Monday, August 24, 2015

Habeas relief affirmed: government concedes unreliable fire-science and chromatography evidence has been discredited and Court finds remaining evidence not sufficiently “ample” to prove arson and murder beyond a reasonable doubt

In Han Lee v. Superintendent Houtzdale SCI, the Third Circuit affirmed habeas relief (under 28 U.S.C. § 2254) granted to a father who spent 24 years in prison for allegedly setting a fire that killed his daughter. 

First, the Court accepted the case on the merits, rejecting procedural challenges to the appeal. A notice of appeal is delivered when received by the clerk, regardless of when it was officially filed. (discussing Fed.R.Civ.P. 5(d)(2)). A notice of appeal is valid so long as it specifies the appealing party, designates the judgment being appealed, and names the court to which the appeal is taken, even if it violates a local electronic filing requirement. (citing Fed.R.App.P. 3(c)(1)). 

 The Court then reviewed magistrate’s report and recommendation for plain error, without AEDPA deference, consistent with the law of the case.  See Lee v. Glunt, 667 F.3d 397, 400–03 (3d Cir. 2012).  The magistrate found that Lee had shown “that the admission of the fire expert testimony undermined the fundamental fairness of the entire trial because the probative value of [that] evidence, though relevant, [was] greatly outweighed by the prejudice to the accused from its admission.” Lee, 667 F.3d at 403.  The Commonwealth conceded that the basis for fire-science and gas-chromatography evidence has now been discredited.  The Court found that the remaining evidence was not sufficiently “ample” to prove arson and murder beyond a reasonable doubt.  That evidence was: (1) alleged inconsistencies in the Korean-to-English interpretation of statements made by Lee in the hours following his daughter’s death, (2) a cultural stoicism construed as nonchalance, and (3) autopsy results which posited two alternate theories of cause of death, one wholly consistent with death in an accidental fire, and the other (strangulation) which had very little forensic support.

Tuesday, July 28, 2015

Martinez v. Ryan does not apply to excuse procedural default caused by attorney error at the state collateral appeal stage.

In Norris v. Brooks,No. 13-4448, the Court addressed a Rule 60(b) motion filed by a 2254 habeas petitioner who claimed that the case of Martinez v. Ryan, 132 S.Ct. 1309 (2012), called for the reopening of his federal habeas petition, previously denied in 2007.

Procedural background in Norris:
            In his state PCRA proceedings, Norris raised a claim of ineffective assistance of trial counsel (“IAC trial counsel”) for failing to move to dismiss on rule based and constitutional speedy trial grounds.  PCRA counsel raised the IAC trial counsel claim (poorly, citing the wrong dates) in the initial PCRA petition and then abandoned the claim, over Norris’s strenuous objections, on PCRA appeal.  Norris sought review of his IAC trial counsel/speedy trial claim in a 2254 federal habeas petition.  The federal habeas court denied his petition finding that the claim was procedurally defaulted because it was not raised at the PCRA appeal level. 

A recap of Martinez:
In Martinez v. Ryan, SCOTUS held that, under certain circumstances, attorney error at the initial collateral review stage could constitute cause for the procedural default of an IAC trial counsel claim in a federal 2254 proceeding.  For example, in Pennsylvania, the first time a defendant can claim IAC trial counsel is in a PCRA petition.  If the defendant fails to raise an IAC trial counsel claim in the PCRA petition, then the claim is normally considered procedurally defaulted and federal habeas court cannot review the claim.  Under Martinez, if the reason that the trial counsel-IAC claim was not presented in the initial PCRA petition was due to ineffective assistance of PCRA counsel, then it is possible that the PCRA counsel’s error constitutes cause and excuse for the procedural default and the federal habeas court may be able to review the trial counsel-IAC claim even though it was never presented in state court.  In this way, Martinez overruled Coleman v. Thompson, 501 U.S. 722 (1991).

Raising Martinez via Rule 60(b)(6) motions:
            Fed.R.Civ.Pro. 60(b)(6) allows for relief from civil judgments in “extraordinary circumstances.”  The question of whether SCOTUS’s decision in Martinez could constitute extraordinary circumstances allowing for the reopening of a federal habeas petition which had previously been denied due to procedural default under Coleman was addressed by the Third Circuit in Cox v. Horn, 757 F.3d 113 (3d Cir. 2014).  In Cox, the Court held that while Martinez, by itself, did not constitute extraordinary circumstances allowing for the re-opening of a federal habeas petition under Rule 60(b)(6), Martinez, in conjunction with other equitable factors, could potentially merit Rule 60(b)(6) relief.

