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Nature of Suit Code: 530
Nature of Suit: Prisoner Petitions - Habeas Corpus
Cause of Action: 

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PUBLISH 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

DONNIE SHAFER, 

Petitioner-Appellant, 

v. 

HAL STRATTON, ATTORNEY GENERAL 

STATE OF NEW MEXICO, 

Respondent-Appellee. 

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No. 88-2026 

FI LED 

Uflited Scates Courc of Appeals 

·r enth Circuit 

JUN 2 d 1990 

ROBERT L. HOECKER 

Clerk 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW MEXICO 

(D.C. NO. CIV-86-199) 

Stephen P. Mccue, Assistant Federal Public Defender, Albuquerque, 

New Mexico, Attorney for Petitioner-Appellant. 

William McEuen, Assistant Attorney General, Santa Fe, New Mexico, 

Attorney for Defendant-Appellee. 

Before ANDERSON, EBEL, Circuit Judges, and RUSSELL,* District 

Judge. 

ANDERSON, Circuit Judge. 

Donnie Clay Shafer appeals from an order of the United States 

District Court for the District of New Mexico denying his petition 

for a writ of habeas corpus under 28 U.S.C. § 2254. We affirm. 

Shafer was convicted on three counts of unlawful offer to 

sell or sale of an unregistered security in New Mexico, in viola-

* Honorable David L. Russell, United States District Judge of 

the Eastern,. Northern .and Western Districts of Oklahoma. 

Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 1 
tion of N.M. Stat. Ann. § 58-13-4, and one count of conspiracy, in 

violation of N.M. Stat. Ann. § 30-28-2. He was sentenced to three 

years imprisonment on the unlawful sale convictions and eighteen 

months on the conspiracy conviction, all to run concurrently. 

Shafer's conviction and sentence were affirmed on direct appeal to 

the New Mexico Court of Appeals, with the exception that the three 

year sentences were ordered reduced to eighteen months. State v. 

Shafer, 102 N.M. 629, 698 P.2d 902 (N.M. Ct. App. 1985). 1 The New 

Mexico Supreme Court denied his petition for certiorari. Shafer 

v. State, 102 N.M. 613, 698 P.2d 886 (1985). 

The present petition for a writ of habeas corpus followed. 

The magistrate to whom the matter was referred recommended 

dismissal of the petition with prejudice. The district court 

adopted the magistrate's proposed findings and recommendations and 

dismissed the petition with prejudice. 

We recite the pertinent facts from the New Mexico Court of 

Appeals opinion: 

"Defendants Shafer and [H.D.] Berry, along 

with S. Stewart Shelton, incorporated SBS 

Development, Inc., a Texas corporation. The 

corporation sought to develop and sell 

corporate securities allegedly to develop a 

perpetual motion machine which would generate 

electricity. Texas counsel assisted in the 

incorporation. 

Defendants testified that it was their 

understanding, following consultation with an 

1 On remand, the trial court resentenced Shafer to eighteen 

months imprisonment on the three unlawful sale convictions. 

Subsequently, Shafer's total sentence was enhanced by one year 

·=~-- because he was an habitual of fender. 

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Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 2 
attorney in Texas, that their actions would 

not constitute violations of the New Mexico 

criminal or securities laws if all of the 

sales of the corporate stock of SBS took place 

in Texas or if the stock qualified for exemptions. Defendants stated that all of the 

transactions involving sales of corporate 

stock were set up so that investors' checks 

would be sent to Texas and the stock would be 

issued in Texas." 

State v. Shafer, 698 P.2d at 905. 

DISCUSSION 

Shafer argues: (1) that the state trial court's refusal to 

instruct the jury in several respects on his theory of his defense 

violated his rights to due process and a fair trial; (2) that the 

court's restriction of his cross-examination of two prosecution 

witnesses deprived him of his right of confrontation; and (3) that 

the sentences imposed ''were so improper and arbitrary in light of 

the state statutes applicable" as to violate his due process 

rights. The district court rejected these arguments. 

