PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v. No. 95-6126

WARREN HARDING MCNAMARA, JR.,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia, at Newport News.

Robert E. Payne, District Judge.

(CR-93-50, CA-94-58-4)

Argued: September 27, 1995

Decided: February 2, 1996

Before ERVIN, Chief Judge, and RUSSELL and HAMILTON,

Circuit Judges.

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Reversed and remanded by published opinion. Judge Russell wrote

the opinion, in which Chief Judge Ervin and Judge Hamilton joined.

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COUNSEL

ARGUED: William Graham Otis, Senior Litigation Counsel,

UNITED STATES ATTORNEY'S OFFICE, Alexandria, Virginia,

for Appellant. Kevin Paul O'Connell, KEVIN O'CONNELL, P.C.,

Portland, Oregon, for Appellee. ON BRIEF: Helen F. Fahey, United

States Attorney, Vincent L. Gambale, Assistant United States Attorney, Alexandria, Virginia, for Appellant. Ronald L. Smith, Hampton,

Virginia, for Appellee.
OPINION

RUSSELL, Circuit Judge:

On July 19, 1993, a federal jury convicted Warren Harding McNamara, Jr. ("McNamara") of illegally structuring financial transactions

to avoid currency reporting requirements in violation of 31 U.S.C.

§ 5324(a)(3) ("antistructuring law") and§ 5322(a). He received

twenty-one months imprisonment, three years supervised release, and

a $4,000 fine. One year later after forgoing direct appeal of either his

conviction or sentence, McNamara filed a motion under 28 U.S.C.

§ 2255 asking the district court to vacate his sentence. He advanced

two grounds for his motion: (1) that he was denied effective assistance of counsel because his trial counsel had failed to object to the

jury instruction on the "willfulness" element of unlawful structuring;

and (2) that there had been an intervening substantive change in the

antistructuring law which required a reversal of his conviction.

The district court found ineffective assistance of counsel and

granted McNamara's motion, vacating his sentence and ordered a new

trial. McNamara v. United States, 867 F. Supp. 369 (E.D. Va. 1994).

The district court reasoned that McNamara's trial counsel should have

objected to the jury instruction because at the time of trial, the

Supreme Court had granted certiorari in Ratzlaf v. United States, 976

F.2d 1280 (9th Cir. 1992), a case addressing the willfulness element

of the antistructuring statutes. In accordance with our recent decision

in Kornahrens v. Evatt, 66 F.3d 1350 (4th Cir. 1995), we reject the

district court's holding and conclude that McNamara's counsel was

neither ineffective for following the controlling circuit law at the

time, nor for being unaware that the Supreme Court had granted

certiorari in Ratzlaf.

I.

The antistructuring law under which McNamara was convicted

makes it a crime for an individual to "structure or assist in structuring

or attempt to structure or assist in structuring, any transaction with

one or more domestic financial institutions." 31 U.S.C. § 5324(a)(3).

And section 5322(a) provides the punishment for a person "willfully

violating this subchapter or a regulation prescribed under this sub-

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chapter . . . ." 31 U.S.C. § 5322(a) (1988), amended by 31 U.S.C.A.

§ 5322(a) (Supp. 1994) (emphasis added). This Circuit's controlling

authority, in 1993, did not require the defendant to have specific

knowledge of the illegality of his conduct. See United States v.

Rogers, 962 F.2d 342, 345 (4th Cir. 1992). The district court was not

required, therefore, to instruct juries that the government must prove

that the defendant knew his conduct was illegal. 1 In April of 1993, 90

days prior to McNamara's trial, the Supreme Court granted certiorari

in a Ninth Circuit case to resolve a conflict in the circuits on

"[whether] a defendant's purpose to circumvent a bank's reporting

obligation suffice[s] to sustain a conviction for `willfully violating'

the antistructuring provision." Ratzlaf v. United States, 114 S. Ct. 655,

657 (1994). Six months after McNamara's sentence, the Supreme

Court overruled Rogers (and the decisions of nine other courts of

appeal),2 holding that the structuring statute did, in fact, require the

Government to prove that the defendant acted with specific knowledge that his conduct was illegal. Id. Because of Ratzlaf, juries must

be instructed that in order to convict the defendant of structuring, they

find that he knew he was engaged in unlawful conduct.

Following the Supreme Court's Ratzlaf decision, the district court

found that if McNamara's trial counsel had more thoroughly prepared

for trial, his research would have discovered the certiorari grant in

Ratzlaf and he would have preserved the issue for appeal. Specifically, the district court concluded that:

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1 Bound by Rogers, the district court submitted an instruction on willfulness to the jury. Neither the Government nor McNamara's trial counsel objected to the instruction or brought Ratzlaf to the court's attention.

