1

Revised March 24, 1999

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 99-30027

United States of America,

Plaintiff-Appellant,

VERSUS

Michael O’Keefe, Sr., Eric Schmidt, John O’Brien, and

Gary Bennett,

Defendants-Appellees.

Appeal from the United States District Court

for the Eastern District of Louisiana

March 9, 1999

Before HIGGINBOTHAM, JONES, and DENNIS, Circuit Judges.

PER CURIAM:

It is ordered that the motion of appellant for temporary

stay pending appeal is GRANTED.

DENNIS, Circuit Judge, dissents for the reasons attached.
2

DENNIS, Circuit Judge, dissenting:

The defendants applied to the district court to continue

bail pending their appeals from their convictions and sentences

for mail and wire fraud and related offenses. The district court

granted their applications, and the defendants were released

after posting bonds of $1 million (O’Keefe), $500,000 (Schmidt),

$500,000 (O’Brien) and $250,000 (Bennett). The government

appealed from the district court’s order as authorized by 18

U.S.C. § 3731.

Rule 9(b) of the Federal Rules of Appellate Procedure

provides that “[a]pplication for release after a judgment of

conviction shall be made in the first instance in the district

court.” In reviewing the district court’s decision, a court of

appeals is free to make an independent determination on the

merits of the prisoner’s application. United States v. Clark,

917 F.2d 177, 179-80 (5th Cir. 1990); United States v. Hawkins,

617 F.2d 59 (5th Cir.), cert. denied, 449 U.S. 952 (1980); 

United States v. Provenzano, 605 F.2d 85, 92-93 (3rd Cir. 1979). 

However, the district court’s conclusion is entitled to “great

deference.” Harris v. United States, 404 U.S. 1232, 1232 (1971);

United States v. Oliver, 683 F.2d 224, 235 (7th Cir. 1982);

United States v. Gigax, 605 F.2d 507 (10th Cir. 1979); United

States v. Provenzano, 605 F.2d at 91-92. See United States v.

Crabtree, 754 F.2d 1200 (5th Cir. 1985).

To obtain release pending appeal, a convicted defendant must

establish four factors: (1) that he is not likely to flee or pose

a danger to the safety of others; (2) that the appeal is not for

purpose of delay; (3) that the appeal raises a substantial

question of law or fact; and (4) that the substantial question,

if decided favorably to the defendant, is likely to result in

reversal, in an order for a new trial, in a sentence without

punishment, or in a sentence with reduced imprisonment. 18 U.S.C.
3

§ 3143(b). United States v. Clark, 917 F.2d at 179. In its order

admitting the defendants to bail pending appeal, the district

court found that the defendants passed all four prongs of this

test. Reviewing the district court’s written reasons and oral

statements at the hearing on this issue with deference, and

independently reviewing relevant portions of the record of the

trial and post-trial proceedings, I concur with the district

court’s determinations, and would affirm the district court’s

judgment admitting the defendants to bail pending their appeals.

In the present case, the only prong of the four-part test

that is problematic or that warrants any discussion is the third

one: whether the defendants’ appeals raise a substantial question

of law or fact, i.e., “‘one of more substance than would be

necessary to a finding that it was not frivolous[;]...a “close”

question or one that very well could be decided the other way.’”

United States v. Valera-Elizondo, 761 F.2d 1020, 1024 (5th Cir.

1985)(quoting United States v. Giancola, 754 F.2d 898, 901 (11th

Cir. 1985)).

I.

After the jury convicted the defendants of conspiracy, wire

fraud, mail fraud, and money laundering, the trial judge, in the

same order in which he recused himself, granted the defendants’

motion for a new trial; several weeks later, he denied the

government’s motion for reconsideration. The government filed an

interlocutory appeal under 18 U.S.C. § 3731 contesting the trial

judge’s new trial order and contending that the trial judge’s

order denying the government’s motion for reconsideration was

void because of his prior order disqualifying himself in the

case. In O’Keefe I, a panel of this court held that the district

court judge erred in performing a discretionary act by ruling on

the motion for reconsideration after he had recused himself, but

that the error did not have to be vacated because it was
 

1 The panel concluded that “harmless error” existed because:

(i) little risk of injustice would result from not vacating the

denial of the motion for reconsideration and remanding the case

to the successor judge, who had been assigned the case, for a

decision on the government’s reconsideration motion; (ii) a

decision on the merits of the trial judge’s granting of the

defendants’ motion for new trial would serve justice in other

cases because it would clarify an unclear area of the law and

admonish district judges as to the importance of taking no

discretionary actions after recusal; and (iii) there is little

risk of undermining the public’s confidence in the judicial

process. O’Keefe I, 128 F.3d 892-93. 

 

2 The O’Keefe I panel also found that two of the additional 

findings were inherently flawed: (i) the government’s delay in

disclosing the FBI 302 reports of investigative interviews of the

two key prosecution witnesses, Donaldson and Moore, containing

4

“harmless.”1 O’Keefe I, 128 F.3d at 891, 892-93. The O’Keefe I

panel then proceeded to review the district judge’s ruling on the

defendants’ motion for new trial on the merits. The panel

concluded that the judge’s ruling constituted an abuse of

discretion or legal error in that (i) the government’s knowing

failure to correct perjured testimony did not violate the

defendants’ due process rights under Napue v. Illinois, 360 U.S.

264 (1959), because the falsehoods were not material, i.e., there

was not “a reasonable probability that the jury would have

reached a different outcome even had it been fully aware of all

of the alleged inconsistencies and falsehoods in [the prosecution

witness] Donaldson’s testimony,” O’Keefe I, 128 F.3d at 898; (ii)

in the absence of a material Napue violation, the trial judge’s

additional findings, viz., that the government impermissibly

delayed the disclosure of Brady material, that the

inconsistencies in prosecution witness Moore’s testimony clouded

or weakened the government’s case, and that the prosecution

attempted to mislead the defense by changing the indictment, were

insufficient to warrant the granting of a new trial in the

“interests of justice” under Fed. R. Crim. P. 33.2
exculpatory evidence, did not violate Brady by impairing

defendants’ ability to cross-examine those witnesses, based on

the panel’s review of the record and the absence of any

affirmative finding (other than the conclusion) by the district

judge to that effect, O’Keefe I, 128 F.3d at 898-99; and (ii)

even if the prosecution attempted to mislead the defense by

redrafting of the indictment, the defense had too much knowledge

of the underlying facts to be misled. Id. at 895-96, 899.

5

II. 

The government contends that the defendants’ appeal cannot

raise any “substantial issue of law” with respect to government

misconduct and perjury by prosecution witnesses because any such

purported issue is foreclosed by the law of the case doctrine. 

The government argues that United States v. O’Keefe, 128 F.3d 885

(5th Cir. 1997) (O’Keefe I), decided upon rules of law that will

continue to govern the same issues during the defendants’ appeal

of right from final judgment. However, whether the law of the

case doctrine precludes the direct appeal panel from considering

such issues is itself a threshold “substantial issue of law.” 

