Tenth Circuit Opinion on Mens Rea for Tax Obstruction - What Does Unlawful Mean? (7212(a)) (3/30/14)

In United States v. Williamson,  746 F.3d 987 (10th Cir. 2014), here, the Tenth Circuit rejected the taxpayer's argument that the jury should have been instructed on the meaning of "unlawful" meant in a standard form of tax obstruction definition of the "corruptly" element of the crime. See Section 7212(a), here.  The defendant wanted an instruction that was or very close to the standard Cheek instruction -- intentional violation of a known legal duty -- for the willfulness element of most tax crimes, but not an express element of the crime of tax obstruction.  I have argued that the tax obstruction crimes (principally Section 7212(a) and the defraud conspiracy, 18 USC Section 371, here) should be interpreted to have an element functionally equivalent to willfulness and hence that something like intentional violation of a known legal duty should apply.  John A. Townsend, Tax Obstruction Crimes: Is Making the IRS's Job Harder Enough, 9 Hous. Bus. & Tax. L.J. 255 (2009), here and in an online appendix with examples, Tax Obstruction Crimes: Is Making the IRS's Job Harder Enough? Online Appendix, 9 Hous. Bus. & Tax L.J. A-1 (2009), here.

Let's see what happened in the case.

The defendant undertook more or less standard tax protester actions, making monetary claims against IRS personnel and filing a lien against the agents' real and personal property.  He was indicted for tax obstruction and another crime, 18 USC § 1521, here, for filing a false lien.

At trial, the court gave a standard tax obstruction instructio, first listing the elements of the crime as follows:

First: The defendant in any way corruptly; 

Second: Endeavored to; 

Third: Obstruct or impede the due administration of the Internal Revenue Laws.

After listing the elements, the trial court defined some of the terms in the elements (emphasis supplied):

"Endeavor" means to knowingly and intentionally make any effort which has a reasonable tendency to bring about the desired result. It is not necessary for the Government to prove that the "endeavor" was successful. 

To act "corruptly" is to act with the intent to gain an unlawful advantage or benefit either for oneself or for another. 

To "obstruct or impede" is to hinder or prevent from progress; to slow or stop progress; or to make accomplishment difficult or slow. 

The phrase "due administration of the Internal Revenue laws" means the Internal Revenue Service of the Department of the Treasury carrying out its lawful functions to calculate and collect income taxes.

The trial court did not define "unlawful" which is a term used in the definition of "corruptly."  The defendant wanted it defined.  The sets the stage, so now I include excerpts (in these excerpts except for the footnote number the excerpts are my to draw the readers' attention):

At trial, defense counsel did not challenge the accuracy of these instructions but argued that the court should add a definition of unlawful (which appears in the definition of corruptly). He stated that "the definition of unlawful in the Tenth Circuit is, 'with the specific intention to do something the law forbids'" and that "an alternative definition of unlawfully would be violation of a known legal right." Id., Vol. 3 pt. 3 at 359. Also, quoting United States v. Winchell, 129 F.3d 1093 (10th Cir. 1997), he said that he would accept as the definition: "'[a] voluntary, intentional violation of a known legal right.'" Id. at 360. When the government pointed out that Winchell was defining willful, not unlawful, defense counsel asserted that "unlawful and willfulness converge in this instance," but offered that he would be "happy to defer to any other definition of unlawfulness, which the Tenth Circuit set out in Winchell." Id. at 361. The court ended the discussion by saying, "I don't think we need a definition of unlawful." Id. On appeal Defendant argues that unlawful should have been defined and that he could be guilty of violating § 7212(a) only if his acts were an "intentional violation of a known legal duty." Aplt. Br. at 39 (italics omitted). 

Insofar as Defendant is arguing that the word unlawful in the instructions should have been defined, we disagree. The meaning of unlawful is common knowledge and ordinarily does not need to be defined. See Atchison, Topeka & Santa Fe Ry. Co. v. Preston, 257 F.2d 933, 937 (10th Cir. 1958) ("[A] court is not required to define words and phrases which are familiar to one of ordinary intelligence."). We note that the Tenth Circuit Criminal Pattern Jury Instructions repeatedly use the word unlawful but never define it, and the Tenth Circuit case adopting the instruction used at Defendant's trial saw no need to define it. See Winchell, 129 F.3d at 1098. Defendant cites no authority requiring it to be defined or defining it as he proposes. 

Perhaps Defendant is trying to argue something a bit different from the failure to define unlawful and is simply asserting that the instructions did not impose the proper mens rea requirement. This alternative argument is suggested by his reliance on Cheek v. United States, 498 U.S. 192 (1991). In Cheek the issue was the meaning of willfully as used in 26 U.S.C. § 7201 and 26 U.S.C. § 7203. Id. at 194. The Supreme Court concluded, using the language Defendant would have liked in his jury instruction, "that the standard for the statutory willfulness requirement is the voluntary, intentional violation of a known legal duty," id. at 201 (emphasis added) (internal quotation marks omitted), and that a defendant can overcome this requirement by showing that he acted in the good-faith belief that he was complying with the law, even if the belief was not objectively reasonable, see id. at 203-04. 

