United States v. McFall ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 07-10034
Plaintiff-Appellee,
v.  D.C. No.
CR 02-0468 MCE
MONTE D. MCFALL,
OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of California
Morrison C. England, District Judge, Presiding
Argued and Submitted
December 8, 2008—San Francisco, California
Filed March 9, 2009
Before: Mary M. Schroeder, A. Wallace Tashima, and
William A. Fletcher, Circuit Judges.
Opinion by Judge Tashima
2865
2868 UNITED STATES v. MCFALL
COUNSEL
Victor S. Haltom, Sacramento, California, for the defendant-
appellant.
Benjamin B. Wagner, Assistant United States Attorney, Sac-
ramento, California, for the plaintiff-appellee.
UNITED STATES v. MCFALL 2869
OPINION
TASHIMA, Circuit Judge:
Monte D. McFall (“McFall”), a former lobbyist and local
elected official, stands convicted of nine counts of attempted
extortion and conspiracy to commit extortion, 18 U.S.C.
§ 1951, six counts of honest services mail fraud, 18 U.S.C.
§§ 1341, 1346, and two counts of attempted witness tamper-
ing, 18 U.S.C. § 1512(b)(1), (3). He was sentenced to 121
months’ imprisonment and a $50,000 fine.
On appeal, McFall challenges the sufficiency of the evi-
dence supporting the attempted extortion (Counts 2 and 3)
and conspiracy to commit extortion (Count 4) convictions, the
jury instructions relating to the government’s “official right”
theory of attempted extortion (Count 11), and the district
court’s exclusion of exculpatory grand jury testimony on
Count 14.1 We have jurisdiction pursuant to 28 U.S.C. § 1291,
and we reverse these five convictions.
BACKGROUND
The charges against McFall concern corrupt profiteering
among a group of state and local officials in San Joaquin
County, California. The principal players are: Neat Allen
Sawyer (“Sawyer”), a former prosecutor in the San Joaquin
County District Attorney’s Office and, at the time of the
events at issue, the Chief Deputy Director of the Governor’s
Office of Criminal Justice Planning (“OCJP”), T. Baxter
Dunn (“Dunn”), former Sheriff of San Joaquin County, Lynn
1
In this opinion we address McFall’s contentions relating only to Counts
2, 3, 4, 11, and 14 of the final superseding indictment. McFall’s other con-
tentions are addressed in a separate, concurrently filed memorandum dis-
position in which we affirm McFall’s conviction on the remaining 12
counts. Accordingly, the facts relevant only to the other counts are omit-
ted.
2870 UNITED STATES v. MCFALL
Bedford (“Bedford”), former San Joaquin County supervisor,
and McFall, a lobbyist and former member of the Board of
Trustees of Water Reclamation District 17 (the reclamation
district responsible for maintenance of a portion of the levees
along the San Joaquin River).2
Dunn, Sawyer, and McFall worked in concert to support
Bedford’s candidacy for a county supervisor’s seat that had
become vacant in 2001. They raised money and solicited
political support on his behalf. Bedford was ultimately
appointed to the open seat. Although he had no official staff
position, McFall represented himself as Bedford’s proxy, and
the government introduced evidence that Bedford told others
that McFall spoke for him.
Shortly after Bedford’s appointment, Dunn, Sawyer, and
McFall formed two entities, MSD Ventures, Inc. (short for
“McFall, Sawyer, Dunn”) and SMTM Partners, LP, (short for
“Show me the Money”). The partners sought to further their
own private economic interests through the exercise of public
powers, and specifically through their ties to Bedford. The
government filed a final superseding indictment (the “indict-
ment”) against all four men on September 9, 2004. Bedford,
Sawyer, and Dunn all pleaded guilty between January 11-18,
2005, roughly two weeks before their joint trial was set to
begin. Sawyer and Dunn each pleaded to one count of honest
services mail fraud, 18 U.S.C. §§ 1341, 1346, and were sen-
tenced to serve six-month prison terms and six-months of
home confinement. Bedford pleaded guilty to one count of
making false statements in violation of 18 U.S.C. § 1001, and
2
Reclamation districts are special purpose local government entities,
organized under state law, responsible for constructing and maintaining
drains, canals, water gates, levees, and other irrigation works, as well as
assessing taxes on landholders within the district to carry out these proj-
ects. See generally CAL. WATER CODE § 50000 et seq. McFall was elected
a trustee of Water Reclamation District 17 in 1991, and held the position
until resigning in March 2002.
UNITED STATES v. MCFALL 2871
received six-months of home confinement and three years’
probation.
As a part of their plea agreements, Sawyer and Dunn both
“agree[d] to cooperate fully with the government with respect
to its investigations and prosecutions of public corruption in
the Eastern District of California and elsewhere.” Prosecutors
ultimately elected not to call either man as a witness at
McFall’s trial, despite their authority to do so pursuant to the
plea agreements. When McFall sought to call Sawyer, Bed-
ford, and Dunn as defense witnesses, each invoked his Fifth
Amendment right not to testify.
