Wednesday, June 26, 2013

Supremes Strike Down the Government's Attempt to Stretch The Hobbs Act

In Sekhar v. United States, the Supreme Court looked at the question of "whether attempting to compel a person to recommend that his employer approve an investment constitutes 'the obtaining of property from another' under 18 U.S.C. s 1951(b)(2),"  the Hobbs Act.  The Hobbs Act has been a statute of choice for federal prosecutors in many white collar cases.  Its heavy penalty provisions offer increased sentence posibilities when the defendant knowingly and willfully induced someone to part with property by extorionate means and there has been interstate commerce. 

In Sekhar, the issue arose from an alleged threat to disclose an alleged affair following a general counsel's written recommendation to a state comptroller not to invest in a fund. Although the jury form offered three options of the possible property of the attempted extortion, the jury selected only the third option - "the General Counsel's recommendation to approve the Commitment." The Supreme Court reversed the Second Circuit finding that this was not extortion.

The Court issued an unanimous holding with three concurrences.  Justice Scalia, writing for the Court, stated that:

"As far as is known, no case predating the Hobbs Act - English, federal, or state - ever identified conduct such as that charged here as extiotionate.  Extortion required the obtaining of items of value, typically cash, from the victim."

 The opinion provides a wonderful history of the Hobbs Act, and highlights how "extortion" requires "obtaining property from another." The Court holds that "[t]he property extorted must therefore be transferable - that is, capable of passing from one person to another." Finding that the alleged property fails here, the Court reverses the convictions. The Court also goes on to say that you need "something of value." The Court states:

"The principle announced there [referencing its prior opinion in Scheidler] - that a defendant must pursue something of value from the victim that can be exercised, transferred, or sold - applies with equal force here. Whether one considers the personal right at issue to be property in a broad sense or not, it certainly was not obtainable property under the Hobbs Act." (footnotes omitted).

Citing to the prior decision in Cleveland, the Court holds that "an employee's yet-to-be-issued recommendation" is not obtainable property. Intangible property is not enough, it must be "obtainable property."

The Court emphasizes that coercion is not extortion, and Congress has not criminalized coercion in the Hobbs Act.

The three-person concurrence (Justices Alito, Kennedy, and Sotomayor), focuses on property and tries to limit the decision by saying that this case is an "outlier and that the jury's verdict stretches the concept of property beyond the breaking point." They reference the rule of lenity and although this concurrence agrees that Congress did not "classify internal recommendations pertaining to government decisions as property," they leave open the possibility that the government could perhaps have prosecuted "under some other theory."

My Commentary -  

Bottom line - the government stretched the statute and they were caught.

This decision offers defense counsel strong arguments and requests for instructions in Hobbs Act cases.  Limiting the definition of property to "obtainable property" and requiring a clear definition of when "something is of value" are likely to be requests coming from defense counsel in the future.

My advice to the government - -  there is real crime out there, please put our valuable resources into prosecuting it! 

(esp)  

June 26, 2013 in Judicial Opinions, Prosecutions | Permalink | Comments (2) | TrackBack (0)

Supreme Court Issues Decision in Hobbs Act Case

Sekhar v. United States here.   Commentary to follow.

(esp)

June 26, 2013 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 25, 2013

Second Circuit Affirms Rajaratnam Case - But Goes A Step Further in Supporting the Government

It's a relatively short opinion issued by the Second Circuit, and 24 of the 29 pages pertain to a summary of the holding, facts, and the wiretap order used in this case.  For background on the issues raised, the briefs (including amici briefs), see here. Judge Cabranes wrote the majority opinion, joined by judges Hon. Sack and Hon. Carney. A summary of the holding states:

In affirming his judgment of conviction, we conclude that: (1) the District Court properly analyzed the alleged misstatements and omissions in the government’s wiretap application under the analytical framework prescribed by the Supreme Court in Franks; (2) the alleged misstatements and omissions in the wiretap application did not require suppression, both because, contrary to the District Court’s conclusion, the government did not omit information about the SEC investigation of Rajaratnam with "reckless disregard for the truth," and because, as the District Court correctly concluded, all of the alleged misstatements and omissions were not "material"; and (3) the jury instructions on the use of inside information satisfy the "knowing possession" standard that is the law of this Circuit.

Some highlights and commentary:

1. The Second Circuit goes further than the district court in supporting the government's actions with respect to the wiretap order.

2.  The Second Circuit agrees with the lower court that a Franks hearing is the standard to be used with a wiretap order where there is a claim of misstatements and omissions in the government's wiretap application. The Second Circuit notes that the Supreme Court has "narrowed the circumstances in which ...[courts] apply the exclusionary rule."  But the question here is whether the Supreme Court has really addressed the wiretap question in this context and whether a cert petition will be forthcoming with this issue.

