Case o' The Week: Treading Well on Fraud Clients - Treadwell, Wire Fraud, and "Intent to Harm"

Last week, the Green case taught us that one can commit wire fraud without breaking any specific state or federal law or regulation.

This week, the Ninth explains that one can commit wire fraud without intending to cause any loss to the "victims." See United States v. Treadwell, __ F.3d __, 2010 WL 309027 (9th Cir. Jan. 28, 2010), decision available here.

Ever feel like it would have been easier to defend Charles Ponzi (above), in 1920?

Players: Decision by Judge Gould, joined by Judge Bea and D.J. Molloy.

Facts: Treadwell and his co-defendants ran a massive, four-year Ponzi scheme that bilked 1,700 investors out of over $40 million. Id. at *1. The wire-fraud defense was that although the defendants “misrepresented the nature of the various corporations’ earnings, the defendants always believed that their investors would always make money.” Id. at *2. Without defense objection, the jury instructions stated that “it is no defense to fraud that the defendant honestly holds a certain opinion or belief, but also knowingly makes false or fraudulent promises, representations, or promises to others.” Id. (internal quotations omitted).

After a jury convicted the defendants on various conspiracy and wire counts Treadwell was sentenced to 300 months. Id. at *2.

Issue(s): “On appeal, [defendants] challenge their jury conviction, arguing that the jury instructions violated their Fifth Amendment due process rights because ‘intent to defraud’ under 18 U.S.C. § 1343 requires an intent to cause an actual loss.” . . . “[Defendants] argue that their . . . rights were violated by jury instructions that did not define ‘intent to defraud’ under 18 U.S.C. § 1343 to require an intent to cause a financial loss to the victims.” Id. at *3.

Held: “[T]o ‘defraud’ under § 1343 does not require an intent to cause a pecuniary loss to the victim.” Id. at *4 (quoting United States v. Oren, 893 F.2d 1057, 1062 (9th Cir. 1990)). “While an honest, good faith belief in the truth of the misrepresentations may negate intent to defraud, a good-faith belief that the victim will be repaid and sustain no loss is no defense at all.” Id. (quoting United States v. Benny, 786 F.2d 1410, 1417 (9th Cir. 1986)).

Of Note: The interesting defense argument focuses on, arguably, a circuit split. In the Second, Third, Fifth and Eight Circuits, “intent to defraud” requires a deprivation of asserts with an “intent to harm.” Id. at *4. In Treadwell, Judge Gould dodges the question of whether the Ninth has a “harm” requirement. Even if there is, though, Judge Gould concludes that “[t]he intent to induce one’s victim to give up his or her property on the basis of an intentional misrepresentation causes ‘harm’ by depriving the victim of the opportunity to weigh the true benefits and risks of the transaction, regardless of whether or not the victim will suffer the permanent loss of money or property.” Id. at *5 (emphasis added).

With all due respect, this rule seems to edge wire fraud closer to the unmoored “honest services” fraud problem. For example, assume that with a pure heart a broker embellishes the value of a stock in an e-mailed solicitation to her client. Her “victim” buys the stock, it rises, and the client makes a killing with a quick sale. Under Treadwell, the broker committed wire fraud – despite no intent to harm, and despite a tidy profit for the victim.

How to Use: Treadwell was a plain error challenge to jury instructions, and on horrible facts. Maybe the fraud issue still has some fight in a better case? The Supreme Court now has a trio of “honest services” fraud cases before it, and the Justices are clearly hostile to that amorphous species of fraud. See article here . Given an (arguable) circuit split on the “intent to harm” issue, and given the likely Supreme Court guidance coming down this term on fraud generally, Treadwell’s “intent to harm” challenge to the Ninth’s pattern fraud instructions may be worth preserving in a case going to trial anyway.

For Further Reading: Ever feel like the Madoff & Stanford headlines are stacking the government’s deck before the jury is even empaneled? Read Treadwell. The opinion is studded with history lessons on Ponzi schemes, Madoff, and other fraudsters. See e.g., id. at *1 n.1 (discussing the history of Charles Ponzi).

To survey the historical baggage we face in a fraud case, hit the N.Y.T.’s interesting summary here .


Image of Charles Ponzi from http://www.nytimes.com/2009/05/05/nyregion/05ponzi.html?_r=1, originally from the book “The Lawless Decade,” by Paul Sann.

Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org

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U.S. v. Treadwell et al, No. 08-50562 (1-28-10). Defendants ran a Ponzi scheme that resulted in a $40 million loss. Defendants entinced investers to "loan" money to companies that were doing humanitarian projects, salvaging wrecks in the Caribbean, and other good deeds. Charged and convicted of wire fraud and conspiracy, co-defendants argued that the jury instructions failed to define "intent to deceive" adequately, and that the element required intent to do harm. The 9th rejected this argument, joining the other circuits, which only require deception and a loss. The 9th also affirmed the sentences, holding that the +22 adjustment for loss was not error, and that the standard of proof was preponderance. In this case, a jury found guilt, and the evdience presented at trial supported the court's findings. The court also did not err in adjusting for misrepresenting the charitable aim. The defendants did not have a fraudulent charitable organization, but they presented their business as providing humanitarian aid. The sentences were not unreasonable.

U.S. v. Juvenile Male, No. 07-50107 (1-26-10). Youth is wasted on the young, especially if they should misstate their age. Here, the juvenile was arrested for alien smuggling after a chase. He gave a birthdate that made him 18. The Border Patrol, however, had information that he had given other dates, when he was previously arrested, which made him a minor. Indeed, he had been deported as a minor recently. The government contested his juvenile status, which lead to hearings, which included testimony by the Mexican consulate. The court found the defendant was indeed a juvenile. The government then lodged a certificate to proceed under the Juvenile Justice and Delinquency Prevention Act. The Act requires the government to allege that a state will not take jurisdiction. Here, the federal prosecutor asserted that the state district attorney would not take jurisdiction. The 9th, on appeal, issued a per curiam opinion, that discusses what amounts to take state jurisdiction. In California, the state constitution vests the courts with criminal jurisdiction upon the filing of criminal charges. Thus, the decision by the district county attorney not to press charges had the affect of refusing jurisdiction. Thus, the certificate was not in error. The problem for the government, though, lay with protections of the Juvenile Act, which were all violated when the juvenile was arrested but stated he was an adult. The 9th (Berzon, Ikuta, and Singleton) came down on an interpretation of the Act that stressed the triggering of the Act upon arrest, with a reasonable knowledge provision. In this instance, the government had information that would raise the issue of minor status. The government should have taken steps to contact the Mexican consulate or the parents. The violation of the Act's protections (notification of parents and consulate among others) could not be considered harmless. The juvenile had confessed, and the court relied heavily upon the confession in the adjudication. However, the confession was given without the parents being present or notified. The case is therefore remanded for a determination whether the confession was a result of the Act's violation and if so, then it must be suppressed. The court then must determine whether there was sufficient evidence to adjudicate. On another issue, related to speedy trial, there was no violation as the continuances tolled the Act's clock and were a result of the defendant's actions.

Congratulations to Deputy Federal Defender Leila Morgan of the Federal Defenders of San Diego.

U.S. v. Aguirre-Ganceda, No. 08-35696 (1-19-10). The 9th dismisses a 2255 motion as untimely because it was filed more than a year after the Supreme Court denied certiorari. The petitioner argued that the time should start running not from the denial of cert, but from the denial of his subsequent petition for rehearing. The 9th (Beezer joined by Gould and Tallman) holds that the Supreme Court was clear that time starts running with the denial of cert or the time for filing cert expires. The 9th also joins seven other circuits which have so ruled, looking at Supreme Court Rule 16.3. The 9th also holds that the petitioner has not demonstrated extraordinary circumstances to toll the statute.

U.S. v. Palos-Marquez, No. 08-50498 (1-19-10). UPS does more than deliver packages; its drivers can also provide "tips" to effectuate reasonable suspicion stops. Here, a pick-up truck passed a UPS truck going "faster than usual." The UPS driver gestured to an oncoming Border Patrol agent car. The agent took the gesture, combined it with the area's connection with alien smuggling, erratic driving, and the high rate of speed, to suspect that the pick-up might be smuggling. The agent radioed ahead and, before the truck was stopped, the occupants appeared "nervous and shaky." The truck was stopped and aliens were found. Can this unidentified tip with other facts amount to reasonable suspicion? "Yes," said the 9th. Ikuta, joined by Schroeder and Berzon, recognized that an unindented person can tip-off the police if the facts are reliable; a face-to-face encounter strengthens the reliability analysis because the tipster puts himself forward to be identified and risks losing anonymity, and his demeanor can be viewed. The UPS driver here presented both himself, and was observed. The UPS driver could easily be identified. The tip displayed a significant indicia of reliability that, combined with other factors, went to forming a reasonable suspicion.

Chaffer v. Propser, No. 07-16853 (1-19-10). In a per curiam AEDPA decision, the 9th again examines California's indeterminate timeliness rule. Under the state's rule, as long as the prisoner files a petition for review within a reasonable time, the petitioner can count as pending the time between the lower court reaching an adverse decision and the day he files a petition in a higher court. This pending time is added to the one year limit. What is reasonable? The petitioner had spans of 115 days and 101 days. That was not reasonable, the 9th writes, because this was "substantially longer" than the 30 to 60 days most states allow for the filing of petitions. The petitioner did not explain why the time took longer. He also cannot meet the extraordinary circumstances to trigger equitable tolling. His explanation that his prison library was missing reporters, and inmate law helpers were transferred, was met with a shrug by the court, stating that those "vicissitudes" of prison life were hardly "extraordinary." The entrusting of his file to fellow inmates to assist him was at his peril, and he did not specifically point to any document he really needed. Petitioner also failed to show his diligence. For these reasons, judgment of the district court dismissing the petition is affirmed. Petitioner, by the way, had received a life sentence.

