Opinion ID: 3002136
Heading Depth: 2
Heading Rank: 1

Heading: Exclusion of Ms. Hubbard’s Statements

Text: The defendants contend that the district court erred by excluding evidence that Ms. Hubbard recanted prior statements and lied to the government about Ms. Shaw’s involvement in the Young wire transfer. They assert that the excluded evidence was essential to their case and, as a result, its exclusion denied them a fair trial. This court generally reviews a district court’s decision regarding the admission of evidence for an abuse of discretion. United States v. Swan, 486 F.3d 260, 263 (7th Cir. 2007). As noted, however, only Ms. Shaw sought admission of Ms. Hubbard’s January 20th recanting statements; Mr. Jackson did not address the evidence and Ms. Young actually objected to their admission. This is a clear case of waiver by Ms. Young of any right to challenge the exclusion of the statements, see United States v. Clements, 522 F.3d 790, 793 (7th Cir. 2008) (“Waiver occurs when a criminal defendant intentionally relinquishes a known right.”), and a forfeiture by Mr. Jackson of any such right, see id. (“Forfeiture occurs when a defendant negligently fails to assert a right in a timely fashion.”). Waiver extinguishes any error, precluding appellate review; forfeiture, however, allows for plain error review. Id. A plain Nos. 06-3848, 06-4124, & 06-4399 17 error “must be clear or obvious and affect substantial rights in order to warrant reversing the district court’s decision” as to the admissibility of evidence. United States v. Schalk, 515 F.3d 768, 776 (7th Cir. 2008) (citation omitted). Thus, we review the exclusion of this evidence for an abuse of discretion as to Ms. Shaw and for plain error as to Mr. Jackson. And because of Ms. Young’s waiver, our review is precluded as to her. Prior to analyzing admissibility under Rule 804(b)(3), we observe that by offering Ms. Hubbard’s recanting statements, Ms. Shaw sought, in effect, to impeach Ms. Hubbard on a collateral matter. “[C]ontradiction is a valid method of impeachment, [but] it is well-settled that one may not impeach by contradiction regarding collateral or irrelevant matters and that a party may not contradict for the sake of contradiction.” United States v. Bitterman, 320 F.3d 723, 727 (7th Cir. 2003) (quoting United States v. Kozinski, 16 F.3d 795, 805-06 (7th Cir. 1994)). We note that this rule ordinarily is utilized when a witness is testifying, and Ms. Hubbard never testified as a witness. However, in our view, the rule is equally applicable where a party attempts to put a non-testifying person’s statement before the trier of fact solely to impeach that person. The jury was not asked to determine whether Ms. Shaw participated in the Young wire transfer: before trial the government had dismissed the Young wire transfer count against Ms. Shaw. Furthermore, Ms. Hubbard’s earlier statements that Ms. Shaw participated in the Young wire transfer were not before the jury. Thus, in order for the jury to find that Ms. Hubbard lied about Ms. Shaw’s participation in the Young wire transfer, the 18 Nos. 06-3848, 06-4124, & 06-4399 jury would also have to hear evidence that Ms. Hubbard had made statements implicating Ms. Shaw in that transaction. Such evidence was irrelevant because Ms. Shaw was no longer charged with any offense arising out of the Young wire transfer. The only purpose of presenting evidence that Ms. Hubbard recanted prior statements implicating Ms. Shaw in the Young wire transfer was to prove that Ms. Hubbard was lying. But “[m]erely attempting to prove that a witness is lying is not a proper purpose of impeachment by contradiction.” Kozinski, 16 F.3d at 807. And the district judge could have excluded this collateral and irrelevant evidence under Fed. R. Evid. 403 because its tendency to mislead and confuse the jury outweighed its negligible probative value. All that said, we move on to consider whether the district court abused its discretion in excluding the evidence under Rule 804(b)(3). Under Fed. R. Evid. 804(b)(3), hearsay statements are not excluded by the hearsay rule if “(1) the declarant is unavailable as a witness, (2) the statement was against the declarant’s penal interest when made, and (3) corroborating circumstances clearly suggest that the statement is trustworthy.” United States v. Loggins, 486 F.3d 977, 981 (7th Cir. 2007), cert. denied, 128 S. Ct. 805 (2007); see also United States v. Leahy, 464 F.3d 773, 797-98 (7th Cir. 2006), cert. denied sub nom. Duff v. United States, 128 S. Ct. 46 (2007). The proponent of the hearsay statement bears the burden of demonstrating that each of these elements is satisfied. United States v. Robbins, 197 F.3d 829, 838 (7th Cir. 1999). Here, the district