Opinion ID: 799033
Heading Depth: 3
Heading Rank: 3

Heading: The nature of the settlement

Text: Cunningham and Gallion next assert that the district court violated their Sixth Amendment rights to a jury trial, their due process rights to present a defense, and the law-of-the-case doctrine when the court instructed the jury that the state-court settlement was an aggregate settlement of 440 claims rather than a class-action settlement. We review de novo a claim that a district court's ruling violates the Constitution. See United States v. Davis, 577 F.3d 660, 666 (6th Cir.2009) (Sixth Amendment); United States v. Tarwater, 308 F.3d 494, 507 (6th Cir.2002) (due process). But a claim that the district court violated the law-of-the-case doctrine is subject to the more deferential abuse-of-discretion standard of review. Rouse v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th Cir.2002).
The Fifth Amendment to the United States Constitution guarantees that no one will be deprived of liberty without `due process of law'; and the Sixth, that `in all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury.' United States v. Gaudin, 515 U.S. 506, 509-10, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995) (brackets omitted). Cunningham and Gallion argue that the district court violated these constitutional provisions by deciding, as a matter of law, that the state-court settlement was an aggregate settlement of 440 claims and not a class-action settlement. Their argument takes the form of a syllogism: (A) the nature of the settlement agreement is a mixed question of law and fact, in that it involves the application of law to fact; (B) mixed questions of law and fact are for the jury to decide; (C) the nature of the settlement was therefore for the jury to decide. The government responds by disagreeing with premises A and B of the syllogism. As to premise A, the government contends that the legal characterization of the defendants' settlement agreement with AHPas an aggregate settlement or a class action settlementwas a question of law because the answer to that question did not turn on factual issues. It instead depended on the plain language of the agreement. And if the question was one of law, then it was one for the judge to decide. See Gaudin, 515 U.S. at 513, 115 S.Ct. 2310 (noting the century-old precedent that [i]n criminal cases, as in civil,... the judge must be permitted to instruct the jury on the law and to insist that the jury follow his instructions); see also United States v. Mentz, 840 F.2d 315, 319 (6th Cir.1988) (The trial judge instructs the jury on the law applicable to the issues raised and, in appropriate circumstances, may comment on the evidence. (footnote omitted)). The problem with the government's view is that [t]here is no categorical distinction between `legal' and `factual' questions, for in every case application of a legal principle turns on the presence of particular facts. United States v. Johnson, 718 F.2d 1317, 1321 (5th Cir.1983) (en banc) (footnote omitted); see also Pullman-Standard v. Swint, 456 U.S. 273, 288, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982) (noting the vexing nature of the distinction between questions of fact and questions of law). Whether the settlement agreement at issue here was an aggregate settlement or a class-action settlement depends upon the probative value of evidence produced at trial, including the settlement agreement itself, no matter how clear that evidence may have seemed. See Johnson, 718 F.2d at 1324. The defendants are therefore correct that the nature of the settlement is a mixed question of law and fact, even if the mix weighs heavily on the law side. This brings us to premise B of the defendants' argumentthat mixed questions of law and fact are for the jury to decide. Underlying this premise is the basic precept that the jury's constitutional responsibility is not merely to determine the facts, but to apply the law to those facts and draw the ultimate conclusion of guilt or innocence. See Gaudin, 515 U.S. at 514, 115 S.Ct. 2310. For this reason, the application-of-legal-standard-to-fact sort of question ..., commonly called a `mixed question of law and fact,' has typically been resolved by juries. Id. at 512, 115 S.Ct. 2310. But context matters: It is commonplace for the same mixed question of law and fact to be assigned to the court for one purpose, and to the jury for another. The question of probable cause to conduct a search, for example, is resolved by the judge when it arises in the context of a motion to suppress evidence obtained in the search; but by the jury when it is one of the elements of the crime of depriving a person of constitutional rights under color of law. Id. at 521, 115 S.Ct. 2310. In other words, the question of whether the judge or a jury decides an issue rests not on a distinction between questions of law and questions of fact, but rather the issue is the role of the jury in the trial guaranteed to the accused. United States v. White Horse, 807 F.2d 1426, 1430 (8th Cir.1986) (brackets and internal quotation marks omitted). As to that issue, the caselaw provides a clear answer: The Constitution gives a criminal defendant the right to have a jury determine, beyond a reasonable doubt, his guilt of every element of the crime with which he is charged.  