On March 8, 2005, a jury returned a verdict convicting
McFall of attempted extortion, conspiracy to commit extor-
tion, honest services mail fraud, and witness tampering. The
jury convicted McFall of seventeen of the twenty counts
charged in the indictment and acquitted him on three counts
of mail fraud. The district court sentenced him to 121 months’
imprisonment and a $50,000 fine — the maximum sentence
in the advisory Guidelines range. With respect to the counts
disposed of in this opinion, the relevant facts are as follows.
The Calpine Scheme (Counts 2, 3, and 4)
In 2001, Calpine Corporation (“Calpine”) and Sunlaw
Energy Corporation (“Sunlaw”) were competing to secure the
right to build a power plant at a site in the Port of Stockton.3
McFall and his partners (acting through their SMTM partner-
ship) entered into a consulting contract with Sunlaw under
which the partners stood to reap substantial financial rewards
if Sunlaw obtained the right to build at the Port of Stockton
site, and an even greater sum if the plant was actually built.
According to the evidence, McFall and his partners sought to
3
The Port of Stockton is an inland deep water port in Stockton, Califor-
nia, located on the San Joaquin River. Stockton is the San Joaquin County
seat.
2872 UNITED STATES v. MCFALL
undermine Calpine’s chances of prevailing at the Port of
Stockton by mounting political opposition to another pending
Calpine project in neighboring Alameda County.
Calpine was in the process of securing a permit from the
California Energy Commission (“CEC”) for its Alameda
County project. McFall warned Calpine representatives that if
they did not drop their bid for the Port of Stockton site, he
would use his political influence to create a “public outcry”
over the project, thereby complicating the permitting process.
After Calpine declined to withdraw its bid, McFall and his
partners conspired to pass a resolution through the San Joa-
quin County Board of Supervisors raising environmental,
health, and safety concerns about Calpine’s Alameda County
project. Dunn appeared at the meeting and denounced Cal-
pine’s project as a threat to public safety. Bedford sponsored
the resolution, and it passed 4-1. The resolution was then
transmitted to the CEC. The indictment charged that this con-
duct amounted to attempted extortion (Counts 2 and 3) and
conspiracy to commit extortion (Count 4) under color of offi-
cial right, in violation of the Hobbs Act.
The Golden State Developers Scheme (Count 11)
In 2001, McFall contacted an attorney that represented Gol-
den State Developers (“Golden State”) and invited him to a
fundraiser for Bedford. A few weeks after attending the event,
the attorney and another Golden State representative met with
Bedford and McFall at Bedford’s county office. The partici-
pants discussed Golden State’s pending development projects,
and Bedford indicated that McFall could help them with the
process of securing the necessary permits. Prosecutors intro-
duced evidence that McFall later communicated to Golden
State representatives that he could deliver Bedford’s vote in
favor of their development proposals if they paid McFall
between $50,000 and $100,000. The indictment charged that
this conduct amounted to attempted extortion under color of
official right in violation of the Hobbs Act.
UNITED STATES v. MCFALL 2873
The Digital Angel Corporation Scheme (Count 14)
In late 2001, the state OCJP awarded a $400,000 grant to
the Digital Angel Corporation (“Digital Angel”) to fund a
pilot project whereby the California Department of Correc-
tions would utilize the company’s electronic tracking devices.
In January 2002, Sawyer (then Chief Deputy Director of
OCJP) and McFall met with Robert Levy, a lobbyist for Digi-
tal Angel, in Sacramento to discuss potential collaboration.
Digital Angel was seeking additional funding from OCJP, and
Sawyer indicated that McFall could be of assistance.
A few weeks after the meeting, Levy received a draft mem-
orandum of understanding (“MOU”) from McFall’s daughter
proposing an agreement between Digital Angel’s parent com-
pany and the Stagecoach Corporation (an entity McFall cre-
ated and controlled). Under the proposed MOU, Digital Angel
would pay a $100,000 fee to a consultant that Stagecoach
would later name. Levy complained about the agreement to
Sawyer, who urged him to work with McFall and, according
to Levy, stated that OCJP funding would not materialize with-
out McFall’s help. Digital Angel did not agree to the terms of
the MOU and had no further dealings with McFall. The
indictment charged that McFall’s and Sawyer’s conduct
amounted to conspiracy to commit extortion under color of
official right in violation of the Hobbs Act.
Post-Trial Proceedings
McFall dismissed his trial counsel after the defense rested
its case, and delivered closing argument on his own behalf.
After his conviction, McFall retained new counsel, who
promptly filed a motion for a new trial pursuant to Federal
Rule of Criminal Procedure 33. The district court held a two-
day evidentiary hearing on the motion for a new trial, and
denied the motion on July 20, 2006. McFall timely appealed.
2874 UNITED STATES v. MCFALL
DISCUSSION
I. Sufficiency of the Evidence on Counts 2, 3, and 4
McFall contends that the evidence presented at trial is
insufficient to support his conviction on Counts 2, 3, and 4.4
In reviewing the sufficiency of the evidence on appeal, “the
relevant question is whether, after viewing the evidence in the
light most favorable to the prosecution, any rational trier of
fact could have found the essential elements of the crime
beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S.