The question of the applicability of the law of the case doctrine

is substantial, not only because it is “close” and of more

substance than “non-frivolous” questions, but also because it

involves novel issues concerning the recusal of judges, harmless

error, and the effects of government interlocutory appeals in

criminal cases upon defendants’ fundamental rights to appeal and

to have a full and fair day in court. 

As defined by the Supreme Court, the doctrine of the law of

the case “‘posits that when a court decides upon a rule of law,

that decision should continue to govern the same issues in

subsequent stages of the same case.’ This rule of practice

promotes the finality and efficiency of the judicial process by

‘protecting against the agitation of settled issues.’”

Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816

(1988) (citing Arizona v. California, 460 U.S. 605, 618 (1983)
6

and 1B J. Moore, J. Lucas, & T. Currier, Moore’s Federal Practice

¶ 0.404[1], at 118 (2d ed. 1984)).

The law of the case doctrine attaches in interlocutory

appeals only upon matters that have actually been decided. As to

decisions upon rules of law, the interlocutory appeal establishes

the law of the case. Royal Ins. Co. v. Quinn-L Capital Corp., 3

F.3d 877, 881 (5th Cir. 1993). Factual determinations in an

interlocutory appeal will generally not establish the law of the

case. Id. See 18 Moore’s Federal Practice § 134.20 (3d ed. 1998)

(“Unlike the doctrine of claim preclusion, the law of the case

doctrine does not apply to issues or claims that were not

actually decided; for this reason, failure to raise an issue on

interlocutory appeal should not operate to preclude the issue on

a later appeal from a final judgment, even if other issues were

raised by the party or an opponent in a permitted interlocutory

appeal.”).

The law of the case doctrine applies to an issue that has

actually been decided, not to statements made by the court in

passing, or stated as possible alternatives, or dictum. 18

Moore’s Federal Practice §§ 134.20[3], 134.21[2] (3d. ed. 1998)

(citing, e.g., Royal Ins. Co. v. Quinn-L Capital Corp., 3 F.3d at

880; Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller,

957 F.2d 1575, 1578 (11th Cir.), cert. denied, 506 U.S. 981

(1992)).

When the law of the case doctrine is applied by a court to

its own prior decisions, it is properly characterized as

discretionary in nature. 18 Moore’s Federal Practice § 134.21[1]

(3d ed. 1998). The doctrine “‘merely expresses the practice of

courts generally to refuse to reopen what has been decided, not a

limit to their power.’” Christianson v. Colt Industries, 486 U.S.

at 817 (quoting Messenger v. Anderson, 225 U.S. 436, 444

(1912)(Holmes, J.)(citations omitted)). “A court has the power

to revisit prior decisions of its own or of a coordinate court in
7

any circumstance, although as a rule courts should be loathe to

do so in the absence of extraordinary circumstances such as where

the initial decision was ‘clearly erroneous and would work a

manifest injustice.’” Id. (quoting Anderson v. California, 460

U.S. at 618, n.8 (citation omitted)).

In this Circuit, we have described the nature of the law of

the case doctrine and its exceptions in similar fashion:

While application of the doctrine is discretionary,

this court will generally refuse to revisit a prior

panel’s decision unless “(i) the evidence on a

subsequent trial was substantially different, (ii)

controlling authority has since made a contrary

decision of the law applicable to such issues, or (iii)

the decision was clearly erroneous and would work a

manifest injustice.”

Free v. Abbott Laboratories, No. 97-31341, 1999 WL 926, at *2

(5th Cir. Jan. 19, 1999) (quoting North Miss. Comms., Inc. v.

Jones, 951 F.2d 652, 656 (5th Cir. 1992)). See United States v.

Becerra, 155 F.3d 740, 752-753 (5th Cir. 1998).

Applying these principles, it is evident that the

defendants’ appeal and the government’s assertion of the law of

the case bar raise substantial questions of law with respect to

whether the O’Keefe I panel committed clear error that will work

manifest injustice by (a) holding that a trial judge’s legal

error in knowingly performing a discretionary judicial act in

violation of his own order disqualifying himself under 28 U.S.C.

§ 455(a) can be “harmless error” that does not have to be

vacated; and (b) failing to hold that both of the trial judge’s

rulings, i.e., his grant of the defendant’s new trial motion and

his denial of the government’s motion for reconsideration, were

discretionary acts performed in violation of his disqualification

order, that the rulings must be vacated, and that the case must

be remanded for further proceedings before a different judge.
 

3 Doddy v. Oxy USA, Inc., 101 F.3d 448 (5th Cir. 1996),

although problematic, is not inconsistent with the general rule. 

The trial judge, who owned Exxon stock, recused herself when

informed that a corporate party had become affiliated with that

company. Later the same day, she vacated the order of recusal

and took evidence on the relationship of the two corporations. 

The evidence indicated that the two corporations had formed a

joint venture but that neither Exxon nor the third entity venture

could be affected by the litigation. The trial judge referred

the question of recusal to the chief judge of the district, who

determined that there was no basis for recusal. Under these

8

(a)

The trial judge disqualified himself in accordance with 28

U.S.C. § 455(a), which provides that “[a]ny justice, judge, or

magistrate of the United States shall disqualify himself in any

proceeding in which his impartiality might reasonably be

questioned.” The O’Keefe I panel correctly held that “[o]nce a

judge recuses himself from a case, the judge may take no action

other than the ministerial acts necessary to transfer the case to

another judge, even when recusal is improvidently decided.” 

O’Keefe I, 128 F.3d at 891 (citing “Doddy v. Oxy USA Inc., 101

F.3d 448, 457 (5th Cir. 1996)(holding that judge erred in

vacating recusal order after recusing herself); Moody v. Simmons,

858 F.2d 137, 143 (3rd Cir. 1988)(stating that judge may only

perform the ‘housekeeping’ duties necessary to transfer a case to

another judge after recusing himself from a proceeding)”).

There is a substantial question, however, whether O’Keefe I

clearly erred in holding that a trial judge’s discretionary

rulings in a criminal case in violation of his own order of

disqualification can be harmless and may not require his

infringing orders to be vacated. Before O’Keefe I, this court

and other federal courts of appeals had held consistently in both

civil and criminal cases that such an error requires the

appellate court to vacate the offending discretionary order and

to remand the case for reassignment to a different judge.3 See,
circumstances, although technically the trial judge performed a

discretionary act in vacating her own recusal, the chief judge

could and would have vacated the recusal in any event, and her

act had no effect upon the parties or the litigation. The trial

judge did not deliberately violate her own recusal order by fully

stepping back into role of trial judge and taking further

discretionary action in disregard or violation of her initial

recusal. The trial judge’s infraction of § 455, if any, was the

kind of “harmless error committed by busy judges who

inadvertently overlook a disqualifying circumstance” that the

Supreme Court indicated “there is surely room for.” Liljeberg v.

Health Services Acquisition Corp., 486 U.S. 847, 862 (1988).

