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United States v. Warner

October 13, 2006

UNITED STATES OF AMERICA, PLAINTIFF,
v.
LAWRENCE E. WARNER AND GEORGE H. RYAN, SR., DEFENDANTS.



The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge

Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

On April 17, 2006, a jury convicted Defendants Lawrence E. Warner and George H. Ryan, Sr. of multiple violations of federal law, including racketeering conspiracy, mail fraud, obstruction of justice, money laundering, and tax violations. Both Defendants filed motions seeking judgment of acquittal or new trials, arguing, inter alia, that juror misconduct violated their right to due process, and that the evidence was insufficient to support convictions on several charges. Defendant Warner further argued that the court erred in denying his numerous requests for severance. On September 7, 2006, this court granted judgments of acquittal on two of ten mail fraud counts, finding the evidence insufficient to support convictions on those two charges, but otherwise denied Defendants' post-trial motions in their entirety, including as to all the juror-related issues. See United States v. Warner, No. 02 CR 506-1, 02 CR 506-4, 2006 WL 2583722, at *1 (N.D. Ill. Sept 7, 2006). Defendants timely filed notices of appeal. On August 31, 2006, while Defendants' post-trial motions were pending, Ryan filed a motion for release on bond pending appeal pursuant to 18 U.S.C. § 3143(b), arguing that the alleged jury misconduct and other juror-related issues in this case create a sufficient likelihood that his appeal would result in a reversal of the verdict or a new trial. Warner joined Ryan in seeking release pending appeal on September 11, 2006, adopting Ryan's arguments and further contending that the severance issues also warrant bond. For the reasons explained here, Defendants' motions are denied.

I. Legal Standard

Section 3143(b), enacted as part of the Bail Reform Act of 1984, provides in pertinent part that a defendant who has been found guilty and sentenced to a term of imprisonment, must be detained pending appeal unless the defendant is not a flight risk or a danger to the community and the court finds "that the appeal is not for the purpose of delay and raises a substantial question of law or fact likely to result in . . . reversal [or] an order for a new trial . . . ." 18 U.S.C. § 3143(b)(1)(B); see United States v. Shoffner, 791 F.2d 586, 588 (7th Cir. 1986) (per curiam). The government does not dispute that Defendants pose no flight risk or danger, nor contend that Defendants' appeal is for the purpose of delay. The sole issue before the court is whether Defendants' appeal "raises a substantial question of law or fact likely to result in" either reversal of the verdict or a new trial.

A literal reading of § 3143(b) might suggest that a district court should not grant bail pending appeal unless the court believes that the conviction would be reversed. The Seventh Circuit has not adopted such an interpretation, however. See Shoffner, 791 F.2d at 588 (citing United States v. Miller, 753 F.2d 19, 22-24 (3d Cir. 1985)); United States v. Thompson, 787 F.2d 1084, 1085 (7th Cir. 1986) ("A judge need not find that he should have been reversed, i.e., that he probably will be reversed"); United States v. Bilanzich, 771 F.2d 292, 299 (7th Cir. 1985) ("requiring district court judges to determine the likelihood of their own error is repugnant."). Rather, here as in other circuits, the court must engage in a two-step process: first, the court must determine whether the question raised by the appeal is "substantial"; second, the court must determine whether, assuming the question is decided in the defendant's favor, the Court of Appeals is likely to order reversal of the conviction or a new trial.*fn1 Shoffner, 791 F.2d at 588; Bilanzich, 771 F.2d at 298. The defendant bears the burden of making the required showing. Bilanzich, 771 F.2d at 298.Thedistrict court must provide a statement of its reasons supporting its ruling on a motion for release pending appeal. United States v. Eaken, 995 F.2d 740, 741 n.1 (7th Cir. 1993) (citing FED. R. APP. P. 9(b)).

A question is "substantial" if it is "'a "close" question or one that very well could be decided the other way.'" Bilanzich, 771 F.2d at 298 (quoting United States v. Molt, 758 F.2d 1198, 1200 (7th Cir. 1985) (quoting in turn United States v. Giancola, 754 F.2d 898, 901 (11th Cir.1985))). A determination of whether a question is "substantial" must be made on a case-by-case basis. Id. at 299. While a district court is not required to "predict the outcome of the appeal[,]" United States v. Hatterman, 853 F.2d 555, 557 n.6 (7th Cir. 1988), the court must find "that the appeal could readily go either way, that it is a toss-up or nearly so." United States v. Greenberg, 772 F.2d 340 (7th Cir. 1985). Thus, although the court's "task is in some sense predictive[,]" a determination of "substantial" does not entail assessing a defendant's chances before the Court of Appeals. Shoffner, 791 F.2d at 589.

