Federal Criminal Lawyer Blog

Eleventh Circuit Holds No Expectation of Privacy in Delivered Email Messages

2010-03-17T19:57:45Z

Last week in Rehberg v. Paulk, the Eleventh Circuit held that sending “emails to third parties constitute[s] a voluntary relinquishment of the right to privacy in that information.” In this case, the investigators subpoenaed the emails directly from the Internet Service Provider (ISP) through which Rehberg transmitted his messages. The Court held that he did not have a valid expectation of privacy in the email information, so he failed to state a Fourth Amendment violation.

This ruling might be a dangerous precedent, for several reasons. First, the Court of Appeals says that none of us has any privacy in our emails the moment we hit the ‘send’ button. Second, this means that the government can get our otherwise private messages from every ISP we use to connect us with the outside world. This ruling represents one more step towards a lack of privacy, and in favor of the government’s ability to intrude into our lives.

The opinion in Rehberg v. Paulk is here.
A lengthy analysis by Orin Kerr on why the Eleventh Circuit got this wrong is here at the Volokh Conspiracy.

Harrington v. Richter: Cert Granted in AEDPA Ineffective Counsel Case

2010-03-09T20:04:49Z

The Supreme Court has granted certiorari in Harrington v. Richter, a federal habeas corpus case out of the Ninth Circuit. The Ninth Circuit held that Richter was prejudiced by his defense lawyer’s unreasonable failure to investigate and present expert testimony on blood evidence and that the state court’s determination that he was not denied effective assistance of counsel was an unreasonable application of clearly established federal law.

The question presented is whether the Ninth Circuit denied the state court the deference mandated by AEDPA and impermissibly enlarged the Sixth Amendment right to counsel by elevating the value of expert opinion testimony to virtually always require criminal defense attorneys to produce such testimony. In addition, the Court asked the parties to brief whether AEDPA deference applies to a state court’s summary disposition of a claim, including under the Strickland test for ineffective assistance of counsel.

The facts of this case would make for an interesting episode of CSI. Both parties agreed that two defendants, Richter and Branscombe, socialized for several hours in Johnson’s house with Johnson and Klein until 2:30 a.m., when they left but Klein decided to spend the night. The prosecution and defense presented divergent theories at trial of the events occurring later that morning, when Klein was killed and Johnson received gunshot wounds.

The central dispute between the prosecution and the defense was Klein's location at the time he was shot. Blood-spatter evidence could have confirmed either the defense’s or the prosecution’s theory of the case, but the state conducted an inadequate forensic investigation. Had Richter’s lawyer chosen to consult a forensic expert for the defense, that expert could have assisted him in evaluating the testimony of the prosecution’s experts or guided him in developing effective cross-examination of those witnesses.

The Ninth Circuit’s lengthy opinion is available here.
The briefs are available at the following links:
Petition for Writ of Certiorari
Brief in Opposition
Reply to Opposition

Bloate: Supreme Court Holds Time Granted to Criminal Defendants to Prepare Pretrial Motions is Not Automatically Excludable under Speedy Trial Act

2010-03-08T18:57:35Z

This morning the Supreme Court issued its opinion in Bloate v. U.S. The Court resolved a circuit court split, holding that additional time granted to criminal defendants to prepare pretrial motions is not automatically excludable from the federal Speedy Trial Act’s 70-day limit under subsection (h)(1). The Eleventh Circuit Court of Appeals, which sits here in Atlanta, previously held the opposite, so this decision marks a change in the law of this circuit. We explained the issues in this case and the Eleventh Circuit case in this post last year.

The government argued that defendants could “lay a trap” for judges by requesting time to prepare motions. The Court noted that a district court judge may still exclude such time from the Speedy Trial Act under subsection (h)(7) if it finds “that the ends of justice served by [a continuance for time to prepare pretrial motions] outweigh the best interest of the public and the defendant in a speedy trial.” The judge need only place these reasons on the record.

The Speedy Trial Act is available here.
The Court’s opinion is available here. The majority was written by Justice Thomas. Justice Ginsburg filed a concurring opinion and Justice Alito filed a dissenting opinion, in which Justice Breyer joined.

