Court Opinion

ID: 2963416
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:09:27.554824+00
Date Added: 2024-06-11T11:37:21.108968
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 95-8026

                              UNITED STATES OF AMERICA,

                                 Plaintiff, Appellee,

                                          v.

                              JOHN W. BILLMYER, ET AL.,

                                Defendants, Appellees.
                                      __________

                         AMERICAN HONDA MOTOR COMPANY, INC.,

                                      Appellant.
                                 ___________________

        No. 95-1393

                              UNITED STATES OF AMERICA,

                                 Plaintiff, Appellee,

                                          v.

                                 JOHN W. BILLMYER and
                                   DENNIS JOSLEYN,

                                Defendants, Appellees.
                                       ________

                                     LYON & LYON,

                                      Appellant.
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

                 [Hon. Joseph A. DiClerico, Jr., U.S. District Judge]
                                                 ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________

                            Bownes, Senior Circuit Judge,
                                    ____________________

                            and Stearns,* District Judge.
                                          ______________

                                 ____________________

            Steven M. Gordon  with whom  Shaheen, Cappiello,  Stein &  Gordon,
            ________________             ____________________________________
        Richard A. Gargiulo, Gargiulo, Rudnick & Gargiulo, Peter G. Callaghan,
        ___________________  ____________________________  __________________
        Richard  J. Inglis  and Marielise  Kelly were  on brief  for appellant
        __________________      ________________
        American Honda Motor Company, Inc.
            Jeremiah T.  O'Sullivan with whom  Christopher H.M. Carter,  Nancy
            _______________________            _______________________   _____
        W. Geary and Choate, Hall & Stewart were on brief for appellant Lyon &
        ________     ______________________
        Lyon.
            Paul Twomey with  whom Mark L.  Sisti was on brief  for defendant,
            ___________            ______________
        appellee Dennis Josleyn.

                                 ____________________

                                    June 14, 1995
                                 ____________________

        ___________________

        *Of the District of Massachusetts, sitting by designation.

                 BOUDIN, Circuit Judge.  Two former employees of American
                         _____________

            Honda Motor  Company,  defendants John  Billmyer  and  Dennis

            Josleyn, have  been on  trial in  the district  court charged

            with RICO, conspiracy and  mail fraud violations arising from

            an alleged commercial bribery scheme involving Honda dealers.

            The defendants were indicted by a federal grand jury on March

            11,  1994, and  trial began  in February  1995.   About three

            weeks into the trial, Josleyn  served a subpoena duces  tecum

            on American Honda, pursuant to Fed. R. Crim. P. 17(c).  It is

            this  demand that gave rise to the present proceeding in this

            court.

                 The  Josleyn  subpoena   demanded  that  American  Honda

            produce inter alia  a file maintained  by Sherry Cameron,  an
                    __________

            American  Honda  vice  president, that  consists  largely  of

            information  received  from  the company's  outside  counsel,

            notes  taken by  her  during conversations  with counsel  and

            memoranda reflecting such information.  American Honda  moved

            to quash the subpoena  on attorney-client privilege and work-

            product  grounds.  Its former  law firm, Lyon  & Lyon, joined

            the  motion, asserting that certain of the documents were its

            work product and protected under the work-product doctrine.

                 The  district  court found  that  Josleyn  had made  the

            threshold  showing required under  United States  v. LaRouche
                                               _____________     ________

            Campaign, 841 F.2d 1176 (1st Cir. 1988), to warrant in camera
            ________                                            _________

            review  of the  documents in  the Cameron  file.   After some

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            wrangling, American Honda submitted  the file to the district

            court,  but appealed the court's LaRouche ruling.  This Court
                                             ________

            dismissed  that appeal on April  4, 1995, on  the ground that

            the district court's order  was not final.  United  States v.
                                                        ______________

            Billmyer, No. 95-1324, 95-1325, slip op. at 1 (1st Cir., Apr.
            ________