3. Although the Second Circuit uses the same basic test in reviewing the wiretap, it finds that "the District Court erred in applying the 'reckless disregard' standard because the court failed to consider the actual states of mind of the wiretap applicants."  The Second Circuit then goes a step further and finds that omission of evidence does not mean that the wiretap applicant acted with "reckless disregard for the truth."

4.  The court states that "the inference is particularly inappropriate where the government comes forward with evidence indicating that the omission resulted from nothing more than negligence, or that the omission was the result of considered and reasonable judgment that the information was not necessary to the wiretap application."  - This dicta provides the government with strong language in future cases when they just happen to negligently leave something out of a wiretap application.

5.  Does the CSX Transportation decision by the Supreme Court call into question Second Circuit precedent?  The Second Circuit is holding firm with its prior decisions.  But will the Supreme Court decide to take this on, and if so, will it take a different position.

Stay tuned.

(esp)

June 25, 2013 in Celebrities, Civil Enforcement, Judicial Opinions, Prosecutions, Prosecutors, SEC, Securities | Permalink | Comments (0) | TrackBack (0)

Friday, June 21, 2013

DOJ Continues To Violate Brady Rule

by: Solomon L. Wisenberg

Despite all the promises and policy iterations we continue to see blatant DOJ Brady violations. These are violations that first year criminal procedure students would know not to commit. The latest to come to light is from the Eastern District of Tennessee.

Yesterday, the U.S. Court of Appeals for the Sixth Circuit reversed Abel Tavera's conviction for conspiracy to distribute meth and possession with intent to distribute meth. Tavera was the passenger in a truck involved in an undercover drug deal. He plausibly claimed no knowledge of the drug transaction, testifying that he thought he was heading to a roofing job. Some of the physical evidence tended to corroborate Tavera's story. The evidence against Tavera was almost entirely bottomed on the testimony of co-defendant Granado. Non-testifying co-defendant Mendoza debriefed. He first told the government that Tavera had no knowledge of the drug transaction. Later the same day Mendoza told the government that Tavera only gained knowledge of the drug transaction upon entering the truck on the day of the transaction. Mendoza also denied that Tavera came along to count money and provide security, and consistently stated that one of the purposes of the truck ride was to work on a roofing job. All of this was contradictory to Granado's ultimate testimony. Mendoza later pled guilty. Mendoza's written plea agreement stated: "Tavera knew that they were transporting methamphetamine from North Carolina to be delivered to another person in Tennessee and agreed to accompany [Mendoza]. Since they were transporting methamphetamine, Tavera told [Mendoza] that they needed to be careful." The prosecutor, AUSA Donald Taylor, failed to disclose Mendoza's earlier debriefing statements to the defense.

Judge Merritt, speaking for the majority, decided to send a message:

"This particular case is not close. Prosecutor Taylor's failure to disclose Mendoza's statements resulted in a due process violation. We therefore vacate Tavera's conviction and remand for a new trial. In addition, we recommend that the U.S. Attorney's office for the Eastern District of Tennessee conduct an investigation of why the prosecutorial error occurred and make sure that such Brady violations do not continue."

Tavera's attorney never tried to interview Mendoza. The government argued that no Brady violation occurred, under Sixth Circuit precedent. because Mendoza was equally available to both sides. The majority disagreed with this contention,and further found it foreclosed by the U.S. Supreme Court's ruling in Banks v. Dretke, 540 U.S. 668 (2004). Judge Clay accepted the government's position regarding Sixth Circuit precedent and dissented.

The statements were plainly material and exculpatory. So the question remains, why is such conduct continuing to occur and what is the DOJ doing about it when it comes to light? Here, what one branch of the DOJ did was to argue that Brady wasn't violated.

These constitutional violations directly affect the fairness of federal criminal trials. They will never stop, absent legislation with teeth and/or a federal criminal defense bar willing to be fanatical in its intolerance of Brady violations.

Here is the decision in United States v. Tavera.

(wisenberg)

June 21, 2013 in Judicial Opinions, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, June 13, 2013

Circuit Report

by: Solomon L. Wisenberg

Today in U.S. v. Cherry, the Fourth Circuit held that it was plain error for a trial court to tell the jury about the defendant's inadmissible criminal history prior to polling the jurors. Alas, the error was harmless, given the overwhelming evidence of guilt. The offending jurist was Senior District Judge Robert Doumar of the Eastern District of Virginia (Norfolk Division), who informed the jurors of defendant's three prior criminal convictions immediately after the verdict, but prior to polling. The Fourth Circuit opinion was authored by Judge Allyson  Duncan.

