United States v. Kelly, Paul ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-2226
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
PAUL KELLY,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 CR 497—James B. Moran, Judge.
____________
ARGUED JANUARY 13, 2003—DECIDED JULY 24, 2003
____________
Before POSNER, KANNE, and DIANE P. WOOD, Circuit
Judges.
DIANE P. WOOD, Circuit Judge. Paul Kelly pleaded guilty
to conspiracy to import cocaine and heroin into the United
States in violation of 21 U.S.C. § 963. The plea agreement
provided that he would cooperate fully with the investiga-
tion of his associates, and in return the government would
recommend a sentence of two-thirds of the low end of the
applicable sentencing guidelines, pursuant to U.S. Sentenc-
ing Guidelines (U.S.S.G.) § 5K1.1 and 18 U.S.C. § 3553(e).
When Kelly refused to accompany authorities on a trip to
identify the residence of a possible co-conspirator, however,
the government asserted that Kelly had breached the
agreement. The district court, without making a formal
2 No. 02-2226
determination that Kelly’s actions amounted to a substan-
tial breach, declared the plea agreement to be null and void
and reinstated a plea of not guilty. Kelly then quickly en-
tered a second plea of guilty when the district court sug-
gested that “all” of his previous statements would be ad-
missible against him at trial. Kelly now seeks specific per-
formance of the original plea agreement, challenging both
the district court’s failure to make a formal determination
of the materiality of his alleged breach of the first agree-
ment and also properly to ascertain the voluntariness of his
second plea. Having considered his arguments, we conclude
that the district court did not err in either respect, and we
therefore affirm its judgment.
I
In late 1998 and early 1999, Paul Kelly initiated a drug
smuggling operation using young women and babies as
mules. Heroin and cocaine were smuggled into the United
States either in cans of baby formula or in packages in-
serted into the women’s vaginas. Using this scheme, Kelly
organized at least seven different trips to Panama to obtain
drugs. This continued until May 1999, when U.S. Customs
stopped one of Kelly’s female drug couriers and discovered
the drugs.
Through the cooperation of the intercepted courier, Kelly
was arrested and charged with a single count of conspiracy
to import illegal substances in violation of 21 U.S.C. § 963.
Kelly pleaded guilty pursuant to a plea agreement. This
agreement detailed Kelly’s involvement in each of the seven
trips, including Kelly’s recruitment of female couriers, his
purchase of plane tickets for them, his payment of their
other travel expenses, his provision of transportation to the
airport, his setting up the meetings between the couriers
and his drug source in Panama, and his taking possession
of drugs upon their return to the United States. In at least
No. 02-2226 3
one case, the agreement continued, Kelly traveled along
with one of his couriers. In addition, the agreement pro-
vided that Kelly would “fully and truthfully cooperate with
the government in any matter” in which he was called upon
to cooperate. In return, the government agreed to “make
known to the sentencing judge the extent of defendant’s co-
operation, and, assuming the defendant’s full and truthful
cooperation, shall move the Court, pursuant to Sentencing
Guideline 5K1.1 and 18 U.S.C. § 3553(e), to depart from the
applicable . . . range” and to recommend a sentence of “two-
thirds of the low end of the applicable sentencing guideline
range.”
At sentencing, the government informed the district court
that it would not move for a downward departure because
Kelly had failed to cooperate fully pursuant to the plea
agreement. The alleged failure of cooperation stemmed from
Kelly’s unwillingness to travel with government agents to
a Chicago neighborhood to locate the residence of a possible
co-conspirator known only as “Debbie.” Kelly’s outright
refusal to take part in this expedition led to the following
exchange:
THE COURT: Well, the problem is that I can’t down-
wardly depart unless the government moves, and the
government isn’t prepared to move. It would certainly
seem to me that it would make life simpler for every-
body, particularly Mr. Kelly, if he just went out and did
the best he could.
MR. LEVINE (for the United States): That’s all we are
asking.
MR. BEAL (for the defense): Perhaps I should confer
with Mr. Kelly.
[Discussion off the record.]
