Case o' The Week: Ninth Affirms for Posts on Aptly-Named, "Raging Bull" - Securities Fraud, Jenkins

Does vague internet chatter on a bulletin board called "Raging Bull" rise to the level of a "material misrepresentation" supporting security fraud?

Yep (and particularly so when a company board member and stockholder relies on Raging Bull for info on the corporation). United States v. Jenkins, 2011 WL 208357 (9th Cir. 2011), decision available here.

Players: Decision by Judge B. Fletcher.

Facts: Jenkins was disbarred lawyer who created a Bahamian shell corporation to further a “pump and dump” scheme. Id. at *2. Jenkins and a co-defendant inflated the company’s value with (false) assurances on an internet bulletin board called, “Raging Bull.” Id. The duo then dumped the inflated stock through a Canadian brokerage. Id.

The case was investigated by Canada, and the US feds got an order tolling the statute of limitations while a MLAT request to Canada was pending. Id. at *4. The initial application for a tolling order did not have a supporting affidavit. Id.

Jenkins was convicted of various white collar counts after trial and received a sentence of ninety months (down from guidelines of 324-405!). Id. He appealed (including a challenge to the reasonableness of his sentence).

Issue(s): “The principal legal issue we face is whether 18 U.S.C. § 3292 suspended the running of the statute of limitations . . . . Section 3292 permits the district court to suspend the statute upon finding that the government reasonably believes evidence of a crime under investigation by a grand jury is in a foreign country and has requested that evidence.” Id. at *1. “[Jenkins] argues that an application to suspend the running of the statute of limitations must be supported by a sworn affidavit or other material of evidentiary value . . . .” Id.

Held: “[W]e hold that when the government moves to suspend the statute of limitations under § 3292, it must present something with evidentiary value tending to prove it is reasonably likely that evidence of the charged offenses is in the foreign country – not merely unsupported assertions.” Id. at *6 (internal quotations and citations omitted).

Of Note: This statute of limitations holding is a new rule for the Ninth, and follows a case out of the Eleventh Circuit. Id. at *6. Unfortunately for Jenkins, the government “cured” this mistake by submitting a supplemental application for order with an affidavit, that saved the otherwise-blown statute of limitations. Id. at *7.

How to Use: Jenkins is chock-a-block with white collar issues: two newish holdings merit flagging. First, Jenkins complains on appeal that a securities fraud conviction can’t rest on misrepresentations on an informal internet bulletin board (“Raging Bull”) – after all, what reasonable investor would ever rely on vague internet chatter? Surely an internet chat post isn’t “material?” Id. at *10. “We are not persuaded,” responds Judge Fletcher – there was sufficient evidence “to allow the jury to conclude that the Raging Bull posts were material.” Id. at *10. Hence, beware that “material” misrepresentations can lurk in even the most unreliable of places.

The second issue of note is a righteous challenge to some money-laundering counts, where the funds at issue went from Canada to Antigua without ever crossing US borders. Id. at *12. That challenge was rather summarily rejected by the Court, based on FRE 1006 “summary exhibits” illustrating the flow of funds from Canada to the United States. Id. at *13. Hence, beware of those brightly-colored flow-charts trotted out by government agents at trial: that innocuous “summary” evidence has a way of transforming itself into substantive evidence that can defeat an appeal.

For Further Reading: The roots of the fraud in Jenkins was a businessman who touted infrared camera technology for an application that wouldn’t work. Id. at *2. Last week a similar fraud was revealed by the BBC: millions of dollars worth of electronic “bomb detection devices” were sold internationally with the active endorsement of the British military. The gadgets (they look like divining rods) are pure hooey: their guts contain a digital anti-theft tag designed to prevent shoplifting. For a very interesting video and article on this scam, see here. The first arrest has already taken place: look forward to bomb dowsing-rod clients coming soon to a jurisdiction near you.


Image of the Wall Street bull from http://www.digitaljournal.com/img/8/7/3/i/4/1/8/o/RagingBull-WallStreet.jpg


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

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U.S. v. Liu, No. 09-10136 (1-21-11) (Tallman with B. Fletcher and Rawlinson).