1. Denial of defense instructions: 

Shafer argues five specific errors in the court's refusal to 

give certain instructions pertaining to Shafer's theory of 

defense. He asserts he was entitled to an instruction (1) that an 

isolated transaction is exempt from the securities laws; (2) that 

sales of stock by corporations having twenty-five or fewer shareholders are exempt from the securities laws in certain 

circumstances; (3) that "sale" is to be defined by the Uniform 

Commercial Code definition, N.M. Stat. Ann. § 55-2-106; (4) that 

Shafer's honest and reasonable belief that SBS Development, Inc. 

stocks were being sold only in Texas would constitute a defense; 

-and· (5.) that "any transaction executed by a bona fide pledgee 

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Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 3 
without any purpose of evading the Securities Act of New Mexico" 

is exempt. Shafer argues that the failure to so instruct, both 

individually and cumulatively, violated his due process rights and 

deprived him of a fair trial. 

The New Mexico Court of Appeals addressed and rejected each 

of these arguments, finding no error under New Mexico law. The 

district court found no constitutional error in the refusal to 

give Shafer's proffered instructions. We agree. 

"Habeas proceedings may not be used to set aside a state 

conviction on the basis of erroneous jury instructions unless the 

errors had the effect of rendering the trial so fundamentally 

unfair as to cause a denial of a fair trial in the constitutional 

sense." Brinlee v. Crisp, 608 F.2d 839, 854 (10th Cir. 1979), 

cert. denied, 444 U.S. 1047 (1980); see also Nichols v. Sullivan, 

867 F.2d 1250, 1253 (10th Cir.)("the scope of our review is 

narrow: our responsibility is to ensure that [petitioner] was afforded the protections of due process, not to exercise supervisory 

powers over the New Mexico courts."), cert. denied, 109 s. Ct. 

3169 (1989); Gaines v. Hess, 662 F.2d 1364, 1368 (10th Cir. 

198l)("we are faced with a habeas corpus petition challenging 

state trial proceedings, and we are limited in our review of error 

to those of constitutional magnitude."). Shafer bears a heavy 

burden of proof. See Henderson v. Kibbe, 431 U.S. 145, 154 

(1977). After reviewing the record in this case and the reasoning 

of the New Mexico Court of Appeals, we cannot say that the failure 

to give the requested instructions rendered the trial so 

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Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 4 
fundamentally unfair as to deny Shafer a fair trial, nor do we 

find a denial of due process. 

One of Shafer's jury instruction arguments raises a question 

of procedural bar. As indicated, Shafer argued the jury should 

have been instructed that sales of stock by corporations having 

twenty-five or fewer shareholders were exempt under certain 

circumstances. This argument is based on former N.M. Stat. Ann. 

§ 58-13-30(J) (1986), which provided an exemption for: 

The issuance and sale by any corporation 

organized under the laws of this state of its 

securities at a time when the number of 

security holders does not, and will not in 

consequence of the sale exceed 25, and: (1) 

The seller reasonably believes that all buyers 

are purchasing for investment; and (2) No commission or other remuneration is paid or given· 

directly or indirectly for soliciting any 

prospective buyer; 

The trial court rejected an instruction based on this statute 

because, by its terms, the statute only applies to New Mexico 

corporations, whereas Shafer's corporation was a Texas corporation. On appeal to the New Mexico Court of Appeals, Shafer argued 

the exemption, applicable only to New Mexic.o corporations, 

violated the Commerce Clause. The New Mexico court stated: 

"This argument ••• was not raised in the 

trial court. A party objecting to an instruction has the burden to provide a record sufficient to demonstrate reversible error in 

refusing the instruction. Moreover, the argument is without merit. We find no 

constitutional infirmity in the statute." 

State v. Shafer, 698 P.2d at 907-08 (citations omitted). 

Shafer relies on Brasier v. Douglas, 815 F.2d 64 (10th Cir.) 