(wisenberg)

June 13, 2013 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Sunday, June 9, 2013

"'We the people' are the boiling frog, and the water has started to boil."

by: Solomon L. Wisenberg

The wonderful John Wesley Hall concisely explains, at Welcome to the Fourth Amendment.com, the decades-long erosion of our Fourth Amednment rights, at the hands of the Supreme Court and a succession of do-nothing Congresses. No surprises here, as Hall laments: 

"What is Congress doing? Essentially nothing. Proposing a law with great fanfare is meaningless if it goes nowhere. I wrote my Senators about email privacy, so I figure they don’t care since they never wrote back. So, I haven’t bothered to write to them about Sen. Paul’s bills. Congress is too mired in gamesmanship to do their damned jobs of actually legislating in the public interest."

***

"Now, what are we going to do about it? Complain, but sit on or wring our hands and do nothing?"

Hat Tip to NACDL's tireless weekend warrior, Ivan J. Dominguez, for sending this out. Similar points were made on Friday by the inimitable Scott Greenfield at Simple Justice in Seize It All And Trust the Government To Sort IT Out:

"Yet all the hand-wringing interest today will fade and we will elect the same men and women to power to continue to re-enact the same laws that allow the government to do such things to its own people, and presidents who believe so strongly in their own exceptionalism that they can be trusted with our personal data even though the other team could never be."

Cheery thoughts for a Sunday afternoon.

(wisenberg)

June 9, 2013 in Congress, Current Affairs, Judicial Opinions, Searches | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 5, 2013

Sideshow: DC District Court Staff's Failure to Unseal the James Rosen Affidavit

by: Solomon L. Wisenberg

FBI Special Agent Reginald Reyes' affidavit supporting DOJ's search warrant application for Fox News Reporter James Rosen's Google email account was ordered unsealed in November 2011. But it wasn't actually unsealed by the DC U.S. District Court's staff until late May of 2013. In other words, the affidavit was only unsealed several days after AG Holder testified that, "[w]ith regard to potential prosecution of the press for the disclosure of material, that is not something that I have ever been involved in, heard of, or would think would be a wise policy." Once the affidavit and search warrant application were unsealed, it became clear that Holder's testimony was inacurrate, as he had personally authorized the search warrant application. See here for yesterday's post on this issue.

DC Chief Judge Royce Lamberth is not happy about his staff's failure to unseal the affidavit and related documents. Here is Chief Judge Royce Lamberth's 5-23-2013 Order expressing his unhappiness.

(wisenberg)

June 5, 2013 in Congress, Current Affairs, Investigations, Judicial Opinions, Legal Ethics, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, April 11, 2013

Administrative Judge Reverses Suspension of Stevens Prosecutors

by: Lawrence S. Goldman

An administrative judge for the Merit Systems Protection Board has overturned the DOJ internal decision finding reckless misconduct for violating Brady obligations by two prosecutors of Senator Ted Stevens, Joseph Bottini and James Goeke, and ordering their suspensions.  See here

The administrative judge ruled that DOJ had violated its own disciplinary procedures which require a rank-and-file DOJ attorney in the Professional Misconduct Review Unit to review OPR findings and determine whether misconduct had occurred.  The career attorney who reviewed the OPR findings, Terrence Berg (now a federal district judge in Michigan), decided in favor of the prosecutors, but his ruling was reviewed and reversed by his superiors, who found that misconduct had occurred and suspensions were appropriate.  Review and reversal by the superiors, said the administrative judge, was improper procedurally, and the rank-and file attorney's decision was non-reviewable and final.

I lack sufficient familiarity with administrative law to opine whether this decision is wrong  (although Prof. Bennett L. Gershman has made a strong case that it is).  See here.  I recognize that prosecutors, like those they prosecute, are entitled to due process.  However, procedural infirmities aside, the actions of the prosecutors were clear enough and serious enough to warrant on the merits a finding of misconduct and a suspension.  See here.

I find it ironic that DOJ's finding of misconduct was (according to the administrative judge) based on DOJ's own procedural misconduct.  More seriously, however, I find extremely troubling the notion that a DOJ prosecutor's misconduct should be finally determined by a fellow career DOJ prosecutor.  Defense lawyers, for instance, are not entitled to have their alleged misconduct weighed by a fellow defense lawyer.

A prosecutor's alleged misconduct ideally should be determined by the appropriate state bar disciplinary committee, not a fellow prosecutor (or fellow prosecutors).  Of course, bar disciplinary committees, as several commentators have pointed out, have been extraordinarily hesitant to discipline prosecutors, especially with respect to Brady violations.

DOJ has the right to appeal to the three-judge Merit Systems Protection Board.  It will be interesting to see if it does.

(goldman)

April 11, 2013 in Judicial Opinions, Legal Ethics, News, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 5, 2013

Eleventh Circuit Finds Violation of Customs Regulation Not Criminal

by: Lawrence S. Goldman

One of the several troubling aspects of the continuing overcriminalization of federal law is the frequent elevation of a violation of civil regulation to a crime.  In United States v. Izurieta, 11th Cir., 11-13585 (February 22, 2013), the Eleventh Circuit addressed this issue.

