White Collar Defense and Compliance : New Jersey White Collar Defense Lawyer & Attorney : Fox Rothschild Law Firm : Criminal Defense, Insider Trading, RICO, Consumer Fraud : New Jersey, New York City

Alain Leibman writes:

As discussed here previously, prosecutors always look to introduce evidence of pleadings or orders entered in related civil litigation to achieve a variety of purposes in the present criminal case. Ostensibly, the civil matters are offered to establish an element of the offense, usually going to intent or knowledge, but quite often the evidence is sought simply to show that the defendant has a propensity for behaving badly and that he/she did so on other occasions. As a result, the offer of such evidence usually precipitates a vigorous argument under Federal Rule of Evidence 403, but only after the government first successfully hurdles the admissibility question.

A case in point is the recent decision in United States v. Dupree, 2013 WL 309983 (2nd Cir., January 28, 2013), a bank fraud prosecution against the CEO of the borrower. Based on evidence that the borrower entity had inflated its assets in order to obtain a term loan and line of credit worth $21,000,000, the Amalgamated Bank obtained a state court restraining order enjoining the entity and its CEO from removing any assets maintained at the bank; this order was obtained on the same date that the CEO, Dupree, and others were arrested in connection with an alleged scheme to defraud the bank through the same means. According to subsequent indictment, Dupree then also took various steps following the entry of the state court order to gain access to frozen funds, and so was additionally charged specifically for his post-freeze activity.

The government moved in limine in the trial court to allow it to admit the restraining order as evidence that Dupree had knowledge of his and his company's obligations under the agreements with the bank and that his post-freeze order actions were intended to evade those obligations. The District Court declined to admit the evidence, and the government thought it important enough to seek, and obtain, interlocutory appeal. The Second Circuit reversed the trial court decision. The appeals court rejected the holding below that the state court order was inadmissible hearsay, holding instead that its offer fell under Federal Rule of Evidence 801(c), which defines hearsay as including only those statements offered to prove the truth of the matter asserted. The relevance of the court order, the appeals court held, was not in the legal effect of its directives to the affected parties, but in Dupree's knowledge of the order and the notice which it gave him of the pertinent loan agreement terms which were referenced in the order and which he allegedly evaded improperly in accessing funds.

As for the Rule 403 considerations, the Second Circuit acknowledged the concerns expressed by the trial court that the jury might place undue emphasis on the freeze order and thus on its violation by the defendant. However, the appeals court noted, as they often do under such circumstances, that the danger of unfair prejudice could be cured by appropriate limiting instructions.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office.  A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts) 
 

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

Under Fed. R. Evid. 404(b), the government often seeks to introduce evidence of prior conduct by a defendant, ostensibly because such conduct is probative of one of the Rule's permitted purposes for introducing extraneous evidence, such as showing that the presently-charged conduct was committed intentionally and not by accident or mistake.  Even when the prior act is nothing more than the previous assertion of allegations of misconduct by the defendant, the government argues that it should be admitted to show that the defendant was on notice that a course of conduct was improper, and so later engaged in that course of conduct knowingly and cognizant of his legal obligation to refrain from such conduct.

The Ninth Circuit recently made it harder for prosecutors to handily use prior allegations to show notice to the defendant of the illegality of a particular course of conduct.  In United States v. Bailey, 696 F.3d 794 (9th Cir. 2012), the court reversed the conviction of Bailey, a health-products company CEO, who had been convicted of violating the SEC's Rule S-8, which requires that public companies issue stock to consultants only for bona fide services performed, or otherwise make a rigorous set of disclosures about the stock issuance.  Bailey had allegedly issued stock in order secretly to raise capital from the third party transferee, who paid money for the stock.  The SEC had in 2003 filed a civil complaint against Bailey and others making the same allegation, and Bailey settled the SEC case without admission.  When he engaged in the same conduct thereafter, the indictment followed.

At the criminal trial, the government introduced the SEC complaint, arguing that its allegations had put Bailey on notice that the stock transfers were illegal, so when Bailey in 2004 engaged in similar conduct, he did so knowingly.  In closing, the prosecutor went even further, arguing that the previous SEC complaint showed that Bailey had broken the law twice.

In a 2-1 decision, the court of appeals held that the SEC complaint was erroneously introduced.  Under Huddleston v. United States, 485 U.S. 681, 685 (1988), a proponent of Rule 404(b) evidence is not only required to show a proper purpose for the evidence of a prior act (such as notice to a defendant), but must proffer evidence sufficient to support a finding that the prior act had been committed by the defendant, and here the government had failed to do so.  Bailey never admitted the allegations in the SEC complaint, and his settlement was held not to be probative of whether he had committed the alleged violations.  While "there is some logic" to the argument that the SEC complaint, even if denied, put Bailey on notice of the law's requirements, the naked complaint was not by itself sufficient evidence under Huddleston.  "All a complaint constitutes is knowledge of what a plaintiff claims.  It does not establish the truth of either the facts asserted in the complaint, or of the law asserted in the complaint." Without further evidence that Bailey had in 2003 engaged in the conduct alleged in the complaint, the SEC's mere assertion that he had was insufficient to meet a foundational element of the Rule.

To be sure, the majority's reasoning is hyper-technical.  The proof-of-commission element of Huddleston should have arguably not been applied to the underlying acts alleged in the SEC complaint, but to the mere filing of the complaint itself and its service upon Bailey whether the allegations were true or not.  The "prior act" of the filing and service upon Bailey of an adverse complaint was undisputed, and arguably should have been sufficient to support admission of the complaint with a limiting instruction if only to show that its recipient was immediately then aware that an agency of the United States considered such stock sales illegal. The opinion thus confuses the evidentiary utility of the making of an allegation (slight, but permissible under the Rule to show knowledge of the law's requirements) from that of the underlying activity.  Undoubtedly, the prosecution's heavy-handed and inaccurate use of the SEC complaint in summation, arguing as if the underlying allegations had been true, did not help the government's cause on appeal.  No matter, this Ninth Circuit opinion may be very helpful in frustrating the introduction of similar notice pleadings in other cases under the Rule.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

Often, the government finds itself desirous of introducing the prior civil deposition testimony of a witness who is unavailable for trial, occasionally because the witness is deceased or cannot be located. but more often because the witness has asserted a Fifth Amendment objection to his/her compelled testimony. Sometimes, though, it is the defendant who seeks to introduce such prior deposition testimony. In either circumstance, application of Federal Rule of Evidence 804(b)(1) requires a trial court to determine whether the deposition testimony is being offered against a criminal party who enjoyed in the civil case an opportunity, and a similar motive, to develop that testimony.

So, when prior deposition testimony is offered by the government against a criminal defendant who was a civil defendant in the earlier case, those elements are rather easily met. Not so when the offeror is a criminal defendant, because the United States cannot usually be said to have had an opportunity to develop testimony in a civil litigation to which it was not a party, nor can it be said that it shares a motivation with an unaffiliated civil party seeking money. That is, unless an agency of the United States was a litigant in the prior civil case.

In United States v. Sklena, 2012 WL 3608583 (7th Cir., Aug. 23, 2012), the defendant was a trader at the Chicago Board of Trade, charged with conspiring to commit fraud with another trader named Sarvey in a series of rigged trades involving Sarvey's customer accounts. Sarvey was originally charged as a co-defendant, but died before trial. Before he died, however, Sarvey was also deposed as a civil defendant in a regulatory action brought by the CFTC against both of them. In his deposition testimony, Sarvey exculpated Sklena in various respects. So, when Sklena was criminally charged and went to trial, he sought to introduce the now-unavailable Sarvey's deposition testimony in his defense, but the trial court would not permit it, and convicted Sklena in a bench trial.

The Seven Circuit held that the deposition testimony was erroneously excluded. On the first element – opportunity to have developed the earlier testimony – the Court of Appeals acknowledged that there was "very little law on the question whether two government agencies" should be considered the same party in terms of the opportunity to have developed the earlier testimony. There were, however, several factors which suggested a sufficient connectedness between the CFTC and the Department of Justice to make them the same party for purposes of the Rule: the CFTC was statutorily required to report its litigation activities to the Department; and the agencies closely coordinated their roles in enforcement. Their connection "would be even more clear if the Department had litigating authority for the agency," which it does not, but the appeals court held that this criterion was not dispositive.

As to the second element – similarity of motive – this finding turns on a number of factors, including the substantive law that each agency is enforcing; the factual overlap between the two proceedings; the type of proceeding; the potential associated penalties; and any differences in the number of issues and parties. These factors, the court held, in this case supported the conclusion that the two agencies did indeed enjoy similar motives to develop Sarvey's deposition testimony, given the same underlying conduct being investigated by both agencies with a joint objective toward taking enforcement action. The fact that the first action was civil and the second criminal did not augur a different result, since the deterrent effect of a large civil penalty would be quite similar to that of a criminal sentence.