MR. BEAL: Your Honor, our position has not changed.
I’m sorry.
4 No. 02-2226
THE COURT: Well, if that’s the case, then the govern-
ment isn’t going to move for a downward departure. If
the government doesn’t move for a downward depar-
ture, then that voids the plea agreement. We reinstate
a plea of not guilty and go back to square one, although
all the statements that you have made, Mr. Kelly, they
don’t get expunged.
MR. KELLY: Okay.
THE COURT: The government can still use those.
MR. KELLY: Okay, I understand that.
At the conclusion of this exchange, Kelly entered a blind
plea of guilty based on the facts stipulated in the original
plea agreement. The district court then conducted a Rule 11
colloquy and sentenced Kelly to 192 months in prison. Kelly
now appeals.
II
Kelly advances two claims on appeal, both of which arise
from the district court’s comments we just quoted. First,
Kelly contends that the district court violated his right to
due process by failing to enter a formal finding that Kelly’s
refusal to participate in the ride-along amounted to a sub-
stantial breach of the plea agreement, in direct contraven-
tion of United States v. Lezine, 166 F.3d 895 (7th Cir. 1999).
Second, Kelly argues that the district court’s suggestion
near the end of the colloquy that “all the statements” made
by Kelly would be admissible at trial rendered involuntary
his decision to enter a second guilty plea.
A
We turn first to the question whether the district court
erred by failing to make a formal finding that Kelly’s re-
No. 02-2226 5
fusal to go on the ride-along with federal investigators
placed him in substantial breach of the plea agreement.
This is a question of law subject to de novo review. See
Lezine, 166 F.3d at 900.
Kelly’s principal argument is that the district court’s
failure to make a formal determination that he had sub-
stantially breached the plea agreement is directly contrary
to our holding in Lezine. In that case, the district court
made no formal determination that the defendant’s lack of
cooperation amounted to a substantial breach of a plea
agreement that was nearly identical to the one entered into
by Kelly. We held that due process requires that the dis-
trict court hold an evidentiary hearing and make a formal
finding of breach prior to voiding a plea agreement. Id. at
901; see also United States v. Ataya, 864 F.2d 1324, 1330
(7th Cir. 1988); United States v. Verrusio, 803 F.2d 885,
888-89 (7th Cir. 1986).
Our task here is made easier by the government’s conces-
sion that the district court indeed did not meet its ob-
ligations under Lezine, and so we can jump immediately to
the question whether that failure amounts to reversible
error. On this point, we agree with the government that
Kelly’s refusal to take part in the ride-along amounted to
substantial breach of the agreement, rendering harmless
any error the court may have made in this respect.
Plea agreements are treated like contracts, see United
States v. Ingram, 979 F.2d 1179, 1184 (7th Cir. 1992);
Ataya, 864 F.2d at 1329, and so our determination of breach
must be made “in light of the parties’ reasonable expec-
tations” upon entering the agreement, see United States v.
Schilling, 142 F.3d 388, 395 (7th Cir. 1998); Ataya, 864 F.2d
at 1330. In general, a defendant’s substantial breach of an
unambiguous term of a plea agreement frees the gov-
ernment to rescind the deal. See United States v. Ramunno,
6 No. 02-2226
133 F.3d 476, 484 (7th Cir. 1998); United States v.
Hauptman, 111 F.3d 48, 51 (7th Cir. 1997). In addition, in
order to pull out of a plea agreement, the government need
only prove substantial breach on the part of the defendant
by a preponderance of the evidence. See United States v.
Frazier, 213 F.3d 409, 419 (7th Cir. 2000); Ataya, 864 F.2d
at 1337.