The defendants in Izurieta were convicted after trial by jury of violating the general smuggling statute, 18 U.S.C. 545, importing goods "contrary to law," by violating a customs regulation, 19 C.F.R. 142.113(c), in failing to redeliver to Customs for exportation or destruction goods purportedly contaminated with E. coli, Staphylococcus aureus and/or Salmonella which had been conditionally released.

The defendants appealed on various grounds -- significantly not including whether the indictment sufficiently charged a crime by relying on the Customs regulation.  At oral argument, however, the Court raised this issue sua sponte and ordered supplemental briefing.

Section 545, as pertinent here, reads:

Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law . . . shall be fined . . . or imprisoned . . . .

Emphasis added.

The regulation or "law" upon the charges here were based covered the "failure to deliver, export, and destroy with FDA supervision" certain foods found to be adulterated.  19 C.F.R. 141.113(c).

The Court in its opinion recognized a split among circuits on when a regulation constitutes the "law" upon which a Section 545 indictment may be based.  The Ninth Circuit in United States v. Alghazouli, 517 F.3d 1179, 1187 (9th Cir. 2008) took what the opinion called "a relatively narrow interpretation" of Section 545 that regulations are included in "law" only when "there is a statute (a 'law') that specifies that violation of that regulation is a crime."  The Fourth Circuit in United States v. Mitchell, 39 F.3d 465, 470 (4th Cir. 1994), to the contrary, took what the opinion called a "more expansive" view, deciding that Section 545 criminalizes violations of any regulation "having the force and effect of law" based on a three-prong test.

The Court, while claiming its binding authority, Bobb v. United States, 252 F.2d 702, 707 (5th Cir. 1958) was consistent with the Fourth Circuit's "expansive" approach in Mitchell, applied the rule of lenity and held that the regulation in question did not qualify as a "law" for purposes of Section 545 liability.  It found that the regulation in question was primarily to reflect contractual requirements between Customs and the importer and thus was "civil only."

The rule of lenity was premised, it said, on two ideas:  first, that "a fair warning should be given . . . of what the law intends to do if a certain line is passed" and, second, that "legislators and not courts should define criminal activity."

This apparent case-by-case approach, of course, does not establish a "bright line" as to when violations of an administrative regulation become a crime.  Citizens and attorneys will often have to guess whether a violation of a regulation is a crime; that is, "what the law intends to do if a certain line is passed."  The case may, however, curb the government's increasing efforts to convert violations of ostensible civil regulations into crimes.

This case should remind lawyers that the uncertainties in this area require that they pay attention at both the trial and appellate levels to the issue of whether a violation of an administrative regulation is a crime.

 (goldman)

(A hat tip to Paul Kish and the Federal Criminal Lawyer Blog)

 

March 5, 2013 in Food and Drink, Judicial Opinions, Prosecutions, Prosecutors, Statutes | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 29, 2013

Ring Case - Commentary

The D.C. Court of Appeals rejected all of Kevin Ring’s appellate arguments, from his claims of an impropriety premised on the district court’s definition of what constitutes an "official act" to a claim of a  Federal Rule of Evidence 403 violation. The court’s findings include that "campaign contributions can be distinguished from other things of value." (see here). 

The court states "[t]he distinction between legal lobbying and criminal conduct may be subtle, but, as this case demonstrates, it spells the difference between honest politics and criminal corruption."  This sentence in the opinion concerns me.  Should a distinction that results in imprisonment be "subtle"?  "Googling" the word "subtle" a definition provided is "[s]o delicate or precise as to be difficult to analyze or describe."  And if this distinction is "subtle," should the rule of lenity be considered?  And should a "subtle" difference be considered to "spell[ ] the difference between honest politics and criminal corruption" or as this case finds - spell the difference between freedom and prison.

Irrespective of whether the movie Lincoln wins best picture, unlike Argo, Zero Dark Thirty, Silver Lining Playbook, and the other nominees, Steven Spielberg will be able to say that a federal appellate court has quoted the movie in its decision.  Yes, Hon.Tatel held that "[t]he ubiquity of these practices perhaps explains why in Steven Spielberg’s film Lincoln a lobbyist declared, "It is not illegal to bribe congressmen—they’d starve otherwise."

(esp)

January 29, 2013 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

D.C. Circuit Affirms Ring Decision

The D.C. Circuit affirmed the decision in the Kevin Ring case.  See here - Download Ring Decision Commentary to follow.