Moreover, under 28 U.S.C. § 455(f), added in 1988, after

Liljeberg, the trial judge in situations like Doddy v. Oxy USA,

Inc., supra, may be able to avoid disqualifying herself

altogether. Section 455(f) provides that if a judge, after

substantial judicial time has been devoted to a matter, discovers

or is apprised that she has a financial interest in a party

(other than an interest that could be substantially affected by

the outcome), disqualification is not required if the judge

divests herself of that financial interest.

In re Continental Airlines Corp., 901 F.2d 1259, 1263 (5th

Cir. 1990) is distinguishable because it did not involve a

judge’s deliberate violation of his own disqualification order. 

9

e.g., Moody v. Simmons, 858 F.2d 137, 143 (3d Cir. 1988)(“Once a

judge has disqualified himself, he or she may enter no further

orders in the case. His power is limited to performing

ministerial duties . * * * A judge who was obliged to recuse

acts outside his jurisdiction [or] commits a clear error of law.

. . . Mandamus is thus the proper remedy to vacate the orders of

a judge who acted when he should have recused.”); Stringer v.

United States, 233 F.2d 947, 948 (9th Cir. 1956)(“[O]nce having

disqualified himself for cause, on his own motion, it was

incurable error for the district judge to resume full control and

try the case.”); United States v. Feldman, 983 F.2d 144 (9th Cir.

1992)(A judge cannot order that his recusal from a proceeding be

limited to certain aspects or issues of the case. An order

denying complete recusal must be vacated and the case reassigned

to a different judge.); McCuin v. Texas Power and Light Co., 714
10

F.2d 1255, 1260-61 (5th Cir. 1983)(A recused judge’s order

reassigning case to a particular judge must be vacated and the

case remanded according to local practice, or in the absence

thereof, by the senior active judge.); El Fenix de Puerto Rico v.

The M/Y Johanny, 36 F.3d 136, 141 (1st Cir. 1994)(“As a general

rule, a trial judge who has recused himself should take no other

action in the case except the necessary ministerial acts to have

the case transferred to another judge. . . . [A] recused judge’s

power is limited to performing [such] ministerial duties . . .”

(internal quotation marks and citations omitted)). In fact, in

O’Keefe I the government relied on these same authorities in

urging the appellate panel to vacate the trial judge’s denial of

the motion for reconsideration as void for having been entered

after the judge disqualified himself. Brief for Appellant,

United States v. O’Keefe, No. 96-31181, at 70-74. Consequently,

it is at least a “close” question of “more substance than would

be necessary to a finding that it was not frivolous,” whether

O’Keefe I clearly erred in departing from the precedents of this

and all other federal circuits which hold that a trial judge’s

deliberate performance of a discretionary judicial act in

violation of his own order disqualifying himself must be vacated.

There is also a substantial question as to whether O’Keefe I

clearly erred in concluding that Liljeberg v. Health Services

Acquisition Corp., 486 U.S. 847 (1988) created a new, special

harmless error test for determining whether “any order that a

judge issues after the judge has, or should have, recused himself

must be vacated.” O’Keefe I, 128 F.3d at 892. It may be cogently

argued that Liljeberg does not create a special harmless error

test at all; does not expressly or impliedly require, by calling

attention to three appropriate equitable considerations for

courts to use in determining whether a party should be relieved

of a final civil judgment under Fed.R.Civ.P. 60(b)(6) based on a

judge’s § 455(a) violation, that the same considerations be
11

applied outside of the Rule 60(b) motion context; and certainly

does not require or contemplate that Rule 60(b)(6), or those

three equitable considerations, be applied in criminal cases.

In Liljeberg, a party in a civil case filed a motion under

Fed.R.Civ.P. 60(b)(6) to be relieved from a final civil judgment

on the ground that the trial judge, during the trial and

rendition of the judgment, was, unbeknownst to the movant, a

fiduciary of a university having a substantial financial interest

in the outcome of the case. On the movant’s second appeal to

this court, 796 F.2d 796 (5th Cir. 1986); see also 747 F.2d 1463

(5th Cir. 1984) (unpublished table decision), we granted the

motion to vacate the judgment and remanded the case for a new

trial or other further proceedings.

On certiorari, the Supreme Court affirmed. Liljeberg v.

Health Services Acquisition Corp., 486 U.S. 847 (1988). The

Court addressed the violation of § 455 by the trial judge and the

relief of the judgment debtor from the judgment under

Fed.R.Civ.P. 60(b)(6) in separate parts of its opinion.

First, the Supreme Court held that a violation of 28 U.S.C.

§ 455(a), which requires a judge to disqualify himself in any

proceeding in which his impartiality might reasonably be

questioned, occurs when a reasonable person, knowing the relevant

facts, would expect that a judge knew of the circumstances

creating an appearance of partiality, notwithstanding a finding

that the judge was not actually conscious of those circumstances. 

Moreover, in a proper case, § 455(a) applies retroactively, as

well as prospectively, and requires a judge, upon discovering

that he performed a discretionary judicial act under

circumstances that would cause an objective observer to question

his impartiality, to rectify an oversight and to take steps

necessary to maintain public confidence in the impartiality of

the judiciary. For example, such a judge may be required to

disqualify himself retrospectively and to vacate his
12

discretionary judicial action in violation of § 455(a). Here,

because there was ample basis in the record to support the

findings of the courts below that an objective observer would

have questioned the original trial judge’s impartially, his

performance of discretionary judicial acts at that time was a

plain violation of the terms of § 455(a), even though his failure

to disqualify himself was the product of a temporary lapse of

memory. Id. at 859-61. 

Second, the Court held that under the circumstances of the

case the proper remedy for the § 455(a) violation was to grant

the Rule 60(b)(6) motion of the judgment debtor to be relieved of

the judgment and granted a new trial. I paraphrase most of the

pertinent paragraph of the Court’s opinion. While § 455 itself

does not authorize the reopening of closed civil litigation,

Fed.R.Civ.P. 60(b) provides a remedy whereby, in an appropriate

case, a party may be relieved of a final judgment. In

particular, rule 60(b)(6) grants federal courts authority to

relieve a party from a final civil judgment “upon such terms as

are just.” The Court had “previously noted that it provides

courts authority ‘adequate to enable them to vacate judgments

whenever such action is appropriate to accomplish justice,’

Klapprott v. United States, 335 U.S. 601, 614-15 (1949)[civil

immigration case], while also cautioning that it should only be

applied in ‘extraordinary circumstances,’ Ackermann v. United

States, 340 U.S. 193 (1950)[same].” Liljeberg, 486 U.S. at 863-

64. After setting forth these precepts, the Court concluded that

pertinent paragraph as follows:

Rule 60(b)(6) relief is accordingly neither

categorically available nor categorically unavailable

for all §455(a) violations. We conclude that in

determining whether a judgment should be vacated [under

Rule 60(b)(6)] for a violation of §455, it is

appropriate to consider the risk of injustice to the

parties in the particular case, the risk that the

denial of relief will produce injustice in other cases,
 

4 See 11 Charles Alan Wright et al., Federal Practice and

Procedure § 2857, at 254-57 (2d ed. 1995). “A number of cases

say that discretion ordinarily should incline toward granting

rather than denying relief, especially if no intervening rights

have attached in reliance upon the judgment and no actual

injustice will ensue. The policy of the law to favor a hearing

of a litigant’s claim on the merits must be balanced against the

desire to achieve finality in litigation.” Id. at 255-57.

