In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 06-3192

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES P. ROTI,

Defendant-Appellant.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 04 CR 448—James B. Zagel, Judge.

____________

ARGUED APRIL 9, 2007—DECIDED MAY 3, 2007

____________

Before EASTERBROOK, Chief Judge, and KANNE and

WILLIAMS, Circuit Judges.

EASTERBROOK, Chief Judge. Saddled with a judgment

for more than $400,000 on account of a guarantee of his

small corporation’s debts, James Roti decided to hide his

assets from creditors. He has been convicted of bankruptcy

fraud, see 18 U.S.C. §157, and concealing assets from the

bankruptcy trustee, see 18 U.S.C. §152. His sentence is

21 months’ imprisonment. Roti concedes that he parked

some assets with family members and moved others to

accounts unknown to his creditors, and that he lied to his

principal creditor, to the federal bankruptcy court, and to

the trustee. Roti says that his lawyer Andrew Werth put
2 No. 06-3192

him up to it, and at trial he contended that he should be

acquitted because Werth managed the scheme’s details.

The jury rejected that defense—for it was no defense at all.

That two people cooperate to swindle a third does not

excuse either of the schemers, even if one of them is a

lawyer. Advice of counsel is not a free-standing defense,

though a lawyer’s fully informed opinion that certain

conduct is lawful (followed by conduct strictly in compliance with that opinion) can negate the mental state

required for some crimes, including fraud. See United

States v. Sprong, 287 F.3d 663, 665-66 (7th Cir. 2002); cf.

United States v. Cheek, 3 F.3d 1057, 1061 (7th Cir. 1993).

But Roti does not contend that Werth assured him that

concealing assets and lying to the court would be lawful.

Roti did not call Werth as a witness or introduce any

opinion letter. So it is hard to understand how Werth’s

role, whatever it was, can negate scienter. Roti does not

deny knowing that he was lying under oath, if not at the

outset (he says that he signed blank schedules that Werth

filled in and filed) then in his oral declaration at the

creditors’ meeting under 11 U.S.C. §341 that all of the

schedules were complete and correct.

What Roti did propose to offer is evidence that, after the

fraud was uncovered, he filed suit against Werth. That

suit was taken over by Roti’s trustee in bankruptcy and

settled for $15,000. According to Roti, the settlement

shows Werth’s recognition of his culpability for Roti’s

predicament. The district court held, however, that Fed. R.

Evid. 408 barred the introduction of evidence about the

settlement, and Roti’s principal argument on appeal is

that the decision was mistaken because Rule 408 does

not apply in criminal prosecutions.

United States v. Prewitt, 34 F.3d 436 (7th Cir. 1994),

states that Rule 408 is limited to civil cases. See also

United States v. Ghilarducci, 480 F.3d 542 (7th Cir.
No. 06-3192 3

2007) (decided while this case was on appeal). But Roti’s

lawyer did not call Prewitt to the district judge’s attention until after trial or make an argument along its lines.

The point therefore has been forfeited, and our review is

limited to a search for plain error—of which there was

none, for multiple reasons.

One reason is that the district judge ruled that he

would exclude the evidence under Fed. R. Evid. 403

independent of Rule 408. That decision was not an abuse

of discretion. It should be evident from what we have said

already that Roti proposed a wild goose chase; the district

judge properly limited the inquiry into this distraction.

Indeed, we doubt that the evidence was relevant, and if

that’s so then it was inadmissible independently as a

result of Rule 402. The problem is not only that Werth’s

culpability would not excuse Roti’s but also that the

settlement of a civil claim does not imply anything helpful

about Roti’s state of mind. There were at least four

possibilities consistent with settlement: (a) Werth failed to

investigate Roti’s finances adequately before filing the

bankruptcy petition and schedules; (b) Werth misled Roti

about what he was going to omit from the bankruptcy

schedules; (c) Werth told Roti to lie in both the schedules

and the creditors’ meeting; (d) Roti lied to Werth as well as

to the court, and Werth did nothing wrong but sought

to avoid the cost and distraction of defending the suit. All

four situations produce a settlement, so the fact that

Werth agreed to pay something would not have helped a

jury distinguish among the possibilities.

More than that, however, is what has happened to Rule

408 since Prewitt. The panel in Prewitt deemed Rule 408

inapplicable to criminal prosecutions because its text did

not specifically mention criminal litigation. Prewitt did not

discuss Fed. R. Evid. 1101(b) or say, after the fashion of

Green v. Bock Laundry Machine Co., 490 U.S. 504 (1989),

that application of Rule 408 to criminal prosecutions
4 No. 06-3192

would be absurd. In 2006 the Supreme Court promulgated

an amendment to Rule 408 demonstrating that at least the

new version (which took effect on December 1, 2006)

applies to criminal cases. The amended rule provides:

Rule 408. Compromise and Offers to Compromise

(a) Prohibited uses.—Evidence of the following is

not admissible on behalf of any party, when offered

to prove liability for, invalidity of, or amount of a

claim that was disputed as to validity or amount,

or to impeach through a prior inconsistent statement or contradiction:

(1) furnishing or offering or promising to furnish—or accepting or offering or promising to

accept—a valuable consideration in compromising or attempting to compromise the claim;

and

(2) conduct or statements made in compromise

negotiations regarding the claim, except when

offered in a criminal case and the negotiations

related to a claim by a public office or agency

in the exercise of regulatory, investigative, or

enforcement authority.

