50 (2007); United

States v. Booker, 543 U.S. 220, 245 (2005).

13. U.S.S.G. § 8C3.1(b).

14. Id. § 8C2.4(a).