307, 319 (1979). We review the district court’s interpretation
of the applicable statute, in this case the Hobbs Act, 18 U.S.C.
§ 1951, de novo. See United States v. Brannan, 898 F.2d 107,
109 (9th Cir. 1990).
[1] The Hobbs Act defines extortion as “the obtaining of
property from another, with his consent, induced by wrongful
use of actual or threatened force, violence, or fear, or under
color of official right.” 18 U.S.C. § 1951(b)(2). McFall was
charged under an “official right” theory of extortion. The gov-
ernment contended that he and his collaborators manufactured
political opposition to a pending Calpine project in order to
coerce the company into withdrawing its bid to build a power
plant at the Port of Stockton.5 According to the government,
McFall sought to “obtain”—a term the statute does not define
— Calpine’s property interest in bidding for the right to built
a power plant at the Port of Stockton for Sunlaw, his client.
4
McFall also challenges the jury instructions on Counts 2, 3, and 4. His
argument substantially tracks his sufficiency of the evidence contention,
and finding that contention meritorious, we do not reach the jury instruc-
tion question.
5
The Hobbs Act criminalizes two distinct modes of extortion. The first
relates to the obtaining of property from another, with his or her consent,
through the “wrongful use of actual or threatened force, violence, or fear,”
and the second relates to the obtaining of property “under color of official
right.” 18 U.S.C. § 1951(b)(2); see Evans v. United States, 504 U.S. 255,
261-62 (1992).
UNITED STATES v. MCFALL 2875
[2] We have stated that Hobbs Act extortion is a “larceny-
type offense,” which “does not occur when a victim is merely
forced to part with property.” United States v. Panaro, 266
F.3d 939, 943 (9th Cir. 2001). Instead, “there must be an
‘obtaining’: someone — either the extortioner or a third per-
son — must receive the property of which the victim is
deprived.” Id. In Scheidler v. National Organization for
Women, Inc., 537 U.S. 393, 397 (2003), the Supreme Court
reached the same conclusion, holding that anti-abortion pro-
testers who obstructed access to abortion clinics did not
obtain the clinics’ property within the meaning of the Hobbs
Act. The Court explained that the Hobbs Act’s obtaining ele-
ment requires a showing that a defendant received “something
of value” from the victim of the alleged extortion, and that the
“thing of value” can be exercised, transferred or sold. Thus,
conduct that “merely interfere[s] with or depriv[es] someone
of property” is not sufficient, standing alone, to constitute
Hobbs Act extortion. Id.6
McFall argues that the government did not prove — or
even allege — that he attempted to obtain Calpine’s property
within the meaning of the Hobbs Act. The indictment charged
McFall and his collaborators with “attempt[ing] to obtain
from Calpine Corporation a financial benefit not due any of
them, that is, its right to solicit business in San Joaquin
County, to bid on the construction of a power plant and to
construct a power plant at the Port of Stockton.” In essence,
McFall argues, the government charged him with employing
coercion to derail Calpine’s bid to build a power plant at the
Port of Stockton, thereby increasing the probability, at least
6
The Court noted that extortion, stripped of an obtaining requirement,
really amounts to the lesser crime of coercion, i.e., “the use of force or
threat of force to restrict another’s freedom of action.” Scheidler, 537 U.S.
at 405. Because Congress modeled the Hobbs Act on New York’s extor-
tion statute and the 19th Century Field Code, both of which contained the
lesser crime of coercion at the time of the act’s passage, the Court pre-
sumed that Congress did not intend to blur the extortion/coercion distinc-
tion. See id. at 403, 405-08.
2876 UNITED STATES v. MCFALL
theoretically, that Sunlaw would secure the right to build the
plant at the contested site.
[3] We agree that decreasing a competitor’s chance of win-
ning a contract, standing alone, does not amount to obtaining
a transferable asset for oneself (or one’s client). Neither Cal-
pine nor Sunlaw had a vested right to build at the contested
site, and there was no guarantee that either company would
secure such a right. The district court concluded that McFall’s
“improper attempt to secure a business advantage” satisfied
the Hobbs Act’s obtaining element, but this formulation fails
to account for Scheidler’s principal point: To violate the
Hobbs Act, an alleged extortionist must actually appropriate
(or attempt to appropriate) the victim’s property such that it
can be exercised, transferred or sold. Id. at 405. It is not
enough to gain some speculative benefit by hindering a com-
petitor.
Moreover, Schiedler made clear that the rule of lenity
applies to ambiguous applications of the Hobbs Act. Id. at
408-09; see also United States v. Enmons, 410 U.S. 396, 411
(1973). Thus, even if a coherent argument could be made that
attempting to thwart Calpine’s bid to build a plant at the Port
of Stockton amounted to an attempt to “obtain” an increased
probability of winning a right to build for Sunlaw, we must
resolve the ambiguity in favor of McFall. See McNally v.