Supreme Court Criminal Case: Police May Reinterrogate a Suspect Two Weeks After He Requests a Lawyer, Even if He Remains in Prison, Lawyerless

2010-02-26T16:07:12Z

This week, the United States Supreme Court handed down its opinion in Maryland v. Shatzer. The case examined the parameters of the protections afforded by Edwards v. Arizona regarding reinterrogation of a criminal suspect after he has requested counsel. The court held that 1) a break in custody lasting more than two weeks between attempts at interrogation is sufficient to avoid the coercive pressures against which Edwards protected and 2) a return to the general prison population amounts to a break in custody for the purposes of this rule.

Justice Scalia delivered the opinion of the Court. Justices Thomas and Stevens each concurred in the judgment but disagreed with the 14-day break in custody rule. Justice Thomas would prefer Edwards be limited to “the circumstances present in Edwards itself” whereas Justice Stevens did not find the bright-line rule to provide enough protection against coerced confessions. We agree with Justice Stevens.

The facts of the case involve allegations of sexual child abuse against Mr. Shatzer while he was incarcerated for another offense. In 2003 a detective attempted to interview Mr. Shatzer about sexual abuse of his 3-year-old son, but Mr. Shatzer declined to speak without an attorney. The investigation was closed.

Two and a half years later, another detective was assigned, who interviewed the son (who had somehow aged 5 years in that period) and acquired more details. That detective then interrogated Mr. Shatzer after obtaining a Miranda waiver. Mr. Shatzer had been transferred to another prison, but had been incarcerated for the entire time. Detectives later administered a polygraph exam. Mr. Shatzer failed, then became upset and incriminated himself.

In the majority opinion, Justice Scalia explained the rationale behind Miranda and Edwards, describing the Edwards protections as “not a constitutional mandate, but judicially prescribed prophylaxis.” He explained that in cases following Edwards, the rule had been applied where the suspects had been in continuous custody without a chance to regain “a sense of control or normalcy after they were initially taken into custody.” Due to the diminished benefits and increased costs of extending Edwards, an extension of Edwards without time limits is not justified. Justice Scalia seemed to choose a 14-day bright-line rule arbitrarily, assuming that two weeks is long enough to “shake off any residual coercive effects of his prior custody.”

In his concurring opinion, Justice Stevens expressed his qualms that “[t]he Court’s analysis today is insufficiently sensitive to the concerns that motivated the Edwards line of cases.” He disagrees with the assertion that Edwards is not a constitutional command because the Fifth Amendment is the source of that protection. He also worries that allowing reinterrogation after only 14 days “disregards the compulsion caused” by a subsequent interrogation of a suspect who has requested a lawyer after being told that one would be provided for him, but have not received counsel. That suspect is likely to feel that the police lied, so he does not really have any right to a lawyer. Justice Stevens suggested a concrete event, such as police providing counsel, rather than or in addition to the time-based rule.

The other issue decided in this case was whether Mr. Shatzer was “in custody” for purposes of the break-in-custody rule. Although he was incarcerated, the Court determined that a return to the general prison population amounts to a “return to their accustomed surroundings and daily routine” with “the degree of control they had over their lives prior to the interrogation.” The Court also assumes that the prisoner suspect understands that the interrogator has no power to increase or decrease his time served. Because of those circumstances, a return to prison qualified as a break in custody.

We believe Justice Stevens took a more reasonable approach to this issue in his concurring opinion. He recognizes that “[a] prisoner’s freedom is severely limited, and his entire life remains subject to government control,” which is “not conducive to shaking off any residual coercive effects of his prior custody. Nor can a prisoner easily seek advice from an attorney, family members, or friends [as emphasized in the majority opinion,] especially not within 14 days; prisoners are frequently subject to restrictions on communications.” In addition, “[p]risoners are uniquely vulnerable to the officials who control every aspect of their lives; prison guards may not look kindly upon a prisoner who refuses to cooperate with police. And cooperation is frequently relevant to whether the prisoner can obtain parole.”

