*1 pattern practice be evidence of a of Harold Lawrence and Douglas Zelma discrimination. “they Since she said don’t should be parties reinstated as in their indi- niggers want ..her statement is also capacities. vidual principal’s evidence of her intent toward REVERSED AND REMANDED FOR A the Mosses. NEW TRIAL. Holding that Boomgaarden Robbie was agent of Kwikway does not end our inquiry. Kwikway may still not be liable to parties
third for Robbie Boomgaarden’s if statements she overstepped the bound- aries of authority. her This issue is usual- ly a question fact jury for the and was not
addressed in the record. It must be on retrial. UNITED America, STATES of Plaintiff-Appellee, D. ATTORNEY’S FEES appeal magistrate’s Defendants deni- STEELE, Robert L. al of their attorney’s motions for fees. Be- Defendant-Appellant. cause this case is reversed and remanded trial, for a new the defendants have not No. 87-4083. prevailed. Therefore, they are not entitled United States of Appeals, Court to attorney’s fees under 42 U.S.C. Sixth Circuit. stage litigation. Reargued Dec. 1990. III. CONCLUSION Decided May We REVERSE and REMAND for a new trial with instructions. The Air Force re-
port should have been admitted. The HUD report, hand, on the other was properly
excluded. The testimony of Smallman and Johnson generally should have been admit-
ted; part their testimony may neverthe-
less still be excluded according to routine
application of the Rules of Evidence. Addi- tionally, jury was improperly instructed
as to the agency relationship between Rob- Boomgaarden bie Kwikway, Inc. Rob- Boomgaarden bie is the agent of Kwikway, Inc., although corporation may not be liable for remand, her acts. On the court must make the necessary rulings on the
issue of Kwikway’s liability for her state- Further, ments. magistrate improperly ruled corporate officers cannot have liability individual for acts done on behalf of the corporation. plaintiffs If prove an wrong, they
actionable against can recover both the corporate individual officer and corporation itself when the individual was directly involved in wrongful act.
Douglas incorporated rence, the business. No al- individually; one Douglas, Zelma individual- leged that she agent Henry ly; Estate, Law- or Ole South Real Inc. *2 Nelson, Judge, filed Circuit A.
David concurring opinion. Judge, filed
Wellford, Circuit Senior opinion. concurring Judge, Brown, Circuit Senior Bailey Keith, Na- opinion which dissenting filed Krupansky, Circuit R. Jones and thaniel Merritt, Chief in which joined, and Judges, Martin, Jr., F. Boyce Judge, and separate dissenting through joined Judge, opinions.
13x5 *3 Arnold (argued), Bauer, Morelli Morelli & Heyd LPA, Co. Cincinnati, Ohio, for defen- dant-appellant. Brichler, Robert C. Asst. Atty., U.S. Cin-
cinnati, Ohio, James A. (argued), Braton Robert E. Lindsay, Shirley Peterson, D. D.C., Washington, for plaintiff-appellee. MERRITT, Before Judge, Chief KEITH, KENNEDY, MARTIN, JONES, KRUPANSKY, MILBURN, GUY, NELSON, RYAN, BOGGS, NORRIS, and SUHRHEINRICH, Judges, Circuit *, BROWN and WELLFORD Senior Judges. Circuit KENNEDY, Judge. presented issue to the en banc court is whether the submission of false doc- uments to the Internal Revenue Service defendant, who was not a suspect, in re- sponse to an inquiry agent an IRS dur- ing the course aof criminal investigation, prosecutable is a offense under 18 U.S.C. 1001. urges Defendant adopt § us to judicially-created “exculpatory excep- no” tion adopted by several other circuits to limit the of section 1001. We apply decline to the doctrine to the facts this case and it unnecessary find to decide whether the doctrine is viable in other cir- cumstances.