2 Prior to McNamara's trial, nine other circuits had issued opinions in

accord with our holding in Rogers. See United States v. Scanio, 900 F.2d

485 (2d Cir. 1990); United States v. Shirk, 981 F.2d 1382 (3d Cir. 1992);

United States v. Beaumont, 972 F.2d 91 (5th Cir. 1992); United States

v. Baydoun, 984 F.2d 175 (6th Cir. 1993); United States v. Jackson, 983

F.2d 757 (7th Cir. 1993); United States v. Gibbons, 968 F.2d 639 (8th

Cir. 1992); United States v. Hoyland, 914 F.2d 1125 (9th Cir. 1990);

United States v. Dashney, 937 F.2d 532 (10th Cir. 1991), cert. denied,

112 S. Ct. 402 (1991); United States v. Brown , 954 F.2d 1563 (11th Cir.

1992).

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[A] lawyer must be aware of the fact that an element of an

offense he must defend at trial is under examination by the

Supreme Court, particularly where the decision on that issue

has the potential to alter the controlling rule in the circuit

and likely will be issued while his client's case is on direct

appeal if an appeal is taken. At least at the confluence of

these factors, it is beyond the wide range of acceptable professional conduct to be unaware of developments in the law.

McNamara, 867 F. Supp. at 376. Accordingly, the district court held

McNamara's trial counsel to be constitutionally deficient for failing

to object to the willfulness element of the instruction.3

In accordance with our recent opinion in Kornahrens, we find the

district court's reasoning unpersuasive. In Kornahrens, we examined

whether Kornahrens' trial counsel was constitutionally ineffective for

failing to preserve an issue at trial based merely on the Supreme

Court's grant of certiorari in a case which raised the issue. Specifically, at the time of Kornahrens' trial, South Carolina law prohibited

the proffering of expert evidence of future adaptability. The Supreme

Court had granted certiorari in State v. Skipper, 328 S.E.2d 58 (S.C.),

cert. granted, 474 U.S. 900 (1985), to review the constitutionality of

this practice. The Supreme Court eventually overturned the South

Carolina law prohibiting admission of this evidence. Skipper v. South

Carolina, 476 U.S. 1 (1986). Kornahrens asserted his trial counsel

was ineffective for failing to preserve the admissibility issue in light

of the grant of certiorari in Skipper . We rejected Kornahrens' arguments and held that an attorney's failure to anticipate a new rule of

law was not constitutionally deficient. Kornahrens, 66 F.3d at 1360.

Our decision in Kornahrens is consistent with our prior decisions in

this area. We concluded that Kornahrens' trial counsel was not constitutionally deficient "because he followed a long-standing and wellsettled rule of South Carolina criminal law--even when that rule was

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3 Applying the Strickland v. Washington, 466 U.S. 668 (1984), analysis

for determining ineffective assistance of counsel, the district court found

that McNamara was prejudiced by his trial counsel's constitutionally

deficient performance. Because we hold that the district court erred in

finding counsel's performance deficient, we need not reach the prejudice

issue.

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under attack in the United States Supreme Court at the time of trial."

Id. See also Honeycutt v. Mahoney, 698 F.2d 213, 217 (4th Cir. 1983)

(holding that defendant's trial counsel was not ineffective for failing

to object to instruction regarding presumptions of malice and unlawfulness, where Supreme Court decisions supporting challenges to

such presumptions had not yet been rendered at time of trial);

Nickerson v. Lee, 971 F.2d 1125, 1136 (4th Cir. 1992), cert. denied,

113 S. Ct. 1289 (1993) (holding that Nickerson's trial counsel could

not have been expected to object to the State's peremptory challenges,

despite that certiorari in Batson had been granted six months before

trial, since Nickerson's trial predated the Batson decision by several

months); Randolph v. Delo, 950 F.2d 243 (8th Cir. 1991), cert.

denied, 504 U.S. 920 (1992) (ruling that trial counsel was not ineffective by failing to raise Batson challenge two days before Batson was

decided).

We find Kornahrens directs this case's disposition. Like

Kornahrens, McNamara's trial counsel, mindful of the controlling circuit law at the time, had no basis for objecting to the willfulness element of the given jury instruction. Furthermore, post-trial testimony

reveals that McNamara's trial counsel made adequate efforts to prepare himself for trial. In light of these facts and our previous decisions, we conclude that the district court erred in finding McNamara's

trial counsel to be constitutionally deficient.

II.

Although McNamara's § 2255 motion requested that his sentence

be vacated pursuant to Ratzlaf, the district court did not address

whether McNamara could retroactively take advantage of the substantive rule announced in Ratzlaf. Because we believe that a more thorough discussion of Ratzlaf's retroactive application to McNamara's

appeal would be dispositive, we remand this issue to the district court

for further proceedings.

III.

For the foregoing reasons, we reverse the district court's order,

reinstate McNamara's sentence, and remand the case to the district

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court for further consideration of the retroactive application of the

substantive rule in Ratzlaf.

REVERSED AND REMANDED

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