No relief for Norris:
            The problem for Norris was that the procedural default of the IAC trial counsel-speedy trial claim occurred at the PCRA appeal level (according to the original federal habeas court) and not at the initial PCRA proceeding.  Because Martinez explicitly applied only to claims that were procedurally defaulted at the initial PCRA stage and not at the appellate stage, Norris’s appeal was denied. 

Wednesday, July 15, 2015

Doyle Error Not Harmless in Credibility Contest Between Cooperator and Accused

In United States v.Jace Edwards, No. 14-4088, the Court remands for a new trial following the government's concession that the trial prosecutor had violated the constitutional rule of Doyle v. Ohio, 426 U.S. 610 (1976).  As restated in contemporary Third Circuit precedent, that rule prohibits the prosecutor from causing the jury to draw an impermissible inference of guilt from a defendant’s post-arrest silence after the defendant has been Mirandized.  On appeal, the government’s sole contention was that the trial prosecutor’s misconduct was harmless.

The Court easily dispatches of the government's contention.  Though the prosecution was founded on a controlled delivery, the Court explains, the trial boiled down to a credibility contest between the defendant and a cooperating witness.  Despite “some evidence suggesting that [the defendant’s] exculpatory story was not plausible,” there was no way to say the verdict “was surely unattributable to the error.”  Accordingly, the government had failed to "prove[] beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained," as required to establish that constitutional error was harmless.  Along the way, the Court lays stress on “the District Court’s belated and ineffective curative instruction,” noting that the court initially overruled defense counsel’s objection to the prosecutor’s improper closing argument, and that language elsewhere in the charge approved consideration of “any statements made and acts done or omitted by the defendant.”  Quoting its earlier criticism of this language in United States v. Waller, 654 F.3d 430 (3d Cir. 2011), the Court notes that “jurors were invited by the District Court to consider the statements that [the defendant] failed to make.”

Tuesday, July 14, 2015

Court Clarifies Mental State Requirement for 'Color of Official Right' Extortion, Rejects Challenges to 'Sophisticated Means' Enhancement

In United States v.Fountain, Nos. 13-3023 &c., the Court finds occasion to clarify the elements of extortion under “color of official right” within the meaning of the Hobbs Act, 18 U.S.C. § 1951.  The three appellants were found guilty after a two-week trial of participating in a tax refund scam.  A Hobbs Act count named only one defendant, an IRS employee who drew upon her knowledge of internal auditing procedures to avoid the red-flagging of fraudulent applications for certain tax credits.  The applications were submitted using personal information supplied by third-party claimants in exchange for a portion of the refunds.  The Hobbs Act count rested on one claimant’s agreement to pay $400 to the IRS employee in the belief — on the government’s theory — that it would help the claimant obtain the refund and avoid an audit.

Distinguishing certain broad language in two prior opinions, the Court (per Krause, J., joined by Fuentes and Fisher, JJ.) holds that to prove extortion under color of official right, the evidence must show: “(1) that the payor made a payment to the defendant because the payor held a reasonable belief that the defendant would perform official acts in return, and (2) that the defendant knew the payor made the payment because of that belief.”  (Emphasis supplied.)  That some earlier decisions had not explicitly referenced the italicized mental state requirement, the Court explains, reflects only that the reasonableness of the payor’s belief was uncontested and obvious in those cases.  Applying the clarified standard, the Court upholds conviction based on the $400 payment despite what the IRS employee submitted was insufficient evidence as to the claimant’s state of mind in making it.

The Court also upholds a bevy of sentence enhancements.  It first rejects challenges to the two-level enhancement for “sophisticated means” under the fraud guideline at U.S.S.G. § 2B1.1.  The enhancement can apply, the Court concludes, based on conduct “less sophisticated” than the examples set forth in a guideline application note referencing “the use of fictitious entities, corporate shells, or offshore financial accounts.”  While the opinion proceeds to reiterate that the sophisticated-means enhancement requires conduct showing “a greater level of planning or concealment than a typical fraud of its kind,” the ensuing analysis states that “factors like the duration of a scheme,” the “number of participants,” and “efforts to avoid detection” may be relevant.  Nonetheless, the Court also points to reliance on specialized expertise, as in the IRS employee’s use of “inside knowledge of the IRS’s enforcement thresholds” and another defendant’s electronic filing of claims in a manner traceable only to a third party’s wireless network.

