Document: 527 U.S. 1119 S.Ct. 1827144 L.Ed.2d 35 136 F.3d 1459, affirmed in part, reversed and remanded. SUPREME COURT OF THE UNITED STATES119 No. 97 1985 ELLIS E. NEDER, Jr., PETITIONER v. STATES ON WRIT CERTIORARI TO APPEALS FOR ELEVENTH CIRCUIT [June 10, 1999] Chief Justice Rehnquist delivered the opinion of Court. 1 Petitioner was tried on charges violating a number federal criminal statutes penalizing fraud. It is agreed that District Court erred refusing to submit issue materiality jury with respect those involving tax See United States Gaudin, 515 506 (1995). We hold harmless-error rule Chapman California applies this error. also an element mail fraud, wire bank fraud under which petitioner charged. 2 * In mid-1980's, Ellis Neder, attorney real estate developer Jacksonville, Florida, engaged transactions financed by fraudulently obtained loans. Between 1984 1986, Neder purchased 12 parcels land using shell corporations set up his attorneys then immediately resold at much higher prices limited partnerships he controlled. Using inflated appraisals, secured loans typically amounted 70 75% resale price land. so doing, concealed from lenders controlled corporations, had substantially lower than prices, not made substantial down payments as represented. several cases, sign affidavits falsely stating no relationship sharing profits sales. By keeping for himself amount loan proceeds exceeded original purchase land, able obtain more $7 million. He failed report nearly all money personal income-tax returns. eventually defaulted 3 schemes development 1985, $4,150,000 construction build condominiums project known Cedar Creek. To loan, represented lender satisfied condition making advance sales 20 condominium units. fact, been unable meet condition, additional buyers their himself. transferred back him escrow accounts into they placed. later without repaying any principal. employed similar scheme second $5,400,000, unsuccessfully attempted same manner. 4 consolidated $14 million acquisition Reddie Point. Pursuant could request funds work actually performed project. September 1987 March 1988, submitted numerous requests based false invoices, approved requests, almost $3 unrelated performed. 5 indicted on, among other things, 9 counts violation 18 U.S.C. § 1341; §1343; §1344; filing income return, 26 7206(1). The charged devising executing various defraud connection loans, totaling over $40 statements According Government, $1 $4 both amounts reflecting fraudulent 6 accordance then-extant Circuit precedent Neder's objection, instructed that, convict offenses, it "need consider" "even though language used indictment." App. 256. question materiality, court instructed, "is decide." Ibid. gave instruction id., 249, subsequently found, outside presence jury, evidence established issue, 167. instructing did include either offense. Id., 253 255. again objected instruction. convicted sentenced 147 months' imprisonment, years' supervised release, $25 restitution. 7 Appeals Eleventh conviction. 1459 (1998). held our intervening decision (1995), failing offense jury. concluded, however, error subject analysis and, further, harmless because "materiality dispute," F.3d, 1465, thus " 'did contribute verdict obtained,' ibid. (quoting Yates Evatt, 500 391, 403 (1991)). statutes, err 8 granted certiorari, 525 ___ (1998), resolve conflict Courts two questions: (1) whether, what circumstances, omission judge's charge can be error, (2) whether statutes. II Rule 52(a) Federal Rules Criminal Procedure, governs direct appeals judgments conviction system, provides "[a]ny defect, irregularity or variance does affect rights shall disregarded." Although its terms errors where proper objection trial, we have recognized class fundamental constitutional "defy 'harmless error' standards." Arizona Fulminante, 499 279, 309 (1991); see California, 386 18, 23 (1967). Errors type are intrinsically harmful require automatic reversal (i.e., "affect rights") regard effect outcome. For errors, reviewing courts must apply 52(a)'s "disregar[d]" "beyond reasonable doubt." 24. 10 case Government dispute Gaudin deciding §7206(1) itself, rather submitting Brief n. 1. decide here if so, harmless. 