Court Opinion

ID: 9474408
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:56:31.516029+00
Date Added: 2024-06-11T17:44:03.971711
License: Public Domain

McKAY, Circuit Judge,
dissenting:
A fundamental precept in our system of jurisprudence is that “[sjociety wins not only when the guilty are convicted but when criminal trials are fair; our system of the administration of justice suffers when any accused is treated unfairly.” Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215 (1963).
Once a prosecutor determines that evidence in the government’s possession is favorable to the defendant, either because it is arguably exculpatory or bears on the credibility of a government witness, he must resolve any doubts about the materiality of the evidence in favor of the accused, erring on the side of disclosure. United States v. Bagley, — U.S.-, 105 S.Ct. 3375, 3392, 87 L.Ed.2d 481 (1985) (Marshall, J., dissenting). In this ease, rather than disclose evidence with favorable implications for the defense, the prosecutor chose to withhold it and take the chance that, if the evidence were discovered by the defendant after trial, it would be determined by the reviewing court to be immaterial. As a result, this case is before us for the third time, appellant once again having discovered documentary evidence that failed to emerge from the government’s files prior to trial. Moreover, the jury that convicted appellant was deprived of the opportunity to decide for itself whether the nondisclosed evidence was important.
To my mind, the government’s failure to disclose the so-called “Gushi letter” requires reversal of defendant’s conviction on Count I of the indictment. Moreover, appellants’ failure to submit the twenty-six documents as part of the appellate record does not, in my view, present a procedural bar to our deciding whether the district court should have considered those documents in ruling on appellant’s petition. Accordingly, I must dissent.
I.
Appellant, Michael William Strand, was indicted on July 12, 1978, for subscribing a false tax return and committing fraud in the sale of securities. An additional charge of interstate transportation of stolen property was dismissed before the case went to the jury.
The government charged that during 1973 appellant engaged in numerous brokerage transactions involving the purchase and sale of common shares of Epoch Corpo*1502ration from which he received substantial gross income, as defined by the Internal Revenue Code, which he failed to report on his 1973 tax return. Appellant effectuated these transactions through his own accounts and through various nominee accounts at different brokerage houses. The government charged that, by using the various accounts, appellant was able to control the purchase and sale “prices” of Epoch stock and create the appearance of an active market for its securities. The government also alleged that appellant received $29,000 in finder’s fees in 1973 which he did not report on his 1973 income tax return. The government’s case was based, in large part, on the testimony of Bruce Jensen.
Appellant defended the charge that he had subscribed a false income tax return on the basis that he had actually suffered a loss of $7,000 in 1973 on the Epoch transactions; that he did not realize that he had any tax reporting obligation until after 1973; and that, accordingly, in January 1975, he filed a 1973 tax return.
Appellant defended the securities fraud charge by arguing that he took over trading in Epoch Corporation when he thought its proposed merger with an insurance company would cause its stock to increase in value; that the sale of Epoch’s stock, giving rise to the charges, was actually initiated by Bruce Jensen; that Jensen managed the entire transaction and was a principal actor throughout the transaction; that appellant was not aware that his account had been improperly used by Jensen; and that, because Jensen was a principal in the transaction and wholly aware of the nature of the transaction, there was no fraud perpetrated on Jensen.
The jury returned a verdict of guilty on both counts. Appellant was sentenced to three years for subscribing a false tax return and five years for securities fraud, with all but six months suspended. Appellant appealed his conviction to this court, and we affirmed. United States v. Strand, 617 F.2d 571 (10th Cir.1980). However, because the trial judge had instructed the jury that the government need only prove one of the six alleged acts set forth in Count II of the indictment (the securities fraud charge), where another district judge had previously charged the government with proving all of the allegations in Count II, I dissented. In my view, the trial court permitted the government to “change the rules of the game” after appellant had presented his defense, thereby depriving him of the right to “be informed of the nature and cause of the accusation” against him. U.S. Const, amend. VI.
Thereafter, appellant filed a motion for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure and for habeas corpus relief under 28 U.S.C. § 2255 (Supp.1985). The basis for the motion was newly discovered evidence that appellant alleged was exculpatory and that had been in the government’s possession prior to trial but was never made known to the defense. Following an evidentiary hearing, the district court denied the motion, and appellant appealed. We affirmed in United States v. Strand, No. 81-1697, slip op. (10th Cir. Aug. 27, 1982) (unpublished opinion). We noted that it was “arguable” that the newly discovered evidence was not within the purview of the Jencks Act, 18 U.S.C. § 3500 (1985), or the Brady rule, but concluded that
before a new trial may be granted on the ground of newly discovered evidence, the defendant must show, inter alia, that the newly discovered evidence is not merely cumulative or impeaching in nature, but is so material and of such character that a new trial would probably produce a different result. [United States v. Maestas, 523 F.2d 316, 320 (10th Cir.1975) ]. Here, the newly discovered evidence, which, incidentally, related primarily to the tax fraud charge contained in count one of the indictment, and had no direct relationship to the securities fraud charge contained in count two, was impeaching and cumulative in its character, and, as did the district court, we believe disclosure of the evidence would not have changed the outcome of the trial.