A substantial question may exist where the defendant's argument finds support in Seventh Circuit precedent, or where circuit courts are divided. See Eaken, 995 F.3d at 741-42 (affirming release pending appeal; where earlier Seventh Circuit decision indicated that the mere concealment of embezzled funds is insufficient to show the intent to evade tax obligations, defendant's "sufficiency of the evidence" challenge raised a substantial question). See also United States v. Lane, 281 F.3d 638, 639 (7th Cir. 2002) (Rovner, J., dissenting) (dissenting from the Seventh Circuit's holding denying bond pending appeal, and arguing that the court should have found a substantial question where Seventh Circuit precedent supported defendant's loss-calculation argument and other circuits were divided as to the proper method of calculation).

The second step-"likely to result in reversal or an order for a new trial"-goes to the impact that the substantial question will have on the ultimate disposition of the appeal. Bilanzich, 771 F.2d at 299 (quoting Miller, 753 F.2d at 23). The district court must assume that the substantial question presented will go the other way on appeal, and then determine whether that issue is "so integral to the merits that it is more probable than not" that the result would be reversal or a new trial. Id. In other words, the determination of whether the question a defendant raises on appeal is "substantial" is an evaluation of its merit; a determination of "likely to result in reversal or an order for a new trial" goes to the "type of question" and its impact. Id. (quoting United States v. Handy, 761 F.2d 1279, 1280 (9th Cir. 1985)). In Bilanzich, for example, the Seventh Circuit affirmed the district court's decision to deny the defendant bail pending appeal where the defendant satisfied neither step: defendant's appeal raised the question of whether evidence was illegally seized, but the question was not a "close call", i.e., not "substantial," because the search was clearly proper under Fourth Amendment jurisprudence; and the conviction would not have been reversed even if the question had been resolved in her favor because none of the evidence was introduced at trial. Id. at 300.

The parties here disagree over whether the court should take into account the standard of review the Court of Appeals will likely apply to the issues Defendants have indicated they will raise on appeal. The government argues that where the Court of Appeals will apply a deferential standard of review, Defendants likely cannot make the required showing under the second step of this court's § 3143(b) analysis because even if the reviewing court may be inclined to disagree with this court's substantive decision, the conviction will not be reversed or a new trial ordered absent a finding of abuse of discretion. (Government's Response to Defendants' Motions for Release Pending Appeal (hereinafter, "Govt. Resp."), at 5-6, 23.) Defendants contend that the appellate standard of review should not enter into this court's analysis. (Ryan's Reply in Support of His Motion for Release Pending Appeal (hereinafter, "Ryan Reply"), at 2, 5-6.) Although neither party cites to any authority holding that a district court either should or should not take into account the likely standard of review, both sides point to district court decisions from this circuit and elsewhere in which courts have either taken or not taken this factor into account. The cases cited by the government note, while engaging in a § 1343(b) analysis, whether a deferential standard of review applies. See, e.g., United States v. Maas, No. 05-CR-245, 2006 WL 2345992, at *1-2 (E.D. Wis. Aug. 10, 2006) (explicitly noting the Seventh Circuit's deferential standard of review of determinations concerning the sufficiency and admissibility of evidence); United States v. Reich, 420 F. Supp. 2d 75, 90 (E.D.N.Y. 2006) (appeal challenging the admission of evidence under Rule 403 did not present a substantial question because Rule 403 accords discretion to the trial judge); United States v. Day, 433 F. Supp. 2d 54, 57 (D.D.C. 2006) (evidence rulings, reviewed for abuse of discretion, less likely to result in a reversal than a resolution of an issue of law, which is subject to de novo review); United States v. Kemp, 379 F. Supp. 2d 690, 715 (E.D. Pa. 2005) (finding no substantial question where the issues raised by the defendant, including the replacement of a juror with a substitute, all involved matters within its discretion, and which the court decided consistent with precedent from other circuits); United States v. Viana, No. 01 CR. 1043 SAS, 2003 WL 22480046, at *2 (S.D.N.Y. Nov. 3, 2003) (rejecting defendants' argument that the court's denial of a mistrial over the jurors' alleged exposure to a prejudicial newspaper article amounted to a substantial question, and noting its wide discretion in these matters); United States v. Lane, 194 F. Supp. 2d 758, 777, 782, 786 (N.D. Ill.) (Norgle, J.) (emphasizing that its evidentiary rulings are subject to discretionary review, and holding that Rule 404(b) and Rule 403 challenges raised no substantial questions), aff'd, 281 F.3d 638 (7th Cir. 2002); United States v. Butler, 704 F. Supp. 1351, 1354 (E.D. Va. 1989) (denial of a mistrial after questioning jurors about the effect of a co-defendant's suicide did not raise substantial question in part because it was reviewable only for abuse of discretion); United States v. Sokoloff, 696 F. Supp. 1451, 1455 (S.D. Fla. 1988) (denying bond where defendant contended that judge should have held a hearing to determine jury misconduct, and noting the court's discretion); United States v. Draiman, 614 F. Supp. 307, 311 (N.D. Ill. 1985) (court's restriction of cross-examination, a discretionary matter, raised no substantial question under § 1343(b)).