            19,  1995).   We  recognized that  American Honda  might have

            difficulty  appealing any  subsequent  orders  rejecting  its

            privilege claims  because it would no  longer have possession

            of the files and  could not automatically provoke a  contempt

            proceeding.  Id.
                         ___

                 The district judge then conducted an in camera review of
                                                      _________

            the Cameron  file and issued  a 40-page order  appraising the

            documents page by page.   Although he found much of  the file

            to  be protected  either by  attorney-client privilege  or as

            work product, the judge found that some of the documents were

            unprotected,  either  because  neither  doctrine  applied  or

            because the privilege had been  waived.  American Honda  then

            moved  for the  return of  the sealed  documents, so  that it

            could  test  the rulings  in a  contempt proceeding,  but the

            district court denied the motion and made ready to reveal the

            disputed materials to the defendants.

                 American  Honda and  Lyon  & Lyon  then filed  immediate

            appeals,  challenging   the   proposed  disclosure   of   the

            documents; in the alternative,  writs of mandamus were sought

            if the appeal were dismissed.  American Honda objected to all

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            of  the disclosures while Lyon & Lyon restricted its claim to

            one  document.  At  appellants' request, this  court on April

            19, 1995, stayed the district court's order pending expedited

            review.    The district  court  then  suspended the  criminal

            trial,  awaiting a ruling by  this court.   Briefs were filed

            here on April 28, 1995, and oral argument was heard on May 1,

            1995.

                 On May 4, 1995, this court decided the case and released

            a  brief  order  in advance  of  this  opinion,  so that  the

            recessed criminal  trial could  be resumed immediately.   Our

            order  stated  that  the  district  court's  order  directing

            disclosure  of the  disputed  materials did  not qualify  for

            review either under the  collateral order doctrine or through

            mandamus.   We directed  entry of  judgment, issuance  of the

            mandate  forthwith, and  dissolution  of the  April 19  stay.

            This opinion is to  explain the reasons for our  dismissal of

            the appeals and denial of mandamus.

                 The first  question is whether American Honda and Lyon &

            Lyon may appeal from the discovery  order.  Surprisingly, the

            law in this area is more tangled than one would expect, given

            the  recurring nature of the problem.  From the standpoint of

            the proceeding itself--a  criminal trial--there is no  "final

            decision"  until  the trial  ends.    Corporacion Insular  de
                                                  _______________________

            Seguros  v.  Garcia,  876  F.2d  254,  256  (1st  Cir.  1989)
            _______      ______

            ("Garcia").  But the  collateral order doctrine recognized in
              ______

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            Cohen v. Beneficial Indus.  Loan Corp., 337 U.S.  541, 545-47
            _____    _____________________________

            (1949), provides one means for examining issues that arise in

            the course of a continuing proceeding; failing that, mandamus

            remains a  possibility.   Appellants invoke both  concepts in

            this court.

                 At the threshold Josleyn  urges dismissal because a non-

            party normally  cannot appeal  an order enforcing  a subpoena

            but must provoke a contempt order as the basis for an appeal.

            United States v. Ryan, 402 U.S.  530 (1971).  That path is no
            _____________    ____

            longer  open  to  American  Honda  and may  never  have  been

            available to Lyon  & Lyon.   Given the  judicial interest  in

            allowing  a  trial court  to  inspect  disputed documents  in
                                                                       __

            camera,  we  decline  to  hold  that  a  holder  of documents
            ______

            forfeits appeal  rights otherwise available by  allowing such

            an inspection.

                 Conversely, we  do not  think that the  district court's

            discovery order becomes a "final decision" under  28 U.S.C.  

            1291 simply  because contempt is  not available as  a vehicle

            for review.  Perlman v. United States, 247 U.S. 7, 13 (1918),
                         _______    _____________

            and Cobbledick v.  United States, 309 U.S. 323  (1940), might
                __________     _____________

            once  have lent some support to such a theory; but Cobbledick
                                                               __________

            was  cited by  the Supreme Court  in adopting  the collateral

            order  doctrine, Cohen,  337 U.S.  at 546,  and the  Perlman-
                             _____                               ________

            Cobbledick line  of authority  appears to have  been absorbed
            __________

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            into  the collateral order doctrine.  Garcia, 876 F.2d at 258
                                                  ______

            n.3.1   See also In re  Oberkoetter, 612 F.2d  15, 17-18 (1st
                    ________ __________________

            Cir. 1980).  

