Wednesday, October 11, 2017

Another Interesting NonTax Case on Willful Blindness (10/11/17)

In United States v. Oti, ___ F.3d ___, 2017 U.S. App. LEXIS 19180 (5th Cir. 2017), here, the court held that the willful blindness instruction was given in error but affirmed anyway based on harmless error.  In so holding, the Court said: 
We emphasize once again, however, that the deliberate ignorance instruction should rarely be given. Kuhrt, 788 F.3d at 417; United States v. Faulkner, 17 F.3d 745, 766 (5th Cir. 1994); United States v. Ojebode, 957 F.2d 1218, 1229 (5th Cir. 1992); see also United States v. Cartwright, 6 F.3d 294, 301 (5th Cir. 1993) ("Because the deliberate ignorance instruction may confuse the jury, the instruction should rarely be given."). The instruction is not a failsafe mechanism that the government can implement to relieve itself of proving the mens rea requirement of a crime. See Kuhrt, 788 F.3d at 417 ("The proper role of the deliberate ignorance instruction is not as a backup or supplement in a case that hinges on a defendant's actual knowledge."). We caution the government that, while this instance of misapplying the deliberate ignorance instruction amounted to harmless error, that will not always be the case.
Just a few points about the decision on willful blindness:

1.  The court held that the instruction may be appropriate in conspiracy cases where a proper foundation exists in the evidence.  The court cited United States v. Inv. Enters., 10 F.3d 263, 269 (5th Cir. 1993) ("To the extent that the instruction is merely a way of allowing the jury to arrive at the conclusion that the defendant knew the unlawful purpose of the conspiracy, it is hardly inconsistent with a finding that the defendant intended to further the unlawful purpose.")  As a side note to the specific holding, I call attention to the phrasing of the willful blindness instruction -- that a finding of willful blindness is merely a way of "allowing the jury to arrive at the conclusion that the defendant" had the requisite knowledge.  I have harped on it before, but I think the willful blindness instruction should not compel a finding the requisite knowledge that is the element of the crime but merely permits the jury to find that knowledge based upon evidence of willful blindness in conjunction with all the other evidence.

2.  The court then offered the following discussion which, I think, is quite good:
"We have often cautioned against the use of the deliberate ignorance instruction." Mendoza-Medina, 346 F.3d at 127. In United States v. Skilling, we noted that such an instruction should be given only in "'rare' instance[s]" and observed: 
The concern is that once a jury learns that it can convict a defendant despite evidence of a lack of knowledge, it will be misled into thinking that it can convict based on negligent or reckless ignorance rather than intentional ignorance. In other words, the jury may erroneously apply a lesser mens rea requirement: a "should have known" standard of knowledge. 
Skilling, 554 F.3d at 548-49, rev'd on other grounds, 561 U.S. 358, 130 S. Ct. 2896, 177 L. Ed. 2d 619 (2010). "The instruction is appropriate [*33]  only in the circumstances where a defendant claims a lack of guilty knowledge and the proof at trial supports an inference of deliberate indifference." United States v. Kuhrt, 788 F.3d 403, 417 (5th Cir. 2015).
Appellants argue that the instruction was inappropriate because, with the evidence before it, the jury had the choice of deciding whether Appellants were actually aware of the pill mill activities or actually not aware of the activities. We agree. "[T]he district court should not instruct the jury on deliberate ignorance when the evidence raises only the inferences that the defendant had actual knowledge or no knowledge at all of the facts in question." Mendoza-Medina, 346 F.3d at 133-34. The government has failed to cite to specific evidence in the record that demonstrates that Okechuku, Oti, or Iwuoha purposely contrived to avoid learning of the pill mill activities. This showing is necessary as to each defendant to justify the use of the deliberate ignorance instruction. A boilerplate deliberate ignorance instruction that applies to all defendants in a case is inappropriate absent a showing that the proper factual basis exists as to each defendant. See Fuchs, 467 F.3d at 902. Where the government relies on evidence of actual knowledge, the deliberate ignorance instruction is not appropriate. Kuhrt, 788 F.3d at 417.
 Addendum 10/11/17 1:00pm:

I just read the decision in United States v. Chogsom, 2017 U.S. Dist. LEXIS 165738 (ND Ill. 10/6/17).  I do not offer a link because I excerpt the relevant portion in full.  Note that in  the excerpt the Court addresses the type of evidence needed to support the willful blindness instruction (referred to as the ostrich instruction, an equivalent term commonly used in the Seventh Circuit).  The bold-face in the excerpt is added by me:
A. Ostrich Jury Instruction 
Tantchev challenges the Court's "ostrich" or "deliberate avoidance" jury instruction, which stated: 
"With respect to Counts One, Three, and Five you may find that the defendant you are considering in each Count acted knowingly if you find beyond a reasonable doubt that he had a strong suspicion that the vehicles in the containers he was exporting and attempting to export in those Counts were stolen and that he deliberately avoided the truth. 
With respect to Counts Two and Four, you may find that the defendant you are considering in each Count acted knowingly if you find beyond a reasonable doubt that he had a strong suspicion that the documents and information he caused to be filed with the Bureau of Customs and Border Protection regarding the vehicles in the containers he was exporting and attempting to export in Counts One and Three contained materially false, fictitious, or fraudulent statements or entries, and that he deliberately avoided the truth.\ 
You may not find that the defendant acted knowingly if he was merely mistaken or careless in not discovering the truth, or if he failed to make an effort to discover the truth." 
(R. 77, Jury Instructions 33.) Tantchev argues that the Court gave the instruction in error because the government did not introduce sufficient evidence that Tantchev believed it was likely that the shipping containers contained stolen vehicles and deliberately avoided learning that fact to warrant giving the instruction. Tantchev also argues that the instruction prejudiced him because the government argued in closing that Tantchev's failure to look inside the shipping containers showed that he was deliberately avoiding learning about the stolen vehicles. 
To obtain a new trial based on incorrect jury instructions, Tantchev must establish that "(1) the instructions did not accurately state the law, and (2) the error prejudiced [him] because the jury was likely to be misled or confused." Johnson v. Gen. Bd. of Pension & Health Benefits of United Methodist Church, 733 F.3d 722, 733 (7th Cir. 2013). The Seventh Circuit has explained that the ostrich instruction is properly used to "inform jurors that the legal definition of 'knowledge' includes the deliberate avoidance of knowledge. United States v. Pabey, 664 F.3d 1084, 1092 (7th Cir. 2011) (citation omitted). Essentially, the instruction prevents a defendant from avoiding "criminal liability by sticking his head in the sand to purposefully avoid the knowledge that he is involved in criminal dealings." Id. (citing United States v. Green, 648 F.3d 569, 582 (7th Cir. 2011). The Seventh Circuit has cautioned, however, that evidence "merely supporting a finding of negligence—that a reasonable person would have been strongly suspicious, or that a defendant should have been aware of criminal knowledge—does not support an inference that a particular defendant was deliberately ignorant." United States v. Carrillo, 435 F.3d 767, 782 (7th Cir. 2006). Accordingly, the ostrich instruction is only appropriate when: "(1) a defendant claims a lack of guilty knowledge and (2) the government presents evidence that suggests that the defendant deliberately avoided the truth." Pabey, 664 F.3d at 1092 (citing United States v. Tanner, 628 F.3d 890, 904 (7th Cir. 2010) (emphasis in original). When determining whether an ostrich instruction was appropriate, the Seventh Circuit views the evidence in the light most favorable to the government. United States v. Pierotti, 777 F.3d 917, 920 (7th Cir. 2015). 
Tantchev has claimed a lack of guilty knowledge, so the government was required to present evidence that the defendant deliberately avoided the truth. "There are two types of evidence that can illustrate a defendant's deliberate attempts to remain ignorant." Id. (citing Carrillo, 435 F.3d at 780). First, "a prosecutor can show that the defendant committed overt physical acts to avoid the knowledge." Id.; see e.g., United States v. Giovannetti, 919 F.2d 1223, 1228 (7th Cir. 1990) (finding ostrich instruction warranted where landlord changed his route to work to avoid driving past suspicious tenants). Second, the prosecutor can show "purely psychological avoidance, otherwise described as the cutting off of one's normal curiosity by an effort of will." Pabey, 664 F.3d at 1092 (quoting Carrillo, 435 F.3d at 780). The Seventh Circuit has held that a jury can "infer the deliberate avoidance of knowledge from circumstantial evidence alone," such as a defendant consistently ignoring red flags. Id. at 1093 (citing Carrillo, 435 F.3d at 781). Accordingly, the "key determinations to make when examining this type of evidence are therefore what the defendant knew and whether that knowledge raises a reasonable inference that [he] remained deliberately ignorant of facts constituting criminal knowledge." Id. (citations and quotations omitted).
