United States v. McGuire

United States Court of Appeals,
Fifth Circuit.
No. 94-60648.
UNITED STATES of America, Plaintiff-Appellee,
v.
Jimmy D. McGUIRE, Defendant-Appellant.
March 26, 1996.
Appeal from the United States District Court for the Southern District of Mississippi.
Before SMITH, WIENER and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
Jimmy D. McGuire, a Mississippi attorney, was convicted by jury in the Southern District of
Mississippi of filing a false IRS form 8300 in violation of 26 U.S.C. § 6050I(f)(1)(B) and 26 U.S.C.
§ 7206(1).1 McGuire was sentenced to 36 months incarceration to be followed by one-year
supervised release. McGuire was also fined $50,000, ordered to pay $20,000 for cost of confinement
and ordered to pay a $50 special assessment.
McGuire appeals his conviction, the district court's order denying his post-trial motions for
acquittal or new trial and the sentencing order. On appeal McGuire claims that the jury instructions
were deficient, the evidence was insufficient and that he was unduly prejudiced by the prosecutors'
improper remarks in closing argument. During the pendency of this appeal, the Supreme Court
1
Title 26 U.S.C. § 6050I requires that cash receipts of more than $10,000 per transaction (or
set of related transactions) be reported. Section 6050I(f)(1)(B) provides in relevant part:
"No person shall for the purpose of evading the return requirements of this section
... (B) cause or attempt to cause a trade or business to file a return required under
this section that contains a material omission or misstatement of fact...."
The criminal penalties applicable for violation of § 6050I(f)(1) are the same as those
provided for failing to file or filing a false return. 26 U.S.C. § 6050I(f)(2).
Title 26 U.S.C. § 7206(1) provides that any person who "willfully makes and
subscribes any return, statement, or other document, which contains or is verified by a
written declaration that it is made under the penalties of perjury, and which he does not
believe to be true and correct as to every material matter" can be fined up to $100,000 and
sentenced to three years or both.
decided United States v. Gaudin, --- U.S. ----, 115 S. Ct. 2310, 132 L. Ed. 2d 444 (1995). We are
persuaded that Gaudin renders the jury instruct ions given in this case reversible error. McGuire's
conviction will be reversed and the case remanded for possible retrial.
BACKGROUND
Jimmy D. McGuire is an attorney licensed in the state of Mississippi. In February 1982,
McGuire had a substantial criminal defense practice representing individuals charged with drug
offenses, as well as other matters. Around that time, the IRS received information from a number
of sources suggesting that McGuire routinely received and failed to report large amounts of cash in
his practice, which he then laundered in various transactions for the purchase o f expensive
automobiles and real estate.2 As a result, McGuire became the target of an undercover "sting"
operation. Three government agents were involved in the sting that resulted in McGuire's conviction:
(1) agent Narciso Hernandez, posing as Hector Flores (Flores); (2) agent Henry Montes, posing as
Hector Martinez (Martinez); and (3) agent David Barrientos, posing as David Bolivar (Bolivar).3
Flores contacted McGuire by telephone on February 5, 1992, with the story that $280,000
had been seized from Flores' car during a traffic stop by the Mississippi Highway Patrol. Flores
requested McGuire's assistance in recovering the money and avoiding forfeiture. Later that day
Flores and another agent, Martinez, met with McGuire in his Gulfport office. During the meeting,
Flores explained that it would be hard to come up with a legitimate source for the $280,000, to which
McGuire responded: "You don't have to be a genius. Ah, did you win the lottery in Florida? Did
you, ah—did it belong to someone else?" Flores informed McGuire that he was a cocaine dealer,
stating "I've just been selling a little bit of cocaine, that's about it." McGuire suggested that Flores
could more successfully evade law enforcement by flying or by driving Highway 90 and Highway 26
as an alternative to Interstate 10, because "[t]hey don't patrol that area at all."
2
The information generating the investigation was well-documented at trial. Several ex-clients
testified that McGuire routinely required large cash payments in the tens of thousands of dollars
and refused to give receipts. Other individuals offered testimony about large amounts of cash
observed in McGuire's home and about large purchases made with cash.
3
To avoid confusion, the opinion refers to the agents using their aliases.
Flores said that he had told police that the money was from a sale of floor tile, but confessed
to McGuire that this was not true. Nonetheless, when Martinez asked whether it would be a good
idea to have a contractor claim to have received tile, McGuire replied that it would. McGuire advised
Flores and Martinez that it would back up their claim if they filed a form with the IRS reporting that
they had received the $280,000 from the sale of tile, but that it would be inadvisable to file the form
if the money was illegal, because filing a false form is also a crime.
Martinez explained that he had not been present at the stop and seizure, but that he had a
partial interest in the $280,000. McGuire agreed to represent both Flores and Martinez in their effort
to recover the money and proposed a $20,000 retainer, plus an agreement for 30% of whatever was
recovered. Martinez asked whether McGuire would have to file a form with the IRS if Martinez paid
McGuire the $20,000 retainer in cash. Both Flores and Martinez expressed concern about having
their name appear on any forms. The three men then discussed at length different methods for
evading the filing requirement established by 26 U.S.C. § 6050I.
McGuire proposed that Flores and Martinez bring in a third party, who could hand the money
to McGuire. McGuire said he could then set up a dummy file for representation of that third party
and, if anyone asked, McGuire could say that the arrangement for representation of Flores and
Martinez was strictly on a contingent fee basis. McGuire explained, "you will be my client, but that
money won't be connected to it."4
The next morning, February 6, Flores telephoned McGuire, explaining that he was trying to
secure money for McGuire's retainer. Later that day, Flores and Martinez went back to McGuire's
office, this time with a third agent who posed as David Bolivar. McGuire again agreed to represent
Flores and Martinez in the forfeiture action. Flores "agreed to pay McGuire $20,000 as partial
payment of the fee." Then the following exchange occurred:
Flores: We thought about what you said yest erday. We'll just go ahead and give you the
20,000.
4
McGuire also suggested keeping the initial retainer just under the statutory $10,000 amount
and structuring the transaction through different banks with cashiers' checks drawn for less than
$10,000.
McGuire: Okay.
Flores: And, then, if you need to put somebody's name or something, you can put his name
on it.
McGuire: Okay.
McGuire inquired whether Bolivar had the money, to which Flores replied, "I got it here." McGuire
admonished Flores to "[p]ut that away. It should not come from you." Sounding exasperated,
McGuire added "I'm gonna walk out of the room for just a second, okay?" As McGuire left, Flores
directed McGuire's attention to Bolivar and said "[j]ust give it to him?" McGuire responded by
throwing up his hands and leaving the room.
When McGuire returned, Bolivar gave McGuire $20,000 in cash. Both Bolivar and Flores
requested a receipt. Bolivar told McGuire he would say that they had a percentage fee arrangement,
if anyone asked. McGuire confirmed the arrangement and agreed that they did not have to tell
anyone about the $20,000. Flores informed McGuire that the bills were all in hundreds, and that the
money was packaged one thousand dollars to a bundle. Martinez again expressed concern about
whether his name would appear on any documents, but instructed McGuire to "get what we want."
The following day, February 7, McGuire prepared IRS form 8300, reporting the receipt of
$20,000 cash. Part I of the form identified David Bolivar as the "individual from whom cash was
received." Part II, which required the identity of the "person ... on whose behalf this transaction was
conducted," was left blank. Ten days later, on February 17, McGuire filed an amended form 8300.
Part I of the amended form again listed Bolivar as the payor, but disclosed in Part II that Hector
Flores was the person on whose behalf David Bolivar paid the $20,000. Neither form disclosed
Martinez' identity.
McGuire was indicted in two separate indictments on charges of conspiracy, money
laundering, filing a false income tax return and filing a false IRS form 8300. He was acquitted on all
counts except count four, the count relating to the 8300 forms filed after the sting operation. With
the regard to the first 8300 form, the indictment alleged McGuire "falsely stated the identity of the
individual from whom the cash was actually received and failed to disclose the person on whose
behalf the transaction was conducted." With regard to the second 8300 form, the indictment alleged
McGuire "falsely stated the identity of the individual from whom the cash was actually received."
McGuire appeals his conviction on count four, the district court's order denying his post-trial motion
for acquittal or new trial and the district court's sentencing order.
JURY INSTRUCTIONS
McGuire was convicted of violating 26 U.S.C. § 6050I(f)(1)(B) in conjunction with 26 U.S.C.