There are counterfeit bills so good that they can pass undetected through slot machines and cash counting machines in Las Vegas (you see where this is going). These bills, known as supernotes, come from outside the country, possibly North Korea or Russia. The defendant was charged with being a member of a conspiracy to bring such bills in Los Angeles. The California indictment was filed in 2005 and the defendant was released. The trial was then continued numerous times. During this time, the defendant was caught in Las Vegas continuing his participation in the conspiracy (and losing $1.9 million at a single casino). The California indictment was dismissed and a superseding indictment was filed in Las Vegas in 2008. He was convicted on conspiracy charges related to counterfeiting. On appeal, the defendant argues that the Speedy Trial Act was violated. He argues that the California indictment had the same conspiracy charges as the Las Vegas indictment. He also argued that he should have a multiple conspiracy instruction and a unanimity instruction. The 9th rejected these arguments and affirmed. The 9th held that the delay in the superseding indictment was reasonable: there were continuances, no evidence of government bad faith, and a new co-defendant was added (later acquitted) in the Las Vegas indictment. The 9th also found no need for a multiple conspiracy instruction given that there was no spillover prejudice.

U.S. v. Basher, No. 09-30311 (1-20-11) (Mills, Sr. D.J. C.D.Ill with Wardlaw and Gould).

If a shot is fired in the woods, does anyone hear? Yes, they do, especially if they are off-duty law enforcement camping on National Forest Land. Add to that an illegal fire, and no wonder the agents decided the next morning to investigate. They drove to where they thought the shots were fired, and found a tent with the defendant and son inside. The police car blocked driving away, and they asked the tent occupants to come out. Oh yes, the agents saw shotgun ammunition on the bench. Well, it turns out that the defendant was a prohibited possessor. On appeal from a conditional plea, the 9th held that this was a Terry stop, and that the questioning of the defendant was no custodial and did not require Miranda. The retrieval of a weapon from the tent was under the public safety exception. A warrant was not required here.

Lopez v. Ryan, No. 08-99021 (1-20-11) (McKeown with Graber and Callahan).

The 9th affirms a denial of habeas. The 9th basically held that the state courts did consider all mitigation presented, and did not require or use a requirement of casual connection.

Case o' The Week: Not Quite Clooney - Liu and Speedy Trial Act

Dashing men and a beautiful woman hatch a clever conspiracy to successfully steal millions from a Las Vegas casino? The Ninth considers a case with facts just like Ocean's Eleven -- -- except for the "successfully" part. United States v. Liu, 2011 WL 182228 (9th Cir. Jan 21, 2011), decision available here.

Players: Hard-fought appeal by D. Nev. AFPDs Dan Maloney and Michael Powell.

Facts: Liu was involved in an international conspiracy involving “supernotes”: counterfeit so good that it works in casino slot and cash-counting machines. Id. at *1. Liu was first indicted for this offense in L.A. Id. He was released and then continued to conspire to pass the notes in Vegas while on pretrial release. Id. He was ultimately indicted in Nevada on charges from the original California indictment, allegations from a previous Nevada indictment, and allegations of new post-release conduct. Id. at *2. Liu’s wife, Min Li Liu, was also added to the superseding Nevada indictment, and the California indictment was dropped. Id. at *1, *2. Liu filed a motion to dismiss the conspiracy charge of the Nevada indictment, “arguing that it was ‘merely an extension’ of the California indictment and that the failure to timely prosecute him on the California indictment violated his rights under the [Speedy Trial Act, or STA].” Id. at *2. The district court found the STA time limits for the California indictment did not apply to the Nevada indictment because the Nevada indictment ‘charged a new and distinct offense from the one charged in the California indictment.’” Id.

Issue(s): “We assume, without deciding, that the two indictments charged Liu with the same overarching conspiracy although the [second superseding indictment] supplemented new facts . . . . Assuming the Liu was charged with the same conspiracy in the two indictments, we must now determine whether the time that lapsed between Liu’s first appearance in court in California and his trial in Nevada violated the STA.” Id. at *3.

Held: “If we apply our holding in [United States v. King, 483 F.3d 969, 972 (9th Cir. 2007)], Liu’s STA clock under the California indictment reset upon the addition of his wife, Min Li, to the [second superseding indictment in Nevada]. There is no evidence in the record before us to suggest that the delay between the filing of the California indictment and the addition of Min Li through the filing of the [second superseding indictment] was unreasonable.” Id. at *4. “Because the delay in the filing of the [second superseding indictment] that named another defendant was reasonable, and because there is no evidence of bad faith on the part of the government, Liu’s [Speedy Trial Act] clock restarted [when the second superseding indictment was filed.]” Id. at *4.

Of Note: The general rule is that the addition of a new co-defendant restarts the Speedy Trial Act clock. See id. at *3 (discussing King). There are two caveats to that rule, however: the delay must be “reasonable” and the addition of the codefendant requires the “absence of bad faith on the part of the government.” Id.