While Justice Stevens agreed that the 2½ year period between interrogations is a basis for treating the second interrogation as no more coercive than the first, he acknowledged that “[n]either a break in custody nor the passage of time has an inherent, curative power.” We agree. Unfortunately, the majority held otherwise.

The full opinion is available here.

Upcoming Changes in the Supreme Court?

2010-02-24T20:26:53Z

Tom Goldstein at SCOTUSblog discussed his predictions for the future of the Supreme Court yesterday. He predicts that Justice Stevens will retire, but Justice Ginsburg will remain on the bench. His entry includes an in-depth analysis of potential nominees to replace Justice Stevens, concluding that Solicitor General Elena Kagan is the most likely choice for the Obama Administration.

Read the full post here.

Phillips: A Crack Reduction is a Sentence Under Rule 35

2010-02-24T20:12:47Z

Congratulations to Jake Waldrop and the Federal Defender Office here in Atlanta for winning one at the Court of Appeals this week! Yesterday, the Eleventh Circuit held that Federal Rule of Criminal Procedure 35, which imposes a seven-day jurisdictional time limit on modifications of sentences, applies to crack resentencings, as well as original sentencings.

The opinion in the case, U.S. v. Phillips, is available here.
The Federal Defender blog has a post on the case here.
More information on crack resentencing is available here at the Sentencing Law and Policy blog.

Oral Arguments in Third Circuit Electronic Privacy Case – Should the DOJ Need a Warrant to Obtain Location Data from Cell Phones?

2010-02-18T19:59:01Z

Last week, the Third Circuit, which hears appeals from federal cases in Pennsylvania, Delaware, and New Jersey, heard oral arguments in a worrisome electronic privacy case: In The Matter Of The Application Of The United States Of America For An Order Directing A Provider Of Electronic Communication Service To Disclose Records To The Government. The Department of Justice is challenging a denial of a request for cell phone location data in a drug-trafficking case, which was signed by all of the magistrate judges in the Western District of Pennsylvania and affirmed by the district court judge.

At oral arguments, Third Circuit Judge Sloviter seemed understandably concerned about the privacy implications and potential over-reaching by the government in allowing police to obtain information about a person’s location based on cell phone data without probable cause. Judge Tashima, visiting from the Ninth Circuit, seemed more sympathetic to the government’s argument. Judge Roth, also on the panel, did not attend the oral arguments. An audio recording of the arguments is available here.

Professor Orin Kerr, at The Volokh Conspiracy blog, explained the case in this post and blogged the oral arguments in this post. His posts, and the extensive discussion in the comments, provide a good overview of the legal arguments involved in the case. We have also posted the appellate briefs below. We disagree with Professor Kerr’s Fourth Amendment argument that Smith v. Maryland (in which the Supreme Court held that use of a pen register is not a “search” for Fourth Amendment purposes because the user of the phone voluntarily conveys the outgoing numbers to the phone company) is applicable precedent, because a cell phone user actively dials a phone number, but only passively shares his location with the phone company. We hope that the Third Circuit decides that a warrant is necessary for the police to obtain such information.

The statute involved is 18 U.S.C. § 2703(c), which is available here.

The Atlanta Journal Constitution article about this case is available here.

Briefs and Orders in the Western District of Pennsylvania:
The District Court Order affirming magistrate judge's ruling denying the government's request is available here.
The Government's reply memorandum of law in support of request for review is available here.
The Amicus brief of the Federal Defender is available here.
The Amicus brief of Susan Freiwald is available here.
The Amicus brief of the Electronic Frontier Foundation, the ACLU, and the Center for Democracy and Technology is available here.
The Government's memorandum of law in support of request for review is available here.
The Magistrate Court Order Denying Government Request to Obtain Stored Cell Site Records without Probable Cause is available here.

Briefs to the Third Circuit:
The Amicus brief of Susan Freiwald is available here.
The Amicus brief of the Electronic Frontier Foundation, the ACLU, and the Center for Democracy and Technology is available here.