United States, 483 U.S. 350, 359-60 (1987) (“[W]hen there
are two rational readings of a criminal statute, one harsher
than the other, we are to choose the harsher only when Con-
gress has spoken in clear and definite language.”).
The government stresses that Scheidler expressly left intact
a lower court decision assigning an expansive definition to the
term “property” as used in the act. See 537 U.S. at 402 n.6
(explaining that the holding does not disturb the Second Cir-
cuit’s decision in United States v. Tropiano, 418 F.2d 1069,
1076 (2d Cir. 1969), where the court “concluded that the
intangible right to solicit refuse collection accounts consti-
UNITED STATES v. MCFALL 2877
tuted property within the Hobbs Act definition”) (internal
quotation marks omitted). Tropiano, however, does not help
the government to satisfy the Hobbs Act’s obtaining element.
Even assuming that the intangible right to bid on a power
plant site constitutes property for Hobbs Act purposes, the
government must establish that McFall attempted to acquire
that property right such that he alone could sell, transfer, or
exercise it. Cf. United States v. Gotti, 459 F.3d 296, 323 (2d
Cir. 2006) (holding that Schiedler effected a general tighten-
ing of the Hobbs Act’s obtaining requirement, but did not
undermine Second Circuit precedent holding that intangible
property rights can qualify as “extortable property”).7 Even
assuming that the right to submit a bid is property within the
meaning of the Hobbs Act, McFall did not, and indeed could
not, attempt to exercise Calpine’s right to submit a bid.
Instead, according to the evidence introduced at trial, he
sought to increase Sunlaw’s odds of prevailing on its own bid
by restricting the activities of a competitor — conduct that
cannot amount to obtaining under Scheidler.
[4] Because the evidence did not establish, nor did the
indictment allege, that McFall obtained or attempted to obtain
any property or intangible right from Calpine, we conclude
7
In approving of Tropiano’s broad definition of extortable property, but
simultaneously imposing a stringent “obtaining requirement,” Schiedler
created considerable tension in the caselaw. For example, in United States
v. Zemek, 634 F.2d 1159, 1174 (9th Cir. 1980), we concluded that “[t]he
right to solicit business free from wrongful coercion is a protected prop-
erty right.” But could an extortionist ever “obtain” that right after
Schiedler? See Matthew T. Grady, Extortion May No Longer Mean Extor-
tion After Scheidler v. National Organization for Women, Inc., 81 N.D. L.
REV. 33, 61-62 (2005) (arguing that Scheidler effectively held that intangi-
ble rights are not property under the Hobbs Act, because such rights are
incapable of being obtained or captured); but see Gotti, 459 F.3d at 323
(“We therefore read [Scheidler] as leaving intact [Second Circuit] prece-
dent that intangible property rights can qualify as extortable property
under the Hobbs Act and as simply clarifying that before liability can
attach, the defendant must truly have obtained (or, in the case of attempted
extortion, sought to obtain) the property right in question.”).
2878 UNITED STATES v. MCFALL
that the evidence is insufficient to sustain a conviction under
Counts 2, 3, and 4, and reverse the conviction on those
counts.
II. Count 11 Jury Instruction
McFall argues that the district court’s jury instruction on
Count 11 omitted a necessary element of the offense. We
review de novo whether jury instructions accurately state the
elements of a statutory crime. United States v. Hicks, 217 F.3d
1038, 1045 (9th Cir. 2000).
McFall contends that the district court erred in failing to
instruct the jury that a finding of aiding and abetting Supervi-
sor Bedford, or conspiring with him, was necessary to convict
McFall of attempted extortion under claim of official right.
The district court gave the following instruction on Count 11:
[T]he defendant is charged with attempting to extort
Golden State Developers in connection with a proj-
ect in San Joaquin County in or about mid-August
2001. In order for the defendant to be found guilty
of that charge, the Government must prove each of
the following elements beyond a reasonable doubt.
First, that Lynn Bedford was a public official. Sec-
ond, that the defendant attempted to obtain property
in return for the taking or withholding of some offi-
cial action by Lynn Bedford. Third, that the defen-
dant attempted to obtain property to which he knew
he was not entitled. Fourth, commerce or the move-
ment of an article or commodity in commerce from
one state to another would have been affected in
some way. And fifth, the defendant did something
that was a substantial step toward committing the
crime of attempted extortion, with all of you agree-
ing as to what constituted a substantial step.
UNITED STATES v. MCFALL 2879
[5] As the Seventh Circuit has explained, “as a general mat-
ter . . . proceeding against private citizens on an ‘official
right’ theory is inappropriate under the literal and historical
meaning of the Hobbs Act, irrespective of the actual ‘control’
that citizen purports to maintain over governmental activity.”
United States v. McClain, 934 F.2d 822, 831 (7th Cir. 1991);
see also United States v. Freeman, 6 F.3d 586, 592 (9th Cir.