§ 7206(1). Title 26 § 6050I(f)(1)(B) requires proof that a defendant (1) for the purpose of evading
the § 6050I reporting requirement; (2) caused or attempted to cause a trade or business to file a §
6050I return; (3) containing a material omission or misstatement of fact. 26 U.S.C. § 6050I
(Supp.1995) (emphasis added). Title 26 U.S.C. § 7206(1) requires proof that a defendant: (1)
willfully; (2) made and subscribed a return, statement or other document; (3) containing or verified
by a written declaration that it was made under penalties of perjury; and (4) that the defendant did
not believe that document to be true and correct as to every material matter (emphasis added).
United States v. McCord, 33 F.3d 1434, 1450 (5th Cir.1994), cert. denied sub nom., Haley v. United
States, --- U.S. ----, 115 S. Ct. 2558, 132 L. Ed. 2d 812 (1995).
McGuire's jury received 38 separate instructions. Many of those instructions applied generally
to all counts, while others were specific to the counts charged. Instruction 36, the only instruction
specific to the count of conviction, required that the jury find that: (1) McGuire knew that the law
practice had a duty to report currency transactions in excess of $10,000; (2) McGuire knowingly and
willfully caused or attempted to cause the filing of a form 8300 containing a material omission or
misstatement of fact; and that McGuire so acted (3) for the purpose of evading the reporting
requirement. Instruction 20, which was specific to a separate § 7206(1) violation involving conduct
unrelated to the sting operation, instructed the jury, in relevant part, as follows:
If you find that the government has proved these things, you need not consider
whether the false statement was a material false statement, even though that language is used
in the indictment. This is not a question for the jury to decide.
I. Failure to Instruct on Materiality
"The Constitution gives a criminal defendant the right to demand that a jury find him guilty
of all the elements of the crime with which he is charged." United States v. Gaudin, --- U.S. ----, ----,
115 S. Ct. 2310, 2314, 132 L. Ed. 2d 444 (1995). McGuire first contends that he was deprived of this
right because the district court removed the issue of materiality, an essential element of both the §
6050I reporting requirement and the § 7206(1) criminal enforcement provision, from the jury's
consideration. We agree.
McGuire was convicted in May 1994. In May 1994, the well-settled law in the overwhelming
majority of our federal circuits, including our own, considered the materiality of false statements made
the subject of criminal prosecution to be a question of law for the court. United States v. Daily, 921
F.2d 994, 1004 (10th Cir.1990), cert. denied, 502 U.S. 952, 112 S. Ct. 405, 116 L. Ed. 2d 354 (1991);
United States v. Corsino, 812 F.2d 26, 31 n. 3 (1st Cir.1987); United States v. Brantley, 786 F.2d
1322, 1327 & n. 2 (7th Cir.), cert. denied, 477 U.S. 908, 106 S. Ct. 3284, 91 L. Ed. 2d 572 (1986);
United States v. Hansen, 772 F.2d 940, 950 (D.C.Cir.1985), cert. denied, 475 U.S. 1045, 106 S. Ct.
1262, 89 L. Ed. 2d 571 (1986); United States v. Greber, 760 F.2d 68, 73 (3d Cir.), cert. denied, 474
U.S. 988, 106 S. Ct. 396, 88 L. Ed. 2d 348 (1985); Nilson Van & Storage Co. v. Marsh, 755 F.2d
362, 367 (4th Cir.), cert. denied, 474 U.S. 818, 106 S. Ct. 65, 88 L. Ed. 2d 53 (1985); United States
v. Swaim, 757 F.2d 1530, 1534 (5th Cir.), cert. denied, 474 U.S. 825, 106 S. Ct. 81, 88 L. Ed. 2d 66
(1985); United States v. Chandler, 752 F.2d 1148, 1150-51 (6th Cir.1985); United States v. Elkin,
731 F.2d 1005, 1009 (2d Cir.), cert. denied, 469 U.S. 822, 105 S. Ct. 97, 83 L. Ed. 2d 43 (1984);
United States v. Lopez, 728 F.2d 1359, 1362 n. 4 (11th Cir.), cert. denied, 469 U.S. 828, 105 S. Ct.
112, 83 L. Ed. 2d 56 (1984); United States v. Hicks, 619 F.2d 752, 758 (8th Cir.1980). The Ninth
Circuit considered the issue of materiality to be a question of law for most purposes, but recognized
an exception for prosecutions involving 18 U.S.C. § 1001. See United States v. Flake, 746 F.2d 535,
537-38 (9th Cir.1984), cert. denied, 469 U.S. 1225, 105 S. Ct. 1220, 84 L. Ed. 2d 360 (1985); United
States v. Valdez, 594 F.2d 725, 728-29 (9th Cir.1979); see also United States v. Gaudin, 28 F.3d
943, 946 (9th Cir.1994) (en banc), affd., --- U.S. ----, 115 S. Ct. 2310, 132 L. Ed. 2d 444 (1995).
Shortly after McGuire's conviction, the Ninth Circuit, sitting en banc in Gaudin, turned the
exception into the rule. Id. Gaudin was convicted on 43 counts of making false statements on loan
documents in violation of 18 U.S.C. § 1001. Id. at 944. The Ninth Circuit reversed Gaudin's
conviction based on the district court's failure to submit the issue of materiality to the jury. Id. On
subsequent rehearing en banc, the Ninth Circuit affirmed the panel decision, holding broadly that
materiality is "in most situations ... a mixed question of law and fact," that must be submitted to the
jury. Id. at 948-49 ("Only if it can be said that there is no factual component to the determination of
materiality and thus, that it is a pure question of law, would the Sixth Amendment constraint not
apply.").
The Ninth Circuit's decision in Gaudin was quickly affirmed by the Supreme Court. --- U.S.
----, 115 S. Ct. 2310, 132 L. Ed. 2d 444 (1995). When materiality is an essential element in a criminal
prosecution, the defendant has a constitutional right to have that issue submitted to the jury. Id. at
----, ----, 115 S. Ct. at 2314, 2320. There is no historical, logical or precedential exception to the
Sixth Amendment jury right for criminal prosecutions for false statement or perjury. Id. at ---- - ----,
115 S. Ct. at 2316-19. Gaudin's requirement that materiality be submitted to the jury has been applied
to require submission of that element in prosecutions involving other federal statutes. E.g., United
States v. Keys, 67 F.3d 801 (9th Cir.1995) (18 U.S.C. § 1623); United States v. DiRico, No. 94-
1471, 1995 WL 646259 (1st Cir. Nov. 3, 1995) (unpublished) (26 U.S.C. § 7206(1)); United States
v. Wells, 63 F.3d 745 (8th Cir.1995) (18 U.S.C. § 1014).
Because Gaudin was decided while McGuire's direct appeal was pending, he is entitled to
invoke the rule of that case as controlling. Griffith v. Kentucky, 479 U.S. 314, 327-28, 107 S. Ct.
708, 716, 93 L. Ed. 2d 649 (1987); United States v. Oreira, 29 F.3d 185, 188 (5th Cir.1994).
McGuire's jury was instructed that it must find that the form 8300 contained a material omission or
misstatement of fact (instruction 36), but the jury was further instructed that, even though the
indictment required materiality, the issue was "not a question for the jury to decide" (instruction 20).5
Gaudin's jury was likewise instructed that, while the offense required the false statements to be
material, materiality was not a question for the jury. Gaudin, --- U.S. at ----, 115 S. Ct. at 2313.
5
Although instruction 20 related specifically to count 5, there is no other instruction on
materiality in the charge. We evaluate the sufficiency of the jury instructions with reference to the
entire charge. United States v. Welch, 810 F.2d 485, 487 (5th Cir.), cert. denied, 484 U.S. 955,
108 S. Ct. 350, 98 L. Ed. 2d 376 (1987).
Gaudin makes it error for the district court to fail to submit the issue of materiality to the jury. See
Oreira, 29 F.3d at 188.
Not surprisingly, McGuire failed to object at trial to the district court's instruction which
removed the issue of materiality from the jury. Indeed, to have done so would have required
prescience on McGuire's part and would have been futile in light of well-established precedent, not
only in this Circuit, but in every other federal circuit that had examined the issue, including the Ninth.6
Nonetheless, McGuire's failure to preserve error at trial requires that we review his claim for plain
error only. FED.R.CRIM.P. 52(b).
II. Plain Error Analysis
We are convinced that the error in McGuire's case meets even the lofty plain error standard.
Under Federal Rule of Criminal Procedure 52(b), the court may review "[p]lain errors and defects
affecting substantial rights ... although they were not brought to the attention of the court." In United
States v. Olano, 507 U.S. 725, 113 S. Ct. 1770, 123 L. Ed. 2d 508 (1993), the Supreme Court
construed rule 52(b) to require a showing that (1) there was error and no waiver; (2) the error was
plain; and (3) that the error affected the defendant's substantial rights. Id. at 730-31, 113 S.Ct. at
1776. Provided the three elements are satisfied, the reviewing court has discretion to correct the
otherwise forfeited error when the error "seriously affects the fairness, integrity, or public reputation
of judicial proceedings." Id. (internal quotations omitted).