court found—and the government does not dispute—that Ms. Hubbard was Nos. 06-3848, 06-4124, & 06-4399 19 unavailable to testify because she would assert her Fifth Amendment right against self-incrimination. The government also concedes, and we accept, that Ms. Hubbard’s recantation of her prior statements implicating Ms. Shaw in the Young wire transfer were against Ms. Hubbard’s penal interest. Ms. Hubbard stood to and did, in fact, lose the benefits of a favorable plea agreement and exposed herself to additional criminal charges. Thus, the only issue is whether the defendants have shown that corroborating circumstances clearly suggest that Ms. Hubbard’s January 20 statements were trustworthy.2 The district judge’s determination as to the trustworthi- ness of an out-of-court statement is entitled to considerable deference and should be upheld unless “clearly erroneous.” United States v. Amerson, 185 F.3d 676, 684 (7th Cir. 1999); see also United States v. Hall, 165 F.3d 1095, 1112 (7th Cir. 1999). We have emphasized that Rule 804(b)(3) “expressly requires the exclusion of out-of-court statements offered to exculpate the accused unless there are corroborating circumstances that ‘clearly indicate’ the trustworthiness of the statement.” Hall, 165 F.3d at 1112 (quoting United States v. Garcia, 897 F.2d 1413, 1420 (7th Cir. 1990)). The defendants submit that the statements in question were admissible based on consideration of 2 Ms. Hubbard’s recanting hearsay statements concern only the first wire transfer into Ms. Young’s account. The recantation has no relevance as to either Ms. Shaw or Mr. Jackson who were not charged under the count arising from that wire transfer. 20 Nos. 06-3848, 06-4124, & 06-4399 the factors from United States v. Nagib, 56 F.3d 798 (7th Cir. 1995). In Nagib we identified three factors for district courts to consider when determining whether corroborating circumstances exist for Rule 804(b)(3) purposes: (1) the relationship between the declarant and the exculpated party; (2) whether the statement was voluntary and given after Miranda warnings; and (3) whether there is any evidence the statement was made to curry favor with authorities. Id. at 805 (citing United States v. Garcia, 986 F.2d 1135, 1140 (7th Cir. 1993)). These factors might seem to provide some weight in favor of finding corroborating circumstances here. Ms. Hubbard and Ms. Shaw did not have a close personal relationship which one would expect for Ms. Hubbard to be motivated to falsely exculpate Ms. Shaw—though they were close enough to be involved in the fraudulent scheme together. Ms. Hubbard had been advised of her Miranda rights and made the statements in the presence of her counsel. It seems that her statements were voluntary; the government does not suggest otherwise. Nor is there anything in the record to suggest that Ms. Hubbard recanted her prior statements in order to curry favor with the government. To the contrary, Ms. Hubbard would have known that recanting her prior statements and admitting to having lied to the government in pretrial preparation, in her plea agreement, and even under oath at her plea hearing would result in the withdrawal of her plea agreement, at the least, and expose her to additional criminal charges. We have never said, however, that the considerations we identified in Nagib were the only factors to be Nos. 06-3848, 06-4124, & 06-4399 21 weighed in determining whether corroborating circumstances exist. See Am. Auto. Accessories, Inc. v. Fishman, 175 F.3d 534, 541 (7th Cir. 1999) (stating that the factors to consider in determining whether corroborating circumstances exist “include” the factors identified in Nagib); Garcia, 986 F.3d at 1140 (indicating that the case law identifies some circumstances relevant to determining whether corroborating circumstances clearly indicate trustworthiness). Other circumstances in this case strongly detract from any corroboration raised by the Nagib factors. Ms. Hubbard’s statements that Ms. Shaw was not directly involved in the Young wire transfer clearly contradicted her several prior statements to the government, in her plea, and affirmed under oath, that Ms. Shaw was involved in the Young wire transfer. We have concluded that similar circumstances justified the conclusion that a statement lacked the requisite trustworthiness for admission under Rule 804(b)(3). United States v. Groce, 999 F.2d 1189, 1190-91 (7th Cir. 1993) (upholding district court’s conclusion that out-of-court statement lacked the trustworthiness required under 804(b)(3) where the declarant “gave several conflicting statements, most of which contradicted the statement [sought to be admitted]”). The defendants argue that Ms. Hubbard’s statements