(esp)

January 29, 2013 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Thursday, January 3, 2013

Mail Fraud - Part II By Hon. Jed Rakoff

The Ninth Circuit issued an opinion in United States v. Philips, a case that includes issues related to mail fraud, money laundering, forfeiture, and alleged government misconduct.  The court reversed the district court decision to deny the government's forfeiture application, and affirmed other aspects of the case, including the money laundering conviction.  All but one, that is - the mail fraud conviction.  Here the court rejected the government's arguments and reversed the conviction. 

In a opinion written by District Judge Jed Rakoff (yes, sitting on the Ninth Circuit by designation) we are finally getting to see what we hope he will include in a Part II to his famed mail fraud article published in 18 Duq. L. Rev. 771 (1979-80) titled Federal Mail Fraud (Part 1).  

Hon.Rakoff does not cite to himself in this opinion, but his incredible knowledge of this statute definitely shows.He dissects the Supreme Court's decision in United States v. Maze and concludes that "[h]ere as in Maze, the success of Phillip's fraudulent scheme did not depend in any way on the use of the mails."

Too many take for granted the enormous power of the government in its use of the "stop-gap" provision. But it is also important to remember that there are limits - constitutional ones - with this statute. Thank you, Judge Rakoff for reminding us of this. And thank you Washington Appellate Project atty Lila Silverstein for making this argument.

(esp)(with a hat tip to Evan Jenness)

January 3, 2013 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 5, 2012

Second Circuit Rules Off-Label Promotion Is Protected Free Speech

Guest Bloggers - José P. Sierra & William B. Mateja

The U.S. Court of Appeals for the Second Circuit in a 2-1 split vote overturned the misdemeanor conviction of a former Orphan Medical, Inc. (now Jazz Pharmaceuticals Inc.), sales representative who had been charged with "misbranding" under 21 U.S.C. § 331(a) and (a)(1). The sales representative, Alfred Caronia, and Dr. Peter Gleason (now deceased) had been charged with conspiring with Orphan to promote Xyrem, a powerful depressant known as the "date rape drug," for various off-label purposes. Although the trial record showed that Caronia and Gleason were caught on tape speaking to a physician (who was cooperating with the government) about various off-label uses, and even though Gleason and Orphan had pleaded guilty, Caronia fought the charges, arguing that his off-label promotion was truthful, accurate and not misleading and, therefore, was constitutionally protected free speech. While the trial court recognized that off-label promotion implicated speech, it denied Caronia's motion to dismiss and he was later convicted.

On appeal, Caronia continued to press his First Amendment argument. The government responded that Caronia's off-label speech was relevant only as "evidence" of Caronia's intent that Xyrem be used off-label and that the First Amendment does not proscribe the use of speech as evidence of criminal intent. Although the Second Circuit majority acknowledged that the FDA regulations don't criminalize off-label promotion per se, it ultimately concluded that Caronia's conviction rested entirely on his speech and that, under Sorrell v. IMS Health, 131 S. Ct. 2653 (2011) and Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557 (1980), the First Amendment required that his conviction be vacated. In arriving at its decision, the majority reasoned that because the FDA regulations effectively regulated "content" (favoring on-label speech and disfavoring off-label speech) and discriminated among speakers (penalizing manufacturers, but not physicians, academics and other speakers), it was required to apply "heightened scrutiny" to the regulations. Under the heightened scrutiny standard, the majority found that while the government had substantial interests in ensuring drug safety, public health, and the effectiveness and integrity of the FDA drug approval process, the FDA's off-label regulations neither directly advanced those interests nor were narrowly drawn to further the interests served. For example, the majority noted numerous examples of less restrictive regulations that could effectively advance the Government's interests, including "warning or disclaimer systems" that could alert physicians that the certain uses have not been FDA-approved.

The dissent took the government's view that what was at issue was Caronia's intent that Xyrem be used off-label and that Caronia's off-label speech could have been properly used as evidence of his intent to sell off-label without implicating the First Amendment and putting into question the FDA's well-established regulatory scheme. As the dissent noted in its first paragraph: "By holding, instead, that Caronia's conviction must be vacated - and on the theory that . . . he was in fact convicted for promoting a drug for unapproved uses, in supposed violation of the First Amendment - the majority calls into question the very foundations of our century-old system of drug regulation."

Given the significant implications of the Caronia decision in the area of qui tam false claims act litigation, particularly for pharmaceutical, medical device and other life science companies, as well as for the medical community, we anticipate further developments and will be monitoring those carefully.

José P. Sierra & William B. Mateja

December 5, 2012 in Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Sunday, October 7, 2012

Defense Witness Immunity & Global Tech - Important Issues on Cert

An interesting issue is presented to the Supreme Court on cert - defense witness immunity.  The case of Walton v. the United States presents an issue that has plagued many a defense counsel - what do you do when you have a critical defense witness who will not testify without immunity. The government has the ability to give a witness immunity and often they do so in criminal cases to secure cooperation for the prosecution.  But shouldn't the defense also be allowed this immunity when the evidence that would be offered is exculpatory to the defendant? This cert petition presents strong arguments showing the differing views among the circuits on defense witness immunity.