Here, the ostrich instruction was warranted because the government produced sufficient evidence that Tantchev deliberately avoided learning the truth about the stolen vehicles in his shipping containers—specifically, the government showed that Tantchev cut off his normal curiosity by an effort of will. On direct examination, Tantchev claimed that he did not know there were stolen vehicles in his shipping containers because his customers loaded the containers and he deliberately never looked inside the containers. (Tr. 924-35, 959, 967.) On cross-examination, Tantchev conceded that he only had verbal agreements with his customers and that as the shipper of the containers, he bore the ultimate liability risk for the containers and the materials inside the containers. (Id. 1132-36.) Tantchev also admitted that he specifically avoided being present when his customers—many whom he did not know and who were effectively strangers—came to his truck yard and loaded the containers, despite the fact that he had over a decade of experience shipping containers, safety was a "paramount issue" in his business, there were many potential safety issues associated with loading and shipping the containers, and he was responsible for any liability and viewed it as his job to make sure the cargo was shipped safely. (Id. 1136-37, 1139-40.) Tantchev conceded that because he did not check the containers to ensure they were properly loaded, the loads in his containers, for which he was responsible, might be unsecured and "bouncing all over the place" and "causing some damage," and he would not know. (Id. at 1137-38.) 
This evidence sufficiently demonstrated that Tantchev deliberately avoided exhibiting normal curiosity and safety and liability-related caution as to the contents of the shipping containers in his truck yard, especially for someone with years of experience in the transportation industry. The Court's jury instruction, which closely tracks the pattern jury instruction in this Circuit, was thus appropriate based on the evidence in this case. See Pabey, 664 F.3d at 1093-94 (finding deliberate avoidance where defendant avoiding asking questions of or talking to his friends who were working illegally on his house); United States v. Leahy, 464 F.3d 773, 794 (7th Cir. 2007) (finding deliberate avoidance where defendant, an insurance broker for a temp agency, asked no questions about the company's auditing problems despite his exposure to "numerous red flags, obvious to someone with his training and experience"); see also Pattern Criminal Jury Instructions of the Seventh Circuit (2012 ed.) § 4.10. 
Accordingly, the Court denies Tantchev's motion for a new trial due to the Court's "ostrich" jury instruction.
Addendum 10/11/17 2:30pm: 

As readers of this blog know, I do not like the willful blindness instruction, particularly used with the high level of criminal intent required for tax crimes with a willfully element and other crimes (such as FBAR) with that high standard for willfulness.  To remind readers, that high standard per Cheek is intent to violate a known legal.  There are several components there -- the legal duty must in the first instance be knowable (per James and its progeny and then the defendant must actually know the duty and then the defendant must specifically intend to violate that known and knowable legal duty.  If the jury could infer from the actions proved by the Government that the defendant avoided knowing, that alone should not suffice.  Ignorance of the law is not intent to violate the law.  I think the Cheek standard assumes that the Government prove that the defendant actually knew.  So, what is the role of willful blindness?  I think acts of willful blindness like any other circumstantial evidence can be used for the jury to infer the require intent to violate a known legal duty.  If I am correct, I think that any discussion of willful blindness in a specific intent crime a la Cheek should be in the discussion of circumstantial evidence of intent.  Willful blindness should not be carved out and separately treated because it can confuse the jury and it elevates it above other circumstantial evidence and gives it an importance in the pantheon of potential circumstantial evidence that it just does not deserve.

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