(footnotes omitted).

13

and the risk of undermining the public’s confidence in

the judicial process.

Id. at 864 (emphasis added).

It may be forcefully argued that, when the underlined

sentence above is read in the context of the paragraph in which

it occurs and of the opinion as a whole, the reader should

understand that the sentence is intended to apply in the context

of deciding a motion to relieve a party of a civil judgment under

Rule 60(b)(6) and that the bracketed words, “under Rule

60(b)(6),” are implicitly included in the sentence. If so, it is

evident that underlined sentence merely sets forth some equitable

principles that the Court deemed appropriate for consideration in

determining whether a § 455(a) violation creates “extraordinary

circumstances” warranting the relief of a party from a final

civil judgment under Fed.R.Civ.P. 60(b)(6). It is well

recognized that a motion for relief from a civil judgment under

Rule 60(b) is addressed to the discretion of the court, e.g.,

Hand v. United States, 441 F.2d 529 (5th Cir. 1970)(tax refund

case); Simons v. Gorsuch, 715 F.2d 1248 (7th Cir. 1983); Clarke

v. Burkle, 570 F.2d 824 (8th Cir. 1978), and that equitable

principles may be taken into account by a court in the exercise

of its discretion under Rule 60(b). Bros Inc. v. W.E. Grace Mfg.

Co., 320 F.2d 594 (5th Cir. 1963); MIF Realty L.P. v. Rochester

Assocs., 92 F.3d 752, 756 (8th Cir. 1996).4

In reviewing this court of appeals’ decision in Liljeberg to
14

grant the Rule 60(b)(6) motion to vacate the judgment on the

basis of the trial judge’s § 455(a) violation, the Supreme Court 

used several traditional equitable considerations, as well as the

three it had said were appropriate, to determine whether

relieving the movant from the final civil judgment under Rule

60(b)(6) was the proper remedy for the trial judge’s violation. 

Of the equitable factors customarily used by courts in deciding

60(b) motions, the Supreme Court considered whether there had

been a timely request for relief, whether a showing of special

hardship by reason of reliance on the original judgment had been

made, or whether the delay in seeking relief was to any extent

due to the fault of the Rule 60(b) movant. Liljeberg, 486 U.S.

at 868-69; See 11 Wright et al., Federal Practice and Procedure §

2857, at 256-62 (and cases cited therein); § 2866, at 381-92 (and

cases cited therein). The Supreme Court did not suggest that

there had been an error in the court of appeal’s decision that

needed to be reviewed under a harmless error rule. The words

“harmless” and “error” do not appear in this part of the opinion. 

Liljeberg, 486 U.S. at 868-70. In approving of the court of

appeal’s decision, the Supreme Court called it “an eminently

sound and wise disposition of this case,” id. at 870, not one

that was free of “harmless error.” Thus, the Court’s opinion as

a whole clearly indicates that the three factors it mentioned as

“appropriate to consider” were not meant to be used as a

freestanding “harmless error” rule, but as a non-exclusive list

of equitable considerations, which courts may use along with

other established equitable precepts, to guide sound and wise

exercise of judicial discretion in deciding Rule 60(b)(6) motions

based on § 455 violations.

Consequently, there is at least a “substantial” or “close”

question whether O’Keefe I was clearly mistaken in reading the

three appropriate considerations mentioned in Liljeberg in

isolation as creating a new special freestanding “harmless error”
 

5 In general terms, harmless error analysis usually calls

upon a reviewing court, either trial or appellate, to set aside a

verdict or to disturb a judgment when an error affects the

substantial rights of the unsuccessful party, and to disregard

any error which does not, leaving the judgment undisturbed. See

Fed.R.Civ.P. 61 and Fed.R.Crim.P. 52(a). It is doubtful that any

verbal formulation can avoid the subjectivity that necessarily

inheres in determining whether an error has affected the

substantial right of a party. 11 Charles Alan Wright et al.,

Federal Practice and Procedure § 2883, at 445-46 (2d ed. 1995). 

Two of the best short attempts have been made by Judge Traynor

and Justice Rutledge. See Roger Traynor, The Riddle of Harmless

Error 35 (1970)(“[U]nless the appellate court believes it highly

probable that the error did not affect the judgment, it should

reverse.”); and Kotteakos v. United States, 328 U.S. 750, 760

(1946) (Rutledge, J.) (“Do not be technical, where technicality

does not really hurt the party whose rights in the trial and in

its outcome the technicality affects.”), cited in 11 Wright et

al., Federal Practice and Procedure § 2883, at 445-47. Thus, a

harmless error determination is concerned mainly with whether an

error has affected the outcome of a case to the substantial

disadvantage of the losing party.

On the other hand, exercising discretion in deciding whether

to relieve a party from a final civil judgment under Rule

60(b)(6) because of a judge’s § 455(a) violation does not involve

a determination of whether the violation affected the outcome of

the case. Instead, it involves the consideration of a more

complex constellation of factors, including the impact that

denying or granting relief will have upon the values of justice

for both parties, the deterrence of judicial misconduct, the

appearance of justice and the integrity of the courts. 

Consequently, the considerations mentioned in Liljeberg, i.e.,

risks of injustice to the parties, injustice in other cases, and

the undermining of confidence in the courts, are pertinent and

useful to the exercise of judicial discretion under Rule 60(b)(6)

and § 455, but they are not particularly relevant or helpful to a

harmless error determination.

15

rule, not confined to the context of Rule 60(b)(6) motions, but

applicable to all civil and criminal cases involving § 455

violations. Such a broad, discretionary “harmless error” rule

would be radically different in language, focus and purpose from

the harmless error rules of Fed. R. Civ. P. 61 and Fed. R. Crim.

P. 52(a).5 Furthermore, there is a substantial question whether

O’Keefe I was clearly in error because it applied the equitable
 

6 The harmless error rule calls upon a reviewing court to

(1) disregard a harmless error, viz., one that does not really

hurt the complaining party or affect the outcome of the judgment

or order complained of, and (2) leave undisturbed, i.e., to

affirm, an order or judgment affected only by harmless error. See

11 Wright et al., Federal Practice and Procedure § 2883; 12

Moore’s Federal Practice § 61.02 (3d ed. 1998). O’Keefe I used 

the equitable factors to take the first step in applying a

harmless error rule by disregarding the trial judge’s error of

law in violating his own disqualification order, but O’Keefe I

did not follow through with the second step required by a

harmless error rule, i.e., affirming the trial judge’s ruling on

the motion for reconsideration and remanding for further

proceedings. Instead, O’Keefe I left the second part of its

“so-called” harmless error operation undone, skipped over the

usual step of affirming an order or judgment free of harmful

error, to a review of the merits of the trial judge’s ruling on

the motion for a new trial. Based on that merits review O’Keefe

I vacated the new trial order and, sub silentio, vacated the

trial judge’s ruling on the motion to reconsider that it had

earlier found to be affirmable as harmless error, and denied the

defendant’s motion for new trial on the merits and with

prejudice. Thus, the convolutions and non sequiturs involved in

O’Keefe I’s application of what it mischaracterized as a harmless

error rule underscore that there is a substantial question as to

whether that panel’s decision was clearly erroneous.