U.S. v. Green, No. 08-10149 (1-22-10). The prosecutors convicted the defendant, a school teacher for 30 years, of masterminding a fraud scheme that bilked the government of $60 million. The scheme took advantage of a FCC program that funds technology projects in schools. Basically, she rigged bids. She arranged for vendors to bid on services to supply IT equipment to schools. The bids were high enough that the schools did not have to fork over their required payments. The bidders did not mind inflating their bids because they were assured of the job. The equipment lists were altered and the actual amounts hid to avoid auditing or inquiring by the funding agency. Eventually this all came crashing down. The defendant argued that she was just facilitating the grants and providing IT as was intended. Convicted of all counts, the court sentenced her to 90 months. On appeal, the 9th affirmed the convictions and sentences. Tashima, joined by Rymer and Adelman, D.J., discussed whether a wire fraud had to violate a specific law, federal, or state. Going through the statutes, the 9th was surprised to find a paucity of decisions on the point, but reasoned that wire fraud was a separate offense, and that one could break the law without breaking a specific rule or regulation of the agency. The 9th did find error in the jury instruction that made her vicariously liable to acts that were foreseeable to her co-defendants without narrowing the focus to her foreseeability (as in conspiracy cases). The error was harmless, though, because the evidence was overwhelming. Lastly, the 9th found the sentence was reasonable.

Case o' The Week: It's Not Easy, Being Green - US v. Judy Green, Wire Fraud and Underlying Criminal Activity

As Kermit complained, "It's not easy being green." That's particularly true if you're Judy Green, and are serving a ninety-month sentence for your first offense. The crime?

Excellent question.

Apparently, says the Ninth, it is a crime to use the wires to commit a fraud (even if you're not breaking a law while you're doing it). United States v. Judy Green, __ F.3d __, 2010 WL 200280 (9th Cir. Jan. 22, 2010), decision available here.

Players: Hard-fought trial by ND Cal CJA attorney Erik Babcock. Decision by Judge Tashima.

Facts: Judy Green, a former school teacher, became a consultant to help poor schools procure federal “E-Rate” funding to add telecommunication access. Id. at *1-*2. The E-Rate program subsidizes part of the costs for telecommunications installation – the school itself is responsible for purchasing “ineligible” equipment (like computers). Id. at *1.

Evidence at trial showed that Green colluded with vendors to inflate bids and, essentially, fraudulently shift “ineligible” costs (normally borne by the schools) into “eligible” expenses that the E-Rate program would subsidize. Id. at *2-*3. The government believes this scheme bilked the federal government out of $60 million dollars. Id. at *1.

The glitch was that under “E-Rate’s byzantine application process,” id. at *2, it wasn’t at all clear that what Green did was prohibited by the rat’s nest of regulations around this program. Id. Green lost at trial and was sentenced by the Honorable William A. Alsup to ninety months. Id. at *3.

Issue(s): “Green’s overarching contention on appeal is that her actions were not fraudulent because they were not prohibited by the rules and regulations that governed the E-Rate program during the time period charged in the indictment.” Id. at *3.

Held: “We conclude that the offense of wire fraud does not require that Green’s conduct violated a rule or regulation of the E-Rate program; thus, her specific challenges fail.” Id. at *3.

Of Note: Remarkably, this is essentially an issue of first impression in the Ninth Circuit - and maybe in any circuit. Id. at *4. Judge Tashima(below) begins by reviewing the analogous question of whether wire (or mail) fraud requires a violation of an underlying state law. Id. These federal fraud statutes do not have such a requirement, and from this the Court concludes that “it is settled that wire fraud does not require proof that the defendant’s conduct violated a separate law or regulation, be it federal or state law.” Id. at *5.

The scheme to defraud for mail or wire fraud must only include an “affirmative, material misrepresentation.” Id. at *5. “A defendant’s conduct need not otherwise be illegal in the sense that the government must also prove that the defendant’s conduct violated a specific statute or regulation.” Id. at *5.

Judge Tashima shrugs-off the concern that this rule leaves wire and mail fraud untethered to actual criminal conduct, and ripe for prosecutorial abuse (like honest services fraud). Id. at *5. Others, however, may be less sanguine about the government’s self-restraint. See, e.g., Barry Bonds in Context; see also, Former Brocade exec gets two months in prison for backdating options; see also Misguided Marijuana War, The New York Times (regarding Ed Rosenthal).