Strand, supra, at 7.
Subsequently, on November 23, 1982, appellant again filed a petition for habeas *1503corpus relief pursuant to 28 U.S.C. § 2255 (Supp.1985) and a motion for reduction of sentence under Rule 35 of the Federal Rules of Criminal Procedure. As grounds for habeas corpus relief, appellant again alleged that he had become aware of evidence that had not been disclosed to the defense prior to trial in violation of the Jencks Act * and Brady v. Maryland, supra. Thereafter, appellant filed an amended petition, attached to which was a green folder containing twenty-six exhibits.
On May 13, 1983, a hearing was held in the district court on both of appellant’s motions. At the conclusion of the testimony, appellant’s counsel presented arguments to the court regarding the so-called “Gushi letter” and other documentary evidence contained in the green folder. When the Assistant United States Attorney suggested that the court should only consider the “Gushi letter” because the other documents had not been formally introduced into evidence, the court stated:
Well, respond as you may think is appropriate. I have heard what you have said that it hasn’t been received as an exhibit. It looks like an exhibit. It has tabs like an exhibit. But, I don’t know if it is already in the record. I would just have to look to see if the pleadings and/or the memo that may be in the file identify it as in the record.
Record, supp. vol. 3, at 85-86.
On August 3, 1983, the district court entered its memorandum opinion, granting appellant’s motion for reduction of sentence but denying his motion for habeas corpus relief. The court’s opinion makes no reference to any of the twenty-six documents contained in the green folder. In determining whether the government’s nondisclosure of the “Gushi letter” requires reversal of appellant’s conviction, the district court relied on United States v. Maestas, 523 F.2d 316 (10th Cir.1975). The court concluded that the “Gushi letter” is “not of such character that it is at all likely to produce a different result at a new trial.” Record, vol. 1, at 126. As the majority’s opinion indicates, appellant’s subsequent efforts to supplement the district court record, or to ascertain whether the district court considered the twenty-six documents, have been to no avail.
II.
Appellant argues, and the government concedes, that, in relying on United States v. Maestas, supra, the district court applied the incorrect legal standard in deciding whether the newly discovered evidence warrants reversal of appellant’s conviction. Rather than confronting this issue directly, the majority holds that “even if the district court did limit its consideration to our decisions in United States v. Maestas and Wion v. United States, error, if present, was harmless.”
First, we should note that the district court’s reliance on Maestas is understandable in view of our citation to that case in appellant’s prior appeal. There, in addressing appellant’s claim that the government’s failure to disclose Brady material and Jencks Act statements warranted a new trial, we cited Maestas for the proposition that a new trial should not be granted on grounds of newly discovered evidence unless the evidence is “of such a character that a new trial would probably produce a different result.” United States v. Strand, No. 81-1697, slip op. at 7 (10th Cir. Aug. 27, 1982). Our reliance on Maestas was in error, however, because the newly discovered evidence in Maestas had not been in the possession of the prosecutor prior to trial. Where the prosecutor fails to divulge material evidence that is favorable to the defendant, despite the defendant’s request for disclosure, the constitutional rule of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), is invoked, and the defendant is not required to meet the severe burden of showing that the evidence, had it been disclosed, “probably would have resulted in acquittal.” United States v. Librach, 602 F.2d 165, 167 (8th Cir.1979) (quoting United States v. *1504Aqurs, 427 U.S. 97, 111, 96 S.Ct. 2392, 2401, 49 L.Ed.2d 342 (1976)). While our disposition of the issues raised in appellant’s prior appeal is the law of the case, Drachenberg v. Canal Barge Co., Inc., 621 F.2d 760, 762-(5th Cir.1980), we should not compound our error by allowing the district court’s reliance on Maestas to go uncorrected.
The constitutional rule of discovery announced in Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), requires the government to disclose to the defense, prior to trial, evidence that is both favorable to the accused and “material either to guilt or to punishment.” Id. at 87, 83 S.Ct. at 1196. As the Supreme Court explained in United States v. Agurs, 427 U.S. 97, 104, 96 S.Ct. 2392, 2397, 49 L.Ed.2d 342 (1976): “A fair analysis of the holding in Brady indicates that implicit in the requirement of materiality is a concern that the suppressed evidence might have affected the outcome of the trial.”
In United States v. Bagley, — U.S. -, 105 S.Ct. 3375, 87 L.Ed.2d 481 (1985), the Supreme Court abandoned the Agurs standard for determining materiality and held that, regardless of the specificity of the defendant’s request for disclosure, “evidence is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. A ‘reasonable probability’ is a probability sufficient to undermine confidence in the outcome.” Id. at 3384.
While the new standard announced in Bagley does not turn on the specificity of the accused’s request for disclosure of Brady material, Justice Blackmun observed in Bagley that reviewing courts may
consider directly any adverse effect that the prosecutor’s failure to respond might have had on the preparation or presentation of the defendant’s case. The reviewing court should assess the possibility that such effect might have occurred in light of the totality of the circumstances and with an awareness of the difficulty of reconstructing in a post-trial proceeding the course that the defense and the trial would have taken had the defense not been misled by the prosecutor’s incomplete response.