With these principles in mind, we turn to the question
whether the lack of a finding on the substantiality of Kelly’s
breach amounted to harmless error. In our view, the agree-
ment Kelly signed contemplated Kelly’s cooperation in
whatever way the government reasonably requested, in-
cluding assistance in determining the whereabouts of co-
conspirators. Indeed, both parties should have been able to
anticipate ex ante that this would be one of the principal
forms that cooperation would take. See Ataya, 864 F.2d at
1331 (noting that the defendant’s cooperation in an investi-
gation related to his counterfeiting operations was undoubt-
edly a part of the government’s “reasonable expectations” in
entering the agreement). This is particularly the case here,
since Kelly does not contend that the government’s request
was made in bad faith, or that Kelly’s participation would
endanger Kelly or his family. Indeed, Kelly’s only re-
sponse—both at the sentencing hearing and on this ap-
peal—is that he was not in substantial breach of the plea
agreement because he would not have been able to identify
the house of the mysterious “Debbie,” rendering his partici-
pation pointless. We are unmoved by this argument. The
standard for assessing the reasonable expectations of the
parties is an objective one. See United States v. Fields, 766
F.2d 1161, 1168 (7th Cir. 1985), and so Kelly’s subjective
beliefs about the utility of his cooperation is simply not
relevant to our inquiry. Instead, we find that Kelly’s par-
ticipation in a ride-along to help finger potential co-conspir-
ators was consistent with the reasonable expectations of the
parties in entering into the plea agreement. Kelly’s outright
No. 02-2226 7
refusal to do so was thus a substantial breach of that agree-
ment.
Our conclusion is bolstered by two final considerations.
First, while several of our sister circuits have held that the
government’s breach of a plea agreement is never subject to
harmless-error analysis, see, e.g., United States v. Mon-
dragon, 228 F.3d 978, 981 (9th Cir. 2000); United States v.
Nolan-Cooper, 155 F.3d 221, 236 (3d Cir. 1998); United
States v. Clark, 55 F.3d 9, 13-14 (1st Cir. 1995), we have
found that a judicial failure to make formal findings of sub-
stantial breach can be harmless where there was sufficient
evidence before the district court to make such a finding.
Lezine, 166 F.3d at 903-04. Second, it is well-settled that in
the absence of a plea agreement the government has broad
discretion to withhold a § 5K1.1 motion. See Wade v. United
States, 504 U.S. 181, 185-86 (1992). Thus, while the district
court jumped over too many steps in declaring that a down-
ward departure would not be available unless the govern-
ment so moved, its failure to make a formal finding to that
effect probably resulted from its sense that it was obvious
to all concerned that an outright refusal to perform conduct
requested by the government pursuant to a cooperation
agreement amounted to a substantial breach of that agree-
ment.
We conclude that Kelly breached his plea agreement with
the government through his refusal to take part in the ride-
along and, accordingly, that the failure of the district court
to hold an evidentiary hearing and to enter a formal finding
to that effect was harmless error.
B
That leads us to Kelly’s attempt to withdraw his second
guilty plea as involuntarily entered. Under normal circum-
stances, we review a district court’s determination that a
8 No. 02-2226
guilty plea was knowing and voluntary by asking “whether,
looking at the total circumstances surrounding the plea, the
defendant was informed of his or her rights.” United States
v. Mitchell, 58 F.3d 1221, 1224 (7th Cir. 1995) (quoting
United States v. DeCicco, 899 F.2d 1531, 1534 (7th Cir.
1990)). In this case, however, the government argues that
the more demanding plain error standard should apply
because Kelly did not move to withdraw the plea of guilty
while he was still before the district court. See United
States v. Gilliam, 255 F.3d 428, 433 (7th Cir. 2001); United
States v. Driver, 242 F.3d 767, 769 (7th Cir. 2001). (It might
have added that it is unclear that a mistake in this context
about what evidence would be admissible at a later trial
might not give rise to reversible error in any event, by anal-
ogy to Ohler v. United States, 529 U.S. 753 (2000), and Luce
v. United States, 469 U.S. 38 (1984). But it did not, and we
are content to resolve the case as both parties have pre-
sented it and save that argument for another day.)