recanting her prior statements about the fraud scheme were corroborated by other evidence, but her prior statements implicating Ms. Shaw were not. We disagree. Specifically, the defendants point to the evidence that none of the co-defendants other than Ms. Hubbard knew Ms. Shaw. While the government did not have 22 Nos. 06-3848, 06-4124, & 06-4399 evidence to suggest that Ms. Shaw would risk being charged with a crime solely to benefit persons she did not know, it did offer evidence that Ms. Shaw herself benefitted from her participation in the scheme. The evidence allowed a reasonable jury to find that Ms. Shaw received $80,000 for her role in the Jackson and Jones wire transfers. This, and other evidence, for example, the use of Ms. Shaw’s user identification number in fraudulent wire transfers, and the timing of the Jones wire transfer and Hulet wire transfers after Ms. Hubbard had left Washington Mutual’s employ, corroborated Ms. Hubbard’s earlier statements as to Ms. Shaw’s involvement in the scheme to defraud. As Judge Castillo explained, because Ms. Hubbard made conflicting statements before him, “a lot of corroborating circumstances” would be required to admit her recanting hearsay statements. In effect, he was saying that her statements were so conflicting that her recanting hearsay statements were untrustworthy. The judge later reiterated that Ms. Hubbard’s credibility was “zero” and he “could not in good conscience admit any of her out-of-court statements.” The district judge did not err in finding that Ms. Hubbard’s recanting hearsay statements lacked trustworthiness. And we cannot disagree with his conclusion that a lot of corroboration would be needed to admit the recanting hearsay statements of an incredible and untrustworthy declarant. Ultimately, Judge Castillo did not find sufficient corrobo- rating circumstances to admit the statements. That was well within his discretion based on the entire record before him. And, as we have noted, Rule 804(b)(3) explicitly Nos. 06-3848, 06-4124, & 06-4399 23 requires a judge to exclude an out-of-court statement unless there are sufficient corroborating circumstances. Hall, 165 F.3d at 1112. We thus uphold the judge’s decision to exclude Ms. Hubbard’s recanting hearsay statements. The defendants suggest that the district court relied on its inherent powers to exclude Ms. Hubbard’s hearsay statements. They are incorrect. As explained supra, we do not quarrel with the district court’s conclusion that there were insufficient corroborating circumstances to indicate the trustworthiness of Ms. Hubbard’s hearsay statements. Thus, Rule 804(b)(3) expressly required the exclusion of those statements. See id. Accordingly, the basis for the district court’s ruling was Rule 804(b)(3), not its inherent powers. The defendants cite Taylor v. Illinois, 484 U.S. 400 (1988), for the well-established proposition that it is the jury’s role to assess the credibility of witnesses. But it is the judge’s role to determine the admissibility of evidence. See Fed. R. Evid. 104(a) (“Preliminary questions concerning . . . the admissibility of evidence shall be determined by the court.”); United States v. Collins, 966 F.2d 1214, 1223 (7th Cir. 1992) (“[I]t is the judge’s role to determine admissibility of evidence.”). A defendant’s right to offer testimony is not absolute. See United States v. Scheffer, 523 U.S. 303, 308 (1998) (holding military rule of evidence making polygraph evidence inadmissible in court martial proceedings did not violate the accused’s right to present a defense); Taylor, 484 U.S. at 410 (“The accused does not have an unfettered right to offer testimony that is . . . 24 Nos. 06-3848, 06-4124, & 06-4399 inadmissible under standard rules of evidence.”); Malinowski v. Smith, 509 F.3d 328, 338 (7th Cir. 2007) (concluding the district court did not violate petitioner’s right to present a defense by excluding victim’s school counselor’s testimony at trial); Tyson v. Trigg, 50 F.3d 436, 444 (7th Cir. 1995) (“A court does not violate the Constitution every time it sustains an objection to the testimony of one of the defense witnesses, or for that matter every time it excludes one of those witnesses altogether.”). Finally, the defendants’ reliance on United States v. Peak, 856 F.2d 825 (7th Cir. 1988), is misplaced. The hearsay exception at issue there was the state of mind exception under Rule 803(3). Id. at 834. Rule 803(3) does not expressly require the exclusion of evidence absent corroborating circumstances clearly indicating the trustworthiness of the statement. Rule 804(b)(3) does. The defendants argue that the exclusion of Ms. Hubbard’s statements recanting her prior statements violated their Sixth Amendment right to confrontation. This court reviews de novo evidentiary rulings that affect a defendant’s Sixth Amendment right to confront witnesses. United States v. Gilbertson, 435 F.3d 790, 794 (7th Cir. 2006). The Confrontation Clause guarantees a defendant an opportunity for effective cross-examination. Delaware v. Fensterer, 474 U.S. 15, 20 (1985) (per curiam); United States v. Ghilarducci, 480 F.3d 542, 548 (7th Cir.), cert. denied sub nom. Richardson v. United States, 128 S. Ct. 159, and cert. denied, 128 S. Ct. 252 (2007). There is no guarantee of cross-examination “to whatever extent[] the defense might wish.” Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986) (quoting Fensterer, 474 U.S. at 20). A district Nos. 06-3848, 06-4124, & 06-4399 25 judge has wide discretion to impose reasonable limits on cross-examination, and may do so based on concerns about, inter alia, prejudice, confusion of the issues, or questioning that is only marginally relevant. Id.; United States v. Smith, 454 F.3d 707, 714 (7th Cir. 2006). The defendants had the opportunity to effectively crossexamine Agent Clifford, and did so. The district judge was well within his discretion in prohibiting Ms. Shaw from questioning Agent Clifford about Ms. Hubbard’s recantation of her earlier statements about Ms. Shaw’s role in the Young wire transfer. Ms. Shaw was not charged with participating in the Young wire transfer. Thus, testimony that Ms. Hubbard originally implicated Ms. Shaw in that wire transfer and later said she had been untruthful about that would be only marginally, if at all, relevant. Such testimony also had a strong potential for confusing the issues because Ms. Shaw was not charged with the Young wire transfer and Ms. Hubbard’s credibility was not directly at issue. Furthermore, Ms. Hubbard did not recant all of her prior statements regarding Ms. Shaw’s role in the fraudulent scheme. Had the district court allowed evidence of Ms. Hubbard’s statements that were exculpatory as to Ms. Shaw with respect to the Young wire transfer, the other statements that Ms. Hubbard made to Agent Clifford implicating Ms. Shaw in the overall scheme may have been admissible on redirect. See United States v. Glover, 101 F.3d 1183, 1189 (7th Cir. 1996) (indicating that where a fragmentary statement is introduced, Fed. R. Evid. 106 allows an adverse party to require the admission of any other part of the statement to clarify or explain the 26 Nos. 06-3848, 06-4124, & 06-4399 part already received so as to avoid any misleading impression created by offering the statement outside of context). Additional statements made by Ms. Hubbard, including other things she said on January 20th, could have been offered to put the recanting statements in their proper context and to avoid misleading the jury into believing that Ms. Shaw had no involvement in the fraudulent scheme. During the same January 20th recantation exculpating Ms. Shaw in the Young wire transfer, Ms. Hubbard reconfirmed that she and Ms. Shaw had had several discussions about wiring money into other’s accounts and Ms. Shaw knew that Ms. Hubbard wired money into Ms. Young’s account. Ms. Hubbard further stated that after seeing that the wire transfer was successful and knowing how much money Ms. Young and Ms. Hubbard received, Ms. Shaw said she wanted to get some money through a wire transfer. Ms. Hubbard made several very damaging statements about Ms. Young’s involvement in the scheme in the January 20th statement as well. The admission of the remainder of Ms. Hubbard’s statements to Agent Clifford may have been highly prejudicial to Ms. Young and would have raised concerns about Ms. Young’s confrontation rights. See Crawford v. Washington, 541 U.S. 36, 54, 59 (2004) (defendant’s right to confrontation violated by admission of testimonial statements if declarant was unavailable to testify at trial and defendant did not have a prior opportunity to cross-examine the declarant); United States v. James, 487 F.3d 518, 525 (7th Cir. 2007) (citing Crawford). The defendants assert that it was inconsistent for the district court to allow Ms. Hubbard’s out-of-court stateNos. 