Eleventh Circuit: Both Defendant and Federal Prosecutors Entitled to Notice and Opportunity to Respond when Court Intends to Rely on New Information in Modification of a Criminal Sentence

2010-02-11T19:07:13Z

Last week the Eleventh Circuit, which sits here in Atlanta, Georgia, decided U.S. v. Jules. The Court held that “when a district court intends to rely on new information in deciding a motion for the modification of a sentence pursuant to 18 U.S.C. § 3582(c)(2),” both the federal government and the criminal defendant are entitled to notice of the information and an opportunity to respond.

Jules was originally sentenced to 151 months, the bottom of his Guidelines range, for conspiracy to possess with intent to distribute 50+ grams of cocaine base. The Guidelines were subsequently amended to reduce the base offense-level in such a case. Thereafter, Jules requested a modification of his sentence. The probation office sent a memo to the district court detailing misconduct by Jules while in prison. That memo was neither docketed nor provided to either of the parties. The district court relied on the sanctions in the memo in denying Jules’ motion for modification.

The Eleventh Circuit held that, although a defendant in a § 3582(c)(2) proceeding is not afforded all of the protections as at an original sentencing, the “fairness and due process principles embodied in the Federal Rules of Criminal Procedure, the Sentencing Guidelines’ policy statements, and the reasoning of [the Fifth and Eighth Circuits] compel us to hold that each party must be given notice of and an opportunity to contest new information relied on by the district court in a § 3582(c)(2) proceeding. The court also stated that a hearing is permissible for allowing parties to contest such information, but not necessary.

The Eleventh Circuit’s opinion is available here.

Eleventh Circuit Discussion of Loss and Restitution in Sentencing for Federal Crimes

2010-02-09T15:06:37Z

Yesterday, the Eleventh Circuit issued an opinion in U.S. v. Patterson. Even though the criminal defense attorney below failed to object to the Presentence Investigation Report (PSI) and Patterson lost his appeal on the plain error standard, this opinion provides a good review of the Eleventh Circuit law regarding intended loss, actual loss, and restitution and the Federal Sentencing Guidelines.

The Guidelines calculate a sentencing range based, in part, on how much ‘loss’ was caused by the defendant’s crime. The sentence is calculated using “intended” loss because a “criminal pays the price for the ambition of his acts, not their thoroughness,” whereas the amount that a criminal must pay back, called “restitution,” “must be based on the amount of loss actually caused by the defendant’s conduct.”

It often is hard to calculate the loss figure, because some fraud crimes result in “actual” loss amounts that differ dramatically from the “intended” loss. That was the problem in this case. This case involved stolen cars, some of which were never recovered and/or owners could not be located, and others were returned to their owners intact. For these reasons, the “intended” loss more than doubled the “actual” loss and restitution. Patterson argued that the loss amount used in sentencing should equal the restitution amount, but the Court rejected his argument, explaining that “cases offer substantial explanations why these figures can diverge.” The Court of Appeals said, “the district court did not err, let alone plainly err.”

The opinion is available here.

Briscoe v. Virginia: Federal Supreme Court Upholds Recent Opinion Regarding Testimony By Forensic Analysts in Criminal Trials

2010-02-04T19:54:09Z

Last week the Supreme Court vacated and remanded Briscoe v. Virginia for proceedings consistent with the decision in Melendez-Diaz v. Massachusetts. We discussed Melendez-Diaz last summer in this post.

In Melendez-Diaz, the Supreme Court held that crime lab reports are testimonial statements covered by the Confrontation Clause of the Sixth Amendment. For such reports to be admissible, the forensic analysts must testify as witnesses in criminal trials, both federal and state. Shortly after that decision, the Court granted cert in Briscoe, a case presenting the same issue. Justice Scalia criticized the grant of cert, asking, “Why is this case here except as an opportunity to upset Melendez-Diaz?”

He asked that question at oral argument less than one month ago. SCOTUSblog covered that oral argument thoroughly in this post. They also explained last week’s decision in the context of the changing Court in the first half of this SCOTUSblog post.

The extremely short per curium opinion is available here.

Photo courtesy of the U.S. Army.

Supreme Court Grants Certiorari in § 924(c) Cases Regarding Mandatory Minimums in Federal Criminal Firearms Cases

2010-01-28T18:45:23Z

This week, the Supreme Court agreed to hear Abbott v. U.S. and Gould v. U.S. These criminal cases involve a deep circuit split among the federal courts that we addressed in this post in September, when the 11th Circuit decided U.S. v. Segarra.

