Charles H. Keating v. Robert Hood Attorney General of the State of California

Never- Alas, party was satisfied. neither from the result

theless, no bevue detracts err when efforts. It did not evidence,11 refused certain

it excluded estoppel, harmonized judicial

apply and fixed interrogatories,

jury’s answers

attorney’s fees. recover her Norris shall

AFFIRMED. appeal.

costs KEATING, Petitioner- H.

Charles

Appellee, HOOD; Attorney General

Robert California, Re-

the State of

spondents-Appellants.

No. 98-55468. Appeals,

United States

Ninth Circuit. Nov. and Submitted

Argued Sept.

Filed 19, 1999.

As Amended Oct. claim, in deter- court did err the district the district Norris' assertion outweighed mining that the relevance an al- evidence of not have excluded should time, unfair danger waste of trial employee by of undue rape leged attempted of a female issues. See prejudice and confusion Despite the fact merit. a coworker is without Fed.R.Evid. to her evidence had some relevance federal and state both prosecuted terms

court, to substantial and sentenced concurrent- to be served imprisonment, pris- ultimately spent years five ly. He state trials were both His federal and on. however, marred, by which led our errors and his federal conviction1 court to reverse his state grant court district federal actions, Following these petition. prior to prison was released from Keating At prison of his sentences. completion time, before remained six months parole for eligible become he would subse- Keating state sentence. on his the federal guilty to pleaded quently and, plea agree- pursuant charges ment, to time served. sentenced the district consider whether We now Keating habeas granting decision court’s Kumar, Attorney Gen- Deputy Sanjay T. legally his state conviction relief from California, the re- for eral, Angeles, Los on the based The decision was correct. spondents-appellants. defining jury instruction that the ground Stephen C. D. Devereaux Scott erroneously fraud of securities the offense Alto, Godward, Califor- Neal, Palo Cooley affirm We the mens rea element. omitted nia, petitioner-appellee. for the omis- holding that the district Ellis, McGaan, of the offense Kirkland & element this essential Andrew R. sion of Illinois, petitioner-appel- the re- requires for the process and Chicago, violated due lee. conviction. versal

I.

BACKGROUND in Califor- Keating was indicted REINHARDT, violating sections BOOCHEVER, nia state Before: Corporations RYMER, of the California Judges. Circuit and 25540 offense to Code, it make a criminal which REINHARDT; by Judge Opinion “by means security sell offer or Partial Dissent Concurrence Partial in- which oral communication written or Judge RYMER. by of material fact untrue statement cludes REINHARDT, the statements Judge: in order to make necessary Circuit made, of the circumstances light be well opinion will of this Most readers misleading.” made, not they were of Charles the activities acquainted essence, contended, state corporations, American Keating, whose Keating’s fail- by were misled bond sellers Sav- Corporation Lincoln Continental Continen- of American them to inform ure elderly out Loan, individuals bilked ings & the riski- condition and poor financial tal’s savings selling millions of dollars turn, bonds, they, in and that ness savings bonds. them worthless circum arising out of factual same Keating, offense United States 1. See convic federal required reversal of knowledge stances 1998) jurors’ (holding that Cir. tion). been convicted unwittingly possible misled bond purchasers. way to view Keating as a direct undisputed It is that in when Ameri- perpetrator: can Continental’s financial circumstances thing [O]ne the evidence does demon point had deteriorated to the where the strate is that it was the defendant who company longer pay- was no able to make singly offer, setting the terms of the bonds, ments on bankruptcy filed for offer, interest maturity rates purchasers most bond lost the dates in the offer and that [American money they had invested.2 promulgating Continental] was various trial, judge Prior informed the records, material in the form of track criminally could be held reports annual and the like that were responsible either as a direct perpetrator part utilized as of an offer as well or for aiding abetting the offense. these individuals. And I would state parties’ Before closing arguments, that regard, the bond seller a becomes however, dispute a erupted over whether a that; communicator of but it is de direct perpetrator theory liability would again fendant who is the source of the presented jury. to the The defense bond. requested jury that, a instruction because The judge was not convinced. While had Keating personally not or sold offered acknowledging that “both theories are in a purchasers, securities he could technical jury,” sense before the con- only be convicted as an aider and abettor. cluded that perpetrator the direct theory prosecution objected, The informing the was inconsistent with both the wording of planned to argue both theo- indictment, charged which complet- “a jury. ries to the Keating renewed his offer, ed sale” protest, rather than an pointing out that he and the had had no face-to-face contact or statute under prosecution direct communica- which the tion with the individuals named in in- charged Keating. The defendant contin- dictment, and the trial judge concurred ued urge the judge to offer the instruc- skepticism with his perpe- about the direct tion only be convicted theory. prosecutor trator The countered abettor, as an aider and arguing perpetrator that a direct instruction was need for such an instruction clearly “supported in an evidentiary if sense” by prosecution’s demonstrated insis- viewed as the original source tence that a perpetrator direct theory was of the and of offer the misleading omission supported by the evidence. Realizing of information. prosecution The charac- if it did not back off of its insistence terized “as the alter ego for the viable, theory was corporation” and stated that in its view judge give the instruction proposed gravamen “the ... offense is not so defense, by the prosecution promised much an actual sale as it is the omission or argue only the case under an aiding misrepresentation aspect of it.” This theo- abetting theory. ry identified Keating as the source of the When defense attorney later re- failure to notify anyone of financial newed request for an instruction limit- bonds, risks of the a material omission that ing the basis on which Keating could be ultimately transmitted to the bond convicted, announced, judge “I had purchasers, and that was “violative previously declined to so just statute instruct I as much an as actual sale.” think judge’s As the the evidence is discomfort clear that prose- with the Mr. Keat- theory cution’s of liability ing actually never any became increas- face-to-face clear, ingly prosecution urged one last contact any purchasers. the bond 2. We alleged discuss the facts of his sion underlying of the conduct the state they insofar crimes are relevant to the charges, 280, People Keating, see 16 Cal.App.4th errors in instructions that infected Keat- Cal.Rptr.2d (Cal.Ct.App.1993). ing’s state trial. For a more discus- detailed “sell” includes ev- “sale” or The term as an can be only liability clearly his

