Opinion ID: 758506
Heading Depth: 2
Heading Rank: 2

Heading: Hoff's Immunity Agreement

Text: 26 Hoff raises two issues on appeal dealing with his immunity agreement. First, Hoff asserts that the fact that the prosecutors indicted him without first securing a judicial determination that Hoff had breached the agreement violated his right to due process. Secondly, Hoff argues that the district court abused its discretion in reopening the evidentiary hearing on his motion to dismiss the indictment, thereby giving the government a second chance to prove that Hoff had breached the immunity agreement. We review these two arguments separately.
27 After the government had entered into its agreement with Hoff and had received information from him, further investigation uncovered convincing evidence that Hoff had withheld information from investigators and had given false information. Investigators determined that, contrary to his statements to authorities, Hoff was involved in a long-term conspiracy to distribute both marijuana and cocaine and that Hoff had ordered the murder of Dennis Fenner. The government, believing that Hoff was in breach of the immunity agreement, indicted him. Hoff filed a motion to dismiss the indictment based on his immunity agreement. The magistrate judge held an evidentiary hearing to determine whether Hoff had breached the agreement, thereby releasing the government from its obligations under the agreement. After receiving the magistrate's report and recommendation, the district judge held a supplementary hearing on Hoff's motion. The district judge determined that Hoff had indeed breached his promise to the government and denied the motion to dismiss. 28 Hoff asks this court to reverse his conviction and to dismiss the case based on the timing of the evidentiary hearings. He asserts that due process required a pre-indictment hearing to determine breach. The government contends that a preindictment hearing is not constitutionally required and asserts that the district court's pretrial hearing to determine whether Hoff had breached his agreement with the government was sufficient to satisfy due process. We review Hoff's constitutional claim de novo. Turner, 93 F.3d at 286. 29 A fundamental requirement of the due process clause is that an individual receive notice and the opportunity for a hearing before he is deprived of a significant property interest. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985). With respect to immunity agreements, due process requires prosecutors to scrupulously adhere to commitments made to suspects in which they induce the suspects to surrender their constitutional rights in exchange for the suspects giving evidence that the government needs against others which simultaneously implicates themselves. United States v. Eliason, 3 F.3d 1149, 1153 (7th Cir.1993). However, if the suspect fails to fulfill his obligations under the contract, the government is relieved of its reciprocal obligations. United States v. Verrusio, 803 F.2d 885, 888 (7th Cir.1986) (citations omitted). [D]ue process prevents the government from unilaterally determining that the defendant breached the ... agreement. Id. Rather, the government must obtain a judicial determination of the defendant's breach. See id. In the present case, Hoff does not contend that the district court erred in determining that he had breached the agreement, he merely contests the timing of that determination. 30 Absent exigent circumstances, an individual is entitled to a judicial determination of his breach before being deprived of his interest in the enforcement of an immunity agreement. Verrusio, 803 F.2d at 888. In Verrusio, we held that, under the facts of the case, a post-indictment evidentiary hearing on the defendant's alleged breach was sufficient to satisfy due process, because the benefit of Verrusio's bargain was avoiding the risk of conviction on certain charges. Thus, Verrusio would be denied his interest in enforcing the agreement only if he were tried on those charges. The mere fact of an indictment did not deny Verrusio the benefit of his bargain. Id. at 889. 