United States v. Daniel E. Manning and David A. Wooldridge
509 F.2d 1230
9th Cir.
1975
Check Treatment

*3 merg- acquired in supposedly were which James N. (argued), Barber Salt Lake actu- mergers such Had er transactions. Utah, City, for defendants-appellants. place had the distributees ally and taken Gregory C. Glynn, Asst. U. Atty., S. merged shareholders of the been in fact Angeles, Los (argued), Cal. plaintiff- for permit- Rule 133 would have companies, appellee. sales of the stock received limited public, despite lack of a general Before LUMBARD,* ELY and sales could statement. Such registration WRIGHT, Circuit Judges. of purpose been made if the not have in fact transaction had been the entire OPINION unregistered such stock. of the sale WRIGHT, EUGENE A. Judge: Circuit of lists By padding the shareholder Appellants were conspir- convicted of corporations and several Empire Oil acy multiple and violating counts of merger, acquired through purportedly registration and provisions antifraud of unregistered Empire Oil appellants sold the Securities Act Exchange and public, Act Holding stock to the Capitol and and mail fraud. They argue friends, parties innocent third using convictions should be reversed because of persons “stockholders” fictitious prejudicial jury misconduct, erroneous conduits. Appeals Senior for Judge, Circuit United States Court of Second Circuit. proposed respect to instruction with Sales of such stock were halted liability co-conspirators. vicarious January S.E.C. on 1969. The acts judge’s respect instructions in this charged comprising elements of the First, proper. proposed in on A spiracy ended December struction is not a correct statement of Report Reference Criminal S.E.C. in Kotteakos v. United Department was transmitted to the States, 328 U.S. Justice in October the issue was (1946), precludes since it Attorney in referred to the U. March S. liability except for in which they acts and the were re- indictments “knowingly and willingly participated.” Jury February on turned Grand Kotteakos held that was error 14, 1973. instruct that conspiratorial lia Appellants sentenced four bility premised could be on the overt act conspiracy count to two years *4 defendant underlying when the counts, years each of separate on several separate acts independent involved concurrently the latter run sentences to conspiracies involving only single cen consecutively other with each figure. tral This did not under conspiracy Appellant sentence. Wool- cut the rule co-conspirator settled that a $10,000 dridge conspir- was fined on the could be held liable for reasonably fore acy Manning while count was fined seeable acts committed in furtherance of $8,000 the on count and conspiracy objective, illegal the common Pinkerton $2,000 on anti-fraud count. States, 640, v. United 328 66 U.S. S.Ct. trial that the Appellants claim 1180, (1946). 90 1489 L.Ed. grant refusing to a new in judge erred Second, given the strong evidence of a alleged jurors reported after several trial single, conspiracy, unified the instruction forelady. the part on misconduct proper. judge was Blumenthal v. evidentiary hearing, judge held an The States, 539, 385, 332 U.S. 68 United S.Ct. involved, and con the questioned (1947); 92 425 United States v. the prejudice to defend that no cluded King, (9th Cir.), 472 F.2d 1 cert. den. 414 the conduct of ants resulted 40, 84, 864, U.S. 94 S.Ct. 38 L.Ed.2d reh. no abuse of question. find juror in We den., 1033, 463, 414 94 U.S. S.Ct. 38 in part on discretion refusing (1973). L.Ed.2d 325 trial. Holt v. grant a new States, 245, 2, 218 31 U.S. S.Ct. United also Appellants argue that ev v. (1910), United States 1021 54 L.Ed. idence insufficient to sustain was their (6th Cir.), 471 1128 Brumbaugh, F.2d convictions. A careful review of the evi 918, 2732, 93 37 412 U.S. S.Ct. cert. den. dence indicates there substan in (1973). No error was 144 L.Ed.2d support jury’s tial evidence to ver submitted relying questions in on volved general conspiracy charge dict on the permitting rather them by than counsel where evidence count 9 jurors. to cross-examine personally appellants’ fraudulent conduct 885, Handy, v. 454 F.2d States United overwhelming.2 1971), den. 409 (9th cert. U.S. 892 Cir. appellants’ contention that 49, (1972). 86 846, 34 L.Ed.2d 93 S.Ct. prove government failed to willful viola- appellants argue registration that the tri tion of the and antifraud refusing accept provisions in their Act and al erred Securities Ex- court requested S14: rently, No. instruction need not examine the evidence ad we Defendants’ counts, support of the other Jordan duced in Rob- acts of may these not attribute “You States, (9th 1969), 416 F.2d 338 Cir. v. United in case Eisenberg this Defendants ert 930, 920, U.S. 90 S.Ct. 25 cert. 397 den. they knowledge know- you have unless 1018, 101, 90 reh. den. 397 U.S. S.Ct. L.Ed.2d in willingly participated with him ingly and Mary 1233, (1970); 433 Benton 25 L.Ed.2d acts.” accomplishing these 2056, 784, 791, land, 23 U.S. 395 substantive sentences 2. Since 707 L.Ed.2d run concur- were identical and counts 1234 counsel, without this material cannot be

