## Facts

- Thomas Joyce was indicted in the Northern District of California for conspiring to rig bids at public foreclosure auctions in Contra Costa County, in violation of § 1 of the Sherman Act.
- The charged scheme involved horizontal agreements among auction participants to suppress competition for foreclosed properties.
- Conspirators allegedly agreed to refrain from bidding against each other on selected properties and to designate in advance which conspirator would win at the public auction.
- The designated winner would acquire properties at artificially suppressed prices due to the coordinated non-bidding.
- After public auctions, conspirators allegedly conducted second, private auctions among themselves to reallocate properties and determine payoffs for the agreement not to compete.
- Before trial, Joyce sought a legal ruling that the conduct should be analyzed under the rule of reason and sought to introduce evidence of alleged beneficial or “ameliorative” effects.
- The district court treated the alleged conduct as per se unlawful bid rigging, excluded evidence offered to show procompetitive effects, and a jury convicted Joyce.

## Issues

1. Whether the charged bid-rigging conspiracy at public foreclosure auctions is per se unlawful under Sherman Act § 1 or instead subject to rule-of-reason analysis.
2. Whether, given per se treatment, the district court properly excluded evidence offered to show procompetitive or ameliorative effects of the agreement.

## Decision

- The Ninth Circuit affirmed the conviction.
- The court held that bid rigging of the type charged is a per se violation of Sherman Act § 1.
- The foreclosure-auction setting did not remove the conduct from the per se category.
- Because per se analysis applied, the district court properly excluded evidence of claimed efficiencies or favorable effects as irrelevant to liability.

## Legal Principles

- Sherman Act § 1 analysis generally proceeds under either the rule of reason (case-specific competitive effects inquiry) or the per se rule (categorical condemnation based on the restraint’s nature).
- Horizontal bid rigging—agreements among competitors to refrain from bidding, designate winners, or use side arrangements to allocate gains—is a paradigmatic per se unlawful restraint.
- When a restraint is per se illegal, defendants may not defend liability by offering evidence that the agreement produced efficiencies, was reasonable in context, or had offsetting benefits; the relevant questions focus on the existence of the prohibited agreement and the defendant’s knowing participation.

## Conclusion

The Ninth Circuit held that a conspiracy to suppress bidding at public foreclosure auctions, coupled with post-auction private reallocation and payoffs, constitutes per se illegal bid rigging under Sherman Act § 1, and it affirmed the exclusion of procompetitive-effects evidence and Joyce’s resulting conviction.


United States v. Joyce, 895 F.3d 673 (9th Cir. 2018)