Accordingly, the trial court should have admitted the deposition testimony, and Sklena's conviction was reversed.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

In an important decision for the right to a fair trial, the Second Circuit recently held that a detective -- testifying against the only charged defendant in a case involving the seizure of weapons from a minivan occupied by several persons besides that defendant -- could be impeached with prosecutors' initial decision to charge other occupants of the vehicle with possession of those firearms.

In United States v. White, 2012 WL 3734425 (2nd Cir., August 30, 2012), the central issue in the felon-in-possession trial was possession: which of several passengers actually had possessed the firearms in question? The Court of Appeals vacated the conviction because of erroneous evidentiary rulings made by the district judge, with significant consequences for other cases. In the first ruling, the trial judge precluded defense counsel from cross-examining the lead detective involved in the arrest of White and the weapons seizure from the minivan on the basis that state prosecutors had initially charged other occupants of the vehicle with possessing those weapons. The court had reasoned that charging decisions rest on a number of considerations which do not necessarily speak to the issues of guilt or innocence of the person on trial. Here, however, defense counsel argued, the initial charging decision was simply inconsistent with the decision to charge White alone when his defense was that the guns were not his. The Court of Appeals agreed, rejecting the authorities relied upon by the court below, including United States v. Re, 401 F.3d 828 (7th Cir. 2005), and held that charging decisions may be proper subjects for cross-examination and so may not be reflexively excluded. In White's case, the inconsistent earlier charging decision was "plainly relevant" to the question of possession, and under Federal Rule of Evidence 403, its probative value was not substantially outweighed by the risk of jury confusion.

In this second erroneous ruling, the trial court had precluded the defense from cross-examining the same detective under FRE 608(b) on the basis of his testimony in an unrelated case. The trial judge in the unrelated case had in a number of respects found the detective's testimony to be non-credible, but the White trial judge would not allow those findings of untruthfulness to be used in the present cross-examination. The Second Circuit held that this, too, was error, reaffirming its earlier decision in United States v. Cedeno, 644 F.3d 79 (2nd Cir.), cert. denied, 132 S. Ct. 315 (2011). The Cedeno case had set forth a list of factors for courts to consider in determining the admissibility of a prior incident in which the witness's testimony was found non-credible (Cedeno had not yet been decided when the same evidentiary issue arose at the trial in White). In this instance, the district judge in the earlier case had repeatedly found the detective’s testimony "not credible." The government made the specious argument in White that a judge's finding that testimony was "not credible" was not equivalent to a finding that the witness had lied. The Second Circuit easily rejected this argument, saying "A finding that a witness is not credible is not fundamentally different from a finding that the witness lied. It often just reflects a fact finder's desire to use more gentle language." While trial judges retain authority to impose reasonable limits on cross-examination, the court below erred in excluding the prior judge's findings of lack of credibility.

Of course, in the Second Circuit and perhaps elsewhere now, the White and Cedeno decisions open up new avenues of discovery prior to trial. Arguably, defense counsel are entitled to receive not simply Jencks material relating to the testimony at issue in the present trial, and conventional Giglio impeachment material, but any prior testimony of the law enforcement officers involved in the present trial, to be exhaustively mined for any adverse findings or comments by the trial judge regarding the officers' earlier truthfulness or lack of truthfulness.

It is also worth noting that, in vacating White’s conviction and remanding based on the above two significant errors, the Court of Appeals explicitly declined to decide another interesting issue raised by defense counsel. Counsel had also sought to cross-examine the detective based on statements made in the government's brief in opposition to a suppression motion in the same case, statements which described a sequence of events regarding the finding of the weapons which was inconsistent with the testimony of the detective; counsel had argued at the inconsistent statements in the brief were admissible as an admission by a party-opponent under FRE 801(d)(2). The only argument the government could muster in opposition, it appears, was that the admission of the contrary statements from the brief would require the lead prosecutor to take the witness stand to explain why he wrote what he did (and, presumably, why either he or the detective got the facts wrong). Why this step, even if necessary, would be an impediment to the defendant’s exercise of his right to full cross-examination and his entitlement to a fair trial is entirely unclear. However, as noted, the Court of Appeals did not reach this issue.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

Assuming that defense counsel can identify important evidence, written or testimonial, sufficiently in advance of trial to provide notice to the prosecution, then that counsel can offer the evidence under the residual hearsay exception, FRE 807. This material will often take the form of alibi offered by a third party not testifying at trial or an offense element-negating statement by a non-testifying third party. Under Rule 807, that hearsay evidence may be admitted if it goes to a material fact; bears circumstantial guarantees of trustworthiness equivalent to other hearsay exceptions; is more probative than other evidence reasonably available; and its admission serves the interests of justice.

To be sure, the government will occasionally seek to rely on the Rule, as reflected in various courts of appeal cases considering the admissibility of grand jury transcripts of non-testifying witnesses, with the results mixed. But such evidence is usually more crucial to the defense, which enjoys somewhat less leverage than does the government in eliciting the trial testimony of third parties. The importance to defense counsel of reliance on the Rule, and the poor result which usually obtains are both illustrated in United States v. Halk, 634 F.3d 482 (8th Cir. 2011). Charged as a felon in possession, Halk’s attorney sought at trial to offer the statements of defense investigators who had interviewed two witnesses, on the scene at the time of arrest, both of whom made statements exculpating Halk on the issue of who owned the gun in question. One declarant was dead, and the other, after writing to the court to claim possession of the weapon, then obtained counsel and discovered the Fifth Amendment, so was not available at trial.

Halk’s attorney sought to admit the statements under Rule 807. To be sure, the witnesses’ statements contradicted each other (each ascribing possession to the other declarant) but each exculpated Halk as the owner of the gun. The court of appeals agreed with the trial court that the declarants’ statements lacked the requisite guarantees of trustworthiness because the proffered statements were made more than one year after the arrest and, after dismissing the contribution to the trustworthiness analysis of the purported training or experience of the investigators, because they were taken “during interviews conducted by defense investigators in anticipation of litigation.” Pausing to reflect for a moment on the court’s reasoning, one is struck by its import: if an FBI agent had interviewed the two witnesses three years, not one year, after an arrest and the government sought to use at trial the agent’s testimony drawn from the resulting 302 -- under Rule 807 or in cross-examining another witness based on the implied reliability of the three year-old 302’s -- it is hard to imagine an appellate so readily disparaging the credibility of the agent and so easily concluding that the statements were untrustworthy.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

By charging a conspiracy or other broad scheme, such as mail or wire fraud, the government secures for itself an important evidentiary advantage: it can offer in evidence a string of acts or events not mentioned anywhere in the Indictment’s paragraphs or overt acts, limited as a practical matter only by the court’s impatience at the length of the government’s case. The court will require only that the acts or events be intertwined or closely connected to the charged conspiracy or scheme, and then they are outside the strictures on admissibility applied to “other acts” of misconduct or crime by FRE 404(b). Episodes which are “inextricably intertwined” with the charged activity are by definition not “other act” evidence whose admissibility is limited by the Rule.

A recent Ninth Circuit mortgage fraud case illustrates how a clever prosecutor can double down on his or her evidentiary edge. In United States v. Rizk, 660 F.3d 1125 (9th Cir. 2011), the defendant real-estate appraiser was charged with conspiracy, bank fraud and making false statements to a financial institution as the result of her inflated appraisals. The Indictment identified 9 properties on which loans were granted based on allegedly falsified appraisals, but as the centerpiece of its case, the government proposed to introduce a summary chart under FRE 1006 -- which under the terms of the Rule would go directly into evidence in lieu of the underlying appraisals and loan documents -- reflecting 96 such properties. Rizk argued that the chart was overbroad and violated Rule 404(b) because it included properties not named in the Indictment.

The district court and then the appeals court rejected defendant’s arguments. The Ninth Circuit held that summary evidence admitted under Rule 1006 could reflect the full scope of the scheme, including all inextricably intertwined acts and events, just as co-conspirator testimony could range beyond the literal allegations of the indictment. In the same way and according to the same relevance standard, summary chart entries could thereby fall outside the limiting scope of Rule 404(b). The color-coded chart was admitted in evidence, and Rizk was convicted.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Alain Leibman writes:

The business records rule, FRE 803(6), has in some quarters become so loosely observed that its terms for qualifying certain records as admissible have been taken as nearly rendered unnecessary by the expectation that courts will not insist on rigorous observance. But a recent district court case serves as a reminder to trial lawyers that some judges actually read the rule and expect counsel to meet its terms.

In multi-district litigation venued in the Eastern District of Louisiana as a result of the Deepwater Horizon spill in the Gulf of Mexico, the court in preparation for trial sought to have the parties organize the preliminarily present for resolution various evidentiary issues. In re Oil Spill by the Oil Rig Deepwater Horizon, 2012 WL 85447 (E.D. La., Jan. 11, 2012). At issue were approximately 300 emails produced by the corporate defendants, which the plaintiffs contended were collectively admissible under Rule 803(6) because of their regular creation as part of the companies’ business activities and because of courts’ “increasingly … liberal view of emails as business records.”