change Act is basis. See United Murdock, 389, event, exculpatory. ap- strued as S.Ct. States 223, pellants have (1933), failed to show that they 78 L.Ed. 381 United States v. any way prejudiced in Corporation, delay Wing Channel Custer production (4th Cir.), den. in of the letter. cert. 389 U.S. F.2d 119, reh. 19 L.Ed.2d den. S.Ct. Finally, appellants argue 998, 88 19 L.Ed.2d 503 389 U.S. (1967). S.Ct. right speedy their to a trial and due

process rights were violated three-and-a-half-year delay between appel The assertion constituting acts their conspiracy lants’ actions were immunized re alleged Supreme advice of their indictment. The liance on the Court co-conspirator Eisenberg delay has held a similar misreads the did not rights: violate respect. in Bisno v. defendants’ law States, 1961), 299 F.2d 711 cert. Sixth speedy Amendment [T]he den. 370 U.S. S.Ct. provision application has no until the (1962). Their L.Ed.2d 818 actions in uti putative defendant way some be- lizing fictitious stockholders and nomi “accused,” comes an an event that oc- negative any they nees claim that only curred in appellees this case when they acting lawfully. were indicted Moreover, appears from the evidence Marion, United States 404 U.S. Eisenberg did not treat that independent, as an 313, *5 455, 459, 92 S.Ct. 30 L.Ed.2d 468 advisor, legal unbiased (1971). Piepgrass, 194, v. United States 425 F.2d In selling stock schemes of complexity (9th 1970), 198 Shewfelt, Cir. United States v. magnitude, and such as the scheme dis- 836, (9th Cir.), 455 F.2d case, closed the record of this con- cert. den. 406 U.S. S.Ct. siderable time is necessarily involved in (1972). Similarly, L.Ed.2d 331 their assembling verifying and all the evi- knowledge pro claimed lack of about the dence which may be relevant provides visions of securities law no government’s prosecute decision to those here, Wolfson, defense United States thought culpable. to be (2d 1968), 405 F.2d 779 Cir. cert. den. 394 Appellants have failed to show that 1275, 22 U.S. 89 S.Ct. L.Ed.2d 479 length of time between the conspira- (1969). acts and indictment prejudiced torial The exclusion of testimony of defense, or has involved harass- Chaplin proper Alex was it since was not ment, or was the intentional ploy of the relevant to the issue before the court. prosecution gain a tactical advantage, Eisenberg’s persuasiveness Mr. in other Erickson, United States 472 F.2d dealings business is not material to the 1973). question of the complicity appel of the judgment of the district court is lants in the conspiracy actually before Affirmed. the court. ELY, Circuit Judge (concurring): It is further asserted that prosecution improperly my I concur in delayed pro Wright’s in Brother ma- viding appellant jority opinion. Manning time, At the opinion let same how- ever, ter I feel Eisenberg obliged shortly express until my before tri al, citing Brady cern over the Maryland, misconduct of one of the jurors, as well L.Ed.2d 215 that of the District The letter Court’s bailiff. indicated that The district judge certain Empire prop- erly Oil shares were exempt repeatedly registra jur- admonished tion. Similar ors that none of letters were them was to discuss introduced as proceedings part prosecution’s with person other light prior case. discussion, to the submission of the supra, appellants’ cause for their good claim of deliberation. faith Notwithstanding, reliance on advice fore- lady jury forelady apparently defied the apparently believed that court’s admonition. answers questions to her were in post-trial At a hearing question on the way some related to the issues in misconduct, jury forelady admit the trial. At jury misconduct hear that she asked the court’s bailiff ear ing, two of the other testified that ly in the trial whether one could borrow during the jury’s course of the delibera money buy from bank to stock. The tions, forelády mentioned the bail bailiff answered to the effect that he question.2 iff’s answer to her When the Furthermore, not.1 some district forelady asked the wheth trial, other time forelady er she had mentioned the opin bailiff’s telephoned a bank office to make during deliberations, ion she repled that inquiry. the same she could not remember. 