Opinion ID: 510320
Heading Depth: 2
Heading Rank: 8

Heading: Limiting the Conspiracy Claims to Trial Defendants

Text: 143 The second error claimed by USI on appeal arises from the trial court's instructions to the jury that the defendants could be found liable on the conspiracy and aiding and abetting claims arising from the 1969 sale of Kennibec to USI only if the jury found that the defendants had conspired with, or aided and abetted, other named defendants. 34 See, e.g., 324 R. 16,95 1-55 (Aiding and Abetting Instructions); 324 R. 16,955-69 (Conspiracy Instructions). See also 324 R. 16,903; 324 R. 16,906. But see 324 R. 16,910. These instructions, USI argues, both prevented the jury from finding a conspiracy among a trial defendant and the settling defendants, and precluded a finding by the jury that a trial defendant had aided and abetted a settling defendant. 144 Moreover, USI says that this error in the instructions was compounded by the special verdict forms submitted to the jury. In the event a defendant was found liable for conspiracy or aiding and abetting, USI notes, the jury was required on the special verdict forms to specify the individuals or business entities with whom the wrongdoer had conspired or aided and abetted. Unfortunately, however, the list of potential coconspirators was limited on the special verdict forms to the trial defendants. See, e.g., 22 R. 6697; 33 R. 6704; 33 R. 6710-11; 33 R. 6718; 33 R. 6725; 33 R. 6732. As a result, the jury was effectively prevented from finding that the wrongdoer had conspired with, or aided and abetted, anyone other than the trial defendants. 145 The trial court's refusal to instruct the jury that it could find a conspiracy between a trial defendant and a settling defendant, USI argues, was particularly prejudicial in light of the fact that three of the settling defendants--Robert Rice, Kenneth Melby and Raymond Wilson--were major architects of the 1969 fraud. Based on the evidence, USI insists, the jury could easily have concluded that some of the settling defendants had conspired with one of the trial defendants to defraud USI in the 1969 sale of Kennibec to USI. Because the jury was prevented from considering this possibility the trial court's error substantially prejudiced USI. Brief of Appellee and Cross-Appellant U.S. Industries, at 30. 146 It is axiomatic that since coconspirators are jointly and severally liable for all damages caused by a conspiracy, a private plaintiff need not sue all the conspirators, but may choose to proceed against any one or more of them. Wilson P. Abraham Const. Corp. v. Texas Indus. Inc., 604 F.2d 897, 904 n. 15 (5th Cir.1979), aff'd sub nom. Texas Indus. Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981). 35 As a consequence, a defendant may be held liable for having participated in a conspiracy, even though his coconspirators are not defendants to the action. 147 USI presented evidence that settling defendants--Robert Rice and Melby in particular 36 --had participated in the alleged conspiracy to defraud USI in the 1969 transaction. 37 And while the evidence was perhaps not overwhelming, it was sufficient to create an issue of fact for the jury. J.I. Case Credit Corp. v. Crites, 851 F.2d 309, 311 (10th Cir.1988). 148 Accordingly, the trial court should have instructed the jury that a defendant would be liable for the conspiracy and aiding and abetting claims arising out of the 1969 transaction if the jury found that the defendant had conspired with, or aided and abetted, any other defendant, or any other individual or business entity that had participated in the conspiracy. Similarly, the special verdict forms submitted to the jury should not have restricted the jurors to finding a conspiracy among the codefendants. Rather, the list of potential coconspirators should either have named those settling defendants against whom evidence was presented, or have included a generic category such as others not at trial. 149 Despite our conclusion that the trial court erred when it limited the jury to finding a conspiracy among the trial defendants, the error requires reversal only if we conclude that the faulty jury instruction affect[ed] the substantial rights of the parties. 28 U.S.C. Sec. 2111 (1982); Fed.R.Civ.P. 61. 38 Where the verdict more probably than not was untainted by the error, 39 the error is harmless and a new trial is not required. 40 Haddad v. Lockheed California Corp., 720 F.2d at 1459. In assessing the effect of the erroneous instruction, we must not only consider 'the instruction as a whole, but ... the opening statements, the evidence and the closing arguments....'  Smith v. Chesapeake & Ohio Ry., 778 F.2d at 389 (quoting Alloy Int'l Co. v. Hoover-NSK Bearing Co., 635 F.2d 1222, 1227 (7th cir.1980)). 150 We are firmly convinced that the trial court's error in no way affected the substantial rights of the parties. From our examination of the special verdicts returned by the jury, it seems clear that the jury entirely rejected USI's substantive claim that the 1969 transaction was tainted by violations of state or federal law. No defendants were found liable on USI's claim of common law fraud in the 1969 transaction; and no defendants were held liable for any substantive securities law violations arising from the 1969 transaction. Indeed, the jury entirely rejected the existence of any violations--either of federal law or of state law--surrounding the sale of Kennibec to USI. As a result, the addition of the names of Melby and Rice to the list of potential coconspirators could not possibly have affected the jury's decision. 151 In sum, we conclude that the trial court's failure to properly instruct the jury on the conspiracy and the aiding and abetting claims was harmless error.