EvidenceProf Blog

Editor: Colin Miller
Univ. of South Carolina School of Law

Tuesday, December 6, 2011

Tax Master?: 10th Circuit Finds Lay Opinion Testimony Doesn't Violate Rule 704(b)

Federal Rule of Evidence 704(b) provides that

In a criminal case, an expert witness must not state an opinion about whether the defendant did or did not have a mental state or condition that constitutes an element of the crime charged or of a defense. Those matters are for the trier of fact alone.

But let's say that a lay witness wants to offer opinion testimony on a criminal defendant's mental state? Is such testimony admissible? According to the recent opinion of the Tenth Circuit in United States v. Abramson-Schmeiler, 2011 WL 5925582 (10th Cir. 2011), the answer is "yes." I disagree.

In Abramson-Schmeiler, Linda Abramson-Schmeiler was convicted of five counts of filing a false tax return. 

The charges were based on her alleged failure to report all of the income she received from her business of"“diversionary sales" (purchasing and then reselling large quantities of hair-care products). The government alleged that she falsely underreported her business's gross receipts, or sales, by more than $1.4 million during the years 2003, 2004, and 2005, which then resulted in her falsely underreporting her personal income for the same amount. In support of these allegations, the government introduced evidence at trial through defendant's bank records and tax returns. These records showed that the gross-receipts figures on defendant's taxes were significantly lower than the gross-receipts amounts reflected in her bank records.

At trial, Abramson-Schmeiler's

main defense was that she did not intentionally underreport her sales and income. She admitted that she had failed to report payments her business received for selling hair-care products. But she asserted that many of her diversionary sales were in cash and unrecorded and that she lost money or broke even on many of these transactions. She testified that when she did not make money on a transaction, she would consider it a "wash" and she would not report the transaction to her accountant for reporting on her income tax returns....She testified that she did not knowingly fail to report gross receipts on her taxes.

After she was convicted, Abramson-Schmeiler appealed, claiming, inter alia, that the district court erred by precluding tax accountant, Richard Powell, who prepared her tax returns for the years she was charged with failure to report all of her income, from providing certain testimony. Specifically, 

During cross-examination of Mr. Powell, defense counsel asked to approach the bench. The following exchange then took place:
[Counsel]: ... The one issue I want to approach on, when I conducted an interview of this witness his opinion was if the payments were underreported that he didn't believe that she did it on purpose, and I know that's an [ultimate] issue opinion but under Rule 704 that's not precluded. There is some language about experts but he has not been qualified as an expert....

Court: No one, expert or any other witness, may express an opinion. It's precluded expressly under [Federal Rule of Evidence] 704, and it's generally precluded through a lay fact witness such as Mr. Powell.

In addressing this argument, the Tenth Circuit found that "Rule 704(b) expressly precludes an expert from offering an opinion about the ultimate issue of a defendant's mental state in a criminal case...." Conversely, it does not categorically preclude the admission of lay opinion testimony on the defendant's mental state, and Federal Rule of Evidence 701

If a witness is not testifying as an expert, testimony in the form of an opinion is limited to one that is:

(a) rationally based on the witness’s perception;

(b) helpful to clearly understanding the witness’s testimony or to determining a fact in issue; and

(c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.

And, according to the court,

This issue came up in a recent case where the district court excluded all lay witness testimony about a defendant's mental state. In reversing the district court's decision, we explained that: "The Federal Rules of Evidence do not ... categorically prohibit lay witnesses from offering opinion testimony regarding the defendant's mental state."...

We conclude that the district court expressed a mistaken view of the law and therefore abused its discretion in excluding this opinion testimony for the reasons expressed at trial.

And while the Tenth Circuit ultimately found harmless error, I am baffled by its evidentiary conclusion. Sure, Rule 704(b) only precludes expert testimony on a criminal defendant's mental state because only an expert would be qualified to render such testimony. Isn't testimony on whether a person intentionally underreported on her taxes based on scientific, technical, or other specialized knowledge within the scope of Rule 702? And if that is the case, wouldn't Powell have to be qualified as an expert witness, meaning that  Rule 704(b) would come into play?



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You are mistaken is saying that only experts are qualified to render an opinion on a person's state of mind. Not at all. Sure, if the opinion relates to the existence of a mental disease or defect, then you are largely correct. But modern courts allow lay witnesses to give an opinion on others' states of mind (intention and the like) all the time. In the Waltz, Park casebook I use, the court allowed a witness to testify that she thought the defendant accidentally fired his gun -- not intentionally. This was allowed because it was a reasonable inference for a lay person based upon what she saw. In fact a lay person who is intimately familiar with another is allowed to testify that the person was acting "crazy" or "insane" on a particular occasion. 704 is not applicable, as the court said.

I might agree with you about what the court did in converting a clearly expert into a lay witness for the purposes of testifying as to the defendants intention regarding underreporting. My gut tells me that that was an opinion based upon the witness' expert training and experience, and is covered by 704.


Posted by: Fred Moss | Dec 7, 2011 2:26:37 PM

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