The Walton Petition also has a post-Global Tech issue. (for background on Global Tech, see here and here).  The obvious is argued - Global Tech applies to criminal cases. The Court used criminal law doctrine in deciding the case, so of course it should apply to criminal law decisions.  I am covering Global Tech in both criminal law and white collar crime classes because it summarizes the law on willful blindness. If the Court was using this criminal standard for a civil case and remarking that this is how it gets handled criminally, therefore, of course, it must be the appropriate standard for a criminal case.  Even in his dissent, Justice Kennedy notes that "[t]he Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge."  He didn't like that they were doing this, but it was pretty clear that this is what they did. This cert petition, if granted, will send this message loudly and clearly to the Fifth Circuit. 

Filing a separate cert petition is James Brooks.  Argued here by attorneys Gerald H. Goldstein and Cynthia Eve Hujar Orr are that "[t]he jury instructions here not only failed to require that Brooks take deliberate steps to blind himself to the illegal purpose of his conduct, but additionally instructed the jury that he did not need to 'know' or even suspect that his conduct was unlawful."Global Tech clearly requires both.    

Petition for Cert for Walton - filed by the law firm of Gerger & Clarke - Download Petition for Writ of Certiorari

Petition for Cert for Brookes - Download Brooks Petition for Writ of Certiorari 

NACDL Amicus Brief for Brooks and Walton - authored by Attorney John D. Cline - Download NACDL--Brooks-Walton amicus 

(esp)

October 7, 2012 in Judicial Opinions, Privileges, Prosecutions, Prosecutors | Permalink | Comments (4) | TrackBack (0)

Thursday, August 23, 2012

Government Takes Harsher Position After Judge Rejects Plea Bargain Because of Appellate Waiver

Professor Douglas Berman, in his excellent blog, Sentencing Law and Policy, quoting a Denver Post article, writes that after a federal judge rejected a plea agreement urged by both parties because it included a standard appellate waiver, the prosecutor came back with a harsher offer, albeit one without an appellate waiver, which the defendant accepted.  See here and here.

Senior District Judge John Kane of Colorado refused to accept a deal involving Timothy Vanderwerff, a defendant accused of child pornography, because of the waiver provision.  That deal provided that the government would seek no more than 12 years in prison and the defendant seek no less than five.  The judge said that "indiscriminate acceptance of appellate waivers undermines the ability of appellate courts to ensure the constitutional validity of convictions and to maintain consistency and reasonableness in sentencing decisions."

In court papers Vanderwerff's attorney, federal public defender Edward Harris (who worked with me years ago) wrote that the prosecutors refused to agree to the same sentencing position deal without the appeal waiver and instead took a much harsher position.

One possible lesson from this case is that well-meaning judges, reacting to the government's increasing efforts to expand the terms of plea agreements to limit a defendant's ability to appeal and appellate courts' ability to review, might actually do harm to the individual defendant before them in rejecting a bargained-for agreement.  Another possible lesson is that the government does not take kindly to judges interfering with its de facto power to set plea bargaining parameters and may demonstrate its displeasure by treating even acquiescent defendants more harshly when the judge rejects a plea deal it has offered.

Whether the defendant will ultimately suffer is unclear, because the court now, presumably subject to appeal by either side (as well as any applicable mandatory minimums), has the ultimate power to set the defendant's sentence and may well choose to sentence him under the posture both sides agreed upon in the original plea bargain.

(goldman)

August 23, 2012 in Judicial Opinions, Prosecutors, Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, August 10, 2012

50 Former Prosecutors (And Judges) Can't Be Wrong

The BLT reports here on the amicus brief filed by former federal prosecutors and judges in Ali Shaygan v. United States. At issue is whether the government can be fined and sanctioned under the Hyde Act, which covers vexatious, frivolous, or bad faith prosecutions, when the charges brought have an objectively reasonable basis in fact. In other words, can federal prosecutors act out of improper motives of bad faith and malice if they have a pretextual fig leaf to cover their actions? The WSJ Law Blog reports here on the brief, which was signed by yours truly, and greater lights.

(wisenberg)

August 10, 2012 in Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (1) | TrackBack (0)

Tuesday, August 7, 2012

None Dare Call It Misconduct: Except For The Second Circuit

And there it is. Right on page 24 of the Second Circuit's opinion in U.S. V. Mahaffy, posted here yesterday. "None of this [the government's various rationales for withholding exculpatory and/or impeaching SEC transcripts] excuses the government's misconduct. The transcripts contained substantial Brady material, much of which was easily identified as such." In fact, an SEC attorney, cross-designated as a Special AUSA in the first squawk-box trial, identified some of the material as potential Brady to his trial team superiors before the first trial commenced. 

