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Sunday, March 8, 2009

In Birmingham, They Love The Governor: HealthSouth Appeal Prompts Interesting Hearsay And Jury Impeachment Rulings

The recent opinion of the Eleventh Circuit in United States v. Siegelman, 2009 WL 564659 (11th Cir. 2009), contains interesting co-conspirator admission and jury impeachment conclusions.

In Siegelman, Don Eugene Siegelman, the former governor of Alabama, and Richard Scrushy, the former CEO of HealthSouth Corporation were convicted of federal funds bribery and five counts of honest services mail fraud and conspiracy (Siegelman was also convicted of obstruction of justice):

The defendants' bribery convictions were based on allegations that they made and executed a corrupt agreement whereby Scrushy gave Siegelman $500,000 in exchange for Siegelman's appointing him to Alabama's Certificate of Need Review Board (the "CON" Board). The honest services mail fraud convictions incorporated the same bribery allegations, but also alleged that Scrushy used the CON Board seat obtained from Siegelman to further HealthSouth's interests. Siegelman's obstruction of justice conviction [wa]s based on allegations that he corruptly influenced another to create a series of sham check transactions to cover up a "pay-to-play" payment to him.

Siegelman and Scrushy subsequently appealed, alleging nine errors at trial, and the Eleventh Circuit affirmed in part and reversed in part. I will address two of those allegations in this post, and you can check out the rest in the Eleventh Circuit's opinion.

The first alleged error involved the admission of an alleged co-conspirator admission made by Eric Hanson, an outside lobbyist for HealthSouth, to Mike Martin, the former Chief Financial Officer of HealthSouth. Apparently, at a HealthSouth retreat, after Martin had procured the first $250,000 of the $500,000, Hanson bragged to him about the fact that he was able to get HealthSouth a spot on the CON Board with the help of the $250,000.

Federal Rule of Evidence 801(d)(2)(E), the co-conspirator admission rule, indicates that:

A statement is not hearsay if...[t]he statement is offered against a party and is...a statement by a coconspirator of a party during the course and in furtherance of the conspiracy."

The big question for the Eleventh Circuit was whether Hanson's statement to Martin was in furtherance of the conspiracy, and the Eleventh Circuit noted that it:

applies a liberal standard in determining whether a statement was in furtherance of a conspiracy...."The statement need not be necessary to the conspiracy, but must only further the interests of the conspiracy in some way...." "[I]f the statement 'could have been intended to affect future dealings between the parties,' then the statement is in furtherance of a conspiracy...." Finally, "[s]tatements between conspirators which provide reassurance, serve to maintain trust and cohesiveness among them, or inform each other of the current status of the conspiracy further the ends of the conspiracy...." Even defendants concede that boasting or bragging is in furtherance of a conspiracy if the statements are directed at obtaining the confidence or allaying the suspicions of coconspirators.

Applying this "liberal standard," the Eleventh Circuit easily found that the statement was in furtherance of the conspiracy because:

Hanson's statement at the HealthSouth retreat furthered the conspiracy. We agree with the government that, given Martin's own involvement in the conspiracy..., Hanson's bragging to him about purchasing the CON Board seat "with the help of" the IHS check informed Martin that their plan had worked and that Martin's involvement had helped. This alone is sufficient to permit its introduction under Ammar....Additionally, however, the statement is easily seen to affect the coconspirators future dealings because Martin's assistance might be needed in connection with the second $250,000 donation and Hanson knew this.

The second alleged error involved jurors allegedly exchanging e-mails both during trial and during deliberations. Such e-mails would have been improper as both premature jury deliberation and deliberation by fewer than all the jurors. But because this was merely alleged intra-jury misconduct rather than anything external being brought to bear upon the jurors, the Eleventh Circuit found that it could not form the proper predicate for jury impeachment under Federal Rule of Evidence 606(b). This was undoubtedly the correct decision under the Rule, but I have to wonder whether improper e-mailing among jurors is an increasing problem that courts will have to address at some point.

-CM

http://lawprofessors.typepad.com/evidenceprof/2009/03/co-conspirator.html

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