The Armed Career Criminal Act (ACCA), drug laws, and the gun statute 18 U.S.C. § 924(c) each carry heavy mandatory minimum sentences. The ACCA and drug minimums are often longer than the minimum called for by § 924(c). § 924(c) contains a prefatory clause, called the “except” clause, that applies the subsection “[e]xcept to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law.” The plain language of that clause prohibits application of § 924(c) where defendants are subject to greater minimums.

]]> Two questions are at issue in Abbott, one of which is also present in Gould. The first issue, applicable to both cases, is whether the exception applies when a defendant is subject to a higher mandatory minimum for any crime that is the predicate for the § 924(c) conviction. Despite the plain language of “any other provision of law,” only the Second Circuit has interpreted this language in favor of the defendant. Eight Circuit Courts of Appeals, including the Eleventh Circuit, have held that “any other provision of law” does not include predicate crimes.

The Courts of Appeals are more evenly divided on Abbott’s second issue, which is whether the “except” clause applies where the defendant is convicted for another offense for possession of the same firearm in the same transaction as the § 924(c) conviction. The Second, Sixth, and Eighth Circuits have held that the “except” clause applied to firearm-related conduct. The Third, Fourth, and Fifth Circuits have held the opposite, absurdly explaining that “any other provision of law” just reserves the possibility of a § 924(c) provision codified elsewhere in the future. The Eleventh Circuit has not decided this narrower question.

In Gould, the defendant pleaded guilty to one drug count and one § 924(c) firearm count. The drug count carried a ten-year mandatory minimum and the firearm count added a five-year mandatory minimum. The district court judge applied both. Gould argues that, because the predicate drug count carried a higher minimum sentence, the district court applied the § 924(c) minimum sentence erroneously.

In Abbott, the defendant was convicted of drug crimes, § 924(c) possession of a firearm in furtherance of a drug trafficking crime, and § 924(e) (ACCA) possession of a firearm by a convicted felon. The ACCA count carried a mandatory minimum of 15 years and the § 924(c) count carried a minimum of five years. The district court applied both minimum sentences consecutively for his possession of one firearm at one time.

The plain language of § 924(c) prohibits its application where “any other” greater minimum sentence applies. We hope that the Supreme Court honors that legislative instruction. The briefs and opinions below in Abbott and Gould are available at the following links:

Abbott
Petition for Certiorari
Memorandum for the United States
Reply Brief for Petitioner
Third Circuit Opinion Below

Gould
Petition for Certiorari
Memorandum for the United States
Fifth Circuit Opinion Below

Photo of Supreme Court Building:

http://www.flickr.com/photos/bootbearwdc/ / CC BY 2.0

Eleventh Circuit Court of Appeals Avoids Rule of Specialty in Federal Criminal Extradition Case… Again

2010-01-25T18:42:18Z

Last week, the Eleventh Circuit Court of Appeals, which sits here in Atlanta, Georgia, decided U.S. v. Marquez, a federal criminal RICO case involving two extradition rules, the rule of specialty and the rule of dual criminality. The Court held that those rules concern the court’s personal jurisdiction over the defendant, rather than subject matter jurisdiction. Because personal jurisdiction is subject to waiver, the Court held that Marquez waived the protections provided by the rules by failing to timely assert them.

As we explained in this post last July, the rule of specialty requires countries that request extradition of a person to prosecute that person only for the offenses for which the foreign country surrenders the person. In other words, if the United States asks Spain to extradite someone for charges A, B, and C, once Spain extradites that person, the United States can’t turn around and charge the person with X, Y, or Z. Marquez argued that a superseding indictment changed the basis under which Spain agreed to extradite him.

The rule of dual criminality allows extradition only where the defendant’s actions constitute a crime in both the requesting and surrendering countries. Marquez argued that the extradition request was too vague, rendering it impossible for Spanish courts to determine whether the rule of dual criminality was satisfied.