Defendants, for their part, cite to only three cases-none from this circuit-where courts did not mention the applicable standard of review, and released a convicted defendant on bond pending appeal notwithstanding the fact that the issues involved matters apparently within the courts' discretion. See, e.g., United States v. Hart, 906 F. Supp. 102, 106 (S.D.N.Y. 1995) (holding, without mentioning its discretion or the standard of review, that the court's admission of extrinsic acts evidence presented a substantial question "that could very well be decided the other way on appeal" and result in a new trial); United States v. Colletta, 602 F. Supp. 1322, 1328-29 (E.D. Pa. 1985) (finding that the prosecutor's improper references during closing arguments to matters not in the record presented a substantial question that upon a contrary appellate ruling would likely lead to an order for a new trial); United States v. Lamp, 606 F. Supp. 193, 199 (W.D. Tex. 1985) (noting that in light of contrary authority from other circuits, the court's admission of extrinsic evidence and hearsay statements raised substantial questions).

The Seventh Circuit has not addressed whether a district court should consider the appellate standard of review in its § 3143(b) analysis. Language from the cases supports both parties' arguments. In Bilanzich, the court, while discussing the second step of a district court's analysis, observed that even assuming a contrary conclusion on a "substantial" question, "harmless errors, errors that have no prejudicial effect, or errors that have been insufficiently preserved" would not result in reversal or a new trial. 771 F.2d at 292. By analogy, according to the government, issues reviewed for abuse of discretion, even if the appellate court found error, would be unlikely to lead to reversal; thus, the court must take the appellate standard of review into account. (Govt. Resp., at 6.) In Shoffner, however, the court explained that a district court "should not base its bail determination on its assessment of a defendant's chance of getting some panel of the Court of Appeals to agree with him." 791 F.2d at 589. The court further stated that the district court should not focus on what the appellate court might do; rather, "the court should return its attention to its own analysis of these issues at earlier stages of the proceedings . . . . [The court] must essentially evaluate the difficulty of the question [it] previously decided." Id. (emphasis in original). On the other hand, Shoffner also acknowledged that a district court's "task is in some sense predictive[,]" involves "[a]n assessment of what will probably happen in the future[,]" and "retain[s] its predictive character . . . ." Id.; see also id. at 590 (Cudahy, J., concurring) ("the language of the statute does seem to require a district judge to place a bet against himself when he elects to release a convicted defendant on bail. . . . one still seems to be peeking at [the probability of reversal] out of the corner of one's eye." ). Moreover, in Greenberg, Judge Posner explained that "'substantial' . . . must mean that the appeal could readily go either way," see 772 F.2d at 341, which language Shoffner quoted with approval. See 791 F.2d at 590 n.6.

In this court's view, the government's "harmless error" analogy is not entirely satisfying. As the Seventh Circuit explained in Bilanzich, the purpose of the second step of the § 3143(b) analysis is to assess the impact of the substantial question, assuming that the appellate court decided it the other way. Thus, the standard of review would not enter into that part of the analysis; rather the court must assume that a decision has been made on the merits of the question raised, and assess whether a contrary ruling on that issue would be more likely than not to result in reversal or an order of a new trial. Bilanzich, 771 F.2d at 299. On the other hand, the court is not persuaded that it should entirely disregard the likely standard of review under the first part of the § 3143(b) analysis. Bilanzich also explains that the test for whether a question is "substantial" is whether it is a "toss-up" or a "close call." Id. at 298. What may have been a close call for the district court will not at all be a close call for the Court of Appeals if the question is reviewed for abuse of discretion. Of course, it may make no difference to the end result if the standard of review is taken into account in the first or second step of the district court's analysis. Nonetheless, if the "ultimate question" is whether the appellate court is more likely than not to reverse, see United States v. Shields, No. 90 CR 1044-1, 1992 WL 57941, at *1 (N.D. Ill. March 20, 1992) (Rovner, J.), then the appellate standard of review cannot be altogether irrelevant to the district court's analysis.