11 "most harmless." supra, 306. "[I]f defendant counsel impartial adjudicator, there strong presumption constitutiona[l] may occurred analysis." Rose Clark, 478 570, 579 (1986). Indeed, found "structural," reversal, only "very cases." Johnson States, 520 461, 468 (1997) (citing Gideon Wainwright, 372 335 (1963) (complete denial counsel); Tumey Ohio, 273 510 (1927) (biased trial judge); Vasquez Hillery, 474 254 (1986) (racial discrimination selection grand jury); McKaskle Wiggins, 465 168 (1984) (denial self-representation trial); Waller Georgia, 467 39 public Sullivan Louisiana, 508 275 (1993) (defective reasonable-doubt instruction)). omits differs markedly violations defy review. Those explained, contain "defect affecting framework within proceeds, simply process itself." 310. Such "infect entire process," Brecht Abrahamson, 507 619, 630 (1993), "necessarily render fundamentally unfair," Rose, U.S., 577. Put another way, these deprive defendants "basic protections" "a cannot reliably serve function vehicle determination guilt innocence punishment regarded fair." 577 578. 13 Unlike such defects complete deprivation before biased judge, necessarily unfair unreliable determining innocence. Our instructive. perjury prosecution which, here, decided judge object reviewed her claim "plain error." reserving ipso facto "affect[s] rights," 469, concluded warrant correction light 'overwhelming' "uncontroverted" supporting 470. Based evidence, 'seriously affec[t] fairness, integrity reputation judicial proceedings.' Olano, 725, 736 (1993)). 14 That conclusion cuts against argument will always unfair. shows, quite opposite true: correct standard proof assistance counsel; fairly selected, consider defense charges. Of course, erroneously but "fundamentally term cases. 15 often applied cases improper instructions single See, e.g., 391 (1991) (mandatory rebuttable presumption); Carella 491 263 (1989) (per curiam) conclusive Pope Illinois, 481 497 (1987) (misstatement element); supra presumption). improperly omitting "easily analogized offense, Johnson, 469 (citations omitted); Roy, 519 2, (1996) ("The specific defined crime easily characterized 'misdescription element' crime, 'omission' "). misdescriptions omissions erroneous precludes finding actual same, think, said presumptions, presume ultimate certain predicate facts (e.g., "You malice you find intentional killing"). Like omission, deters considering related killing) "directly foreclose[s] independent consideration proved elements offens[e]" malice). Carella, 266; 270 (Scalia, J., concurring judgment). 16 consistent holding (if reasoning) upon principally relies. Sullivan, defective "reasonable doubt" defendant's Fifth Sixth Amendment beyond doubt. Cage 498 (1990) curiam). Applying traditional mode analysis, "vitiates jury's findings," 281, produces "consequences unquantifiable indeterminate," 282. contrast, jury-instruction "vitiat[e] findings." 281; 284 (Rehnquist, C. concurring). did, prevent materiality. 17 argues Sullivan's alternative reasoning application here. Under reasoning, rendering guilty-beyond-a-reasonable-doubt "the premise review absent." 280. absence guilty-beyond-a-reasonable-doubt, would rendered absent utterly meaningless. There object, speak, scrutiny operate." Ibid.; 268 269 equal force prevents "complete verdict" every As argues, basis 'is absent.' 7. strand provide support position, squared Pope, example, guilty obscenity allegedly obscene material lacked serious value "community standards," person" required First Amendment. 501. Because properly consequently finding, result case. Yet appropriate. 502 503. 19 Similarly, "embezzled [a] vehicle" "[i]nten[ded] commit theft" return rental car days after expiration period. 264 (internal quotation marks omitted). Again, seen foreclosed offenses." 266. unconstitutional "subject rule." And habeas state-court murder conviction, instruct aider abettor "intent purpose" aiding confederate's crime. emphasis Despite "[t]he us standard." 5. 21 correctly establishes violates Amendment's guarantee. (a point uncontested, 5), analysis. think decisions Roy dictate answer question. 22 Forced accept has attempts reconcile offering approach gleaned plurality Connecticut 460 73 (1983), judgment supra. restrictive approach, instructional misdescription, three "rare situations": acquitted (and, despite affected count, bearing it); admitted instructed; (3) "functional equivalent" omitted, misdescribed, presumed element. 