Barry Tarlow is a nationally prominent criminal defense lawyer practicing in Los Angeles, CA. He is a frequent author
and lecturer on criminal law. He was formerly a prosecutor in the United States Attorney's Office and is a member of
The Champion Advisory Board.
The author wishes to thank Blair Berk, a member of his firm, for her invaluable assistance
in the preparation of this column.
18 U.S.C. 1959(5) describes the "pattern of racketeering activity" necessary for a RICO violation as "at least two acts of racketeering, one of which occurred after the effective date of the chapter and the last of which occurred within ten years...after the commission of a prior act of racketeering activity." Courts have long disagreed concerning what kind of relationship must exist between the two acts of racketeering for those acts to constitute a "pattern of racketeering." Some circuits refused to find a pattern of racketeering where the two acts of racketeering were completely unrelated to each other, insisting that the acts had to be "connected by a common scheme, plan, or motive." United States v. Brooklier, 685 F.2d 1208, 1222 (9th Cir. 1982); see also United States v. Starnes, 644 F.2d 673, 678 (7th Cir. 1981). Other circuits, however, found that even unrelated racketeering acts constituted a pattern of racketeering as long as those acts were all committed in connection with the same RICO enterprise. See, e,g., United States v. Weisman, 624 F.2d 1118, 1122 (2d Cir. 1980); United States v. Welch, 656 F.2d 1029, 1052 (5th Cir. 1981). The relationship of racketeering acts to each other can best be described as "horizontal relatedness," while the relationship of racketeering acts to the enterprise can best be described as "vertical relatedness." See, e.g, United States v. Minicone, 960 F.2d 1099, 1106 (2d Cir. 1992) (employing those terms).
The Supreme Court's major attempt to interpret RICO's relationship requirement came in H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (1989). In H.J., Inc., the Court defined relatedness by reference to 18 U.S.C. 3575, in which Congress defined the pattern requirement of the Dangerous Special Offender Sentencing Act solely in terms of the relationship of the defendant's criminal acts to one another: "Criminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." 18 U.S.C. 3575(e). Such an interpretation was warranted, the Court asserted, because there is "no reason to suppose that Congress had in mind for RICO's pattern of racketeering component any more constrained a notion of the relationships between predicates that would suffice." H.J. Inc., 492 U.S. at 240.
Despite its apparent clarity, H.J. Inc. has not resolved the circuits' different and irreconcilable interpretations of RICO's relationship requirement. While most circuits now follow H.J., Inc. and use a relatedness standard that closely approximates Section 3575's definition of pattern, see, e.g., Fleet Credit Corp. v. Sion, 893 F.2d 441, 445 (1st Cir. 1990); Morgan v. Bank of Waukegan, 804 F.2d 970, 975 (7th Cir. 1986); Alexander Grant & Co. v. Tiffany Indus., Inc., 770 F.2d 717, 718 n.1 (8th Cir. 1985); United States v. Alexander, 888 F.2d 777, 778 (11th Cir. 1989), the Second and Third Circuits continue to insist that unrelated racketeering acts are interrelated if those acts are all related to the same RICO enterprise. See, e.g., United States v. Eufrasio, 935 F.2d 553, 565 (3d Cir. 1991); United States v. Local 359, 889 F.2d 232, 278 (2d Cir. 1989); see also United States v. Thomas, 749 F. Supp. 847, 848 (M.D. Tenn. 1990).
The Second Circuit, however, has wavered in its adherence to its pre-H.J., Inc. standard. For example, in United States v. Long, 917 F.2d 691 (2d Cir. 1990), the court reversed a RICO conviction because the jury instruction defining "pattern" did not expressly require horizontal relatedness -- a relationship between the predicate acts, not just between the acts and the enterprise itself. Id. at 697. Moreover, even before H.J., Inc. was decided, district courts in the Second Circuit had routinely ignored the Weisman standard when faced with a civil RICO action. See, e.g., Zerman v. E.F. Hutton & Co., 628 F. Supp. 1509, 1512 (S.D.N.Y.1985) (rejecting civil RICO claim on the ground that the racketeering acts, though related to the enterprise, were not related to each other).