Judge Tallman assures us that there is no showing of bad faith from the government’s addition of the wife to the Nevada indictment (and she was admittedly arrested with Liu as he tried to pass counterfeit through a casino machine). Id. at *1. Nonetheless, it is interesting to note that Liu’s wife was fully acquitted in his trial through her successful Rule 29 motion. Id. at *2. The result is that his Liu’s wife was exonerated of the conspiracy, yet her presence in the superseding indictment bought the government a Speedy Trial exclusion as to Liu. Probably not bad-faith charging based on these facts, but the exclusion of time based on the (exonerated) wife’s charges still doesn’t seem fair.

How to Use: Another issue was Liu’s request for a specific unanimity instruction as to the specific overt act committed in furtherance of the conspiracy. Id. at *5. Judge Tallman questions whether the district court “must instruct a jury that it must make a unanimous finding of which over act was committed in furtherance of the conspiracy.” Id. at *5 & n.7. Thankfully, the panel didn’t resolve that issue – so we should still seek a specific offense instruction (or “Echeverry” instruction) for conspiracy overt acts (except for § 841 drug conspiracies, which do not require proof of an overt act. United States v. Cazares, 121 F.3d 1241, 1246 (9th Cir. 1997).

For Further Reading: How good were the supernotes in the case? An undercover agent was supposed to pay Liu in this counterfeit, but used real bills instead– and Liu couldn’t tell the difference. Id. at *1 n.1. For an interesting description of these bogus bills, see “What Are Supernotes?” available here.



"Ocean's Eleven" poster from http://www.impawards.com/2001/posters/oceans_eleven_ver5.jpg Image of one-hundred dollar bills from Slate article on Supernotes, available here.


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

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Miller v. Oregon Board of Parole, No. 07-36086 (1-18-11)(Burns, D.J. S.D. Ca, Paez, Clifton). The 9th holds that state law can indeed create a liberty interest in early eligibility for parole. This extends the 9th's holding in Hayward v. Marshall, 603 F.3d 546 (9th Cir. 2010) (en banc) that only state law can give rise to a liberty interest in parole that is protected by the Constitution's due process. The early eligibility is created under the statutory scheme even when the burden is on the petitioner to show that he or she is capable of rehabilitation after an aggravated murder conviction. Under the facts here, the Board's denial of relief, however, was not unreasonable and did not violate due process.

U.S. v. Lindsey, No. 09-50459 (1-14-11) (D. Nelson with Ikuta; concurrence by Pregerson). The defendant just received 9 out of 10 peremptory strikes. The trial court made this error in good faith, and the defendant did not object when the court closed the book on the jury selection. Under U.S. v. Annigoni, 96 F.3d 1132 (9th Cir. 1996) (en banc), that would provide for an automatic reversal. However, the 9th holds that Rivera v. Illinois, 129 S. Ct. 1446 (2009) effectively overruled it. The error was not structural. Given the failure to object, plain error review is appropriate, and plain error was not committed. The 9th also found that there was sufficient evidence for conviction for various robbery and robbery related counts. There was also no error in the court's failing to substitute counsel. As for the wrong conspiracy jury instruction (proposed by the defendant), the error was harmless. The instruction failed to instruct on the requirement of an overt act. There were plenty of acts that the jury convicted on which would qualify as overt acts. The sentencing issues related to whether the sentence was reasonable (it was, the court gave detailed explanations); the brandishing of a firearm was a sentencing factor and not an element; and there was physical restraint for an adjustment because the defendant forced the bank manager into the vault at gunpoint). Pregerson concurred on the peremptory issue. he felt that Annigoni need not have been overruled, because that case involved the court who actively prevented a defendant from exercising a peremptory challenge. That differs from here, where the defendant did not object to the court's good faith error. It could be decided under plain error, and not finding an overruling, and that is the basis of the concurrence.

U.S. v. Doss, No. 07-50334 (1-14-11) (Hawkins with Berzon and Clifton). In an appeal from convictions for sex trafficking of children, transportation of minors into prostitution, conspiracy, and two counts of witness tampering, the 9th affirms most convictions. However, importantly, it reverses one count of witness tampering. The defendant had asked his spouse to assert her marital privilege. This request was not corrupting. The 9th sides with the 3rd Circuit on this, and is opposite the approach of the 2nd and 11th Circuits. The 9th does get support from dicta in the Supremes' Arthur Anderson decision as to privileges, 544 U.S. at 703-04. The 9th also vacated the life sentences in the sex trafficking with minors to allow the court (it was a bench trial) to determine if the prior sex offense (pandering under a Nevada statute) involved a minor under the federal definition. This is an Apprendi fact enhancement.

Congratulations to Davina Chen, AFPD, of the FPD Central District Office (Los Angeles).