Here are some interesting dates. Jury selection in the squawk-box retrial began on March 30, 2009. The government rested on April 14, 2009, as did the defense. The jury returned its verdict on April 22. Ted Stevens had been found guilty in Washington DC in October 2008 and, as Judge Sullivan has noted, "[d]uring the course of the five-week jury trial and for several months following the trial there were serious allegations and confirmed instances of prosecutorial misconduct that called into question the integrity of the criminal proceedings against Senator Stevens." Attorney General Holder moved to set aside the Ted Stevens verdict and dismiss the indictment with prejudice due to gross Brady-related misconduct on April 1, 2009. Judge Sullivan granted the government's motion on April 7, 2009. According to the Mahaffy opinion, the second set of squawk-box prosecutors deliberately chose not to revisit any of the disclosure decisions made by the first trial team. New York prosecutors must not read the DC papers.They did not start to sift through the SEC transcripts until after the second trial concluded.

(wisenberg)

August 7, 2012 in Judicial Opinions, Legal Ethics, Prosecutions, Prosecutors, Securities | Permalink | Comments (1) | TrackBack (0)

Monday, August 6, 2012

Brady Violations. Again.

Here is the Second Circuit's opinion (U.S. v. Mahaffy) from last Thursday in the EDNY's Squawk-Box case, vacating the convictions due to Brady violations and an untenable honest services jury charge.

(wisenberg)

August 6, 2012 in Judicial Opinions, Prosecutions, Prosecutors, Securities | Permalink | Comments (0) | TrackBack (0)

Thursday, July 12, 2012

Lying Juror Requires New Trial in Massive Tax Fraud Case

Last month, in a thorough 64-page opinion, Southern District of New York Judge William Pauley ordered a new trial for three of four defendants convicted in what he described as "the largest tax fraud prosecution in U.S. history" because a juror, Catherine M. Conrad, had lied her way into being accepted as a juror.  United States v. Daugerdas, et al., 09 Cr. 581.

There appears to be little question Ms. Conrad, a suspended lawyer, connived to make herself in her own word "marketable" so that she could have "an interesting trial experience" as a juror.  In voir dire, she lied about her education, claiming the highest level she had reached was a B.A. when in fact she had a law degree.  She concealed not only her membership in and suspension from the bar but her own criminal convictions -- for shoplifting, DWI, contempt and aggravated harassment -- as well as her husband's extensive criminal history, which included a seven-year prison stay.  She made, according to the court, a "calculated, criminal decision to get on the jury." 

At a post-trial hearing at which she was granted use immunity, Conrad stated that if the truth were known, "defense counsel would be wild to have me on the jury."  In fact, however, Conrad turned out to be extremely biased against the defendants.  In a congratulatory letter she sent to the prosecutors after the trial, she said she was "privileged to observe la creme de la creme -- KUDOS to you and your team."  In that letter, she mentioned that she had fought against but ultimately had "thrown[n] in the towel" on a not guilty verdict on one of the counts concerning defendant David Parse.  At the hearing, she testified that "most attorneys" are "career criminals."  Two of the four convicted defendants were practicing lawyers; Parse was a non-practicing lawyer.

Judge Pauley, clearly upset by the need to retry a case which took three months, strongly urged the government to prosecute Conrad.  Perhaps concerned that the government might feel that prosecuting her would be inconsistent with its opposition to a new trial, he added, "The prospect of preserving a tainted jury verdict should not temper the Government's resolve to call Conrad to account for her egregious conduct."  Any prosecution of Conrad, however, obviously would have Kastigar obstacles because of her immunity.

The judge, following the Supreme Court's decision in McDonough Power v. Greenwood, 464 U.S. 548 (1984), found that in order to obtain a new trial, the moving party must "first demonstrate that a juror failed to answer honestly a material question on voir dire and then further show that a correct response would have provided a valid basis for a challenge for cause" (emphasis added).  Apparently, even in a criminal case, the mere existence of a juror who deliberately lied her way onto the jury may not be sufficient to require a new trial.  See United States v. Martha Stewart, 433 F.3d 273 (2d Cir. 2006).  The McDonough test appears to be "If the juror hypothetically had answered truthfully, would her truthful answers have led to a challenge for cause?"  Thus, unknown facts that might have affected her fitness to serve as a juror which would not in any case have been revealed by accurate responses to voir dire questioning presumably should not be considered.

