United States v. O'Keefe ( 1999 )

Revised March 24, 1999
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-30027
United States of America,
Plaintiff-Appellant,
VERSUS
Michael O’Keefe, Sr., Eric Schmidt, John O’Brien, and
Gary Bennett,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
March 9, 1999
Before HIGGINBOTHAM, JONES, and DENNIS, Circuit Judges.
PER CURIAM:
It is ordered that the motion of appellant for temporary
stay pending appeal is GRANTED.
DENNIS, Circuit Judge, dissents for the reasons attached.
1
DENNIS, Circuit Judge, dissenting:
The defendants applied to the district court to continue
bail pending their appeals from their convictions and sentences
for mail and wire fraud and related offenses. The district court
granted their applications, and the defendants were released
after posting bonds of $1 million (O’Keefe), $500,000 (Schmidt),
$500,000 (O’Brien) and $250,000 (Bennett). The government
appealed from the district court’s order as authorized by 18
U.S.C. § 3731.
Rule 9(b) of the Federal Rules of Appellate Procedure
provides that “[a]pplication for release after a judgment of
conviction shall be made in the first instance in the district
court.” In reviewing the district court’s decision, a court of
appeals is free to make an independent determination on the
merits of the prisoner’s application. United States v. Clark,
917 F.2d 177, 179-80 (5th Cir. 1990); United States v. Hawkins,
617 F.2d 59 (5th Cir.), cert. denied, 449 U.S. 952 (1980);
United States v. Provenzano, 605 F.2d 85, 92-93 (3rd Cir. 1979).
However, the district court’s conclusion is entitled to “great
deference.” Harris v. United States, 404 U.S. 1232, 1232 (1971);
United States v. Oliver, 683 F.2d 224, 235 (7th Cir. 1982);
United States v. Gigax, 605 F.2d 507 (10th Cir. 1979); United
States v. Provenzano, 605 F.2d at 91-92. See United States v.
Crabtree, 754 F.2d 1200 (5th Cir. 1985).
To obtain release pending appeal, a convicted defendant must
establish four factors: (1) that he is not likely to flee or pose
a danger to the safety of others; (2) that the appeal is not for
purpose of delay; (3) that the appeal raises a substantial
question of law or fact; and (4) that the substantial question,
if decided favorably to the defendant, is likely to result in
reversal, in an order for a new trial, in a sentence without
punishment, or in a sentence with reduced imprisonment. 18 U.S.C.
2
§ 3143(b). United States v. Clark, 917 F.2d at 179. In its order
admitting the defendants to bail pending appeal, the district
court found that the defendants passed all four prongs of this
test. Reviewing the district court’s written reasons and oral
statements at the hearing on this issue with deference, and
independently reviewing relevant portions of the record of the
trial and post-trial proceedings, I concur with the district
court’s determinations, and would affirm the district court’s
judgment admitting the defendants to bail pending their appeals.
In the present case, the only prong of the four-part test
that is problematic or that warrants any discussion is the third
one: whether the defendants’ appeals raise a substantial question
of law or fact, i.e., “‘one of more substance than would be
necessary to a finding that it was not frivolous[;]...a “close”
question or one that very well could be decided the other way.’”
United States v. Valera-Elizondo, 761 F.2d 1020, 1024 (5th Cir.
1985)(quoting United States v. Giancola, 754 F.2d 898, 901 (11th
Cir. 1985)).
I.
After the jury convicted the defendants of conspiracy, wire
fraud, mail fraud, and money laundering, the trial judge, in the
same order in which he recused himself, granted the defendants’
motion for a new trial; several weeks later, he denied the
government’s motion for reconsideration. The government filed an
interlocutory appeal under 18 U.S.C. § 3731 contesting the trial
judge’s new trial order and contending that the trial judge’s
order denying the government’s motion for reconsideration was
void because of his prior order disqualifying himself in the
case. In O’Keefe I, a panel of this court held that the district
court judge erred in performing a discretionary act by ruling on
the motion for reconsideration after he had recused himself, but
that the error did not have to be vacated because it was
3
“harmless.”1 O’Keefe I, 128 F.3d at 891, 892-93. The O’Keefe I
panel then proceeded to review the district judge’s ruling on the
defendants’ motion for new trial on the merits. The panel
concluded that the judge’s ruling constituted an abuse of
discretion or legal error in that (i) the government’s knowing
failure to correct perjured testimony did not violate the
defendants’ due process rights under Napue v. Illinois, 360 U.S.
264 (1959), because the falsehoods were not material, i.e., there
was not “a reasonable probability that the jury would have
reached a different outcome even had it been fully aware of all
of the alleged inconsistencies and falsehoods in [the prosecution
witness] Donaldson’s testimony,” O’Keefe I, 128 F.3d at 898; (ii)
in the absence of a material Napue violation, the trial judge’s
additional findings, viz., that the government impermissibly
delayed the disclosure of Brady material, that the
inconsistencies in prosecution witness Moore’s testimony clouded
or weakened the government’s case, and that the prosecution
attempted to mislead the defense by changing the indictment, were
insufficient to warrant the granting of a new trial in the
“interests of justice” under Fed. R. Crim. P. 33.2
1
The panel concluded that “harmless error” existed because:
(i) little risk of injustice would result from not vacating the
denial of the motion for reconsideration and remanding the case
to the successor judge, who had been assigned the case, for a
decision on the government’s reconsideration motion; (ii) a
decision on the merits of the trial judge’s granting of the
defendants’ motion for new trial would serve justice in other
cases because it would clarify an unclear area of the law and
admonish district judges as to the importance of taking no
discretionary actions after recusal; and (iii) there is little
risk of undermining the public’s confidence in the judicial
process. O’Keefe I, 128 F.3d 892-93.
2
The O’Keefe I panel also found that two of the additional
findings were inherently flawed: (i) the government’s delay in
disclosing the FBI 302 reports of investigative interviews of the
two key prosecution witnesses, Donaldson and Moore, containing
4
II.
The government contends that the defendants’ appeal cannot
raise any “substantial issue of law” with respect to government
misconduct and perjury by prosecution witnesses because any such
purported issue is foreclosed by the law of the case doctrine.
The government argues that United States v. O’Keefe, 128 F.3d 885
(5th Cir. 1997) (O’Keefe I), decided upon rules of law that will
continue to govern the same issues during the defendants’ appeal
of right from final judgment. However, whether the law of the
case doctrine precludes the direct appeal panel from considering
such issues is itself a threshold “substantial issue of law.”
The question of the applicability of the law of the case doctrine
is substantial, not only because it is “close” and of more
substance than “non-frivolous” questions, but also because it
involves novel issues concerning the recusal of judges, harmless
error, and the effects of government interlocutory appeals in
criminal cases upon defendants’ fundamental rights to appeal and
to have a full and fair day in court.
As defined by the Supreme Court, the doctrine of the law of
the case “‘posits that when a court decides upon a rule of law,
that decision should continue to govern the same issues in
subsequent stages of the same case.’ This rule of practice
promotes the finality and efficiency of the judicial process by
‘protecting against the agitation of settled issues.’”