Despite cases such as Long and Zerman, it is clear that the Second Circuit is not yet ready to completely abandon the Weisman relatedness standard in favor of the standard the Supreme Court approved in H.J., Inc. In a recent RICO case involving facts that can only be described as bizarre, the Second Circuit once again upheld a RICO conviction on the ground that the defendant's racketeering acts satisfied the relationship requirement because the acts, though seemingly lacking in horizontal relatedness, were each vertically related to the criminal enterprise itself. United States v. Polanco, 145 F.3d 536 (2d Cir. 1998).
Raymond Polanco allegedly ran the Polanco Enterprise in Brooklyn, whose primary purpose was to distribute crack cocaine in the Gowanus Housing Project. In order to monopolize the drug trade there, Polanco was alleged to have orchestrated the murder of Antonio Rivera and the attempted murder of Carlos Morena, two of his biggest rivals.
In addition to the drug distribution charges, it was alleged that the Polanco enterprise also sold and distributed guns. One of Polanco's major customers was Lenin Sepulveda, the leader of a gang known as the Red Top Crew that distributed drugs in the Bronx. Polanco sold Sepulveda handguns and machine guns.
Each time Sepulveda purchased a machine gun from Polanco he would test it prior to consummating the sale. During one machine gun sale, Sepulveda told Polanco "let's go to the highway [and] as soon as we get [there] we will test it out." How Sepulveda intended to test the machine gun on the highway is not clear. What is clear, however, is that, as they drove to the highway, an innocent motorist, 20-year-old David Cargil, ran a red light and almost hit the car driven by Sepulveda's brother, which was in front of Polanco's car. Angered by the incident, Sepulveda decided to retaliate against Cargil by shooting him with the machine gun.
When Sepulveda tried to shoot Cargil, the gun did not fire. Sepulveda removed the clip and told Polanco that the gun did not work. Polanco allegedly insisted that it did work and attempted to fix the gun. Polanco then handed the gun back to Sepulveda.
For a second time, however, the gun jammed when Sepulveda attempted to shoot Cargil. Frustrated, Sepulveda repeated his assertion that the gun did not work. Again Polanco insisted that it did, and again Polanco attempted to fix it. Sepulveda's third attempt to shoot Cargil proved successful. Sepulveda sprayed Cargil's car with bullets and killed him. Polanco then said, according to Sepulveda, "told you it works," and Sepulveda purchased the machine gun.
On August 1, 1996, a thirteen-count indictment was returned naming Polanco as the sole defendant. Counts 1, 4, and 5-13 charged him with various illegal acts in connection with the operation of his enterprise, including engaging in a continuing criminal enterprise ("CCE") in violation of 21 U.S.C. 848, conspiring to distribute narcotics in violation of 21 U.S.C. 846, and conducting the affairs of an enterprise in violation of RICO, 18 U.S.C. 1962(c). Counts 2 and 3 charged Polanco with murdering Cargil with a machine gun for the purpose of maintaining or increasing his position in the Red Top Crew in violation of 18 U.S.C. 924(c) and 1959. The jury convicted Polanco on all counts except two of the Polanco Enterprise counts, counts 6 and 7. The district court then sentenced Polanco to five consecutive life terms plus 120 years.
On appeal, Polanco's talented and always impeccably-attired defense counsel, Herald Price Farhringer, argued that his convictions for murdering Cargil with a machine gun for the purpose of maintaining or increasing his position in the Red Top Crew should be reversed for insufficient evidence. The Second Circuit agreed.
Both counts were premised on 18 U.S.C. 1959(a), which proscribes committing murder "as consideration for the receipt of, or as consideration for a promise or agreement to pay, anything of pecuniary value from an enterprise engaged in racketeering activity, or for the purpose of gaining entrance to or maintaining or increasing position in an enterprise engaged in racketeering activity." The prosecution specifically indicted and prosecuted Polanco on the theory that he murdered Cargil for the purpose of maintaining or increasing his position in Sepulveda's Red Top Crew. That being the case, the prosecution had to prove: "(1) that the Red Top Crew was a RICO enterprise, (2) that the enterprise was engaged in racketeering activity as defined in RICO, (3) that Polanco had a position in the enterprise, (4) that Polanco committed the alleged crime of violence, and (5) that his general purpose in so doing was to maintain or increase his position in the enterprise." Polanco, 145 F.3d at 539-540 (citing United States v. Concepcion, 983 F.2d 369, 381 (2d Cir. 1992)).
