UNITED STATES of America, Plaintiff-Appellee, v. Michael Scott CALHOUN, Defendant-Appellant.
No. 14-7077.
United States Court of Appeals, Tenth Circuit.
Aug. 10, 2015.
1251
III
The district court‘s grant of the motion to suppress is AFFIRMED.
James G. Wilcoxen, Muskogee, OK, for Defendant-Appellant.
Before PHILLIPS, BALDOCK, and EBEL, Circuit Judges.
BALDOCK, Circuit Judge.
This matter was previously before the Court when Defendant Michael Calhoun (and two co-conspirators) prematurely sought to appeal a district court order denying his motion to quash the indictment. The 60-count indictment, which we are told arose wholly out of Defendant‘s
Our decision dismissing Defendant‘s original appeal set forth the complex historical and procedural facts of this case. Tucker, 745 F.3d at 1057-62. For purposes of the present appeal, both parties have adopted that factual recitation in its entirety as their own. We therefore need not repeat the facts here. Rather, we simply assume the reader‘s familiarity with the facts as recited in Tucker. This allows us to proceed directly to Defendant‘s claim that a “division of loyalties,” i.e., conflict of interest, on the part of his retained counsel prompted his incriminating grand jury testimony, thus tainting the indictment. Specifically, Defendant asserts his criminal counsel, Tom Mills—hired and paid by Texas Capital Bank on the recommendation of his civil counsel Larry Friedman—encouraged Defendant to incriminate himself before the grand jury for the purpose of assisting the Bank in its efforts to overturn a $65 million civil judgment related to the scheme.1 See id. at 1058. Defendant says this imbroglio rendered his criminal counsel ineffective in violation of his Sixth Amendment right to counsel, thereby requiring suppression of his grand jury testimony and quashing of the indictment.2
Perhaps Defendant portrays his quandary accurately when he tells us the prospect of maintaining any defense was gone after he made his incriminating statements to the grand jury. But that alone does not render his testimony or the resulting indictment constitutionally infirm under the Sixth Amendment‘s right to counsel clause. To be sure, the Supreme Court has recognized “the inherent dangers that arise when a criminal defendant is represented by a lawyer hired and paid by a third party.” Wood v. Georgia, 450 U.S. 261, 268, 101 S. Ct. 1097, 67 L. Ed. 2d 220 (1981). One risk of such arrangement, apparent here, is that “the party paying the fees may have had a[n] interest in establishing a legal precedent and could do so only if the interests of the defendant[] ... were sacrificed.” Id. at 270, 101 S. Ct. 1097. On the facts presented, the conduct of Friedman, Mills, and the Bank‘s attorney Stephen Jones gives rise to at least an
But a constitutional right to representation free from a conflict of interest arises only where a constitutional right to counsel exists in the first place. See Nix v. Whiteside, 475 U.S. 157, 165, 106 S. Ct. 988, 89 L. Ed. 2d 123 (1986) (“[B]reach of an ethical standard does not necessarily make out a denial of the Sixth Amendment guarantee of assistance of counsel.“). Therein lies the problem for Defendant. “By its very terms, [the Sixth Amendment right to counsel] becomes applicable only when the government‘s role shifts from investigation to accusation.” Moran v. Burbine, 475 U.S. 412, 430, 106 S. Ct. 1135, 89 L. Ed. 2d 410 (1986). The Sixth Amendment provides that “[i]n all criminal prosecutions, the accused shall enjoy the right ... to have the assistance of counsel for his defence.”
This is so even if the individual summoned to appear before a grand jury is the subject of the investigation. See Williams, 504 U.S. at 49, 112 S. Ct. 1735; United States v. Mandujano, 425 U.S. 564, 581, 96 S. Ct. 1768, 48 L. Ed. 2d 212 (1976) (plurality); see also United States v. Hayes, 231 F.3d 663, 674 (9th Cir. 2000) (en banc) (“Being a target is not enough, either.“). In re Groban, 352 U.S. 330, 77 S. Ct. 510, 1 L. Ed. 2d 376 (1957), is illustrative. There, the issue was whether complainants had a constitutional right to the assistance of retained counsel in connection with their testimony before a state fire marshal regarding the cause of a fire. The Court analogized the complainants’ situation to that of a suspect witness before a grand jury:
The fact that [complainants] were under a legal duty to speak and that their testimony might provide a basis for criminal charges against them does not mean that they had a constitutional right to the assistance of their counsel.... A witness before a grand jury cannot insist, as a matter of constitutional right, on being represented by his counsel.... There is no more reason to allow the presence of counsel before a
Fire Marshal trying in the public interest to determine the cause of a fire. Obviously in these situations evidence obtained may possibly lay a witness open to criminal charges. When such charges are made in a criminal proceeding, he then may demand the presence of his counsel for his defense.