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816
(1988) (citing Arizona v. California, 460 U.S. 605, 618 (1983)
exculpatory evidence, did not violate Brady by impairing
defendants’ ability to cross-examine those witnesses, based on
the panel’s review of the record and the absence of any
affirmative finding (other than the conclusion) by the district
judge to that effect, O’Keefe I, 128 F.3d at 898-99; and (ii)
even if the prosecution attempted to mislead the defense by
redrafting of the indictment, the defense had too much knowledge
of the underlying facts to be misled. Id. at 895-96, 899.
5
and 1B J. Moore, J. Lucas, & T. Currier, Moore’s Federal Practice
¶ 0.404[1], at 118 (2d ed. 1984)).
The law of the case doctrine attaches in interlocutory
appeals only upon matters that have actually been decided. As to
decisions upon rules of law, the interlocutory appeal establishes
the law of the case. Royal Ins. Co. v. Quinn-L Capital Corp., 3
F.3d 877, 881 (5th Cir. 1993). Factual determinations in an
interlocutory appeal will generally not establish the law of the
case. Id. See 18 Moore’s Federal Practice § 134.20 (3d ed. 1998)
(“Unlike the doctrine of claim preclusion, the law of the case
doctrine does not apply to issues or claims that were not
actually decided; for this reason, failure to raise an issue on
interlocutory appeal should not operate to preclude the issue on
a later appeal from a final judgment, even if other issues were
raised by the party or an opponent in a permitted interlocutory
appeal.”).
The law of the case doctrine applies to an issue that has
actually been decided, not to statements made by the court in
passing, or stated as possible alternatives, or dictum. 18
Moore’s Federal Practice §§ 134.20[3], 134.21[2] (3d. ed. 1998)
(citing, e.g., Royal Ins. Co. v. Quinn-L Capital Corp., 3 F.3d at
880; Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller,
957 F.2d 1575, 1578 (11th Cir.), cert. denied, 506 U.S. 981
(1992)).
When the law of the case doctrine is applied by a court to
its own prior decisions, it is properly characterized as
discretionary in nature. 18 Moore’s Federal Practice § 134.21[1]
(3d ed. 1998). The doctrine “‘merely expresses the practice of
courts generally to refuse to reopen what has been decided, not a
limit to their power.’” Christianson v. Colt Industries, 486 U.S.
at 817 (quoting Messenger v. Anderson, 225 U.S. 436, 444
(1912)(Holmes, J.)(citations omitted)). “A court has the power
to revisit prior decisions of its own or of a coordinate court in
6
any circumstance, although as a rule courts should be loathe to
do so in the absence of extraordinary circumstances such as where
the initial decision was ‘clearly erroneous and would work a
manifest injustice.’” Id. (quoting Anderson v. California, 460
U.S. at 618, n.8 (citation omitted)).
In this Circuit, we have described the nature of the law of
the case doctrine and its exceptions in similar fashion:
While application of the doctrine is discretionary,
this court will generally refuse to revisit a prior
panel’s decision unless “(i) the evidence on a
subsequent trial was substantially different, (ii)
controlling authority has since made a contrary
decision of the law applicable to such issues, or (iii)
the decision was clearly erroneous and would work a
manifest injustice.”
Free v. Abbott Laboratories, No. 97-31341, 1999 WL 926, at *2
(5th Cir. Jan. 19, 1999) (quoting North Miss. Comms., Inc. v.
Jones, 951 F.2d 652, 656 (5th Cir. 1992)). See United States v.
Becerra, 155 F.3d 740, 752-753 (5th Cir. 1998).
Applying these principles, it is evident that the
defendants’ appeal and the government’s assertion of the law of
the case bar raise substantial questions of law with respect to
whether the O’Keefe I panel committed clear error that will work
manifest injustice by (a) holding that a trial judge’s legal
error in knowingly performing a discretionary judicial act in
violation of his own order disqualifying himself under 28 U.S.C.
§ 455(a) can be “harmless error” that does not have to be
vacated; and (b) failing to hold that both of the trial judge’s
rulings, i.e., his grant of the defendant’s new trial motion and
his denial of the government’s motion for reconsideration, were
discretionary acts performed in violation of his disqualification
order, that the rulings must be vacated, and that the case must
be remanded for further proceedings before a different judge.
7
(a)
The trial judge disqualified himself in accordance with 28
U.S.C. § 455(a), which provides that “[a]ny justice, judge, or
magistrate of the United States shall disqualify himself in any
proceeding in which his impartiality might reasonably be
questioned.” The O’Keefe I panel correctly held that “[o]nce a
judge recuses himself from a case, the judge may take no action
other than the ministerial acts necessary to transfer the case to
another judge, even when recusal is improvidently decided.”
O’Keefe I, 128 F.3d at 891 (citing “Doddy v. Oxy USA Inc., 101
F.3d 448, 457 (5th Cir. 1996)(holding that judge erred in
vacating recusal order after recusing herself); Moody v. Simmons,
858 F.2d 137, 143 (3rd Cir. 1988)(stating that judge may only
perform the ‘housekeeping’ duties necessary to transfer a case to
another judge after recusing himself from a proceeding)”).
There is a substantial question, however, whether O’Keefe I
clearly erred in holding that a trial judge’s discretionary
rulings in a criminal case in violation of his own order of
disqualification can be harmless and may not require his
infringing orders to be vacated. Before O’Keefe I, this court
and other federal courts of appeals had held consistently in both
civil and criminal cases that such an error requires the
appellate court to vacate the offending discretionary order and
to remand the case for reassignment to a different judge.3 See,
3
Doddy v. Oxy USA, Inc., 101 F.3d 448 (5th Cir. 1996),
although problematic, is not inconsistent with the general rule.
The trial judge, who owned Exxon stock, recused herself when
informed that a corporate party had become affiliated with that
company. Later the same day, she vacated the order of recusal
and took evidence on the relationship of the two corporations.
The evidence indicated that the two corporations had formed a
joint venture but that neither Exxon nor the third entity venture
could be affected by the litigation. The trial judge referred
the question of recusal to the chief judge of the district, who
determined that there was no basis for recusal. Under these
8
e.g., Moody v. Simmons, 858 F.2d 137, 143 (3d Cir. 1988)(“Once a
judge has disqualified himself, he or she may enter no further
orders in the case. His power is limited to performing
ministerial duties . * * * A judge who was obliged to recuse
acts outside his jurisdiction [or] commits a clear error of law.
. . . Mandamus is thus the proper remedy to vacate the orders of
a judge who acted when he should have recused.”); Stringer v.
United States, 233 F.2d 947, 948 (9th Cir. 1956)(“[O]nce having
disqualified himself for cause, on his own motion, it was
incurable error for the district judge to resume full control and
try the case.”); United States v. Feldman, 983 F.2d 144 (9th Cir.