How to Use: The victory (such as it is) in United States v. Judy Green case is on vicarious liability. The jury instructions in the case allowed for Green’s vicarious liability for acts that were reasonably foreseeable to her co-schemers. Id. at *12. In a thoughtful discussion, Judge Tashima explains that this is incorrect: vicarious liability for wire (or mail) fraud is limited to acts that were reasonably foreseeable to the defendant alone. Id. Unfortunately, in this case this mistake was harmless error – but the principle bears remembering for future fraud jury instructions.

For Further Reading: If you pay for interstate phone calls, you’ve been subsidizing the program to get broadband into low-income schools. Great concept, lousy execution: the FCC’s “troubled” program has spawned a number of federal indictments across the country in addition to the Green case prosecuted in San Francisco. See article here.


Image of the Honorable Judge Tashima from http://www.totaldenialfilm.com/previewpic.php?pic=judge-Tashima.jpg&title=Federal%20Judge%20Wallace%20Tashima . Image of Kermit the Frog from http://halloweenswimteam.files.wordpress.com/2009/07/kermit.jpg .

Steven Kalar, Senior Litigator N.D. Cal. FPD. Blog at www.ndcalfpd.org

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Case o' The Week: Large Amounts of Fertilizer - Pineda-Moreno and GPS Tracking

Can a cop legally crawl underneath your car, in your private driveway, several feet from your home, in the dead-middle of the night, and install a GPS tracking device with which he'll follow your every move for the next week -- all without a search warrant?

Yep, in the Ninth (at least for now). United States v. Pineda-Moreno, __ F.3d __, 2009 WL 59215 (9th Cir. Jan. 11, 2009), decision available here.

Players: Decision by Judge O’Scannlain (below right).

Facts: A DEA agent noticed Pineda-Moreno, and others, buying large amounts of fertilizer at Home Depot. Id. at *1. “Recognizing the fertilizer as a type frequently used to grow marijuana,” (!?!) the agent followed the men to a Jeep and saw them drive away. Id.

A month later, DEA learned that the men were buying large quantities of groceries, irrigation equipment, and deer repellant. Id. Eventually, they followed the men back to a trailer rented by Pineda-Moreno. Id. Over the next four months, the agents tracked Pineda-Moreno using a magnetic GPS device placed under the Jeep. Id. They put GPS devices on the Jeep seven times; five in public places, and twice in his driveway, a few feet from his trailer. Id. There was no gate or “No Trespassing” sign leading to the driveway. Id. [Ed. Note: The agents had no search warrant].

GPS tracking revealed Pineda-Moreno leaving a marijuana grow; later searches revealed two garbage bags full of marijuana. Id. After his suppression motion was denied Pineda-Moreno entered a conditional plea of guilt and brought this appeal. Id.

Issue(s): “Pineda-Moreno argues that the agents violated his Fourth Amendment rights by entering his driveway between 4:00 a.m. and 5:00 a.m. and attaching the tracking devices to the underside of his Jeep.” Id. at *2.

Held: “Pineda-Moreno cannot show that the agents invaded an area in which he possessed a reasonable expectation of privacy when they walked up his driveway and attached the tracking device to his vehicle. Because the agents did not invade such an area, they conducted no search, and Pineda-Moreno can assert no Fourth Amendment violation.” Id. at *3.

Of Note: Pineda-Moreno is a disappointing curtilage decision, treating a driveway as a “semi-private area” that doesn’t deserve heightened Fourth Amendment protection (even when the agents are crawling around, feet from the defendant’s home, at 4:00 a.m. at night). Id. at *2.

More troubling, however, is the Court’s brief discussion of a very complex issue: the use of a sophisticated technology not generally available to the public (GPS tracking) without a warrant. Id. at *3. While an ‘82 Supreme Court case, Knotts, tolerated the use of a beeper in a car, there is a compelling argument that the Supreme’s later thermal-imaging decision in Kyllo modified the Fourth Amendment analysis for sophisticated surveillance technologies. Id. at *3. Pineda-Moreno gives this compelling argument short shrift, particularly in light of three state supreme courts that have held that the warrantless use of tracking devices is unconstitutional under their respective state constitutions. Id. at 4 & n.2 (discussing contrary authority).

How to Use: Like Ninth Circuit authority on the searches of computers preceding Comprehensive Drug Testing, Pineda-Moreno is nineteenth-century analysis glommed onto to twenty-first century technology. The warrantless use of GPS tracking is an unsettled area, likely to provoke Circuit splits and Supreme Court review, and is an issue worth preserving. (The D.C. Circuit has this issue before it now in Jones: see blog here.)