The district court rejected the plaintiffs’ argument in favor of collective admissibility, insisting instead on a searching application of the elements of the Rule, which requires that the subject record be made at or near the time of the event it described; by or from a person with knowledge of the event; that the record be kept in the course of a regularly-conducted activity of a business; and that creating the record was a regular practice of that activity. As a result, the court pointed out, each email would have to be reviewed to determine, among other things, if it was created contemporaneously with the events recorded therein; whether the email’s author had personal knowledge of the information asserted in the email; whether the producing entity had a corporate policy imposing a duty on employees to report or record the information; and whether corporate policies dictated that emails be the required form of information reporting or storage. “[I]t is not enough to say that as a general business matter, most companies receive and send emails as part of their business model.”

The need for individual email analysis meant that “there is no across-the-board rule that all emails are admissible as business records.”
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

Much has been written in the academic and scientific literature about the accuracy, or apparent inaccuracy, of eyewitness identification, particular cross-racial identification. Some have called for a Daubert-like gatekeeper role for trial judges. But the Supreme Court last week in Perry v. New Hampshire clarified the test for the admissibility of eyewitness identifications without requiring any general gate-keeping function. In an opinion by Justice Ginsburg, the Court held that the Due Process Clause, under most circumstances, does not require a trial judge to screen eyewitness identification evidence for reliability before allowing the jury to assess its creditworthiness. The Due Process Clause only requires a preliminary judicial inquiry into the reliability of an eyewitness identification when the identification was procured under unnecessarily suggestive circumstances arranged by law enforcement.

In Perry an eyewitness was asked at the scene for a more specific description of the man that she had seen breaking into her neighbor’s car, and pointed to the defendant while he was standing next to a police officer in the parking lot where the car was parked. The witness had identified the defendant in the equivalent of what, if arranged deliberately by the police, would have been an improper one-man line-up. But the eyewitness had voluntarily and spontaneously identified the defendant without being asked by the police to identify him. Because there was no improper police influence affecting the eyewitness’s identification in this case, the Court held that the identification procedure was not suggestive and unnecessary, and that the eyewitness testimony was, therefore, properly placed before the jury without a preliminary judicial assessment of its reliability.

The Court also held that, even when a suggestive and unnecessary identification procedure is used, suppression of the resulting identification is not automatic. Where there has been improper police conduct, the trial judge must screen the identification evidence for reliability before trial. After screening the evidence for reliability, the judge should only suppress the resulting identification if the “indicators of [a witness’] ability to make an accurate identification” are “outweighed by the corrupting effect of the improper police conduct.” In other words, the trial judge should only suppress the identification evidence if the improper police conduct created a “substantial likelihood of misidentification.” Otherwise, the identification evidence should be submitted to the jury. 

(Jana Volante, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Pittsburgh, PA office. Her practice concerns white collar criminal defense and commercial litigation)

 

• Print
• Comments
• Trackbacks
• Share Link

We previously explored  the wonderfully amorphous evidentiary doctrine known as “impeachment by contradiction.” Sitting outside, but in parallel with, the Federal Rules of Evidence, the doctrine creates an exception to FRE 608(b) . The evidence rule generally limits a cross-examiner to matters relating to the truthfulness of a witness, together with certain criminal convictions under FRE 609 . However, under appropriate circumstances not spelled out in Rule 608(b), the doors to the courtroom are thrown open and a stream of otherwise extraneous matters can be brought to bear.

Once the witness’s direct testimony has opened that door, then nearly anything which contradicts the witness is fair game. The rationale for broadened cross-examination is to prevent witnesses from engaging in perjury, then using the shield of FRE 608(b) to preclude their successful impeachment with collateral facts.

A recent Eighth Circuit case which does not use the phrase “impeachment by contradiction” nevertheless well illustrates the animating principle. In United States v. Allen, 630 F.3d 762 (8th Cir. 2011), the defendant was charged with possession of an illegal machine gun. As part of its case-in-chief, the government had introduced a video of Allen showing his mother how to fire a machine gun. Presumably in an effort to make that demonstration appear more normal, Allen testified on direct examination that he was familiar with machine guns because of his military service. Had he stopped there, he would have been fine. Instead, Allen then testified that he was very proud of his military service and hoped to share his experiences with his children, and concluded his testimony by again mentioning his pride in his military service. In the view of the district court, this lily-gilding emphasis on the quality of his service allowed the government to cross-examine Allen about his arrests while in the military and his less-than-honorable discharge, neither of which meet the Rule’s criterion of matters going to truthfulness.

The Eighth Circuit found no abuse of discretion. Allen’s direct testimony opened the door to his being cross-examined on matters which contradicted that volunteered testimony, even if it would normally have been error to allow such impeachment otherwise.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

• Print
• Comments
• Trackbacks
• Share Link

We have previously questioned the sensibility of courts of appeals decisions permitting cooperating witnesses to testify to their sense or intuition of the guilty knowledge of a defendant. Such testimony violates a host of evidence rules, since the cooperator cannot possibly have personal knowledge of another’s thoughts (FRE 602), and cannot offer an admissible opinion as to the nature of those thoughts (FRE 701), and since the slender probative value of such testimony will nearly always be substantially outweighed by its prejudice (FRE 403), especially in intent cases. Another basis for objection, of course, is that asking a cooperating witness to state his/her view of the defendant’s state of knowledge invades the province of the jury, whose function it is to determine whether or not the defendant’s words and actions prove the necessary criminal intent.

However, there are some boundaries in the metaphysical world of witnesses’ divination of the intent of others. The Eleventh Circuit, joining a unanimous group of appeals courts which have directly decided the question, recently held that it is improper to ask a defendant on cross-examination whether government witnesses, whose testimonies conflicted with his, should be considered liars or untruthful.

In United States v. Schmitz, 2011 WL 754148 (11th Cir., Mar. 4, 2011), an Alabama state legislator was convicted of mail fraud for receiving compensation for, a no-show, no-work job with a community college program. Schmitz testified in her own defense and provided a markedly different explanation for key events than had several government witnesses. In cross-examination, the prosecutor asked Schmitz to characterize those witnesses as untruthful or liars; she fenced with the examiner before yielding and making the requested accusation. In summation, the prosecutor then successfully denigrated Schmitz’s credibility by arraying all of the “liar” witnesses against her, the sheer force of their numbers making her accusation of them all improbable and thereby proving her testimony to be lacking in credibility.

The Schmitz court held that it was improper to have cross-examined in this fashion, citing the lack of probative value of such accusatory testimony; the irrelevance of another witness’s opinion on the subject; the violation of FRE 608(b) in allowing specific-instance accusations of untruthfulness, as opposed to the opinion/reputation testimony allowed by the rule; the invasion of the jury’s province; and the argumentative nature of the questions. The opinion cited cases from the First, Second, Third, Fifth, Seventh, and D.C. Circuits which have held similarly. However, since Schmitz’s attorney made no contemporaneous objection, the plain error standard applied, and the conviction was affirmed.

The effect of a failure to object contemporaneously was underscored in United States v. Harris, 471 F.3d 507 (3d Cir. 2006), one of the cases cited in Schmitz. The Third Circuit there, also finding fault with the liar series of cross-examination questions directed to a defendant, but also affirming the resulting conviction, explained that while courts of appeal have condemned the practice, they have generally not reversed convictions on that basis because of an absence of contemporaneous objections. Id at 511.

It is important, therefore, that defense counsel create a record of objections at trial court to secure the more lenient review standard. These cases may also be used in limine to try to avoid damaging testimony from government witnesses about what the defendant thought or intended. After all, a witness has no greater insight nor any higher competence to declare another’s intent to commit fraud than he/she has to swear that the other intended to lie.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)
 

• Print
• Comments
• Trackbacks
• Share Link

Federal Rule of Evidence 404(b), and its state analogs, place limits on the prosecution’s ability to admit damaging evidence about a defendant by requiring that the evidence of his/her other bad acts be moored to a permissible purpose illustrated in the Rule. Prosecutors typically attempt to slip the bounds of the Rule by offering such evidence, not under the categories of 404(b), but as “inextricably intertwined” with the charged offenses, what was once known as the “res gestae” to the crime. In a thoughtful survey of the law concerning this loosely-defined and elastic concept, the Iowa Supreme Court recently criticized and limited this law enforcement tool.

The Supreme Court in State v. Nelson, 2010 WL 5018540 (12/10/2010) addressed the introduction in a murder case of uncharged evidence that the defendant had been a crack cocaine dealer, consisting of drug packaging materials and an empty digital scale box all found in his car and home. The Nelson Court surveyed federal law and academic commentary, and concluded that the federally-derived “inextricably-intertwined” doctrine was typically advanced by prosecutors under several circumstances, including that the proffered evidence was a necessary preliminary step toward commission of the offense; it was proof of the offense, or one of its elements; it arose from the same transaction or transactions; it was an integral part of a witness’s testimony; or it completed the story of the offense, a kind of narrative glue. The lower court had admitted the evidence in the shooting of a victim in a drug-infested area of Des Moines on the State’s theory that the drug activity evidence was necessary to complete the presentation of the story of how and why Nelson and the victim were present in the same neighborhood.