1992)(A judge cannot order that his recusal from a proceeding be
limited to certain aspects or issues of the case. An order
denying complete recusal must be vacated and the case reassigned
to a different judge.); McCuin v. Texas Power and Light Co., 714
circumstances, although technically the trial judge performed a
discretionary act in vacating her own recusal, the chief judge
could and would have vacated the recusal in any event, and her
act had no effect upon the parties or the litigation. The trial
judge did not deliberately violate her own recusal order by fully
stepping back into role of trial judge and taking further
discretionary action in disregard or violation of her initial
recusal. The trial judge’s infraction of § 455, if any, was the
kind of “harmless error committed by busy judges who
inadvertently overlook a disqualifying circumstance” that the
Supreme Court indicated “there is surely room for.” Liljeberg v.
Health Services Acquisition Corp., 486 U.S. 847, 862 (1988).
Moreover, under 28 U.S.C. § 455(f), added in 1988, after
Liljeberg, the trial judge in situations like Doddy v. Oxy USA,
Inc., supra, may be able to avoid disqualifying herself
altogether. Section 455(f) provides that if a judge, after
substantial judicial time has been devoted to a matter, discovers
or is apprised that she has a financial interest in a party
(other than an interest that could be substantially affected by
the outcome), disqualification is not required if the judge
divests herself of that financial interest.
In re Continental Airlines Corp., 901 F.2d 1259, 1263 (5th
Cir. 1990) is distinguishable because it did not involve a
judge’s deliberate violation of his own disqualification order.
9
F.2d 1255, 1260-61 (5th Cir. 1983)(A recused judge’s order
reassigning case to a particular judge must be vacated and the
case remanded according to local practice, or in the absence
thereof, by the senior active judge.); El Fenix de Puerto Rico v.
The M/Y Johanny, 36 F.3d 136, 141 (1st Cir. 1994)(“As a general
rule, a trial judge who has recused himself should take no other
action in the case except the necessary ministerial acts to have
the case transferred to another judge. . . . [A] recused judge’s
power is limited to performing [such] ministerial duties . . .”
(internal quotation marks and citations omitted)). In fact, in
O’Keefe I the government relied on these same authorities in
urging the appellate panel to vacate the trial judge’s denial of
the motion for reconsideration as void for having been entered
after the judge disqualified himself. Brief for Appellant,
United States v. O’Keefe, No. 96-31181, at 70-74. Consequently,
it is at least a “close” question of “more substance than would
be necessary to a finding that it was not frivolous,” whether
O’Keefe I clearly erred in departing from the precedents of this
and all other federal circuits which hold that a trial judge’s
deliberate performance of a discretionary judicial act in
violation of his own order disqualifying himself must be vacated.
There is also a substantial question as to whether O’Keefe I
clearly erred in concluding that Liljeberg v. Health Services
Acquisition Corp., 486 U.S. 847 (1988) created a new, special
harmless error test for determining whether “any order that a
judge issues after the judge has, or should have, recused himself
must be vacated.” O’Keefe I, 128 F.3d at 892. It may be cogently
argued that Liljeberg does not create a special harmless error
test at all; does not expressly or impliedly require, by calling
attention to three appropriate equitable considerations for
courts to use in determining whether a party should be relieved
of a final civil judgment under Fed.R.Civ.P. 60(b)(6) based on a
judge’s § 455(a) violation, that the same considerations be
10
applied outside of the Rule 60(b) motion context; and certainly
does not require or contemplate that Rule 60(b)(6), or those
three equitable considerations, be applied in criminal cases.
In Liljeberg, a party in a civil case filed a motion under
Fed.R.Civ.P. 60(b)(6) to be relieved from a final civil judgment
on the ground that the trial judge, during the trial and
rendition of the judgment, was, unbeknownst to the movant, a
fiduciary of a university having a substantial financial interest
in the outcome of the case. On the movant’s second appeal to
this court, 796 F.2d 796 (5th Cir. 1986); see also 747 F.2d 1463
(5th Cir. 1984) (unpublished table decision), we granted the
motion to vacate the judgment and remanded the case for a new
trial or other further proceedings.
On certiorari, the Supreme Court affirmed. Liljeberg v.
Health Services Acquisition Corp., 486 U.S. 847 (1988). The
Court addressed the violation of § 455 by the trial judge and the
relief of the judgment debtor from the judgment under
Fed.R.Civ.P. 60(b)(6) in separate parts of its opinion.
First, the Supreme Court held that a violation of 28 U.S.C.
§ 455(a), which requires a judge to disqualify himself in any
proceeding in which his impartiality might reasonably be
questioned, occurs when a reasonable person, knowing the relevant
facts, would expect that a judge knew of the circumstances
creating an appearance of partiality, notwithstanding a finding
that the judge was not actually conscious of those circumstances.
Moreover, in a proper case, § 455(a) applies retroactively, as
well as prospectively, and requires a judge, upon discovering
that he performed a discretionary judicial act under
circumstances that would cause an objective observer to question
his impartiality, to rectify an oversight and to take steps
necessary to maintain public confidence in the impartiality of
the judiciary. For example, such a judge may be required to
disqualify himself retrospectively and to vacate his
11
discretionary judicial action in violation of § 455(a). Here,
because there was ample basis in the record to support the
findings of the courts below that an objective observer would
have questioned the original trial judge’s impartially, his
performance of discretionary judicial acts at that time was a
plain violation of the terms of § 455(a), even though his failure
to disqualify himself was the product of a temporary lapse of
memory. Id. at 859-61.
Second, the Court held that under the circumstances of the
case the proper remedy for the § 455(a) violation was to grant
the Rule 60(b)(6) motion of the judgment debtor to be relieved of
the judgment and granted a new trial. I paraphrase most of the
pertinent paragraph of the Court’s opinion. While § 455 itself
does not authorize the reopening of closed civil litigation,
Fed.R.Civ.P. 60(b) provides a remedy whereby, in an appropriate
case, a party may be relieved of a final judgment. In
particular, rule 60(b)(6) grants federal courts authority to
relieve a party from a final civil judgment “upon such terms as
are just.” The Court had “previously noted that it provides
courts authority ‘adequate to enable them to vacate judgments
whenever such action is appropriate to accomplish justice,’
Klapprott v. United States, 335 U.S. 601, 614-15 (1949)[civil
immigration case], while also cautioning that it should only be
applied in ‘extraordinary circumstances,’ Ackermann v. United
States, 340 U.S. 193 (1950)[same].” Liljeberg, 486 U.S. at 863-
64. After setting forth these precepts, the Court concluded that
pertinent paragraph as follows:
Rule 60(b)(6) relief is accordingly neither
categorically available nor categorically unavailable
for all §455(a) violations. We conclude that in
determining whether a judgment should be vacated [under
Rule 60(b)(6)] for a violation of §455, it is
appropriate to consider the risk of injustice to the
parties in the particular case, the risk that the
denial of relief will produce injustice in other cases,
12
and the risk of undermining the public’s confidence in
the judicial process.
Id. at 864 (emphasis added).