                 We turn  now to  the  collateral order  doctrine as  the

            primary basis  for possible  jurisdiction in  this case.   In

            this circuit, to qualify for immediate appeal as a collateral

            order, an order must involve

                 (1) an issue essentially unrelated to the merits of
                 the  main  dispute,   capable  of  review   without
                 disrupting   the  main   trial;   (2)  a   complete
                 resolution   of  the   issue,  not   one  that   is
                 `unfinished'   or   `inconclusive';  (3)   a  right
                 incapable  of  vindication  on  appeal  from  final
                 judgment;  and  (4)  an  important   and  unsettled
                 question of controlling law, not  merely a question
                 of  the   proper  exercise  of  the  trial  court's
                 discretion.

            United States v. Sorren, 605 F.2d 1211, 1213 (1st Cir. 1979).
            _____________    ______

            In addition, the Supreme  Court has warned that interlocutory

            appeals "are  especially inimical  to the effective  and fair

            administration of the criminal law."  Abney v. United States,
                                                  _____    _____________

            431 U.S. 651, 657 (1977).

                 The  instant  appeal   meets  the  first  three   listed

            requirements.  The privilege and work product issues posed by

                                
            ____________________

                 1The  Fifth Circuit  has so  held in  circumstances very
            similar to our  own case,  In re grand  Jury Proceedings,  43
                                       _____________________________
            F.3d  966, 969-70  (1981),  although the  Third Circuit  some
            years  before   treated  Perlman-Cobbledick  as   a  separate
                                     __________________
            doctrine.   United States v.  Cuthbertson, 651 F.2d  189, 194
                        _____________     ___________
            (3d  Cir.),  cert. denied,  454  U.S. 1056  (1981).   Further
                         ____________
            uncertainty is  added by a  brief and ambiguous  reference in
            Church of Scientology v.  United States, 113 S. Ct.  447, 452
            _____________________     _____________
            n.11 (1992), not cited to us by anyone.

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                                         -7-

            the  discovery  order have  little to  do  with the  guilt or

            innocence of  Billmyer and Josleyn; and  the district court's

            order is  a complete resolution of  those issues.  As  to the

            third prong, any disclosure that occurs now will be virtually

            unreviewable  after  a final  judgment.   In  the case  of an

            acquittal,  no appeal  can  ensue,  and  in  the  case  of  a

            conviction,  any  appeal would  be  taken  by defendants  who

            either sought or acquiesced in the disclosure.

                 The  remaining, and most  daunting, question  is whether

            this  case presents  a  distinct and  important legal  issue.

            Although not  all  circuits employ  such  a test,  it  enjoys

            considerable  support.  See, e.g., 15A C. Wright, A. Miller &
                                    ___  ____

            G. Cooper, Federal Practice and Procedure    3911, 3911.5 (2d
                       ______________________________

            ed. 1992) (citing  case law); see also  National Super Spuds,
                                          ________  _____________________

            Inc. v. New York  Mercantile Exchange, 591 F.2d 174,  180 (2d
            ____    _____________________________

            Cir.  1979) (Friendly,  J.).   Ordinarily, a  discovery order

            will  meet the legal-importance  test only  if it  presents a

            claim  of clear-cut legal error and not merely a challenge to

            the   district  judge's   factual   determinations   or   the

            application of a settled legal rule to the particular facts.

                 The  requirement of  an important  legal issue  rests in
                                                    _____

            part on the increased  likelihood that such an appeal  may be

            fruitful;  legal rulings  are  reviewed de  novo, while  more
                                                    ________

            deferential standards of review  apply to factual findings or

            application of known legal  rules to specific facts.   See In
                                                                   ___ __

                                         -8-
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            re Extradition of  Howard, 996 F.2d  1320, 1327-28 (1st  Cir.
            _________________________

            1992).   It is  not easy  to justify the  interruption of  an

            ongoing  proceeding,  especially   a  criminal  trial,  where

            affirmance is  very likely because the issues  are ones where

            the  district court is reviewed only for clear error or abuse

            of discretion.