Note also that Pineda-Moreno assumes that a GPS unit only tracks a car in places where a cop could follow anyway. That is untrue: a GPS unit continues to transmit or collect location-data just as regularly when a car is driving on private land where police can not follow without a warrant. Even if Pineda-Moreno survives, it should be distinguished in cases where GPS monitoring revealed the movements of a defendant on land off-limits to cops without warrants.

For Further Reading: Our brainy friends at the Electronic Frontier Foundation have been fighting the good fight on the government’s use of warrantless GPS surveillance. For a good discussion of the enlightened state court decisions clamping down on this abuse, visit the EFF blog here.

Image of the Hon. Diarmuid O'Scannlain from http://monash.edu/news/monashmemo/archive/20040901/ Image of GPS tracking device from http://www.vellard.com.au/images/P/GPSWRT8B.jpg


Steven Kalar, Senior Litigator N.D. Cal. Website at www.ndcalfpd.org

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U.S. v. Yip, No. 08-10235 (1-13-10). Death and taxes may be certain, and when it comes to federal guidelines, add relevant conduct. This was a tax conviction. The defendant had an "off the books" business and failed to report income, or disclose foreign bank accounts. In assessing the guidelines for sentencing, the court also looked at unpaid state taxes. The defendant argued that the focus should only have been on unpaid federal taxes. The 9th was unpersuaded, looking at the guidelines both for the offense and relevant conduct, the 9th held that it was not error to consider all unpaid taxes in the loss. The 9th also rejected the argument that the state taxes would be time-barred under a state prosecution. Lastly, the 9th upheld an obstruction of justice enhancement for submitting false tax records to the IRS during the investigation.

U.S. v. Mausali, No. 08-50062 (1-11-10). If there is a claim of outrageous government misconduct, and the defendant is aware of the conduct, he must raise it in a pretrial motion. This is the position of the 2nd, 3rd, and 8th circuits, and it is now the position of the 9th. An undercover agent of the ATF used a CI to infiltrate a crew doing alleged home invasions. The agent supposedly masterminded the plan for a home invasion that was thwarted on the day of the planned acts. The defendant knew about the agent's involvement, but failed to raise the motion pretrial, at trial, or even after trial. The 9th (Silverman joined by Hall and Conlon, D.J.) reasoned that such claims go to the tainting of the prosecutorial function, and must be presented in time to fully air out the allegations. Of course, the 9th agrees, this depends on the defendant's awareness. If facts come out after trial has begun, or there is some excuse for not raising it pretrial, then the 9th can consider it. That is not the case here. The 9th also finds no error in the actions of the district court in dismissing a juror who said he was to be impartial, and could not decide the facts on the evidence. The defendant was given a chance to possibly ask the juror "why" or delve deeper into the reasons, but he declined. The 9th found the challenge to the mandatory minimum of life to be foreclosed by precedent.

U.S. v. Pineda-Moreno, No. 08-30385 (1-11-10). A curtilage isn't what it used to be. Time to get out the "No Trespassing" signs and stake them around the driveway. Here, the defendant was being investigated on drug charges. Agents placed a mobile tracking device on his Jeep while in his driveway. The driveway had no special features that raised an expectation of privacy necessary for curtilage protetcion under the 4th Amendment. There were no barriers or fences, or enclosures, or a lack of visibility. There were no "No Trespassing" signs or warnings. The driveway was open to the public, and was used to approach the house. The attaching of the device in the early morning -- between 4 and 5 am -- did not raise the expectation of privacy to the driveway's physical nature. The 9th (O'Scannlain joined by N. Smith and Wolle, D.J.) followed precedent (McIver) in holding that the undercarriage of the car was the exterior; and that parking the car on the public street was outside the curtilage. Finally, the mobile tracking device is permitted by the Supremes.

U.S. v. Burkholder, No. 08-50446 (1-8-10). Must victims' letters be attached to the PSR? In this victim's rights case, the 9th finds no violation of either the Crime Victim's Rights Act or of Rule 32 in the removal of victim impact letters from the PSR. The victims' had their views considered, and neither the Act nor Rule 32 required that the impact letters be attached. Indeed, the court found that the letters contained conduct unrelated to the defendant.

Case o' The Week: Can't See the Forrester for the Trees - Constitutional Right to Knowingly and Intelligently Reject a Deal

You have a constitutional right to an attorney who doesn't screw-up the description of a plea agreement. You have a constitutional right to be correctly advised of statutory maximum exposures when you make a decision to represent yourself. Do you have a constitutional right to be properly advised of the statutory maximum when you reject a plea agreement? An interesting question, and one that is neatly sidestepped by the Ninth Circuit in the latest iteration of a hard-fought case. United States v. Forrester, __ F.3d __, 2010 WL 10984 (9th Cir. Jan. 5, 2010), decision available here.