It may be forcefully argued that, when the underlined
sentence above is read in the context of the paragraph in which
it occurs and of the opinion as a whole, the reader should
understand that the sentence is intended to apply in the context
of deciding a motion to relieve a party of a civil judgment under
Rule 60(b)(6) and that the bracketed words, “under Rule
60(b)(6),” are implicitly included in the sentence. If so, it is
evident that underlined sentence merely sets forth some equitable
principles that the Court deemed appropriate for consideration in
determining whether a § 455(a) violation creates “extraordinary
circumstances” warranting the relief of a party from a final
civil judgment under Fed.R.Civ.P. 60(b)(6). It is well
recognized that a motion for relief from a civil judgment under
Rule 60(b) is addressed to the discretion of the court, e.g.,
Hand v. United States, 441 F.2d 529 (5th Cir. 1970)(tax refund
case); Simons v. Gorsuch, 715 F.2d 1248 (7th Cir. 1983); Clarke
v. Burkle, 570 F.2d 824 (8th Cir. 1978), and that equitable
principles may be taken into account by a court in the exercise
of its discretion under Rule 60(b). Bros Inc. v. W.E. Grace Mfg.
Co., 320 F.2d 594 (5th Cir. 1963); MIF Realty L.P. v. Rochester
Assocs., 92 F.3d 752, 756 (8th Cir. 1996).4
In reviewing this court of appeals’ decision in Liljeberg to
4
See 11 Charles Alan Wright et al., Federal Practice and
Procedure § 2857, at 254-57 (2d ed. 1995). “A number of cases
say that discretion ordinarily should incline toward granting
rather than denying relief, especially if no intervening rights
have attached in reliance upon the judgment and no actual
injustice will ensue. The policy of the law to favor a hearing
of a litigant’s claim on the merits must be balanced against the
desire to achieve finality in litigation.” Id. at 255-57.
(footnotes omitted).
13
grant the Rule 60(b)(6) motion to vacate the judgment on the
basis of the trial judge’s § 455(a) violation, the Supreme Court
used several traditional equitable considerations, as well as the
three it had said were appropriate, to determine whether
relieving the movant from the final civil judgment under Rule
60(b)(6) was the proper remedy for the trial judge’s violation.
Of the equitable factors customarily used by courts in deciding
60(b) motions, the Supreme Court considered whether there had
been a timely request for relief, whether a showing of special
hardship by reason of reliance on the original judgment had been
made, or whether the delay in seeking relief was to any extent
due to the fault of the Rule 60(b) movant. Liljeberg, 486 U.S.
at 868-69; See 11 Wright et al., Federal Practice and Procedure §
2857, at 256-62 (and cases cited therein); § 2866, at 381-92 (and
cases cited therein). The Supreme Court did not suggest that
there had been an error in the court of appeal’s decision that
needed to be reviewed under a harmless error rule. The words
“harmless” and “error” do not appear in this part of the opinion.
Liljeberg, 486 U.S. at 868-70. In approving of the court of
appeal’s decision, the Supreme Court called it “an eminently
sound and wise disposition of this case,” id. at 870, not one
that was free of “harmless error.” Thus, the Court’s opinion as
a whole clearly indicates that the three factors it mentioned as
“appropriate to consider” were not meant to be used as a
freestanding “harmless error” rule, but as a non-exclusive list
of equitable considerations, which courts may use along with
other established equitable precepts, to guide sound and wise
exercise of judicial discretion in deciding Rule 60(b)(6) motions
based on § 455 violations.
Consequently, there is at least a “substantial” or “close”
question whether O’Keefe I was clearly mistaken in reading the
three appropriate considerations mentioned in Liljeberg in
isolation as creating a new special freestanding “harmless error”
14
rule, not confined to the context of Rule 60(b)(6) motions, but
applicable to all civil and criminal cases involving § 455
violations. Such a broad, discretionary “harmless error” rule
would be radically different in language, focus and purpose from
the harmless error rules of Fed. R. Civ. P. 61 and Fed. R. Crim.
P. 52(a).5 Furthermore, there is a substantial question whether
O’Keefe I was clearly in error because it applied the equitable
5
In general terms, harmless error analysis usually calls
upon a reviewing court, either trial or appellate, to set aside a
verdict or to disturb a judgment when an error affects the
substantial rights of the unsuccessful party, and to disregard
any error which does not, leaving the judgment undisturbed. See
Fed.R.Civ.P. 61 and Fed.R.Crim.P. 52(a). It is doubtful that any
verbal formulation can avoid the subjectivity that necessarily
inheres in determining whether an error has affected the
substantial right of a party. 11 Charles Alan Wright et al.,
Federal Practice and Procedure § 2883, at 445-46 (2d ed. 1995).
Two of the best short attempts have been made by Judge Traynor
and Justice Rutledge. See Roger Traynor, The Riddle of Harmless
Error 35 (1970)(“[U]nless the appellate court believes it highly
probable that the error did not affect the judgment, it should
reverse.”); and Kotteakos v. United States, 328 U.S. 750, 760
(1946) (Rutledge, J.) (“Do not be technical, where technicality
does not really hurt the party whose rights in the trial and in
its outcome the technicality affects.”), cited in 11 Wright et
al., Federal Practice and Procedure § 2883, at 445-47. Thus, a
harmless error determination is concerned mainly with whether an
error has affected the outcome of a case to the substantial
disadvantage of the losing party.
On the other hand, exercising discretion in deciding whether
to relieve a party from a final civil judgment under Rule
60(b)(6) because of a judge’s § 455(a) violation does not involve
a determination of whether the violation affected the outcome of
the case. Instead, it involves the consideration of a more
complex constellation of factors, including the impact that
denying or granting relief will have upon the values of justice
for both parties, the deterrence of judicial misconduct, the
appearance of justice and the integrity of the courts.
Consequently, the considerations mentioned in Liljeberg, i.e.,
risks of injustice to the parties, injustice in other cases, and
the undermining of confidence in the courts, are pertinent and
useful to the exercise of judicial discretion under Rule 60(b)(6)
and § 455, but they are not particularly relevant or helpful to a
harmless error determination.
15
factors in the underscored sentence, not as a harmless error
rule, but as a talisman giving it the extraordinary power and
discretion to skip over affirming or vacating the trial judge’s
ruling on the motion to reconsider to review on the merits the
trial judge’s granting of a new trial.6
Although the Supreme Court’s Liljeberg opinion refers to
harmless error in passing at one point, it may be argued that it
is highly doubtful that the court intended to establish a new or
special harmless error rule for all cases involving §455
violations. At the end of Part III, in which the Court analyzed
§ 455 and concluded that the trial judge in Liljeberg plainly
violated the statute, the Court added:
A conclusion that a statutory violation occurred
does not, however, end our inquiry. As in other areas
of the law, there is surely room for harmless error
6
The harmless error rule calls upon a reviewing court to
(1) disregard a harmless error, viz., one that does not really
hurt the complaining party or affect the outcome of the judgment
or order complained of, and (2) leave undisturbed, i.e., to
affirm, an order or judgment affected only by harmless error. See
11 Wright et al., Federal Practice and Procedure § 2883; 12
Moore’s Federal Practice § 61.02 (3d ed. 1998). O’Keefe I used
the equitable factors to take the first step in applying a
harmless error rule by disregarding the trial judge’s error of
law in violating his own disqualification order, but O’Keefe I
did not follow through with the second step required by a
harmless error rule, i.e., affirming the trial judge’s ruling on
the motion for reconsideration and remanding for further
proceedings. Instead, O’Keefe I left the second part of its
“so-called” harmless error operation undone, skipped over the
usual step of affirming an order or judgment free of harmful
error, to a review of the merits of the trial judge’s ruling on
the motion for a new trial. Based on that merits review O’Keefe
I vacated the new trial order and, sub silentio, vacated the
trial judge’s ruling on the motion to reconsider that it had
earlier found to be affirmable as harmless error, and denied the
defendant’s motion for new trial on the merits and with
prejudice. Thus, the convolutions and non sequiturs involved in
O’Keefe I’s application of what it mischaracterized as a harmless
error rule underscore that there is a substantial question as to
whether that panel’s decision was clearly erroneous.