1993) (noting that the majority of Hobbs Act cases arising
under an “official right” theory involve prosecutions of
elected or appointed officials).8 Following the other circuits
that have addressed the issue, the Sixth Circuit has held that
“a private citizen who is not in the process of becoming a
public official may be convicted of Hobbs Act extortion under
a ‘color of official right’ theory only if that private citizen
either conspires with, or aids and abets, a public official in the
act of extortion.” United States v. Saadey, 393 F.3d 669, 675
(6th Cir. 2005); accord United States v. Tomblin, 46 F.3d
1369, 1382 (5th Cir. 1995) (noting that every decision
upholding a private citizen’s Hobbs Act conviction under an
official right theory “involved a public official in some past,
present, or future capacity receiving money”); United States
v.
Margiotta, 688 F.2d 108, 131 (2d Cir.1982) (affirming a pri-
vate citizen’s Hobbs Act conviction where the defendant
aided and abetted a public official’s extortion), overruled on
other grounds by McNally v. United States, 483 U.S. 350
(1987).
8
The standard is slightly different where a public employee purports to
have powers beyond the scope of his or her actual authority. See Freeman,
6 F.3d at 593 (“[W]e conclude that the Hobbs Act reaches those public
employees who may lack the actual power to bring about official action,
but create the reasonable impression that they do possess such power and
seek to exploit that impression to induce payments.”) (emphasis added).
McFall’s position as a Water Reclamation Board Trustee is not related to
the charges underlying Count 11, and the government does not contend
that McFall acted as a public employee in any of his dealings with Golden
State.
2880 UNITED STATES v. MCFALL
McFall himself made no claim of official right. He claimed
to have outsized political influence, but did not represent him-
self to Golden State representatives as a public official or as
an employee or agent of a public official. McFall’s criminal
act was, according to the government’s theory, his claim that
he had significant influence over Bedford, and could affect his
votes on matters of importance to Golden State if the compa-
ny’s representatives paid McFall — not Bedford — between
$50,000 and $100,000.
The Sixth Circuit’s decision in Saadey is closely on point.
In Saadey, the government charged a private citizen with
Hobbs Act extortion under an official right theory, alleging
that the defendant attempted to solicit money under the “pre-
tense” that the money would be used to bribe an uncharged
public official. Saadey, 393 F.3d at 675-76. The public offi-
cial had been acquitted on all charges of conspiracy, and the
government did not offer evidence indicating that he had
knowledge of the defendant’s scheme. Id. at 676. Because the
district court “refused to charge the jury on the issue of aiding
and abetting,” the Sixth Circuit determined that the defen-
dant’s Hobbs Act conviction could not stand. Id.
The government relies on our decision in Freeman, which
upheld an extortion under claim of official right conviction
against a legislative aide that represented himself as a proxy
for his boss, a state assemblywoman. See Freeman, 6 F.3d at
593. Freeman, however, cannot bear the weight the govern-
ment ascribes to it. The holding reaches only the conduct of
government officials that “actually exercise[ ] official pow-
ers,” even if those powers correspond to an un-elected and un-
appointed position. Id.
Alternatively, the government argues that the district
court’s articulation of the second element of the offense
encompasses aiding and abetting. The instruction described
that element as requiring a finding that McFall “attempted to
obtain property in return for the taking or withholding of
UNITED STATES v. MCFALL 2881
some official action by Lynn Bedford.” That articulation,
however, does not require a finding that Bedford himself
attempted to extort money from Golden State (which would
necessarily include a finding that Bedford himself possessed
the requisite criminal intent).9 See United States v. Sayetsitty,
107 F.3d 1405, 1412 (9th Cir. 1997) (“The elements neces-
sary to convict an individual under an aiding and abetting the-
ory are (1) that the accused had the specific intent to facilitate
the commission of a crime by another, (2) that the accused
had the requisite intent of the underlying substantive offense,
(3) that the accused assisted or participated in the commission
of the underlying substantive offense, and (4) that someone
committed the underlying substantive offense.”). In other
words, the jury could have interpreted the instruction as
requiring no more than a claim that Bedford would act in a
certain way if a bribe was paid to McFall, regardless of
whether Bedford himself intended to extort funds from Gol-
den State, or was even aware of McFall’s scheme.
The district court, in denying McFall’s motion for a new
trial, concluded that a private individual may be prosecuted
under an official right theory of Hobbs Act liability if the
individual “parades his control or influence over a public offi-
cial in alleged concert with such official.” The court’s state-
ment is supportable as far as it goes, but fails to acknowledge
that the jury was not instructed on the issue of whether
McFall actually acted “in concert” with Bedford to extort
funds from Golden State.
[6] We hold that the district court erred in failing to give
an aiding and abetting or conspiracy instruction to the jury on
Count 11. As instructed, the jury could have concluded that
McFall’s claims of influence over Bedford were gross exag-
9
The Supreme Court has held that a public official commits Hobbs Act
extortion when he “obtain[s] a payment to which he was not entitled,
knowing that the payment was made in return for official acts.” Evans,
504 U.S. at 268.
2882 UNITED STATES v. MCFALL
gerations, and still convicted him of attempted extortion under
claim of official right. The Hobbs Act does not sweep so
broadly.