The Nelson Court noted that the “completes the story” rationale had come in for harsh criticism because of its vagueness. The court decreed that the doctrine should be used infrequently and only as a narrow exception to Rule 404(b). “Completing the story” evidence could be admitted in criminal case only where keeping that evidence from the jury would leave the narrative of the charged crime “unintelligible, incomprehensible, confusing, or misleading,” or where it “fill[s] in gaping holes in the narrative,” a much more rigorous requirement of the prosecution than is typically imposed in many federal courts.

Unfortunately for Mr. Nelson, while the Supreme Court found that the admission of drug evidence under this doctrine was error, the evidence fit comfortably into the Rule 404(b) categories of admissible evidence of motive and intent. So, his conviction was nonetheless affirmed.
 

• Print
• Comments
• Trackbacks
• Share Link

In a recent post here we commented on the perplexing affirmance in a recent case in which the Third Circuit agreed that a government cooperating witness could speculate in his testimony regarding what a defendant knew or thought in a given conversation about the accuracy of tax returns signed by that defendant. Even if such lay opinion testimony can, like the proverbial round peg, be pounded into the square hole of Fed. R. Evid. 701, it seems obvious that the slight probative value of such mind-reading testimony is substantially outweighed by its enormous prejudice, precluding its admission under Fed. R. Evid. 403. Fundamentally, permitting such testimony by self-interested witnesses invites the jury to ground their decision on unreliable, biased, and nearly unimpeachable testimony.

The Third Circuit has just issued another head-scratching opinion of like nature. The case of United States v. Christie, 2010 WL 4026817 (3d Cir., Sept. 15, 2010) was a child pornography case in which the defendant was one of a large number of persons charged through their connection to the same pornography-distribution website. At trial defense counsel cross-examined the FBI case agent about the government’s arrangement with the cooperating website administrator. Counsel sought to show that the FBI failed to follow its confidential informant guidelines and was misled by an unreliable witness.

On redirect examination of the agent, the prosecutor was permitted to validate the reliability of the overall investigation by asking the FBI agent to “relay [sic] the circumstances of the investigation that would address concerns” raised by defense counsel about the implication of innocent persons. Overruling an objection that the agent lacked personal knowledge (but facing no Rule 403 objection), the court permitted the agent to testify that the FBI had executed 30 search warrants all across the country and had in the process obtained confessions from 24 individuals as to child pornography charges.

The court of appeals easily batted away the personal-knowledge objection made at trial, since the same agent had oversight for all thirty investigations. Other objections to the agent’s testimony were raised for the first time on appeal, and thus were subject to the more onerous plain error standard. The Third Circuit found none had merit: the testimony was not hearsay, since it was not the truth of others’ confessions which was relevant, only the fact that others had confessed, which bolstered the credibility of the web administrator and “illustrated the reliability of the investigation”; and it was not improper vouching, since information about the government’s track record had not come from the argument of a prosecutor but the testimony of a witness. There was no explicit discussion in the opinion of the probative versus prejudicial balance of Rule 403.

Applied to the fullest degree, Christie stands for the remarkable proposition that any time counsel representing one defendant who is part of a sweep challenges in opening statement or cross-examination the bona fides of the government’s investigation or the reliability of its informants, the government is free to respond with a litany of its successes in other similar matters. Nothing in Christie, for example, prevents the government from redirecting an agent-witness, who has been cross-examined on the lack of credibility of her informant, to tell the jury about how many convictions have been obtained in cases where the same informant’s information has been the basis for a search warrant or a lead to a defendant. The trial jury is no longer moored to the evidence presented in the courtroom in which it sits, but is encouraged to consider the government’s batting average in related cases.

 

• Print
• Comments
• Trackbacks
• Share Link

A vexing problem in trying white collar cases involving alleged group activity is the willingness of judges to allow cooperating witnesses to offer their opinions as to the guilty knowledge of the defendant-participants. Prosecutors elicit cooperator opinion testimony regarding defendants to the effect that “they all knew” of certain fraud or “everyone in the office was aware” that certain documents were falsified. It is no remedy to wait until cross-examination to unring that particular bell by attempting to show that the witness was not competent to have offered that wide-ranging opinion.

A couple of years ago I was brought into a mortgage fraud case after trial in order to handle sentencing and any appeal for a convicted client who had been employed as a loan representative at a mortgage company. The multi-defendant trial in federal court, resulting in convictions across the board, had been conducted by skilled, experienced counsel, who had nonetheless been unable to persuade the judge to exclude cooperator statements that “everyone” in the office knew that loan applications were false and that supporting income and bank statements were fabricated; the weeks of trial transcripts were rife with these vague but very damning statements. More recently, news reports reflect that Solomon Dwek, the FBI’s star witness in two New Jersey corruption trials thus far -- and who recorded sessions in which he, in assumed identity, made payments to numerous local politicians -- has been permitted to opine that the recipients “knew” the illicit purpose and nature of his payments.

The evidence rules seemingly prohibit such testimony. Under FRE 602, the witness’s lack of personal knowledge as to the beliefs or knowledge of another would seem to effect a bar. FRE 701’s requirements that lay opinions be rationally based on the witness’s perceptions and helpful to the trier of fact would also seem to block these intuitions about the thoughts of another. Finally, FRE 403’s balancing test should yield the conclusion that the probative value of such testimony is substantially outweighed by the risk of unfair prejudice and jury confusion. Yet, courts consistently allow such testimony, as evidenced in the recent Third Circuit opinion in United States v. Stadtmauer, 2010 WL 3504321 (3d Cir., Sept. 9, 2010).

In Stadtmauer, an officer of certain prominent real estate companies was convicted after a two-month trial of committing tax fraud relating to the reporting of entity expenses. An outside accountant was permitted to testify that Stadtmauer “knew” that certain tax returns which he signed in the presence of the witness were problematic. On appeal, Stadtmauer argued that the testimony ran afoul of Rule 701. The Third Circuit noted that Rule 701 excludes lay opinion testimony which simply tells the jury what result to reach, and that testimony as to what a defendant did or did not know “comes dangerously close to doing just this.” However, the accountant’s testimony was held to be rationally based on his perceptions of Stadtmauer’s involvement in the entities and on Stadtmauer’s knowledge of the characterization of the expenditures in the entities’ books and records (citing among other cases United States v. Anderskow, 88 F.3d 245 (3d Cir. 1996), where the “he must have known” testimony met the rationally-based test because of the witness’s knowledge of the defendant’s involvement in fraudulent loan documents).

However, the Stadtmauer Court noted that the “helpfulness” component of Rule 701 was not as easily met, because the jury had before it the same evidence of Stadtmauer's state of knowledge.  (In Anderskow, the “he must have known” testimony was ultimately held inadmissible because the jury had before it the evidence on which the witness’s opinion was based and so was as well-positioned as the witness to form a view as to the defendant’s knowledge.) But any error in Stadtmauer’s trial was deemed harmless based on the weight of the other evidence against him.
 

• Print
• Comments
• Trackbacks
• Share Link

In a long-awaited decision last week, the Ninth Circuit Court of Appeals, by a 2-1 vote, affirmed a ruling of the trial court in United States v. Barry Lamar Bonds which granted a defense motion in throwing out blood and urine test results in Barry Bonds’ perjury prosecution. While the majority opinion filed on June 11, 2010 in Bonds, No. 09-10079 (Westlaw citation not yet available) provides an interesting survey of the hearsay rule and some of its exceptions, it may all be predicated on a misunderstanding of the central question: whether the lab results are properly admissible as business records under Fed. R. Evid. 803(6).

According to the government’s theory of the case, Bonds lied to a grand jury when he testified that he did not use performance enhancing drugs and creams. To prove the falsity of the statement, the government wanted to introduce at trial certain blood and urine test results logged by BALCO laboratories, based on fluid samples provided to BALCO by Bonds’ personal trainer, Greg Anderson, who had prior to testing identified the samples as coming from Bonds. However, Anderson refused to cooperate with the government or to testify before the grand jury, leaving the government to rely on the test results maintained at BALCO.

Here is where the government’s analysis went off the proverbial rails, leading to an adverse court ruling which could have been avoided. The prosecution wanted to admit the BALCO test results and logs as business records under Rule 803(6) to show the presence in Bonds’ body of the prohibited substances, according to the Ninth Circuit. (To be sure, as discussed in an earlier post, under the Confrontation Clause and Melendez-Diaz, the government could have been required to present live witness testimony about the testing rather than rely on mere reports of the results).  

Indeed, BALCO’s records showed the samples which were tested to have been those of Bonds, categorized that way based on the information presented at the time the samples were first delivered. But, the opinion explains, the government felt hamstrung without being able to introduce the statements made by Anderson at the time of those sample deliveries, so resorted to a series of evidentiary theories in an effort to admit Anderson’s statements to the BALCO director about the samples’ source. First the district court and then the court of appeals assessed and considered theories of the residual hearsay exception (Fed. R. Evid. 807), statements against Anderson’s penal interest (Fed. R. Evid. 804(b)(3)), and statements of an authorized agent or employee (802(d)(2)(C), (D)). The reader is referred to the Court of Appeals opinion for a lively discussion of these rules, and the holding that the government could avail itself of none of them.