16
committed by busy judges who inadvertently overlook a
disqualifying circumstance.[FN9] There need not be a
draconian remedy for every violation of § 455(a). It
would be equally wrong, however, to adopt an absolute
prohibition against any relief in cases involving
forgetful judges.
Liljeberg, 486 U.S. at 862. In footnote 9 the Court stated that
“[l]arge, multidistrict class actions, for example, often present
judges with unique difficulties in monitoring any potential
interest they may have in litigation.” Id. at 862 n.9. In this
connection the Court cited Union Carbide Corp. v. U.S. Cutting
Service, Inc. 782 F.2d 710, 714 (7th Cir. 1986); In re Cement and
Concrete Antitrust Litigation, 515 F. Supp. 1076, 1080 (D. Ariz.
1981), large class actions in which the trial judges discovered
for the first time, well into the litigation, that each of their
spouses owned a relatively small amount of securities in a member
of the class. These cases, however, hinged upon potential
§455(b)(4)(financial conflict of interests) violations rather
than §455(a)(appearance of partiality) infractions. Thus, the
Court’s vague references to “room for error committed by busy
judges who inadvertently overlook a disqualifying circumstance,”
and the lack of need for “a draconian remedy for every violation
of §455(a),” or the wrong of an “absolute prohibition against any
relief in cases involving forgetful judges,” do not appear to
formulate a rule at all. Rather, the comments appear to be a
precautionary dictum that, in enforcing § 455(a)&(b), inadvertent
violations under extenuating circumstances, as opposed to sheer
forgetfulness, may sometimes be disregarded as harmless.
The Court’s Part III dictum on harmless error occurs
separately and apart from its discussion in Part IV of relieving
a party from a final civil judgment under Rule 60(b)(6), in
appropriate equitable and extraordinary circumstances, as a
remedy for a judge’s §455(a)violation. Part III makes but one
mention of Rule 60(b)(6), and it is revealing. In footnote 9,
17
after observing that large, multidistrict class actions often
present judges with unique difficulties in monitoring any
potential interest they may have in the litigation, the Court
said, “[o]f course, notwithstanding the size or complexity of the
litigation, judges remain under a duty to stay informed of any
personal or fiduciary financial interest they may have in cases
over which they preside. See 28 U.S.C. § 455(c). The complexity
of determining the conflict, however, may have a bearing on the
Rule 60(b)(6) extraordinary circumstance analysis.” Id. at 862
n.9. The Court did not refer to the Rule 60(b)(6) extraordinary
circumstances analysis as a harmless error rule. And the Court
did not anywhere suggest that the equitable considerations
involved in the Rule 60(b)(6) extraordinary circumstances
analysis discussed in Part IV of the opinion may be used in other
contexts as a harmless rule. The Court does not regard the two
conceptions as fungible; and a very strong argument can be made
that courts of appeals should not either.
Finally, there is a substantial question as to whether it
was clearly erroneous for O’Keefe I to conclude that the Supreme
Court in Liljeberg, a civil action, held that Fed.R.Civ.P.
60(b)(6) motions, or the equitable principles appropriate for use
in deciding them, may be used to relieve a party of a final
judgment or order in a criminal case. Federal Rules of Civil
Procedure 1 and 81 provide that those rules shall apply to all
suits of a civil nature, whether cognizable as cases at law or in
equity except those specifically excepted. Federal Rule of Civil
Procedure 60(b), therefore, simply does not provide for relief
from a judgment in a criminal case. See United States v. Mosavi,
138 F.3d 1365, 1366 (11th Cir. 1998). A criminal conviction can
be attacked by motion under 28 USC § 2255, but only for errors of
constitutional dimension. See 13A Wright et al., Federal Practice
and Procedure, § 3550 (1998 Supp.).
18
(b)
Under § 455(a), grounds for a judge to disqualify himself
arise whenever his impartiality might reasonably be questioned;
and, even if the judge was not aware of the circumstances
creating an appearance of partiality when it occurred, once he
realizes that the impropriety existed he is called upon to take
steps necessary to maintain public confidence in the impartiality
of the judiciary; in a proper case, the judge may be obliged to
disqualify himself retroactively and to vacate any orders entered
during the time that a reasonable person would harbor doubts
about the judge’s impartiality. Liljeberg, 486 U.S. at 860-61;
Health Services Acquisition Corp. v. Liljeberg, 796 F.2d 796, 802
(5th Cir. 1986); Moody v. Simmons, 858 F.2d 137 (3d Cir. 1988);
Hall v. Small Business Administration, 695 F.2d 175, 179 (5th
Cir. 1983).
In the present case, the trial judge’s 82 page written
memorandum and order contains both his order granting defendants’
motion for a new trial and his order recusing himself from the
case. The memorandum and order clearly indicates that the trial
judge formed the intention to grant the new trial and to recuse
himself either during the oral argument on the motion for new
trial or at some time before the written order was prepared and
filed. The trial judge’s written memorandum and order states:
“Although based on the extensive briefs filed by all the parties
I was prepared to deny the defendants’ motion for a new trial,
following oral argument I am now persuaded that a new trial is
the proper remedy under the circumstances.” Memorandum and Order
at 80 (footnote omitted). In its Conclusion, the memorandum and
order provides:
The defendants have been successful in obtaining a
new trial. As I said before in addressing the perjury
of Charles Donaldson, prior to oral argument I was not
inclined to grant this remedy. I believed that the
jury, which performed its duty so diligently, had been
19
apprised of all relevant information required to reach
a verdict. At oral argument it became apparent that
such was not the case.
Because of the sensitive nature of the court’s
inquiry concerning conduct of government counsel, the
court’s personal participation and questioning of
counsel in connection with that inquiry, and the
findings of the court resulting from that inquiry, the
court feels compelled to recuse itself from further
handling of this matter in accordance with 28 U.S.C. §
455.
Accordingly,
IT IS ORDERED that the defendants’ motion for new
trial is GRANTED. (Signature omitted).
Id. at 81-82.
