Appeals

June 21, 2010

Holland: Supreme Court Reverses Eleventh Circuit, Holding That Its Standard for Equitable Tolling of the Federal Habeas Corpus Statute’s Timeliness Provision is Too Rigid

Last Monday, the Supreme Court of the United States reversed the Eleventh Circuit‘s decision in Holland v. Florida. The Court held, as have all Courts of Appeal, that the AEDPA‘s statute of limitations in habeas corpus cases is subject to equitable tolling. The Court further held that the Eleventh Circuit’s per se rule regarding when such equitable tolling applies is “too rigid.” The Court reversed and remanded without explaining a precise standard for when equitable tolling should apply.

In determining that equitable tolling is available, the Court reasoned that the AEDPA’s statute of limitations is nonjurisdictional and such statutes of limitations are normally subject to a rebuttable presumption in favor of equitable tolling. In addition, equitable principles have traditionally governed the law regarding habeas corpus. The Court distinguished cases in which nonjurisdictional statutes of limitations were interpreted as not subject to equitable tolling.

The Court then explained that, for equitable tolling to be available, a petitioner must show diligence in pursuing his rights and some extraordinary circumstance that prevented timely filing. Emphasizing that equity requires decisions on a case-by-case basis, flexibility, and avoidance of mechanical rules, the Court pointed out that equity’s intent is relief from hardships resulting from “evils of archaic rigidity.”

April 5, 2010

Berghuis v. Smith: Supreme Court Unanimously Reverses Jury-Diversity-Based Habeas Case in Favor of Government

by Kish Law

Last week the Supreme Court decided Berghuis v. Smith in favor of the government. The Court held that criminal defendant Smith was not entitled to federal habeas corpus relief on his claim that the jury selection process had violated his Sixth Amendment right to an impartial jury drawn from a fair cross section of the community.

Because Smith was challenging his state conviction in a federal habeas corpus petition, under AEDPA, the federal courts could grant relief only if the state court decisions involved an unreasonable application of clearly established federal law, as determined by the Supreme Court. The Supreme Court unanimously held that Smith had not met this burden under the law established by Duren v. Mississippi in 1979.

Under Duren, to establish a prima facie violation of this Sixth Amendment right, a defendant must show:

October 22, 2009

Supreme Court Will Hear Another Miranda Case: Where Criminal Defendant Neither Waived Nor Invoked Rights, Is Further Interrogation Proper?

by Kish Law

The United States Supreme Court granted certiorari in Berghuis v. Thompkins. The Court will decide what the default rule ought to be where a suspect confirms that he understands his rights, but neither waives nor invokes them.

In this case, Thompkins was read his Miranda rights and confirmed that he understood them, but then was uncommunicative for nearly three hours of interrogation before answering “Yes” to a question regarding whether he prayed for forgiveness for “shooting that boy down.” He nodded his head every so often and declined a peppermint, but was otherwise withdrawn, refusing to sign an advice of rights form or anything else. His statement was used at trial and a jury convicted him.

The Sixth Circuit Court of Appeals below reversed the denial of his federal habeas petition, holding that the state had failed to show that Thompkins’s course of conduct amounted to an implied waiver of his rights. We hope the Supreme Court remembers its words from Miranda: “[A] valid waiver will not be presumed simply from the silence of the accused after warnings are given or simply from the facts that a confession was in fact eventually obtained.”

October 16, 2009

Skilling Added to the Mix of Honest Services Fraud Cases to Be Heard by the Supreme Court

by Kish Law

Earlier this week, the Supreme Court granted certiorari in another honest services fraud case: Skilling v. United States. Jeffrey Skilling, of Enron notoriety, is challenging his conviction for honest services fraud and the venue of his trial.

The honest services fraud statute, 18 U.S.C. § 1346, expands the definition of a scheme or artifice to defraud under the mail and wire fraud statutes to encompass schemes that “deprive another of the intangible right of honest services.” This federal criminal case will address whether the statute requires the government to prove that the defendant’s conduct was intended to achieve “private gain” rather than to advance the employer’s interests, and, if not, whether the statute is unconstitutionally vague. A second issue in the case involves when a presumption of jury prejudice arises.