The problem with the prosecution's proof, according to the court, involved the third element, Polanco's position in the Red Top Crew. The prosecution argued that Polanco had a position in the Red Top Crew because he supplied it with weapons. The court noted, however, that the legislative history of Section 1959(a) indicates that Congress enacted the phrase "for the purpose of . . . maintaining or increasing position in an enterprise" specifically to target criminal enterprise "members" who commit violent crimes "as an aspect of membership" in that enterprise. See S. Rep. No. 225, at 306, reprinted in 1984 USCCAN at 3486. The prosecution's own proof made clear that Polanco was not a member of the Red Top Crew at the time of Cargil's murder: no witnesses testified that he was a member of that enterprise; and Sepulveda himself testified that Polanco was not a member. On the contrary, "Polanco's relationship with the Red Top Crew did not exceed a vendor-vendee relationship," because "Polanco had no role in determining how or why the Red Top Crew would use the guns." Polanco, 145 F.3d at 540 . The court thus held that Polanco's life sentence on count 2 and 30-year sentence on count 3 had to be vacated: "because Polanco was not a member of the Red Top Crew, Cargil's murder could not have been committed for the purpose of maintaining or increasing Polanco's position in the Red Top Crew." Id.
Fahringer also persuasively argued that the substantive RICO conviction had to be reversed, because Cargil's murder, one of seven predicate acts alleged in the indictment (three murders and four drug sales), was not related to the operation of the Polanco Enterprise and thus could not be considered a predicate act of the enterprise. This time, the Second Circuit disagreed.
Section 1962(c) makes it "unlawful for any person employed by or associated with any enterprise . . . to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." 18 U.S.C. 1962(c). That pattern may be established by two or more predicate acts that are related and pose a threat of continued criminal activity. See, e.g., Minicone, 960 F.2d at 1106.
As noted earlier, different panels of the Second Circuit have disagreed over the proper standard for determining whether racketeering acts are related: some panels have applied the Weisman standard, under which even unrelated racketeering acts constitute a pattern of racketeering as long as those acts were all committed in connection with the same enterprise (vertical relatedness), Weisman, 624 F.2d at 1122, while others have applied the more narrow standard approved by the Supreme Court in H.J., Inc., under which racketeering acts form a pattern only if the acts "have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events" (horizontal relatedness). See, e.g., Long, 917 F.2d at 697.
For reasons it did not discuss, the Polanco panel decided to follow Weisman instead of Long. Polanco, 145 F.3d at 540. Under the Weisman standard, the court held, Cargil's murder was clearly related to Polanco's RICO enterprise. "Each machine gun sale, including the sale of the machine gun used to murder Cargil, was related to Polanco's RICO enterprise," because Polanco sold guns to Sepulveda to earn money for the Polanco Enterprise and to persuade the Red Top Crew to ally themselves with the Polanco Enterprise to further increase the enterprise's power in the Gowanus Project. Id. at 540. Moreover, "Cargil's murder clearly was related to Polanco's sale of the machine gun to Sepulveda," because "each time Polanco sold Sepulveda a machine gun, Sepulveda would first test the machine gun to make sure that it was fully automatic" and "would not pay for the machine gun unless he was satisfied that the gun was operational." Id. at 541. Consequently, "a reasonable jury could easily conclude that shooting Cargil was a necessary precedent to consummating the gun sale, and that Cargil's murder was part and parcel of the gun sale." Id. at 541-542
The Second Circuit's decision in Polanco illustrates the difficulty with the Weisman standard, which emphasizes vertical rather than horizontal relatedness. To begin with, the standard is simply unworkable in the civil context, because it would allow a plaintiff to state a RICO claim simply by combining a personal allegation of fraud with allegations of disparate frauds on others. Given that a securities broker-dealer can face dozens of fraud claims per year, the Weisman standard would literally put such broker-dealers out of business. Indeed, it is for that very reason that district courts in the Second Circuit have refused to apply the standard in the civil context. See, e.g., Conan Properties, Inc. v. Mattel Co., 619 F. Supp. 1167, 1171 (S.D.N.Y. 1985) (finding unacceptable a standard that permits a RICO plaintiff to allege "any past act of another as a predicate act, regardless of whether he has been injured by that act or whether that act relates at all to the other alleged predicate acts").