Thus, it is evident that the trial judge’s inquiry of a
“sensitive nature” into the conduct of the government attorneys
at the oral argument on the new trial motion, the judge’s
“personal participation and questioning of counsel” during that
inquiry, and the judge’s findings resulting from the inquiry,
caused the trial judge to decide that he could no longer maintain
impartiality, that he should recuse himself, and that a new trial
should be granted.
Consequently, the defendants’ appeal raises a substantial
question as to whether O’Keefe I clearly erred in finding or
assuming that the trial judge’s decision and order on the new
trial motion distinctly preceded the grounds for his recusal
under § 455. The judge’s written memorandum and order indicates
that he probably decided that he should disqualify himself before
the order was prepared in final form or certainly before it was
actually signed and filed. Consequently, the possible influence
of the judge’s reasons for disqualification upon his decision of
the new trial motion is clearly evident. As a practical matter,
the trial judge’s new trial and recusal rulings cannot be
hermetically separated either temporally or in substance.
Moreover, because of the judge’s recounting of the events
and his mental impressions in his written memorandum and order,
20
it would appear to a reasonable person that the judge lost his
ability to maintain his impartiality prior to his granting of the
new trial, and that the judge realized that his impartiality at
the time he granted the new trial might reasonably be questioned.
Accordingly, this is a proper case for the retroactive
application of § 455. The trial judge had a duty to make his
disqualification retroactive so as to precede his granting of the
new trial and to vacate both his new trial and denial of
reconsideration order. Accordingly, there is a substantial
question whether O’Keefe I clearly erred in not recognizing the
pervasiveness of the trial judge’s violations of § 455, in not
vacating both his granting of the new trial and his denial of the
motion to reconsider, and in not remanding the case to a
different judge to consider the defendants’ motion for a new
trial anew, shorn of the disqualified judge’s vacated orders.
(c)
Consequently, the defendants’ appeal raises substantial
questions as to whether O’Keefe I clearly erred in reaching the
merits of the trial judge’s granting of the new trial and in
deciding upon the rules of law it adopted in that merits review.
Thus, it would clearly cause manifest injustice to the defendants
to preclude them, on the basis of a flawed law of the case
application, from presenting in their appeal all of their
substantial arguments that constitutional errors and defects in
the trial affected their substantial rights and the judgment of
the jury.
There is a substantial argument that O’Keefe I’s clearly
erroneous interlocutory appellate intervention into the merits of
this criminal case during a government appeal would, under
improper application of a law of the case bar, make for truncated
presentation of the defendants’ issues in their own appeal and
risk a failure to have a complete appellate determination of the
21
true nature and seriousness of alleged errors based on all of the
evidence and a full and fair opportunity for argument by the
parties. Consequently, manifest injustice will result if the
defendants are denied a full consideration of their
constitutional claims and a full vindication of their
constitutional rights on direct appeal.
II.
If the direct appeal panel decides that it is not bound by
O’Keefe I under the law of the case doctrine, the defendants’
appeal raises substantial questions of law or fact which, are,
additionally, so integral to the merits of the convictions, on
all counts for which imprisonment has been imposed, that an
appellate ruling for the defendants on any of those substantial
questions would be likely to require a reversal of the conviction
or a new trial. 18 U.S.C. § 3143(b)(2); United States v. Valera-
Elizondo, 761 F.2d 1020 (5th Cir. 1985).
The primary substantial question of law raised for appeal is
whether the government obtained the defendants’ convictions
through use of perjury and other false evidence, known to be such
by the government’s representatives, that the government
knowingly allowed to go uncorrected during the jury trial in
which it appeared.
A principal element of the prosecution theory was that the
defendants, under the leadership of Michael O’Keefe, Sr., caused
a domestic insurer, Physicians National Risk Retention Group
(PNRRG), which they managed, to enter a sham reinsurance contract
with a foreign insurer, Builders and Contractors Insurance (BCI),
managed by Charles Donaldson, who later became a key prosecution
witness. One crucial issue in the case was whether the
defendants had foreknowledge that Donaldson had no authority to
enter the contract for BCI from its owners or directors. An FBI
agent’s report of her interview of Donaldson, after he agreed to
22
cooperate in the investigation of the defendants, related that
Donaldson said that Michael O’Keefe, Sr., had “suggested [to
Donaldson] that BCI’s shareholders meeting minutes be altered [by
Donaldson] to make it appear that Donaldson had authority to
enter into the PNRRG/BCI contract.” Donaldson FBI 302 Report,
quoted in O’Keefe I, 128 F.3d at 888. The government’s attorneys
placed this same statement in the factual basis for Donaldson’s
guilty plea in another district court to one count of mail fraud
in exchange for his testimony against the defendants. Id. In
that guilty plea proceeding the FBI agent testified that the
factual basis accurately reflected what Donaldson had said in his
interview and Donaldson testified that the factual basis
accurately set forth what transpired between him and Mr. O’Keefe.
Trial Transcript (Cross Examination of Charles Donaldson), March
12, 1996, at 110.
During Donaldson’s direct testimony in the present case, the
prosecuting attorneys did not ask Donaldson any questions about
his alteration of the BCI shareholders’ meeting minutes.
Immediately prior to Donaldson’s direct examination by the
government’s attorneys, the prosecution handed a copy of the FBI
302 report to the defense. During cross-examination, Donaldson
at first denied that he had ever said that O’Keefe had suggested
that Donaldson should alter the BCI minutes. Later during the
cross-examination, however, Donaldson testified that he had told
the FBI agent that O’Keefe suggested that he alter the minutes
and that it was a false statement. Still later on cross,
Donaldson testified that during his guilty plea proceeding in
Baton Rouge, the FBI agent had taken the stand and, in giving the
factual basis for his plea, repeated the false statement that
Michael O’Keefe, Sr., had acted with Donaldson to alter the BCI
minutes. Donaldson also testified in the present case that the
FBI agent’s testimony at his guilty plea proceeding was correct.
Trial Transcript (Cross Examination of Charles Donaldson) at 110.
23
A conviction obtained through use of false evidence, known
to be such by representatives of the government, must fall under
the Fourteenth Amendment. Napue v. Illinois, 360 U.S. 264, 269
(1959) (citing Mooney v. Holohan, 294 U.S. 103 (1935)). See
Miller v. Pate, 386 U.S. 1 (1967)(false “blood” on shorts).
“‘[T]he same result obtains when the State, although not
soliciting false evidence, allows it to go uncorrected when it
appears.’” Giglio v. United States, 405 U.S. 150, 154 (1972)
(quoting Napue, 360 U.S. at 279); United States v. Agurs, 427
U.S. 97, 103 (1976). “‘It is of no consequence that the
falsehood bore on the witness’ credibility rather than directly
upon defendant’s guilt. A lie is a lie, no matter what its
subject, and, if it is in anyway relevant to the case, the
district attorney has the responsibility and the duty to correct
what he knows to be false and elicit the truth. * * * That the
district attorney’s silence was not the result of guile or a
desire to prejudice matters little, for its impact was the same,
preventing, as it did, a trial that could in any real sense be
termed fair.’” Napue, 360 U.S. at 269-70 (quoting People v.