31 Hoff attempts to distinguish his agreement from the one in Verrusio. He argues that the agreement in Verrusio was a non-conviction agreement while his agreement promised non-prosecution. However, in making this assertion, Hoff fails to note the similarity in the terms of the two agreements. In Verrusio, the plea agreement provided that, in exchange for the defendant's performance, the government would dismiss eight pending charges and would not file any additional known charges or newly discovered charges occurring out of the same criminal conspiracy. Id. at 886-87 n. 1. Likewise, Hoff's agreement provided that, in exchange for Hoff's performance, the government would dismiss the charge currently pending against him and would not charge him with any other violations relating to the same criminal conspiracy or with other drug or money laundering violations. Notably, neither agreement addressed a particular procedure for the government to follow in the event of a perceived breach by the defendant. See id. at 899 n. 3 (noting that parties could contract for a pre-indictment hearing in the event of a perceived breach). In fact, Hoff's agreement provided [i]f the government at anytime determines that the defendant is being less than fully cooperative or is not truthful, then the United States has the option of declaring this plea agreement void .... 32 While Hoff attempts to distinguish his agreement from the agreement in Verrusio by referring to them by different names, the terms of the agreements provide for the same performance by the government. The benefit of Hoff's bargain, like Verrusio's, was to avoid the risk of conviction on charges arising from the drug conspiracy or from any money laundering or controlled substance violations. 3 The fact that Verrusio agreed to plead guilty to one count in addition to cooperating with the government while Hoff only agreed to cooperate alters the advantage for which the government bargained, but does not change the benefit of Hoff's bargain. In accordance with due process, Hoff was entitled to a judicial determination that he had breached the agreement before being subjected to the risk of conviction. The district court's pretrial evidentiary hearing satisfied this requirement. Nevertheless, we again stress that, in cases such as these, the preferred procedure, absent exigent circumstances, would be for the government to seek relief from its obligations under the immunity agreement prior to indictment. Since the government is required to obtain a judicial determination of a defendant's breach prior to trial, it is but a de minimis inconvenience for the government to secure that determination pre-indictment. See United States v. Ataya, 864 F.2d 1324, 1330 n. 9 (7th Cir.1988). A pre-indictment hearing would curtail prosecutorial overreaching in drafting ambiguous immunity agreements and, in cases in which the defendant had fulfilled his obligations under the agreement, would help to prevent the government from using the threat of criminal prosecution to achieve by coercion what it could not achieve through voluntary negotiation. Id. On the facts of the present case, however, Hoff received all of the protection demanded by due process.
33 As noted above, when the government indicted Hoff for the second time, Hoff filed a motion to dismiss the indictment based on his immunity agreement. The magistrate judge held an evidentiary hearing, as allowed under 28 U.S.C. § 636(b)(1)(B). At this hearing, the government attempted to prove breach through the testimony of only one witness, Agent Southworth. Hoff's attorney objected to much of Southworth's testimony as hearsay. The magistrate, in his report and recommendation to the district judge, stated that he believed the government had erred in trying to prove Hoff's breach with hearsay evidence. He noted that the government had failed to produce sufficient non-hearsay testimony to prove a breach and recommended that Judge Crabb hear further evidence on the matter. Judge Crabb held a supplementary evidentiary hearing on Hoff's motion at which time the government called seven witnesses. Following this hearing, Judge Crabb determined that the government had shown breach by more than the required preponderance of the evidence standard and denied Hoff's motion to dismiss. 34 Hoff argues that the district court erred in reopening the evidentiary hearing on Hoff's motion to dismiss, thereby giving the government a second chance to prove that Hoff had breached the immunity agreement. We review for abuse of discretion. United States v. Turk, 870 F.2d 1304, 1307 (7th Cir.1989). We will reverse only if it is clear that no reasonable person could concur in the district judge's decision. Ladien v. Astrachan, 128 F.3d 1051, 1056 (7th Cir.1997) (internal quotations and citations omitted).  'The district court's decision must strike us as fundamentally wrong for an abuse of discretion to occur.'  Id. (citing Anderson v. United Parcel Service, 915 F.2d 313, 315 (7th Cir.1990)). 35 In the present case, the district judge did not abuse her discretion in deciding to reopen the evidentiary hearing. Under 28 U.S.C. § 636(b)(1), when a district judge designates a magistrate to conduct an evidentiary hearing, the district judge may also receive further evidence on the matter. Judge Crabb's decision to exercise this statutory power cannot be viewed as clearly unreasonable or fundamentally wrong. Hoff's claim fails.