It is equally unacceptable, however, for courts to use different standards of relatedness in the criminal and civil contexts, which is what the Second Circuit does implicitly and the Third Circuit does explicitly. See Eufrasio, 935 F.2d at 565 (holding that the Weisman standard only applies in organized crime cases). The substance of a RICO violation is set forth in Section 1962(c) and is identical for both civil and criminal cases, see 18 U.S.C. 1962(c); only the remedies differ. Compare 18 U.S.C. 1963 (criminal remedies) with 18 U.S.C. 1964 (civil remedies). There is, therefore, no textual basis for applying different standards in the two contexts. See Chivas Prods. Ltd. v. Owen, 864 F.2d 1280, 1284 (6th Cir.1988) (noting that "RICO is a criminal statute and . . . the civil portion of the statute derives its meaning from the first two sections, which define criminal liability").
The Second Circuit's Weisman standard is, moreover, internally inconsistent. According to the Polanco court, to constitute a pattern of racketeering, predicate acts "must be related to each other (horizontal relatedness) and they must be related to that enterprise (vertical relatedness)." Polanco, 145 F.3d at 541 (emphasis added) (citing Minicone, 960 F.2d at 1106). Nevertheless, the Polanco court defined horizontal and vertical relatedness in exactly the same way: according to the opinion, a predicate act is vertically related to an enterprise if it is "related to the activities of the enterprise," and a predicate act is horizontally related to another predicate act "if each predicate act is related to the enterprise." Id. at 541. The Polanco court thus eliminated any distinction between horizontal and vertical relatedness.
Bills of Particulars in CCE and RICO Cases
In addition to challenging Polanco's Red Top Crew and RICO convictions, Fahringer also argued on appeal that the district court erred in denying his motion for a bill of particulars listing the five persons that Polanco organized, supervised, or managed for purposes of the CCE count. Rule 7(f) of the Federal Rules of Criminal Procedure permits a defendant to seek a bill of particulars in order to identify with sufficient particularity the nature of the charge pending against him, thereby enabling him to prepare for trial, to prevent surprise, and to interpose a plea of double jeopardy if he is prosecuted a second time for the same offense. Wong Tai v. United States, 273 U.S. 77, 82 (1927). The decision of whether to grant a bill of particulars is entrusted to the discretion of the trial court. See, e.g., United States v. Panza, 750 F.2d 1141, 1148 (2d Cir. 1984). Generally, if the information sought by the defendant is provided in the indictment or in some acceptable alternate form, no bill of particulars is required, see, e.g., United States v. Matlock, 675 F.2d 981, 986 (8th Cir. 1982), because a demand for a bill of particulars may not be used to discover the prosecution's theory of the case or to learn the specific proof the prosecution will offer at trial. See, e.g., United States v. Jimenez, 824 F. Supp. 351, 363 (S.D.N.Y. 1993).The Second Circuit rejected Fahringer's argument without discussion. That decision was probably correct, because courts have consistently held that "[i]t certainly is not necessary to establish in every CCE case the specific identity of all five individuals subject to the defendant's direction." United States v. Alvarez, 860 F.2d 801, 817 (7th Cir. 1988); see also United States v. Markowski, 772 F.2d 358, 364 (7th Cir. 1985) (noting that because the CCE statute "is directed against all enterprises of a certain size, the identity of those involved is irrelevant"). A CCE conviction is thus valid as long as the district court instructed the jury that it had to unanimously agree that the defendant had five or more subordinates. Alvarez, 860 F.2d at 817.
In Polanco's case, the district court correctly instructed the jury that it did "not have to agree unanimously on the specific identity of the five persons the defendant supervised" as long as it was "unanimous that the defendant did supervise at least five persons." The prosecution, therefore, was not required to establish, through a bill of particulars or otherwise, the specific identity of the five persons Polanco supervised in order to convict him on the CCE count.
From a practical point of view, there are serious problems with this approach. Considering CCE's broad scope and severe penalties, a defendant should not have to guess which individuals he is alleged to be supervising. Fundamental principles of fairness dictate that a defendant ought to be advised of the identity of his alleged supervisees, so that he will have a meaningful opportunity to prepare and present his defense.