271 judgment); 87 (plurality opinion). understandably contends fall last exception, explains why believe mistaken one reason. initial matter, means just mentioned equivalence" test times articulates it. 29 ("[A]ppellate [cannot be] given even slightest latitude record 'fill gaps' verdict, 'minor' gaps seem"). "gap" between (that standards") national standard). Petitioner's submission mandated new case, juror Rockford, who community standards, presumably broader tolerant standards. But since appropriate petitioner's rejects 24 imports structural-error structural) case-by-case inquiry harmless). structural not. Thus, were inclined follow "so closely related" omitted "that rational finding" element, 281) omitted), inconsistent categorical errors. 25 note present arose legal equivalent laboratory tube. court, following existing law, ruled therefore refused future likely clear cut. "as 'omission.' concedes, call far common subcategory misdescriptions. each determine how "misdescription" was. Difficult issues when dealing ample volume defining crimes, measurably compounded necessity courts, state convictions 28 2254 ascertain laws 50 different States. 27 illogical extend failure But, indicated foregoing discussion, matter res nova law. life law logic experience, O. Holmes, Common Law (1881), entitled stand accomplished extension underreported $5 returns, contest trial. suggest introduce allowed. Reversal send retrial focused contested instructed. do requires veer away settled reach result. B Having remains (1967), forth test, said, appears doubt complained obtained." 24; Delaware Van Arsdall, 475 673, 681 ("[A]n otherwise valid should aside confidently say, whole record, doubt"). prove filed "which true matter." general, statement natural tendency influence, [is] capable influencing, decisionmaking body addressed." 509 Kungys 485 759, 770 (1988) omitted)). §7206(1), determined "any material." Holland, 880 F.2d 1091, 1096 (CA9 1989); 1465 (collecting cases). formulations, reasonably returns 30 At introduced obtained. incontrovertibly liability. overwhelming, argue immaterial. Instead, defended arguing intended repay believed, advice accountant lawyer, need income. 208 211, 235 (closing argument). situation, concludes uncontested supported overwhelming cavil "did Chapman, 31 disputes Relying decisions, rested allowed consider. 279; Yates, 404. rely consider, contends, dispense allow judges offense.2 32 bottom form involved constitutionally infirm presumptions crux intent. one, preclude relevant Since previously look 33 admission guarantee self-incrimination, 279 (1991), exclusion right confront witnesses guaranteed Amendment, less infringe factfinding role deliberative ways are, strictly speaking, readily calculable. therefore, essentially same: Is error? barrier high never surmounted justify very criticism spawned doctrine first place: "Reversal regardless judgment, encourages litigants abuse bestirs ridicule it." R. Traynor, Riddle Harmless Error (1970). 34 uncontroverted reaches balance "society's interest punishing [and] method made." 86 doctrine, "recognizes principle central purpose factual innocence, promotes focusing underlying fairness trial." 681. time, "was designed guard spirit oppression tyranny part rulers,' 'was early insisted ancestors parent country, great bulwark civil political liberties.' 511 J. Story, Commentaries Constitution 540 541 (4th ed. 1873)). not, apparently bring contesting answering undermine purposes safeguarding conduct thorough examination record. If, end examination, conclude raised sufficient contrary 36 A Traynor put it, "become guilty." 21. Rather typical appellate-court fashion, asks contains rationally lead If "no," "reflec[t] denigration involved." On contrary, "serve[s] useful insofar [it] block[s] setting small little, any, likelihood having changed 22. Court's III 37 certiorari "scheme artifice defraud" (18 1341), (§1343), (§1344) employ falsehoods. disagree. 