UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellant,

v.  No. 01-2266

JAMES E. HOWARD, JR.; DOWN EAST

FARMS, INCORPORATED,

Defendants-Appellees. 

Appeal from the United States District Court

for the Eastern District of North Carolina, at New Bern.

Malcolm J. Howard, District Judge.

(CA-99-192-4-H(3))

Argued: September 23, 2002

Decided: November 18, 2002

Before LUTTIG and WILLIAMS, Circuit Judges, and

HAMILTON, Senior Circuit Judge.

Affirmed by unpublished per curiam opinion. Senior Judge Hamilton

wrote a dissenting opinion. 

COUNSEL

ARGUED: Neal Irving Fowler, Assistant United States Attorney,

Civil Division, Raleigh, North Carolina, for Appellant. George Mason

Oliver, STUBBS & PURDUE, P.A., New Bern, North Carolina, for

Appellees. ON BRIEF: John Stuart Bruce, United States Attorney,

Anne M. Hayes, Assistant United States Attorney, Civil Division,
Raleigh, North Carolina, for Appellant. Trawick H. Stubbs, Jr.,

STUBBS & PURDUE, P.A., New Bern, North Carolina, for Appellees. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

Appellant, the United States, appeals from the judgment of the district court, contending that the court erred in several of its evidentiary

rulings made below in the course of a bench trial. The United States

requests a new trial. As we determine that the district court either did

not err or committed harmless error in its rulings, we affirm. 

I.

James Howard and his corporation Down East Farms, Inc. (the "defendants") farmed approximately 2,400 acres of land during the 1992

crop year. In September and October of 1992, Howard sold approximately 45,000 bushels of corn owned by Down East Farms under a

fictitious name. Also in 1992, the defendants signed or caused to be

signed various documents in connection with filing for and obtaining

crop insurance indemnity payments and disaster relief payments from

several federal agencies and programs, including the Risk Management Agency and the Farm Service Agency’s Disaster Assistance

Program. The defendants received $85,893 for crop losses from these

programs. The defendants did not report the 45,000 bushels of corn

they sold in 1992 on the documents filed with the federal agencies.

If the bushels were from the 1992 harvest, then evidently the defendants would not have been entitled to the insurance and disaster relief

payments received for crop losses in 1992. 

The United States sued the defendants under several legal theories,

including violation of the False Claims Act, common law fraud,

2 UNITED STATES v. HOWARD
unjust enrichment, and payment under mistake of fact. All of these

claims turned on the allegation that the defendants gave false information on the forms submitted to the federal agencies in order to defraud

the United States. This allegation in turn depended on the United

States’ contention that the 45,000 bushels sold under a false name

were part of the 1992 harvest. 

The basis for the United States’ contention that the corn was harvested in 1992 was as follows (according to the testimony of the

expert witnesses presented by the United States, or admitted by the

defendants). Corn can be stored safely for long periods of time only

at or below a moisture level of 15.5-16%. Corn stored at a higher

moisture level runs the risk of disease, mold, or rot. When sold, the

moisture level of corn is measured by machine. The type of machine

used to measure the disputed bushels’ moisture was known as a

Dickey John. When samples of the disputed 45,000 bushels of corn

were measured by a Dickey John, the readings returned by the

machine placed the moisture level of the corn between 15.5% and

17.8%. The buyer of the disputed corn reduced the price paid for drying charges, but not for poor quality, as one would presumably expect

if the corn were stored for a long period of time above a 15.5-16%

moisture level. Hence, the United States argued, this evidence,

although circumstantial, established that the disputed 45,000 bushels

sold by the defendants in 1992 were harvested in 1992. 

The defendants claimed that the 45,000 bushels sold in 1992 were

from the defendants’ stored corn, harvested in 1991 or earlier. Therefore, they argued, they did not give false information on the various

documents relating to crop losses in 1992. To explain the high moisture level of the corn, the defendants claimed that they had sprayed

water on the corn either during storage or during the transfer of the

corn from the storage bins into the trucks used to ship the corn. 