16

factors in the underscored sentence, not as a harmless error

rule, but as a talisman giving it the extraordinary power and

discretion to skip over affirming or vacating the trial judge’s

ruling on the motion to reconsider to review on the merits the

trial judge’s granting of a new trial.6

Although the Supreme Court’s Liljeberg opinion refers to

harmless error in passing at one point, it may be argued that it

is highly doubtful that the court intended to establish a new or

special harmless error rule for all cases involving §455

violations. At the end of Part III, in which the Court analyzed

§ 455 and concluded that the trial judge in Liljeberg plainly

violated the statute, the Court added:

 A conclusion that a statutory violation occurred

does not, however, end our inquiry. As in other areas

of the law, there is surely room for harmless error
17

committed by busy judges who inadvertently overlook a

disqualifying circumstance.[FN9] There need not be a

draconian remedy for every violation of § 455(a). It

would be equally wrong, however, to adopt an absolute

prohibition against any relief in cases involving

forgetful judges. 

Liljeberg, 486 U.S. at 862. In footnote 9 the Court stated that

“[l]arge, multidistrict class actions, for example, often present

judges with unique difficulties in monitoring any potential

interest they may have in litigation.” Id. at 862 n.9. In this

connection the Court cited Union Carbide Corp. v. U.S. Cutting

Service, Inc. 782 F.2d 710, 714 (7th Cir. 1986); In re Cement and

Concrete Antitrust Litigation, 515 F. Supp. 1076, 1080 (D. Ariz.

1981), large class actions in which the trial judges discovered

for the first time, well into the litigation, that each of their

spouses owned a relatively small amount of securities in a member

of the class. These cases, however, hinged upon potential

§455(b)(4)(financial conflict of interests) violations rather

than §455(a)(appearance of partiality) infractions. Thus, the

Court’s vague references to “room for error committed by busy

judges who inadvertently overlook a disqualifying circumstance,”

and the lack of need for “a draconian remedy for every violation

of §455(a),” or the wrong of an “absolute prohibition against any

relief in cases involving forgetful judges,” do not appear to

formulate a rule at all. Rather, the comments appear to be a

precautionary dictum that, in enforcing § 455(a)&(b), inadvertent

violations under extenuating circumstances, as opposed to sheer

forgetfulness, may sometimes be disregarded as harmless.

The Court’s Part III dictum on harmless error occurs

separately and apart from its discussion in Part IV of relieving

a party from a final civil judgment under Rule 60(b)(6), in

appropriate equitable and extraordinary circumstances, as a

remedy for a judge’s §455(a)violation. Part III makes but one

mention of Rule 60(b)(6), and it is revealing. In footnote 9,
18

after observing that large, multidistrict class actions often

present judges with unique difficulties in monitoring any

potential interest they may have in the litigation, the Court

said, “[o]f course, notwithstanding the size or complexity of the

litigation, judges remain under a duty to stay informed of any

personal or fiduciary financial interest they may have in cases

over which they preside. See 28 U.S.C. § 455(c). The complexity

of determining the conflict, however, may have a bearing on the

Rule 60(b)(6) extraordinary circumstance analysis.” Id. at 862

n.9. The Court did not refer to the Rule 60(b)(6) extraordinary

circumstances analysis as a harmless error rule. And the Court

did not anywhere suggest that the equitable considerations

involved in the Rule 60(b)(6) extraordinary circumstances

analysis discussed in Part IV of the opinion may be used in other

contexts as a harmless rule. The Court does not regard the two

conceptions as fungible; and a very strong argument can be made

that courts of appeals should not either. 

Finally, there is a substantial question as to whether it

was clearly erroneous for O’Keefe I to conclude that the Supreme

Court in Liljeberg, a civil action, held that Fed.R.Civ.P.

60(b)(6) motions, or the equitable principles appropriate for use

in deciding them, may be used to relieve a party of a final

judgment or order in a criminal case. Federal Rules of Civil

Procedure 1 and 81 provide that those rules shall apply to all

suits of a civil nature, whether cognizable as cases at law or in

equity except those specifically excepted. Federal Rule of Civil

Procedure 60(b), therefore, simply does not provide for relief

from a judgment in a criminal case. See United States v. Mosavi,

138 F.3d 1365, 1366 (11th Cir. 1998). A criminal conviction can

be attacked by motion under 28 USC § 2255, but only for errors of

constitutional dimension. See 13A Wright et al., Federal Practice

and Procedure, § 3550 (1998 Supp.). 
19

(b)

Under § 455(a), grounds for a judge to disqualify himself

arise whenever his impartiality might reasonably be questioned;

and, even if the judge was not aware of the circumstances

creating an appearance of partiality when it occurred, once he

realizes that the impropriety existed he is called upon to take

steps necessary to maintain public confidence in the impartiality

of the judiciary; in a proper case, the judge may be obliged to

disqualify himself retroactively and to vacate any orders entered

during the time that a reasonable person would harbor doubts

about the judge’s impartiality. Liljeberg, 486 U.S. at 860-61;

Health Services Acquisition Corp. v. Liljeberg, 796 F.2d 796, 802

(5th Cir. 1986); Moody v. Simmons, 858 F.2d 137 (3d Cir. 1988);

Hall v. Small Business Administration, 695 F.2d 175, 179 (5th

Cir. 1983).

In the present case, the trial judge’s 82 page written

memorandum and order contains both his order granting defendants’

motion for a new trial and his order recusing himself from the

case. The memorandum and order clearly indicates that the trial

judge formed the intention to grant the new trial and to recuse

himself either during the oral argument on the motion for new

trial or at some time before the written order was prepared and

filed. The trial judge’s written memorandum and order states:

“Although based on the extensive briefs filed by all the parties

I was prepared to deny the defendants’ motion for a new trial,

following oral argument I am now persuaded that a new trial is

the proper remedy under the circumstances.” Memorandum and Order

at 80 (footnote omitted). In its Conclusion, the memorandum and

order provides:

 The defendants have been successful in obtaining a

new trial. As I said before in addressing the perjury

of Charles Donaldson, prior to oral argument I was not

inclined to grant this remedy. I believed that the

jury, which performed its duty so diligently, had been
20

apprised of all relevant information required to reach

a verdict. At oral argument it became apparent that

such was not the case.

Because of the sensitive nature of the court’s

inquiry concerning conduct of government counsel, the

court’s personal participation and questioning of

counsel in connection with that inquiry, and the

findings of the court resulting from that inquiry, the

court feels compelled to recuse itself from further

handling of this matter in accordance with 28 U.S.C. §

455.

Accordingly,

IT IS ORDERED that the defendants’ motion for new

trial is GRANTED. (Signature omitted).

Id. at 81-82.