Although Polanco's bill of particulars argument failed, it is important to note that similar arguments have proven successful in the RICO context, where an indictment fails to adequately specify the racketeering acts that the prosecution intends to use to satisfy RICO's "pattern of racketeering activity."
Consider United States v. Davidoff, 845 F.2d 1151 (2d Cir. 1981), which involved extortion of air freight carriers by members of the Lucchese Crime Family. The extortionate payments were extracted in return for labor peace, frequently by threatening to have labor unions enforce to the hilt the onerous terms of their collective bargaining agreements. Once a carrier made the requested payments, the unions moderated their insistence on strict compliance with the terms of the agreements.
Harry Davidoff was a vice-president of Local 851, International Brotherhood of Teamsters. The local represented clerical workers and truckers employed by air freight and trucking companies handling air freight business at JFK International Airport. Davidoff was indicted on five counts: one count of RICO conspiracy and four counts of extortion offenses. The RICO conspiracy count alleged a pattern of racketeering activity consisting of acts of extortion, in violation of 18 U.S.C. 1951, and unlawful payments to unions, in violation of 29 U.S.C. 186. The count also alleged that it was part of the RICO conspiracy to commit extortion offenses that "included, but were not limited to," the violations set forth in the four remaining counts of the indictment. Those four counts all alleged extortionate demands directed at Air Express International Corp. ("AEI").
Prior to trial, Davidoff unsuccessfully moved for a bill of particulars "stat[ing] with particularity the unspecified violations indicated [in the RICO conspiracy count] by the phrase "but were not limited to." Id. at 1153. The district court denied the motion. The prosecution then introduced evidence at trial -- over Davidoff's objection -- of extortions directed at three air freight companies other than AEI, arguing that those extortions constituted other acts of racketeering. Davidoff was convicted on all five counts and sentenced to 12 years imprisonment.
On appeal, Davidoff argued that the district court erred in denying a bill of particulars. Noting that the legal principles governing Rule 7(f) motions "must be applied with some care when the [prosecution] charges criminal offenses under statutes as broad as RICO," id. at 1154, the Second Circuit agreed and reversed the convictions. As the court correctly pointed out, although the indictment put Davidoff on notice that he would have to defend against extortionate schemes directed at only one company, AEI, at trial he was confronted with evidence of extortions aimed at entirely different companies. Therefore, the district court should have granted Davidoff's motion for a bill of particulars, because "it is simply unrealistic to think that a defendant preparing to meet charges of extorting funds from one company had a fair opportunity to defend against allegations of extortions against unrelated companies, allegations not made prior to trial." Id.
In reaching that conclusion, the court also rejected the prosecution's excuse that information concerning the other companies were contained in Jencks Act statements turned over to Davidoff during jury selection and trial and in some 6000 pages of material concerning wiretap applications and transcripts of wiretap conversations. With regard to the Jencks Act statements, the court held that although such statements "may sometimes provide adequate notice of uncharged offenses that a defendant will be obliged to meet, especially if the material is made available sufficiently in advance of trial, such material may not be automatically relied upon . . . as an adequate substitute for a straightforward identification in a bill of particulars." Id. at 1155 (citing United States v. Rosenthal, 793 F.2d 1214 (11th Cir. 1986)). And with regard to the discovery material, the court noted simply that the material did not adequately identify the other three companies Davidoff allegedly extorted. Id.
The Second Circuit reached a similar conclusion in United States v. Bortnovsky, 820 F.2d 572 (2d Cir. 1987), which involved a scheme to defraud the Federal Emergency Management Administration and the New York Property Underwriting Association through the submission of false and inflated insurance claims. Specifically, Alexander Bortnovsky was charged with mail fraud, 18 U.S.C. 1341, conspiring to defraud the United States, 18 U.S.C. 286, and violating RICO, 18 U.S.C. 1961 et seq., by conducting and conspiring to conduct the affairs of an enterprise through a pattern of racketeering activity. The RICO counts charged as predicate acts of racketeering the crimes of arson, reckless murder, and mail fraud. Bortnovsky was convicted on all counts and was sentenced to 20 years imprisonment.