So of, sell, contract ery of sale already contract that’s I think aider and abettor. of, interest in security or disposition or abundantly clear.” security for value. are dis- which arguments, closing After in the commis- concerned persons The opin- in .this later detail greater cussed regarded by are crime who sion of a Be- jury.3 ion, instructed the judge crime thus com- in the principals laws instructions cause content in- thereof equally guilty mitted and case, in this importance paramount is of clude: excerpted here: they are actively directly and 1. Those who willfully sells who Every person crime, constituting act commit the this state security in offers sell or; oral communi- written or means the com- and abet 2. Those who aid untrue state- includes which cation the crime. mission of omits to state fact or a material ment of in order necessary Transcript fact at 7468-70. material Trial made, light the statements make that, jury was then instructed they circumstances aiding Keating under to convict of a made, misleading, guilty were to find theory, it would abetting of the sections violation 25401/25540 sellers were the bond he knew that Corporations Code. California ma- omitting making untrue statements or intended, crime, each of such prove to In order to facili- that he facts terial proved: must be elements untrue following tate, these encourage promote or omissions.4 sold or of- or willfully statements defendant 1. The state of security in the to fered sell a read apparent are key Two facts California; First, instruc ing of the instructions. or oral any written means of By 2. aiding jury limit the to did not tions an untrue includes which communication possible two abetting theory, but outlined' omits to or material fact liability statement Keating’s. criminal for bases necessary fact a material him on either jury to convict allowed made, light Second, make the statements in to proven. theory it deemed they the circumstances convict Keat- jury allowed structions made, misleading. finding were without perpetrator ing as direct falsity of knowledge of

that he had conveyed or that information to sell” “offer” or “offer term The failing to or negligent reckless dis- he was attempt or offer every includes words, respect to the know; with in other buy, of, of an offer solicitation or pose instructions theory, the security for interest in security or an This requirement. rea mens contained no value. omitting a material fact or ment material counsel re- closing arguments, defense 3. After count, in each sales involved fact in the judge’s refusal objection to trial newed and; requested instruction. give the aid, encour- intended 3. The defendant abetting making aiding re- bond sellers age 4. The or facilitate instruction following: om- fact or jury find the of material quired that the statement an untrue involved in sales itting fact a material fact material or An statement of 1. untrue and; count, each by made a material fact omission advice, defendant, inten- by act or The with the sale of in connection bond sellers aided, encouraged or in- promoted, tionally buyers identified in the bond bonds to untrue state- making inclusive, XX, stigated the through XVIII and counts II omission of facts or material and; ments of indictment, material facts. knowledge 2. The defendant Transcript at 7470-71. Trial untrue state- making an were bond sellers 1058 interpretation

was consistent peals §§ with defining 25401 and 25540 as es Appeals California Court of had given tablishing a liability strict offense. See the law at the People time. See v. Baum Keating, Cal.Rptr .2d at 917-18. gart, 540-41, 267 Cal.Rptr. 218 Cal. The Supreme California initially Court App.3d (Cal.Ct.App.1990) granted Keating’s petition review. See §§ (concluding 25401 and 25540 re People Keating, Cal.Rptr .2d quired intent); no People criminal v. John (Cal.1993). P.2d 673 Before it decided his son, 366, 369, 262 Cal.Rptr. Cal.App.3d case, however, Simon, it decided People (same). (Cal.Ct.App.1989) 9 Cal.4th Cal.Rptr.2d 886 P.2d jury The returned a verdict convicting (1995), in which it held that “knowl- Keating of seventeen of the eighteen edge falsity misleading nature of charged counts of sales of by securities or of materiality statement of an means of false statements or omissions. omission, or criminal negligence in failing general This specify verdict did not wheth- investigate and discover them” is re- er the convicted as a direct quired to convict a defendant of violating perpetrator or as an aider and abettor. §§ 25401 and overruling the Court Keating appealed, and his conviction was Appeals decisions that held otherwise. by affirmed California Ap Simon, Court of Cal.Rptr.2d 886 P.2d at peals. rejected Keating’s argu Then, rather proceeding than ment that judge trial erred with its review of Appeals’ the Court of instructing jury on a direct perpetrator (a rejection of Keating’s appeal decision theory for which there was insufficient evi based on the, two cases that Supreme dence. It acknowledged that the “[t]he disavowed), Court had now Supreme trial presented the case to dismissed petition without possi instructions conviction was review improvidently granted. ble under that Keating theories was either People v. Keating, 410, 39 Cal.Rptr.2d the direct principal seller or a who was (Cal.1995). P.2d 1119 aiding violation,” and abetting the but rea A few months after the Su California soned that reading “[a] of these instruc preme Court petition, dismissed his Keat- court, tions indicates to this as it must ing petition a filed for habeas relief in have jurors, that Keating being federal district court. The court granted tried theory on the that he aided petition ” Ms based on two grounds: that abetted in the ‘junk sales of the bonds.’ the to failure include a mens rea require People Keating, v. Cal.Rptr.2d 916, at d ment in the direct perpetrator instruction 920. The court also Keating’s denie an essential eliminated element the of claim regarding the failure to give the fense jury’s from the consideration and limiting instruction jury’s consider therefore process, violated due and that ations to the aider and abettor theory, the omission of this element also infected reasoning, “[cjlearly, Keating per never Keating’s conviction by allowing sonally sold any security to any of the to Mm as an convict aider and abettor individual investors.... It is inconceiva finding that the perpetrator ble that without direct any there give need to this had requisite instruction. To criminal given Keating intent. this instruction Hood, would be stating F.Supp. 1486-88, the obvious.” Id. at 920. 1492- (C.D.Cal.1996).5 Finally, rejected the court Keating’s The argu appealed ment decision, that the omission of the this January mens rea and on 1998 this error, element was an relying previous on Court dismissed Keating’s petition without decisions Ap the California Court prejudice his failure to exhaust Keating immediately conviction, appeal released be- reel of that he was released cause serving he was later, still time for his federal on 3, bond federal six months on October conviction. progress Based on the of his di- unwilling to make such state was claim, the absence that secondary his that then decided The court commitment. perpetrator the direct element rea mens Keating’s consider to jurisdiction it had conviction any infected had also instruction that of position his to analogizing theory. petition, Keat abetting aiding and on the his own on who is released defendant Hood, ing holding appeal, pending recognizance Cir.1998). plans of its announcement state’s for rehear- petition filing than Rather “a to subjected him him reincarcerate secondary pursuing court ing in liberty.” upon restraint significant court, decided in state claim on the merits reaching its decision January In Accordingly, on claim. waive state’s rejected the petition, court habeas filed same again evidence court, om- absence argument this time district in the petition theory perpetrator February support the direct secondary claim. On itting the had convicted hearing made it clear 3,1998, shortly before thus abettor and discuss an aider and scheduled to had court district error harmless. of Cor- Department the instructional rendered petition, State new informing the facts that relied on letter The court sent rections judge of this the trial argued the mandate expected prosecutor him that ordering justify February 5 and evidence to was sufficient issue on there instruction, authori- and that prison to state perpetrator surrender a direct him to in order to February 6 the jury p.m. closing argument 3:00 in his ties at analo- employed language, serving his sentence. prosecutor finish direct suggested reasoning that gies expedited held court The district liability. time it February at which hearing on petition Keating’s February habeas verbally granted issued mandate Our the omission ground day the district on the the next perpe- element granting mens rea its filed written process. due violated appealed instruction state has trator petition.6 rejected the state’s so, objecting both doing ruling, the district peti- over jurisdiction to its challenge mer- and on the grounds jurisdictional petition, the new he filed the time At tion. its. and our longer prison, no Keating was decision II. on issued yet had not mandate reinstated appeal and dismissed his JURISDICTION thus, argued, the conviction; the state his jurisdictional raises a The state his habe- granting decision district was not arguing that challenge, effect, he could remained petition filed his at the time custody” “in jurisdic- custody” “in for considered not be been he had petition because new habeas the state’s To address purposes. tional mandate petition and first freed on the delay the concerns, offered to the court decision this Court’s on yet issued as the state long proceeding habeas to ex failure for petition dismissing remain Keating would promise that Thus, rea the state remedies. haust state the district custody until from state free over jurisdiction sons, However, we do not petition. his rule (1) the essentials only when petition ment occurs Grant habeas Decision to 6. The in a writ- 11, are set forth or order February judgment actually effective became opin- Keating’s separate from the court's granting the written ten document date (2) sub- See Fed. on the docket. when petition was entered ion or memorandum 79(A) ("A judgment is effective reflected separate Pr. document is R. Civ. stance of entered as forth when only when so set docket on the appropriate notation in sheet.”). 79(a).”); JUR. 2D 46 AM. in Rule provided (1994) ("Entry judg- § 135 JUDGMENTS 1060 petition.

