Tuesday, April 17, 2018

Reliance on Counsel "Defense" and Jury Instructions (4/17/18)

I just read an interesting article -- Stephen A. Saltzburg, Evidence Supporting Advice of Counsel Defense (ABA Criminal Justice Spring 2018) [no link available].  Saltzburg. here, is a prominent law professor and expert on rules of evidence in criminal trials; he makes his publications available on his publications page here, but this article does not appear yet.

The article discusses United States v. Scully, 877 F.3d 464 (2d Cir. 2017), here, a significant opinion on the reliance on counsel defense.  Scully was not a tax case, but, as readers know, this defense (sometimes in a broader category of reliance on professional) often arises in tax cases to, if successful, defeat the government's evidence of willfulness.

Saltzburg concludes his discussion with the following "Lessons:"
  1. A defendant is entitled to rely on an advice of counsel defense provided there is some evidence to support the elements of that defense.
  2. In proving the advice of counsel defense, the defendant may testify to what counsel advised, may call counsel to testify about the advice, and may both testify and call counsel to testify in order to establish the defense.
  3. The advice provided by counsel is not offered for its truth, but to explain the defendant's state of mind, and is therefore not hearsay.
  4. An advice of counsel defense waives attorney-client privilege.  So, in Scully's case, the government could call Tomao [the lawyer] as a witness even if Scully did not.
  5. The government has the burden of proving beyond a reasonable doubt that the defendant acted willfully and knowingly, and the advice of counsel defense does not shift the burden of persuasion to the defense.
  6. Jury instructions should make clear how the defense relates to the government's burden of persuasion.
My only quibble with these numbered bullet points is that paragraph 1 seems to suggest that defendant must prove the defense.  True, paragraph 5 says that the government must prove beyond a reasonable doubt that the defendant acted willfully and knowingly (which would be willfully in tax crimes).  As Scully makes clear, the advice of counsel defense is not really an affirmative defense that the defendant must prove in order to prevail.  Rather, the defendant must prove only to the extent of creating doubt that the government had proved its case beyond a reasonable doubt.  In this regard, the Scully court said:
While “the prosecution must prove guilt beyond a reasonable doubt,” “the long-accepted rule was that it was constitutionally permissible to provide that various affirmative defenses were to be proved by the defendant.” Patterson v. New York, 432 U.S. 197, 211 (1977). An affirmative defense is “[a] defendant’s assertion of facts and arguments that, if true, will defeat the plaintiff’s or prosecution’s claim, even if all the allegations in the complaint are true.” Black’s Law Dictionary 451 (8th ed. 2004); see also Saks v. Franklin Covey Co., 316 F.3d 337, 350 (2d Cir. 2003). In a fraud case, however, the advice-of-counsel defense is not an affirmative defense that defeats liability even if the jury accepts the government’s allegations as true. Rather, the claimed advice of counsel is evidence that, if believed, can raise a reasonable doubt in the minds of the jurors about whether the government has proved the required element of the offense that the defendant had an “unlawful intent.” United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181, 1194 (2d Cir. 1989). The government must carry its burden to prove Scully’s intent to defraud, and that burden does not diminish because Scully raised an advice-of-counsel defense. Accordingly, the district court must advise the jury in unambiguous terms that the government at all times bears the burden of proving beyond a reasonable doubt that the defendant had the state of mind required for conviction on a given charge. 
That said, defendants are entitled to an advice-of-counsel instruction only if there are sufficient facts in the record to support the defense. United States v. Evangelista, 122 F.3d 112, 117 (2d Cir. 1997). There must be evidence such that a reasonable juror could find that the defendant “honestly and in good faith sought the advice of counsel,” “fully and honestly laid all the facts before his counsel,” and “in good faith and honestly followed counsel’s advice.” United States v. Colasuonno, 697 F.3d 164, 181 (2d Cir. 2012) (brackets and internal quotation marks omitted). Once the evidence meets that threshold, it is for the government to carry its burden of proving fraudulent intent beyond a reasonable doubt and for the jury to decide whether that burden was met. It is therefore potentially confusing to instruct the jury that the defendant “has the burden of producing evidence to support the defense” n5 or must “satisfy” the elements of the defense, or that it is the jury’s job to determine whether the defense was “established.” App’x 368–70.
   n5 The "burden of producing evidence," App'x 368, simply means that the issue is not for the jury's consideration at all absent some evidence of the required facts. Whether that burden is met is thus, in the first instance, for the court to decide. See, e.g., United States v. Bok, 156 F.3d 157, 164 (2d Cir. 1998). It is generally preferable, in our view, not to use the language of "burden of production" in jury instructions for fear that it would confuse the jury about the all-important burden of proof that remains on the prosecution.  
Now, the defendant's burden is really to introduce enough evidence as to the reliance on counsel that the court will submit to the jury a jury instruction on how the jury deals with the "defense."  The Scully Court said on the instructions:
In drafting a more appropriate instruction on the advice-of-counsel defense, it may be tempting to turn to the Supreme Court’s century-old formulation, adopted by this Court in Beech-Nut
