Opinion ID: 787481
Heading Depth: 3
Heading Rank: 6

Heading: Absence of a puffing instruction.

Text: 79 Defendant proposed two puffing instructions. The district court rejected both. The district court did give a good-faith instruction, telling the jury: 80 The good faith of Defendant [ ] is a complete defense to the charges of the indictment because good faith on the part of the defendant, is, simply, inconsistent with the intent to defraud alleged in that charge. Actually, that should be in those charges. 81 A person who acts, or causes another person to act, on a belief or an opinion honestly held is not punishable under this statute merely because the belief or opinion turns out to be inaccurate, incorrect, or wrong. 82 And again, that should be is not punishable under these statutes. This does apply to all of the charges. 83 An honest mistake in judgment or an error in management does not rise to the level of intent to defraud. 84 A defendant does not act in good faith if, even though he honestly holds a certain opinion or belief, that defendant also knowingly makes material false or fraudulent pretenses, representations, or promises to others. 85 While the term good faith has no precise definition, it means, among other things, a belief or opinion honestly held, an absence of malice or ill will, and an intention to avoid taking unfair advantage of another. 86 The burden of proving good faith does not rest with the defendant because the defendant does not have any obligation to prove anything in this case. 87 In determining whether or not the government has proven beyond a reasonable doubt that the defendant acted with an intent to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or whether the defendant acted in good faith, the jury must consider all of the evidence in the case bearing on the defendant's state of mind. 88 A belief that a victim will be repaid and will sustain no loss, even if that belief is held in good faith, is not a defense to a charge of securities or mail fraud. 89 It is also not a defense to charges of securities fraud and mail fraud that the victim may have been gullible or negligent. The laws against fraud are designed to protect the naive and careless as well as the experienced and careful. 90 While good faith is a defense to securities fraud and mail fraud, an honest belief in the ultimate success of the enterprise is not, in itself, a defense. 91 Defendant argues that a separate puffing instruction was necessary, because he could have made misrepresentations that fell outside the definition of good faith but qualified as puffery rather than fraud. 92 We held in United States v. Amlani, 111 F.3d 705, 718 (9th Cir.1997), that a very similar good faith instruction in a fraud case adequately instructed the jury about the gist of a puffing defense. We based our holding on United States v. Gay, 967 F.2d 322, 329 (9th Cir.1992), in which we explained that `[p]uffing' concerns expressions of opinion, as opposed to the knowingly false statements of fact which the law proscribes. Thus, no puffing instruction is required if the district court gives an instruction that good faith constitutes a complete defense, that one who acts with honest intention does not possess fraudulent intent, that one who expresses an opinion honestly held by him is not chargeable with fraudulent intent even though such opinion is erroneous and such belief is a mistaken belief, and that evidence establishing only that a person made a mistake of judgment or an error in management, or was careless, does not establish fraudulent intent. Id. Such a good faith instruction adequately convey[s] the defendant's message. `Puffing,' enthusiasm, and even overzealous selling all fall under the umbrella of the good faith and honest intention instructions. Id. 93 The same is true here. The district court's refusal to give Defendant's proposed puffing instruction was not erroneous.