38 Wells, 482 (1997), text discern showing dwell long because, parties agree, none defines phrase defraud," mentions jurisdictional (§1341 use mails while §1343 interstate facilities), prohibit, pertinent property "by pretenses, representations, promises."3 statute, modeled similarly prohibits financial institution" institution promises."4 solely "natural reading full text," 490, inquiry, interpreting statutory necessary step. well-established '[w]here Congress uses accumulated meaning . infer, unless statute dictates, incorporate terms.' Nationwide Mut. Ins. Co. Darden, 503 318, 322 (1992) Community Creative Non-Violence Reid, 490 730, 739 (1989)); Standard Oil N. 221 1, 59 (1911) ("[W]here words time well-known sense"). "defraud" term, implicitly incorporated common-law meaning, including requirement materiality,5 issue. 40 statute's enactment 1872, enacted actionable "fraud" well-settled Nor misrepresentation concealment fact. sources aware demonstrate, conceived BMW North America, Inc. Gore, 517 559, ("[A]ctionable omission") Restatement (Second) Torts §538 (1977); W. Keeton, D. Dobbs, & Owen, Prosser Keeton §108 (5th 1984))); Smith Richards, Pet. 26, (1839) (in action "to contract fraud" "misrepresentation something material"); Equity Jurisprudence §195 (10th 1870) ("In place, material, constituting inducement motive act party"). intends uses, infer express reference drop statutes.6 'unless dictates.' Ins., 322.7 41 rebut bear "indicated codified pretenses torts sounding fraud." 37. chose unmoor analogs punishing, completed person "having devised intending devise defraud." Read light, limit liability constitute particular, misrepresentations omissions. Rather, exist deceive victim, particular chosen turn out immaterial, i.e., incapable influencing victim. 3, 42 relies heavily Durland 161 306 (1896), construing sweep broadly There, defendant, sell bonds intend honor, argued criminally liable scope "false pretenses." rejected as, come definition 'false pretenses,' order make some fact mere promise future." 312. construed "includ[e] everything representations past present, suggestions promises 313. constituted pretenses" hold, encompasses 43 sense, requirements "justifiable reliance" "damages," plainly place Stewart, 872 957, 960 (CA10 1989) ("[Under statute,] government reliance misrepresentations"); Rowe, 56 747, 749 (CA2) (L. Hand, J.) ("Civilly course [mail statute] fail damage, liability"), cert. denied, 286 554 (1932). prohibiting damage clearly enacted. incompatible requirements, show requirement. 44 Accordingly, falsehood Consistent normal practice below yet passed harmlessness 266 267, remand instance IV 45 respecting affirmed. remaining reversed, remanded further proceedings opinion. 46 ordered. Notes 47 Stevens, concurrence, says included issue." Post, ___. While incorrect say finding; explicitly directed statements. 48 2. Scalia, dissent, suggests next step 578 Happily, adjudication "in penny, pound" approach. hesitation reaffirming narrow like 49 3. Section 1341 part: "Whoever, defraud, obtaining promises, attempting do, places post office authorized depository thing whatever sent Postal Service, deposits causes deposited private commercial carrier, takes receives therefrom, thing, knowingly carrier according direction thereon, whom addressed, fined title imprisoned five years, both. affects institution, $1,000,000 both." 1343 provides: transmits transmitted wire, radio, television communication foreign commerce, writings, signs, signals, pictures, sounds artifice, 4. 1344 "Whoever executes, execute, "(1) institution; "(2) moneys, funds, credits, assets, securities, owned by, custody control of, promises; "shall 51 instructs if: "(a) man attach importance existence nonexistence choice transaction question; "(b) maker representation knows reason know recipient regards important action, although (1976). 52 6. Field Mans, 516 59, 69 (1995): "'[F]alse frau[d]' carry acquired art. They terms, imply them include. enumerated elements, Congress's drafting significance richer bare terms." 53 provided conduct, 'speaks volumes.' 843(a)(4)(A)) (prohibiting furnishing information" documents drug laws); 6700(a)(2)(A) (criminalizing regarding investment benefits individual "knows kno[w] matter"). These differ prohibit "false" "fraudulent" information. statement" requirement, 482, word "material" limits statutes' Moreover, rebuttal structure themselves. 322. 