Players: Hard-fought case by former San Diego AFPD Ben Coleman.

Facts: Forrester was charged with conspiracy to manufacture and distribute ecstasy from a big L.A. lab. Id. at *1. He went pro per, and survived a Faretta hearing – but was advised of the wrong stat max during the hearing. Id. at *5. Five days before trial, he and his co-d were offered a package deal that capped their exposure at twenty years. If rejected, the government would file a § 851 enhancement that increased Forrester’s stat max to 30. Id. The pair rejected the deal, were convicted at trial, and Forrester got 30. Id. The Ninth remanded on the first appeal, finding a defective waiver of counsel because of the misadvisement of the stat max. Id.

On remand, Forrester moved the district court to strike the § 851 enhancement because he had been mis-advised of the potential penalties at the Faretta hearing. Id. The district court refused, Forrester pleaded guilty, and got thirty - again. Id.

[Ed. Note: Thirty again? Forrester could have presumably insisted on another trial on remand, at considerable expense in resources. To again max him out at thirty years despite the fact he pleaded guilty the second round - seems bad form. This case was remanded yet again by the Ninth for sentencing errors; hopefully Mr. Forrester will come in below thirty this third time around].

Issue(s): (Among many): “Forrester argues that, once a plea offer has been made, a defendant has a right to be accurately informed about his potential exposure before deciding to reject it. He relies on Nunes v. Mueller, a habeas case in which an attorney misinformed the defendant that he had received a plea offer for 22 years as opposed to 11 years . . . . In Nunes, we suggested that the right to make an informed decision about a plea is a corollary to the right to voluntarily and intelligently plead guilty.” Id. at *6.

Held: “Nunes was based on the well-founded constitutional right to effective assistance of counsel . . . . For Nunes to apply here, we would have to find that Forrester suffered a similar unconstitutional deprivation of rights that tainted his rejection of the plea offer. We decline to do so on these facts. Though a defendant may have a right to voluntarily and intelligently reject a plea offer, we need not reach that question in this case because any error was harmless.” Id. at *6.

Of Note: Forrester bristles with issues. One holding of first impression in the opinion relates to wiretaps. Author Judge M. Smith holds that the government can redact portions of a wiretap affidavit and refuse to give redacted sections to the defense, if the government is willing (and able) to disclaim reliance on those redacted portions. Id. at *8-*9. It is another disappointing blow in the sisyphian task of Title III litigation, but note that the holding is narrow – if the government refuses to disclose a portion (typically, relating to an informant), it can’t rely on information in that portion of the affidavit to defend against a necessity or Franks challenge.

How to Use: Is there a constitutional right to be informed of the details of a plea – and the risks in rejecting it? The panel artfully dodges that question in Forrester, because the co-D rejected the deal anyway and it was a package (hence harmless error).

Judge M. Smith agrees that there is a Sixth Amendment right to effective assistance of counsel, that includes a duty to convey and correctly advise regarding plea offers. Id. at *5-*6. But Forrester presented the question in more stark terms – because the defendant was pro per, the Sixth Amendment wasn’t in play. This is an interesting issue to bear in mind when stuck as advisory or “stand-by” counsel for pro per defendants: maybe there is a constitutional obligation for the court, or the government, to correctly advise a defendant about the benefits and consequences of a plea? And how does that jive with Rule 11, which prohibits a district judge from knowing about the details plea discussions before trial? May be a fertile field for future challenges.

For Further Reading: Forrester II familiar? That’s because Forrester I got a good deal of press for creating new (and bad) Fourth Amendment law on searches of IP addresses. See 512 F.3d 500 (9th Cir. 2008). For a blog on the unfortunate first Forrester, visit the posting, "Finding Forrester" here.



Image of the Hon. Milan D. Smith from http://georgewbush-whitehouse.archives.gov/index.html . Image of the poster from the movie, "Finding Forrester," from http://www.impawards.com/2000/finding_forrester.html

Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org

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Farrakhan v. Gregoire, No. 06-35669 (1-5-10). This is a big civil rights/disenfranchisement case. Originally filed in 1996, plaintiffs contended that due to racial discrimination in the State of Washington's criminal justice system, the automatic disenfranchisement of felons resulted in the denial of the right to vote on account of race. This violated Sec. 2 of the Voting Rights Act. The 9th (Tashima joined by Reinhardt) reversed the district court’s denial of summary judgment for plaintiffs in a 1983 action brought by minority citizens of Washington state who had lost their right to vote pursuant to the state’s felon disenfranchisement provision. In a prior appeal, Farrakhan v. Washington, 338 F.3d 1009 (9th Cir. 2003), cert denied, 543 U.S. 984 (2004) ("Farrakhan I"), this court reversed the district court’s summary judgment and held that vote denial claims challenging felon disenfranchisement laws were cognizable under § 2 of the VRA.

