Wednesday, April 22, 2015

Ninth Circuit Reverses Barry Bonds Obstruction Conviction (4/21/15; revised 4/24/15)

The Ninth Circuit, in an en banc decision, just reversed Barry Bonds [Wikiepedia entry here] conviction for obstruction under 18 USC § 1503's omnibus clause, here, for his grand jury testimony.  United States v. Bonds, 2015 U.S. App. LEXIS 6708 (9th Cir. 2015), here. This is an important decision for tax crimes both for the grand jury context for § 1503 obstruction but also because § 7212(a), here, tax obstruction, has the same omnibus clause.  The analysis may further affect other statutory interpretations in the areas of false statements under 18 USC 1001(a), here.

When I posted on the opinion shortly after its release three days ago, I did a substantial amount of cutting and pasting because I did not have time to offer a good summary and synthesis.  So, I am revising the blog entry to delete the substantial quotations and offer more limited quotations with some of my own analysis.

First, the context.  The grand jury was investigating the use of sales enhancing drugs in sports and whether the proceeds from sales of the drugs were being laundered.  The investigation was focused on the persons providing drugs to athletes.  Athletes were not the targets of the investigation, but some were expected to testify to further the investigation.  Hence, a judicial order of immunity -- conferring use and derivative use immunity -- was given Bonds.  The grant of immunity effectively shielded Bonds from being prosecuted except for his own criminal footfaults in giving the immunized testimony.  Pursuant to the order, Bonds testified for about 3 hours.  The Government secured an indictment for false statements and obstruction based upon the testimony.  In the criminal trial, the jury acquitted on the false statement charges and convicted only for the obstruction charge.

The Q&A [referred to in the opinions as Statement C] and follow-through on which the conviction for obstruction was based (this is from Judge Kozinski's concurring opinion):
Q: Did Greg[, your trainer,] ever give you anything that required a syringe to inject yourself with?
A: I've only had one doctor touch me. And that's my only personal doctor. Greg, like I said, we don't get into each others' personal lives. We're friends, but I don't—we don't sit around and talk baseball, because he knows I don't want—don't come to my house talking baseball. If you want to come to my house and talk about fishing, some other stuff, we'll be good friends. You come around talking about baseball, you go on. I don't talk about his business. You know what I mean?
Q: Right.
A: That's what keeps our friendship. You know, I am sorry, but that—you know, that—I was a celebrity child, not just in baseball by my own instincts. I became a celebrity child with a famous father. I just don't get into other people's business because of my father's situation, you see.
Defendant was again asked about injectable steroids immediately following this exchange and a few other times during his testimony. He provided direct responses to the follow-up questions. For example, he was asked whether he ever "injected [him]self with anything that Greg . . . gave [him]." He responded [4]  "I'm not that talented, no." The government believed that those answers were false but, as noted, the jury failed to convict defendant on the false statement counts.
Bonds appealed.  The three Ninth Circuit judges originally hearing the appeal unanimously affirmed the conviction.  United States v. Bonds, 730 F.3d 890 (9th Cir. 2013), here.  The reasoning was that the testimony was evasive and misleading and thus within the scope of 18 USC 1503 even if true.

Bonds then requested en banc review.

The Ninth Circuit granted the en banc review and issued the following per curiam opinion (short enough to quote in full):
During a grand jury proceeding, defendant gave a rambling, non-responsive answer to a simple question. Because there is insufficient evidence that Statement C was material, defendant's conviction for obstruction of justice in violation of 18 U.S.C. § 1503 is not supported by the record. Whatever section 1503's scope may be in other circumstances, defendant's conviction here must be reversed. 
A reversal for insufficient evidence implicates defendant's right under the Double Jeopardy Clause. See United States v. Preston, 751 F.3d 1008, 1028 (9th Cir. 2014) (en banc) (citing Burks v. United States, 437 U.S. 1, 11, 98 S. Ct. 2141, 57 L. Ed. 2d 1 (1978)). His conviction and sentence must therefore be vacated, and he may not be tried again on that count. 
REVERSED.
As I said in my original posting, "[t]hat per curiam opinion might have been the resolution of the case without further ripples.  But some judges choose to ripple further in concurring and dissenting opinions."