Id. at 332-33, 77 S. Ct. 510 (emphasis added).
Precedent, both our own and that of the Supreme Court, provides us no alternative but to recognize that Defendant‘s Sixth Amendment right to counsel did not attach until August 15, 2012, the date he was formally charged by way of indictment. Unfortunately for Defendant, his right to counsel claim centers on his counsel‘s conduct prior to that date. Defendant has no remedy without a right.3
For reasons that escape us, the Government has never challenged Defendant‘s apparent but erroneous assumption that his right to counsel attached upon Mills’ retention. See Moran, 475 U.S. at 430, 106 S. Ct. 1135 (rejecting the “suggestion that the existence of an attorney-client relationship itself triggers the protections of the Sixth Amendment“). Because Defendant has had no opportunity to defend his assumption, we could, in our discretion, deem any challenge to Defendant‘s claimed right to counsel waived. But see United States v. Snyder, 793 F.3d 1241, 1243 (10th Cir. 2015) (recognizing our authority to affirm a district court‘s ruling on “any ground adequately supported by the record“). Even if we were to join the Government in ignoring the elephant in the room, however, Defendant would fare no better.
Dismissal of an indictment is a “drastic step,” and as such, is a “disfavored remedy.” Kingston, 971 F.2d at 491. “[E]ven if [a defendant] can show that an important privilege or right ... was violated during the grand jury stage of a criminal prosecution, the indictment will not be dismissed unless [defendant] can show prejudice.” Id. In United States v. Morrison, 449 U.S. 361, 364, 101 S. Ct. 665, 66 L. Ed. 2d 564 (1981), the Supreme Court held a violation of the Sixth Amendment right to counsel did not warrant dismissal of the indictment. “[A]bsent demonstrable prejudice, or substantial threat thereof, dismissal of the indictment is plainly inappropriate, even though the violation may have been deliberate.” Id. at 365, 101 S. Ct. 665. In view of the facts here, we conclude Defendant has not shown that Mills’ representation caused an “effect of constitutional dimension” sufficient to warrant quashing the indictment. Id. at 366, 101 S. Ct. 665. Let us explain.
In 2011, Defendant “received a subpoena to appear before a federal grand jury ... along with a letter informing him that he was a target of the grand jury‘s investigation.” Tucker, 745 F.3d at 1058. When the FBI asked Defendant for his assistance in the investigation, he “responded that he intended to cooperate, but he could not afford counsel because he had exhausted his financial resources in the civil litigation.” Id. Following entry of the civil judgment, attorney Friedman, who had served as Defendant‘s civil counsel, informed him that if he would testify before the grand jury, Friedman would ask the Bank to retain and pay for his criminal counsel. “Friedman explained that if [De-
Eventually, the Bank retained attorney Mills to represent Defendant. Defendant testified before the grand jury on February 15, 2012. Our prior opinion describes what took place.
Before he took the stand, Mr. Mills told [Defendant] he was working on a plea deal with AUSA Roberts, but that Mr. Roberts could not announce the deal until after all the other defendants in the case had been tried and sentenced. Mr. Mills allegedly told [Defendant] that under the terms of this deal, he would receive probation after giving substantial assistance to the grand jury investigation.
During [Defendant‘s] grand jury testimony, AUSA Roberts asked him if he understood he had a deal with the Government whereby he would plead guilty to a one-count indictment for conspiracy to defraud a financial institution and his sentence would be capped at five years, with a downward departure to less than five years if he provided substantial assistance. [Defendant] said yes but later testified at the district court‘s hearing on his motion to quash that he believed the downward departure would get him to probation at worst.
Id. at 1059 (emphasis added).
Sure, Defendant did not want to be indicted and he understood that Friedman and the Bank did not want him indicted either. But the Government made no such promise. Defendant acknowledged at the hearing on his motion to quash that Mills told him just prior to his grand jury testimony “that after I had given substantial help, then I would be granted probation.” Rec. vol. 2, at 39. Defendant understood this to mean “a deal had been made and I would get probation at worst.” Id. Then, after the prosecutor advised him that he would receive a downward departure for his assistance, Defendant testified before the grand jury. Defendant may not have received the deal he had hoped for, but he undoubtedly received the deal he expected.
AFFIRMED.
BOBBY R. BALDOCK
UNITED STATES CIRCUIT JUDGE