Gaudin, 515 U.S. at 522-23, 115 S.Ct. 2310 (emphasis added); see also Mentz, 840 F.2d at 320 (There can be little doubt that a trial judge commits error of constitutional magnitude when he instructs the jury as a matter of law that a fact essential to conviction has been established by the evidence, thus depriving the jury of the opportunity to make this finding. (internal quotation marks omitted)). Under this rule, if a mixed question of law and fact constitutes an element of the offense, the question goes to the jury; if it does not, then the judge may resolve the question without invading the jury's province. The defendants in this case were charged with the crimes of wire fraud and conspiracy to commit wire fraud. Neither of these crimes contains as an element of the offense the requirement that the fraud occur in connection with an aggregate settlement. See Part II.A. above (setting forth the elements of the offenses). Indeed, the judge in the first trial assumed that the state-court action was settled as a class-action settlement, and yet the jury was still free to find that the defendants were guilty. And the opposite is also true: the jury in the second trial was free to find that the defendants were not guilty even though the judge ruled that the state-court action was settled as an aggregate settlement. That is, the judge's instructions did not ha[ve] the effect of relieving the government of its burden of proving, beyond the jury's reasonable doubt, that the accused committed the crimes charged. See Mentz, 840 F.2d at 320 (emphasis in original). As the government correctly points out, the defendants were free to and didargue that they did not intend to defraud their clients because they did not know that they were subject to the requirements of the aggregate settlement rule. They just could not argue that the rule did not apply in the first place. To be sure, the mixed question of law and fact at issue in the present case bears oneven if it is not determinative ofan element of the crimes with which the defendants were charged. It determines whether the defendants violated Kentucky's aggregate-settlement rule, which in turn is evidence of an intent to defraud. But it does so in the same way as do questions regarding the admissibility of evidence, the competency of witnesses, and the voluntariness of confessions. And yet judges routinely make theses kinds of decisions. See Gaudin, 515 U.S. at 525-26, 115 S.Ct. 2310 (Rehnquist, C.J., concurring). Here, the district court ruled that the state-court settlement was an aggregate settlement, not a class-action settlement, because the agreement by its own terms covered the claims of a specific number of known individuals and not the claims of anyone else. That ruling finds support in the state court's treatment of the settlement, including that court's failure to direct notice to all class members after approving the settlement, as would ordinarily have been required by Rule 23.05 of the Kentucky Rules of Civil Procedure had the case been settled as a class action. And the district court's ruling finds further support in the defendants' own admissions to the KBA; specifically, their admission that they violated Kentucky's aggregate-settlement rule, which does not apply to class-action settlements. In short, the district court's ruling was correct as a matter of law and did not invade the province of the jury or otherwise violate the defendants' constitutional rights.
The defendants argue in the alternative that the district court's ruling violates the law-of-the-case doctrine, which holds that a decision on an issue made by a court at one stage of a case should be given effect in successive stages of the same litigation. United States v. Todd, 920 F.2d 399, 403 (6th Cir.1990). This doctrine applies with equal vigor to the decisions of a coordinate court in the same case and to a court's own decisions, and can be applied to rulings made in a case that ends in a mistrial. Id. at 403, 404. The key word here is can. Unlike stare decisis or collateral estoppel, the `law of the case' doctrine is not a rigid rule. Rather, it is a discretionary tool that courts use to promote efficiency. United States v. Perez, 178 F.3d 1297 (table), 1999 WL 196501, at  (6th Cir.1999) (unpublished opinion). And a court's discretion to use this tool is at its apex in the context of a retrial following a mistrial, because a retrial of a case is exactly what it says; it is a re trial, not a replay. See United States v. Palmer, 122 F.3d 215, 221 (5th Cir.1997) (A retrial following a mistrial is both in purpose and effect a new trial.... [T]he two are entirely separate affairs.). A district court retains the power to reconsider previously decided issues as they arise in the context of a new trial. Todd, 920 F.2d at 404. In applying this standard to the facts of the present case, we find no abuse of discretion. The district judge in the first trial assumed that the state-court lawsuit was settled as a class action. A different district judge in the second trial undertook his own evaluation of the issue and determined just the opposite. We are persuaded that the latter determination was the correct one and thus find no error on this issue.