The 9th first found that Farrakhan I remained binding precedent despite contrary decisions from the 1st, 2nd, and 11th circuits. The 9th recognized the circuit split with its decision in Farrakhan I, but did not recognized Farrakhan I as clearly erroneous or that it needed to be reconsidered. The 9th found that the plaintiffs had standing, and that the plaintiffs had demonstrated that the discriminatory impact of Washington’s felon disenfranchisement was attributable to racial discrimination in Washington’s criminal justice system. The panel thus held that Washington’s felon disenfranchisement law violated § 2 of the VRA. The 9th remanded with instructions to grant summary judgment to plaintiffs given the evidence already before the court. Dissenting, Judge McKeown argued that the majority erred in granting summary judgment for the plaintiffs and that the proper approach would have been to remand the case to the district court for consideration of the plaintiffs’ motion for summary judgment. On remand, the court would weigh the evidence as to racial discrimination, and to assess other factors to determine if the VRA had been violated.

Given the state constitutional issues, the statutory VRA issues, and a circuit split, plus the shadow of McCleskey, this could well be headed to the Supremes, if there is not an en banc first.

Harrison v. Gillespie, No. 08-16602 (1-5-10). The state jury came back guilty on murder. As to the sentence, the jury reported that it was deadlocked, and two juror notes indicated that the deadlock was between life with parole, and life without. The petitioner asked to poll the jurors on whether there was unanimous agreement that as to whether aggravated circumstances existed and whether they found that mitigating circumstances outweighed aggravators. The trial court denied the request, and declared a mistrial. The State of Nevada sought to retry the petitioner on death, and he seeks double jeopardy relief through habeas. The 9th (Reinardt joined by Hug) granted relief and reversed the district court’s denial of the petition. The panel held the trial court abused its discretion by declaring a mistrial without first granting petitioner’s request to poll the jury to determine whether it had acquitted petitioner of the death penalty. The panel further held that, because no other alternative would adequately protect petitioner’s rights under the Double Jeopardy Clause, the State could not seek and the court could not impose the death penalty at a sentencing retrial. Judge Silverman dissented, because the federal constitution does not require a state trial judge to inquire into the unfinished deliberations of a discretionary matter before declaring a mistrial.

U.S. v. Morales, No. 09-30047 (1-5-10). The 9th holds that the district court is without jurisdiction to reduce a supervised release revocation sentence because the guideline range for the original crack offense was reduced. Simply put, lowering the crack guideline does not help lowering the supervised release revocation sentence. The 9th (Kozinski joined by Fisher and Paez) find that a reduction of sentence can be considered when the two prongs of 3582(c)(2) are met: (1) the lowering of applicable guidelines; and (2) it is consistent with the Sentencing Commission's applicable policy statements. The defendant here met the first prong, with the crack guidelines having been lowered; but failed to meet the second prong because the applicable note of 1B1.10(a)(1) note 4 states that the reduction of a SR term is not called for. Under 3582, the policy statements control in the second prong of the reduction of sentences because of a lowering of guidelines.

U.S. v. Forrester, No. 09-50029 (1-5-10). In an appeal from a conviction and 30-year sentence for ecstasy drug offense, the 9th (M. Smith joined by Hall and T. Nelson) affirm the conviction but remand for a new sentencing. On the conviction, the defendant had previously gotten relief because the 9th had found that he had unintelligently waived counsel. Now, on this plea and sentence, defendant argues that he deserves to be afforded the original plea terms (max of 20 years). The 9th discusses this interesting point of whether the defendant has a right to voluntarily and intelligently to reject a plea, but sidesteps it because any error was harmless. The defendant was offered a deal that the co-defendant had to accept as well, and the co-defendant did not (he was already facing life). The 9th also found that in regards to the conviction, the defendant did not have the right to challenge the applicability of the drug as a Schedule I as opposed to a Schedule III. The defendant can challenge temporary designations of scheduling designation as to controlled substances but not permanent ones. The 9th also rejects various challenges to the wiretap evidence. Relief is granted in the form of a remand as to sentencing so that the district court can determine the end of the conspiracy for relevant conduct purposes. The government has to prove that the conspiracy extended until after the temporary scheduling amendment became effective that raised the equivalency penalty from 50:1 (marijuana to ecstasy) to 500:1. The court should also make specific findings as to various factual challenges as they relate to sentencing.