new sequence ically provided events petitioners habeas with the causes us to reach a different option conclusion. amending applications their to Keating’s first petition was not actually delete unexhausted claims rather than suf 11, February dismissed until dismissal”); after our fering Estelle, Guizar v. 843 (9th Cir.1988) (under mandate had issued. Well 371, before Febru 372 Rose v. 11, ary Keating had filed a new petition Lundy, petitioners “should option have the omitting the unexhausted claim. The new of either resubmitting petitions their with petition simply restated primary only claims, exhausted or exhausting the claim and secondary dropped one. of their remainder claims in state court The district filing court treated his aas and then filing petitions.... new peti [If however, petition; second because the first petition tioner] resubmit[s] petition dismissed, yet had not been claims, and the exhausted ... the district court because, stated, as the district court may accept “[t]he pro nunc tunc and reinstate grounds petition] [in the instant are identi its opinion.”).7 We now in hold cal to petition,” those stated in the 1995 petition stant may be treated as an amend petition new would more properly be ment or resubmittal of Keating’s first ha- regarded petition as an deleting amended petition, beas and instruct the district the unexhausted claim. See Rose Lun v. court to filed, deem it as having so dy, 509, 510, tunc, 102 S.Ct. pro nunc under case number CV 95- (1982) (when L.Ed.2d 379 habeas petition 5151 JGD.8 See Calderon v. U.S.D.C. exhaust, has been for dismissed failure to (“Kelly”), (9th Cir.1998) 163 F.3d — petitioner (en has “the choice of returning banc), denied, U.S. -, cert. state court to exhaust his claims or of (1999) S.Ct. 143 L.Ed.2d (noting amending resubmitting peti the habeas that district court could pro exercise nunc present tion to only exhausted power claims tunc to deem recently filed habeas court.”); the district Calderon v. petitions U.S.D.C. to have been filed as of the filing (“Thomas”), (9th 144 F.3d Cir. date of two petitions earlier that were 1998) (discussing power district court’s erroneously dismissed); Laird, Miller allow amendment of petition (9th Cir.1972) 464 F.2d 534-35 (filing claims); strike unexhausted Calderon v. of petition amended relates back to date of (9th (“Taylor”), U.S.D.C. 134 F.3d 981 original Cir. petition purposes in custody 1998) (“The Supreme specif Court in Rose requirement).9 Because Keating’s pe 351-52, The fact that petition labelled the (1973) 93 S.Ct. 36 L.Ed.2d 294 petition second peti (petitioner rather than an amended released recognizance pending dispositive. tion is not necessary It is often execution of custody sentence is in beyond look party labels that a "subject selects. public restraints not shared Calderon, Thompson 151 F.3d generally” and faces imminent threat of in- (9th 1998) (en banc) (petitioner's carceration) (internal Cir. motion quotation marks and ci- judgment omitted); relief Swan, under Federal Rule tation Vargas v. 60(b) of Civil Procedure must be Cir.1988) construed as (unlikely possi- petition); successive Org. bility habeas National that INS custody would to decline take Mullen, Marijuana Laws v. petitioner 828 of under detainer warrant Reform of does not 536, (9th Cir.1987) (court 541 deprive Moreover, dis jurisdiction). has court of cretion to appeal petition treat for writ of unquestionably was in custody with mandamus). conviction, respect to his federal under a fed- subject eral and bond to restraints on his 8. Because of the in manner which we resolve freedom of petitioner movement. A habeas issue, jurisdictional we need not deter- custody who is may one conviction mine whether the district court was correct in challenge use the writ to a future sentence. concluding that was in custody when 534, Dorrough, See v. Estelle 420 U.S. 95 S.Ct. January petition 22nd was filed. sim-We 1173, (1975). 43 L.Ed.2d 377 ply note that strong argument a makes that Only he was. possibility 1240, the slim 9. Henry a sua Lungren, (9th of v. 1241 sponte request en rehearing 1999), case, banc stood Cir. contrary. is not to the In that reimprisonment. between and See after the district court ha- dismissed Court, Hensley 345, Municipal v. 411 petition U.S. beas jurisdiction failed to retain