A. Plainness and Gaudin's Change in the Law
No one disputes that, in light of Gaudin, the jury instructions were in error. See United
States v. Calverley, 37 F.3d 160, 162-63 (5th Cir.1994) (en banc), cert. denied, --- U.S. ----, 115
S. Ct. 1266, 131 L. Ed. 2d 145 (1995); Oreira, 29 F.3d at 188. Plain errors are those that are clear
and obvious under current law. Olano, 507 U.S. at 732-34, 113 S.Ct. at 1777. When McGuire was
tried, existing precedent dictated that materiality was a question of law for the court. At that time,
6
At the time of McGuire's trial, the Ninth Circuit exception for prosecutions involving 18
U.S.C. § 1001 was apparently limited to that statute. United States v. Flake, 746 F.2d 535, 537-
38 (9th Cir.1984), cert. denied, 469 U.S. 1225, 105 S. Ct. 1220, 84 L. Ed. 2d 360 (1985); see also
Gaudin, 28 F.3d at 945.
any error in the jury instructions, which affirmatively removed that issue from the jury's consideration,
was neither clear nor obvious. Now, of course, Gaudin makes that error patently clear and obvious.
The issue then becomes whether "plainness" is measured at the time of trial or at the time of
appeal. We conclude that, when there is no error under existing law at the time of trial, but plain
error under existing law when the appeal is decided, the plainness prong of Rule 52(b) is satisfied.
Olano expressly declined to decide this issue, but the Supreme Court tipped its hand by stating that
"[at] a minimum, the Court of Appeals cannot correct error pursuant to Rule 52(b) unless the error
is clear under current law." Id. Our recent en banc decision in Calverley, which did not involve any
change in the nature of error from the time of trial to the time of appeal, is not to the contrary.7
Calverley omitted language tying "current law" to the "Court of Appeals" disposition, stating that
Rule 52(b) " "[a]t a minimum' contemplates an error which was "clear under current law' at the time
of trial." The Court went on to footnote Olano's failure to decide the special case presented when
there is a change in the law between the time of trial and the time of appeal. See Calverley, 37 F.3d
at 162-63 & n. 18.
Any other construction would compromise the well-settled principle that criminal defendants
are entitled to the benefit of changes in the law announced while their cases are pending on direct
review. See, e.g., Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987);
Oreira, 29 F.3d at 188. To deny a criminal defendant the benefit of a rule that clearly departed from
well-settled law to the contrary, merely on the basis that he failed to make a futile and probably
frivolous objection, does not accord with basic fairness. We do not decide whether error that was
merely undecided or unclear at the time of trial, and subsequently becomes clear on appeal, is subject
to review for plain error. See, e.g., United States v. Hurley, 63 F.3d 1, 14 (1st Cir.1995) ("[t]his case
does not present the conundrum of a failure to object followed by a wholly unexpected change in
law"). That issue will be left for another day.
We take comfort in the fact that many of our sister circuits have similarly concluded that when
7
Calverley pled guilty as to both counts of his indictment. The critical issue in Calverley
related to sentencing, not guilt or innocence.
there has been a change in the law, provisions must be made such that whether the error is plain can
be determined with reference to the law existing at the time of appeal. United States v. Walker, 59
F.3d 1196, 1198 (11th Cir.1995), cert. denied, --- U.S. ----, 116 S. Ct. 547, 133 L. Ed. 2d 450 (1995);
United States v. Keys, 67 F.3d 801, 809-10 (9th Cir.1995); United States v. Retos, 25 F.3d 1220,
1230 (3d Cir.1994); United States v. Viola, 35 F.3d 37, 41-42 (2d Cir.1994), cert. denied, --- U.S.
----, 115 S. Ct. 1270, 131 L. Ed. 2d 148 (1995); United States v. Jones, 21 F.3d 165, 172 (7th
Cir.1994); United States v. Washington, 12 F.3d 1128, 1138 (D.C.Cir.), cert. denied, --- U.S. ----,
115 S. Ct. 98, 130 L. Ed. 2d 47 (1994).8 Although the district court faithfully followed existing
precedent and the jury instructions were not clearly in error when given, it is now obvious on the
basis of Gaudin that the instructions unconstitutionally precluded the jury from considering an
essential element of the offense. That error is plain for purposes of Rule 52(b).
B. McGuire's Substantial Rights
8
For example, the D.C. Circuit's "supervening decision doctrine" operates as an exception to
the general requirement that review under Rule 52(b) requires an error that was plain at the time
of trial. E.g., United States v. Baucum, 66 F.3d 362, 363 (D.C.Cir.1995); United States v.
Washington, 12 F.3d 1128, 1138 (D.C.Cir.), cert. denied, --- U.S. ----, 115 S. Ct. 98, 130
L. Ed. 2d 47 (1994). Some decisions of that Court review errors made plain by supervening
changes in the law without clear reference to Rule 52(b) or plain error analysis, suggesting that a
supervening change provides an independent basis for reviewing otherwise forfeited error. E.g.,
United States v. Rhodes, 62 F.3d 1449, 1452 (D.C.Cir.1995).
We are aware that the more traditional concerns addressed by rigorous review of
forfeited error are not operative when a criminal defendant's failure to object is excusable.
McGuire could not have foreseen the change in the law that occurred after his trial.
Nonetheless, we conclude that the discretion allowed the Court of Appeals by Olano is the
more appropriate vehicle for remedying such error. Accord United States v. Viola, 35
F.3d 37, 41-42 (2d Cir.) ("The better view is that Rule 52(b) is the sole source of our
authority to correct errors not preserved by objection."), cert. denied, --- U.S. ----, 115
S. Ct. 1270, 131 L. Ed. 2d 148 (1995); United States v. Retos, 25 F.3d 1220, 1228 (3d
Cir.1994) (review of error made plain by supervening Supreme Court decision limited to
Rule 52(b) plain error principles); United States v. Jones, 21 F.3d 165, 172 (7th
Cir.1994) (although a supervening change in the law excuses the defendant's failure to
object, the court's review is still subject to Rule 52(b)). Published cases in other circuits
have uniformly applied Rule 52(b) analysis to Gaudin error, and even the D.C. Circuit has
not explicitly held to the contrary.
We do not construct a legal fiction that the error was plain at the time of trial.
Rather, we intend to construct an exception to that requirement for cases in which the law
has clearly changed between the time of trial and direct appeal. In those rare cases, the
plainness of the alleged error should be measured at the time of appeal.
Finally, forfeited plain error is not reviewable under Rule 52(b) unless it affected the
defendant's substantial rights. "Normally, although perhaps not in every case, the defendant must
make a specific showing of prejudice to satisfy the "affecting substantial rights' prong of Rule 52(b)."
Olano, 507 U.S. at 734-36, 113 S.Ct. at 1778. The inquiry is much the same when the court reviews
error preserved at trial, under the familiar harmless error analysis, except that in those cases, it is the
government that bears the burden of demonstrating beyond a reasonable doubt that the error was
harmless. FED.R.CIV.P. 52(a); Id. at 734-36, 113 S. Ct. at 1778. Although many constitutional
errors can be harmless, "structural" errors that affect the framework within which the trial proceeds
are not subject to that analysis. Arizona v. Fulminante, 499 U.S. 279, 307-09, 111 S. Ct. 1246, 1264,
113 L. Ed. 2d 302 (1991). Olano explicitly left open the issue of whether Rule 52(b) requires that a
defendant demonstrate prejudice when the error at issue is structural. Olano, 507 U.S. at 734-36,
113 S.Ct. at 1778.
Harmless error analysis focuses on the effect of the alleged error on the verdict actually
returned by the jury. Sullivan v. Louisiana, 508 U.S. 275, 278-79, 113 S. Ct. 2078, 2081, 124
L. Ed. 2d 182 (1993). When, as in this case, the jury was not instructed on an essential element of the
offense, it is questionable whether there has been any constitutionally obtained verdict for harmless
error analysis to act upon. See Sullivan v. Louisiana, 508 U.S. 275, 278-81, 113 S. Ct. 2078, 2081-
82, 124 L. Ed. 2d 182 (1993) ("to hypothesize a guilty verdict that was never in fact rendered—no
matter how inescapable the findings to support that verdict might be—would violate the jury right").