                 In addition,  where the appeal occurs  during a criminal

            trial,  a  mistrial  may  result  if  the appeal  process  is

            prolonged, raising  both  speedy trial  and  double  jeopardy

            concerns.   United States v. Horn, 29 F.3d 754, 768 (1st Cir.
                        _____________    ____

            1994).  Were  every factual dispute or law  application issue

            posed by  a privilege claim  open to interlocutory  review in

            mid-trial,  it  could  take  weeks to  secure  the  necessary

            transcripts, learn background facts  that the trial judge has

            absorbed  over many  months,  and then  replicate and  review

            district court rulings.

                 Admittedly,  this collateral  order  test does  create a

            possibility that disclosure of documents may be ordered based

            on a mistake of  fact or a misapplication of settled law, and

            the error may escape review.  But litigation  is full of such

            instances:     a  temporary   restraining  order   may  cause

            irreparable  harm;  burdensome  discovery  may  be  compelled

            before  review  can be  secured;  a  witness whose  claim  of

            privilege is overruled may  answer rather than risk contempt.

            The finality  rule  reflects  a  compromise  among  competing

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            interests.   Given the protection afforded  by the collateral

            order  doctrine and mandamus,  we think that  there is little

            chance of any grave miscarriage of justice.

                 No  one  can make  a  seamless web  out  of  all of  the

            decisions  on  collateral  orders.    The  circuits  are  not

            unanimous in every nuance, see 15A Wright, supra,   3911, and
                                       ___             _____

            even  within  circuits,  a  wider  scope  of  review  may  be

            available  for some   interlocutory orders, such  as an order

            denying a claim of immunity or an order imposing sanctions on

            a non-party for  contempt.  E.g.,  Lowinger v. Broderick,  50
                                        ____   ________    _________

            F.3d 61,  64 (1st  Cir. 1995)  (immunity).   But we  have set

            forth the  collateral order  doctrine in  this circuit  as it

            applies  to  discovery  orders,  and  must  respect  our  own

            precedents. 

                 Turning to the merits, we conclude that the  claims made

            in these attempted appeals  do not reveal any clear  error of

            law.   The district judge  at the outset  accurately laid out

            the rules  applicable to  the  attorney-client privilege  and

            work-product protection, including  the pertinent  exceptions

            and  waiver.   He reviewed  the  documents virtually  line by

            line, finding  some pages  or portions  to be  protected from

            disclosure  and  some unprotected.    Most  of the  arguments

            raised on appeal are patently  attacks on factual findings or

            on the application  of legal  standards to those  facts.   To

            review each ruling would  require a time-consuming effort and

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            entail  a delay all out of  proportion to any likelihood of a

            reversal. 

                 But American Honda does raise one issue that involves an

            arguable claim  of legal  error.   In  examining the  Cameron

            "legal  file,"  the  district  judge concluded  that,  as  to

            certain  portions of  the  materials  protected by  attorney-

            client privilege,  American Honda  had waived  the privilege.

            American Honda says that the district judge misunderstood the

            legal  standard  for  an  implied waiver  of  the  privilege.

            Specifically, the district court found that 

                 American Honda has  disclosed to the  United States
                 government considerable portions of the information
                 acquired  through  internal investigation  into the
                 conduct   comprising   the   charges  against   the
                 defendants  in  this  case. .  .  .    In light  of
                 American Honda's disclosure of information acquired
                 through  internal  investigation,  the court  finds
                 that  American Honda has waived the attorney-client
                 privilege  with  respect  to  documents  containing
                 information      acquired     through      internal
                 investigation.

                 The court then listed the  portions of the materials  as

            to which American Honda  had waived the privilege.   American

            Honda now contends that  waiver results only when  the client

            reveals privileged communications to  a third party, not when

            the client reveals "the  information" contained in privileged

            communications.    American Honda  argues  that  the district

            court clearly  erred by finding  a waiver from  the company's

            disclosure  to the  government  of facts,  not of  privileged
                                               _____

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            communications.  E.g., Upjohn Co. v.  United States, 449 U.S.
            ______________   ____  __________     _____________

            383, 395 (1980).