1061 Gaudin, U.S. v. 515 States United of doubt.” date effective before the filed tition 2310, 444 L.Ed.2d 506, 510, 132 115 S.Ct. Death Effective Antiterrorism re Therefore, that (1995). an instruction AEDPA of the Act, provisions Penalty proving of of the burden the state See lieves of this case. resolution govern do not con doubt 327, beyond a reasonable 117 mens rea 521 U.S. Murphy, v. Lindh innocence (AED- of (1997) presumption tradicts the 481 L.Ed.2d 138 S.Ct. jury, thereby of the the function on invades pending petitions apply does not PA v. See Sandstrom process. due enactment).10 violating of date 521-24, Montana, 99 S.Ct. 442 U.S. III. (1979). Sev As the L.Ed.2d 39 61 court to noted, “every federal enth Circuit DUE PROCESS de the Court since question consider of the omission that disputed It is that agreed ... Winship has re cided In from the element mens rea in any jury without procured conviction un- erroneous Instruction of an element essential struction 493, 37 Simon, 9 Cal.4th People v. der v. Cole constitutionally invalid.” is offense (1995). At 1271 P.2d Cal.Rptr.2d Cir.1987). (7th 412, 424 Young, 817 F.2d instructing error whether is issue Ohio, 495 U.S. also Osborne See federal of a violation jury constituted 1691, 109 17, 110 S.Ct. n. 122-24 & of habeas grant compelling process due (omission (1990) of element L.Ed.2d relief. pro due violates jury instructions from Mendoza, 11 F.3d cess); States United jury allow Instructions (“[W]hen Cir.1993) a trial 126, 128 element every finding without convict offense an element judge omits re Winship’s re violate offense instructions, deprives it jury from charged necessary “every fact quirement vio duty and fact-finding its jury of be proven must crime” constitute rights”). process due defendant’s lates the Winship, In re doubt. yond reasonable omission clear It is .therefore 358, 364, 90 S.Ct. U.S. from the instruc rea element the mens “re (1970). process Due L.Ed.2d Keating’s right violated tions upon a to rest convictions criminal quire[s] jury to convict allowing the .by process due the defendant jury determination requisite element finding him without the crime every element guilty of the offense.11 beyond a reasonable charged, he is grant argument reject the state’s We it, refiled petitioner over Keating would violate ing relief habeas Accordingly, un his claims. to exhaust rules of reliance Teague’s prohibition and, case, effect took the dismissal in this like has conviction defendant’s adopted after a pro the state following termination Lane, Teague v. final. become required to file a ceeding, petitioner (1989). 103 L.Ed.2d S.Ct. petition. second an omission long clear It has instruc offense element disapproval of Rymer's Judge our We find argu state’s process. The violates due tions question odd in jurisdictional holding on the interpretation erroneous rests ment toward attitude "pragmatic” of her view pre interpretation Teague—an ap- petitions premature filing of unless petitioner any habeas relief to clude (ap- "flip side” regard to With peals. case involv decided Supreme Court had pre- permit circumstances, we legal Judge Rymer facts, concludes peals) ing identical refiling contention, requiring filings slate's Contrary mature issues. not as Although the is rule have issued "silly.” Court necessary be that is not that, accept willing to her on to instruct we are failure simple that the as decision pro due be violates petition should involved particular element view Teague, the Court's purposes it be- and that filed For prematurely cess. treated regarding a general rule We mandate issued. declaration “ripe” when our came of the offense an element holding on to instruct on failure alternate as an adopt position her is sufficient. question. jurisdictional 1062