Our own Court has spoken with a divided voice on the issue of whether failure to instruct on every
essential element of the offense is plain error, structural error or error amenable to harmless error
analysis. See United States v. Oreira, 29 F.3d 185, 188 n. 6 (discussing conflict and applying
harmless error analysis); United States v. Garza, 42 F.3d 251, 253 (5th Cir.1994) (agreeing that, as
the government conceded, a post-trial change in the law rendered failure to instruct on an essential
element plain error); United States v. Ortega, 859 F.2d 327, 333 (5th Cir.1988) ("It is plain error
for a judge to fail to instruct the jury on all essential elements of a crime, even though such an
instruction is not requested"), cert. denied, 489 U.S. 1027, 109 S. Ct. 1157, 103 L. Ed. 2d 216 (1989);
United States v. Brown, 616 F.2d 844, 846 (5th Cir.1980) ("we divine from precedent in this Circuit
no rule that failure to specifically instruct on any single essential element of a crime per se constitutes
plain error"); United States v. Bosch, 505 F.2d 78, 82-83 (5th Cir.1974) (failure to instruct an
essential element is not plain error when it is clear that the error was harmless). Even Supreme Court
authority on the point appears to be conflicting. Compare Pope v. Illinois, 481 U.S. 497, 503 n. 7,
107 S. Ct. 1918, 1922 n. 7, 95 L. Ed. 2d 439 (1987) ("to the extent that cases prior to Rose may
indicate that a conviction can never stand if the instructions provided the jury do not require it to find
each element of the crime under the proper standard of proof ... they are no longer good authority"),
with Sullivan v. Louisiana, 508 U.S. 275, 278-81, 113 S. Ct. 2078, 2081-82, 124 L. Ed. 2d 182 (1993)
(harmless error analysis inapplicable when jury verdict secured in violation of In re Winship, 397 U.S.
358, 364, 90 S. Ct. 1068, 1072-73, 25 L. Ed. 2d 368 (1970), which requires conviction on the basis
of every essent ial element of the offense). Gaudin itself did not resolve the issue because the
government failed to challenge the Ninth Circuit's determination that the error identified was both
plain and structural, and therefore not amenable to harmless error analysis. Gaudin, --- U.S. at ----,
----, 115 S. Ct. at 2320, 2321 (Rehnquist, J. concurring).
The conflict within our own Circuit makes it inadvisable, and perhaps impermissible, to
conclusively resolve in this case the proper scope of appellate review when the district court fails to
instruct the jury on an essential element of a criminal offense. Regardless of whether such an error
is structural, McGuire made a specific factual showing such that, in the circumstances of this case,
the district court's failure to instruct on the issue of materiality was plain error which did affect his
substantial rights.
Materiality was critical to Mcguire's defense at trial. As to the first form 8300, the
government alleged that McGuire "falsely stated the identity of the individual from whom the cash
was actually received and failed to disclose the person on whose behalf the transaction was
conducted." As to the second form, the government alleged only that McGuire "falsely stated the
identity of the individual from whom the cash was actually received." McGuire argued at trial: (1)
that he subjectively believed the money was being delivered to him by Bolivar rather than Flores; and
(2) that once he disclosed Flores' name in the second form 8300, the internal revenue service would
not be misled by the information provided in that form. See Gaudin, --- U.S. at ----, 115 S. Ct. at
2313 (a statement is material if it has a natural tendency to influence the decision of the
decision-making body to which it is addressed). Therefore, an essential premise in McGuire's defense
was that any misidentification of Bolivar was not material because the identity of the client was also
disclosed on the form. McGuire elicited testimony relevant to this issue from his expert, who had
significant experience in the criminal investigation division of the Internal Revenue Service. On the
basis of the present record, the district court's denial of McGuire's Fifth and Sixth Amendment right
to a jury determination on every essential element of the charged offense was not harmless. The
district court's instruction that materiality was not an issue for the jury, although a correct statement
of the law when given, constituted plain error affecting McGuire's substantial rights. Therefore, this
court has authority pursuant to Rule 52(b), to correct that error. Olano, 507 U.S. at 734-36, 113
S.Ct. at 1778.
C. Remedial Discretion
"Rule 52(b) is permissive, not mandatory." Olano, 507 U.S. at 734-36, 113 S.Ct. at 1778
(when the life or liberty of a criminal defendant is at stake, the courts of appeal have the authority to
correct otherwise forfeited error when it is plain and affects the defendant's substantial rights).
Whether plain error should be corrected lies within the sound discretion of the appellate courts. Id.
at 734-37, 113 S.Ct. at 1778-79. The Supreme Court instructs that remedial discretion under Rule
52(b) should be exercised only when the error " "seriously affects the fairness, integrity or public
reputation of judicial proceedings.' " Id. at 736-37, 113 S.Ct. at 1779 (quoting United States v.
Atkinson, 297 U.S. 157, 56 S. Ct. 391, 80 L. Ed. 555 (1936)). Whether our remedial discretion should
be exercised is a particularized inquiry that necessarily depends upon the facts of the specific case as
well as the extent of legal prejudice imposed upon the defendant. See Calverley, 37 F.3d at 164.
Moreover, an error may affect the substantial rights of the defendant without also rising to the level
that it "seriously affects the fairness, integrity or public reputation of judicial proceedings." Id.
We are convinced that the circumstances of this case merit exercise of our remedial discretion.
First, the statutes of conviction, § 6050I and § 7206(1), both expressly require that the statements
at issue be material. Compare, United States v. Taylor, 66 F.3d 254 (9th Cir.1995) (distinguishing
Gaudin on the basis that materiality is neither an express nor an implicit element of 18 U.S.C. § 287).
Second, the materiality of McGuire's statements identifying Bolivar as the payor was a critical part
of McGuire's defense to the count of conviction, and t he subject of conflicting testimony at trial.
Considered as a whole, the record presents a serious factual question regarding the materiality of
McGuire's statements. United States v. Keys, 67 F.3d 801, 811-12 (9th Cir.1995). Third, refusing
to exercise our remedial discretion to correct the plain error identified in this case would result, not
only in the denial of McGuire's Fifth and Sixth Amendment rights, but in an abdication of the principle
that we adjudicate cases pending before this Court on direct review "in light of our best understanding
of governing constitutional principles." Griffith v. Kentucky, 479 U.S. 314, 323, 107 S. Ct. 708, 713,
93 L. Ed. 2d 649 (1987). Given the circumstances of this case, we conclude that the district court's
failure to instruct on materiality seriously affected the fairness and integrity of McGuire's trial and,
potentially, the public reputation of judicial proceedings. See Griffith, 479 U.S. at 322, 107 S.Ct. at
713 ("failure to apply a newly declared constitutional rule to criminal cases pending on direct review
violates basic norms of constitutional adjudication"). We will exercise our discretion so as to not let
the error stand. McGuire's conviction is reversed and the case remanded for further proceedings
consistent with this opinion.
III. Refusal to Deliver Ratzlaf Willfulness Instruction
Having concluded that the case must be retried, it is appropriate to address at least one issue
that relates to the count of conviction and is likely to recur on remand. McGuire was convicted for
violation of 26 U.S.C. § 6050I(f)(1)(B), in combination with 26 U.S.C. § 7206(1), which requires
a showing of willfulness. McGuire contends that the district court erred by refusing to give his
requested instruction on willfulness, which was based on the Supreme Court's holding in Ratzlaf v.
United States, --- U.S. ----, 114 S. Ct. 655, 126 L. Ed. 2d 615 (1994). At issue in Ratzlaf were
provisions of the Bank Secrecy Act which impose on financial institutions a reporti ng obligation
similar to that imposed by § 6050I. Title 31 U.S.C. § 5324 states an offense for structuring a
transaction to evade the reporting requirement, while § 5322 specifies criminal penalties for willful
violation of § 5324. Like McGuire, Ratzlaf was charged both with the offense of purposefully
evading the obligation and with the penalty provision, which required a showing of wilfulness.
Ratzlaf, --- U.S. at ----, 114 S. Ct. at 657. Ratzlaf held that the statutory formulation of the offense
(§ 5322 and § 5324) required both government proof and a jury instruction on the issue of whether
Ratzlaf willfully, i.e. with knowledge that his conduct was unlawful, violated § 5324. Id. at ----, 114
S.Ct. at 663.9
Ratzlaf does not provide the controlling definition of willfulness for prosecutions under 26
U.S.C. § 7206(1). Willfulness, for the purpose of that section, is defined as the intentional violation
of a known legal duty. United States v. Pomponio, 429 U.S. 10, 11-13, 97 S. Ct. 22, 23-24, 50
L. Ed. 2d 12 (1976); United States v. Charroux, 3 F.3d 827, 831 (5th Cir.1993). Although the jury
was not given that precise definition, the jury was adequately instructed on the issue of willfulness.