Thus, it is evident that the trial judge’s inquiry of a

“sensitive nature” into the conduct of the government attorneys

at the oral argument on the new trial motion, the judge’s

“personal participation and questioning of counsel” during that

inquiry, and the judge’s findings resulting from the inquiry,

caused the trial judge to decide that he could no longer maintain

impartiality, that he should recuse himself, and that a new trial

should be granted.

Consequently, the defendants’ appeal raises a substantial

question as to whether O’Keefe I clearly erred in finding or

assuming that the trial judge’s decision and order on the new

trial motion distinctly preceded the grounds for his recusal

under § 455. The judge’s written memorandum and order indicates

that he probably decided that he should disqualify himself before

the order was prepared in final form or certainly before it was

actually signed and filed. Consequently, the possible influence

of the judge’s reasons for disqualification upon his decision of

the new trial motion is clearly evident. As a practical matter,

the trial judge’s new trial and recusal rulings cannot be

hermetically separated either temporally or in substance.

Moreover, because of the judge’s recounting of the events

and his mental impressions in his written memorandum and order,
21

it would appear to a reasonable person that the judge lost his

ability to maintain his impartiality prior to his granting of the

new trial, and that the judge realized that his impartiality at

the time he granted the new trial might reasonably be questioned. 

Accordingly, this is a proper case for the retroactive

application of § 455. The trial judge had a duty to make his

disqualification retroactive so as to precede his granting of the

new trial and to vacate both his new trial and denial of

reconsideration order. Accordingly, there is a substantial

question whether O’Keefe I clearly erred in not recognizing the

pervasiveness of the trial judge’s violations of § 455, in not

vacating both his granting of the new trial and his denial of the

motion to reconsider, and in not remanding the case to a

different judge to consider the defendants’ motion for a new

trial anew, shorn of the disqualified judge’s vacated orders.

(c)

Consequently, the defendants’ appeal raises substantial

questions as to whether O’Keefe I clearly erred in reaching the

merits of the trial judge’s granting of the new trial and in

deciding upon the rules of law it adopted in that merits review. 

Thus, it would clearly cause manifest injustice to the defendants

to preclude them, on the basis of a flawed law of the case

application, from presenting in their appeal all of their

substantial arguments that constitutional errors and defects in

the trial affected their substantial rights and the judgment of

the jury.

There is a substantial argument that O’Keefe I’s clearly

erroneous interlocutory appellate intervention into the merits of

this criminal case during a government appeal would, under

improper application of a law of the case bar, make for truncated

presentation of the defendants’ issues in their own appeal and

risk a failure to have a complete appellate determination of the
22

true nature and seriousness of alleged errors based on all of the

evidence and a full and fair opportunity for argument by the

parties. Consequently, manifest injustice will result if the

defendants are denied a full consideration of their

constitutional claims and a full vindication of their

constitutional rights on direct appeal.

II. 

 If the direct appeal panel decides that it is not bound by

O’Keefe I under the law of the case doctrine, the defendants’

appeal raises substantial questions of law or fact which, are,

additionally, so integral to the merits of the convictions, on

all counts for which imprisonment has been imposed, that an

appellate ruling for the defendants on any of those substantial

questions would be likely to require a reversal of the conviction

or a new trial. 18 U.S.C. § 3143(b)(2); United States v. ValeraElizondo, 761 F.2d 1020 (5th Cir. 1985). 

The primary substantial question of law raised for appeal is

whether the government obtained the defendants’ convictions

through use of perjury and other false evidence, known to be such

by the government’s representatives, that the government

knowingly allowed to go uncorrected during the jury trial in

which it appeared. 

A principal element of the prosecution theory was that the

defendants, under the leadership of Michael O’Keefe, Sr., caused

a domestic insurer, Physicians National Risk Retention Group

(PNRRG), which they managed, to enter a sham reinsurance contract

with a foreign insurer, Builders and Contractors Insurance (BCI),

managed by Charles Donaldson, who later became a key prosecution

witness. One crucial issue in the case was whether the

defendants had foreknowledge that Donaldson had no authority to

enter the contract for BCI from its owners or directors. An FBI

agent’s report of her interview of Donaldson, after he agreed to
23

cooperate in the investigation of the defendants, related that

Donaldson said that Michael O’Keefe, Sr., had “suggested [to

Donaldson] that BCI’s shareholders meeting minutes be altered [by

Donaldson] to make it appear that Donaldson had authority to

enter into the PNRRG/BCI contract.” Donaldson FBI 302 Report,

quoted in O’Keefe I, 128 F.3d at 888. The government’s attorneys

placed this same statement in the factual basis for Donaldson’s 

guilty plea in another district court to one count of mail fraud

in exchange for his testimony against the defendants. Id. In

that guilty plea proceeding the FBI agent testified that the

factual basis accurately reflected what Donaldson had said in his

interview and Donaldson testified that the factual basis

accurately set forth what transpired between him and Mr. O’Keefe. 

Trial Transcript (Cross Examination of Charles Donaldson), March

12, 1996, at 110.

During Donaldson’s direct testimony in the present case, the

prosecuting attorneys did not ask Donaldson any questions about

his alteration of the BCI shareholders’ meeting minutes. 

Immediately prior to Donaldson’s direct examination by the

government’s attorneys, the prosecution handed a copy of the FBI

302 report to the defense. During cross-examination, Donaldson

at first denied that he had ever said that O’Keefe had suggested

that Donaldson should alter the BCI minutes. Later during the

cross-examination, however, Donaldson testified that he had told

the FBI agent that O’Keefe suggested that he alter the minutes

and that it was a false statement. Still later on cross,

Donaldson testified that during his guilty plea proceeding in

Baton Rouge, the FBI agent had taken the stand and, in giving the

factual basis for his plea, repeated the false statement that

Michael O’Keefe, Sr., had acted with Donaldson to alter the BCI

minutes. Donaldson also testified in the present case that the

FBI agent’s testimony at his guilty plea proceeding was correct. 

Trial Transcript (Cross Examination of Charles Donaldson) at 110. 
24

A conviction obtained through use of false evidence, known

to be such by representatives of the government, must fall under

the Fourteenth Amendment. Napue v. Illinois, 360 U.S. 264, 269

(1959) (citing Mooney v. Holohan, 294 U.S. 103 (1935)). See

Miller v. Pate, 386 U.S. 1 (1967)(false “blood” on shorts). 

“‘[T]he same result obtains when the State, although not

soliciting false evidence, allows it to go uncorrected when it

appears.’” Giglio v. United States, 405 U.S. 150, 154 (1972)

(quoting Napue, 360 U.S. at 279); United States v. Agurs, 427

U.S. 97, 103 (1976). “‘It is of no consequence that the

falsehood bore on the witness’ credibility rather than directly

upon defendant’s guilt. A lie is a lie, no matter what its

subject, and, if it is in anyway relevant to the case, the

district attorney has the responsibility and the duty to correct

what he knows to be false and elicit the truth. * * * That the

district attorney’s silence was not the result of guile or a

desire to prejudice matters little, for its impact was the same,

preventing, as it did, a trial that could in any real sense be

termed fair.’” Napue, 360 U.S. at 269-70 (quoting People v.