                 The  district  judge  may  have  meant  that  privileged

            communications were disclosed to the government and therefore
            ______________

            privilege as to  those topics was waived.  On the other hand,

            the judge  twice referred  to American Honda's  disclosure of

            "information,"  and  did  not   indicate  that  any  specific

            privileged  documents had been  disclosed.  So  the judge may

            have found waiver because the substance of the communications

            had  already  been revealed  to  the  government by  American

            Honda.  If the court's ruling embraced this latter theory, we

            agree that  a legal issue  is raised, but  do not  agree that

            such a theory constitutes legal error.2

                 To put the matter in context, we note that the documents

            as to  which waiver was found appear  to be pages or portions

            of pages setting forth information gathered by Lyon & Lyon at

            the behest of American Honda  from sources whose identity  is

            not  revealed.    The  information  consists  importantly  of

            allegations or evidence as to payments  made by Honda dealers

            to  Honda employees.  The documents, prepared by Lyon & Lyon,

            Cameron  or  others,  reflect   the  communication  of  these

                                
            ____________________

                 2In noting the ambiguity,  we intend no criticism.   The
            district  judge's   careful  analysis,  detailed   order  and
            document-by-document  review--undertaken in  the middle  of a
            complex trial--were altogether admirable.

                                         -12-
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            allegations  or evidence  to Cameron  or other  executives of

            American Honda.

                 It  is  fair to  read the  district  court's order  as a

            finding that the same allegations or evidence were thereafter

            disclosed by American Honda to government investigators.  The

            district  court  does  not   describe  means  of  disclosure;

            appellants' briefs shed no light upon the matter, but also do

            not  contest the finding that such a disclosure occurred.  We

            thus  take the case as  one in which  American Honda received

            factual information  from its counsel,  disclosed those facts

            to  the government, and  now seeks to  withhold the documents

            that reflect the original  communication of that  information

            to American Honda.

                 One might  ask why  there is  any basis  for a  claim of

            privilege  in  the first  instance,  since  the privilege  is

            primarily designed to protect communications by the client to
                                                         _____________

            the lawyer in  order to procure  legal advise.   See VIII  J.
                                                             ___

            Wigmore,  Evidence    2320,  at  628-29  (J. McNaughton,  ed.
                      ________

            1961).   Possibly some of the information was provided to the

            law  firm by American Honda employees.  Or the district court

            may have  deemed the material privileged  (aside from waiver)

            because  the  lawyer's  communications  to   the  client  are

            secondarily protected as needed to prevent inferring what the

            client said to the lawyer.  Id.
                                        ___

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                 In  all  events,  the question  here  is  the effect  of

            American  Honda's  disclosure  of  this  information  to  the

            government.  Wigmore tells us that "[j]udicial decision gives

            no  clear answer  to th[e] question"  of what  constitutes "a

            waiver by implication," and that only a few general instances

            are  well  settled.   Wigmore,  supra    2327, at  635.   For
                                            _____

            example, a client's offer of his own testimony as to specific
                                                 _________

            facts does not waive the  privilege as to his  communications

            with  his attorney on  the same subject, id.    2327, at 638;
                                                     ___

            but  this  rule protects  testimony  given by  the  client in
                                                                       __

            court, in order that the right  to testify should not come at
            _____

            the price of one's ability to consult privately with counsel.

            Id.    2327, at 637.   Admitting that  "authority is scanty,"
            ___

            McCormick cites a number of cases in which disclosures by the

            client, other than  those involving in-court testimony,  have

            been  held to be a waiver.   I McCormick on Evidence   93, at
                                           _____________________

            377-48 (J. Strong ed., 4th ed. 1992).

                 Appellants   respond   that   the   privilege   protects

            "communications, not facts," Upjohn, 449 U.S. at 395, so that
                                         ______

            American Honda  cannot have  waived the privilege  as to  the

            notes or memoranda merely by  revealing to the government the

            allegations or  evidence recorded in the  notes or memoranda.