(b) Permitted uses.—This rule does not require

exclusion if the evidence is offered for purposes not

prohibited by subdivision (a). Examples of permissible purposes include proving a witness’s bias or

prejudice; negating a contention of undue delay;

and proving an effort to obstruct a criminal investigation or prosecution.

Note that the new Rule 408(a)(2), by creating a partial

exception for criminal cases, shows that the rest of the

rule applies to both civil and criminal litigation. The

Committee Note accompanying the amended Rule 408

explains that this was done because the Committee agreed
No. 06-3192 5

with the result of Prewitt, which concluded that admissions of fault made in compromise of a civil securities

enforcement action were admissible against the accused

in a criminal action for mail fraud, but not Prewitt’s view

that Rule 408 is wholly inapplicable to criminal prosecutions.

Our point is not that the amended Rule 408 governs on

this appeal. It took effect after the trial, and the Supreme

Court’s order promulgating the amendment did not

direct retroactive application. Instead we refer to this

development to show that failure to apply Prewitt to Roti’s

trial would not seriously affect the fairness, integrity, or

reputation of judicial proceedings, one ingredient of plainerror review. See United States v. Olano, 507 U.S. 725,

735-37 (1993). Criminal defendants do not acquire vested

rights to the benefit of appellate opinions whose rationale

has been repudiated. See Lockhart v. Fretwell, 506 U.S.

364 (1993). The 2006 change shows that Prewitt gave an

overbroad reason for what was a sound conclusion on the

case’s facts. There is no reason to deem Prewitt’s rationale,

which is no longer authoritative, such a fundamental

component of criminal procedure that it must be applied

on plain-error review.

Roti’s reply brief presents an argument that was not

made in either the district court or his opening brief: that

after Cunningham v. California, 127 S. Ct. 856 (2007),

district judges no longer may find facts that affect federal

sentences. Although this argument could be dispatched as

forfeited, it has become popular since the Supreme Court’s

decision, and it is best to close the door before other

lawyers waste their time and ours pursuing it.

Cunningham holds that California’s determinate sentencing law violates the sixth amendment, as understood

in Apprendi v. New Jersey, 530 U.S. 466 (2000); Blakely v.

Washington, 542 U.S. 296 (2004); and United States v.
6 No. 06-3192

Booker, 543 U.S. 220 (2005), by granting the judge rather

than the jury the power to find facts that raise the maximum lawful sentence. Roti contends that Cunningham

applies to the federal Sentencing Guidelines as well as to

California’s system.

Yet Booker itself held that the Guidelines as enacted

violate the sixth amendment. The remedial portion of

Booker solved that constitutional problem by making the

Guidelines advisory. Given that adjustment, findings of

fact under the Guidelines no longer determine statutory

maximum sentences. Cunningham therefore has no effect

on post-Booker federal practice. District judges remain

free, as the remedial portion of Booker instructs, to make

findings of fact that influence sentences, provided that

the sentence is constrained by the maximum set by

statute for each crime. See, e.g., United States v. Hawkins,

480 F.3d 476 (7th Cir. 2007).

One observation before we close. Roti is in prison, but

Andrew Dean Werth remains licensed to practice law.

According to the Attorney Registration and Disciplinary

Commission of Illinois, he is in good standing and no

disciplinary inquiry has ever been conducted. If Roti’s

testimony at trial is correct, however, then Werth planned

and executed a federal crime for which Roti has taken the

fall. If Roti was lying at trial about Werth’s role (as the

district judge concluded when holding that Roti obstructed

justice by his perjury), there remains the possibility that

Werth turned a blind eye to his client’s fraud and facilitated misuse of the bankruptcy process. The settlement

may reflect Werth’s recognition that he seriously mishandled the situation—though, as we mentioned, it may

show only Werth’s desire to put costly litigation behind

him and get on with life. Neither knaves nor fools should

be representing debtors who need legal assistance. We will

send copies of this opinion (and of the briefs, which provide
No. 06-3192 7

additional factual detail) to the ARDC and the disciplinary

committee of the federal district court so that appropriate inquiries can be made into Werth’s fitness. In

asking these bodies to conduct an inquiry, we do not

express any opinion about whether Werth has engaged in

sanctionable conduct.

AFFIRMED

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—5-3-07