Our review of the record satisfies us that Kelly did not
raise the knowingness and voluntariness of his second plea
before the district court and so has forfeited the issue. The
voiding of the initial plea agreement and the entry of a sec-
ond guilty plea took place on March 25, 2002. Kelly said
nothing about withdrawing his plea at the sentencing
hearing, which took place on May 2, 2002, and was the first
opportunity he had in open court to voice an objection. (He
certainly could have filed something in writing before that,
but he did not.) At the hearing, the district court was care-
ful to ask defense counsel, “Are there objections to [the
PSR] other than those which have already been set forth?”
Defense counsel responded no, and the entire hearing was
then devoted to a line-by-line analysis of the factual section
of the PSR and, in particular, to a dispute about drug
amounts. Later, on May 10, 2002, Kelly filed with the dis-
trict court along with his notice of appeal a long, pro se mo-
tion requesting a copy of the Rule 11 hearing. His motion
No. 02-2226 9
was accompanied by a document titled, “Defendant’s Pro Se
Tentative Sentencing Position Paper.” This document out-
lines a variety of claims, including Kelly’s version of the of-
fense, as well as analysis relating to acceptance of responsi-
bility, base offense level, guidelines enhancements, criminal
history computation, mental and emotional health, entrap-
ment, coercion, duress, diminished capacity, post-offense re-
habilitation, and convergence of factors. One very small
part of this filing references the plea agreement, but there
Kelly simply asserts his belief that the court is not bound
by specific drug amounts or levels of departure contained
therein. There is no discussion of the knowingness or volun-
tariness of the subsequent plea, and no hint of a request
actually to withdraw the plea.
Given Kelly’s failure to raise the argument below, the
only factor that cuts against our finding forfeiture is that
Kelly appears to have had trouble with his defense counsel
during this critical period. The May 10 motion and position
paper specifically states that Kelly is requesting a copy of
the Rule 11 proceeding because his repeated efforts to ob-
tain those documents from trial counsel have proven un-
availing. Kelly might therefore have argued that his forfei-
ture resulted from incompetent counsel. See, e.g., United
States v. Jeffries, 265 F.3d 556, 558-59 (7th Cir. 2001). But
Kelly has wisely refrained from making any such argument
in his brief here, perhaps in response to the well-estab-
lished principle that the trial record is normally insufficient
for an evaluation of effective assistance claims. See gener-
ally Massaro v. United States, ___ U.S. ___, 123 S.Ct. 1690(2003). That leaves us with a forfeited claim, which we eval-
uate under the plain error standard of review set forth in
United States v. Olano, 507 U.S. 725 (1993). Kelly can
prevail on this claim only if he can show that (1) an error
has occurred, (2) it was “plain,” (3) it affected his substan-
tial rights, and (4) it seriously affected the fairness, integ-
rity, or public reputation of the proceedings. See id. at 736-
10 No. 02-2226
37; see also Johnson v. United States, 520 U.S. 461, 466-67
(1997).
Turning to the merits of Kelly’s claim, we begin with the
well-established principles governing the withdrawal of
guilty pleas. Because a defendant waives many constitu-
tional rights by pleading guilty, due process requires that
a guilty plea must be entered knowingly and voluntarily,
with the advice of competent counsel. See Brady v. United
States, 397 U.S. 742, 748 (1970); United States v. Wagner,
996 F.2d 906, 912 (7th Cir. 1993). “The standard was and
remains whether the plea represents a voluntary and intel-
ligent choice among the alternative courses of action open
to the defendant.” North Carolina v. Alford, 400 U.S. 25, 31
(1970). Here, Kelly points to two ways in which his second
guilty plea did not meet this standard. The first is the fail-
ure of the district court to hold an evidentiary hearing or to
make a formal finding of breach as to the original plea
agreement. The second is the possible miscommunication by
the district court concerning the admissibility of the
statements Kelly had previously made pursuant to that
agreement.