To support this explanation, at trial the defendants called a witness

by the name of Harold Smith, an operator of a Dickey John, and the

individual who purchased the disputed bushels of grain from the

defendants. After an objection from the United States (overruled by

the district court), Mr. Smith testified and then performed an in-court

experiment on the Dickey John machine. He took a small sample of

corn and measured it in the Dickey John machine. The machine

UNITED STATES v. HOWARD 3
returned a reading of 13.8% moisture. Then, Mr. Smith sprayed a

small amount of water on the corn, and ran it through the machine.

After approximately 15 minutes (during which time Mr. Smith was

vigorously cross-examined by counsel for the United States as to his

observations and his expertise in the Dickey John and in corn), the

machine returned a reading of 19.5% moisture. 

At the close of the trial, defendants moved for a judgment on partial findings pursuant to Fed. R. Civ. P. 52(c). The district court, relying in part on the result of the in-court experiment in its factual

findings, granted the defendants’ motion and entered a judgment

against the United States on all of its claims. 

The United States now appeals, challenging the admission of opinion testimony from Mr. Smith, as well as the admission of the in-court

experiment. 

II.

The United States argues that the district court erred in allowing

the in-court experiment into evidence. Although it is not clear as to

which of the Federal Rules of Evidence the United States contends

was violated, two seem possible: Fed. R. Evid. 402 (stating that evidence "which is not relevant is not admissible") and Fed. R. Evid. 403

(stating that "evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of

the issues, or misleading the jury . . . ."). 

First, we conclude that the in-court experiment was relevant. "‘Relevant evidence’ means evidence having any tendency to make the

existence of any fact that is of consequence to the determination of

the action more probable or less probable than it would be without the

evidence." Fed. R. Evid. 401. The fact that the spraying of water on

the exterior of a sample of corn could raise the moisture reading of

the corn sample on the Dickey John does make the defendants’ explanation for the high moisture readings of the disputed bushels at least

slightly more probable. Hence, the admission of this evidence did not

violate Fed. R. Evid. 402 ("All relevant evidence is admissible, except

as otherwise provided . . . ."). 

4 UNITED STATES v. HOWARD
Second, the United States’ objection fares no better under Fed. R.

Evid. 403. "[I]n the context of a bench trial, evidence should not be

excluded under 403 on the ground that it is unfairly prejudicial."

Schultz v. Butcher, 24 F.3d 626, 632 (4th Cir. 1994). As the instant

case involved a bench trial, rather than a jury trial, Fed. R. Evid. 403

was not violated by the admission of the in-court experiment. 

The United States also raises numerous objections to aspects of Mr.

Smith’s testimony, characterizing portions of the testimony as opinion

testimony, admitted in violation of Fed. R. Evid. 701 and 702. But,

the only factual findings in the district court’s order relating to Mr.

Smith’s testimony are the following: "13. The court finds, through the

testimony of grain buyer Harold Smith and his demonstration with the

actual Dickey John used to measure the moisture content of the disputed 45,000 bushels of corn, that it is possible to spray water onto

corn and thereby raise the moisture content measurement on the

Dickey John. 14. The aforementioned demonstration in the court

showed that spraying water on corn with an initial content of 13.8

could raise the moisture level of the corn to approximately 19.5, an

increase of 5.7." J.A. 553. These factual findings are seemingly based

entirely on the result of the in-court experiment, which we have determined to be admissible. The district court does not rely elsewhere on

any of the objected-to opinion testimony in its order.* Hence, to the

extent that the district court entered opinion testimony in violation of

Fed. R. Evid. 701 and 702, these errors were harmless. See Taylor v.

Virginia Union Univ., 193 F.3d 219, 235 (4th Cir. 1999). 

The judgment of the district court is affirmed.