Savvides, 136 N.E.2d 853, 854-55 (1956)).

A new trial is required if the false testimony could in any

reasonable likelihood have affected the judgment of the jury.

United States v. Bagley, 473 US 667, 678-79 (1985); Giglio v.

United States, 405 U.S. 150, 154 (1972) (quoting Napue, 360 U.S.

at 271); Kirkpatrick v. Whitley, 992 F.2d 491 (5th Cir. 1993). 

The fact that the jury was apprised of other grounds for

believing that the government witness may have had an interest in

testifying against the defendant does not turn what was otherwise

a tainted trial into a fair one. Napue, 360 U.S. at 270.

The government’s attorneys, in a sidebar conference during

the trial, at oral argument on the motion for a new trial, and in

affidavits filed with the motion for reconsideration, took the

position that Donaldson had never told the FBI that O’Keefe urged
25

him to alter the BCI minutes, that the FBI agent who interviewed

Donaldson mistakenly thought Donaldson had accused O’Keefe of

complicity in the alteration of the BCI minutes, that the FBI

agent attributed that incorrect statement to Donaldson in the

written FBI 302 report of the interview, that the government

attorneys in New Orleans became aware of the false statement in

the 302 prior to Donaldson’s arraignment, and that the government

attorneys in New Orleans tried unsuccessfully to correct the

false statement before a government attorney in Baton Rouge

placed it in the factual basis for Donaldson’s guilty plea in the

federal court for Middle District of Louisiana. See Trial

Court’s Memorandum and Order (Aug. 15, 1996), at 64-70. Thus,

the government was aware before trial that through its own fault

Donaldson’s 302 FBI statement and guilty plea factual basis

contained a false statement accusing O’Keefe of actively

participating in the falsification of the BCI minutes in order to

facilitate the BCI/PNRRG reinsurance contract; moreover, the

government knowingly did not correct the inaccuracies in the FBI

302 Report prior to making the report available to the defense

before Donaldson’s testimony. The government was also aware

before trial that Donaldson’s guilty plea factual basis was of

record and accessible to the defendants. Thus, there is a

substantial argument that the government knew before trial that

there was a reasonable likelihood that the defense would ask

Donaldson about the false statement before the jury but that the

defense would not know that the false statement originated with

the FBI agent’s mistake, and not with what Donaldson actually

told the FBI agent. Nevertheless, the government did not inform

the court or the defense prior to trial or Donaldson’s testimony

of the true nature of the false statement or its source. The

government did not ask Donaldson any questions about the false

statement or attempt to correct the 302 or the factual basis

during Donaldson’s direct testimony. The government did not call
26

the FBI agent or any of its attorneys to explain what was false

and elicit the truth. The government was aware that Donaldson

perjured himself several times during his cross examination by

testifying that he had made the statement to the FBI agent,

although he later said he was lying at the time, and although he

also testified several times that he did not make the false

statement to the FBI agent. Nevertheless, the government

knowingly did not ever in open court before the jury correct or

explain Donaldson’s perjurious testimony or the false statement

in the 302 or the factual basis.

Applying the constitutional principles set forth by the

Supreme Court in the cases cited above, it is clear that

defendants’ appeal raises a substantial question whether their

convictions and sentences must fall under the Fourteenth

Amendment because (1) they were obtained through the use of

perjured testimony and false evidence, known to be such by

representatives of the government, Napue v. Illinois, 360 U.S. at

269; Miller v. Pate, 386 U.S. 1, 7 (1967); Faulder v. Johnson, 81

F.3d 515, 519 (5th Cir.), cert. denied, 117 S. Ct. 487 (1996) ;

Pyles v. Johnson, 136 F.3d 986, 996 (5th Cir. 1998); (2) although

the government may not have directly solicited the perjury or

false evidence, it was responsible for the creation of the false

statement, knew or should have known that the jury would be

exposed to the false statement wrongfully indicating that O’Keefe

participated in altering the BCI minutes, and knowingly allowed

it to go uncorrected when it appeared before the jury, Giglio v.

United States, 405 U.S. at 154; Napue, 360 U.S. at 279; United

States v. Agurs, 427 U.S. 97 (1976); Faulder v. Johnson, 81 F.3d

at 519; Pyles v. Johnson, 136 F.3d at 996; and (3) the perjury

and false evidence could in any reasonable likelihood have

affected the judgment of the jury. United States v. Bagley, 473

U.S. at 678-79; Giglio, 405 U.S. at 154; Napue, 360 U.S. at 271;

Kirkpatrick v. Whitley, 992 F.2d 491, 497 (5th Cir. 1993). See 2
27

Wayne R. LaFave & Jerold H. Israel, Criminal Procedure §19.5, at

534 (1984) (“This obligation [of the prosecutor to disclose]

requires that it not suborn perjury, not use evidence known to be

false, and not allow known false testimony of its witnesses to

stand uncorrected.”).

Consequently, there is a substantial question as to whether

O’Keefe I clearly erred by applying incorrect principles of law

to determine whether the government violated its duty to correct

perjury and false evidence and, if so, whether the government’s

violations were material. In O’Keefe I, the court stated that:

 [1] Along with other circuits, we have limited

material lies to those that occur as a part of the

prosecution’s case. The prosecution has a duty only to

refrain from knowingly presenting perjured testimony

and from knowingly failing to disclose that testimony

used to convict a defendant was false. Thus, when the

defense elicits the alleged perjury on crossexamination, no material falsehood has occurred because

the government has not itself knowingly presented false

testimony. [Id. at 894 (citations and internal

quotations omitted)].

 [2] [W]e do not find that there is a reasonable

probability that the jury would have reached a

different outcome even had it been fully aware of all

of the alleged inconsistencies and falsehoods 

 in Donaldson’s testimony. As a result, the falsehoods

were not material and no Napue deprivation of due

process occurred. [Id. at 898].

It is arguable that the first O’Keefe I statement is clearly

erroneous because it is contrary to the decisions of the Supreme

Court and to previous panel opinions of this Circuit following

the Supreme Court cases. In Napue and Giglio, both of which

involved perjury by a prosecution witness during his crossexamination by a defense attorney, see Napue, 360 U.S. at 267-68

& n.2; Giglio, 405 U.S. at 765, the Court held that a conviction

obtained through use of false evidence, known to be such by

representatives of the prosecuting government, must fall as a
28

violation of due process; and that “‘[t]he same result obtains

when the State, although not soliciting false evidence, allows it

to go uncorrected when it appears.’”. Giglio, 405 U.S. at 766

(quoting Napue, 360 U.S. at 269). Prior to O’Keefe I this

Circuit has consistently followed Napue and Giglio. See Pyles v.

Johnson, 136 F.3d 986, 996 (5th Cir. 1998)(“A state denies a

criminal defendant due process when it knowingly uses perjured

testimony at trial or allows untrue testimony to go

uncorrected.”)(quoting Faulder, 81 F.3d at 519 (citing Napue)).