IV. determine its “It long basis. has settled that when a case is submitted to HARMLESS ERROR ANALYSIS jury on alternative theories the uncon- Supreme The recently Court has made stitutionality of any theories re- it clear analysis that harmless error is quires that the conviction be set aside.” required even when element of an of Sandstrom, 526, 442 U.S. at 99 S.Ct. 2450. entirely fense has been removed from the States, See also Yates v. United 354 U.S. jury’s consideration. Neder v. United 298, 312, 1064, 77 S.Ct. 1 L.Ed.2d 1356 — States, U.S. -, 1827, 119 S.Ct. 144 (1957), overruled grounds, on other Burks (1999). L.Ed.2d 35 burden of demon The States, 1, 2141, United 437 U.S. 98 S.Ct. strating that the error was harmless be (1978) (“[T]he 57 L.Ed.2d 1 proper rule to longs to government. See O’Neal v. applied be is that requires which a verdict McAninch, 432, 444-45, 513 U.S. 115 S.Ct. to be set aside in cases where the verdict (1995). L.Ed.2d 947 supportable is on ground, one but not on another, and it impossible is to tell which argues The state the omission of ground jury selected”); Stromberg v. mens rea element from in jury 359, California, U.S. 51 S.Ct. harmless, struction was but on a very (1931) (“[I]f 75 L.Ed. 1117 any of the specific ground. The state does not argue in question clauses is invalid under the even if the jury convicted :as Constitution, Federal the conviction cannot direct the instructional error be upheld”). When two pre- theories are was harmless because “the omitted ele jury sented to a and one is factually insuf- ment was supported uncontested and ficient, a may conviction upheld, be- evidence, overwhelming jury- such that the cause a jury “equipped is analyze verdict would have been the same absent evidence” and so a may assume that Neder, the error.” supra. Nor does it it rested its ground verdict contend that a review of the record would supported. facts States, v. United Griffin establish, under the applicable harmless 46, 59, 502 U.S. 112 S.Ct. 116 L.Ed.2d standard, error jury would have (1991). However, “[j]urors since are found that Keating had the mens rea re not generally equipped to determine quired statute, under the rendering any particular whether a theory of conviction process due Instead, violation harmless. law,” submitted to them contrary is the state contends error was conviction must be overturned if one of the harmless jury because the convicted Keat- theories that was jury submitted to the ing as an aider and rather abettor than as legally erroneous. Id. a direct perpetrator, thus did rely not We have consistently interpreted Su on the legally theory. erroneous At oral preme precedent to require reversal argument, counsel for Keating stated on case in which a may verdict several occasions that the state had con rested on a legally invalid ground. See ceded that the error not harmless if Qualls, United States Keating was convicted perpe — (9th Cir.), vacated other grounds, trator, and the state did not contest this U.S. -, 119 S.Ct. 142 L.Ed.2d 323 Thus, statement. there can question be no (1998) (“[T]he Supreme Court has deter that the state’s decision not to assert that mined that a verdict must be set aside in the error was if the harmless conviction cases such as this where the verdict was based on the direct perpetrator theory legally insupportable on ground, yet one was knowing and deliberate. supportable another, impossi and it is ap fundamental rule that ble tell on ground re plies when a jury a general delivers verdict lied.”); United v. Fulbright, States may rest either legally on a valid or Cir.), denied, cert. legally ground invalid is clear: the verdict 117 S.Ct. 137 L.Ed.2d may (1997) stand when (“[T]he there way is no per instructions it could that correctly instructed also been for con a basis choose jury the mitted degree mur- of the defendant convict impermissible.... legally was first that viction had the defendant it that only the if found der to ascertain way no have we Because “wilful, pre- a deliberate jury convicted committed the on factual basis The de- II at 1151. killing.” Id. under Count meditated his conviction Fullbright, Barona, degree mur- v. was stand.”); convicted United States fendant cannot first Cir.1995) (“Where guilty (9th jury’s the held that Ficklin der. F.3d charge inade murder legally a degree with on the presented is verdict jury the factually a implied malice theo- opposed the theory, as that demonstrated quate the that requires in the Yates theory, played part have not inadequate ry “could vacated”). applied haveWe at 1151. How- Id. be conviction determination.” jury’s cases, in reasoning affirmance that explained ever, the same the hold: support the evidence that, when instruct- jury even ing the when aof conviction “very theory was per- legally theory the correct ing erroneous legally on a ed argue not did the state strong” which this in in “situations missible jury, theory to legally impossible erroneous it was that determines Court not it is when reversed must be conviction the infirm on have relied jury to for the jury whether to determine possible did “not instruction,” that its decision convict theory to erroneous upon relied be sus- can verdict general that a suggest Bunnell, Suniga See the defendant. present- evidence ‘ample’ if there is tained Cir.1993). (9th if or theory a constitutional ed on jury instructing the noted that haveWe a constitu- primarily’ ‘relied prosecution case in in a theory erroneous legally (emphasis at 1152 Id. theory.” tional legally on a instructed is also which it original). damaging particularly theory correct “absolute say that it is We cannot agree required not jurors are when rely on did jury that ly certain” conviction; theory of on the unanimously theory direct erroneous legally one that even cases, possibility in such Ficklin, Keating. Unlike convict legally upon relied have might juror finding any make did not jury invalidation requires theory erroneous it convict that “impossible” it renders 669. id. at the conviction. Because perpetrator. as a him direct ed to the exception limited There is finding, and any such absence if required may not reversal principle: instructed was not jury jury absolutely certain” “it is aider and an only as could convict theory to correct legally upon relied certain abettor, determine we cannot Hatcher, Ficklin defendant. convict the on that its verdict rested jury ty that Cir.1999) (empha theory.13 Ficklin, had original). sis argument state’s reject the We it could erroneously instructed a direct Keating as conviction that the of murder a defendant convict impossible rendered perpetrator was if it found theory malice implied evidence argument the absence a rob part of committed murder theory.14 such support presented However, jury had attempt.12 bery an aider him as to convict in order intent under the was erroneous instruction 12. abettor, plausible reason provide clause; the defendant jeopardy double perpetra- rely might jurors some juvenile guilty in pled already even for conviction as a basis instruction tor n. Slip op. at robbery offense. the more appears to be ground other if the liability. logical basis for did not Moreover, fact that the infor- knew to find that have the California argues that also 14.The sellers the bond conveyed to that he mation finding that a factual made Appeals a direct him as to convict in order was false an aider been convicted criminal to find did but perpetrator, argument This by pros- contradicted the ployed in his closing argument readily can be interpreted ecutor’s own statements at as conveying trial. After the a theory of direct perpetrator liability to evidence, jurors: close the prosecutor the vigor- that Keating was the source the offers ously argued to the judge that Keating to the bond sellers and was directly re- could be held criminally as a liable direct sponsible for the omission of in- material perpetrator.15 Moreover, although the formation from these offers.16 prosecutor did not ask expressly jury the For the reasons above, set forth convict Keating as a perpetrator, direct we cannot conclude that the instructional the language, analogies, and reasoning em- error was harmless.17 abettor rather perpetrator, than as a direct subsidiary to perpetrator the direct theory finding that this must be afforded defer nearly inescapable.” Opinion Dist. Ct. at 25. However, ence. the state court's conclusion In closing argument, his prosecutor the char- that was Keating it "obvious” that could not Keating responsible acterized as every act be convicted as direct perpetrator a of American (stating Continental that "Mr. he being "was theory tried that he Keating was the company”), language utilized aided and abetted in junk the sale of that Keating bonds, described "selling” ” as bonds,’ fact, finding was not a but rather (of employed analogies drive-by shooter any determination that in instructing error salesman) and a used car that were more perpetrator direct theory with suggestive of a direct perpetrator than giving out requested Keating's instruction was aider and abettor. prosecutor empha- harmless. We do not defer a state sized Keating that was the source of the mate- conclusion that a constitutional error was rial omissions by harmless, comparing information but question instead review this de the flow of information at Lincoln and novo. (9th Ameri- Borg, Lawson v. 60 F.3d can Cir.1995); Continental to an Sullivan, "hourglass,” explaining Dickson v. (9th Cir.1988). that "controlled the flow Additionally, be informa- cause the state tion theory through (a discussed the downstream” his "conduit” relied in the reject context of bank official had who more direct contact ing Keating’s argument that there was sellers) insuffi with the bond in a manner that cient justify evidence to direct caused bond sellers to be unaware of the instruction, its conclusion was dicta. See Peo suggesting information that the bonds awere Guiton, ple 4 Cal.4th Cal.Rptr.2d risky opening investment. In his argument, (1993) 847 P.2d (finding that prosecutor similarly emphasized one basis for a factually conviction is insuffi Keating’s direct responsibility for the material cient require does not long reversal as as omissions and thereby suggested that he had there is a factually sufficient basis for the acted as a perpetrator. direct verdict). jury's 17.Even were Although judge we review responded the record express- 15. ing purpose whether, disagreement his of determining prosecutor’s if theory, he did not was convicted disagree- perpetrator, communicate direct jury, ment to the and in fact instructed it omission of the that mens rea element be would an "offer to harmless, sell” could "every include at- we would reach the same result. to, tempt or dispose offer to of ... a securi- Although it is readily apparent how to ty” prosecutor instruction that the him- —an resolve tension between the California self interpreted allowing Keating's Roy, 519 U.S. 117 S.Ct. 136 L.Ed.2d conviction as the source of the offer. In the (1996), cases, Stromberg line of proposed jury instructions submitted possible approaches, trial, prior to the state had relied on this would result be the same. Roy, Under argue definition to "linkage no or con- stringent approach, most we would look first nection” need be shown "between a defen- to the erroneous regarding instruction dant 'offerer' and buyer,” a victim argued perpetrator theory of liability, and de- People "the obligated are not prove termine whether a guilty verdict under it personal direct and contact between each de- Neder, harmless error. Unlike every fendant and People’s victim.” Pro- which the defendant failed to contest posed Liability Theory Jury Instructions at element, omitted here vigorously challenged the pointed state's evidence that fact, knowledge district court of the falsity misleading concluded "[a] reading reasonable prosecutor's nature of the information was conveyed closing argument makes the Indeed, conclusion purchasers. the bond those at- aiding considered the abetting theory tacks constituted entire defense. meantime, the mandate once pened in IV. custody” “in then Keating was did issue CONCLUSION ripe. No action became habeas and his convicted have jury may the not have Keating Because would that suggests one omis- the perpetrator, a direct as February (literally) on custody” “in been offense element of an essential Court, sion 411 U.S. Municipal Hensley v. and due violated instructions the