The Court also rejects more fact-specific challenges to enhancements for use of a minor, see U.S.S.G. § 3B1.4, aggravating role, see id. § 3B1.1(a),  loss amount calculation, see id. § 2B1.1(b)(1), and substantive reasonableness, see 18 U.S.C. § 3553(a).  As to role, the Court firms up the rule that the defendant must have exercised “some degree of control over at least one other person involved in the offense.”  Regarding reasonableness review, the Court repeats what it has occasionally described as a rule that “[s]entences that fall within the applicable Guidelines range are more likely to be reasonable than those that do not.”  Of course, district courts may not indulge any such presumption when sentencing in the first instance.  Nelson v. United States, 555 U.S. 350 (2009).

Saturday, July 11, 2015

Officers did not have reasonable suspicion at the moment of seizure.

In United States v. Shawn Lowe, No. 14-1108, ___ F.3d. ___, 2015 WL 4032921 (3d. Cir. July 2, 2015), the Third Circuit reversed the district court's denial of Lowe's suppression motion, finding that the district court had erred in determining the moment of seizure during a Terry stop.  The Court explained:

Here, three marked police cars nearly simultaneously arrived at Ms. Witherspoon’s residence at 4 o’clock in the morning. Four uniformed police officers immediately got out of their patrol cars and approached Lowe and Witherspoon, commanding them to show their hands. . . .  [T]he record indicates that [the officers] arrived in a hurried manner and at least one drew his firearm at some point during the encounter. A reasonable person in Lowe’s position would not have felt free to decline this interaction, turn, and leave.
 
The Court also determined that Lowe submitted to the show of authority. The seizure was effectuated when he did not flee, did not make any threatening movement or gesture, and remained stationary.  Lowe's "few startled steps back in the face of onrushing, armed police officers is entirely consistent with a surprised reaction and even acquiescence" and did not amount to flight. 

Wednesday, July 08, 2015

Prosecutorial Conduct, Response to Jury's Request and Evidentiary and Sentencing Issues Denied by Circuit

In United States v. Kolodesh, No. 14-2904 (3d. Cir. May 28, 2015), the Third Circuit affirmed the district court’s sentence of 176 months’ imprisonment, three years supervised release, and an order for $16.2 million in restitution.

Kolodesh, who co-owned Home Care Hospice, Inc., appealed his conviction of one count of conspiracy to defraud a health care benefit program (18 U.S.C. § 1349), twenty-one counts of health care fraud (18 U.S.C. § 1347), two counts of mail fraud (18 U.S.C. § 1341), and eleven counts of money laundering (18 U.S.C. § 1957) based on his company’s involvement in a Medicare fraud scheme.  Kolodesh and his co-workers falsified records to show that patients were eligible for continuous Hospice care that the patients never received, gave doctors kickbacks, gifts, and cash for referrals, and even put some doctors on the company’s payroll with sham job titles.  Kolodesh’s company also submitted fraudulent claims for Medicare reimbursement, which constituted 90% of their revenue.

On appeal, Kolodesh alleged prosecutorial misconduct, evidentiary issues, errors in responding to a request from the jury, and in sentencing.

Prosecutorial Misconduct
 
The first allegation of prosecutorial misconduct involved wiretap recorded conversations of Kolodesh talking about opening a Swiss bank account but avoiding one specific Swiss bank because “[it] reports everything to the American government.”  The Court of Appeals found that the district court did not err by allowing the government to refer to this recorded conversation of the defendant because he did not object, and, the recording was relevant.
 
The second allegation of prosecutorial misconduct involved a translated wiretap and testimony about Russian stereotypes.  FBI wiretaps recorded Kolodesh stating he had to “f*** them [Medicare] over this time, one more time .…” Kolodesh argued that the statement was inaccurately translated from Russian to English, and that it was irrelevant.  The Circuit found that the government did not commit prosecutorial misconduct by eliciting testimony about Russian stereotypes because the statements were innocuous and volunteered by the witnesses without government suggestion.

Evidentiary Issues

The Third Circuit found the district court erred by not allowing Kolodesh’s wife to testify that he was home and very ill during some of the years in question.  However, the Court ruled the error was harmless, as other testimony indicated that Kolodesh met with co-workers via phone and at his home while he was ill.