Instruction 17, an instruction that applied to all counts, charged the jury on the issue of specific intent:
The crimes charged in this case are serious crimes which require proof of specific
intent before the defendant can be convicted. Specific intent, as the term implies, means more
than the general intent to commit the act. To establish specific intent the government must
prove that the defendant knowingly did an act which the law forbids, purposely intending to
disobey or disregard the law.
And in Instruction 21, the jury was charged:
The word "willfully" in these instructions[ ] means that the act was committed
voluntarily and purposely, with the specific intent to do something the law forbids; that is to
say, with bad purpose either to disobey or disregard the law. Mere negligence, even gross
negligence, is not sufficient to establish willfulness.
If a person in good faith believes that an income tax return, as prepared by him,
truthfully reports the taxable income and allowable deductions of the taxpayer under the
internal revenue laws, he cannot be guilty of "willfully" making or subscribing a false or
fraudulent return.
The district court did not abuse its discretion by refusing McGuire's requested instruction on the issue
9
Less than six months after Ratzlaf was decided Congress amended the Bank Secrecy Act by
incorporating the penalty provision previously codified as § 5322 into the reporting requirement
of § 5324 and by redefining the elements of the offense to exclude any requirement of willfulness.
See H.R.Conf.Rep. 103-652, 103d Cong., 2d Sess (1994), reprinted in, 1994 U.S.C.C.A.N.1977,
2024 (restoring the "clear Congressional intent" to require no more culpable conduct than a
purpose to evade the reporting requirement).
of willfulness.
We note also that Instruction 36, relating to the count of conviction, neither identifies nor
requires specific findings on the essential elements required for conviction under § 7206(1). On
remand, if the case is retried, the jury must be required to find all of the essential elements set forth
in § 6050I(f)(1)(B) and § 7206(1).
Finally, McGuire also claims on appeal that the evidence was insufficient to support his
conviction and that he was unduly prejudiced by the prosecutor's improper closing remarks. Having
reviewed those claims under the applicable standards of review, we find no reversible error. There
are, therefore, no double jeopardy barriers to McGuire's retrial on remand. Our conclusions as to
these issues are necessarily limited by what appears in the present, rather voluminous, record.
Consideration was not limited to the testimony of the undercover agents and the transcripts of their
conversations with McGuire. This panel's disposition of McGuire's sufficiency claim will obviously
be of no binding effect on any subsequent appeal should McGuire be retried. We have likewise
reviewed for plain error McGuire's claims on appeal that the jury instructions impermissibly allowed
conviction on the basis of either form 8300 and that the jury instructions directed a verdict of guilty.
Having considered the arguments and the entire record, we are persuaded that failure to review those
claims on appeal does not "seriously affect the fairness, integrity or public reputation of judicial
proceedings."
CONCLUSION
For the foregoing reasons, McGuire's conviction for violation of 26 U.S.C. § 6050I and 26
U.S.C. § 7206(1) is REVERSED and the case is REMANDED to the district court for further
proceedings consistent with this opinion.
WIENER, concurring specially:
I concur in the result reached in Judge DeMoss's fine opinion; however, I respectfully
disagree with a key aspect of his analysis. In particular, when both the trial court's ruling and the
defendant's failure to object to that ruling are fully explained and excused by a supervening change
in the law, I would not, for the reasons stated more fully below, visit upon that defendant the burden
of plain error review. Accordingly, I do not join in either the last sentence of Part I of Judge
DeMoss's opinion (holding that plain error applies in this case) or the analysis set forth in Part II.
Yet, despite the differences in the way that we get there, we reach the same result: McGuire's
conviction for violation of 26 § U.S.C. 6050I and 26 U.S.C. § 7206(1) must be reversed, his sentence
vacated, and his case remanded for a new trial on those charges.
I
INTRODUCTION
Out of the blue, and overturning law long-settled in this and all other circuits, the Supreme
Court, in United States v. Gaudin,1 held that when, in a criminal prosecution materiality is an element
of the crime charged, the Constitution requires that the materiality element be decided by the jury as
an issue of fact, not by the judge as an issue of law (hereafter, Gaudin Rule). In this appeal, we must
decide a narrow issue: As the trial judge in McGuire's case withheld the question of materiality from
the jury and decided that issue himself, should we reverse McGuire's conviction? In positing that
question, this appeal presents this court with an opportunity to clarify a broader issue that is sure to
resurface: How do we review unobjected-to evidentiary rulings, jury charges, and the like, that were
clearly unobjectionable at trial but that have become "error" post trial by virtue of a supervening
change in the law (hereafter, Gaudin-type issue)?2 More specifically, when a supervening change in
the law explains (and unquestionably should excuse) the absence of a trial objection, do we review
Gaudin-type issues (1) under the plain error rubric or some variation thereof, or (2) under the
harmless error rubric, just as we would if a contemporaneo us objection had been made? Judge
DeMoss concludes that a Gaudin-type issue should be reviewed under the plain error rubric. Instead,
1
--- U.S. ----, 115 S. Ct. 2310, 132 L. Ed. 2d 444 (1995).
2
This is the second time we have seen this type issue in the last year. A similar problem arose
after Ratzlaf v. United States, --- U.S. ----, 114 S. Ct. 655, 126 L. Ed. 2d 615 (1994) (willfulness
requirement of 31 U.S.C. § 5324(3) mandates that the government prove, and the jury be
instructed, that a defendant acted with knowledge that the structuring he undertook was
unlawful). We have not yet had to decide this larger issue in the context of Ratzlaf. See, e.g.,
United States v. Garza, 42 F.3d 251, 253 (5th Cir.1994) (government conceded jury instructions
were plain error under Ratzlaf ), cert. denied, --- U.S. ----, 115 S. Ct. 2263, 132 L. Ed. 2d 268
(1995); United States v. Oreira, 29 F.3d 185, 189 (5th Cir.1994) (defendant requested proper
jury instruction and objected to its omission at trial, and thus preserved Ratzlaf issue for review).
I would review a Gaudin-type issue as if there had been a contemporaneous objection, and thus
would ultimately apply the harmless error analysis.
To review Gaudin-type issues under the plain error rubric strikes me as patently unfair to
defendants and logically antithetical to the purpose of plain error. Both conceptually and practically,
the plain error rule is intended to encourage and facilitate judicial efficiency. We require a defendant
to make contemporaneous objections so that the district court will have an opportunity to correct its
own errors instanter and thereby avert unnecessary appeals and multiple trials. Consequently, when
the defendant is derelict and fails to bring a correctable error to the court's attention, we deem him
to have forfeited the error. Accordingly, to secure a reversal on appeal despite his forfeiture, we
require the defendant to establish that the unobjected-to error was so extrem e that it affected his
substantial rights.3 In short, we do not want defendants sandbagging the trial judge and then wasting
judicial resources with a "gotcha" reversal on appeal.
When there is a supervening change in the law, however, as there was here, none of these
concerns are present. After all, a pre-Gaudin objection would have been summarily overruled by the
district court, so no purpose of judicial economy is served by "penalizing" the defendant for failing
to perfo rm the hollow and obnoxious act of objecting in the face of well-settled precedent to the
contrary (unless at the time of trial there was reason to expect that a change in the law is in the offing,
e.g., cert. pending, advisory committee recommendations in the mill, a bill to change the law winding
its way through Congress, or the like).
II
DISCUSSION
A. MUST WE APPLY PLAIN ERROR REVIEW?
1. How Rule 52(b) Works4
3
Fed.R.Cr.P. 52(b).
4
Rule 52(b) reads as follows:
Plain Error. Plain errors or defects affecting substantial rights may be noticed
although they were not brought to the attention of the court.
As a threshold issue, we must decide whether under United States v. Olano5 or United States
v. Calverley,6 or both, our appellate authority to review Gaudin-type issues is limited to Rule 52(b),
or whether we have independent authority to review such "errors" directly. Recently, in Olano, the
Supreme Court clarified our general appellate authority under Rule 52(b) to review unobjected-to
errors.7 The Court identified three criteria, each of which it characterized as a "limitation on
appellate authority"8: First, there must be "error," or deviation from a legal rule, which has not been
waived.9 Second, the error must be "plain," which at a minimum means "clear under current law."10
Third, the plain error must "affect[ ] substantial rights," which normally requires a showing of
prejudice.11
In plain error review under Rule 52(b), as contrasted with harmless error review under Rule
52(a), the defendant bears the burden of persuasion.12 The three Olano criteria are necessary but
alone they do not require a court to correct an unobjected-to error. Even when all three prerequisites
are established, the decision whether to correct the error falls within the appellate court's discretion.