from L.Ed.2d 345, 352, 93 S.Ct. of habeas grant a requires and process ap for this authority (1973) provides the dis- we AFFIRM Accordingly, relief. that held the Hensley, Court In proach. relief. of such grant court’s trict on his released petitioner convicted a limited pending held be will mandate “in appeal was pending recognizance own en- to the district permit to remand jurisdic of habeas purposes for custody” in described tunc pro nunc ter the Hensley that fact to the addition tion. In opinion. this and statutory restrictions subject to was AFFIRMED. the stays, of by virtue only large at was its that noted Court concurring in Judge, RYMER, Circuit present- is part: petitioner in the that dissenting conclusion and part with not interfere does custody ly in I and parts judgment the in I concur Indeed, the State. of interest significant as I although opinion, majority II of the accept respondent’s were to if we even jurisdic- have hold we would below explain in custo- not is petitioner that dif- argument petition § Keating’s tion over no more than the due do result would dy, I that dissent reasons. ferent major- until corpus action the analysis habeas error postpone process/harmless IV, and would his sen- III service parts employs begun ity petitioner decision open the district reverse remain still instead It tence. would petition. re- the grant petitioner’s to to order Court District habe- of his consideration pending lease

I re- petitioner if Even corpus claim. as to have enough long in jail mained A Court, the District filed petition his jurisdictional majority’s the my view District by order release his ap necessary nor are neither gymnastics “custo- jeopardize would Court treating Instead propriate. corpus habeas of a purposes dy” as amendment petition instant serve badly would Plainly, we action. petition, his first or resubmittal writ history of purposes as it deem to instructing the district circumstances these hold that to as of (apparently filed so having been even spend failure petitioner’s filed), I petition original date deprive enough jail is minutes petition simply say would his con- hear power District mandate (ie., our before prematurely filed claim. stitutional hap nothing substantive issued), since but harmlessness as to the equipoise in virtual presented evidence While left error,” therefore is the court sufficient have would question of an likely effect "grave doubt about conviction, rea- also support verdict,” error must jury’s error finding that sonably concluded O’Neal, were not harmless. it as if treated intent requisite criminal That, in our S.Ct. at many inferential too take require would we find view, in which the circumstance is "grave be left therefore steps. We state did that because noteWe ourselves. convict- jury would have whether doubt” appeal, a more Roy question on not raise required if a direct ed the law the facts analysis of extensive "the matter When intent. find criminal required. is not question to relevant himself judge] finds [a evenly so balanced Hensley, 411 352-53, U.S. at 93 S.Ct. 1571 B (internal omitted). footnote and citations The majority’s answer to jurisdic- question tional is troubling for number of approach This is also consistent with First, reasons. Keating never asked the how we flip side, handle the when notices district court to construe his habe- second appeal are filed after a decision in the petition as an amendment to his first district court judgment but before is en- petition, nor did try to “resubmit” his tered. In that circumstance we simply petition first without the unexhausted take the pragmatic view dismissing Rather, claim. he deliberately filed his for lack jurisdiction and forcing the petition second as a separate action under appellant to at refile the appropriate time a separate case number. He never argued is silly; the triggering event will have in district court or here that he should passed and nothing of moment will have somehow be respect. relieved this occurred in the interim. See Fed.R.App.P. Second, the bottom line of this court’s 4(a)(2). Put differently, the court to which with respect order to Keating’s first habe- the matter is going jurisdiction lacks when petition as was “DISMISSED WITHOUT the filing is made because the filing is PREJUDICE.” See Keating v. Hood premature, but jurisdiction has by the time 7”), (“Keating (9th 133 F.3d it matters. The premature filing is treat- Cir.1998). As we explained in Henry v. ed as having been made juris- at the time Lungren, (9th Cir. diction actually Here, attaches. the situa- 1999), dismissal of original an petition for tion is quite similar. Even if the State is failure to exhaust remedies, without correct that Keating was not “in custody” retaining jurisdiction, terminates the litiga on January 1998, there is tion. dispute no This means that once this court’s that he would have been mandate taken issued in I, into custo- there was no petition dy to be begun have “amended” or complete serv- “resubmitted.” Contrast, ing example, his for sentence this on court’s February 6 order in (following Crandel, Reutter v. issuance of this mandate on Febru- Cir.1997), where we 5).1 also held ary To hold that he was not in custo- petition was mixed and required dismissal dy on January 22 and to dismiss lack but expressly stated: “Reutter may strike jurisdiction for that reason “would do no the unexhausted claim and resubmit his more postpone than corpus petition to the district court.” This court’s action petitioner until had begun service of order in Keating I provides no such option. his sentence.” Hensley, at Thus, on January 22 when Keating’s sec 352, 93 S.Ct. 1571. case, In this ond habeas petition filed, was the district would have been for no more than fifteen court no longer jurisdiction had to do any days. Nothing happened in the district with thing respect to petition his first since court, except (after a hearing date still appeal; even if it had been mandate expected issue) was set. asked so, to do it could not have construed For this reason it makes sense to hold that the second petition as an amendment or whether or not the district court juris- had resubmittal because it couldn’t do any diction on January Keating’s January thing respect to the petition first 22 filing-although premature-became effec- January 22. got It jurisdiction back when tive of the time this court’s mandate our mandate issued on February at but issued returning him to custody because that time petition the first longer no exist no one questions that the court juris- ed because our dismissal expressly termi diction as of February 5. nated that litigation. Thus, the district 1. As Department of Corrections's Febru- at surrender Wasco State p.m. Prison at 3:00 ary directs, 1998 letter was to self- February present, filing of heldWe second construed not have

