Court Opinion

ID: 931968
Source: CourtListenerOpinion
Date Created: 2013-06-26 15:47:52.354616+00
Date Added: 2024-06-11T15:15:12.305035
License: Public Domain

11-3756 (L)
     United States v. Cuti

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 26th day of June, two thousand thirteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                JOHN M. WALKER, JR.,
 9                              Circuit Judge,
10                SANDRA DAY O’CONNOR,
11                              Associate Justice (retired).*
12
13       - - - - - - - - - - - - - - - - - - - -X
14       UNITED STATES OF AMERICA,
15                Appellee,
16
17                    -v.-                                        11-3756-cr(LEAD)
18                                                                11-3831-cr(CON)
19       ANTHONY CUTI, WILLIAM TENNANT,
20                Defendants-Appellants.
21       - - - - - - - - - - - - - - - - - - - -X
22

                *
                The Honorable Sandra Day O’Connor, Associate Justice
         (retired), of the United States Supreme Court, sitting by
         designation.
                                                  1
 1   FOR APPELLANTS:        BRIAN C. BROOK, Clinton Brook & Peed
 2                          (Matthew J. Peed, Clinton Brook &
 3                          Peed, on the brief; Brian D. Waller,
 4                          Simon & Partners, LLP, on the
 5                          brief), New York, New York, for
 6                          Defendant-Appellant Anthony Cuti.
 7
 8                          JOHN J. KENNEY (Laura B. Hoguet,
 9                          Tai-Heng Cheng, Caitlin N. Bush,
10                          Damian R. Cavaleri, on the brief),
11                          Hoguet Newman Regal & Kenney, LLP,
12                          New York, New York, for Defendant-
13                          Appellant William Tennant.
14
15   FOR APPELLEE:          SARAH E. MCCALLUM (Rebecca Monck
16                          Ricigliano, Katherine Polk Failla,
17                          on the brief), Assistant United
18                          States Attorneys, for Preet Bharara,
19                          United States Attorney for the
20                          Southern District of New York, New
21                          York, New York.
22
23        Appeal from judgments of the United States District
24   Court for the Southern District of New York (Batts, J.).
25
26        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
27   AND DECREED that the judgments of the district court are
28   AFFIRMED.
29
30        Anthony Cuti and William Tennant, two former senior
31   executives of the New York drugstore chain, Duane Reade,
32   appeal from the judgments of conviction of the United States
33   District Court for the Southern District of New York (Batts,
34   J.). Cuti, the former CEO of Duane Reade, was convicted of
35   conspiracy to commit securities fraud, securities fraud, and
36   making false statements to the SEC, among other things, and
37   sentenced to three years’ imprisonment, three years’
38   supervised release, a $500 special assessment, and a $5
39   million fine. Tennant, the former CFO, was convicted of
40   securities fraud and sentenced to time served, followed by
41   three years’ supervised release, as well as a $100 special
42   assessment and a $10,000 fine.
43
44        Cuti and Tennant raise numerous issues on appeal. We
45   assume the parties’ familiarity with the underlying facts,
46   the procedural history, and the issues presented for review.
47   Cuti’s challenge to the admission of lay opinion testimony

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 1   and Tennant’s claims as to the sufficiency of evidence and
 2   the conscious avoidance charge are addressed in a separate
 3   opinion issued concurrently with this order.
 4
 5   [1] Cuti argues that the district court erred by denying
 6   Cuti’s request for a Rule 17(c) subpoena to Duane Reade and
 7   Jeff Winick. We review the denial of a pretrial Rule 17(c)
 8   subpoena for abuse of discretion. United States v. Nixon,
 9   418 U.S. 683, 702 (1974); see also United States v. Green,
10   No. 07-3517, 2008 WL 4104220, at *1 (2d Cir. Aug. 27, 2008)
11   (citing Nixon). Under Nixon, a party moving for a pretrial
12   Rule 17(c) subpoena, “must clear three hurdles: (1)
13   relevancy; (2) admissibility; (3) specificity.” 418 U.S. at
14   700; see also United States v. Stein, 488 F. Supp. 2d 350,
15   364-65 (S.D.N.Y. 2007). The district court did not abuse
16   its discretion in concluding that Cuti’s request for a Rule
17   17(c) subpoena did not meet this standard.
18
19   [2] Cuti also claims that the district erred by limiting
20   the cross-examination of John Henry and Jerry Ray. We
21   review a district court’s decision to limit the scope of
22   cross-examination for abuse of discretion. United States v.
23   Cedeño, 644 F.3d 79, 81 (2d Cir. 2011).
24
25        The Confrontation Clause protects “an opportunity for
26   effective cross-examination, not cross-examination that is
27   effective in whatever way, and to whatever extent, the
28   defense might wish.” United States v. Owens, 484 U.S. 554,
29   559 (1988) (internal quotation marks omitted; emphasis in
30   original). “[T]rial judges retain wide latitude insofar as
31   the Confrontation Clause is concerned to impose reasonable
32   limits on such cross-examination based on concerns about,
33   among other things, harassment, prejudice, confusion of the
34   issues, the witness’ safety, or interrogation that is
35   repetitive or only marginally relevant.” Delaware v. Van
36   Arsdall, 475 U.S. 673, 679 (1986). In determining whether
37   the district court abused its discretion in limiting
38   cross-examination, we must ask whether “the jury [was] in
39   possession of facts sufficient to make a discriminating
40   appraisal of the particular witness’s credibility.” United
41   States v. Laljie, 184 F.3d 180, 192 (2d Cir. 1999) (internal
42   quotation marks omitted).
43
44        To the extent that the district court actually limited
45   Cuti’s cross-examination of Henry and Ray, the court did so
46   based on recognized grounds (e.g., jury confusion, marginal
47   relevance, etc.). See Van Arsdall, 475 U.S. at 679. We