Case o' The Week: Mill on the Doss - Witness tampering and "reminding" of testimonial privilges

"I, the bride, take you, the groom, to be my husband, to have and to hold from this day forward, for better or for worse, for richer, for poorer, in sickness and in health, to love and to cherish; from this day forward until death do us part, or until I am charged in a federal indictment and given an opportunity to cooperate against you to save my own skin."

In a moving tribute to the sanctity to marriage, the Ninth upholds a defendant's ability to remind his blushing bride of the marital privilege against testifying. United States v. Doss, 2011 WL 117628 (9th Cir. Jan. 14, 2011), decision available here.

Players: Hard-fought appeal by CD Cal AFPD Davina Chen. Decision by Judge Hawkins, joined by Judges Berzon and Clifton.

Facts: Doss was tried for transporting minors for prostitution and for witness tampering (a violation of 18 U.S.C. § 1512). Id. at *1. Among other allegations, Doss was charged with attempting to persuade his wife to assert the marital privilege and to not testify. Id. Unfortunately, and unbeknownst to Doss, his wife was cooperating. She did not assert the privilege, she testified against him, and he was convicted at trial. Id. at *2-*3.

Doss moved before trial to dismiss the witness tampering counts for failure to state a violation of § 1512(b)(1), (2)(A); during trial he moved for acquittal on those counts on the same grounds. Id. at *3. Both motions were denied. Id. He was sentenced to life. Id.

Issue(s): “The issue before us is whether one can be convicted for witness tampering under 18 U.S.C. § 1512 by encouraging a witness to withhold testimony when that witness possesses a legal right or privilege not to testify.” Id. at *1. “The principal debate is over the meaning of the term, ‘corruptly persuades’ [another person with the intent to cause any person to withhold testimony, as set forth in § 1512(b)(1), (2)(A)].”Id. at *3. “Doss argues that there was nothing ‘corrupt’ about persuading his wife to exercise her marital privilege not to testify, and that therefore the district court should have granted his motion for acquittal.” Id. at *6.

Held: “We . . . conclude that the district court erred by failing to grant Doss’s motion for acquittal of Count 8 [relating to the assertion of the marital privilege]. . . . The evidence at trial established only that Doss appealed to his wife to exercise her marital privilege not to testify against him. As Doss’s wife, Ford had the legal option not to testify, and thus Doss’s request, without more, was insufficient to establish ‘corrupt’ as opposed to innocent persuasion.” Id. at *7.

Of Note: The Ninth Circuit falls on the right side of a circuit split on this issue. The Second and Eleventh have held that if a defendant encourages a witness to assert a lawful privilege against testifying, and does so with an evil heart, he or she is guilty of “corruptly persuading” under § 1512. Id. at *3. The Third, by contrast, requires something inherently wrongful about the persuasion – like bribery, or encouraging perjury. Id.

The panel agrees with the Third Circuit in a particularly well-written analysis. The strength of Judge Hawkin’s opinion may matter: our colleague Davina may be a reluctant white-quill recipient before the dust settles on the case.

How to Use: Doss isn’t limited to the marital privilege. Non-coercive attempts to convince a witness to assert the Fifth Amendment also fall outside of the scope of § 1512. Id. at *7. Unfortunately for Doss, he also encouraged the other witness (for whom the assertion of the Fifth was at issue) to lie. Id. “[N]on-coercive attempts to persuade a witness to lie are clearly covered by § 1512(b).” Id. Thus, under Doss a defendant can lawfully persuade a witness to assert the marital or Fifth Amendment privilege – but (not surprisingly) it remains a crime to suborn perjury. Id.

For Further Reading: After Doss our clients commit no crime if they attempt, without coercion, to persuade government witnesses to assert a lawful testimonial privilege. Does Doss mean that defense counsel can contact witnesses and encourage them to assert a privilege – with the goal of keeping them off the stand?

Maybe.

For example, the Fifth Circuit found “no impropriety” when defense counsel contacted a witness’s attorney, described the dangers of self-implication if the witness testified, and reminded the attorney of the Fifth Amendment. See McNeal v. Hollowell, 481 F.2d 1145, 1152 (5th Cir. 1973).

On the other hand, defense attorneys have been convicted for such advice (though admittedly with a bribe or two thrown in). And there’s a model ethical rule that prohibits unlawfully obstructing opposing counsel’s access to evidence. See ABA Model Rules of Prof'l Conduct R. 3.4(a). For a very helpful article on this murky ethical area, see Mark Mermelstein and Charlotte Decker, Walk the Line, Los Angeles Lawyer, available here.