U.S. v. Laurico-Yeno, No. 09-50093 (1-1-4-10). This is another appellate definition of whether a state prior conviction is a categorical crime of violence in the context of a 1326 (illegal reentry after deportation) sentencing. The defendant received a +16 level increase for the state prior conviction of Inflicting Corporal Injury on Spouse/Cohabitant Partner in violation of California Penal Code 273.5. On appeal, the 9th (Molly, D.J., joined by Gould and Bea) analyzes the elements of 273.5, and finds that it penalizes intentional use of force that results in a traumatic condition. The 9th rejects defendant's argument that the offense also penalizes a mere battery or simple assault, as possibly indicated by state opinions. More is required, according to the panel, than hypothetical situations to take an offense outside of the generic definitions. If the state statute's greater breadth is not apparent from the language of the statute itself, the defendant must point to state court decisions that do in fact apply the statute more broadly. That was not done here. Theoretical possibilities alone will not take this offense outside the crime of violence definition.

Case o' The Week: Anchrum, Anchorage and Experts - Lay and Expert Witness Testimony

Gun a Ford Focus, aim it at a DEA Agent, and hit him as he frantically dives for cover. Any problem with that injured agent later testifying at the defendant's trial as a neutral, detached, dispassionate "expert" witness, and answering hypotheticals that mirror the crime charged?

"Nah," says the Ninth. United States v. Anchrum, __ F.3d __, 2009 WL 5125788 (9th Cir. Dec. 30, 2009), decision available here.

Players: Hard-fought case by Alaska AFPD Michael Dieni. Decision by Judge Tallman.

Facts: A suspicious postal inspector lead to a warrant, then a controlled delivery of a box full of drugs. Id. at *1. Michael Anchrum signed for the box, then left in a Ford Focus. Id.

Realizing that he was being followed, he lead DEA Agents in a chase through Anchorage. Id. This culminated in Anchrum gunning the Ford and driving at Agent Solek, who had left his car; Anchrum hit Solek’s knee as the agent dove out of the way. Id. After then hitting another police car, Anchrum fled on foot and was arrested. Id. at *2.

A search of the Ford revealed two pistols, a scale, and the controlled-delivery box. Id. At trial on gun, drug, and assault charges, Agent Solek – the agent who had been hit by the Ford – testified as a percipient witness. Id. There was a sidebar, the AUSA started a question with, “I’d like to shift gears a bit,” and then the same agent then testified as an “expert” witness on drug dealing and guns. Id. The jury convicted on all counts and Anchrum was sentenced to 157 months.

Issue(s): (Among others): “Anchrum claims . . that the government’s use of United States Drug Enforcement Administration . . .Special Agent Kenneth Solek as both a lay and expert witness resulted in testimony inconsistent with this court’s holding in United States v. Freeman, 498 F.3d 893, 904 (9th Cir.2007), as well as Federal Rule of Evidence . . .704(b).” Id. at *1.

Held: “When the district court divided Agent Solek’s testimony into two separate phases it avoided blurring the distinction between Agent Solek’s distinct role as a lay witness and his role as an expert witness. Not only were these two phases separated temporally by a sidebar, but when the prosecutor began the expert phase, she stated, ‘Agent Solek, I’d like to shift gears here a little bit and talk about some of your education, professional training, and law enforcement experience.’ Accordingly, we find that the concerns we expressed in Freeman were avoided here and the district court did not exceed the permissible bounds of its discretion in admitting Agent Solek’s testimony.” Id. at *7.

Of Note: In the 2007 Freeman case, the Ninth devotes several pages to explaining the dangers of permitting an agent to testify to as both a lay witness and an expert witness (dangers that came to pass in Anchrum). The Court in Freeman reviewed for plain error, because the defense did not object to the dual roles of the agent-witness (a fact not revealed in the Anchrum opinion, which involves the less-deferential abuse of discretion standard).

Finally, the Court in Freeman emphasized “the necessity of making clear to the jury what the attendant circumstances are in allowing a government case agent to testify as an expert. If jurors are aware of the witness’s dual roles, the risk of error in these types of trials is reduced.” Id. It is hard to discern that clear explanation of the dual roles in Anchrum – a sidebar and “shifting gears a little bit” is, a best, a muddy demarcation line for a jury. The panel attempts to cram Anchrum into the Freeman holding by describing two “phrases” of the agent’s testimony – but those phases seem to be labels applied by the Ninth, rather than divisions created at trial.

How to Use: Many good district court judges will refuse to let the government go as far as Anchrum. If this regrettable dual-witness scheme has to happen, object, then insist on a clear instruction delimiting the two roles of the witness-agent. A significant temporal break between the testimony would also help. On facts less egregious than those of Anchrum a different Ninth Circuit panel may not tolerate these blurred witness roles.

For Further Reading: For more discussion on the Freeman decision – including a tip on a Confrontation Clause challenge – visit the blog entry for that case here.

Image of the Ford Focus from http://keetsa.com/blog/eco-friendly/which-car-is-best-for-a-back-to-school-teen/ .

Steven Kalar, Senior Litigator, N.D. Cal. FPD. Website at www.ndcalfpd.org

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