However, the premise for the exercise appears mistaken. It is a common occurrence for a business entity to accept or receive from a third party documents or information and, by relying on those documents or that information in following its own internal processes, to transform the third party’s materials into its own business records for purposes of an exception to the hearsay rule. E.g., United States v. Duncan, 919 F.2d 981, 986 (5th Cir. 1990) (hospital records compiled by insurance companies are business records of those companies), cert. denied, 500 U.S. 926 (1991); In re King Enterprises, Inc., 678 F.2d 73, 77 (8th Cir. 1982) (invoices received from suppliers become business records of receiving entity); Matter of Ollag Construction Equipment Corp., 665 F.2d 43, 46 (2nd Cir. 1981) (financial statements supplied to bank are business records of bank); United States v. Ullrich, 580 F.2d 765, 771-72 (5th Cir. 1978) (automobile manufacturer documents provided to car dealership become the dealership's records); United States v. Consolidated Edison Co. of New York, 580 F.2d 1122, 1131 n.18 (2nd Cir. 1978) (Rule covers contractor records provided to Atomic Energy Commission); United States v. Carranco, 551 F.2d 1197, 1200 (10th Cir. 1977) (freight bill received by shipper is business record of shipper).

Reliance by a testing laboratory upon a third party’s identification of a blood or urine sample is no different than an insurer relying on the accuracy of a hospital providing records which attribute the performance of certain procedures to the correct patient. The implicit or explicit identification by the third party of its invoice, service, record, data, or fluid sample is not considered hearsay, and is subsumed in the hearsay exception created the regularity of the receiving entity’s procedures and the expectation that many businesses receive and depend upon third party submissions in order to properly conduct their own affairs. The trustworthiness or accuracy of the third party’s implicit or explicit assertion about the thing it is submitting is not an element of the business records exception and does not have to be proven by the proponent of the evidence; instead, the Rule provides that the opponent has the burden of showing that the business record bears a distinct lack of trustworthiness.

Thus, the admissibility or not of Anderson’s statements to BALCO is immaterial. The test results, properly presented, should go into evidence, and all else goes to arguments about weight and believability.
 

• Print
• Comments
• Trackbacks
• Share Link

A useful lesson drawn from a recent Tenth Circuit case: don’t hesitate to use the common law “rule of completeness” in an effort to admit verbal statements, such as those memorialized in transcripts of plea allocutions or grand jury testimony, when no hearsay exception presents itself. United States v. Lopez-Medina, 2010 WL 56944 (10th Cir., Feb. 19, 2010).

In an effort to shift all the blame to a co-conspirator in this methamphetamine distribution case, defense counsel elicited testimony from a police officer on cross-examination that the co-conspirator had indeed been convicted and sent to jail. On redirect, the officer was allowed to read from the transcript of the co-conspirator’s plea allocution, in which he fully implicated the defendant in the crime, refuting the idea that the defendant had not been involved. The defendant was convicted.

The Tenth Circuit held that the Confrontation Clause would have barred the introduction of the other’s plea allocution if it had been offered for the truth of the matter asserted. But the allocution was properly admitted for a purportedly different purpose, to correct a “misimpression” that the co-conspirator had accepted sole responsibility for the crime. While Fed. R. Evid. 106 admits only “writing[s] or recorded statements” which in fairness should be considered as a whole, when only portions have been admitted, the common law doctrine of the rule of completeness is only “partially codified” in Rule 106 and more broadly includes oral statements, the court held. Since application of the doctrine does not run afoul of the Confrontation Clause, the other’s plea allocution could be read into the record even though it was testimonial and the defendant had no opportunity to cross-examine the declarant.

The court’s claim that the allocution was not offered for its truth does not hold up logically, because the allocution could only serve to correct a misimpression if believed to be true.  But, illogic aside, counsel should be sensitive to trial situations in which he or she may use the common law doctrine to admit into the record all kinds of statements made out of court by declarants who participated in or witnessed related events, or whose statements diminish the credibility of the government's witness.
 

• Print
• Comments
• Trackbacks
• Share Link

The Tenth Circuit recently joined the Third Circuit in upholding against a Daubert and FRE 702 challenge the admissibility of fingerprint identification.  In United States v. Baines, 2009 U.S. App. LEXIS 15945 (10th Cir., July 20, 2009), the appeals court affirmed a trial court's decision to admit fingerprint identification testimony which implicated Baines in the possession of certain weapons.

FRE 702  requires, inter alia, that expert testimony result from the application of reliable principles and methods, and the Supreme Court in Daubert set forth a series of criteria against which to measure those methods and principles, including testing; peer review and publication; potential error rates; standards of operation; and general acceptance in the relevant community.  Daubert v. Merrell Dow Pharm., 509 U.S. 579, 594-94 (1993).  It was clear from the record below, which included pretrial testimony from an FBI fingerprint specialist,  that the government could not establish several of the Daubert criteria -- the process of reviewing known against latent prints is not measured by the FBI for error rates, because no such statistics are kept; no objective standards for comparison exist, and the FBI admittedly applies subjective criteria; and there is little or no peer review.

Nevertheless, the Baines court upheld the testimony's admissibility.  The Daubert criteria, the Tenth Circuit, emphasized, are flexible and fingerprint analysis is not really the kind of scientific testimony at which Daubert was aimed, and is more akin to technical expertise.  Applying a relaxed version of the Daubert criteria, the Baines court agreed with the Third Circuit opinion in United States v. Mitchell, 365 F.3d 215 (3d Cir. 2004) that, under an abuse of discretion standard, the trial court's decision to admit the testimony was not erroneous.

• Print
• Comments
• Trackbacks
• Share Link

The rules of evidence to which most frequent resort is made in impeaching witnesses with evidence of misconduct are FRE 608(b) and FRE 609.  Rule 608(b) provides that specific instances of the witness's conduct to show untruthfulness, other than conviction of a crime under 609, may not be proved extrinsically; that is, the questioner must generally take the witness's answer.  Rule 609 admits extrinsic evidence of a criminal conviction under certain circumstances.

But what of cross-examining a witness about the details of the conduct underlying his criminal conviction?  The Ninth Circuit has recently held that, where misconduct led to a conviction, Rule 609 is the exclusive vehicle for the use of that conviction and the examiner is limited to admission of the conviction itself and may not inquire into the underlying details.  United States v. Osazuwa, 564 F.3d 1169 (9th Cir. 2009).  Osazuwa was originally convicted of bank fraud and his first, remarkably skilled attorney managed to win a sentence of one day in jail followed by supervised release, plus restitution.  However, Osazuwa could not stand his good fortune, and violated his supervised release by not paying his restitution, resulting in a 90 day sentence.  Exhibiting consistency, if not good sense, Osazuwa was days away from completing his new sentence when he allegedly assaulted a prison guard, resulting in the instant prosecution.

The key witnesses at trial were Osazuwa and the guard, a classic credibility contest.  On direct examination, Osazuwa's attorney brought out the prior conviction.  But In cross-examining Osazuwa, the prosecutor was allowed to probe the details of the bank fraud, asking the witness-defendant several times about how he lied in connection with misusing another's credit card.  The court of appeals reversed the resulting assault conviction, holding that the trial court had abused its discretion in allowing this impeachment.

The Ninth Circuit joined several other circuits in reading Rule 608(b) to exempt from its coverage entirely conduct that was the basis for a conviction, leaving convictions solely to the province of Rule 609.  United States v. Lightfoot, 483 F.3d 876 (8th Cir.), cert. den., 128 S. Ct. 682 (2007); United States v. Parker, 133 F.3d 322 (5th Cir.), cert. den., 523 U.S. 1142 (1998); Mason v. Texaco, Inc., 948 F.2d 1546 (10th Cir. 1991), cert. den., 504 U.S. 910 (1992).  

The bank fraud conviction could be proven extrinsically under Rule 609(a)(2) as a crime of dishonesty, to be sure, but the scope of inquiry into prior convictions is limited.  Collateral details may not be the subject of inquiry to a witness, unless the witness "opens the door" by minimizing his misconduct or otherwise testifying falsely.  Since Osazuwa admitted the conviction on direct, the entire cross-examination into its details was improper and warranted reversal.