54 Opinion 55 57 58 judgment. I agree Part opinion, join Parts concur 60 This easy 7206(1), taxpayer "does matter."1 (Emphasis added.) Appeals, "material matter" describe information taxpayer's liability." (CA11 1998) Aramony, 88 1369, 1384 (CA4 1996); Klausner, 80 55, (CA2 1989)). challenged standard. 61 "falsely reported [his] total 1986 return." 256 (jury instructions). "total income" obviously "information 1465. merely functional possible issue; being give separate harmlessness. 62 rest logic. finds element." Ante, 16. subscribe However formulated, understand disagreement contrasting opinions vividly illustrate point: White stated coerced confession, nature, harmless, 295 302; Kennedy appellate "must appreciate indelible impact confession trier fact," 313 (opinion Justice, joined presents classic error" points strongly towards guilt, 312 (dissenting is, nevertheless, distinction focuses decide, opportunity pass why, my view, "harmless-error enable remove taint preserve findings, supplement 497, (Stevens, dissenting). 63 Appeals' could, should, ground "true explaining states whenever raise finding. My views close expressed dissenting internally passion misdirected. 64 tolerance were, Scalia's dissent suggests, post, malpractice spinal column American democracy," surely timely objection. deprivation. tension eloquent rhetoric narrower espouses. 65 perception controversial white-collar crimes. history recounts powerful view sensitive protecting critical special danger elected listen voices voters witnesses. capital point. 66 attendants adult bookstore magazines "serious literary, artistic, political, scientific value" applying standards prevailed Illinois. many now-valued works art demonstrates, permitted appraisal majority Illinois' citizens thought discerning minority artistic publications. James Joyce selling copies edition "Ulysses" few readers Paris work. might entirely ignored distaste sexually explicit materials subconsciously influence evaluation resolve. particularly distressing colleagues appear today endorse Pope's 67 Admittedly, endorsement Walton Arizona, 639, 647 649 (1990), findings eligible death penalty. argued, faithful wise inspiring voice spoke Duncan [391 145 (1968)]." 709 714 Scalia today. Blackstone concerned about exposed authority personified Crown, whereas concern popular clear, one's peers "an inestimable safeguard corrupt overzealous prosecutor compliant, biased, eccentric judge." 145, 156 (1968). 68 offenses 1343, correct. pointed vast confronted placed criminalizing federally insured banks, 1014. repeat remind amendment §1014 harmonize sections avoid potential injustice created Wells. 7206 provides, "Any Declaration penalties perjury. "Willfully makes subscribes statement, document, verified written declaration perjury, felony." 71 72 74 Souter Ginsburg join, part. 75 II, Court, depriving commission 76 Article III, §2, cl. "The Trial Crimes, except Cases Impeachment, Jury ." "In prosecutions, accused enjoy speedy When deals content Bill Rights operating democracy. William Blackstone, Framers' accepted English Constitution, described prosecutions [the Englishman's] liberties charter." *349. One indictments Independence King George "subject[ed] Jurisdiction unacknowledged Laws" approving legislation "[f]or us, Cases, Benefits Jury." Alexander Hamilton wrote friends adversaries plan convention, nothing else, least jury: Or difference them, consists this, former valuable liberty, latter represent palladium free government." Federalist 83, p. 426 (M. Beloff 1987). constitutions predated Constitutional Convention, appeared constitution State enter Union thereafter. Alschuler Deiss, History U. Chi. L. Rev. 867, 870, 875, (1994). comparison, Johnny-come-lately: Defense become regular fixture until mid-1800's. Beaney, Right Counsel 226 (1955). 77 crimes establish (involuntary manslaughter, killing human negligently), follows proved. this. acknowledges denied protestation lets sentence stand, tell unquestionably guilty. 78 Even (as not) trials pronounced "harmless" address due obvious validate one. distinctive, precisely voluntary waiver right, trust determinations guilt. Perhaps enamoured forgets (we) officers hence objects healthy suspicion power possessed Framers embodied Constitution. Who knows? years appointments oppressive administrations produce willing enforce laws, interpret oppressively vicinages brought. people reserved themselves, sitting jurors. Justices cancel reservation neither permitting waived nor (when done anyway) ourselves pronouncing without-a-doubt (or conceive ) remedy (making jury) repetition jury). 