Because we conclude that the jury instruction on Count 11
omitted a necessary element of the offense, we must consider
whether that error was harmless. See Neder v. United States,
527 U.S. 1, 9 (1999). The test for harmlessness is whether “it
appears beyond a reasonable doubt that the error complained
of did not contribute to the verdict obtained.” Id. at 15 (inter-
nal quotation marks omitted).
[7] We are unable to conclude that the instructional error
was harmless. In their argument to the jury, the prosecutors
stressed that a guilty verdict was necessary if the jury con-
cluded that McFall attempted to trade his influence over Bed-
ford for a cash payment. The government’s basic theory, as
represented in the jury instructions and arguments before the
jury, was based on an improper broadening of the Hobbs Act.
The evidence in the record did not clearly establish that Bed-
ford aided and abetted or conspired with McFall to extort
money from Golden State; thus, we cannot say beyond a rea-
sonable doubt that the error did not contribute to the verdict
— that the jury would have reached the same conclusion had
it been properly instructed. We therefore reverse the Count 11
conviction.
III. Suppression of Exculpatory Grand Jury Testimony
McFall contends that the district court erred in not admit-
ting a transcript of Sawyer’s grand jury testimony, and that
the error was prejudicial because the testimony offered a first-
person account of the key events at issue in Count 14 that
contradicts the testimony of the government’s primary wit-
ness. The court cited two alternative bases for excluding the
grand jury testimony: (1) the transcript amounted to inadmis-
sible hearsay; and (2) the transcript would unfairly prejudice
the government because the jury would not be informed of
UNITED STATES v. MCFALL 2883
Sawyer’s indictment on perjury charges or his guilty plea to
the crime of honest services mail fraud, a felony. We review
the district court’s evidentiary rulings for abuse of discretion.
Hoffman v. Constr. Prot. Servs., Inc., 541 F.3d 1175, 1178
(9th Cir. 2008).
McFall was initially indicted in October 2002. Sawyer, at
that point uncharged, appeared before a grand jury on Novem-
ber 13, 2002. His testimony resulted in a 120-page transcript,
a substantial portion of which is devoted to the events under-
lying the charges in Count 14 (i.e., the scheme to extort
money from Digital Angel). Sawyer was indicted more than
a year later, in December 2003.
An independent review of Sawyer’s grand jury testimony
makes clear that the transcript’s exclusion prejudiced McFall
at trial. Levy, the Digital Angel lobbyist, testified that Sawyer
made extortionate threats on McFall’s behalf during a tele-
phone conversation to which Levy and Sawyer were the only
parties. Sawyer testified that the notion that he and McFall
conspired to deny state grant funds to Digital Angel unless the
company paid a consulting fee to McFall’s daughter — the
crux of the charge against McFall — was “ridiculous.”
According to one of the prosecutor’s notes, Sawyer stuck to
this version of events in his post-plea debriefing. As a result
of the grand jury testimony’s exclusion (and Sawyer’s Fifth
Amendment invocation at McFall’s trial), the jury heard only
two versions of the disputed events — Levy’s and McFall’s.
Sawyer’s excluded grand jury testimony would have largely
corroborated McFall’s account.
Even so, Sawyer’s grand jury testimony represents an out
of court statement offered to prove the truth of the matter
asserted, and as such is hearsay. See Fed. R. Evid. 801(c). At
trial, McFall invoked the hearsay exception laid out in Federal
Rule of Evidence 804(b)(1), which allows admission of the
former testimony of an “unavailable” witness. See Fed. R.
Evid. 804(a). The exception provides:
2884 UNITED STATES v. MCFALL
Testimony given as a witness at another hearing of
the same or a different proceeding, or in a deposition
taken in compliance with law in the course of the
same or another proceeding [is admissible], if the
party against whom the testimony is now offered . . .
had an opportunity and similar motive to develop the
testimony by direct, cross, or redirect examination.
Fed. R. Evid. 804(b)(1).
It is clear that Sawyer, having invoked his Fifth Amend-
ment right not to testify after being subpoenaed by McFall,
was “unavailable” as a witness, at least to McFall. See Padilla
v. Terhune, 309 F.3d 614, 618 (9th Cir. 2002). Further, the
Rule 804(b)(1) hearsay exception can, in some circumstances,
encompass grand jury testimony. See, e.g., United States v.
Salerno, 505 U.S. 317, 325 (1992); United States v. Lester,
749 F.2d 1288, 1301 (9th Cir. 1984). The question is whether
the government’s motive in examining Sawyer before the
grand jury was sufficiently similar to what its motive would
be in challenging his testimony at McFall’s trial. Prosecutors
need not have pursued every opportunity to question Sawyer
before the grand jury; the exception requires only that they
possessed the motive to do so. See United States v. Geiger,
263 F.3d 1034, 1039 (9th Cir. 2001).
[8] In Salerno, the Supreme Court considered the admissi-
bility of grand jury testimony under Rule 804(b)(1). The
Court held that Rule 804(b)(1)’s “similar motive” prong is a
fact-intensive one, dependent on the particular circumstances
of the case. Salerno, 505 U.S. at 325; Geiger, 263 F.3d at
1038 (“The ‘similar motive’ requirement is inherently factual
and depends, at least in part, on the operative facts and legal
issues and on the context of the proceeding.”).