Image of a bride from http://www.completetext.com/picture_library/Bride.jpg


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

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U.S. v. Begay, No. 07-10487 (1-12-11) (en banc majority opinion by Clifton; dissent by Reinhardt, Thomas and Berzon).

[Ed. note: This case came from the FPD Arizona office]

Defendant was convicted of two counts of first-degree murder and two gun counts. The panel had vacated the first-degree murder convictions for insufficient evidence of premeditation and had affirmed the gun counts. Taking the case en banc, the 9th now reverses the panel, and affirms the first-degree murder convictions as having sufficient evidence. The facts involve the defendant shooting two individuals after they had stopped their cars early in the morning of March 28, 2002. The prosecution argued sufficient evidence for premeditation through the acts of the defendant turning around from an initial conversation, walking to his car, getting a rifle, and then shooting. There was no evidence of agitation or being rushed. Using the Nevils two-prong test for sufficiency, see 598 F.3d at 1164, the acts have to be viewed in the light most favorable to the government, and whether such facts adequately support the decision by any rational jury. The majority found that the facts here did. The dissent argued that the decision to go en banc was flawed because it was not to address national importance, circuit conflict, or intra-circuit conflict, but to reconsider a few specific case-bound facts. The panel found that the government failed to prove premeditation and so the murder was second as opposed to first degree. The conclusion is that en banc was to reconsider the interpretation of these facts, which is improper. The dissent argues that the government never proved premeditation but only intent. Premeditation is specific intent. The government did not present any of the evidence usually presented for premeditation, such as motive, demeanor, prior relationship, or whether the means was calculated. The record is silent on such facts. There is no support for premeditation.

Hayes v. Ayers, No. 07-99014 (1-7-11) (Clifton with Bea; dissent by B. Fletcher).

What does it take to get a change of venue? More than extensive press coverage in a small county. The petitioner here was convicted of a double homicide during a drug deal. The press was extensive, with numerous stories and exposés about the petitioner's past. The 9th, however, found no actual or presumptive prejudice. The media was mostly before the jury was empaneled, and time had passed. The dissent would find a due process violation because of the inflammatory nature of the articles, the small size of the county, and the familiarity with the case of the jury panel. The dissent notes that four other homicide cases were moved because of publicity. As for the other issues, the 9th all found no hearsay or confrontation issues in the cross examination of the cooperating witness.

Case o' The Week: Faking Subpoenas A-OK - Prosecutorial [Mis]conduct and Carona

What could be worse than a lying, corrupt County Sheriff who suborns perjury and (allegedly) accepts years of cash bribes? Maybe a federal prosecutor who fakes subpoenas so a lying, corrupt co-defendant can use them as a snitch when speaking to the represented Sheriff?

The Ninth, unfortunately, misses the irony of law enforcement using blatant deception to further the investigation of a deceiving law enforcement officer. United States v. Carona, 2011 WL 32581 (9th Cir. Jan. 6, 2011), decision available here.


Players: Decision by Judge Clifton, joined by Judges Noonan and Bybee.

Facts: Michael S. Carona (above right) was the Orange County Sheriff, and was suspected of accepting bribes. Id. at *1.The feds flipped the briber, who met with Carona and discussed coordinating their testimony on a wire. Id. at *2. The feds knew at the time that Carona was represented by defense counsel. Id.

To bolster his credibility, the feds gave the snitch fake “subpoena attachments” that sought information on cash payments that the snitch had given Carona. Id. The snitch and Carona talked on the wire, Carona was indicted, and was later convicted after trial of witness tampering. Id. at *3.

Before trial Carona’s counsel moved to suppress Carona’s statements to the snitch, on the grounds that they were obtained through a violation of California Rule of Professional Conduct 2-100(A) (prohibiting an attorney from communicating directly or indirectly with a represented adverse party). Id. at *2. The district court agreed that there was a Rule 2-100(A) violation, but rejected all remedies – including a jury instruction about the violation. Id.

Issue(s): “We have not previously needed to consider the question of whether providing fake court papers to an informant to use during a conversation with a represented party is conduct that violates Rule 2-100.” Id. at *4.

Held: “Under facts presented here, we conclude that it does not.” Id. (emphasis added).“The false documents were props used by government [sic] to bolder the ability of the cooperating witness to elicit incriminating statements from a suspect. The district court appears to have been concerned that by allowing such conduct a suspect could be ‘tricked into giving his case away by opposing counsel’s artful questions,’ but it has long been established that the government may use deception in its investigations to induce suspects into making incriminating statements.” Id. at *4. “There were no direct communications here between the prosecutors and Carona. The indirect communications did not resemble an interrogation. Nor did the use of the fake subpoena attachments make the informant the alter ego of the prosecutor. On the facts presented in this case, we conclude that there was no violation of Rule 2-100.” Id. at *5.