We have previously discussed two other honest services fraud cases, Black v. United States and Weyhrauch v. United States, that the Court will also hear this term. Our discussion of Black is here and of Weyhrauch is here.

October 5, 2009

Money Laundering Charge Against Criminal Defense Attorney Argued in Federal Appellate Court

by Kish Law

Last month the Eleventh Circuit Court of Appeals heard oral arguments in U.S. v. Velez, a federal criminal case in which the lower court dismissed a money laundering charge based upon payments of legal fees. The Eleventh Circuit sits here in Atlanta, but also hears oral arguments in Montgomery, Alabama, and Jacksonville and Miami, Florida. The judges’ questions showed skepticism of the prosecution’s arguments.

The case revolves around a defendant’s payment of legal fees to his criminal defense team, including Roy Black. Fabio Ochoa-Vasquez was extradited to the U.S. in 2001 to face charges of conspiracy to smuggle cocaine. His defense team hired Ben Keuhne, a well-respected attorney in South Florida, to investigate the source of the money Ochoa would use to pay fees and to verify that it was not criminally derived property. Kuehne was assisted by Gloria Velez, a CPA in Colombia, and Oscar Saldarriaga Ochoa, a Colombian attorney. Velez, Kuehne, and Saldarriaga are the defendants in the case.

Kuehne’s trust account received wire transfers totaling more than 5 million dollars from various bank accounts. Kuehne drafted six opinion letters advising the criminal defense team that he had analyzed the sources of all funds. Immediately after each of the first four opinion letters, a wire transfer was made to the criminal defense team, totaling the amount sent to Kuehne’s trust account minus $50,000, which the court assumed to be Kuehne’s retainer.

August 6, 2009

Federal Court of Appeals Limits Calculation of Criminal Insider-Trading Gain for Sentencing Purposes

by Kish Law

Last Friday, the Tenth Circuit Court of Appeals decided U.S. v. Nacchio, a white collar criminal case involving insider trading by the former CEO of Quest Communications. The Court held that, in calculating Mr. Nacchio’s gain for purposes of sentencing, the district court must determine the proceeds related to his insider information, rather than simply calculating total net profit. The Eighth Circuit Court of Appeals held the opposite in U.S. v. Mooney in 2005. The Eleventh Circuit, which hears appeals in federal cases here in Atlanta, Georgia, has never addressed this issue.

Mr. Nacchio began earning stock options through his position as CEO of Quest in 1997. By early 2001, he held over 4.4 million vested options. Between April and May 2001, he sold more than 1.3 million of his shares. That July, the company announced to investors that its expected revenue for 2001 would be near the lower end of previously announced ranges. In August, Quest disclosed the magnitude of its prior use of nonrecurring sources of revenue, such that it was at substantial risk of not meeting its year-end guidance.

Alleging that Mr. Nacchio was aware of material, nonpublic information when he sold his shares of Quest stock, the federal government charged him with forty-two counts of insider trading in 2003. He was convicted on nineteen counts covering the trades he made in April in May. The district court sentenced him to 72 months imprisonment, 2 years of supervised release, a $19 million fine, and forfeiture of $52 million. The Tenth Circuit reversed the sentencing order and remanded to the district court for resentencing.

June 2, 2009

Black Requests Bail Pending a Decision on Federal Honest Services Fraud Case

by Kish Law

As we discussed in this post, the Supreme Court of the United States agreed to hear media mogul Conrad Black’s appeal regarding whether the honest services fraud statute applies in a purely private setting where the defendant’s conduct risks no foreseeable harm to the putative victims. We are very interested in the outcome of this case because it has the potential to change the law in the Eleventh Circuit (the court that hears federal criminal appeals from Georgia, Florida, and Alabama.) Unfortunately, we will have to wait a while. The appeal will not be heard until after the beginning of the Court’s new term this fall, likely as late as November or December.

As reported over at the SCOTUS Blog, Black has requested bail during the time his appeal is pending. He has served 15 months of a 78-month prison sentence and, if bail is denied, will have served about two years before the Justices decide his case. If his conviction is reversed, those are several months he cannot get back. His lawyers also argue that he should be released from prison in the meantime because his co-defendant, John Boultbee, has been released on a $500,000 bond and allowed to return to Canada to await the Supreme Court’s decision.