court following dismissal petition, second habeas resubmittal or an amendment petition does petition, the first January prejudice (on without either petition first first date to the first back no relate 6) not there because February or not court did there the district And because petition resubmit. or amend petition original Henry’s over jurisdiction retain isn’t. still fail dismissed court when petition can how we not see I do Regardless, hap exactly what This is exhaust. ure amend district now majori here, and it seems pened (even if it petition first effectively makes opinion ty’s a re- filed alive) the State still were simply because Henry end-run around petition. first to the pleading sponsive instead state court back Henry went himself could Therefore n. at 1060 See ante Circuit. resubmitted Ninth petition amended why this to me occurs leave reason without No petition an amended course, PREJU That, 15(a). WITHOUT “DISMISSAL court’s Fed.R.Civ.P. under or filings case Keating’s for new (without allowing decision. discretionary DICE” is from effect” “take distinguished not doubly did retaining jurisdiction) therefore is Ct. Dist. similar States court’s v. United as the district the same just Calderon (9th Cir.1998), 618 F.3d (“Thomas”), 144 Henry. dismissal Ct. Dist. States v. United and Calderon majority’s how the see I don’t Finally, (9th Cir.1998), F.3d 981 134 (“Taylor”), deem order could tunc pro nunc relies, opinion proposed the which upon peti- habeas “resubmitted” or “amended” 134 Taylor, both for in ante at see the than other any date as of filed tion Thomas, (presumably) and at F.3d actu- petition his second which date sought petitioner the at F.3d 144 1998). ex- To the (January ally filed to de- petition original his to amend leave opinion relies proposed the tent State the and claim an unexhausted lete (“Kel- Dist. Ct. States v. United Calderon pleading responsive filed yet had Cir.1998), (9th for the ”), F.3d 530 163 ly so. did petitioner when parenthetical (asserted proposition deter event, Henry precludes at Kelly, see ante cite following the custody” “in Keating is mining whether ex- court 1059-60) “district his he filed when the date reference re- to deem power pro tunc nunc ercise Henry filed Keating, Like petition. first petitions habeas cently filed clearly in he was when petition original his two earlier date of filing as of filed I, original like custody and say this. fact not in Kelly does petitions,” prejudice without dismissed petition was dis- says is Kelly Instead, what his Henry filed to exhaust. failure pursuant could, in discretion its trict pris from his release after petition second 60(b)(6), aside set Rule motion under ato he ar but parole, discharge deem or permit dismissals earlier its on the custody in actual he was gued filed “to be petitions habeas later the earlier he filed date theory that nunc cases 1993] [1992 earlier-filed the date date-not operative they were date tunc as pro filed disa We petition. present filed add- (emphasis at Id. 1998 cases.” district “[t]he noting greed, a live first were Thus, if there ed). even petition original Henry’s dismissal sought if even petition, ‘termi remedies to exhaust failure if resubmit, even or amend leave v. McDan Farmer litigation.’ nated amendment allowed district Cir.1996), cert. 1548, 1552 iel, resubmittal, not follow it 1188, 117 S.Ct. denied, 3', 1995 August back relate filing would date is (1997). relevant L.Ed.2d pe- first filed Keating originally (when present, filed Henry which date on could, it tition). see how do not I F.3d at Henry, petition.” second Henry or otherwise. Nor follow, would it Ficklin3 square with Roy. But I also do see ante at that “[b]eeause Keating’s not see how we can avoid the conundrum.4 petition first before filed the effective The Stromberg line of cases says that date of the Antiterrorism and Effective when given instructions on two Death Act, Penalty provisions theories of liability, one of which is consti- AEDPA do not govern resolution of this tutionally deficient, the court must con- Rather, case.” we would be back to clude with absolute certainty “that the jury square (however one: a filing it is rechar- did not and could not have relied on the acterized) that if occurred-even deemed to faulty instruction to convict petitioner” in have been made in Keating’s first petition- order to hold the error harmless. See on January a date on which the dis- Ficklin, 177 F.3d at 1150. The deficiency trict court jurisdiction had no with respect in the Stromberg cases has to do with petition and over it lost constitutionally protected, or otherwise jurisdiction at the same it gained time noncriminal, conduct. (when back this court’s mandate dismissed Roy, on hand, the other speaks directly petition 5). February effective to a missing element specifi- instruction — For reasons, these I would simply hold cally, a missing intent element. It makes jurisdictional whatever defect may clear that we apply must Brecht to deter- have existed on January was cured once mine whether the type of error that oc- our mandate issued February curred here-failing to instruct on intent-is harmless. See Roy, 519 4-5, U.S. at 117 II S.Ct. 337 (citing Abrahamson, Brecht v. merits, On the I am more troubled by 619, 507 U.S. 1710, 113 S.Ct. 123 L.Ed.2d the harmless error analysis than with the (1993)). 353 requires This us to review result itself. In nutshell: I do not see record to determine the error’s effect. we how can decide this case without deal question The a court has to answer in this ing with v. Roy, 2, 519 U.S. 117 California context is: Did the failure to include intent 337, S.Ct. 136 L.Ed.2d 266 (1996), which [in the direct perpetrator] instruction have the majority opinion largely ignores. Roy a “substantial injurious and effect or influ- involved Beeman2 error-failure to instruct ence in determining the jury’s verdict.” on mens rea-in a felony-murder case. Roy v. Gomez (Roy II), 242, 108 F.3d 243 This is essentially a copy carbon (9th Cir.1997) (en banc) (adopting analysis, instructional error in Keating. The differ reasoning and conclusions stated in dissent ence is that in Keating, there were two to en banc decision in Roy v. Gomez (Roy (direct theories of liability perpetrator and I), 863, (9th 81 F.3d Cir.1996) (en aiding and abetting) in whereas Roy, there banc) (Wallace, J. dissenting)). It only is one. If anything, it me, seems to if, at the end of exercise, this two of us this makes Roy’s analysis pertinent, more “grave have a (con- doubt” that the error not less. case) in ceded has a substantial and It is difficult to understand how Strom injurious effect that O’Neal’s “tie-breaker” Yates, berg, Griffin, Qualls Suniga, applies. rule McAninch, O’Neal v. 513 Beeman, 2. See People v. 547, 35 Cal.3d (9th 199 Cir.1993); F.2d 664 Qualls, United States v. 60, Cal.Rptr. (1984). 674 P.2d 1318 824, (9th Cir.), 829 vacated grounds, U.S. -, other 398, 119 S.Ct. 3. See Stromberg California, v. 359, 283 (1998); U.S. 142 L.Ed.2d 323 v. Ficklin 532, 51 S.Ct. (1931); Hatcher, L.Ed. 75 1117 (9th Yates v. 177 Cir.1999). F.3d 1147 States, United 354 U.S. 77 S.Ct. 1 (1957), L.Ed.2d 1356 overruled on other 4.When granted district court Keating's grounds, States, Burles v. United 437 U.S. 98 original petition April in it did not have S.Ct. (1978); 57 1 L.Ed.2d of benefit Roy our Griffin decision in v. Gomez States, United 502 U.S. 112 S.Ct. II), (Roy 116 108 Cir.1997) (en F.3d 242 (1991); L.Ed.2d 371 Suniga Bunnell, banc), on remand from Supreme Court. failure including Lincoln’s problems, 444-45, S.Ct. regu- investment the direct comply with (1995). L.Ed.2d worth net meeting its and not lation Roy with rationalize way One Patri- In December requirement. with to start authority is of line Stromberg risky out pointed personally carca (here, direct instruction erroneous Arizona in the investments of nature ver- whether determine perpetrator) sought Keating In estate. real error. harmless it is under guilty dict sena- States United of several assistance “equipoise”), us are (or if two If not with support up his to shore tors full with Stromberg apply O’Neal then nega- the face even Board FHLB If, on granted. be must relief force Magazine. in Forbes coverage tive harm- hand, an error other one-year sale ordered basis is no there Roy, less in October. capital generate bonds to Stromberg reversal. privately met Dochow February harm- analyze us how tells Roy funneling Since concerning the with a failure-to-instruct-on-intent error less deterio- cover ACC’s assets Lincoln the record- play ostrich case, we cannot third- condition. financial rating Appeal the California dismiss disaster such 1988 loss quarter majority easily-as so quite opinion ACC clear quite, it was ACC Strom- differently, where Stated does. tax advance million repay $94.8 Roy- on a predicated is error individual berg-type Lincoln, less much Stromberg- error, I doubt brought type yet principal, investor’s to exam- need obviates Phoenix error typé force sales bond entire whether determine greater record to exhorted ine the personally where harmless. is error Roy-type underlying sales. bond recounted appears then The court record 126-27. ER From light of harmless, involvement particularly his close evidence error deference sales: give bond due to fraudulent obligation our find- factual Appeal’s of was Court indicate California The facts ... (“ 2254(e)(1) ... [A] Lincoln, § down even of U.S.C. control ings. personal by a made be issue pictures a factual of of determination to the detail cor- to both be presumed walls; he selected shall the hung State officers; the burden he have shall applicant Lincoln and rect. ACC person- of correct- FHLB presumption contact rebutting the personal of evidence.”).5 unsound him convincing and outlined who by clear nel ness quite person- made Appeal he of practices; The California business Keating’s financial deteriorating findings on ally factual aware extensive to First, inability dis- of its and intent. of ACC and prospects conduct criminal intent advanced million his criminal the $94 of Lincoln repay evidence cussed provide to refused he taxes; question: years throughout to going anyone, to information negative sales. bond instigated personally He relations public hiring even extent sales bond demand to continued He investors’ answer to in Phoenix literally worth- person they were knew when ordering and calls telephone negative condi- deteriorating less copies available all purchase per- Fidel He net worth. ACC’s tion offices; Lincoln near (the Magazine Forbes in November sonally warned by rated bonds Fidel and Symes ordered month grade; investment below Moody’s by program) sales bond initiate negative all knowing that, while and specific FHLB Patricarca somewhat. differs ap- ulated AEDPA not the so whether This is is artic- due deference although how plies, trends, he still hosted person- the sales pattern tent consistent with criminal posh nel at a party in Phoenix to-encour- conduct whereby representations factual age further bond sales to unsuspecting were made to purchasers of deben- and unsophisticated members of the tures which were inaccurate and mis- public. leading-which representations Keating ER 130-31. knew to be false and unfounded while

