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United States v. Joyce (9th Cir. 2018)

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United States v. Joyce (9th Cir. 2018)

Citation: 895 F.3d 673 (9th Cir. 2018) · Docket: No. 17-10269 (appeal from N.D. Cal. No. 4:14-cr-00607-PJH-4) · Court: U.S. Court of Appeals for the Ninth Circuit · Filed: July 11, 2018 · Panel: Murphy (10th Cir., by designation), Paez, Ikuta; opinion by Judge Murphy

The Ninth Circuit’s published, controlling statement that bid rigging at public real-estate foreclosure auctions is a per se violation of Section 1 of the Sherman Act. It arose from the U.S. Department of Justice Antitrust Division’s northern-california-foreclosure-auction-bid-rigging prosecutions and is the governing appellate precedent for that entire cluster of cases.

Scope

Federal criminal antitrust. Binding precedent in the Ninth Circuit (which includes California). Defines the standard of liability — per se rather than rule-of-reason — for criminal bid-rigging prosecutions at foreclosure auctions.

Facts (the scheme)

Thomas Joyce, a Lafayette, California real-estate investor, was charged by indictment returned in the Northern District of California (Oakland) with conspiring to suppress and restrain competition by rigging bids in violation of 15 U.S.C. § 1. The indictment alleged a bid-rigging scheme involving foreclosed real property in Contra Costa County, California. Per the opinion, the means and methods included:

  • agreeing not to compete to purchase selected properties at public auctions;
  • designating which conspirators would win selected properties;
  • refraining from bidding for selected properties;
  • purchasing selected properties at public auctions at artificially suppressed prices;
  • negotiating, making, and receiving payoffs for agreeing not to compete; and
  • holding second, private auctions (“rounds”) to determine the payoff amounts and choose the conspirator who would be awarded the property.

The companion DOJ release reports the conduct ran roughly June 2008 to January 2011, with the private “rounds” often held at or near the courthouse steps where the public auctions occurred (DOJ Press Release 17-619).

Before trial, Joyce moved to “Adjudicate Government’s Sherman Act Allegations Pursuant to the Rule of Reason,” asking the district court to hold the per se rule inapplicable so he could introduce evidence of the supposed procompetitive (“ameliorative”) effects of his conduct. Chief District Judge Phyllis J. Hamilton denied the motion, holding bid rigging “falls squarely within the per se category.” Joyce was convicted at trial (Feb. 6, 2017) and sentenced to twelve months and one day in prison, three years of supervised release, and 100 hours of community service.

Holding / outcome

Conviction AFFIRMED. The Ninth Circuit held:

“Because bid rigging is per se illegal under Section 1 of the Sherman Act, the district court did not err by refusing to permit Joyce to introduce evidence of the alleged ameliorative effects of his conduct. Accordingly, the judgment of the district court is AFFIRMED.”

The court’s summary frames the rule directly: “the panel held that bid rigging is per se illegal under Section 1 of the Sherman Act.”

Reasoning

  • Bid rigging is a form of horizontal price fixing. Although the Ninth Circuit had “never expressly held that bid rigging is a per se violation,” it adopted the rule on the reasoning of other circuits, quoting United States v. Fenzl, 670 F.3d 778, 780 (7th Cir. 2012) (bid rigging is “a form of price fixing in which bidders agree to eliminate competition among them, as by taking turns being the low bidder”) and United States v. Bensinger Co., 430 F.2d 584, 589 (8th Cir. 1970) (bid rigging is “a price-fixing agreement of the simplest kind, and price-fixing agreements are per se violations of the Sherman Act”).
  • The per se rule forecloses procompetitive-effects evidence. Once conduct falls into a category “conclusively presumed to be unreasonable” (N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958)), “any business justification for the defendant’s conduct is neither relevant nor admissible.” The government “need not prove specific intent to produce anticompetitive effects where a per se violation is alleged” (A. Lanoy Alston, 974 F.2d at 1213).
  • The industry/economic-downturn argument fails. Joyce argued the scheme involved only “a few participants in a narrow set of public foreclosure auctions” with no “demonstrable effect on the pricing or quantity of the real estate sold,” and that courts lack antitrust experience with non-judicial foreclosure auctions. The panel rejected both, relying on Arizona v. Maricopa County Medical Society, 457 U.S. 332, 349–51 (1982): the per se rule applies “regardless of the industry,” and “the elimination of so-called competitive evils [in an industry] is no legal justification” for price fixing. It is “irrelevant that Joyce’s bid rigging activities took place in any particular industry or during a downturn in the broader economy.”

Practical impact

  • For the foreclosure/auction industry, Joyce removes any litigation argument that a bid-rigging “round” or non-compete payoff at a foreclosure sale should be judged on its net economic effect. In a Ninth Circuit criminal prosecution the agreement itself is the crime; proof of suppressed prices, market power, or harm to a specific homeowner is not required for conviction. See sherman-antitrust-bid-rigging.
  • It confirms that the “second private auction at the courthouse steps” model — common to the entire Northern California cluster — is per se unlawful, not a defensible efficiency mechanism.
  • The decision is the appellate backstop that hardened dozens of guilty pleas and trial convictions in the northern-california-foreclosure-auction-bid-rigging investigation, because it eliminated the principal merits defense (rule-of-reason) defendants might otherwise raise.

▸ For Investors / Operators. Coordinating non-competition at a foreclosure or tax-lien auction — agreeing who bids, paying others to stand down, or running a private “round” afterward — is a federal felony judged under the per se rule, where intent-to-harm and actual price effects are not defenses. See auction-bid-rigging-antitrust-compliance for the compliance line between lawful joint bidding/partnerships and unlawful collusion.

Good-law status

Still good law. Published, precedential Ninth Circuit opinion; not overruled, abrogated, or limited as of last_verified 2026-06-02. It is the controlling Ninth Circuit authority that bid rigging is per se illegal under Sherman Act § 1.

Why it matters

Joyce is the appellate keystone of the largest foreclosure-auction antitrust prosecution in U.S. history. It converts the factual question “did the collusion hurt anyone?” into a non-issue: at foreclosure auctions, the bid-rigging agreement is per se criminal. Any surplus-recovery operator, investor, or auction participant in the Ninth Circuit must treat coordinated bidding as categorically unlawful.

Source

  • Official Ninth Circuit slip opinion (retrieved): http://cdn.ca9.uscourts.gov/datastore/opinions/2018/07/11/17-10269.pdf
  • Reported at 895 F.3d 673 (9th Cir. 2018).
  • DOJ Antitrust Division sentencing release (Press Release 17-619, June 7, 2017), “Northern California Man Sentenced to Prison for Rigging Bids at Public Foreclosure Auctions,” confirming the Feb. 6, 2017 conviction date and twelve-months-and-one-day sentence (retrieved via Internet Archive capture of justice.gov).

Legal information, not legal advice. This page summarizes a court decision for educational purposes and does not create an attorney-client relationship. Verify against the primary opinion and consult a licensed attorney in the relevant jurisdiction before acting. Last verified 2026-06-02.

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