5
507 U.S. 725, 732-34, 113 S. Ct. 1770, 1777, 123 L. Ed. 2d 508 (1993).
6
37 F.3d 160 (5th Cir.1994) (en banc), cert. denied, --- U.S. ----, 115 S. Ct. 1266, 131 L. Ed. 2d
145 (1995).
7
See Olano, 507 U.S. at 732-37, 113 S.Ct. at 1777-79.
8
Id. at 732-34, 113 S. Ct. at 1777. In Calverley, we recognized these three criteria and
explained that in "exceptional circumstances, appellate courts may, in the interest of justice, notice
errors to which no objection has been made"; however, we also qualified that statement in the
next sentence by stating that "[s]uch circumstances are sharply circumscribed by the plain error
standard requiring that unobjected-to errors be "plain' and "affect substantial rights.' " 37 F.3d at
162 (emphasis added & footnotes omitted).
Although the three Olano criteria have been described by the Supreme Court and
this court as limitations on appellate authority to review unobjected-to errors, neither
court has expressly held that Rule 52(b) provides the exclusive authority or means to
review unobjected-to errors.
9
Olano, 507 U.S. at 732-34, 113 S.Ct. at 1777.
10
Olano at 732-34, 113 S. Ct. at 1777.
11
Olano, 507 U.S. at 732-36, 113 S.Ct. at 1777-78; Calverley, 37 F.3d at 164.
12
Olano, 507 U.S. at 734-36, 113 S.Ct. at 1778; Calverley, 37 F.3d at 164.
In short, Rule 52(b) is permissive, not mandatory: If the forfeited (but not waived) error is "plain"
and "affects substantial rights," an appellate court has the authority to reverse or vacate, but is not
required to do so.13
2. Most Circuits Apply Plain Error
Judge DeMoss in his opinion and Judge Smith in his dissent join the majority of the circuit
courts in concluding that plain error review should be applied to Gaudin-type issues. Those courts
agree that Olano seems to require that plain error review be applied to all unobjected-to errors.14
This conclusion derives from the following syllogism: (1) Under Olano, all forfeited errors are
subject to plain error review; (2) a Gaudin-type issues is a forfeited error; (3) ergo we must apply
plain error review to Gaudin-type issues. Even if I had to agree with the first premise, the entire
motivation of my writing separately is my abject disagreement with the second premise: All logic is
defied if we hold that a Gaudin-type issue is "forfeited error" for lack of a contemporary objection.
Wholly distinguishable from the situations in Olano and Calverley, the court's treatment of
materiality in McGuire's trial—when viewed in light of the law as it existed then, the way that Judge
Smith tells us we must—was not error at all. Consequently, McGuire had nothing to which he could
object and thus nothing to forfeit. This logical fallacy in the second premise produces a fatally flawed
syllogism, in turn producing the flawed conclusion that we must apply plain error review to
Gaudin-type issues. Before we attach conclusionary tags and labels such as "forfeited error," it seems
13
Id.
14
See United States v. Lopez, 71 F.3d 954, 960-61 (1st Cir.1995); United States v. Viola, 35
F.3d 37, 41-42 (2d Cir.) (discussing Rule 52(b) versus independent authority to review
Gaudin-type issues and concluding that "[t]he better view is that Rule 52(b) is the sole source of
our authority to correct errors not preserved by objection."), cert. denied, --- U.S. ----, 115 S. Ct.
1270, 131 L. Ed. 2d 148 (1995); United States v. Retos, 25 F.3d 1220, 1228 (3d Cir.1994)
("Because Retos failed to object to the jury instruction [which is now erroneous under Ratzlaf ] at
trial, our review is limited to plain error under Federal Rule of Criminal Procedure 52(b)");
United States v. Jones, 21 F.3d 165, 172 (7th Cir.1994) (holding that even though supervening
change in law excuses failure to object, all unobjected-to errors are subject to plain error review
on appeal); United States v. Gaudin, 28 F.3d 943, 951 (9th Cir.1994) (en banc) ("Because
Gaudin did not object to the instruction ... we must ... determine whether this error was "plain
error.' "); United States v. Walker, 59 F.3d 1196 (11th Cir.) (Regardless of change in the law,
"we review issues not preserved below for plain error."), cert. denied, --- U.S. ----, 116 S. Ct.
547, 133 L. Ed. 2d 450 (1995); United States v. Washington, 12 F.3d 1128, 1138 (D.C.Cir.), cert.
denied, --- U.S. ----, 115 S. Ct. 98, 130 L. Ed. 2d 47 (1994).
meet and proper that we pause and examine the definition.
3. Where Was The Error?
In Olano, the Court was careful to articulate the difference between waiver and forfeiture:
"Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the "intentional
relinquishment or abandonment of a known right.' "15 Even though we have two clear
categories—waiver and forfeiture—the issue presented in this appeal does not fit logically into either.
There was no waiver because the case law at the time of trial indicated beyond cavil that no defendant
in this circuit (or anywhere else for that matter, even in the Ninth Circuit) had a right to have a jury
determine the question of materiality.16 Moreover, nothing was "in the works" or "on the drawing
boards" that would have put anyone on notice that a major change in the law was under
consideration. So, just as he waived no "error," McGuire forfeited no "error": How could a
defendant timely object to the violation of a "right," when all case law to date made pellucidly clear
that no such "right" existed. Thus it is axiomatic that if Gaudin-type issues are neither waived error
nor forfeited error, they must be something else. Whatever else they may be, they were not errors
as of the time of the trial.
The trial court could not have ruled other than the way it did, so it committed no error; in
failing to object to that which was non-objectionable, the defense committed no error—either by
waiver or forfeiture. Thus it is a badly misleading fiction to label a Gaudin-type issue as error.17
Quite simply, we should not try to force this square Gaudin peg into the round plain error hole drilled
by Olano and Calverley; instead, we should proceed to carve out a separate but limited square hole
into which Gaudin-type "errors" fit, then define the proper standard under which we review them.
15
507 U.S. at 732-34, 113 S. Ct. at 1777 (citations omitted); See also Calverley, 37 F.3d at
162.
16
See, e.g., United States v. Swaim, 757 F.2d 1530, 1534 (5th Cir.), cert. denied, 474 U.S.
825, 106 S. Ct. 81, 88 L. Ed. 2d 66 (1985).
17
Judge Smith's analysis has a curiously convenient relationship to this fiction, giving rise to
what I see as a "chicken or egg" problem. For even though he begins with the proposition that
plain error is the applicable standard, he ultimately concludes that there was no error at trial.
Which question comes first: (1) was there an error, or (2) do we apply plain error review?
In the legal vernacular, Olano and Calverley are "distinguishable" from Gaudin-type issues. It
follows, then, that as the issue we no w face was not an error at all at the time of trial, our review
should not be restricted to plain error, and we should not be constrained by the cases interpreting that
standard.
B. THE SUPERVENING DECISION DOCTRINE
1. The D.C. Circuit
In the D.C. Circuit, the "supervening decision doctrine" appears to allow a direct harmlessness
review of a true Gaudin-type issue.18 Under this doctrine, the appellate court can consider issues not
raised at trial if a supervening decision has "changed the law in appellant's favor and the law was so
well settled at the time of trial that any attempt to challenge it would have appeared pointless."19 The
D.C. Circuit offered two justifications for the supervening decision doctrine. First, it would be unfair,
and even counter-productive to the efficient administration of justice, to expect a defendant to object
at trial when existing law is so clear that it forecloses any possibility of success.20 Second, unless
appellate courts consider the effect of a supervening decision in such a situation, the defendant will
be denied the benefit of the change in the law.21 (This second prediction would come true every time
if we were to follow the position advocated in today's dissent). Regrettably, the D.C. Circuit has not
yet made clear whether this doctrine operates only within the limitations of Rule 52(b) or
independently as separate authority and procedure for reviewing Gaudin-type issues directly for
harmlessness.
18
See United States v. Washington, 12 F.3d 1128, 1138 (D.C.Cir.), cert. denied, --- U.S. ----,
115 S. Ct. 98, 130 L. Ed. 2d 47 (1994).
19
Id. at 1139. See also United States v. Baucum, 66 F.3d 362, 363 (D.C.Cir.1995) (per
curiam) ("[U]nder the supervening-decision doctrine, we will consider an issue not raised at trial
"where a supervening decision has changed the law in appellant's favor and the law was so
well-settled at the time of trial that any attempt to challenge it would have appeared pointless.' ");
United States v. Rhodes, 62 F.3d 1449, 1450 (D.C.Cir.1995) (same).