            The distinction is useful in some circumstances--say, where a

            party tries to refuse to testify about an automobile accident

            on  the ground that he gave his counsel a private description

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            of  the  same accident.    But, once  again,  the distinction

            appears to have little to do with the present problem.

                 Here, the  gist of the  matter is that  counsel informed

            the  client of  detailed evidence and  allegations concerning

            possible bribes  of its  employees, and  the client  chose to

            make this same information available to the government.  What

            is sought by the defense in the criminal trial is merely  the

            recordations by or for the  client of this same  information.

            The information  now having been  disclosed by the  client to

            the government, it  is unclear what  damage to the  attorney-

            client  privilege  can occur  from  making the  corresponding

            portions of the file available.  the district court carefully

            limited the disclosures to the factual allegations, excluding

            any commentary on their legal implications.

                 Indeed, American Honda's disclosure to the government of

            the  factual information received from  its law firm not only

            reveals that  information, and American  Honda's knowledge of

            it, but makes an  inquiry into the  source and basis for  the

            information hard to avoid.   A risk of unfairness  is evident

            where  information is provided to  one side in  a case (here,

            the United States)  and then  an inquiry into  its origin  is

            shielded by a claim of privilege.   In a variety of contexts,

            the affirmative  use of privileged information  has been held

            to  be a waiver of  privilege.  See  P. Rice, Attorney-Client
                                            ___           _______________

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            Privilege in the United States   9.34, at 711,    938, 9.40  
            ______________________________

            950, at 752-53 (1993) (collecting cases).

                 Given the disclosure to the government, the waiver label

            is presumptively apt.   Waiver doctrine has only a  few hard-

            edged rules; as to many permutations,  it is a fluid body  of

            precedent  reflecting a  variety  of  concerns, including  an

            insistence on  real confidentiality and limitations  based on

            fairness.     See   "Developments  in   the   Law--Privileged
                          ___

            Communications," 98 Harv. L.  Rev. 1450, 1629-32 (1985).   In
                                ______________

            this instance, confidentiality has largely been dissolved  by

            American Honda's own actions.

                 One argument not made by appellants is that, as a matter
                              ___

            of policy, private revelations  to the government of possible

            criminal conduct  ought not waive  the privilege as  to third

            parties.   The  concern,  of  course, is  to  encourage  such

            revelations.  The  general tendency  of the law  is to  treat

            waivers  as an  all-or-nothing  proposition, e.g.,  ALI Model
                                                         ____   _________

            Code  of Evidence, Rule 231, comment (a) (1942); but there is
            _________________

            a  trace  of  support  for  limited  waivers  in  some  cases

            involving   confidential   disclosures  to   the  government.

            Diversified Industries,  Inc. v. Meredith, 572  F.2d 606 (8th
            _____________________________    ________

            Cir. 1977).  See generally Rice, supra, 9.86-9.87 (collecting
                         _____________ ____  _____

            and analyzing the cases).

                 On  the other hand, it  is a serious  matter to withhold

            from a defendant in a criminal case details that have already

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            been made available  to the government  by a person  claiming

            the  privilege.  If there  were ever an  argument for limited

            waiver, it  might well  depend importantly  on just  what had

            been disclosed to the  government and on what understandings.

            Without intending  to preclude such  an argument in  a future

            case, we think that it  is enough in this one to  say that no

            such claim of limited waiver has been argued to us.

                 This discussion also disposes of the alternative request

            for mandamus.   Mandamus is a discretionary writ available in

            extraordinary  circumstances  to   redress  grievous   error.

            Garcia,  876 F.2d  at 260.   While  it is  not restricted  to
            ______

            errors of law, it does require that the error be manifest and

            the burden of  showing manifest error  is upon the  applicant

            for the writ.  No such legal error has been  shown and, as to

            the  district  court's   fact-findings  and  applications  of

            settled rules to particular  facts, it is enough to  say that

            we have found no manifest error.

                 Judgment has  been previously  entered.  We  direct that

            this opinion be filed  and transmitted to the  district court

            and the  parties to the appeal.  Each side shall bear its own

            costs.

                 It is so ordered.
                 ________________

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