You can read Black’s application here.

June 1, 2009

Federal Drug Case Decided by Supreme Court in Favor of Criminal Defense, Rationality

by Kish Law

Last Tuesday, in Abuelhawa v. United States, the Supreme Court ruled that using a cell phone to make a misdemeanor purchase of drugs does not “facilitate” a felony drug distribution crime. The government charged Mr. Abuelhawa with six felony charges, one for each cell phone call, for facilitating the sale of drugs, although his two, first-time, small cocaine purchases qualified only as misdemeanors. Those charges resulted in a potential sentence of 24 years in federal prison, compared with a potential two-year sentence for two misdemeanors. Just for using a cell phone.

The government argued that Abuelhawa’s use of a phone to buy cocaine counted as “facilitation” because it made the drug dealer’s sale easier, hence violating a section of the Controlled Substances Act that makes it a felony “to use any communication facility in committing or in causing or facilitating” felony drug distribution. While at first glance, the common meaning of “facilitate” may give this impression, the result is absolutely absurd. And, as the Court points out, in any sale, the two parties have specific roles and “it would be odd to speak of one party as facilitating the conduct of the other.”

Justice Souter, in his opinion for the unanimous Court, was diplomatic in his criticism of the government’s inane argument. He called it “improbable” and “just too unlikely” because it “comes up short” and “does not follow.” The Court reasoned that the distinction Congress made in the Controlled Substances Act between distribution (a felony) and simple possession (a misdemeanor) makes it “impossible to believe that Congress intended ‘facilitating’ to cause that twelve-fold quantum leap in punishment for simple drug possessors.”

May 29, 2009

Federal Criminal “Honest Services” Fraud Law Applicable Here in Atlanta to be Reviewed by Supreme Court

by Kish Law

Eleventh Circuit case law, the controlling federal law here in Georgia, is at risk of changing next fall, when the Supreme Court will likely decide a criminal case and resolve a split among the circuit courts of appeals.

The mail fraud and wire fraud laws are the bread and butter for federal prosecutors bringing white collar cases. Each of these laws requires a scheme to defraud another person out of “money or property.” For many years, federal prosecutors successfully argued that the word “property” included the right to “honest services” from public employees (such as elected officials). In 1988, the Supreme Court ruled that the word “property” does not include “honest services,” but several months later Congress amended these statutes so as to include the concept of “honest services” within the universe of cases that can be prosecuted under the federal mail and wire fraud statutes. Specifically, Section 1346 of the Federal Criminal Code expands the definition of a “scheme or artifice to defraud” under the mail and wire fraud statutes to encompass schemes that “deprive another of the intangible right of honest services.”

Despite the background of this type of fraud, the concept of “honest services” has now been extended by federal prosecutors beyond situations where a public official may have engaged in fraud. Recently, federal prosecutors are bringing more and more cases against people who work for private companies, arguing that the employee breached his or her duty of rendering “honest services” to the employer.

April 29, 2009

Federal Case May Impact Suppression of Evidence Resulting from Criminal Seizures of Computers in Georgia, Florida, and Alabama

by Kish Law

In a potentially huge decision for criminal law in Georgia, Florida, and Alabama, the Eleventh Circuit federal appeals court in Atlanta held that twenty-one days was an unreasonably long time for law enforcement to wait before obtaining a search warrant after seizing a man’s computer hard drive. Because the circumstances of this case, United States v. Mitchell, failed to justify the three-week delay, the trial court should have suppressed the evidence discovered on the hard drive.

The Fourth Amendment‘s protection against unreasonable seizures both guards us against unreasonable arrests and protects our possessory interests in personal property. Even with probable cause to seize property, the duration of the seizure pending the issuance of a search warrant must still be reasonable. Courts determine reasonableness by weighing the government interests against private interests. This rule ensures the prompt return of property, should a search reveal no incriminating evidence.

In Mitchell, the Court acknowledged the substantial possessory interest people have in their computers’ hard drives. Computers are heavily relied upon for both personal and business uses, storing information including financial information, passwords, photos, e-mails, and countless other items. The Court called the hard-drive “the digital equivalent of its owner’s home, capable of holding a universe of private information.”