20
Washington, 12 F.3d at 1139.
21
Id.; Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987) ("We
therefore hold that a rule for the conduct of criminal prosecutions is to be applied retroactively to
all cases, state or federal, pending on direct review or not yet final, with no exception for cases in
which the new rule constitutes a "clear break' with the past.").
In United States v. Washington22 for example, a panel of the D.C. Circuit recited the plain
error standard, then proceeded to define the supervening decision doctri ne. The structure of the
Washington analysis would thus appear to imply that the doctrine must be applied within the confines
of Rule 52(b) only. Ultimately, however, the Washington panel declined to apply the doctrine to the
facts before it because the alleged supervening decision was determined not to be a "change" in the
law.23 As a result, the analysis is aborted and we are left without a precise application of the doctrine
but with a negative pregnant implying its applicability to a situation involving a truly unforeseeable
change in the law.
Indeed, in United States v. Rhodes,24 a different panel of the D.C. Circuit embraced the
supervening decision doctrine and held "[a]ccordingly, we address [defendant's unobjected-to error]
on the merits."25 Significantly, Rhodes says nothing about Rule 52(b) or plain error review, strongly
suggesting that the supervening decision doctrine (1) operates outside Rule 52(b), and (2) provides
an independent authority to review that rare breed of unobjected-to "errors" which are produced by
true post-trial, unforeseeable changes in the law.
22
12 F.3d at 1138 (supervening change in the reasonable doubt jury instruction). Washington
involved a challenge to a jury instruction directing the jury that it could find the defendant guilty if
the evidence caused them to have a "strong belief" in the defendant's guilt. Washington did not
object at trial, but urged on appeal that Sullivan v. Louisiana, 508 U.S. 275, 113 S. Ct. 2078, 124
L. Ed. 2d 182 (1993), a supervening decision case, changed the law, and required reversal despite
the lack of objection. In Sullivan, the Supreme Court held that a jury instruction which equates
"beyond a reasonable doubt" with "strong belief" is constitutionally deficient.
23
The court held that at the time of trial the constitutionality of the "strong belief" jury
instruction was not so well-established that any objection would have seemed futile. According
to the Washington court, no court of appeals had upheld the "strong belief" jury instruction at the
time of trial and several cases in that circuit should have put the defendant on notice of the
deficiency of such an instruction. Id. at 1139. That cannot be said of McGuire and "materiality"
pre-Gaudin. Thus, the supervening decision doctrine did not apply. See also Baucum, 66 F.3d at
364 (reaffirming availability of supervening decision doctrine, but declining to apply for reasons
similar to Washington: (1) challenging the constitutionality of a new statute would not have been
futile; (2) defendant on notice because previous challenge had been successful).
24
62 F.3d 1449 (D.C.Cir.1995). This panel addressed the applicability Austin v. United States,
509 U.S. 602, 113 S. Ct. 2801, 125 L. Ed. 2d 488 (1993) and Department of Revenue of Montana
v. Kurth Ranch, --- U.S. ----, 114 S. Ct. 1937, 128 L. Ed. 2d 767 (1994), 62 F.3d 1449
(D.C.Cir.1995). Both of these decisions, the defendant urged, were supervening changes in the
law of double jeopardy.
25
Rhodes, 62 F.3d at 1452.
2. Follow the D.C. Circuit's Lead
I would follow the path enlightened by the D.C. Circuit and hold that the supervening decision
doctrine pertains, serving to preserve an issue for appeal in the relatively rare instances when the
following factors coincide: (1) law that is well-settled and thus unobjectionable at the time of trial
(2) is changed (3) without warning (4) during direct appeal. By changed I mean reversed or
overruled, not merely "fine tuned" or clarified.26 When all factors are present, the defendant would
27
be entitled to the benefit of the supervening change. The supervening change in the law both
explains and excuses the absence of an objection by the defendant. Accordingly, I would treat such
an issue as though it had been preserved for appellate review, and would test for harmlessness rather
than apply plain error scrutiny.
Although my analysis would treat the subject issue as a non-error at trial and as an error on
appeal, my position is consistent with the relevant precedent. When the materiality issue in the instant
case is viewed as of the time of trial, there was no error under the case law of this circuit; however,
when the same issue is viewed as of the time of appeal, an "error" has materialized out of thin air
solely because the Supreme Court has overruled prior precedent. In other words, at McGuire's
pre-Gaudin trial, there was no error; on appeal post-Gaudin, there is "error." The supervening
decision both creates this distinction and excuses the absence of a contemporaneous objection. Thus
the supervening decision doctrine should be interposed to preserve the Gaudin-type issues for
appellate review because by definition they can arise only after trial and before exhaustion of all
appellate procedures. The "bottom line" is that, unless as an appellate court we now come forward
with a new rule of review, no criminal defendant will ever receive the Griffith benefit of a supervening
change in the law.
26
I find it both significant and important to my analysis that the Supreme Court in Olano and
this court in Calverley left open the question whether plain error review should apply "where the
error was unclear at the time of trial but becomes clear on appeal because the applicable law has
been clarified." For, in the instant case, the "error" was not just unclear at trial, it was not error
at all; and the applicable law has not just been "clarified," it has been changed entirely.
27
Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987) (requiring that
criminal defendants receive the benefit of changes in the law governing the conduct of criminal
prosecutions, at least those made during the pendency of his appeal).
This is precisely the flaw that, with genuine respect, I discern in Judge Smith's dissent: His
literal examination, as of the time of trial, of the "error" produced by a post-trial sea change in the law
ensures that no defendant will ever receive any benefit from a supervening change in the law. He first
concludes that, as there was no objection at trial, plain error applies. Second, he looks to the case
law at the time of trial and, as the supervening change came after the trial, he finds no error. Third,
he points out that, as a result, the second necessary precondition of plain error review—that the error
be plain—is not satisfied. He then concludes that the failure to meet this precondition has "tied his
hands" and he cannot review the issue. Essentially, Judge Smith uses plain error review to bar
defendants from benefiting from a supervening change. If we follow this "cut 'em off at the pass"
approach, not only is McGuire denied the benefit of Gaudin, but henceforth every criminal defendant
will necessarily be denied the benefit of a supervening change in any law. This cannot be.
3. Burden of Proof
To avoid reversal of a conviction under harmless error review, the government must establish
that the defendant's substantial rights were not affected.28 For all intents and purposes, Judge
DeMoss's standard and my proposed standard are the same except that we place the burden of proof
on the "substantial rights affected" issue on opposite parties. Judge DeMoss, by remaining within the
stricture of the plain error rubric, burdens the defendant with the task of proving that his substantial
rights were affected, while I, by following the supervening decision doctrine's harmless error
procedure, would require the government to establish that the defendant's substantial rights were not
affected.
The burden-shift I advocate here is not without precedent. True, when faced with a
supervening decision changing the law, the Second Circuit sticks with the plain error fiction. But it
does so with a slight yet significant twist: The burden of proof under the plain error analysis is shifted
to the government, requiring it to show that the error did not affect the defendant's substantial
rights.29 As a practical matter, this is very close to, if not the same as, the treatment I am proposing.
28
See Fed.R.Cr.P. 52(a).
29
See Viola, 35 F.3d at 42.
Significantly, the Second Circuit justifies its burden shift by contrasting harmless error and
plain error.30 In the ordinary case, if it is clear at the time of trial that an instruction or an evidentiary
ruling is erroneous, the defendant knows or should know that he has a duty to object. And, if he fails
to object, he forfeits his legal right to have the error corrected because he has impeded the judicial
process by failing to prompt the trial court and afford it the opportunity timely to correct the error.
In that ordinary case, it is eminently fair to hold a defendant accountable for his failure and to deter
defendants from strategically withholding an objection in order to seek reversal on appeal.31
Conversely, when a supervening decision truly changes well-settled law, the analysis changes
dramatically. A defendant has no duty to object to a jury charge that is indisputably supported by
established law. Obviously, an objection would produce no self-correction by the trial court, so the
absence of an objection has no effect on the efficient administration of the judicial system. It follows
that, as no such legal right existed at the time of trial, the defendant did not "forfeit" a "right" by not
making an objection. To penalize defendants for failing to challenge entrenched precedent would only
encourage frivolous objections and appeals. Surely, when the source of what Judges Smith and
DeMoss call plain error is a supervening change, the defendant has not been derelict in failing to
object and should not be saddled with the burden of proving prejudice.32 In this special context, then,
just as in harmless error review under Rule 52(a), the government should bear the burden of showing
that the "error" did not affect the defendant's substantial rights.