On appeal, Bortnovsky argued that the district court erred in denying his motion for bill of particulars identifying which of the insurance claims for burglary losses the prosecution believed to be fraudulent and which of the many invoices submitted to substantiate those claims the prosecution believed to be falsified. In his view, without that information, he was "unable to prepare adequately for trial and, in fact, [was] forced to establish [his] innocence by proving that eight of the burglaries put before the jury, which even the [prosecution] was uncertain were fake, actually occurred. In response, the prosecution argued that it fulfilled its obligation to inform Bortnovsky of the charges against him by being explicit in the indictment and by providing more than 4000 documents to defense counsel during discovery.
The Second Circuit agreed with Bortnovsky and reversed his convictions. In its view, because the district court did not require the prosecution to identify prior to trial the dates of the fake burglaries and the identity of the three fraudulent documents used to satisfy RICO's racketeering requirement, Bortnovsky was forced "to explain events surrounding eight actual burglaries and to confront numerous documents unrelated to the charges pending," effectively -- and impermissibly -- shifting the burden of proof from the prosecution to him. Id. at 575.
The court also had harsh words for the prosecution's discovery argument. In its view, the prosecution "did not fulfill its obligation merely by providing mountains of documents to defense counsel who were left unguided as to which documents would be proven falsified or which of some 15 burglaries would be demonstrated to be staged" -- particularly because Bortnovsky's defense lawyer had only four days to prepare a defense. Id.
Juror Misconduct Undermines Keating RICO Verdicts In an age where high-profile cases have Hard Copy reporters taking "1-900 call-in polls" as to whether a particular jury will convict, and where jurors now frequently have to make decisions whether to appear on Nightline in the first hour after a verdict is returned, the specter of juror misconduct in high-profile trials grows ever more ominous. The fundamental principle that a defendant has a right to confront those who testify against him and the right to conduct cross-examination of witnesses, is dramatically threatened when outside events contaminate the jury process, particularly when extrinsic facts regarding the defendant or the alleged crimes are improperly communicated to jurors during a trial or deliberations. Such a juror becomes an unsworn witness and does irreparable damage to the presumption of innocence.
When a defendant alleges that there was such extrinsic evidence introduced through juror misconduct, fortunately the standard of review does not require a showing of abuse of discretion. In cases where jurors are exposed to extrinsic evidence, the review by the appellate court "is an independent one, and [the appellate court] must consider the entire record in determining whether the state has met its burden of demonstrating that extrinsic evidence did not contribute to the verdict." Dickson v. Sullivan, 849 F.2d 403, 405-06 (9th Cir. 1988) (quoting Marino v. Vasquez, 812 F.2d 499, 504 (9th Cir. 1987)).
Juror exposure to extrinsic evidence during trial implicates significant constitutional concerns. Jeffries v. Wood, 114 F.3d 1484, 1490 (9th Cir. 1997) (en banc) (Jeffries III). In Jeffries, an en banc panel concluded that prejudice from juror misconduct comes from a close analysis of the substance of the contamination and not any arbitrary determination of whether the contamination came from an internal or external source. Jeffries, 114 F.3d at 1488.
During Patrick Jeffries' trial for two murders in Washington State, one of the jurors informed at least two other jurors that Jeffries was a convicted armed robber. After his conviction for two counts of aggravated first-degree murder and aggravated circumstances, Jeffries launched a series of unsuccessful appeals, arguing among other things jury misconduct based on the dissemination of his prior conviction to the jurors by another juror. See, full discussion of Jeffries, RICO Report, The Champion (Dec. 1997). After repeated findings that the misconduct constituted harmless error, the en banc panel which finally agreed to rehear Jeffries found that the introduction of prejudicial material to a jury constitutes possible prejudice, particularly where the past record of the defendant is related to the crimes for which he is on trial. The Ninth Circuit properly rejected the government's argument that because jurors engaged in little discussion about the conviction and that, in the case of Jeffries, were even scolded by another juror that consideration of the conviction was not permitted, that prejudice is somehow ameliorated. Jeffries, 114 F.3d at 1491.