The court concludes that it need not adopt a bright-line rule. If a district court invariably took the standard of review into account, then few defendants would likely be able to raise a substantial question for § 3143(b) purposes for any issue reviewed for abuse of discretion, for few such issues would remain a "close call" or a "toss-up" on appeal. But if a court invariably ignored the standard of review, as Defendants advocate, many of the court's decisions would qualify as substantial questions, even though a defendant would have little chance of success on appeal. Countless decisions made by a district court in the course of a trial-decisions, for instance, based on credibility of witnesses, or admissibility of prejudicial evidence under Federal Rule of Evidence 403-are "close calls" when made, but will likely go undisturbed on appeal because such matters are committed to the discretion of the district court. A rule mandating that the court ignore the standard of review for these types of decisions when conducting a § 3143(b) analysis would arguably contradict the express policy of the Bail Reform Act of 1984, which, as the Seventh Circuit has noted, "gives recognition to the principle that a conviction is presumed to be correct[,]" see Bilanzich, 771 F.2d at 298 (quoting S. Rep. No. 225, 98th Cong., 1st Sess. 27, reprinted in 1984 U.S. Code Cong. & Ad. News 3182, 3210), and "assume[s] that post-conviction bail is confined to those who are among the more promising candidates for ultimate exoneration." Shoffner, 791 F.2d at 589.

Ultimately, "§ 3143(b) 'requires an affirmative finding that the chance for reversal is substantial . . . ." United States v. Ashman, 964 F.2d 596 (7th Cir. 1992) (per curiam) (quoting Bilanzich, 771 F.2d at 298 (quotations omitted)). The Seventh Circuit has directed that a district court consider substantiality on a case-by-case basis, with the burden on the defendant to show the merit of the appeal. Bilanzich, 771 F.2d at 298-99. Although the court acknowledges that its role is not to predict the success of Defendants' appeal, the court cannot utterly disregard the lens through which the Court of Appeals will view this court's decisions. Accordingly, the court will, when determining if a question raised by Defendants is "substantial," consider whether this court's previous resolution of the question was committed to its discretion. See, e.g., Lane, 194 F. Supp. 2d at 786 ("[Defendant] has failed to raise a substantial question in regard to any evidence that was excluded at trial. Further, and more significantly, nothing that occurred at trial could legitimately justify a finding of abuse of discretion by this court in regard to the exclusion of evidence.") (citing United States v. Swanquist, 161 F.3d 1064, 1074 (7th Cir. 1998)) (emphasis added). The court does so not in an effort to "predict the outcome of the appeal," (Ryan's Surreply in Support of His Motion for Release Pending Appeal, at 2), but in recognition of the practical reality that not every difficult decision constitutes a "close call" and thus a "substantial question" for purposes of § 3143(b), if the decision fell within the court's discretion when made and will be reviewed only for abuse of that discretion.

With this standard in mind, the court proceeds with its analysis of the questions Defendants have identified as grounds for release pending appeal.

II. Analysis

Defendants identify four issues, each of which, according to Defendants, presents a substantial question likely to result in a reversal or an order for a new trial. Both Defendants*fn2 argue that three juror issues warrant release pending appeal: extraneous materials brought into the jury room during deliberations by one juror; specific instances of alleged juror misconduct, including jurors' misrepresentations in juror questionnaires, as well as allegedly improper ex parte communications by a juror; and this court's removal and substitution of two jurors several days into deliberations. (Ryan's Motion for Release Pending Appeal (hereinafter "Ryan Mot."), at 3-8.) Defendant Warner further contends that the court's denial of his many motions for severance raises a substantial question likely to result in an order for a new trial. (Warner Mot., at 2.) The court addresses each issue in turn.*fn3

A. Extraneous Materials in the Jury Room

As described more fully in this court's ruling on Defendants' post-trial motions, Juror Peterson, several days after jury deliberations in this case began, brought two documents into the jury room: the first, two pages printed from the American Judicature Society ("AJS") website, and the second, a handwritten statement in which Ms. Peterson expressed her thoughts on a juror's responsibilities during deliberations. Warner, 2006 WL 2583722, at *43-44. Juror Peterson read an excerpt from the AJS document and the handwritten note to Juror Ezell. See id. at *42, 44. Several days later, the court excused Juror Ezell for reasons wholly unrelated to this conflict. Id. at *43. After learning about the extraneous materials approximately one week after the verdict, ...


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