Kolodesh’s former co-workers and co-conspirators pled guilty and testified for the government.  The Court held it was not error to admit testimony of their uncharged acts of fraud because they were not offered to show Kolodesh’s character as a defrauder, but rather as circumstantial evidence of his knowledge of fraudulent activity at the company.

The Court of Appeals also held that the district court did not err in allowing the previously discussed recorded conversation about Kolodesh’s Swiss bank account to be introduced into evidence as the evidence’s probative value substantially outweighed its prejudicial effect.

Response to Jury’s Request

The jury requested the testimony of certain government witnesses at various times during deliberations.  The district court told the jury that, if possible, they should continue their deliberations while the audio recordings and transcripts were prepared.  Two hours later, before the recordings and transcripts were delivered, the jury returned a verdict.  The Third Circuit found that the district court acted properly in instructing the jury that they could wait for the transcripts or continue deliberating using their recollection.

Sentencing

The Court of Appeals held that the district court did not err in determining that the government proved a $16.2 million loss due to Kolodesh’s fraud because witnesses were competent to testify to the amount of loss.

The Court also held that the district court did not err in holding Kolodesh jointly and severally liable for the full amount of loss since no atypical situation had occurred.

Kolodesh objected to the four-level sentencing enhancement for his role as an organizer or leader of fraudulent activity.  The Third Circuit found no error and upheld the sentencing enhancement.

Kolodesh likewise objected to the two-level adjustment for obstruction of justice.  The Court of Appeals upheld the enhancement because Kolodesh pointed to nothing in the record indicating error.

The Court held that the district court did not err in deciding that Kolodesh was an appropriate candidate for a lengthy incarceration because the BOP was fully capable of provide adequate medical care for him.

The Circuit also held that a lengthy prison sentence combined with restitution was not substantively unreasonable because the restitution merely served to make the government whole and the district court imposed a sentence below the applicable guideline range.

Many thanks to Law Clerks Robert K. Lavelle and Anne Yoskoski who prepared this post.

Wednesday, June 03, 2015

Fifth Amendment Privilege Against Self-Incrimination Inapplicable to Corporate Custodian Under Collective Entity Doctrine


In In re: In the Matter of the Grand Jury Empaneled on May9, 2014, 2015 WL 2262650, No. 15-1264 (3d Cir., May 15, 2015), a clinical blood laboratory in New Jersey had been charged with bribing area doctors to refer their patients to the lab for blood testing. Two of the defendants, a medical doctor and his incorporated medical practice, were charged with accepting said bribes. A grand jury subpoenaed the custodian of records for the medical practice seeking to obtain documents related to, inter alia, the medical practice’s patient list and corporate records. The medical practice initially maintained a staff of six; however, due to financial difficulties arising as a result of the instant matter, the doctor was forced to terminate the staff. Consequently, the doctor ultimately served as the sole owner and employee of the medical practice, as well as its custodian of records. The doctor moved to quash the grand jury subpoena, arguing that compelled disclosure of the corporate records would violate his Fifth Amendment privilege against self-incrimination. He also argued that the subpoena was overbroad. The district court denied his motion, ruling that a corporation may not assert the Fifth Amendment privilege. The court also ruled that the subpoena was not overbroad.  Nonetheless, the defendants, i.e., the doctor and the medical practice, refused to comply with the subpoena. The district court ultimately found the defendants in civil contempt.  

The Third Circuit ruled that the district court’s refusal to quash the subpoena was not an abuse of discretion. The court applied the “collective entity” doctrine, as enunciated in Bellis v. United States, 417 U.S. 85 (1974), and Braswell v. United States, 487 U.S. 99 (1988), to determine that, as a representative of a collective entity, the corporate custodian acts on behalf of the corporation, which may not assert the Fifth Amendment privilege itself. The Third Circuit adopted the Supreme Court’s reasoning in rejecting the “act-of-production” doctrine, which focused on the communicative nature of compelled disclosures and their potential to personally incriminate the corporate custodian.  The Third Circuit concluded that a corporate custodian may not enjoy the benefits of incorporation without also enduring its attendant burdens.  

The Third Circuit also determined that, as a grand jury traditionally possesses broad investigatory powers, a grand jury subpoena is valid if it merely identifies materials which could reasonably contain information that is relevant to the government’s investigation. The Third Circuit concluded that the district court properly had ruled that subpoena at issue was sufficiently specific.