The appropriate standard in making a determination whether jury exposure to extrinsic evidence requires a new trial is whether it has been established that there is "a reasonable possibility that the extrinsic material could have affected the jury." Dickson, 849 F.2d at 405 (quoting Marino v. Vasquez, 812 F.2d 499, 504 (9th Cir. 1987)). Although juror exposure to a defendant's previous conviction does not create an irrebuttable presumption of prejudice (see, Patton v. Yount, 467 U.S. 1025, 1035 (1984)), where there is actually intra-jury communication of a prior related conviction established, this will always constitute extrinsic evidence sufficient to trigger the "reasonable possibility" standard. See, Jeffries v. Blodgett, 5 F.3d 1180, 1189 (9th Cir. 1993) (Jeffries III).
In a strong reaffirmation of these important principles, the Ninth Circuit affirmed the granting of a new trial to Charles H. Keating, Jr. and his son, Charles H. Keating, III, aka "C-3," following their convictions on RICO charges of conspiracy, bank fraud, securities fraud, and wire fraud, based on a district court's finding of jury misconduct when jurors communicated and discussed Keating's prior state fraud conviction. U.S. v. Keating, 147 F.3d 895 (9th Cir. 1998).
In 1996, the Ninth Circuit, in an unpublished opinion, held that the trial court had erred when it failed to hold an evidentiary hearing to determine whether there was a reasonable possibility extrinsic evidence gathered in a comprehensive post-trial juror debriefing supervised by Keating's counsel, Stephen Neal and Scott Devereaux of Cooley, Godward, Castro, Huddleson & Tatum, and Andrew R. McGaan of Kirkland & Ellis, had affected Charles Keating's conviction. United States v. Keating, No. 93-50576 1996, U.S. LEXIS, 15276 (9th Cir. 1996). On remand to the district court, Judge Mariana R. Pfaelzer threw out Keating's federal convictions after finding that jurors who had extra-judicial knowledge of Keating's widely publicized problems had discussed the prior California state court convictions during deliberations. Id. This information had specifically been excluded from the prosecution's case by Judge Pfaelzer, and the jury misconduct was blatant and prejudicial.
The jurors originally completed lengthy questionnaires in which they were asked whether they had heard of either defendant. Although ten jurors indicated that they had heard of Keating, all jurors indicated under oath that they had formed no opinion about the case and would decide the case based solely on the evidence presented in court. Although Keating's gifted and dedicated defense counsel, Stephen Neal, was allowed to question the jurors during voir dire about their knowledge of the state convictions, he wisely chose not to, as the Ninth Circuit described, "for fear that such questioning would impart prejudicial knowledge, yet not provide a basis for a cause challenge." See, Keating, 147 F.3d at 898. Following his client's conviction, Neal immediately sent his investigator to interview the jurors, which revealed, not surprisingly, that four jurors in fact knew of Keating's state conviction before the federal trial began. In addition, however, what was astonishing was that two additional jurors admitted that they had learned of Keating's prior conviction during the trial, and that all of the jurors, but for one, had discussed during deliberations that Keating had been previously convicted by the state of California.
Embarrassingly, when the new trial was originally granted in 1996, the government whined that somehow Steve Neal was actually responsible for the problem because he failed to ask the jurors in voir dire about their prior knowledge of the convictions. However, the trial record and all the briefs and pleadings demonstrated that prosecutors' complaints that Neal somehow tricked the judge, the U.S. Attorney's Office, and the court of appeals, were preposterous. Judge Pfaelzer had in fact ruled prior to trial that if a juror said "I heard Mr. Keating was convicted," she would not permit a challenge for cause. Since jurors did not disclose that they knew about the conviction, it was ridiculous to suggest that somehow Neal or any competent defense lawyer should then have told all the jurors about Keating's prior state felony convictions by questioning in voir dire, particularly because Judge Pfaelzer had already ruled that the state convictions were inadmissible at trial.
In analyzing the district court's application of the "reasonable possibility" standard, the Ninth Circuit affirmed the granting of a new trial, while finding that it did not "necessarily agree with the district court's analysis." The government was forced to concede, even in its appeal of Keating's new trial grant, that at least one juror learned of the conviction during the federal trial. The panel found, "In effect, those jurors who communicated the information testified against Keating in violation of his Sixth Amendment rights." Keating, F.3d 147 at 900. The panel, in articulating its "objective rather than subjective" inquiry, was clear that it did not need to ascertain whether the extrinsic evidence actually influenced any specific juror (see, Jeffries, 114 F.3d at 1491); rather, it recognized the important shifting of the burden to the prosecution to show beyond a reasonable doubt that extrinsic evidence did not contribute to the verdict. See, United States v. Navarro-Garcia, 926 F.2d 819, 821 (9th Cir. 1991).