Because the rules limit the crimes that may be prosecuted, they appear to limit the court’s subject matter jurisdiction. However, the Court held that the extradition process is a means of obtaining personal jurisdiction over a defendant, so a violation of these extradition rules raises the question of personal jurisdiction. Thus, claims of such violations must be raised in a pretrial motion pursuant to Rule 12.

Because Marquez did not assert the rules of specialty or dual criminality until nearly 2.5 years after the final deadline for submission of pretrial motions, the Court held that he “waived his right to assert the protection of the rules of specialty and dual criminality” and failed to show good cause to warrant relief from that waiver.

In U.S. v. Valencia-Trujillo last year, the Eleventh Circuit issued an opinion declining to address the rule of specialty. Our commentary on that decision is available here. We hope that the Court decides to address this important issue in future cases.

The Court’s opinion in Marquez is available here.

DOJ Appoints National Coordinator of Criminal Discovery Initiatives

2010-01-21T14:54:10Z

The federal Department of Justice has announced its appointment of Andrew Goldsmith as the new national coordinator of criminal discovery initiatives in this press release.

Earlier this month, the DOJ issued three memoranda regarding criminal discovery procedures. These memos set forth policies in an attempt to ensure that prosecutors meet their obligations in sharing information with criminal defense attorneys. They are available to read in full at the following links:

Issuance of Guidance and Summary of Actions Taken in Response to the Report of the Department of Justice Criminal Discovery and Case Management Working Group

Requirement for Office Discovery Policies in Criminal Matters

Guidance for Prosecutors Regarding Criminal Discovery

This is a step in the right direction, but other steps need to be taken. For example, as many criminal defense lawyers have been saying for far too long, it is time to amend Rule 16 by requiring the parties to exchange witness lists in federal criminal cases. This is precisely what the Advisory Committee and the Supreme Court proposed in 1974 and it should be done now.

Georgia Innocence Project Exonerates Another Wrongfully Convicted Man

2010-01-20T14:48:46Z

Last month, Michael Marshall was released from prison, where he served time for a crime that he did not commit. Eyewitness identification and neglect to investigate the physical evidence led to the incarceration of an innocent man. The lawyers and interns at the Georgia Innocence Project proved Mr. Marshall’s innocence through DNA testing and will continue to help him rebuild his life after exoneration.

In 2007, an eyewitness identified Mr. Marshall ten days after the crime in a prejudicial “show-up” identification. He was charged with armed robbery, aggravated assault, possession of a firearm during a felony, and possession of a firearm by a convicted felon and he faced up to 25 years in prison. After the judge denied his motion to suppress the identification evidence, Marshall pleaded guilty to theft by taking out of fear of the lengthy potential sentence.

What Went Wrong

The principal evidence against Mr. Marshall was misidentification by a victim of the crime. After watching a man steal his mother’s truck and threaten her life, the male victim gave the Hapeville Police Department information to create a composite sketch of the man who committed the crime. Ten days after the crime, officers called the victim to Mr. Marshall’s location, where he identified Mr. Marshall. The other victim failed to pick Mr. Marshall out of a photo line-up.

Eyewitness identification is often faulty and has contributed to the wrongful convictions of more than 75% of the 247 people exonerated by Innocence Projects nationwide. The kind of identification in this case is called a “show-up” and is highly prejudicial because of the suggestive context of the situation. The suspect is surrounded by police officers, often located near the scene of the crime, and alone, rather than lined up with 5 other people.

The Hapeville Police also failed to investigate the physical evidence in the case. Although they had found a cell phone, a cell phone case, and a t-shirt belonging to the person who committed the crime, these items were never even fingerprinted, let alone tested for DNA, until the Georgia Innocence Project got involved.

Georgia Innocence Project

The Georgia Innocence Project has exonerated eight people of crimes that they did not commit. All of those convictions were based on mistaken eyewitness investigation. We are delighted that they have again helped a victim of eyewitness identification to prove his innocence.

More information on the Georgia Innocence Project is available at their website. More information on the background of Mr. Marshall’s case is here and the major issues in his case here.

Photograph used with permission from the Georgia Innocence Project.