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 1   cannot conclude that the district court abused its
 2   discretion by imposing these limitations.
 3
 4   [3] Cuti argues that the district court erred by admitting
 5   the hearsay testimony of Cory Zelnik (allegedly recounting
 6   statements made by Winick) pursuant to Rule 801(d)(2)(E)’s
 7   coconspirator exclusion to the hearsay prohibition. We
 8   review a district court’s admission of purported hearsay
 9   evidence under Rule 801(d)(2)(E) for clear error. United
10   States v. Coppola, 671 F.3d 220, 246 (2d Cir. 2012).
11
12        To admit hearsay evidence of the statement of a
13   coconspirator, a district court must find by a preponderance
14   of the evidence that a conspiracy existed, that the members
15   included the declarant and the party against whom the
16   evidence is offered, and that the statement was made during
17   and in furtherance of the conspiracy. Id. As an initial
18   matter, it is not clear that Zelnik actually introduced any
19   out-of-court statements made by Winick. A review of the
20   record reflects that Zelnik was typically referring to his
21   own views, or was speaking on behalf of the business
22   entities Winick Realty Group, Danielle Equity, or Store Ops.
23   None of Zelnik’s testimony involved him introducing out-of-
24   court statements made by Winick. In any event, even if
25   Zelnik’s testimony introduced hearsay, Cuti has not
26   established that the district court clearly erred in finding
27   that Cuti, Zelnik, and Winick were co-conspirators and that
28   Winick’s “statements” were made during and in furtherance of
29   the conspiracy.
30
31   [4] Cuti contends that the government improperly introduced
32   a new theory of the case during rebuttal summation. When,
33   as here, a defendant has objected at trial, we review a
34   claim of improper argument to the jury for prejudicial
35   error, considering the severity of the misconduct, the
36   curative measures adopted, and the certainty of conviction
37   absent the misconduct. United States v. Helmsley, 941 F.2d
38   71, 96 (2d Cir. 1991).
39
40        Here, the statements made by the government during
41   rebuttal summation were by way of response to statements
42   made in closing by Cuti’s counsel, and were based entirely
43   on evidence introduced by the government at trial. Such
44   rebuttal summation is proper. United States v. Rubinson,
45   543 F.2d 951, 966 (2d Cir. 1976). Even if rebuttal
46   summation was improper in the limited respect raised by
47   Cuti, he has not shown that it deprived him of a fair trial,

                                  4
 1   warranting reversal. See United States v. Pena, 793 F.2d
2   486, 490 (2d Cir. 1986).
 3
 4   [5] Finally, Cuti argues that the district court erred in
 5   imposing a $5 million fine before fixing the amount of
 6   restitution. When, as here, no objection is made below, we
 7   review the district court’s imposition of a criminal fine
 8   for plain error. United States v. Pfaff, 619 F.3d 172, 174
 9   (2d Cir. 2010). Because the district court did consider
10   restitution before imposing the fine, as required by 18
11   U.S.C. § 3572(a), the district court did not err, plainly or
12   otherwise.
13
14   [6] Tennant claims that he suffered prejudice when the
15   government argued during opening and closing statements that
16   Tennant profited from his participation in the fraud and
17   that Oak Hill suffered some loss. We review a claim of
18   improper argument before the jury--where no objection was
19   made at trial--for plain error, meaning that the error
20   affected substantial rights and affected the outcome of the
21   proceedings. United States v. Williams, 690 F.3d 70, 77 (2d
22   Cir. 2012). We must reject Tennant’s challenge unless the
23   error “seriously affect[ed] the fairness, integrity, or
24   public reputation of [the] judicial proceedings.” United
25   States v. Carr, 424 F.3d 213, 227 (2d Cir. 2005) (internal
26   quotation marks omitted).
27
28        Tennant has failed to make such a showing. As to
29   profit, Tennant points to statements by the government that
30   Tennant sold his stock options for $2.9 million after
31   participating in several of the real estate concession
32   transactions. These statements are supported in the record
33   and appear accurate, despite Tennant’s characterization
34   otherwise. And even if the statements were erroneous,
35   Tennant does not remotely approach the steep showing of
36   prejudice necessary under plain error review.
37
38        As to loss, Tennant points to the government’s
39   suggestion that Oak Hill relied on Duane Reade’s manipulated
40   financials in deciding whether to buy the company. These
41   statements bear upon the issue of materiality and are
42   adequately supported in the record. In any event, even if
43   the government argued loss without factual support, Tennant
44   has not established plain error.
45
46   [7] Finally, Tennant claims that the district court erred
47   in denying his motion to sever his trial. A district

                                  5
 1   court’s decision to grant or deny severance “is virtually
 2   unreviewable on appeal,” and the defendant bears a very
 3   “heavy burden” to establish a “miscarriage of justice.”
 4   United States v. Locascio, 6 F.3d 924, 947 (2d Cir. 1993).
 5   “[T]he burden on a defendant to establish that severance was
 6   improperly denied is not an easy one to carry,” because the
 7   defendant must show “prejudice so great as to deny him a
 8   fair trial.” United States v. Cardascia, 951 F.2d 474, 482
 9   (2d Cir. 1991). Tennant has not shown that the district
10   court’s refusal to sever the trial brought about a
11   miscarriage of justice.
12
13        Finding no merit in Cuti and Tennant’s remaining
14   arguments, we hereby AFFIRM the judgments of the District
15   Court.
16
17                              FOR THE COURT:
18                              CATHERINE O’HAGAN WOLFE, CLERK
19

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