Finally, the court contemporaneously failing reiterated: impart negative which, information was the if chairman of known ACC. He powers exercised individual investors, of an owner pro- over both ACC vided and them by Lincoln naming the basis for an informed officers and members of the decision. boards of directors, directing policy, conducting ER (emphasis added). I do not negotiations with FHLB officials and believe that all of these comments can be other government regulators, setting the summarily dismissed or disregarded as interest rates for Lincoln certificate of “dicta,” as does the majority. See ante at deposit accounts vis-a-vis bonds, ACC 1063 n. 14. While we are not by bound hiring personnel, conducting meetings to state appellate legal conclusions, encourage sales, bond and even down to pre both post-AEDPA law requires a selecting the decor at the Lincoln head- considerable degree federal court defer- quarters in Irvine. He personally re- ence to state court factual findings. viewed all press prior releases to their Particularly in light of the deference issuance. He policy directed proce- accorded these findings, and upon based dures. He was person in control. my independent review of the state trial The individual investors ... were not record, I believe it is fair and reason- given pertinent information neces- able to conclude that the trial court’s fail- sary to make an informed judgment- ure to instruct the jury on intent was information about the losses being sus- harmless given the absolutely tained overwhelm- by ACC in its real opera- estate ing evidence demonstrating tions flow, cash the discrepancies criminal intent concerning introduced at trial. As I $94 million tax prepay- it, see ment “there Lincoln is not even ACC, advanced reasonable ' possibility,” concerns of I, see Roy FHLB about the unsafe at 871 (Wallace, unsound operations J. dissenting), of Lincoln based on this evi- of its inability dence meet its that Keating cash require- did not specifically in- ments due in large part tend to “sell excessive or offer to sell” securities cash outflow to ACC management containing “untrue statements material fees and dividends, the FHLB concern fact” or securities which omitted material about the enormous paid salaries to cor- facts “necessary to make the statements porate executives, or information about made ... not misleading.” See ER 145^46 the bond ratings made by Moody’s, (“direct perpetrator” jury instructions). which rated the bonds as being below As such I slightest haven’t the doubt-much grade, investment risky, and generally less a “grave doubt”-about the harmless- described “junk bonds.” In most ness the instructional error in case, cases the individual investors were not and would therefore reverse the district even aware that they were investing in court’s decision granting Keating’s habeas bonds, let alone subordinated deben- petition. But either way, I have “grave tures, but rather thought their invest- doubt” that the majority’s methodology is ments were merely a form of certificate quite on target. deposit fully insured by the federal government.

We conclude from the facts that the

prosecution has amply proven a persis-

Case Details

Case Name: Charles H. Keating v. Robert Hood Attorney General of the State of California

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Sep 16, 1999

Citation: 191 F.3d 1053

Docket Number: 98-55468

Court Abbreviation: 9th Cir.