C. THE SUPERVENING DECISION DOCTRINE AND MCGUIRE
In McGuire's case, all elements of the supervening decision doctrine are present, and the
government cannot establish that the failure to send the materiality issue to the jury was harmless.
Under the law of this circuit as it existed at the time of trial, McGuire did not have the right to have
the jury decide the issue of materiality.33 During the pendency of his appeal, however, the Supreme
30
Id.
31
Id.
32
Id.
33
Swaim, 757 F.2d at 1534.
Court reversed that very law and in so doing gave that right to all criminal defendants, including
McGuire. McGuire's failure to object is explained and excused by this supervening change in the law.
Thus, McGuire's Gaudin-type issue should be treated as though it had been preserved, authorizing
review under the harmless error rubric, not under plain error.
Generally, an error is harmless if the reviewing court is certain, after viewing the entire record,
that the error did not affect the defendant's substantial rights.34 As noted by Judge DeMoss, McGuire
vigorously contested the materiality issue. Throughout the trial, he insisted that the statements in
quest ion were not material. Indeed, this was his principal defense. As materiality was a hotly
disputed element of the offense charged and was a key issue to the defense, the failure of the district
court to allow the jury to determine the element of materiality indisputably affected McGuire's
substantial rights. I hasten to add that alone the presence of the supervening decision doctrine does
not entitle a defendant to automatic reversal; it does nothing more than guarantee that the court will
examine the record as a whole to determine whether the "error" retroactively produced by the
supervening decision affected the defendant's substantial rights. Like Judge DeMoss, I am convinced
that in this case it did. I am equally convinced that if only Judge Smith's view of the law would permit
him to reach the substantial rights issue, he too would agree that here such rights were affected. And,
although in this case we might all agree on the result, regardless of whether the burden of proving
prejudice must be borne by the defense or by the government, such might not always be the case.
Thus the importance of emphasizing a harmless error rather than a plain error analysis, and their
respective burdens of proof, could easily loom large in a case with somewhat different factual aspects.
III
CONCLUSION
I find it particularly perverse to require a defendant either to object in the face of clearly
established law to the contrary or face a stacked appellate deck in the form of plain error review. I
find it equally perverse to deny a defendant appellate review of an issue arising from a supervening
change in the law: Griffith demands that he is entitled to reconsideration in light of all changes in the
34
See Fed.R.R.P. 52(a).
law occurring during the pendency of his appeal. And I find it a cruel irony to subject the defendant
to plain error review when no error was committed at the time of the trial, either by the court in
following the law as it then existed or by the defense in not interposing a frivolous objection.
Consequently, I urge this circuit to adopt a separate jurisprudential doctrine for the review of
Gaudin-type issues—specifically, the supervening decision doctrine set forth above—and in such
cases to avoid the plain error rubric. Although I have failed to win over either of my colleagues on
this panel to my position, I specially concur in the result reached in Judge DeMoss's opinion and write
separately in the hope of encouraging the rest of my colleagues to consider well adopting the
supervening decision doctrine which I champion today.
JERRY E. SMITH, Circuit Judge, concurring in part and dissenting in part:
I.
While concurring in the remainder of the majority opinion, I respectfully dissent from part II,
because I read United States v. Calverley, 37 F.3d 160 (5th Cir.1994) (en banc), cert. denied, --- U.S.
----, 115 S. Ct. 1266, 131 L. Ed. 2d 145 (1995), as requiring us to consider the clarity of the law at the
time of the claimed error, not at the time of review. Calverley holds that plain error "at a minimum,
contemplates an error which was clear under current law at the time of trial." Id. at 162-63
(emphasis added, internal quotations omitted). Our analysis of the plaintiff's claim in Calverley shows
that we meant what we said: "Assuming without deciding that studied analysis of [the law] would
lead to the conclusion that [the defendant's argument is correct], this conclusion was not obvious
when the court sentenced Calverley.... Consequently, neither the trial judge nor the prosecutor may
be considered derelict in failing to notice [the error]." Id. at 165 (emphasis added).1
In short, when assessing the clarity of a claimed error, we do not directly consider whether
error occurred; instead, we determine only whether the district court was "derelict" in making an
"obvious" error. Subsequent legal developments are irrelevant.
1
This passage clarifies our observation that the Supreme Court had declined to determine the
relevance of intervening precedents. See 37 F.3d at 163 n. 18. While that footnote is
ambiguous—it could mean either that we were also reserving that issue or that while we were
speaking to it, we were aware that the case we were citing had not—the subsequent passage
considers only the obviousness of the claimed error at the time the district court made it.
The majority, in its own words, "construct[s] an exception" to this rule. Maj. op. at 2817 n.
8. Calverley carefully lays out a series of bright-line rules, reconciling many of our precedents and
overruling all others: "Although most of our opinions have recognized that an error must be clearly
evident to be plain, a significant number have omitted or given insufficient weight to this element of
the plain error equation. We today disavow all holdings and articulations inconsistent herewith." 37
F.3d at 163-64; see also id. at 163 n. 20, 164 n. 27 (citing overruled cases).
In summary, we decided Calverley en banc, just over a year ago, in a thorough and
carefully-reasoned opinion that overrules a significant number of panel opinions in order to clarify this
area of the law. As a result, Calverley deserves to be interpreted generously and deferentially.2
II.
Although the majority is correct that an objection would have been perceived as frivolous at
the time of trial, following Calverley would not cut against the policies that underlie plain error
review. If we were concerned primarily with fixing mistakes, and not with protecting defendants
against derelict judging, we would reverse all errors that are "plain" or "obvious" to us, regardless
of whether other appellate judges have already ruled on similar claims. Whether a controlling
precedent is decided before trial, between trial and appeal, or after appeal is pure happenstance; no
matter how we conduct plain error review, we will treat defendants differently at divers times.
We therefore review forfeited errors only to protect "the fairness, integrity, [and] public
reputation of judicial proceedings,"3 and we do so by ensuring that criminal defendants are not
convicted or sentenced in blatant disregard of settled law. But we do not insist that trials be free of
forfeited error.
Application of Calverley in this context also would be consistent with the line of cases holding
that we must apply the law as it is understood at the time of appeal. We review a claim of forfeited
2
Most recently, this court has interpreted Calverley in a similar fashion, in United States v.
Dupaquier, 74 F.3d 615, 619 (5th Cir.1996). This caselaw is binding on us, as an interpretation
and application of Calverley.
3
We reverse even obvious errors only when they affect a defendant's substantial rights and
"seriously affect the fairness, integrity, or public reputation of judicial proceedings." Id. at 164
(quoting United States v. Atkinson, 297 U.S. 157, 160, 56 S. Ct. 391, 392, 80 L. Ed. 555 (1936)).
error only if the appellant satisfies the plain error requirements of FED.R.CRIM.P. 52(b), just as we
consider a habeas corpus petition or 42 U.S.C. § 1983 claim only when our older precedent satisfies
a set of threshold requirements. 4 If a claim meets the dictates of rule 52(b), we follow Griffith v.
Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987), and evaluate the merits according
to our current understanding of the law.5
I agree with the majority that Calverley is not technically stare decisis on this point because
it did not present the question of an intervening precedent. I also understand that application of
Calverley to the fact s at hand might appear harsh, as an objection would have been perceived as
frivolous. Nonetheless, I would follow our own precedent and affirm.
4
See Teague v. Lane, 489 U.S. 288, 109 S. Ct. 1060, 103 L. Ed. 2d 334 (1989) (holding that
habeas petitioners receive the benefit of "new rules" only in limited circumstances); Rankin v.
Klevenhagen, 5 F.3d 103, 108 (5th Cir.1993) (deciding that officials have qualified immunity
against suits under § 1983 if their actions were reasonable in light of judicial precedent at the time
of the offense).
5
At least three Supreme Court Justices apparently agree that we must look to the clarity of the
law at the time of the error. Although the government waived the plain error requirements in
Gaudin, Chief Justice Rehnquist noted that because all circuits but one had found materiality to be
a question of law, "it is certainly subject to dispute whether the error in this case was "clear under
current law.' " United States v. Gaudin, --- U.S. ----, ----, 115 S. Ct. 2310, 2322, 132 L. Ed. 2d
444 (1995) (Rehnquist, C.J., concurring, joined by O'Connor and Breyer, JJ.) (quoting United
States v. Olano, 507 U.S. 725, 732-34, 113 S. Ct. 1770, 1777, 123 L. Ed. 2d 508 (1993))
(emphasis added). See also United States v. Allen, 76 F.3d 1348, 1366-68 (5th Cir.1996)
(applying plain error analysis in light of intervening decision in Gaudin).