2. One 1. The bailiffs versation wise ency “BY what any subject hear loan on trial. Frank what securities? to that conversation? with tion. illegal. “BY THE COURT: row question?’ years stock. tell ahead.’ union Q. Q. Q. A. Q. And I She I jury forelady case? says, juror you conversation "akin from a bank said, money THE COURT: time.” percent [*] this case the foreman anybody and told the man I wanted to Mr. Was or Yes. I had a Do Torres, Okay. She said, I with He said, what the extent of that conversation more but not ‘That is all I can tell testified as follows: Torres, whole conversation. ‘The answer [*] says, [*] She says, talking testimony concerning his con- ‘Can to case, involving They money T our Can remember happened at buy else said ago. conversation, don’t says, subjects being reference about a conversation with forelady to borrow securities you go to a bank to bor- *6 ‘Frank, [*] “You can’t st= did with Mrs. McDonald all.’ or its said, bailiff, you now relate to us about [stock]?’ regard you, during the know.’ to ‘It I went securities, what [*] [*] deliberations, has in that conversa- buy any can to me about talking was loans, thereafter made “No,” nothing do it.” statement to [*] [*] I I your discussed this matter as follows: says, you.’ ask my matter of —I or other- I said, taking percent borrow believe Honor, [*] n [*] ’ you didn’t pend- ‘I can credit being to do have And ten go in a The other to Frank about That has taken out get about to do with this case.’ tions ration, know. And she mentioned in court. made a wasn’t mentioned in court we have to for- isn’t.’ * * * ‘Well, them forelady ty ‘Well, from fore deliberation with that —we borrowing money had no assets? ties, * * * “BY THE COURT: money thing came in. She had told us about told discussing that.’ to borrow told case.’ went She was A. Yes. Which I So we She A. Yes.” It was Q. A. Q. A. With Q. She her, illegal. was it securities,’ into deliberations about banks, and she had a discussion be- borrowing money selling she mentioned I borrowing In essence Well, you * * * What, With whom? says, said, and at the time of reference, ‘Well, thought you tell juror’s testimony dropped talking nothing on some of the ‘We don’t [another were [another it.’ money said, can’t illegal— ‘It has ‘Well, Frank, the defendants securities of Later it, T don’t know. discussing himto about talk about money it. says, ** to do with the case.’ is where the to even he said —’ I was juror] juror] you think I don’t know if it is or the [bailiff] in Then buy put said that had know, it, if ‘Well, and then when I was [another] Frank, one deliberations into the securities. anything, said, just the conversation you ought was similar: later in delibera- loans that were _______ a possible illegali- put Mr. to do with * * * * * * for the day which to her company we are not. referring being illegal right It was not case’, Manning’s ‘Whatever borrowing before we putting juror company ___ * * * did the talking securi- corpo- bailiff, And I away said, said, that you also she be forelady the indiscretions While and, light in the deplorable are admonitions, inexcusable, I have judge’s reading my of the entire concluded hearing that post-trial

transcript of the likely af- did not forelady’s actions determinations. jury’s ultimate

fect about who testified

Both with the bail- forelady’s conversation the conver- mention of and her later

iff insisted jury deliberations

sation their decisions as positively that

very of the defendants guilt innocence charged the indict-

on the offenses by the unaffected wholly ment I Consequently,

forelady’s comments. trial

agree my Brothers grant a trial be- refusal to new

court’s jury did not consti- misconduct

cause an the court’s discretion.

tute abuse of confident that district

I am necessary as to taken such measures will not the court’s bailiff

assure he commit

again such indiscretion thoughtlessly during the committed

so of this case. DRUG, al.,

STERLING et INC. Plaintiff-Appellants,

Caspar WEINBERGER, Secretary W. Health, Welfare, Education and Schmidt,

Alexander M. Commissioner Drugs, Defendants-Appel Food and

lees.

No. Docket 74-2477. Appeals, States Court of Second Circuit.

Argued Dec. 1974.

Decided Jan. brought then But deliberations she to do case when ” up, discussing said had such-and-such. Frank it.’ And I told ‘I said