[I]f a man honestly and in good faith seeks advice of a lawyer as to what he may lawfully do . . . , and fully and honestly lays all the facts before his counsel, and in good faith and honestly follows such advice, relying upon it and believing it to be correct, and only intends that his acts shall be lawful, he could not be convicted of [a] crime which involves willful and unlawful intent[,] even if such advice were an inaccurate construction of the law. But, on the other hand, no man can willfully and knowingly violate the law and excuse himself from the consequences thereof by pleading that he followed the advice of counsel.  
871 F.2d at 1194–95 (alterations in original), quoting Williamson v. United States, 207 U.S. 425, 453 (1908). But that language, like many excerpts from appellate opinions articulating legal principles for an audience of judges and lawyers, is unwieldy for a jury instruction. 
More manageable contemporary formulations are available. The treatise on jury instructions authored by the late Leonard B. Sand, a wise and experienced trial judge, and his colleagues, offers the following template that translates the Williamson/Beech-Nut formulation into clearer language:  
You have heard evidence that the defendant received advice from a lawyer and you may consider that evidence in deciding whether the defendant acted willfully and with knowledge. 
The mere fact that the defendant may have received legal advice does not, in itself, necessarily constitute a complete defense. Instead, you must ask yourselves whether the defendant honestly and in good faith sought the advice of a competent lawyer as to what he may lawfully do; whether he fully and honestly laid all the facts before his lawyer; and whether in good faith he honestly followed such advice, relying on it and believing it to be correct. In short you should consider whether, in seeking and obtaining advice from a lawyer, the defendant intended that his acts shall be lawful. If he did so, it is the law that a defendant cannot be convicted of a crime that involves willful and unlawful intent, even if such advice were an inaccurate construction of the law. 
On the other hand, no man can willfully and knowingly violate the law and excuse himself from the consequences of his conduct by pleading that he followed the advice of his lawyer Whether the defendant acted in good faith for the purpose of seeking guidance as to the specific acts in this case, and whether he made a full and complete report to his lawyer, and whether he acted substantially in accordance with the advice received, are questions for you to determine. 
1 Leonard B. Sand, et al., Modern Federal Jury Instructions: Criminal, Instruction 8-4, at 8-19 (2017). 
We also refer district courts to the model instructions drafted by our sister circuits, particularly the Seventh Circuit’s model, which reads as follows:  
If the defendant relied in good faith on the advice of an attorney that his conduct was lawful, then he lacked the [intent to defraud; willfulness; etc.] required to prove the offense[s] of [identify the offense] charged in Count[s] __. 
The defendant relied in good faith on the advice of counsel if: 
1. Before taking action, he in good faith sought the advice of an attorney whom he considered competent to advise him on the matter; and 
2. He consulted this attorney for the purpose of securing advice on the lawfulness of his possible future conduct; and 
3. He made a full and accurate report to his attorney of all material facts that he knew; and  
4. He then acted strictly in accordance with the advice of this attorney. 
[You may consider the reasonableness of the advice provided by the attorney when determining whether the defendant acted in good faith.] 
The defendant does not have to prove his good faith. 
Rather, the government must prove beyond a reasonable doubt that the defendant acted [with intent to defraud; willfully; etc.] as charged in Count[s] __.  
Seventh Circuit Pattern Criminal Jury Instructions, § 6.12 (2012 ed.). 
Neither of these instructions muddles the question of burden of proof by injecting the concept of a “burden of production” or asserting that a defendant must “show” or “establish” or “satisfy” the jury about particular facts. The last paragraph of the Seventh Circuit instruction, which explicitly informs the jury that a defendant need not establish her good faith, seems to us a valuable final reminder of the burden of proof that the prosecution must carry and should be included in any instruction to the jury on the advice-of-counsel defense.
The advice of counsel defense is very much like the good faith defense, also often used in tax crimes cases.  The defendant will want the good faith defense instruction as well and the basis for obtaining the instruction is basically the same.  See Good Faith as a Defense to Tax Crimes (Federal Tax Crimes Blog 2/9/13), here.  In that blog entry, I quote Professor Buell as follows (Samuel W. Buell, Good Faith and Law Evasion, 58 UCLA L. Rev. 611, 639 (2011), here:
The federal courts have repeated innumerable times the black-letter principle that a defendant's good faith negates the specific intent to defraud. With proper record evidence, a defendant in a criminal fraud trial is entitled to a jury instruction on good faith, or at least an instruction defining fraudulent intent that sufficiently encompasses the idea that to act in good faith is to act without such intent. This is not an affirmative defense. A good faith claim is a factual assertion that, if believed (or, more accurately, if raising a reasonable doubt), makes it impossible to conclude that the defendant had the specific intent to defraud. 
Finally, I cannot pass up the opportunity to pass on a joke about the reliance on professional defense:
First man: I have a CPA do my income tax return.
Second man: Why do you do that?
First man: It saves me time. Second man: How much time?
First man: Maybe 5 to 10 years.
-Old Joke
Quoted in Burgess J.W. Raby and William L. Raby, Penalty Protection for the Taxpayer: Circular 230 and the Code, 2005 TNT 105-65.

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