In a lengthy analysis, mingling those hypothetical answers to questions asked during jury selection with, somewhat questionably, facts learned and impressions formed at the post-verdict hearing -- including Conrad's discovered dishonesty, bias and her animus to lawyers -- the court found that the McDonough criteria had been amply met.  Accordingly, it ordered a new trial for all the convicted defendants -- except Parse, who the court ruled had "waived" his claim for a new trial since his attorneys knew or "with a modicum of diligence would have known" that Conrad's statements in jury selection were false and misleading and failed to disclose that knowledge to the court.

Judge Pauley felt that Parse's lawyers, the firm of Brune and Richard, knew or at least suspected (or alternatively should have known) that Conrad was an imposter certainly by the start of jury deliberations, but made a decision not to reveal their belief or suspicion to the court.  The court was apparently affected by what seems to be a carefully-crafted, literally true but arguably misleading, statement in the lawyers' new trial motion that they were "prompted" by disclosure of Conrad's post-verdict letter to investigate and conduct records searches "in the wake of Conrad's . . . post-verdict letter."  The court found that the motion contained "significant factual misstatements" and that its "clear implication" was to give the false impression that Parse's lawyers had no idea of Conrad's true identity until well after the verdict.  In fact, as demonstrated in a later letter from the firm, in the firm's e-mails during trial, which were ordered by the court to be produced, and in testimony by the lawyers at a hearing, the firm apparently had concerns about and suspicion of Conrad's deception, initially at voir dire and later, after further record search revelations, during the judge's charge to the jury.  A most graphic example was one lawyer's e-mail during the charge, "Jesus, I do think it's her."

The court believed that the attorneys' submission was designed to foreclose any government claim that their pre-verdict knowledge doomed their post-verdict motion on the grounds that they failed to act with "due diligence."  The court found unconvincing the attorneys' claim that notwithstanding the similarities between the juror and the suspended lawyer discovered by electronic research -- name, home town, father's occupation, approximate age -- and the juror's use of previously unmentioned legal terms (such as respondeat superior) in jury notes she authored, the attorneys did not believe until after her letter to the government was disclosed that juror Conrad and suspended lawyer Conrad were the same person.

The court thus found that Parse's attorneys had "actionable intelligence" that Conrad was an imposter and that they had been required, but failed, to undertake "swift action" to bring the matter to the court's attention.  The court apparently felt that the attorneys had attempted to "sandbag" it by remaining silent about the defect and only raising the issue when and if the trial did not conclude favorably, in effect providing them and their client with an "insurance policy against an unfavorable verdict."  By his attorneys' conduct, the court ruled, Parse waived any error.

It may well be that during the trial the attorneys chose not to report their suspicions because they felt that Conrad, who appeared from web research to be potentially anti-government, would be a favorable juror for the defense, and they did not want to lose her.  It may also be that, whatever the objective evidence that the juror and the suspended lawyer were one and the same might look like with hindsight, they actually thought that the juror and the suspended lawyer were different people since, as they claimed, they could not believe that the juror -- a lawyer -- would blatantly lie.  Under either alternative, the court found, they had an obligation to share their knowledge with the court.

Some may argue that an attorney, in her duty of zealous representation of a client, may remain silent if she learns during jury selection that a juror misrepresented herself.  Judge Pauley's contrary view is clear:  "An attorney's duty to inform the court about suggested juror misconduct trumps all other professional obligations, including those owed a client."  I agree.  See New York Rules of Professional Conduct 3.3(b).

Some may also question whether Parse, the client, should suffer from his lawyer's purported misconduct or lack of diligence (of which he had no apparent knowledge).  While generally a client is bound by a lawyer's strategic decision, and cannot cry foul if it backfires, Parse did suffer the same denial of a fair jury as the other defendants.  Nonetheless, the court held that his attorneys' failure to report waived any objection by Parse, but granted new trials to the other three convicted defendants (whose lawyers apparently had no knowledge of Conrad's deception).

There are several ironies in this case:  Parse, about whom, according to Conrad's letter to the prosecutors, the jurors "had qualms," is the only one whose conviction stands.  Further, his attorneys were the ones responsible for investigating and presenting the motions which succeeded in a new trial for the others (who joined the motion), but not for him.  And, lastly, if Conrad had told the truth at voir dire and revealed her suspension from the bar and her and her husband's criminal record, she undoubtedly would have been successfully challenged -- whether by cause or peremptory -- on the motion of the prosecution she so strongly favored, and not be the defense she despised.

 (goldman)

July 12, 2012 in Defense Counsel, Fraud, Judicial Opinions, Legal Ethics, Martha Stewart, Perjury, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, June 28, 2012

AG Holder's Response to Contempt Vote

The media is reporting that the house voted to hold AG Holder in Contempt (see here, here, and here).  AG Holder's response is here.

So let's see - President Obama wins on the health care decision with the Supreme Court, and later the same day the Attorney General is held in contempt of Congress. So which item ends up at the top of a blog. Was this political?

(esp)

June 28, 2012 in Congress, Contempt, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)