Lesson From Smith: Withdrawal From A Criminal Antitrust Conspiracy Must Be Affirmative

In a narcotics case surprisingly relevant to the antitrust world, the United States Supreme Court recently addressed withdrawal from a criminal conspiracy. In Smith v. United States,1 a unanimous Court held that the burden rests with the defendant to prove withdrawal from a criminal conspiracy. Although, as noted, the decision involved a drug and racketeering conspiracy, it will certainly affect future criminal antitrust cases in which individuals or corporations seek to argue that they withdrew from an alleged anticompetitive agreement - a not uncommon defense. This alert summarizes the Smith decision and offers crucial practical advice in order to prove withdrawal from a criminal conspiracy.

Calvin Smith was indicted for crimes involving narcotics and racketeering conspiracies that were alleged to have existed in the Washington, D.C. area from the late 1980s to 2000. At trial, Smith raised a statute-of-limitations defense based on the five-year statute of limitations, arguing that he had spent the last six years of the charged conspiracies in prison. Over the defense's objection, the judge instructed the jury that once the government proved that Smith was a member of the conspiracy, the burden was on the defense to prove by a preponderance of the evidence that Smith withdrew, rather than on the government to prove that he did not. The judge defined withdrawal as "affirmative acts inconsistent with the goals of the conspiracy" that "were communicated to the defendant's co-conspirators in a manner reasonably calculated to reach those conspirators." As evidence of withdrawal, Smith introduced a stipulation of his dates spent incarcerated, in addition to testimonial evidence showing that he was no longer a member of the conspiracies during his incarceration. Applying the aforementioned standard, the jury found that Smith had not met his burden of proving withdrawal. Smith was subsequently convicted and given a life sentence .

On appeal, the United States Court of Appeals for the D.C. Circuit affirmed Smith's conspiracy convictions and the Supreme Court granted certiorari to resolve a circuit split as to which party bears the burden of proof regarding withdrawal from a conspiracy prior to a limitations period. In a short, unanimous opinion delivered by Justice Scalia, the Supreme Court held that a defendant bears the burden of proving the defense of withdrawal. According to the Court, unless an affirmative defense negates an element of the...