Of Note: As grim as the Carona decision is, at least Judge Clifton concedes that this issue – a prosecutor’s contact with represented parties – triggers no bright line rules and must be decided on a case-by-case basis. Id. at *3. “We have recognized the possibility that such conversations could violate the rule and declined to announce a categorical rule excusing all such communications from ethical inquiry.” Id. (internal quotations omitted). So the case is bad precedent, but not a blank check, for the type of deceptive investigation used by the CD Cal USAO.

How to Use: Because this issue requires a case-by-case analysis, if confronted with prosecutorial contact of a represented witness emphasize the unique aspects of Carona to limit its reach. First, as noted in the “Held” section above, in Carona the prosecutors themselves didn’t contact the defendant – it was just the snitch. Id. at *5. Moreover, this wasn’t anything close to an interrogation – Carona thought he was speaking with a defense ally. Id. Finally, Carona was trying to suborn perjury – and the Court isn’t keen on “immunizing” defendants who try to shape testimony simply because they have counsel. Id.

For Further Reading: Sauce for the goose, sauce for the gander? Can you whip up some fake subpoenas for your investigator to facilitate interviews of government witnesses? Makes intuitive sense, but be warned that the government usually enjoys an ethical monopoly on lying, cheating, and deception to build its case. For an interesting article on the ethical limits on defense deception to investigate a case, see Gerald B. Lefcourt, Fighting Fire with Fire: Private Attorneys Using the Same Investigative Techniques as Government Attorneys: The Ethical and Legal Considerations for Attorneys Conducting Investigations, available here. This (unfair) asymmetry in prosecutor/defense deception in investigation is a hot topic: for discussions by the ABA on the issue see Roundtable on the ABA Defense and Prosecution Function Standards, available here.



Image of (former) Orange County Sheriff Michael S. Carona from http://www.newsoxy.com/world/disgraced-sheriff-pension-13760.html


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

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U.S. v. Carona, No. 09-50235 (1-6-11) (Clifton with Noonan and Bybee). The defendant in this case was the elected sheriff of Orange County, California, until he resigned in 2008 after being indicted on federal charges that included bribery and witness tampering. He was acquitted of the bribery and convicted of the witness tampering. The prosecutor used a confidential informant to record statements from the defendant even though the defendant was represented by counsel. The prosecutor even supplied fake subpoenas to the CI to add to the deception. The district court had found the actions to be an ethical violation of 2-100 of the California Rules of Professional Conduct, but had not suppressed. On appeal, the 9th affirmed, and held that the prosecutor's actions neither violated California ethics rules nor required suppression of the statements. The 9th reasoned that the actions did not appear unethical because of the specific circumstances, and the need to ferret out wrongdoing without allowing a defendant to subordinate perjury protected by having counsel. The 9th also shrugged about the fake subpoenas, referring to the documents as a prop to bolster the ability of the CI to elicit information. This is not a case of the fake subpoenas turning the CI into the mouthpiece of the prosecutor. Even if there was an ethical violation, the court did not abuse its discretion in failing to suppress. The exclusionary rule would not serve its remedial purpose and the costs would be too high. Any remedies can be had through the state bar. The 9th also found that the jury instructions were not erroneous.

Lakey v. Hickman, No. 09-15940 (1-5-11)(Wallace with Thomas and Mills, Sr. D.J., C.D. Ill.). This is another AEDPA tolling issue. The 9th holds that the petition is untimely and equitable tolling is unavailable. The petitioner filed three state post-conviction challenges before he went to federal court. Alas, for him, one of those filings was pending in the California State Supreme Court for 267 days before it was dismissed as untimely. "Equitable tolling" is unavailable because of the Supremes' decision in Pace, which stated that a state finding of untimeliness would not toll the federal period. Moreover, once Pace came out, which supported the filing of shell petitions, the petitioner should have acted. Instead, he waited five months.

U.S. v. Harris, No. 09-50113 (1-4-11) (Wallace with Graber and Mills, Sr. D.J., C.D. Ill).

This is an issue of waiver of appeal. The defendant was charged with being a prohibited possessor of a firearm. He pled under a plea agreement, where, among other agreements, he stipulated to an enhancement for a crime of violence, and waived his right of appeal. The defendant later backed out of the "crime of violence" stipulation because of uncertainty in the case law, and he was permitted by the government, documented in e-mail exchanges. The court ruled against him, finding that his prior burglary was a crime of violence. He appealed. The 9th enforced the appeal waiver, and refused to exercise jurisdiction. The 9th said that the language of waiver was plain, that the defendant pled knowingly and voluntarily, and that he took his chances with the argument before the district court. This opinion has a good overview of the plea waiver, and acts as a warning to the broad enforcement of such waivers. E-mail exchanges with implicit understandings will not trump explicit provisions.