For Third Circuit practitioners, the contrary case of Elcock v. Kmart Corp., 233 F.3d 734 (3d Cir. 2000) should be noted.  There, plaintiff's expert witness had a prior conviction under 18 U.S.C. § 641 for embezzling government funds, but the trial judge would not allow further impeachment with the underlying offense details.  While upholding the trial judge's decision to limit impeachment as an appropriate exercise of discretion, the court of appeals, in an opinion by Chief Judge Becker, expressed its disagreement with the limitation imposed. All parties agreed that the embezzlement conviction itself was properly admitted under Rule 609(a)(2), but the court of appeals did not view that Rule as the exclusive avenue for use of evidence of conviction, looking to Rule 608(b) to define the discretionary scope of the related, detailed impeachment.  The court observed that the amount of money stolen by the expert and the "exact way" in which it was done was "certainly relevant to prove the extent of [his] dishonesty."  Id. at 753.  "A jury could rationally conclude that one who embezzles a million dollars from the Government over a long period of time has a worse character for veracity than a person who steals five dollars once."  Ibid.  The Osazuwa court did not cite Elcock, which remains good law in the Third Circuit.

• Print
• Comments
• Trackbacks
• Share Link

The concept of "impeachment by contradiction" does not appear in the Federal Rules of Evidence. A vestige of the common law of evidence, the doctrine, however, survived the codification of the FRE and constitutes a valuable overlay and weapon for cross-examiners. Although FRE 609 may not permit convictions to be used which do not meet the requirements of the Rule and FRE 608 may not allow the prior bad acts or convictions to be used because they do not relate to untruthfulness, the principle of "impeachment by contradiction" may throw wide open the door to the use of otherwise disqualified materials. The Ninth Circuit Court of Appeals recently examined the applicability of the doctrine in the context of a political corruption prosecution. United States v. Kincaid-Chauncey, 556 F.3d 923 (9th Cir. 2009).

Defendant Kincaid-Chauncey was a Nevada county commissioner charged with receiving bribes from a strip-club owner in exchange for favorable votes on land use matters. The alleged bribe-payor, Galardi, testified on direct examination to making payments to the commissioner, but on cross-examination was asked about payments to nine other public officials. Since Galardi claimed to have made payments to the nine, Kincaid-Chauncey's attorney sought to call each of the nine as defense witnesses to presumably contradict Galardi, showing him to be a liar for all purposes including his inculpation of Kincaid-Chauncey. But the district court allowed the defense to call only two of the witnesses implicated in the cross-examination testimony of Galardi, and Kincaid-Chauncey argued on appeal that this limitation was error.

The Ninth Circuit noted the continuing vitality of the doctrine of "impeachment by contradiction," characterizing it as "part of the general body of evidentiary law." Id. at 932 n.8. The rationale for the doctrine is to prevent witnesses from engaging in perjury, then using the prohibitions of FRE 608 to preclude impeachment with collateral facts and thereby concealing the perjury. Id. at 932. The only limitation on the scope of impeachment materials is imposed by FRE 403. See United States v. Gilmore, 553 F.3d 266, 271 (3rd Cir. 2009).

However, a witness may generally be impeached by contradiction only when the perjurious statement in question has been offered on direct examination; otherwise, a wily cross-examiner could open up broad areas for impeachment simply by posing clever questions on cross. Id. at 932-33. (The Third Circuit has similarly limited the doctrine to impeachment of statements volunteered by the witness on direct examination. United States v. Pantone,, 609 F.2d 675, 683-84 (3rd Cir. 1979)). Thus, the district court was well within its discretion -- and arguably went beyond the bounds of the doctrine -- by permitting the defense to call only two of nine witnesses to respond to the cross-examination statements of Galardi.
 

• Print
• Comments
• Trackbacks (1)
• Share Link

Monte McFall, a local California lobbyist and ex-officio staffer for an elected official, was charged in a Hobbs Act conspiracy for allegedly coercing a state contractor into paying McFall a fee in exchange for McFall's assistance in securing funding. The co-conspirator, a lawyer and crony named Sawyer, had earlier testified at length in the grand jury, producing a 120-page transcript; in the testimony, Sawyer had exculpated McFall. After indictment, Sawyer pled guilty and cooperated. When the government decided not to call Sawyer at trial, and he invoked the Fifth Amendment when called by the defense, McFall sought to admit Sawyer's grand jury testimony under FRE 804(b)(1) (former testimony of unavailable witness). The district court excluded the transcript, and the Ninth Circuit reversed. United States v. McFall, 558 F.3d 951 (9th Cir. 2009).

Under FRE 804(b)(1), the earlier-taken testimony must be from a witness who is "unavailable" at trial. Clearly, the court of appeals held, a witness who has invoked the privilege is "unavailable." Id. at 961. The Rule further requires that the party against whom the testimony is now offered must have had an "opportunity and similar motive" to develop the testimony in the earlier proceeding. While the district court concluded that the government's motive in examining Sawyer in the grand jury was dissimilar from its hypothetical motivation in questioning him at trial, the Ninth Circuit disagreed.

The court of appeals noted that the Second Circuit, in United States v. DiNapoli, 8 F.3d 909 (2d Cir. 1993), had placed a gloss on the Rule requiring a showing that the opposing party had a substantially similar degree and intensity of interest in both proceedings, not merely that it was on the same side of the same general issue. Id. at 962. For example, the government might not be as motivated to explore details of testimony in the grand jury where defendants had already been indicted; where the grand jurors had expressed skepticism about the testimony's accuracy, vitiating the need for immediate impeachment of it; or where the prosecutors might not wish to risk disclosing other evidence which would be revealed by an impeachment line of questioning. Id. at 962-63 (citing DiNapoli, 8 F.3d at 915).

The Ninth Circuit, however, rejected this gloss on the Rule, which looked to the detailed, comparative intensity of motive in questioning in the two contexts, in favor of a comparison only of the government's fundamental and more general motives. Here, the government intended in the grand jury to elicit testimony from Sawyer to support its theory of a conspiracy with McFall, the same motive it would have at McFall's trial. Id. at 963 (citing with approval United States v. Miller, 904 F.2d 65 (D.C. Cir. 1990) for the general motive test). Thus, the Rule was satisfied, the trial court abused its discretion, and the conviction was reversed.
 

• Print
• Comments
• Trackbacks
• Share Link

Trial attorneys understand that generally a witness can be impeached with evidence of his or her prior acts going to truthfulness, but only by cross-examining the witness on the point. FRE 608(b) requires the examiner to accept the witness’s answer, and prohibits accomplishing the impeachment extrinsically, through the testimony of a follow-on witness or the admission of a document. Unless the misconduct qualifies as a prior conviction under FRE 609 and can under that Rule be proved extrinsically, the cross-examiner may enthusiastically wave a document before the witness or accuse loudly and longly, but the witness can always retreat to the safety of a denial, confident that no other witness or document will be later offered to contradict.

Unless, that is, the prior act in question is an earlier inconsistent statement of the witness, which can be proven extrinsically notwithstanding the wording of Rule 608(b). The court in United States v. Rodriguez, 539 F. Supp.2d 592 (D. Ct. 2008) allowed the government to call two rebuttal witnesses to contradict the testimony offered by defendant Rodriguez regarding alleged drug deliveries. The defendant had argued that Rule 608(b) prohibited the extrinsic evidence which contradicted him.

The court held that, although not explicitly authorized by Rule 608(b), the doctrine of impeachment by contradiction is an exception to the Rule's general bar against extrinsic impeachment. There is, of course, another theory under which to admit extrinsic proof of a prior inconsistent statement by the witness, albeit not one discussed by the court. FRE 613(b) requires that the witness be given an opportunity to explain or deny a prior inconsistent statement, but then permits its proof extrinsically.

• Print
• Comments
• Trackbacks
• Share Link

Another example of the wide berth given to non-scientific expert testimony under Daubert is United States v. Poulsen, 543 F. Supp. 2d 809 (S.D. Ohio 2008). In that health care fraud case, the defendant proposed to elicit the testimony of Wayne Barnes, a former FBI agent who had in his government career worked health care fraud cases, to the effect that the government “did not conduct a proper investigation, nor do they have the necessary understanding of the health care industry and fraud within the industry.”

The government sought on two grounds to preclude this unusual testimony. First the government argued that Mr. Barnes’ testimony failed the Daubert reliability test in that the test failed to identify any industry standards or testing methodologies upon which he had relied. The district court rejected the argument, noting that under Sixth Circuit precedent the reliability of “specialized knowledge” (as opposed to scientific) expert testimony could not be measured by a strict application of the Daubert factors. Experience-based testimony satisfies Daubert’s reliability requirements.

Second, and more obviously, the government argued that Mr. Barnes’ testimony was irrelevant. This argument should have carried the day, since the depth of the prosecution’s understanding of an industry, or the completeness of its investigation, are not matters which in the ordinary case assist the jury in determining whether there has been proof beyond a reasonable doubt of the essential elements of the offense.

Yet, the district court rejected the relevance objection, too. The court held that expert testimony – just as much as cross-examination of law enforcement witnesses – which tends to show that the government failed to follow leads, misinterpreted information, or used investigative techniques “could be probative of whether the Government has made its case against Defendants.”

We do not know if the government is seeking an interlocutory appeal, but at least until it is reversed the Paulsen decision would support a broad array of expert testimony attacking the government’s general competence in conducting its investigation.