See Cordova v. Collins, 953 F.2d 167, 171 (5th Cir. 1992). 

The second O’Keefe I statement is also clearly erroneous. 

The Supreme Court has held that when a Napue violation occurs

“[a] new trial is required if ‘the false testimony could...in any

reasonable likelihood have affected the judgment of the jury.”

Giglio, supra, at 766, quoting Napue, supra, at 271. Prior to

O’Keefe I this Circuit’s panels adhered to the same materiality

standard. Kirkpatrick v. Whitley, 992 F.2d at 497 (“[I]f the

prosecutor has knowingly used perjured testimony or false

evidence, the standard is considerably less onerous [than for

Brady violations]: the conviction ‘must be set aside if there is

any reasonable likelihood that the false testimony could have

affected the jury’s verdict . . . .’” [citing Bagley, 473 U.S. at

679 n.9 (citing Napue)]); Moody v. Johnson, 139 F.3d 477, 484

(5th Cir. 1998)(“It is well settled that the State is not

permitted to present false evidence or allow the presentation of

false evidence to go uncorrected. [citing Giglio, Napue and

Mooney v. Holohan]. However, if false evidence is presented by

the prosecution at trial, a new trial is warranted only if the

false testimony could have, in any reasonable likelihood,

affected the jury’s determination.”).

One panel of this court may not overrule the decision of a

prior panel of this court (absent an intervening decision to the

contrary by the Supreme Court or the en banc court, of which
29

there are none). Hogue v. Johnson, 131 F.3d 466, 491 (5th Cir.

1997); Barber v. Johnson, 145 F.3d 234 (5th Cir. 1998).

Consequently, the defendants’ appeal raises a substantial

question as to whether an application of the correct controlling

principles of law set forth in Napue, Giglio, Pyles, Faulder,

Moody and Kirkpatrick by the court on direct appeal should

require a reversal of the convictions and a new trial because the

government, although not directly soliciting false evidence in

court, allowed it to go uncorrected when it appeared in court. 

It is also cogently arguable that the record on direct appeal

will show that the government’s violation of due process and the

resulting harm to the substantial rights of the defendants were

far more grievous than that depicted by the O’Keefe I opinion

because (i) the government’s bad faith, fault or neglect created 

the false statements in the FBI 302 report and Donaldson’s guilty

plea factual basis; (ii) the government took no steps to disclose

the falsehoods to the court or the defendants, although it became

aware of them before trial; (iii) the government was aware of the

risk that the false evidence would be referred to by Donaldson in

his testimony at trial before the jury; (iv) when this risk

became a reality the government took no steps before the jury to

fulfill its duty to correct what it knew to be false and elicit

the truth for the trier of the facts; (v) had the government

complied with its duty by correcting the false statements prior

to trial, the jury would not have received any of the very

incriminating false evidence that O’Keefe had personally

participated in altering the BCI minutes (including evidence that

Donaldson’s accusation against O’Keefe had been placed in an

official FBI 302 report and that an FBI agent had testified to

receiving such a statement from Donaldson in federal court); (vi)

had the government complied with its duty, after the false

statements were repeatedly mentioned during trial, to apprise the

jury of the true facts, (that the statement was false, that
30

Donaldson had never said O’Keefe participated in the fabrication

of the BCI minutes, that when Donaldson testified that he had

made that statement to the FBI he committed perjury, that the FBI

agent was responsible for the creation of the false statement,

and that the government knowingly had allowed the trial to go

forward without disclosing the false statements to the court or

the defendants), the jury might well have concluded that the

government had either fabricated evidence or had been highly

negligent in its investigation or preparation of the FBI report

and the factual basis to which the FBI agent testified to in

another federal court. There is a substantial question whether

the truth about the government’s creation and perpetuation of the

false statement likely would have affected the jury by shaking

its confidence in the government’s whole investigation and

prosecution. Also, the jury might well have concluded that

Donaldson was willing to say anything to help the government’s

case and to damage the defense, and to commit perjury to cover up

the government’s mistakes. Accordingly, the jury might well have

concluded that Donaldson’s testimony was thoroughly lacking in

credibility or reliability. Thus, there is a substantial

question whether there is a reasonable likelihood that the false

evidence and testimony affected the judgment of the jury so that

a new trial is required. 

III.

The defendants make an additional argument which also

appears to raise a substantial question of law or fact. The

defendants contend that they have newly discovered evidence that

prior to Donaldson’s guilty plea, the government allowed $45,000

which did not belong to Donaldson to be deposited to his credit

in his lawyer’s trust account and withdrawn after Donaldson’s

guilty plea and used by Donaldson as if it were his own money to

pay part of his restitution obligation. The defendants argue
31

that by these transfers, the government gave Donaldson an

additional substantial benefit which the government knowingly did

not disclose in its plea agreement with Donaldson. In the plea

agreement, the government and Donaldson represented that the only

benefits he would receive for his plea, cooperation and testimony

against other persons were a 3-level decrease in his criminal

offense level and a possible recommendation of a downward

departure in sentencing. On direct examination at defendants’

trial Donaldson identified his written plea agreement and

testified that it was the agreement he had signed with the

government. The government elicited from Donaldson the specific

benefits he had been granted or promised by the government. The

prosecuting attorney did not ask Donaldson, and he did not

volunteer any information, about the $45,000 that the government

allowed him to use to pay part of his restitution obligation. 

The defendants contend that the government’s introduction of

Donaldson’s testimony about the plea agreement and the agreement

itself, which was introduced as an exhibit in the defendants’

trial, contained false statements under oath by Donaldson and

government representatives that misled the jury as to the quality

and credibility of Donaldson’s testimony, and could have in

reasonable likelihood affected the judgment of the jury. The

defendants contend that the government therefore violated the

Fourteenth Amendment under both Napue and Brady by presenting

knowingly uncorrected perjury and false evidence at trial and

failing to disclose impeachment evidence to defendants.

In this regard, a further substantial question of law or

fact is raised as to whether O’Keefe I’s clearly erroneous

intervention into the merits of the case prevented the successor

trial judge from allowing the defendants to present substantive

evidence in support of their motion for a new trial.

My pretermitting discussion of other questions raised by

defendants’ appeal does not indicate any opinion as to whether
32

any of these is a substantial question, which if decided

favorably to the defendants, would be likely to result in

reversal.

Conclusion

Accordingly, I respectfully dissent from the majority’s

granting of the government’s motion to stay the district court’s

order releasing the defendants on bail pending the government’s

appeal from that order. I believe the defendants’ appeal will

raise substantial questions of law and that they should therefore

be allowed to remain on bail pending their own appeal. However,

I do not intend to intimate how the substantial questions raised

by defendants’ appeal and the government’s argument based on the

law of the case doctrine should be decided. It would be

inappropriate to express an opinion on the merits of these

questions prior to full briefing and presentation to this court

on direct appeal. United States v. Clark, 917 F.2d 177, 181 (5th

Cir. 1990). The present panel’s function is merely to decide

whether to stay the district court’s decision to grant bail

pending the government’s appeal from the district court’s order

releasing the defendants on bail pending their own appeal.