U.S. v. Montes, No. 08-10539 (1-4-11)(Tallman with B. Fletcher and Rawlinson).

Allegations of juror misconduct ordinarily require an evidentiary hearing to determine the nature of misconduct, if any, and the reasonable probability it affected the jury's verdict. However, an evidentiary hearing is not mandated every time. When, as here, the allegations can be decided without the benefit of a hearing, the court did not err in not holding one. This was a prosecution for marijuana distribution under 21 U.S.C. 848. The evidence was overwhelming (not helped by the defendant's statements and boasting to law enforcement that he was distributing marijuana). During deliberation, a juror saw a headline from the SF Chronicle's webpage that President Obama's administration may go easier on pot growers. The juror discussed this in the jury room. After this was raised post-verdict, the court had the juror affidavit, and the pleadings by the parties and argument. The court felt that it could not go into the juror's deliberations and thought process under Fed. R. Evid. 606(b). The court found that the headline and summary did not affect the verdict. The 9th agreed and affirmed. The district court did not have to hold the hearing and that a new trial was not required. The evidence was presented via affidavit; a hearing would not have added anything because the deliberative process could not be questioned. On the facts as presented, and under the test set out in Bayramoglu v. Estelle, 806 F.2d 880, 887 (9th Cir. 1986), the misconduct did not affect the verdict. The headline if anything helped the defendant.

Hamilton v. Brown, No. 09-15236 (1-4-11) (Tashima with Cowen and Silverman).

The 9th upheld the taking of blood samples for DNA identification under California's DNA and Forensic Identification database statute. The prisoner's complaint failed to state a claim.

U.S. v. Liquidators of European Federal Credit Bank, No. 09-10183 (1-4-11) (Graber with Callahan and Bea).

Take a look at this case if you are ever representing former prime ministers (here of the Ukraine) charged with money laundering. This is the forfeiture issue that arose from the conviction. U.S. v. Lazarenko, 564 F.3d 1026 (9th Cir.), cert. denied, 130 S. Ct. 491 (2009). In this case, the government seized accounts held by Bank of America. The 9th reverses the seizure, finding that the assets were not listed in the charging papers, and that the government was barred by res judicata.

U.S. v. Chaudry, No. 09-10381 (1-3-11) (Thomas with Wallace and Mills, Sr. D.J., C.D. Ill).

The 9th holds that it lacks jurisdiction to review a district court's decision NOT to impose a provisional sentence until the defendant was competent to be sentenced. The case concerns a defendant convicted of various tax fraud charges, but whom, after conviction, was found incompetent. The court committed the defendant to the custody of the AG under 18 U.S.C. 4241 to determine whether he was restorable. The government had agreed, but then several months later, moved to have the court sentence the defendant provisionally under 4244. The latter would require him to be committed to mental health treatment in lieu of sentencing and considers the defendant competent, but mentally ill. The 9th had before it only the order for 4241 (there were subsequent determinations that were not appealed). In considering 4241, the 9th held that this was not a final order, nor order from release, that could be appealed. Defendant was being held civilly at the time. The jurisdiction remained with the district court to sentence him when and if he was restored, or if he was found non-restorable, to determine whether he was dangerous or not.

U.S. v. Contreras-Hernandez, No. 09-50009 (1-3-11) (Kelinfeld with Wardlaw and Callahan).

The 9th held that a California conviction for solicitation to commit murder is a crime of violence under a Guidelines 2L1.2 enhancement (illegal reentry). The argument was that solicitation is a less serious and less culpable criminal mental state than the actual offense, or aiding and abetting. The defendant further argued that "solicitation" is not included in the Guidelines with examples of offenses that should be counted towards crime of violence such aiding and abetting, conspiracy, and attempts along with the designated offense. The 9th however countered that the Guidelines list was not exclusive, but were just examples, and could include other similar offenses. The 9th also looked to immigration, where solicitation was found to be violent. The Sixth Circuit found otherwise, holding solicitation was a lesser mental state, but the 9th joins the other circuits in rejecting that position.

U.S. v. Anaya-Acosta, No. 09-50610 (1-3-11) (Schroeder, Tallman and Jarvey, D.J. S.D. Iowa) (per curiam).