Savvides, 136 N.E.2d 853, 854-55 (1956)).
A new trial is required if the false testimony could in any
reasonable likelihood have affected the judgment of the jury.
United States v. Bagley, 473 U.S. 667, 678-79 (1985); Giglio v.
United States, 405 U.S. 150, 154 (1972) (quoting Napue, 360 U.S.
at 271); Kirkpatrick v. Whitley, 992 F.2d 491 (5th Cir. 1993).
The fact that the jury was apprised of other grounds for
believing that the government witness may have had an interest in
testifying against the defendant does not turn what was otherwise
a tainted trial into a fair one. Napue, 360 U.S. at 270.
The government’s attorneys, in a sidebar conference during
the trial, at oral argument on the motion for a new trial, and in
affidavits filed with the motion for reconsideration, took the
position that Donaldson had never told the FBI that O’Keefe urged
24
him to alter the BCI minutes, that the FBI agent who interviewed
Donaldson mistakenly thought Donaldson had accused O’Keefe of
complicity in the alteration of the BCI minutes, that the FBI
agent attributed that incorrect statement to Donaldson in the
written FBI 302 report of the interview, that the government
attorneys in New Orleans became aware of the false statement in
the 302 prior to Donaldson’s arraignment, and that the government
attorneys in New Orleans tried unsuccessfully to correct the
false statement before a government attorney in Baton Rouge
placed it in the factual basis for Donaldson’s guilty plea in the
federal court for Middle District of Louisiana. See Trial
Court’s Memorandum and Order (Aug. 15, 1996), at 64-70. Thus,
the government was aware before trial that through its own fault
Donaldson’s 302 FBI statement and guilty plea factual basis
contained a false statement accusing O’Keefe of actively
participating in the falsification of the BCI minutes in order to
facilitate the BCI/PNRRG reinsurance contract; moreover, the
government knowingly did not correct the inaccuracies in the FBI
302 Report prior to making the report available to the defense
before Donaldson’s testimony. The government was also aware
before trial that Donaldson’s guilty plea factual basis was of
record and accessible to the defendants. Thus, there is a
substantial argument that the government knew before trial that
there was a reasonable likelihood that the defense would ask
Donaldson about the false statement before the jury but that the
defense would not know that the false statement originated with
the FBI agent’s mistake, and not with what Donaldson actually
told the FBI agent. Nevertheless, the government did not inform
the court or the defense prior to trial or Donaldson’s testimony
of the true nature of the false statement or its source. The
government did not ask Donaldson any questions about the false
statement or attempt to correct the 302 or the factual basis
during Donaldson’s direct testimony. The government did not call
25
the FBI agent or any of its attorneys to explain what was false
and elicit the truth. The government was aware that Donaldson
perjured himself several times during his cross examination by
testifying that he had made the statement to the FBI agent,
although he later said he was lying at the time, and although he
also testified several times that he did not make the false
statement to the FBI agent. Nevertheless, the government
knowingly did not ever in open court before the jury correct or
explain Donaldson’s perjurious testimony or the false statement
in the 302 or the factual basis.
Applying the constitutional principles set forth by the
Supreme Court in the cases cited above, it is clear that
defendants’ appeal raises a substantial question whether their
convictions and sentences must fall under the Fourteenth
Amendment because (1) they were obtained through the use of
perjured testimony and false evidence, known to be such by
representatives of the government, Napue v. Illinois, 360 U.S. at
269; Miller v. Pate, 386 U.S. 1, 7 (1967); Faulder v. Johnson, 81
F.3d 515, 519 (5th Cir.), cert. denied, 117 S. Ct. 487 (1996) ;
Pyles v. Johnson, 136 F.3d 986, 996 (5th Cir. 1998); (2) although
the government may not have directly solicited the perjury or
false evidence, it was responsible for the creation of the false
statement, knew or should have known that the jury would be
exposed to the false statement wrongfully indicating that O’Keefe
participated in altering the BCI minutes, and knowingly allowed
it to go uncorrected when it appeared before the jury, Giglio v.
United States, 405 U.S. at 154; Napue, 360 U.S. at 279; United
States v. Agurs, 427 U.S. 97 (1976); Faulder v. Johnson, 81 F.3d
at 519; Pyles v. Johnson, 136 F.3d at 996; and (3) the perjury
and false evidence could in any reasonable likelihood have
affected the judgment of the jury. United States v. Bagley, 473
U.S. at 678-79; Giglio, 405 U.S. at 154; Napue, 360 U.S. at 271;
Kirkpatrick v. Whitley, 992 F.2d 491, 497 (5th Cir. 1993). See 2
26
Wayne R. LaFave & Jerold H. Israel, Criminal Procedure §19.5, at
534 (1984) (“This obligation [of the prosecutor to disclose]
requires that it not suborn perjury, not use evidence known to be
false, and not allow known false testimony of its witnesses to
stand uncorrected.”).
Consequently, there is a substantial question as to whether
O’Keefe I clearly erred by applying incorrect principles of law
to determine whether the government violated its duty to correct
perjury and false evidence and, if so, whether the government’s
violations were material. In O’Keefe I, the court stated that:
[1] Along with other circuits, we have limited
material lies to those that occur as a part of the
prosecution’s case. The prosecution has a duty only to
refrain from knowingly presenting perjured testimony
and from knowingly failing to disclose that testimony
used to convict a defendant was false. Thus, when the
defense elicits the alleged perjury on cross-
examination, no material falsehood has occurred because
the government has not itself knowingly presented false
testimony. [Id. at 894 (citations and internal
quotations omitted)].
[2] [W]e do not find that there is a reasonable
probability that the jury would have reached a
different outcome even had it been fully aware of all
of the alleged inconsistencies and falsehoods
in Donaldson’s testimony. As a result, the falsehoods
were not material and no Napue deprivation of due
process occurred. [Id. at 898].
It is arguable that the first O’Keefe I statement is clearly
erroneous because it is contrary to the decisions of the Supreme
Court and to previous panel opinions of this Circuit following
the Supreme Court cases. In Napue and Giglio, both of which
involved perjury by a prosecution witness during his cross-
examination by a defense attorney, see Napue, 360 U.S. at 267-68
& n.2; Giglio, 405 U.S. at 765, the Court held that a conviction
obtained through use of false evidence, known to be such by
representatives of the prosecuting government, must fall as a
27
violation of due process; and that “‘[t]he same result obtains
when the State, although not soliciting false evidence, allows it
to go uncorrected when it appears.’”. Giglio, 405 U.S. at 766
(quoting Napue, 360 U.S. at 269). Prior to O’Keefe I this
Circuit has consistently followed Napue and Giglio. See Pyles v.
Johnson, 136 F.3d 986, 996 (5th Cir. 1998)(“A state denies a
criminal defendant due process when it knowingly uses perjured
testimony at trial or allows untrue testimony to go
uncorrected.”)(quoting Faulder, 81 F.3d at 519 (citing Napue)).
See Cordova v. Collins, 953 F.2d 167, 171 (5th Cir. 1992).