*In its order, the district court did reference one piece of opinion testimony by Mr. Smith. J.A. 550. But, the opinion testimony was mentioned

in a section labeled "Preamble." This section appeared to be simply a

short description of what occurred during the trial, rather than a discussion of the district court’s reasoning. Also, the opinion testimony mentioned by the district court was given in response to direct questions from

opposing counsel on cross-examination, and thus any error was invited

by the United States’ counsel and its admission cannot be challenged by

the United States on appeal. See United States v. Neal, 78 F.3d 901, 904

(4th Cir. 1996). 

UNITED STATES v. HOWARD 5
AFFIRMED

HAMILTON, Senior Circuit Judge, dissenting: 

The government brought this case under the theory that the 45,000

bushels of corn, contained in sixty-eight truckloads, were harvested

in 1992 and not, as the defendants claimed, in 1991 or earlier. The

government’s case centered around proving that the high moisture

reading patterns as reflected on the grain tickets could not be achieved

in the manner for adding moisture described by the defendants (rehydrating the corn in storage and/or with a garden hose while being

loaded on trucks for shipment to the grain dealer) and, thus, the corn

had to have been harvested in 1992. The government introduced evidence, through its two experts, that the actual moisture reading patterns obtained from the 45,000 bushels of corn, as reflected on the

grain tickets, were indicative of corn harvested from the fields and not

from storage bins, and that the moisture reading patterns of the 45,000

bushels of corn, as reflected on the grain tickets, could not have been

obtained as James Howard described (by wetting corn in storage

and/or rehydrating the corn with a garden hose as it was being loaded

(sixty-eight truckloads) for delivery to the grain dealer). The government also introduced evidence demonstrating that adding moisture to

the exterior surface of the corn would create highly unstable and

unpredictable moisture patterns depending on the temperature, humidity, evaporation, sample taken, and time elapsed, and that James Howard’s purported method for storing and rehydrating corn was not

practical, logical, or economically beneficial. Stated simply, the government’s theory of the case was that, while one could add a small

amount of water to a small sample of corn and obtain an increased

moisture reading on the Dickey John, one could not add the large

amounts of water described by the defendants to 45,000 bushels of

corn and obtain the moisture reading patterns as reflected on the grain

tickets. 

As recognized by the majority, the gist of the defendants’ defense

centered around an explanation concerning the high moisture reading

patterns, as reflected on the grain tickets, for the 45,000 bushels of

corn. According to the defendants, the high moisture reading patterns,

as reflected on the grain tickets, occurred because they had sprayed

water on the 45,000 bushels of corn either during storage and/or dur6 UNITED STATES v. HOWARD
ing the transfer of the corn from storage bins into the trucks (sixtyeight truckloads) used to transport the corn to the grain dealer. 

To rebut the government’s case and to prove the validity of their

defense, the defendants introduced the expert testimony of, and an incourt experiment conducted by, Harold Smith, the grain dealer who

purchased the 45,000 bushels of corn and paid the defendants under

the false name of Jack Peele. Even though Harold Smith had no

knowledge, skill, experience, training, or education sufficient to render an opinion concerning how one could add the large amounts of

water described by the defendants to 45,000 bushels of corn and

obtain the moisture reading patterns as reflected on the grain tickets,

he was permitted to render an opinion establishing this theory. 

On direct examination, over the government’s objection, Harold

Smith opined that the Dickey John "checks the corn from the inside

out . . . [and that it] won’t check moisture on the outside of the corn."

(J.A. 441). Harold Smith also opined that, if you spray water on corn,

"it will give enough moisture going inside the corn to raise the thing

on the Dickey John." (J.A. 441). Then, after asking Harold Smith

whether he had "tested this Dickey John to indicate whether moisture

can be increased in the corn," (J.A. 442), defense counsel asked Harold Smith to describe his "tests" for the district court. (J.A. 443). Over

the government’s continued objection, Harold Smith testified about

his tests with using water to increase the moisture level of corn when

tested by the Dickey John, describing how adding squirts of water to

a corn sample raises the moisture reading of the corn sample. Harold

Smith then conducted an in-court experiment which involved using

the Dickey John to measure the moisture content of a small sample

of dry corn, then spraying water on the small sample of corn, waiting

approximately fifteen minutes, and having the Dickey John measure

the moisture content of the small sample of wet corn. Through this

experiment, the defendants sought to prove that one could add the

large amounts of water described by the defendants to 45,000 bushels

of corn and obtain the moisture reading patterns as reflected on the

grain tickets. 