As to the first ground, we fail to see how the lack of an
evidentiary hearing and formal determination of breach as
to the original plea agreement impugns the voluntariness
of the subsequent plea. As the government points out, Kelly
could easily have entered a conditional guilty plea at that
time, reserving the right to contest on appeal the district
court’s allegedly erroneous treatment of the first plea agree-
ment and then, if the appeal was successful, to withdraw
the second plea. See FED. R. CRIM. P. 11(a)(2); United States
v. Cain, 155 F.3d 840, 842-43 (7th Cir. 1998). The history of
the first plea may throw light on why Kelly was willing to
enter a blind plea, but it is not relevant to the question
whether Kelly knowingly and intelligently chose this
course. The district court’s second Rule 11 colloquy, con-
ducted with reference to the second plea, was designed to
No. 02-2226 11
elicit any reservations Kelly might have had at that later
point in time. We are particularly reluctant to allow a de-
fendant to withdraw a guilty plea where, as here, the for-
mal inquiries required by Rule 11 have been followed. See
United States v. Coonce, 961 F.2d 1268, 1276 (7th Cir.
1992). In short, the fact that Kelly or his counsel may have
labored under a misapprehension about the court’s obliga-
tions in finding a substantial breach of the first plea agree-
ment is not enough to invalidate his subsequent plea.
That leaves the possible misrepresentation by the district
court of the admissibility of Kelly’s past statements made
pursuant to the original plea agreement. Upon reinstating
Kelly’s plea of not guilty, the district court informed Kelly
that “all the statements that you have made, Mr. Kelly,
they don’t get expunged. . . . The government can still use
those.” Kelly argues that this statement by the district
court left the impression that all of his prior statements, in-
cluding those made as part of the plea agreement itself,
would be admissible against him at trial.
The district court’s assertion was only partially correct,
since any statements Kelly made in the plea agreement and
related discussions would have been inadmissible at trial.
See FED. R. CRIM. P. 11(e)(6); see also United States v.
Brumley, 217 F.3d 905, 909 (7th Cir. 2000); United States
v. Lloyd, 43 F.3d 1183, 1186 (8th Cir. 1994); United States
v. White, 617 F.2d 1131, 1134 (5th Cir. 1980). Only those
statements made either before or after the plea agreement
and formal negotiations would have been admissible
against Kelly at trial. This falls short of “all” of the state-
ments Kelly made to authorities in the months between his
arrest and his sentencing.
Even so, Kelly’s lawyer made no objection to the court’s
statement at the time of the colloquy we reproduced above,
or later during the second Rule 11 colloquy, and so once
again, our review is for plain error. United States v. Vonn,
12 No. 02-2226
535 U.S. 55, 59 (2002). In that light, we conclude that any
misstatement of the law the district court might have made
during its colloquy with Kelly does not entitle Kelly to fur-
ther proceedings. Kelly entered into the initial plea agree-
ment more than a year and a half prior to the sentencing
hearing. During the intervening period, he made numerous
statements to the government about the crimes for which he
was charged. As the government notes, many of these
statements were cumulative of statements that were made
in the actual plea agreement, particularly the extensive
details of the seven trips to Panama that Kelly provided in
his post-arrest interview. Kelly’s only plausible argument
on this score is that he considered the statements made in
connection with the plea agreement to be particularly
damning, perhaps because they were made to prosecutors,
in writing, and in a formal setting. But Kelly’s repeated
inculpatory statements over more than a year of coopera-
tion, which would have been admissible, made the district
court’s statement functionally accurate, even if not techni-
cally accurate, on this particular record. Kelly was aware of
these many meetings and his many statements, and that
alone would have led a rational person to think that an
immediate second plea was the only serious option.
Moreover, even if we were to agree with Kelly that the
court’s error occurred, and that it was “plain” or obvious, he
would still need to show that it affected his substantial
rights. In light of the overwhelming evidence of his guilt,
this is something he simply cannot do. As we said before, a
more precise articulation by the district court of the rele-
vant legal principles governing the admissibility of Kelly’s
past statements would not have altered his decision-making
calculus. As a result, whatever legal errors the district court
made in its overly general statement about the admissi-
bility of Kelly’s prior statements did not affect his substan-
tial rights and did not impugn the integrity of the pro-
No. 02-2226 13
ceedings as a whole. Under the plain error standard of
review that governs our analysis, Kelly cannot prevail.
III
We AFFIRM the judgment of the district court.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-24-03