The district court concluded that the government’s motiva-
tion in examining Sawyer before the grand jury was not at all
similar to its hypothetical motivation in examining him at
UNITED STATES v. MCFALL 2885
McFall’s trial. The court stated the following subsidiary find-
ings in support of its conclusion:
[A]t the time Mr. Sawyer was before the Grand Jury,
it was a fact-finding investigation. It was not an
adversarial proceeding, notwithstanding the fact that
the government’s attorneys did in fact question Mr.
Sawyer before the Grand Jury. Two, the Court
makes a factual finding that Mr. Sawyer was not a
suspect at the time of his testimony. It was over a
year later that he was actually indicted . . . . The
Court makes a further factual finding that the motive
for obtaining Mr. Sawyer’s testimony before the
Grand Jury was completely different from what it
would be today. Five, the Court makes a further
finding that Mr. Sawyer is in fact a person who has
entered a plea of guilty to a felony, which would not
be able to be brought before the jury at this time if
his testimony were simply read to the jury. And the
final factual finding is that Mr. Sawyer, his testi-
mony at the time that he was before the Grand Jury,
is now at least the subject of an indictment for his
own perjury before that very Grand Jury.
[9] As a threshold matter, we must determine at what level
of generality the government’s respective motives should be
compared, an issue that has divided the circuits. See 2
MCCORMICK ON EVID. § 304 (6th ed. 2006) (noting that the cir-
cuits appear to be in disagreement over “whether in typical
grand jury situations exculpatory testimony meets” Rule
804(b)(1)’s similar motive requirement). In United States v.
Miller, 904 F.2d 65, 68 (D.C. Cir. 1990), the D.C. Circuit
compared the government’s respective motives at a high level
of generality. The Miller Court concluded that “[b]efore the
grand jury and at trial” the testimony of an unavailable co-
conspirator “was to be directed to the same issue — the guilt
or innocence” of the defendants, and thus, the government’s
motives were sufficiently similar. Id.; accord United States v.
2886 UNITED STATES v. MCFALL
Foster, 128 F.3d 949, 957 (6th Cir. 1997) (citing Miller with
approval). McFall’s trial counsel made a similar argument
before the district court, contending that the government’s pri-
mary goal in questioning Sawyer before the grand jury was to
incriminate McFall. At trial, the government’s motivation
would, of course, have been the same.
In United States v. DiNapoli, 8 F.3d 909 (2d Cir. 1993) (en
banc), in contrast, the Second Circuit required comparison of
motives at a fine-grained level of particularity.10 See id. at 912
(“[W]e do not accept the proposition . . . that the test of simi-
lar motive is simply whether at the two proceedings the ques-
tioner takes the same side of the same issue.”); see id. (stating
that the proper test for similarity of motive is whether the
questioner had “a substantially similar degree of interest in
prevailing” on the related issues at both proceedings) (empha-
sis added); accord United States v. Omar, 104 F.3d 519, 522-
24 (1st Cir. 1997) (concluding that the government will rarely
have a similar motive in questioning a witness before a grand
jury as it would have at trial).
The DiNapoli Court focused on three factors that distin-
guished the government’s degree of motivation in examining
the witness before the grand jury from its motivation at trial.
8 F.3d at 915. First, at the time of the grand jury testimony,
the defendants in DiNapoli had already been indicted, and
thus the government did not necessarily have a strong incen-
tive to pursue testimony that would incriminate them. Id. Sec-
ond, the grand jurors, as a group, had already indicated to the
prosecutor that they did not believe the witnesses’ testimony,
diminishing the need to pursue impeaching lines of question-
ing. Id. Finally, the court concluded that prosecutors had
declined to impeach some of the statements before the grand
jury that they knew to be false in order to avoid disclosing
10
The DiNapoli opinion issued after the Supreme Court reversed and
remanded the Second Circuit’s judgment in Salerno. DiNapoli, 8 F.3d at
912.
UNITED STATES v. MCFALL 2887
secret evidence (i.e., facts gleaned from undisclosed wiretaps
and informers). Id.
The government’s motivation in questioning Sawyer before
the grand jury was likely not as intense as it would have been
at trial, both because it had already indicted McFall, and
because the standard of proof for obtaining a conviction is
much higher than the standard for securing an indictment. See
id. at 913. We cannot agree, however, with the Second Cir-
cuit’s gloss on Rule 804(b)(1). As one of the dissenters in
DiNapoli (an en banc decision) noted, the requirement of sim-
ilar “intensity” of motivation conflicts with the rule’s plain
language, which requires “similar” but not identical motiva-
tion. Id. at 916 (Pratt, J., dissenting); Geiger, 263 F.3d at 1038
(“ ‘Similar motive’ does not mean ‘identical motive.’ ”)
(quoting Salerno, 505 U.S. at 326 (Blackmun, J., concur-
ring)); see also Salerno, 505 U.S. at 328-29 (Stevens, J., dis-
senting) (“[A] party has a motive to cross-examine any
witness who, in her estimation, is giving false or inaccurate
testimony about a fact that is material to the legal question at
issue in the proceeding.”).