• Print
• Comments
• Trackbacks
• Share Link

Defending a broker, telemarketer, or other salesperson against allegations of fraud in the sale of stocks, products or services often requires enlisting expert testimony as to industry standards concerning the nature and type of disclaimers and caveats typically provided to customers. This testimony is usually offered to persuade the jury that a defendant lacked any intent to defraud, since the implicit argument to the jury is that his/her compliance with commonly observed practices amounts virtually to adherence to a legal standard of conduct. One must of course avoid an explicit and impermissible cross-over into eliciting testimony from an expert that, as a matter of law, the defendant committed no wrong.

This fine distinction is illustrated by Ji v. Bose Corp., 538 F. Supp.2d 354 (D. Mass. 2008), which involved a dispute over the meaning of language in releases signed by the plaintiff-model for a photo shoot. Both sides sought to call expert witnesses, and the opinion reflects the court's relative assessments of the admissibility of the expert testimony. The defendant’s expert was a casting director, who opined that certain language in a release was routinely ignored in the industry and that certain additional language, not present here, was almost always required in order to effect certain restrictions. That testimony, which hewed to the language of industry standards, practices, and expectations, met the Rule 702 and Daubert standard, according to the district court.

The plaintiff-model’s proposed expert fared less well, perhaps because he was an entertainment lawyer who could not avoid the argot of the law. The lawyer-witness proposed to testify that certain release language controlled while other language had no legal force at all. The district court precluded the testimony as impermissible statements to the jury about the requirements of the law, since this expert's proposed testimony contained pronouncements about the effect of common law on the applicability of certain rights (as opposed to the understanding of those rights held by others in the industry as a matter of custom and usage); the lack of consideration reflected in a contract; and the legal precedent held by one document over another.

Shorn of the legal catchwords and phrases - - “common law,” “consideration,” “precedent” – the two experts sounded very much alike, yet the non-lawyer expert passed through the Daubert gates easily while the lawyer-witness was impaled on the gateposts. Moral of the story: if you want to inform the jury of the legal effect of disclaimers and contractual provisions, do not employ a lawyer-witness and lawyer-jargon to do so, but instead have an industry expert communicate the same concepts to the jury in the language of industry custom and usage.

• Print
• Comments
• Trackbacks
• Share Link

This week, the United States Supreme Court narrowed the “forfeiture by wrongdoing” exception to the Sixth Amendment’s Confrontation Clause.  The Court vacated and remanded the California Supreme Court holding in Giles v. California, 2008 WL 2511298 (U.S., June 25, 2008) that a statement made by a victim to the police months before she was killed by the defendant was admissible under the common-law doctrine of “forfeiture by wrongdoing.” 

 

Giles was accused of murdering his ex-girlfriend. During his trial, the prosecution told the jury about a conversation police had with the victim, in which she said Giles had assaulted and threatened to kill her. Giles asserted that since the victim was deceased, he could not cross examine her, and thus, was denied his Sixth Amendment right to confrontation.  The California Supreme Court disagreed and admitted the victim’s statement under the forfeiture by wrongdoing exception to the Confrontation Clause.

 

In a 6-3 decision with the majority written by Justice Scalia, the Court found that California’s exception to the Confrontation Clause was too broad, and not an exception that existed when the Sixth Amendment was adopted.  The dissent, written by Justice Breyer and joined by Justices Stevens and Kennedy, argued that historical cases found that an exception applies and the evidence should be admitted.

 

As the Court noted, it has previously acknowledged an exception to the Confrontation Clause under the “forfeiture by wrongdoing” doctrine, which “permitted the introduction of statements of a witness who was ‘detained’ or ‘kept away’ by the ‘means or procurement’ of the defendant.”  The underlying policy of the rule is that a defendant should not benefit from his wrongdoing by the exclusion of such testimony.  The exception, however, has been narrowly construed by the Court – relying on established common law at the time the Sixth Amendment was adopted – to apply only where the defendant’s purpose was to prevent the witness from testifying at trial, but not where the defendant merely caused the witnesses’ absence.

 

This Court first addressed the issue in Reynolds v. United States, 98 U. S. 145 (1879) where it held the testimony of a witness from the defendant’s prior trial was admissible where the defendant had kept his wife away from home so that she could not be served with a subpoena to testify.  The doctrine was codified in 1997 when the Court approved FRE 804(b)(6), entitled “forfeiture by wrongdoing.”  In its holding, the Court relied principally on the countless common law cases consistently excluding the admission of such testimony “in the innumerable cases in which the defendant was on trial for killing the victim, but was not shown to have done so for the purpose of preventing testimony.”

• Print
• Comments
• Trackbacks
• Share Link

In three recent decisions, the New Jersey Supreme Court considered and applied the parameters of the United States Supreme Court case of Crawford v. Washington, 541 U.S. 36 (2004) to similar, but distinct questions of evidence admissibility.  In Crawford, the Court held that under the Confrontation Clause of the Sixth Amendment, “[t]estimonial statements of witnesses absent from trial have been admitted only where the declarant is unavailable and only where the defendant has had a prior opportunity to cross examine.”  Id. at 59.  The three New Jersey Supreme Court opinions, State v. Ryan Buda (A-45/5-07), State in the Interest of J.A. (A-2-07), and State v. William Sweet (A-1-07)/State v. James Dorman (A-38-07), required the court to consider whether certain types of evidence ran afoul of the Confrontation Clause and the holding in Crawford.

 

In State v. Ryan Buda, the court was asked to evaluate whether two separate hearsay statements made by a severely abused child were “testimonial” under Crawford and therefore inadmissible without the child testifying and being subjected to cross examination.  The first statement made by the child – “Daddy beat me” – was made to the child’s mother.  The second statement – “Dad says nobody beat me.  I fell when I was sleeping in my room.” – was made to a representative of the Division of Youth and Family Services (DYFS) who was called in to speak to the child after he had been hospitalized for injuries.  Buda was charged with three counts of second degree endangering the welfare of a child and one count of third degree aggravated assault, and the child did not testify at trial.  The trial court held that both statements were excited utterances and admissible.  On appeal, the appellate division affirmed that the statements were excited utterances, and further found that the statement to the child’s mother was admissible but the statement to the DYFS worker was testimonial and inadmissible because the child did not testify at Buda’s trial and was not subject to cross examination.

 

The New Jersey Supreme Court affirmed in part and reversed in part, holding that the trial court was correct in admitting the statements into evidence as “excited utterances” under N.J.R.E. 803(c)(2) [FRE 803(2)] and, further, that the statements were not testimonial and did not violate the Confrontation Clause.  All parties agreed that the child’s statements were hearsay, and the court easily held that the statement to the mother was an excited utterance.  The statement to the DYFS worker presented a “closer question,” but was still an excited utterance, considering the context in which it was delivered and the time and circumstances that elapsed between the child’s abuse that day and when the statement was made.  Moving to the Crawford analysis, the court concluded that the child’s statement to his mother was nontestimonial because it did not “bear the indicia of a ‘formal statement to government officers’” and instead was more like “ ‘a casual remark to an acquaintance.’”  Buda at p. 32 (citing Crawford, 541 U.S. at 51).  It then considered whether the child’s statement to the DYFS worker was nontestimonial.  The court rejected the conclusion that the DYFS worker stood in the shoes of a polices officer and therefore, the statement was the result of a policy inquiry.  Instead, the court believed that the DYFS worker, in questioning the child, was confronted with a battered child who needed protection from the adults charged with his care, and the worker took the necessary steps to attain that protection.  Her question to the child was designed to elicit information that would help her determine how to remove the threat of continued bodily harm, and possibly even death, to the child.  The court noted that the primarily obligation of a DYFS worker is “to protect prospectively a child in need” and “not to collect evidence of past events to secure the prosecution of an offender.”  Buda at p. 34.  The court drew an analogy to Davis v. Washington, 547 U.S. 813 (2006), where the United States Supreme Court held that a statement during a 911 call was nontestimonial, even though made in the course of a police interrogation, because the primary purpose was to enable police to meet an ongoing emergency.  Accordingly, the New Jersey Supreme Court concluded that both of the child’s statements were excited utterances and nontestimonial, and therefore admissible.

 

In State in the Interest of J.A. (A-2-70), the New Jersey Supreme Court tackled the issue of whether statements made by a non-testifying witness, to a police officer, and describing a robbery that had been committed ten minutes earlier and the witness’ subsequent pursuit of the robbers, were admissible.  In this case, two juveniles robbed a woman and ran off with her purse.  A police officer responded to the scene and eventually found a witness to the robbery about a block and a half away from where the robbery took place.  At trial, the officer was allowed to testify about the witness’ account of the robbery as a present sense impression, and therefore an exception to the hearsay rule under N.J.R.E. 803(c)(1) [FRE803(1)].  The witness did not testify.  Likely due in large part to the statements made by the non-testifying witness, the family court adjudicated J.A. as delinquent and the appellate division affirmed that adjudication.  The appellate division concluded that the witness’ statements were admissible under the present sense impression and the excited utterance exceptions to the hearsay rule, and, further, that the admission of those statements did not violate the Confrontation Clause.  The appellate division concluded that the witness’ statements were nontestimonial because “an ‘objective witness’ would not have reasonably believed they would be available for use in a later trial.”  The Supreme Court then held that the witness’ hearsay statements were a narrative of past events, and that neither the declarant, nor the victim were in imminent danger when the statements were made, and therefore ineligible for an exception to the hearsay rule.  The court further found that the statements were testimonial and the admission of such statements violated the defendant’s Sixth Amendment rights because the witness was not produced at trial and subject to cross examination.