Judge Kozinski's Concurring opinion (joined by Judges O'Scannlain, Graber, Callahan and Nguyen):

The gravamen of Judge Kozinski's analysis is captured in his opening question.
Can a single non-responsive answer by a grand jury witness support a conviction for obstruction of justice under 18 U.S.C. § 1503?
As I noted in the original blog entry, "[t]ax crimes fans will recall that in United States v. Caldwell, 989 F.2d 1056, 1058 (9th Cir. 1993), here, Judge Kozinski asked a similar question as to the defraud / Klein conspiracy under 18 USC 371, here:
 “We consider whether conspiring to make the government’s job harder is, without more, a federal crime.”
Both questions in their respective contexts and on their face seem to compel an answer of no.  As in Caldwell, in Bonds, Judge Kozinski is concerned about the potential sweep of a yes answer and the statutory interpretation of the crime required to support a yes answer.  In both cases, a yes answer would result in criminalizing conduct that no one would think of as illegal and certainly the language of the statute can be reasonably construed to avoid that result.

He starts by saying the potential scope of the yes answer:
As should be apparent, section 1503's coverage is vast. By its literal terms, it applies to all stages of the criminal and civil justice process, not just to conduct in the courtroom but also to trial preparation, discovery and pretrial motions. Indeed, it arguably covers conduct taken in anticipation that a civil or criminal case might be filed, such as tax planning, hiding assets or talking to police. And the text of the omnibus clause, in concert with our definition of corruptly, encompasses any act that a jury might infer was intended to "influence, obstruct, or impede . . . the due administration of justice." That's true even if no actual obstruction occurs, because the clause's use of "endeavors" makes "success . . . irrelevant." See United States v. Richardson, 676 F.3d 491, 503 (5th Cir. 2012) (internal quotation marks omitted). 
Stretched to its limits, section 1503 poses a significant hazard for everyone involved in our system of justice, because so much of what the adversary process calls for could be construed as obstruction. Did a tort plaintiff file a complaint seeking damages far in excess of what the jury ultimately awards? That could be viewed as corruptly endeavoring to "influence . . . the due administration of justice" by seeking to recover more than the claim deserves. So could any of the following behaviors that make up the bread and butter of litigation: filing an answer that denies liability for conduct that is ultimately adjudged wrongful or malicious; unsuccessfully filing (or opposing) a motion to dismiss or for summary judgment; seeking a continuance in order to inflict delay on the opposing party; frivolously taking an appeal or petitioning for certiorari—the list is endless. Witnesses would be particularly vulnerable because, as the Supreme Court has noted, "[u]nder the pressures and tensions of interrogation, it is not uncommon for the most earnest witnesses to give answers that are not entirely responsive." Bronston v. United States, 409 U.S. 352, 358, 93 S. Ct. 595, 34 L. Ed. 2d 568 (1973). 
Lawyers face the most pervasive threat under such a regime. Zealous advocacy sometimes calls for pushing back against an adversary's just case and casting a despicable client in a favorable light, yet such conduct could be described as "endeavor[ing] to . . . impede . . . the due administration of justice." Even routine advocacy provides ample occasion for stumbling into the heartland of the omnibus clause's sweeping coverage. Oral arguments provide a ready example. One need not spend much time in one of our courtrooms to hear lawyers dancing around questions from the bench rather than giving pithy, direct answers. There is, for instance, the ever popular "but that is not this case" retort to a hypothetical, which could be construed as an effort to divert the court and thereby "influence . . . the due administration of justice."
For this reason, courts including the Ninth Circuit have rightly sought to limit the potential scope of its application and require that it be material in the sense of having a natural tendency to influence the governmental proceeding (here a grand jury investigation).  Judge Kozinski concludes that Statement C had no naturally tendency to influence the grand jury investigation.  Indeed, that was true whether Statement C was true or false.

As Judge Kozinski shaped the relevant inquiry, with the materiality requirement, the answer to his opening question is obvious.  The grand jury investigation could not not have been influenced by the answer given.

Judge N.R. Smith concurring opinion (joined by Judges Wardlaw, Callahan and Friedman):

Judge Smith reached essentially the same conclusion (hence, he joined Judge Kozinski's opinion) but wrote separately to support the Fifth Circuit's analysis of the materiality standard for misleading or evasive statements in United States v. Griffin, 589 F.2d 200, 204 (5th Cir. 1979):
Evasive or misleading testimony, in this light, can only obstruct the due administration of justice when it completely thwarts the investigative nature of the tribunal—when it derails the grand jury "as effectively as if [the witness] refused to answer the question at all." Id. The proper question is not whether a statement had the intrinsic capability to influence the grand jury, but whether the statement, viewed in the context of the witness's testimony as a whole, "closed off entirely the avenue of inquiry being pursued by" the grand jury. United States v. Brown, 459 F.3d 509, 531 (5th Cir. 2006) (internal quotation marks omitted); see also United States v. Cohn, 452 F.2d 881, 884 (2d Cir. 1971) ("The blatantly evasive witness achieves th[e] effect [of impeding the gathering of relevant evidence] as surely by erecting a screen of feigned forgetfulness as one who burns files or induces a potential witness to absent himself.").
Here, Judge Smith reasons:
[T]he "natural and probable effect" of a single true but evasive response to the government's questioning is not to impede the grand jury but, rather, to prompt follow-up questioning. A statement that "goes off into the cosmos" merely triggers the prosecutor's duty to pin the witness down and elicit a clear response.
Judge Reinhart's concurrng opinion:

Judge Reinhart concurs with the per curiam opinion and parts of the opinions by Judges Kozinski and Smith.  Judge Kozinski's stated disagreement with those opinions seems to be nitpicking and not really going to the substance until he states that:
"My own view is that § 1503 should not be construed as covering testimony of witnesses at court proceedings."
This is contrary to dictum in Aguilar, but he lays out why that dictum may be misguided.  He seems to include grand jury proceedings in court proceedings for this purpose.

Judge Fletcher's concurring opinion:

Judge Fletcher takes issue with a claim by the Government attorney as to the scope of Section 1503 to cover a truthful statement intended to "obstruct":

In the government's view, any truthful answer given in the course of civil or criminal litigation, if intended to influence, obstruct, or impede the administration of justice, violates the omnibus clause. At oral argument, the government made terrifyingly clear the result of its reading of the statute. The government contended that the obstruction statute criminalizes a truthful but intentionally evasive or misleading answer to an interrogatory in civil litigation. The government also contended that the statute criminalizes a truthful but intentionally evasive or misleading answer during appellate oral argument:
Q: I think it's a common experience among all of us on the appellate court to ask of the lawyer in front of us in a criminal case that's come up on appeal: "Counsel, could you please explain to me what happened at trial?" and for the lawyer arguing from the U.S. Attorney's Office to say, "Your Honor, I was not the trial attorney." Now, sometimes that's an evasive answer. They may well know the answer, but it's true that they weren't the trial attorney. . . . Has the lawyer just committed a crime? . . . [T]he answer that I just hypothesized was designed to put me off the track. . . . A truthful but evasive answer.
. . .
A: I think that would be obstructive, Your Honor.
When asked how many San Francisco lawyers it planned to throw in jail, the government declined to specify
Well, you can see where that is going, but maybe not.  Certainly, there needs to be boundaries on such claims and potential scope.  Judge Fletcher finds another boundary in analysis of the legislative history which leads him to believe that the word "corruptly" is properly interpreted to mean bribery.  So that, where the omnibus clause comes into play, there should be bribery involved rather than simply some attempt to obstruct.  Judge Fletcher concludes:
Read in light of a contemporaneous dictionary meaning of "corruptly," in light of the contemporaneous report on the bill that became the predecessor to § 1503(a), and in light of the noscitur a sociis canon, I conclude that § 1503(a) forbids individuals from obstructing the administration of justice (1) by bribery, (2) by threats or force, or (3) by any threatening letter or communication.
As with Judge Smith, Judge Fletcher also finds support in from Bronston's holding in a not dissimilar perjury context that the cure for the problem of misleading or evasive testimony is follow-through questions and not criminal prosecution for the bare misleading or evasive testimony.

Finally, Judge Fletcher also challenges the dicta in Aguilar that testimony before a grand jury can be prosecuted under Section 1503.  And concludes:
It is possible that I am wrong and that I am required to regard the Court's dictum in Aguilar as controlling. I do not believe that this is so, but if it is I encourage the Court to revisit, either in this case or another, the question of the scope of the omnibus clause of § 1503(a). If the Court does revisit the question, I think it likely — perhaps very likely — that it will conclude, as I do, that the word "corruptly," as used in § 1503(a), means "by bribery."
Judge Fletcher is thus encouraging the Supreme Court to get it right on further review.

Judge Rawlinson dissent:

Judge Rawlinson starts by disclaiming joy in his task to dissent, but then proceeds with great relish to dissent.  He develops the Government's case that investigation was distracted by the testimony and argues that juries are the ones who decide these types of issues.  The jury here has spoken on the basis of substantial evidence that Bonds intended to mislead.  Moreover, Judge Rawlinson did not see the relevance of the Bronston case involving perjury law to the obstruction statute.

1 comment:

  1. Of course, properly deploying the intellectual capital of the IRS Whistleblower Office would substantially alter the equation for the IRS by focusing IRS audit/investigation resources on high-value "sure things" rather than its current methodology of scrambling around trying to figure out complicated, highly-disguised issues.

    But for that to operate successfully the IRS (specifically Chief Counsel) would have to embrace the concept, engage and pay whistleblowers rather than try to stifle them (and certainly not throw them in gaol as with Bradley Birkenfeld). In fact, that option would seem the only realistic one to change the odds and undermine "audit lottery."

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