Prosecutorial Misconduct -- Federal Criminal Stock-Option Backdating Cases

2009-12-23T14:24:30Z

Prosecutions against executives accused of fraud in connection with backdating stock options have been plagued by prosecutorial misconduct. In August, the Ninth Circuit reversed the conviction of Gregory Reyes, former CEO of Brocade Communication Systems, due to prosecutorial misconduct. Last week, Judge Carney of the Central District of California dismissed charges against former Broadcom executives with prejudice, entering a judgment of acquittal for one.

Stock-option backdating is a practice in which an employer grants stock options to an employee, retroactively dated to increase its value. Backdating itself is not illegal, but it must be properly disclosed in financial records and filings with the SEC. This article, published at the beginning of the backdating scandal in 2006, explains the history and controversy of backdating options. The SEC began charging corporations and executives in enforcement actions relating to backdating in significant numbers in 2006, and criminal charges have resulted in a few cases. The SEC has continued to bring enforcement actions against corporations and executives for secret backdating of options.

US v. Reyes was the first, and most high-profile, of the criminal cases. Reyes’ defense was that, although he had signed off on backdated options, he had relied on Brocade’s finance department to properly account for the backdated options in the corporate books and was not responsible for false records. The government put up a witness from the finance department who testified that she and other employees in the department did not know about the backdating. However, higher-up finance department employees had told the FBI that they did know about the backdating, but those witnesses did not testify because they were subject to possible criminal prosecution and had been targets of SEC civil suits. In the prosecutor’s closing argument, he told the jury that “finance did not know anything” in direct contravention of the statements given to the FBI. The Ninth Circuit stressed the special duty of federal prosecutors not to impede the truth and remanded the case for a new trial, which is scheduled for February.

Even more egregious prosecutorial misconduct occurred in the backdating cases against former executives of Broadcom. In May 2008, the SEC charged former CEO Henry Nicholas, former CFO William Ruehle, chairman and chief technology officer Henry Samueli, and general counsel David Dull with a backdating scheme. All but Dull were charged criminally, as well. Samueli agreed to a plea deal and the prosecutions of Ruehle and Nicholas went forward.

Ruehle’s attorneys first accused the prosecutor of misconduct in October 2008, when AUSA Andrew Stolper leaked confidential communications with counsel for the defendants to reporters for the L.A. Times and the Wall Street Journal. Stolper initially denied the allegations, but has since admitted to the conduct, calling it “the stupidest thing I’ve done in my career.” However, a more complete picture of Stolper’s misconduct eventually emerged. Stolper intimidated and improperly influenced each of the necessary witnesses for the defense. We have included portions of the transcript from December 15, 2009, when Judge Carney of the Central District of California dismissed the backdating cases, explaining:

Nancy Tullos was Broadcom’s vice president of human resources. This is what Judge Carney said of Stolper’s conduct regarding Ms. Tullos:

The judge had this to say regarding the intimidation of Mr. Dull:

Judge Carney was particularly concerned with the prosecution’s disgraceful treatment of Mr. Samueli, whose guilty plea he vacated on December 9, 2009:

Judge Carney noted that, in addition to the misconduct, because the witnesses were improperly influenced, their testimony was unreliable and must be stricken, leaving insufficient evidence to convict Mr. Ruehle. For that reason, the judge dismissed the indictment with prejudice and entered a judgment of acquittal for Mr. Ruehle.

Because Nicholas needed the same three witnesses for his defense, he was also denied compulsory process and would not be able to receive a fair trial. For that reason, Judge Carney also dismissed the stock option backdating case against him with prejudice. Nicholas is also charged in a drug distribution case and will likely call the same witnesses in that case. The judge ordered the government to show cause why that case should not also be dismissed. He noted that other evidence of government misconduct will be admissible at that trial, including a threat to force Nicholas’ 13 year old son to testify before the grand jury.

In addition, Judge Carney dismissed the SEC case without prejudice and discouraged the SEC from proceeding with that case any further.

The judge concluded eloquently:

The Ninth Circuit’s opinion in Reyes is available here.
The criminal minutes from December 15, 2009 in Ruehle is available here and the full transcript is available here.