[10] On balance, we agree with the D.C. Circuit’s elabora-
tion of the “similar motive” test and conclude that the govern-
ment’s fundamental objective in questioning Sawyer before
the grand jury was to draw out testimony that would support
its theory that McFall conspired with Sawyer to commit
extortion — the same motive it possessed at trial. That motive
may not have been as intense before the grand jury, but Rule
804(b)(1) does not require an identical quantum of motiva-
tion. Although McFall had already been indicted when Saw-
yer appeared before the grand jury, prosecutors did not obtain
the final superseding indictment (which brought the total
number of counts against McFall to twenty) until September
9, 2004, almost two years after Sawyer appeared before the
grand jury. Moreover, Count 14 is a conspiracy charge, and
thus depends on proof that McFall and Sawyer cooperated in
a scheme to extort money from Digital Angel, providing pros-
2888 UNITED STATES v. MCFALL
ecutors with ample incentive to develop testimony that would
incriminate McFall.
The district court, therefore, erred in concluding that the
government’s respective motives were “completely different,”
and the exclusion of Sawyer’s grand jury testimony as hear-
say amounted to an abuse of discretion.
The district court’s alternative Rule 403 basis for excluding
the evidence also amounts to an abuse of discretion. See Fed.
R. Evid. 403 (“[E]vidence may be excluded if its probative
value is substantially outweighed by the danger of unfair prej-
udice, confusion of the issues, or misleading the jury, or by
considerations of undue delay, waste of time, or needless pre-
sentation of cumulative evidence.”). First, the district court
appears to have given no consideration to the probative value
of Sawyer’s testimony, a crucial element of the balancing test
that Rule 403 requires. See Old Chief v. United States, 519
U.S. 172, 182-83 (1997). Second, the district court errone-
ously concluded that evidence that Sawyer had been indicted
for perjury and that he pleaded guilty to the crime of honest
services mail fraud would be inadmissible at trial. Evidence
that Sawyer perjured himself (along with evidence of his fel-
ony mail fraud conviction) could have been admitted at trial
to impeach the credibility of his grand jury testimony pursu-
ant to FRE 806. United States v. Becerra, 992 F.2d 960, 965
(9th Cir.1993) (“Federal Rule of Evidence 806 permits attacks
on the credibility of the declarant of a hearsay statement as if
the declarant had testified.”).
Moreover, the unique circumstances of this case present an
additional reason why the district court’s refusal to permit
McFall to introduce Sawyer’s grand jury testimony was an
abuse of discretion. Under Sawyer’s plea agreement, the gov-
ernment had the right to require Sawyer to testify pursuant to
the agreement’s cooperation clause. Thus, Sawyer was
unavailable only to the defendant, McFall. Once Sawyer’s
grand jury testimony was read to the jury, the government
UNITED STATES v. MCFALL 2889
could have called Sawyer in its rebuttal case to testify and
pursued whatever line of impeachment or any other legitimate
line of questioning it desired.11
[11] In sum, the probative value of the grand jury testimony
was very high, and the potential for unfair prejudice, given the
government’s ability to impeach under Rule 806 or even to
call Sawyer as a witness, was substantially lower than the dis-
trict court presumed. The district court thus abused its discre-
tion in excluding Sawyer’s grand jury testimony as unduly
prejudicial under Rule 403. We reverse the Count 14 convic-
tion.
CONCLUSION
For the reasons set forth above, we REVERSE McFall’s
conviction on Counts 2, 3, 4, 11, and 14. Because we reverse
on five of the seventeen counts of which McFall was con-
victed, we vacate the sentence and REMAND for further pro-
ceedings on those five counts12 and for resentencing on the
remaining 12 counts. For the reasons set forth in our concur-
rently filed memorandum, we AFFIRM McFall’s conviction
as to the remaining 12 counts.
11
At Sawyer’s sentencing hearing, prosecutors moved for a U.S.S.G.
§ 5K1.1 downward sentencing departure; a departure that prosecutors
may, in their discretion, recommend where a cooperating witness provides
“substantial assistance.” See United States v. Ming He, 94 F.3d 782, 787-
88 (2d Cir. 1996) (explaining the function of U.S.S.G § 5K1.1). That the
government endorsed Sawyer’s post-plea cooperation — which included
his continued denial of wrongdoing with respect to the events at issue in
Count 14 — after a formal debriefing, undercuts its contention on appeal
that Sawyer’s testimony before the grand jury was unreliable and mislead-
ing.
12
Because we reverse for insufficiency of the evidence on Counts 2, 3,
and 4, McFall cannot again be put in jeopardy on those charges. Those
counts therefore should be dismissed. See Burks v. United States, 437 U.S.
1, 11 (1978) (“The Double Jeopardy Clause forbids a second trial for the
purpose of affording the prosecution another opportunity to supply evi-
dence which it failed to muster in the first proceeding.”).