Faced with Harold Smith’s expert opinion and experiment, the government, on cross-examination, was forced to discredit Harold Smith,

not as a lay witness, but rather as an expert. On cross-examination,

UNITED STATES v. HOWARD 7
Harold Smith admitted that he had no personal knowledge of farmers

adding water to corn to change the moisture level of the corn; that he

had no education or training concerning corn; that he did not know

what method James Howard used for adding moisture to corn; that he

was not aware of any machine that allowed farmers to add moisture

to corn by the truckload; and that he did not know how much water

was added by the defendants to the 45,000 bushels of corn. Notwithstanding all of this testimony suggesting that he knew nothing about

the issue of whether the moisture level of corn could be manipulated

in the manner described by the defendants, Harold Smith opined that

the minor spraying in his experiment was the equivalent to the contentions of the defendants concerning the "volume of water placed on

the corn by use of a garden hose as the corn came from the storage

bin via auger to the truck for transportation to the market." (J.A. 550).

Unfortunately for the defendants, Harold Smith was never identified by them as an expert witness and no expert report was provided

pertaining to Harold Smith; consequently, his testimony, to the extent

he rendered expert opinions, was inadmissible. Fed. R. Civ. P.

26(a)(2). Second, the defendants made no effort to qualify Harold

Smith as having the knowledge, skill, experience, training, or education to render expert opinion testimony admissible under Rule 702 of

the Federal Rules of Evidence.1 Moreover, the defendants did not

establish, and the district court did not elicit evidence of, any expertise on Harold Smith’s part based upon knowledge, skill, experience,

training, or education that would qualify him to opine on the issue of

whether the high moisture reading patterns as reflected on the grain

tickets could have been obtained in the manner described by the

defendants. Harold Smith testified that he was not a scientist, that he

1Rule 702 provides as follows: 

If scientific, technical, or other specialized knowledge will assist

the trier of fact to understand the evidence or determine a fact in

issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of

an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable

principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. 

Fed. R. Evid. 702. 

8 UNITED STATES v. HOWARD
had no training and little knowledge about the internal characteristics

of corn, that he had simply been told how the Dickey John worked,

and that he had "mash[ed]" the button on the Dickey John for about

twenty-five years. (J.A. 457). Thus, there was no basis upon which

Harold Smith legitimately could be qualified as an expert witness on

corn moisture or on how one could add the large amounts of water

described by the defendants to 45,000 bushels of corn and obtain the

moisture reading patterns as reflected on the grain tickets. Accordingly, Harold Smith’s testimony, to the extent that it rendered expert

opinions, was inadmissible under Rule 702.2

In the "Findings of Fact" section of its order, the district court made

two findings concerning the testimony of Harold Smith: (1) "[t]he

court finds, through the testimony of grain buyer Harold Smith and

his demonstration with the actual Dickey John used to measure the

moisture content of the disputed 45,000 bushels of corn, that it is pos2Nor was Harold Smith’s testimony admissible as the opinion testimony of a lay witness under Rule 701. Rule 701 expressly limits the

opinion testimony of non-experts to, inter alia, opinions which are "rationally based on the perception of the witness" and "not based on scientific, technical, or other specialized knowledge within the scope of Rule

702." Fed. R. Evid. 701. In this case, much of the testimony of Harold

Smith was based upon unstated and untested assumptions about the

experiment that he was conducting and how his experiment related to

what was or could have been done under actual farm conditions. It

appeared that Harold Smith could not perceive anything more about his

experiment (observing only the exterior of the Dickey John and what

appeared to be done to the small corn sample) than the fact-finder and

others present. Furthermore, any comparisons between Harold Smith’s

experiment and what the defendants claimed to have done was not based

on reason, but rather, on pure speculation. Harold Smith may have been

experienced in the operation of the Dickey John, but the record does not

reflect that he had any experience in determining whether one could add

the large amounts of water described by the defendants to 45,000 bushels

of corn and obtain the moisture reading patterns as reflected on the grain

tickets. Harold Smith’s expertise regarding pushing the button on the

Dickey John proved nothing, but the defendants attempted, through his

testimony and experiment, to prove their claim that sixty-eight truckloads

of corn (45,000 bushels) were rehydrated to the moisture reading patterns

as reflected on the grain tickets. 