(per curiam), cert. denied, 483 U.S. 1023 (1987) to argue that 

. this court can and···should reach the. merits of the Commerce Clause 

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issue because, despite any procedural default by Shafer in state 

court, the New Mexico court reached the merits. In Brasier, we 

held that "since the state court reviewed petitioner's claims on 

the merits, procedural default did not preclude the federal habeas 

court from addressing the claims on the merits." 815 F.2d at 65. 

Thus, under Brasier, even if a state court specifically finds a 

procedural default on a federal claim, if it also reaches the 

merits of that claim the federal court on habeas review may also 

reach the merits. See also Osborne v. Shillinger, 861 F.2d 612, 

618 (10th Cir. 1988). 

Our position in Brasier has been overruled by the Supreme 

Court in Harris v. Reed, 109 s. Ct. 1038 (1989). The Court in 

Harris began by noting that the procedural default rule, developed 

in Wainwright v. Sykes, 433 U.S. 72 (1977) and subsequent cases, 

"has its historical and theoretical basis in the 'adequate and 

independent state ground' doctrine." Id. at 1042. Thus, where a 

state court finding of procedural default is an adequate and independent state ground, the procedural default bars federal habeas 

review of the claims unless the petitioner can demonstrate "cause" 

for his procedural default and "prejudice attributable thereto," 

or that the failure to consider the federal claim will result in a 

"'fundamental miscarriage of justice.'" Murray v. Carrier, 477 

U.S. 478, 485, 495-96 (1986)(quoting Engle v. Isaac, 456 U.S. 107, 

135 (1982)); see also Dugger v. Adams, 109 s. Ct. 1211, 1217-18 

n.6 (1989). 2 

2 On the question of whether a state procedural default ruling 

is "adequate" and "independent," the Supreme Court in Harris 

[footnote continued ... ] 

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However, "[t]he question whether a state court's reference to 

state law constitutes an adequate and independent state ground for 

its judgment may be rendered difficult by ambiguity in the state 

court's opinion." Harris, 109 S. Ct. at 1042. In the event of 

ambiguity, Harris directs us to apply the "plain statement" rule 

of Michigan v. Long, 463 U.S. 1032 (1983). Accordingly, "a 

procedural default does not bar consideration of a federal claim 

on either direct or habeas review unless the last state court 

rendering a judgment in the case '"clearly and expressly"' states 

that its judgment rests on a state procedural bar." Harris, 109 

s. Ct. at 1043 (quoting Caldwell v. Mississippi, 472 U.S. 320, 327 

(1985)(quoting Michigan v. Long, 463 U.S. 1032, 1041 (1983))). 

Federal courts must not presume a state court relied on procedural 

bar where the state court opinion does not make that clear. 

The Court specifically addressed the question of an alternative procedural bar/merits state court holding: 

"a state court need not fear reaching the 

merits of a federal claim in an alternative 

holding. By its very definition, the adequate 

and independent state ground doctrine requires 

the federal court to honor a state holding 

that is a sufficient basis for the state 

court's judgment, even when the state court 

also relies on federal law." 

[ .•• footnote continued] 

directs us to Ake v. Oklahoma, 470 U.S. 68, 75 (1985)("when 

resolution tif the state procedural law question depends on a 

federal constitutional ruling, the state-law prong of the court's 

holding is not independent of federal law") and Johnson v. 

Mississippi, 486 U.S. 578, 587 (1988)("' [A] state procedural 

ground is not "adequate'' unless the procedural rule is "strictly 

or regularly followed.'''")(quoting Barr v. City of Columbia, 378 

U.S. 146, 149 (1964)). Shafer makes no argument that the Court of 

Appeals' procedural bar holding was not adequate and independent. 

~"Accordingly~ we do not address that question. 