The problem for Defendant is that § 7212(a) does not use the word willfully. Cheek was not a constitutional decision requiring a particular state of mind before one could be convicted of a tax offense. It was interpreting statutory language—language not present in § 7212(a). No decision of the Supreme Court, or of this court, has held that Defendant's suggested mens rea requirement is the mens rea required for violation of § 7212(a). Nor is there any compelling reason to believe that Congress wanted the Cheek standard to apply to § 7212(a). Rather than using the word willfully, it used corruptly to define the mens rea for § 7212(a). And the federal appellate courts have agreed (although with some insignificant variations in language) on the definition of corruptly that appears in the district court's instruction: "To act 'corruptly' is to act with the intent to gain an unlawful advantage or benefit either for oneself or for another." R., Vol. 1 at 222. See United States v. Floyd, 740 F.3d 22, 31 (1st Cir. 2014) (collecting cases); United States v. Crim, 451 F. App'x 196, 201 (3d Cir. 2011). 

Moreover, the definition of willfully in Cheek and the definition of corruptly in the instructions in Defendant's trial have much in common. Indeed, the Second Circuit has suggested that an instruction like the one here "was as comprehensive and accurate as if the word 'willfully' was incorporated in the statute." United States v. Kelly, 147 F.3d 172, 177 (2d Cir. 1998). If there is something missing or ambiguous in the "corruptly" instructions that could be cured only by using the language taken from the definition of willfully, Defendant needed to point that out to the district court. On appeal, Defendant argues (at least indirectly) that what is missing from the instructions at his trial (and is conveyed in the language "intentionally violated a known legal duty," Aplt. Br. at 42) is that the jury, although instructed that he must have acted "with the intent to gain an unlawful advantage or benefit," was not told that it must find that he knew that the advantage or benefit was unlawful. Id. at 38.  But that is not the argument made by Defendant at trial. Defense counsel's brief argument to the district court consistently framed his concern in terms of the need to define unlawful, ending with the statement, "So I'm happy to defer to any other definition of unlawfulness, which the Tenth Circuit set out in Winchell." R., Vol. 3 pt. 3 at 361. (The reference to Winchell is puzzling because that opinion defined corruptly in essentially the same language as the instructions at Defendant's trial and did not define unlawful. See 129 F.3d at 1098-99.) We can hardly expect a trial judge to infer that defense counsel is making a mens rea argument when counsel insists that he just wants the word unlawful to be defined in the instructions. The patient, experienced, and highly intelligent trial judge in this case certainly did not understand the argument as Defendant presents it on appeal, concluding the discussion with the ruling, "I don't think we need a definition of unlawful." R., Vol. 3 pt. 3 at 301. 

Because Defendant's argument at trial did not alert the district court to the argument raised on appeal, we review the appellate argument under the plain-error standard. See United States v. Bedford, 536 F.3d 1148, 1153 (10th Cir. 2008). To establish plain error, Defendant must show "(1) there was error, (2) that is plain, (3) that affects substantial rights, and (4) that seriously affects the fairness, integrity or public reputation of judicial proceedings." Id. (internal quotation marks omitted). We need not resolve whether the "corruptly" instruction was flawed. We leave to another day whether a conviction under § 7212(a) requires that the defendant knew that the advantage or benefit he sought was unlawful and, if so, whether the instruction here would adequately inform a jury of that requirement. On this appeal it is enough that the second requirement of plain-error review (that the error be plain) is not satisfied. Although, as previously noted, the instructions used by the district court are in common use, Defendant has not cited any decision, much less a decision by this court or the United States Supreme Court, holding that they are improper in a § 7212(a) prosecution. See United States v. Fishman, 645 F.3d 1175, 1193 (10th Cir. 2011) ("In general, for an error to be contrary to well-settled law, either the Supreme Court or this court must have addressed the issue." (internal quotation marks omitted)). 

Defendant argues that he has at least shown that the elements of § 7212(a) are doubtful and that therefore the rule of lenity requires that we interpret the statute in his favor. But that rule cannot overcome the requirements of plain-error review. The doubt required for the rule of lenity must be doubt raised by an adequately preserved argument. Otherwise, the second prong of plain-error review (that the appellant show that the alleged error was plain) would be eviscerated. See United States v. Ruiz-Gea, 340 F.3d 1181, 1188 (10th Cir. 2003) ("When the choice between two possible meanings of a statute is so open to debate that the rule of lenity comes into play, one can hardly say that either interpretation is plainly wrong."). 

Finally, Defendant raises snippets of what may be arguments supporting his proposed instruction. But the arguments were not raised in district court and are not properly presented in his opening brief on appeal. We therefore reject them. See Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) ("[W]e routinely have declined to consider arguments that are not raised, or are inadequately presented, in an appellant's opening brief."); McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 999 (10th Cir. 2002) ("It is clear in this circuit that absent extraordinary circumstances, we will not consider arguments raised for the first time on appeal."). n1
   n1 Defendant's counsel at oral argument said that he was also challenging the rejection of his proposed good-faith instruction on § 7212(a). But Defendant did not make that argument in his opening brief. On the contrary, he summed up his § 7212(a) argument by saying, "For the same reasons the evidence supported the giving of a good faith jury instruction with respect to the § 1521 charge, as discussed above, the evidence supported the district court instructing the jury that to convict Mr. Williamson of violating § 7212(a) it had to find he intentionally violated a known legal duty." Aplt. Br. at 42 (citation omitted). We do not address arguments that "are not raised, or are inadequately presented, in an appellant's opening brief." Bronson, 500 F.3d at 1104.

So, if I read the opinion correctly, the Court articulated the argument very well, but apparently rejected it because the error was not "plain."  The defendant had not properly articulated the argument to the trial court.  Perhaps, we trial lawyers can learn from the case and get a different -- better -- result in the next case where the opportunity arises.