UNITED STATES v. HOWARD 9
sible to spray water onto corn and thereby raise the moisture content

measurement on the Dickey John," (J.A. 553); and (2) "[t]he aforementioned demonstration in the court showed that spraying water on

corn with an initial content of 13.8 could raise the moisture level of

the corn to approximately 19.5, an increase of 5.7" (J.A. 553). In its

"Findings of Fact" section, the district court did not mention any of

the government’s evidence which demonstrated that, while one could

add a small amount of water to a small sample of corn and obtain an

increased moisture reading on the Dickey John, one could not add the

large amounts of water described by the defendants to 45,000 bushels

of corn and obtain the moisture reading patterns as reflected on the

grain tickets. Indeed, the district court made no findings concerning

the government’s two experts. 

In its "Conclusions of Law" section, the district court does not

mention how the government failed to prove its case; rather the district court stated in relevant part as follows:

(1) The plaintiff has failed to meet the requisite burden of

proof needed to prove by a "preponderance of the evidence" that defendant made false claims to obtain crop

insurance indemnity payments and disaster assistance

payments that contained false statements regarding the

1992 crop production and losses. 

(2) The plaintiff is unable to meet the requisite burden

needed to prove by a preponderance of the evidence

that defendant obtained the crop insurance indemnity

payments and disaster assistance payments by committing common law fraud, mistake of fact theory, the

unjust enrichment theory, or the False Claims Act, 31

U.S.C. § 3729. 

(J.A. 553-54). 

While recognizing that the district court relied in part on Harold

Smith’s testimony and experiment, ante at 4, the majority in this case

nevertheless takes the view that we should affirm because the district

court did not rely on any of the "objected-to opinion testimony in its

10 UNITED STATES v. HOWARD
order," ante at 5, and, therefore, any error is harmless. With all due

respect, the majority has a myopic view of the record. 

Throughout the trial and during the district court’s colloquy on the

defendants’ Rule 52(c) motion, the district court seemed to believe

that Harold Smith’s expert testimony and the results of his experiment

destroyed the government’s case. See, e.g., (J.A. 513-14) ("through

history in this court, this case will be known as the Dickey John

case"); (J.A. 514) ("I understand [the government’s] expert comments

. . . but if there were 12 people sitting in that [jury] box yesterday,

. . . when I saw it register 13.8 and then the same corn go back in 15

minutes later after it had been sprayed to 19.5. I mean that is classic

evidence to shoot that theory down."); (J.A. 523) ("You going to finish up by telling me why the Dickey John thing shouldn’t impress

me?); (J.A. 545) (captioning the case "The Dickey John Case"). Harold Smith’s expert testimony provided the only evidence that effectively contradicted the testimony of the government’s two experts that

the reported moisture reading patterns as reflected on the grain tickets

for the 45,000 bushels of corn were 1992 production rather than

stored corn, harvested in years prior to 1992. Indeed, in the absence

of Harold Smith’s expert testimony, the testimony of the government’s two experts that dry stored corn could not be rehydrated to the

moisture reading patterns as reflected on the grain tickets would have

been uncontroverted. Having cited to and unmistakably relied upon

the inadmissible expert testimony, the district court understandably

made no mention of the government’s experts in its findings of fact.

In short, I cannot conclude that the district court’s erroneous reliance

on Harold Smith’s expert testimony was harmless because the district

court appears to have been too heavily swayed by Harold Smith’s

inadmissible expert testimony. For these reasons, I would remand for

a new trial.

UNITED STATES v. HOWARD 11