06-3848, 06-4124, & 06-4399 27 ments to come in through Mr. Jones’s testimony but to preclude cross-examination of Agent Clifford about Ms. Hubbard’s recantation of her prior statements about Ms. Shaw. The Confrontation Clause is not violated by the admission of co-conspirator statements made in furtherance of the conspiracy; such statements are not hearsay under Fed. R. Evid. 801(d)(2)(E) and not “testimonial.” United States v. Hargrove, 508 F.3d 445, 448-49 (7th Cir. 2007); United States v. Jenkins, 419 F.3d 614, 618 (7th Cir. 2005). The government’s evidence supported the conclusion that Ms. Hubbard and the defendants on trial were involved in a scheme to defraud Washington Mutual. Ms. Hubbard’s statements to Mr. Jones about Ms. Shaw’s role in the scheme were statements of a co-conspirator made during the course of and in the furtherance of a conspiracy. Thus, those statements were admissible under Rule 801(d)(2)(E). Ms. Hubbard’s recanting statements were not made during the course of or in furtherance of the conspiracy and thus do not fall within Rule 801(d)(2)(E). Moreover, a critical difference exists between Rule 801(d)(2)(E) and Rule 804(b)(3). The former, unlike the latter, does not expressly require corroborating circumstances indicating a statement’s trustworthiness for admissibility. Therefore, the district court did not make inconsistent rulings on the admissibility of Ms. Hubbard’s various out-of-court statements.3 Further, Ms Hubbard’s statements testified to by Mr. Jones 3 The defendants suggest that the district court was biased against them and made rulings simply based on whether the proponent was the government or a defendant. The record does not support this claim. 28 Nos. 06-3848, 06-4124, & 06-4399 were the only co-conspirator statements introduced at trial and were a relatively small piece of evidence at trial. The admission of Ms. Hubbard’s statements through Mr. Jones’s testimony did not violate the Confrontation Clause. The district court was well within its discretion to limit the cross-examination of Agent Clifford by precluding inquiry into Ms. Hubbard’s statements recanting her earlier statements about Ms. Shaw’s role in the Young wire transfer. The decision to exclude this evidence did not violate the defendants’ rights under the Confrontation Clause. We find no error, plain or otherwise, in the district court’s decision to exclude the evidence. Even if the district court erred in excluding such evidence, we will not reverse if the error was harmless. Smith, 454 F.3d at 715. The question is whether the erroneous exclusion of evidence “had a substantial influence over the jury and the result reached was inconsistent with substantial justice.” United States v. Savage, 505 F.3d 754, 762 (7th Cir. 2007) (quoting United States v. Seals, 419 F.3d 600, 607 (7th Cir. 2005)). In determining whether an error was harmless, we consider factors such as the importance of the witness’s testimony in the government’s case, whether the testimony was cumulative, the presence or absence of corroborating or contradicting evidence, and the overall strength of the government’s case. Smith, 454 F.3d at 715. According to the defendants, Ms. Hubbard was essential to the government’s case. They contend that the government’s vehement argument to exclude her statements Nos. 06-3848, 06-4124, & 06-4399 29 strongly suggests it knew the statements would undermine its case. It is difficult to discern how Ms. Hubbard was essential to the government’s case when she never even testified. It seems likely that the government strenuously opposed introduction of evidence of her January 20 statements because it believed then, as it argues now, that the statements were irrelevant. It is also difficult to see how the evidence of Ms. Hubbard’s statements was essential to the defendants’ case when the jury was not charged with deciding whether Ms. Shaw—the only codefendant about whom Ms. Hubbard recanted any statement—was guilty with respect to the Young wire transfer—the only wire transfer to which the statements at issue pertained. The excluded statements would not have been the only—or even primary—evidence as to the defendants’ knowledge or intent. Here, the government’s case against Ms. Shaw was overwhelming.4 The government offered evidence that Ms. Shaw’s user identification number was used to reverse several wire transfers in Pronto, including the Jones wire transfer, the Hulet wire transfers, and the five wires printed in her husband’s name. Furthermore, the evidence also included Ms. Hubbard’s two checks for $10,000 payable to Ms. Shaw shortly after the Jackson wire transfer and the $60,000 check from Mr. Jones, who testified he had never met Ms. Shaw. The evidence of Ms. Hubbard’s statements about Ms. Shaw’s involvement in 4 As discussed below, see infra II.B, the evidence against the other defendants was overwhelming as well. 30 Nos. 06-3848, 06-4124, & 06-4399 the scheme introduced through Mr. Jones’s testimony was helpful, but not necessary to the government’s case. This circumstantial evidence corroborated Ms. Hubbard’s statements about the scheme, particularly Ms. Shaw’s direct participation in it. Therefore, the exclusion of Ms. Hubbard’s January 20 statements recanting her prior statements of Ms. Shaw’s involvement in the Young wire transfer, even if erroneous, was harmless.