Defendant was here illegally, but was allowed to depart voluntarily and then was given a break by getting a departure control order (allowing him to remain here) pending a state trial for which he was a material witness for the state. What could go wrong? Well, defendant was subsequently discovered to possess a firearm and ammunition in violation of 18 U.S.C. 922(g)(5)(A) (illegal alien in possession of firearm and ammo). He argued, though, that he was not an illegal alien because of the "deportation control order." He was allowed to be here. That does not change his status. He was here illegally, and was ordered to leave. This put him in the prohibited status. Moreover, the statute also includes the disjunctive phrase "under an order to deport voluntarily, whether or not he or she has left the United States." He was also not under "official restraint" because he was not in custody.

Case o' The Week: Peeples and Pretrial Release for Child Porn Defendants

Litigating in the post-Booker world should have prepared us for the Ninth's three-page, per curiam, New Year's Eve decision in Peeples, where a panel assures us that "mandatory" is really "discretionary," so there's no constitutional worries at all. United States v. Peeples, No. 10-30338 (9th Cir. Dec. 28, 2010), decision available here.

Players: Hard-fought appeal by Montana AFPD John Rhodes. Per curiam decision by Judges Goodwin, Rymer, and Graber.

Facts: After being indicted for receipt of child porn, Peeples was released by the magistrate. Id. at *1. Some conditions of release were mandatory under the Bail Reform Act, as amended by the Adam Walsh Act of 2006. Id. Specifically, Peeples had a curfew and was subject to electronic monitoring. Id. Peeples challenged these mandatory conditions of release; the district court upheld the conditions. Id.

Issue(s): “Peeples . . . appeals the district court’s denial of his constitutional challenge to his conditions of release imposed pursuant to the Adam Walsh Child Protection and Safety Act of 2006 (‘Walsh Act”), 18 U.S.C. § 3142(c)(1).” Id. “Peeples’s principal argument is that the Walsh Act’s mandatory release conditions are unconstitutional as applied to him.” Id. at *2.

Held: “Peeples’s argument that his constitutional rights have been violated because he has not been afforded an individualized determination of his release conditions cannot stand in light of the district court’s duty to exercise its discretion in imposing the mandated release conditions.” Id. at *2. “Because the Walsh Act requires the district court to exercise its discretion in applying the mandatory release conditions to each individual’s circumstances, and in view of the established principle that a statute should be read to avoid serious constitutional issues, Peeples’s constitutional challenge to the Walsh Act does not succeed.” Id. at *3.

Of Note: This is a disappointing decision – both in its outcome, and in its analysis. The three-page opinion gives short-shrift to serious constitutional challenges that have been (successfully) raised by the defense bar since the 2006 Adam Walsh amendments to the Bail Reform Act. Most notably, the case side-steps the biggest constitutional problem by reassuring us that a magistrate still exercises individualized discretion when imposing mandatory conditions in the release order.

Huh?

Put plainly, the Ninth holds that the conditions aren’t mandatory because i) a magistrate is exercising his or her discretion when deciding to release the defendant at all, and ii) a magistrate still decides the fringes of the mandatory conditions, like when curfew starts. Id. at *2. The panel in Peeples dodges the real constitutional question: how can there be an individualized determination of release conditions, when a magistrate must impose a curfew and must impose electronic monitoring – even if the magistrate finds that those conditions are not warranted except for the Adam Walsh requirements? Hopefully an en banc panel or the Supreme Court will someday give this statute the constitutional scrutiny it deserves.

How to Use: Peeples only avoided constitutional infirmity by relying (too heavily) on the magistrate’s discretion in fashioning the nature of the mandatory Adam Walsh conditions. Id. at *2 (“The [magistrate] court took significant steps to ensure that the monitoring and curfew conditions did not interfere with Peebles’s work- and school-related needs.”) Use this principle against the government by fighting to limit the mandatory conditions as severely as possible. For example, why not limit electronic monitoring to only at night, when the defendant is on curfew? Id. If the magistrate bench refuses to tailor mandatory Adam Walsh conditions based on the specific characteristics of the defendant, then there isn’t an individualized assessment of release conditions. Without an individualized assessment, the statute is again vulnerable to an as-applied constitutional challenge. Put differently, Peebles’s stretch to save the Bail Reform Act from constitutional challenge now requires that magistrates do more tinkering with the mandatory Adam Walsh release conditions.

For Further Reading: For a useful discussion of the impact of the 2006 Adam Walsh Act on pretrial release, see Marcus J. Berghahn, Adam Walsh Act: Implementation, Implication and Challenges here.


New Year's card from http://www.dancegumbo.com/NYE


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


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