There are five initial factors to be considered in determining whether the prosecution has met such a burden. See, Dickson, 849 F.2d at 405; Jeffries, 114 F.3d at 1490. The factors are: (1) Whether the material was actually received, and if so, how; (2) the length of time it was available to the jury; (3) the extent to which the juror discussed and considered it; (4) whether the material was introduced before a verdict was reached, and if so, at what point in the deliberations; and, (5) any other matters which may bear on the issue of reasonable possibility of whether the extrinsic material affected the verdict.
See, Dickson, 849 F.2d at 406 (citing Marino v. Vasquez, 812 F.2d 499, 506 (9th Cir. 1987)). In Keating's case, the court explicitly delineated each of the factors as applied to the facts, and found that the jury had received the information about the prior state conviction from another juror during the federal trial, and thus had much of the trial and the deliberations to consider it. The panel found this information alone was sufficient to trigger factors one, two, and four in favor of a new trial. Keating, 147 F.3d at 902. Moreover, the panel found that the third factor had been met, given testimony from several jurors at the evidentiary hearing that the conviction had been discussed in the jury room.
The Ninth Circuit in Jeffries, decided after Dickson, also articulated several additional factors to consider in determining whether the government had established harmlessness beyond a reasonable doubt: (1) whether the prejudicial statement was ambiguously phrased; (2) whether the extraneous information was otherwise admissible or merely cumulative of other evidence introduced at trial; (3) whether a curative instruction was given or some other step taken to ameliorate the prejudice; (4) the trial context; and (5) whether the statement was insufficiently prejudicial given the issues and evidence in the case. Jeffries, 114 F.3d at 1491-92.
Applying these factors, the Keating panel found the information about Keating's prior state conviction was in no way ambiguous. Each of the jurors who testified at the evidentiary hearing related that they understood that it was for a previous trial on similar issues, not in federal court, and that Keating had been found guilty. Judge Pfaelzer had also explicitly excluded evidence of Keating's state conviction from his federal trial. Since she was unaware that jurors had discussed the extrinsic evidence, no curative instructions were ever given. Moreover, the nature of the evidence of the prior conviction involving financial crimes was extremely prejudicial, and the prejudice was compounded by the fact that the trial court had excluded the conviction.
On appeal, the government weakly argued that despite all of these factors recognizable in Keating's case, the fact that the district court had found that the jurors had followed their instructions and decided the case based on the evidence presented at trial should be enough to overrule the granting of a new trial. When crafting its appellate argument, the prosecution managed to ignore the firmly established rule that the court must make an objective and not subjective review of the prejudicial impact of the extrinsic evidence on the jurors See, e.g., Jeffries, 114 F.3d at 1491 (juror's testimony that extrinsic evidence is not harmful is not controlling); Dickson, 849 F.2d at 406 (stating that "we give no deference to the trial judge's conclusion that the jurors in this case in fact obeyed the jury instructions"); Vasquez, 597 F.2d at 194 ("a trial judge should not investigate the subjective effects of any such breach upon the jurors").
An interesting and unusual ruling involved the reversal of the conviction of the co-defendant, Charles Keating's son. The extrinsic evidence did not involve "C-3." The Ninth Circuit ruled, however, that his conviction was also tainted by the jury misconduct, because in reality his guilt depended on whether his father had committed any crimes. The court found that because of the close association between the two defendants, the prejudice spilled over to the son. Keating, 147 F.3d at 904. While this derivative theory of prejudice is certainly logically sound, the Ninth Circuit did not cite any authority for this expansive interpretation of jury misconduct principles.
As a result of Steve Neal's dedicated and extraordinary representation, Charles Keating is a free man at this time. Although his state securities conviction was affirmed by the state court of appeal, it was overturned when U.S. District Judge John Davies granted a writ of habeas corpus. The appeal of that ruling is still pending before the Ninth Circuit.
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