Id.

Applying the Bagley standard to the facts of this case, I am compelled to conclude that the government’s failure to disclose the “Gushi letter” to the defense, prior to trial, undermines confidence in the outcome of the trial, at least insofar as the charge of subscribing a false tax return is concerned. In relevant part, the “Gushi letter” lends support to appellant’s contention that the $20,000 finder’s fee attributed to appellant as taxable income was actually paid and attributable as income to Carl Martin. In my opinion, there is a reasonable probability that this evidence, had it been disclosed to the defense, would have affected the jury’s verdict on Count I of the indictment. Certainly, the disclosure of this evidence would have at least had a significant impact on defense counsel’s strategy in presenting the defense.
The government plays down the significance of the “Gushi letter,” suggesting that, because the letter refers to “Martin and his associates,” it is consistent with the government’s theory that the finder’s fee was paid directly to Mr. Martin as appellant’s nominee. However, the letter is at least equally supportive of appellant’s contention that the $20,000 finder’s fee was attributable as income to Carl Martin. While it is difficult to estimate what impact the “Gushi letter” might have had on the jury’s decision, it is not the prosecutor’s function “to assume the role of the jury, and to decide whether certain evidence will make a difference. In our system of justice, that decision properly and wholly belongs to the jury.” Bagley, 105 S.Ct. at 3394 (Marshall, J., dissenting).
Insofar as the “Gushi letter” might have been used to impeach the trial testimony of Bruce Jensen, the government’s chief witness, the letter is not sufficiently contradictory to undermine my confidence in the jury’s verdict on Count II of the indictment. And, because the substance of the letter does not directly pertain to the securities transactions which formed the basis for Count II, I am convinced that, while the *1505letter is material to Count I of the indictment, its disclosure prior to trial would not have affected the jury’s decision regarding Count II of the indictment.
III.
Appellant also assigns as error the district court’s failure to consider the twenty-six documents that were attached as exhibits to appellant’s amended petition. However, because appellant has not included the documents in the appellate record, the majority takes the position that we are precluded from reviewing this question. The majority compares this procedural “problem” to the one that arose in appellant’s first appeal, where we refused to consider his “sufficiency of the evidence” claim because he had failed to submit a transcript of the trial proceedings as part of the record on appeal. Of course, in appellant’s first appeal, the absence of the trial transcript in the appellate record made it impossible for us to determine whether the evidence was legally sufficient. Here, in contrast, there is no reason for us to examine the omitted documents to decide whether the district court committed what is essentially a procedural error. Accordingly, I would not hesitate to reach the merits of this issue.
While I concede that it was appellant’s duty to ensure that the documents were properly before the district court for its consideration, I believe that fundamental notions of fairness mandate that appellant be given an opportunity to have the documents reviewed by the district court. To deny appellant this right on the hypertech-nical ground that the documents were not formally introduced at the evidentiary hearing unduly emphasizes form over substance. As represented to this court in appellant’s brief, at least some of the twenty-six documents are clearly Brady material. The government does not challenge this fact or argue that the documents were disclosed prior to trial. Instead, the government opposes a remand simply because the exhibits were not formally introduced at the evidentiary hearing. Because of my deep concern for the interests sought to be protected by Brady v. Maryland, supra, I would allow appellant to supplement the district court record, if necessary, and remand the case so that the district court could evaluate the twenty-six documents under the standard set forth in United States v. Bagley, supra.
I might add that, in light of my dissent in appellant’s first appeal, I believe appellant’s conviction on Count II of the indictment is already of questionable validity. Consequently, nondisclosed evidence of relatively minor importance would be sufficient to create a reasonable doubt as to appellant’s guilt on Count II of the indictment. United States v. Agurs, 427 U.S. at 113, 96 S.Ct. at 2402.

 On appeal, appellant concedes that the newly discovered evidence is not within the purview of the Jencks Act, 18 U.S.C. § 3500 (1985), but continues to- assert that the evidence is Brady material.