79 wrong distinctive character violation. reaffirms (not susceptible "harmless-error" analysis) 'vitiat[e] findings.' 275, 281 cannot, culpability, verdict. Carpenters 330 395, 410 (1947); (1986); 294 (White, raises denying taking treated differently all, asks, answers, know, done, taken impunity, persuaded What if, besides signed 7206(1)? contained copy automatically situation guilty? know. can. How too perhaps proportion high) improvisation. All somewhere tuppence shillings 11, response assertion principled "our 'in pound' approach." 14, 81 theme unfair, certainly reached "right" per se reversible unfavorable evidence. sake basic right. (1927), shows $100, minimum amount, complain lack process, judgment." 535. hand, responding "[n]o him, (emphasis added). preserved place. 82 461 withheld unlike requested context unobjected-to more," 737 appellant "seriously affect[s] proceedings," 736) stands proposition absolute waived, remedied reversal.1 83 Insofar jury-trial exclude peculiar sort, looking misdescribing effectively removed embraced misdescribed. spelled unanimous "looks 'the verdict.' 404 Where (and discerned court) misdescribed instruction, misdescription harmless.2 filled judges. formulation adequately concurring); 504 concurring),3 "dictat[ing] answer" 10. casting aside, confusion existed prior cases; throws open gate trample function. 84 Asserting "[u]nder not," ante, criticizes importing "case-by-case approach" determination. true, seem pay overstates cut-and-dried nature identifying Some visible glance. Others, racial selection, fact-intensive inquiry. Deciding "functionally sort. 85 forms "infringe calculable." 15. admitted, excluded, speculating found. 296 (Would introduced?); 684 unconstitutionally barred admission?). difference, asserts, speculation logically demands ought uphold verdicts absolutely clear. words, repudiation Louisiana articulated line permissible impermissible preserves well discernible limitation intervention: rendered, unattributable Harmless-error renders confirming (Sullivan) (today's decision) semantic. Consider, scenarios. wife restaurant, sense hers, am sure she table, advise waiter stay initially made, informs me change accompanying dish, still mind predict instances well. doubt, low-error rate persuade good idea. sort allocation protects. belongs exclusively jury; court. "Confirming" disturb allocation, "substituting" does. Make mistake shift standard: Whereas confined verdicts, puts business 89 90 recipe produced today's ruling self-esteem, panic, pragmatism. already commented ingredient: possibly bad Nothing distrust underlies ingredient panic: invalidate innumerable concern. rejected. Olano plain-error governs, ordinary apply. omit misdescribe massive problem. (If problem vagueness incompetence judges, discussion insignificant comparison.) 91 pragmatism guilty, go through trouble trying again?), suffices quote once again: 92 "[H]owever convenient [intrusions right] (as, doubtless, arbitrary powers, executed most convenient), yet, let remembered, delays little inconveniences justice nations liberty matters; inroads sacred nation constitution; begun trifles, gradually increase spread, utter disuse juries questions momentous concern." *350. 93 Bollenbach 326 607, 615 (1946). Formal scorned way expediency. obligation take longer view. respectfully dissent. 94 Contrary Stevens' suggestion, judgment), "internally inconsistent" believing procedural asserted fashion. universally acknowledged sleeps lose them. 95 Stevens thinks included" "'total income' 'information liability.'" valid, understatement income; be, offset deductions mean deduce remainder. own illogic) acquit. bottom, "obviously" represents misstated material. Cf. 13, repackaging majority's allows "would found" asked. offers protection deliver "against (1968)). 96 asserts explain [allegedly obscene] 11. measure agree. "judge viewed adults Illinois," added) includes, City Chicago, toddlin' town. ("reasonable person")

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