 

In reaching its conclusion, the Supreme Court held that the witness’ statements conveying the details of a robbery that had occurred ten minutes earlier did not describe the crime “immediately after” it occurred, and therefore, were not admissible under the present sense exception.  The Supreme Court then clarified that a statement which does not qualify for admission under a present sense exception can be admissible as an excited utterance, but the facts elicited on the record in this case did not support such a conclusion.  Finally, the court moved on to the Confrontation Clause question, noting the “seismic shift” in modern jurisprudence on the subject created by Crawford.  The court explained that the non-testifying witness in this case described “what had happened” to the officer, and that at that time, there was no ongoing emergency or immediate danger.  The Supreme Court then concluded that a narrative delivered after a crime has been completed and after the conclusion of any imminent danger to the declarant or someone else, is testimonial.  J.A. at p. 32.  The court also held that the witness’ statements to the police officer met the formality and solemnity requirements of Crawford and that the out-of-court statement was the equivalent of in-court testimony, without being subject to cross examination.  Id. at 34.  All of these factors led to the conclusion (with little difficulty) that the witness’ statements to the police officer were testimonial and the admission of that testimony violated the defendant’s Sixth Amendment right to confrontation.  Id. at 35.

 

Finally, in State v. William Sweet (A-1-07) and State v. James Dorman (A-33-07), the court addressed whether the introduction into evidence of foundational documents concerning the operational status of a Breathalyzer machine used to attain two separate driving while intoxicated convictions violated the defendants’ right to confront a witness against them.

 

At trial, defendant William Sweet (charged with driving while intoxicated and assorted other traffic violations) challenged the admissibility of two “Certificates of Analysis – Breath Alcohol Reagent Ampoule” that were prepared by a laboratory and concerned certain reagent ampoules used in the breathalyzer on the basis that the certificates were inadmissible hearsay.  Likewise, defendant James Dorman, also charged with driving while intoxicated, challenged the admissibility of two “Breath Testing Instrument Inspection Certificates,” claiming that the documents were testimonial and inadmissible under the Confrontation Clause.  All documents were admitted at the municipal court level.

 

On appeal, the New Jersey Supreme Court held that the ampoule testing certificates in Sweet and the inspection certificates in Dorman were hearsay statements.  However, those “statements” were admissible under the business records exception to the hearsay rule, codified at N.J.R.E. 803(c)(6) [FRE 803(6)].  In order to qualify under this exception to the hearsay rule, the court explained that the proponent must satisfy three conditions: (1) the writing is made in the regular course of business; (2) the writing must be prepared within a short time of the act, condition, or event described; and (3) the source of the information and the method and circumstances of the preparation of the writing must justify allowing it into evidence.  State v. Sweet, State v. Dorman, at p. 17.  The court concluded that all of the certificates that were the subject of these appeals qualified as business records.

 

Further, the court held that the records were nontestimonial under Crawford and, accordingly, admissible under the Confrontation Clause.  Regarding the Crawford analysis, the court noted that, under the jurisprudence of that case, business records are considered, by their nature, to be nontestimonial, and consequently, usually not implicating the Confrontation Clause.  The court agreed that these certificates were nontestimonial because neither of them “related to or reported a past fact”, and neither of them was “generated or prepared in order to establish any fact” that was an element of the offense.  Id. at p. 21.  The court unanimously affirmed the convictions of both Sweet and Dorfman.  

• Print
• Comments
• Trackbacks
• Share Link

Determined to halt efforts by DOJ attorneys to improperly demand the fruits of internal investigations as a price for achieving a DPA or a non-prosecution agreement,  32 former federal prosecutors recently issued a letter expressing their support for legislation that would preclude federal attorneys and agents from seeking waivers of attorney-client privilege or attorney work product protection in conducting civil or criminal investigations of business organizations (http://www.nytimes.com/2008/06/23/business/23law.html?ref=business&pagewanted=print).

The legislation, entitled the Attorney-Client Privilege Protection Act of 2007, is authored by Pennsylvania Senator Arlen Specter. A corresponding bill passed in the House of Representatives in November 2007 (http://www.foxrothschild.com/Newsstand/News.aspx?id=5666). The Senate Judiciary Committee held hearings on the legislation in September 2007, receiving testimony from such witnesses as former Attorney General Dick Thornburgh (http://www.foxrothschild.com/Newsstand/News.aspx?id=5328). Senator Specter introduced a revised bill on June 26, 2008, modified to tighten language regarding organizations eligible to benefit from the organization and other language that the Department of Justice had criticized as ambiguous (http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=S6294&dbname=2008_record). As Senator Specter, a former prosecutor, noted, “The prosecutor has enough power without the coercive tools of the privilege waiver" (http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=S6295&dbname=2008_record). 

 

• Print
• Comments
• Trackbacks
• Share Link

In an effort to turn the tables on a person believed to be cooperating with the government, an attorney may direct his client to record conversations with the informant, hoping to hoard those recordings for later trial use against the informant, secure in the belief that the attorney-directed recordings are protected from the prying eyes of the government by the work product doctrine. In the Second Circuit, at least, that attorney would be wrong.

In In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d 180 (2nd Cir. 2007), cert. denied, 2008 WL 2047559 (2008), an attorney opposed a grand jury subpoena seeking the tapes' production on the ground that the recordings constituted opinion attorney work product, entitled to the greatest level of protection, because the topics raised by his client with the other party and captured on tape reflected the attorney’s mental impressions and theories. The Second Circuit rejected the argument, largely because of a procedural flaw: the attorney did not produce the recordings for in camera review by the district court, so the only support for any finding of opinion work product was the attorney’s conclusory assertions about the recordings’ content.

Protected only as lesser fact work product prepared in anticipation of litigation, the court of appeals agreed with the district court that the government had shown substantial need for the information and an inability to obtain the equivalent elsewhere. The district court’s order directing compliance with a grand jury subpoena for the recordings was affirmed.

It is unclear from the opinion why the tape recordings were not reviewed by the district court, that is, whether the judge did not ask for them or the attorney simply did not volunteer them. Except in the unusual situation, it would seem that the better practice in arguing for opinion work product is to let the judge see, or hear, exactly what it is that purports to reflect the attorney’s mental impressions.

• Print
• Comments
• Trackbacks
• Share Link

Defense counsel will often use private investigators to interview potential government witnesses and to secure signed, sometime sworn, statements from them. Such statements are extremely useful as impeachment tools should those witnesses testify at trial and, once the witness has been confronted and afforded an opportunity to explain away the earlier inconsistent statement, they can be admitted under FRE 613 (b). 

Of course, the most helpful written statements are those which exculpate one's client. But can those sworn statements be admitted by the defendant if the witness never testifies? Not under the residual hearsay exception of FRE 807, according to the Sixth Circuit.

The case of United States v Hunt, 521 F. 3d 636 (6^th Cir. 2008) was a fraud prosecution of a doctor, who had signed medical necessity orders necessary to allow Noble, a diagnostic technician, to receive Medicare and private insurance payments for ultrasound tests performed on patients seen by the doctor. Unfortunately, Dr. Hunt signed those orders without ever having seen the patients.

In the course of their investigation, government agents had interviewed Noble, who later pled guilty but did not testify against the doctor. In an unusual step, agents obtained a sworn affidavit from Noble, in which he exculpated Dr. Hunt (perhaps explaining why Noble did not testify for the government at Hunt’s trial).

Dr. Hunt sought to introduce the Nobel affidavit in his own defense in any event, but the district court held it was inadmissible, and the Sixth Circuit agreed. Statements in the affidavit to the effect that Dr. Hunt did not, in Nobel’s opinion, “do anything wrong,” contained lay opinions inadmissible under FRE 804 (b)(1) (former testimony), because although the government [the adverse party which, under the Rule, must have had an opportunity and motive to develop the testimony]created the affidavit, its agents did not have the necessary motive to fully develop the statements, a condition of admissibility under the Rule.

Hunt argued that FRE 807, the residual hearsay exception, supported admission of the statements because it was reasonable to believe that Noble was being truthful because his words tended to incriminate him, while exculpating the doctor. The Sixth Circuit observed that the Rule’s requirements that an out-of-court statement bear circumstantial guarantees of trustworthiness were not satisfied simply because the statement exculpated someone other than the declarant, citing FRE 804 ((b)(3), which requires corroborative evidence of trustworthiness before admitting a statement implicating the declarant while exculpating the accused.

• Print
• Comments
• Trackbacks
• Share Link