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Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 7 
109 s. Ct. at 1044 n.10 (emphasis original). Brasier's holding 

that a federal habeas court should reach the merits of a federal 

claim where the state court addressed the merits, even though the 

state court clearly alternatively held that the petitioner had 

procedurally defaulted, has therefore been overruled. 

Applying the "plain statement" rule of Harris v. Reed to the 

Commerce Clause issue here, we conclude that the New Mexico Court 

of Appeals "clearly and expressly" stated that its rejection of 

Shafer's Commerce Clause argument rested on a state procedural bar 

rule, despite its further analysis of the merits. 3 Accordingly, 

absent cause and prejudice, this court will not address Shafer's 

Commerce Clause argument. Shafer has made no showing of cause and 

prejudice. We therefore turn to his remaining arguments. 

2. Restriction of Cross-Examination: 

Shafer argues that he was improperly limited in his ability 

to cross-examine two prosecution witnesses, and that his Sixth 

3 Harris v. Reed was issued shortly after Shafer filed his 

reply brief in this appeal. Neither party has argued by way of 

supplemental authority either that Harris should or that it should 

not be applied to this case. Our court has assumed, .without 

discussion, that Harris applies to a case pending when Harris was 

issued. See Nieto v. Sullivan, 879 F.2d 743, 746 & n.2 (10th 

Cir.) cerS-denied, 110 S. Ct. 373 (1989). Many other courts have 

made the same assumption without discussion. See,~, Smith v. 

Freeman, 892 F.2d 331, 336 (3rd Cir. 1989); Cavanaugh v. 

Kincheloe, 877 F.2d 1443, 1450 (9th Cir. 1989); Parker v. Dugger, 

876 F.2d 1470, 1476-78 (11th Cir. 1989), cert. denied, 58 U.S.L.W. 

3629 (1990); Owens v. Treder, 873 F.2d 604, 611 (2nd Cir. 1989); 

Booker v. Lynaugh, 872 F.2d 100, 101 (5th Cir. 1989); Waye v. 

Townley, 871 F.2d 18, 19 (4th Cir.), cert. denied, 109 S. Ct. 3202 

(1989). Those courts which have specifically addressed the 

question have likewise concluded that the Harris "plain statement'' 

rule applies to cases pending when Harris was issued. See 

Peterson v. Scully, 896 F.2d 661, 664 (2nd Cir. 1990); Harmon v. 

Barton, 894 F.2d 1268, 1272 n.8 (11th Cir. 1990); Hill v. 

McMackin, 893. F.2d 810, 813-14 (6th Cir. 1989). -8-. 

Appellate Case: 88-2026 Document: 01019880135 Date Filed: 06/26/1990 Page: 8 
Amendment right of confrontation was thereby violated. He also 

argues that the~trial court improperly prohibited him from using 

an affidavit from one of the two witnesses to impeach the other 

witness. The New Mexico Court of Appeals refused to address the 

allegations of improper limitation of cross-examination of the two 

witnesses, on the ground that Shafer had procedurally defaulted on 

those arguments. See Shafer v. State, 698 P.2d at 908-09. 

The district court held that Shafer's procedural default, coupled 

with his failure to demonstrate cause and prejudice, barred 

federal habeas review. We affirm. See Harris v. Reed. 

The Court of Appeals rejected Shafer's argument that the 

trial court improperly restricted Shafer's use of the affidavit. 

The district court likewise rejected the argument, for slightly 

different reasons. We affirm, for substantially the reasons 

contained in the district court's opinion. 

3. Sentences. 

Shafer argues that the New Mexico Court of Appeals' 

interpretation of the applicable statutes governing sentencing was 

"so egregious that the imposition of [Shafer's] excessive sentence 

was violative of due process." Appellant's Brief-in-Chief at 34. 

The district court rejected this argument, stating that it "is 

concerned solely with matters of state law and thus fails to state 

a claim cognizable under 28 u.s.c. § 2254." We affirm. 

For the foregoing reasons, we AFFIRM the dismissal of 

Shafer's petition for a writ of habeas corpus. 

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