The second O’Keefe I statement is also clearly erroneous.
The Supreme Court has held that when a Napue violation occurs
“[a] new trial is required if ‘the false testimony could...in any
reasonable likelihood have affected the judgment of the jury.”
Giglio, supra, at 766, quoting Napue, supra, at 271. Prior to
O’Keefe I this Circuit’s panels adhered to the same materiality
standard. Kirkpatrick v. Whitley, 992 F.2d at 497 (“[I]f the
prosecutor has knowingly used perjured testimony or false
evidence, the standard is considerably less onerous [than for
Brady violations]: the conviction ‘must be set aside if there is
any reasonable likelihood that the false testimony could have
affected the jury’s verdict . . . .’” [citing Bagley, 473 U.S. at
679 n.9 (citing Napue)]); Moody v. Johnson, 139 F.3d 477, 484
(5th Cir. 1998)(“It is well settled that the State is not
permitted to present false evidence or allow the presentation of
false evidence to go uncorrected. [citing Giglio, Napue and
Mooney v. Holohan]. However, if false evidence is presented by
the prosecution at trial, a new trial is warranted only if the
false testimony could have, in any reasonable likelihood,
affected the jury’s determination.”).
One panel of this court may not overrule the decision of a
prior panel of this court (absent an intervening decision to the
contrary by the Supreme Court or the en banc court, of which
28
there are none). Hogue v. Johnson, 131 F.3d 466, 491 (5th Cir.
1997); Barber v. Johnson, 145 F.3d 234 (5th Cir. 1998).
Consequently, the defendants’ appeal raises a substantial
question as to whether an application of the correct controlling
principles of law set forth in Napue, Giglio, Pyles, Faulder,
Moody and Kirkpatrick by the court on direct appeal should
require a reversal of the convictions and a new trial because the
government, although not directly soliciting false evidence in
court, allowed it to go uncorrected when it appeared in court.
It is also cogently arguable that the record on direct appeal
will show that the government’s violation of due process and the
resulting harm to the substantial rights of the defendants were
far more grievous than that depicted by the O’Keefe I opinion
because (i) the government’s bad faith, fault or neglect created
the false statements in the FBI 302 report and Donaldson’s guilty
plea factual basis; (ii) the government took no steps to disclose
the falsehoods to the court or the defendants, although it became
aware of them before trial; (iii) the government was aware of the
risk that the false evidence would be referred to by Donaldson in
his testimony at trial before the jury; (iv) when this risk
became a reality the government took no steps before the jury to
fulfill its duty to correct what it knew to be false and elicit
the truth for the trier of the facts; (v) had the government
complied with its duty by correcting the false statements prior
to trial, the jury would not have received any of the very
incriminating false evidence that O’Keefe had personally
participated in altering the BCI minutes (including evidence that
Donaldson’s accusation against O’Keefe had been placed in an
official FBI 302 report and that an FBI agent had testified to
receiving such a statement from Donaldson in federal court); (vi)
had the government complied with its duty, after the false
statements were repeatedly mentioned during trial, to apprise the
jury of the true facts, (that the statement was false, that
29
Donaldson had never said O’Keefe participated in the fabrication
of the BCI minutes, that when Donaldson testified that he had
made that statement to the FBI he committed perjury, that the FBI
agent was responsible for the creation of the false statement,
and that the government knowingly had allowed the trial to go
forward without disclosing the false statements to the court or
the defendants), the jury might well have concluded that the
government had either fabricated evidence or had been highly
negligent in its investigation or preparation of the FBI report
and the factual basis to which the FBI agent testified to in
another federal court. There is a substantial question whether
the truth about the government’s creation and perpetuation of the
false statement likely would have affected the jury by shaking
its confidence in the government’s whole investigation and
prosecution. Also, the jury might well have concluded that
Donaldson was willing to say anything to help the government’s
case and to damage the defense, and to commit perjury to cover up
the government’s mistakes. Accordingly, the jury might well have
concluded that Donaldson’s testimony was thoroughly lacking in
credibility or reliability. Thus, there is a substantial
question whether there is a reasonable likelihood that the false
evidence and testimony affected the judgment of the jury so that
a new trial is required.
III.
The defendants make an additional argument which also
appears to raise a substantial question of law or fact. The
defendants contend that they have newly discovered evidence that
prior to Donaldson’s guilty plea, the government allowed $45,000
which did not belong to Donaldson to be deposited to his credit
in his lawyer’s trust account and withdrawn after Donaldson’s
guilty plea and used by Donaldson as if it were his own money to
pay part of his restitution obligation. The defendants argue
30
that by these transfers, the government gave Donaldson an
additional substantial benefit which the government knowingly did
not disclose in its plea agreement with Donaldson. In the plea
agreement, the government and Donaldson represented that the only
benefits he would receive for his plea, cooperation and testimony
against other persons were a 3-level decrease in his criminal
offense level and a possible recommendation of a downward
departure in sentencing. On direct examination at defendants’
trial Donaldson identified his written plea agreement and
testified that it was the agreement he had signed with the
government. The government elicited from Donaldson the specific
benefits he had been granted or promised by the government. The
prosecuting attorney did not ask Donaldson, and he did not
volunteer any information, about the $45,000 that the government
allowed him to use to pay part of his restitution obligation.
The defendants contend that the government’s introduction of
Donaldson’s testimony about the plea agreement and the agreement
itself, which was introduced as an exhibit in the defendants’
trial, contained false statements under oath by Donaldson and
government representatives that misled the jury as to the quality
and credibility of Donaldson’s testimony, and could have in
reasonable likelihood affected the judgment of the jury. The
defendants contend that the government therefore violated the
Fourteenth Amendment under both Napue and Brady by presenting
knowingly uncorrected perjury and false evidence at trial and
failing to disclose impeachment evidence to defendants.
In this regard, a further substantial question of law or
fact is raised as to whether O’Keefe I’s clearly erroneous
intervention into the merits of the case prevented the successor
trial judge from allowing the defendants to present substantive
evidence in support of their motion for a new trial.
My pretermitting discussion of other questions raised by
defendants’ appeal does not indicate any opinion as to whether
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any of these is a substantial question, which if decided
favorably to the defendants, would be likely to result in
reversal.
Conclusion
Accordingly, I respectfully dissent from the majority’s
granting of the government’s motion to stay the district court’s
order releasing the defendants on bail pending the government’s
appeal from that order. I believe the defendants’ appeal will
raise substantial questions of law and that they should therefore
be allowed to remain on bail pending their own appeal. However,
I do not intend to intimate how the substantial questions raised
by defendants’ appeal and the government’s argument based on the
law of the case doctrine should be decided. It would be
inappropriate to express an opinion on the merits of these
questions prior to full briefing and presentation to this court
on direct appeal. United States v. Clark, 917 F.2d 177, 181 (5th
Cir. 1990). The present panel’s function is merely to decide
whether to stay the district court’s decision to grant bail
pending the government’s appeal from the district court’s order
releasing the defendants on bail pending their own appeal.
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