I. A. (“defendant”) Robert Steele indicted and subsequently convicted on four counts: conspiring to defraud the Internal Revenue (“IRS”) Service in violation of 18 U.S.C. 371; filing a false Partnership 1981 U.S. § Income Tax in violation Return of 26 U.S.C. 7206; filing a false 1981 § Form 1040 Indi- vidual Income Return in Tax of 26 violation 7206(1); U.S.C. knowingly submit- § ting false documents to the IRS violation of 18 U.S.C. appeal, 1001. On this Court § * Harry The Honorable W. Wellford January assumed sen- status on ior paid these terms of sales contracts convictions on the defendant’s affirmed $40,000 paid his convic- Defendant but reversed defendant cash. counts
first three $19,500 1001. United payment U.S.C. of this cash to the Pel- on 18 tion based (6th Cir. Steele, F.2d 998 proceeds phreys as their share of the from granted then 1990). $20,500 This Court kept the sale and himself. rehearing en petition for government’s 22, 1982, filed a March On judg- vacating thus banc tax- Partnership Tax Return for the U.S. However, no appellate panel. of the ment year 1981 on behalf of the Woodland able any dis- en court has banc member Heights partnership. Defendant did not panel’s affirmance agreement $40,000 payment report cash from therefore *4 three counts. The Court first partnership income. Nor did de- Duerr as the issues panel’s on adopts $40,000 report his share of the fendant to those counts. related personal tax return. payment on his income B. August In Duerr was indicted on Defendant, public accountant a certified drug charges. At this time the various firm, accounting devoted of an and member investigating possible Duerr for IRS was inter- of his time to various business most liability. evasion of tax IRS fraudulent construction, gas and ests, including oil (“Hall”) Special Agent Hall called defen- and resi- operations motel exploration, On the second oc- dant on two occasions. May In defen- developments. dential November, early explained Hall casion in partnership, called Wood- formed a dant investigation against the nature of the wife, accounting his Heights, land with his requested concern- Duerr and information Danny Pelphrey, Pelphrey’s partner, parcels of land ing purchase of the two acquired a tract of partnership The wife. Heights in 1981. by Duerr from Woodland subdividing it and purpose of land for suspect in Defendant was not a this investi- 1981, defen- selling parcels. In June agent that he gation.1 Defendant told (“Duerr”) Duerr dant met with Thomas go out of town but that he would had parcels of two of the subdi- discuss the sale relating copies all documents send Hall of agreed pay defen- Duerr vided tract. property. the sale of this $40,000 that this per parcel, dant but noted thereafter, Immediately defendant met be- problems would create IRS Duerr. Defendant described Hall’s illegally cause he derived his income —sell- requests, sought assurances visit and income ing controlled substances—and his represent Duerr that he would from tax showed an annual income be- returns occurred as reflected the transaction $15,000. $12,000 light of this tween receiving Upon documents. false sales problem, agreed upon and Duerr defendant Duerr, from these assurances $40,000 purchase price per parcel, but the doc- told Duerr that he would send drafted to reflect the sales documents were con- to Hall and thereafter avoid $20,000 uments purchase price per parcel. agent. thereupon Defendant tact with the revealed the full None of these documents $80,000 which are the basis of price parcels. for the sent purchase 1001 count to Hall. payments according to the the section Duerr made Moreover, exculpa- implicating Agent separate defendant. on two Hall contacted Steele Hall, tory in the District Court was raised asked the reason for no issue occasions. when Steele, government’s contacting of the case. initially "that at that motion at the close testified motion, investigating During argument the Assistant fi- on the time we were Mr. Duerr’s represented Attorney to the Dis- United and that recontacted Steele in order States nances" he target any get present against Steele was not the the case trict Court that investigation. information to jury plead guilty. statement was not chal- Duerr to the if Duerr did not Thus, lenged. no evidence in the record there is Hall testified that even when he received the investigation $30,000 target any was the he did know that the recited that Steele records not documents, payment contacted on either occasion part when he was for the a dif- properties, record indicates that it evidence in the was in cash. From this is fair to purpose led to these contacts. yet infer that he did not have Duerr’s ferent confession subsequently Duerr cooperated possible with the est meaning in complete disregard government, purpose disclosing the fraudulent na- the legislature”). ture of land transactions conducted be- 18 U.S.C. 1001 states: tween himself and defendant. Had Duerr Whoever, in any matter within jur- supplied this it information was unlike- isdiction of any department or agency of ly that the IRS would have learned the true the United States knowingly and willful- amount of the transaction.2 ly falsifies, conceals or up by covers any trick, scheme, or device a fact, material or false, makes any fictitious or fraudu-
II.
lent statements or representations, or
makes or
any
uses
false writing or doc-
A. Section 1001
ument knowing the same to
contain
language
of section 1001 is
false, fictitious or fraudulent statement
starting point
our analysis.
See
or entry, shall be fined not more than
United
Enters., Inc.,
Ron Pair
$10,000
imprisoned
not more than five
489 U.S.
103 L.Ed.2d
years, or both.
(1989).
Any
imposed
limitation
on the
Supreme
Court has noted that
*5
application of this section—whether we la
language is
applying
to
matter
broad—
bel it an “exculpatory
exception
no”
or
any department
within
agency
or
has
—and
something else—must
result
from an rejected the
adopted
limitation
by the
analysis
statutory
of the
language
Eighth
leg
Circuit to exclude statements made
history
light
islative
to the FBI
of accepted
because the
jurisdic
canons
FBI lacked
dispose
tion to
of
of
statutory
problem.
the
plain
construction. The
mean
United
v. Rodgers,
475,
466
ing
U.S.
of the
104
statute controls
S.Ct.
interpreta
our
1942, 80
(1984).
L.Ed.2d 492
The
tion,
Eighth
“except in the ‘rare cases [in which]
“
phrase
concluded that the
‘within
the literal
of a statute
pro
will
”
“
jurisdiction’
the
referred
power
to ‘the
duce a
demonstrably
result
at odds with
”
”
make
to
or
final
binding determinations.’
drafters,’
the intentions of its
242,
at
id.
477,
at
Id.
104 S.Ct. at
(quoting
1945
Fried
109 S.Ct. at
(quoting
1031
Griffin
States,
man v.
United
tory basis
present form. False claims
sev-
its
were
the FBI—to con
Rodgers,
of
case
287;
and are covered
section
ered
by a defen
triggered
investigation
duct
incorpo-
provisions were
false statements
a construc
Such
statements.
false
dant’s
Hence,
legisla-
rated into section
purpose
Congress’
keeping
is in
tion
history
congressional
tive
communicates
governmental activities.”
“myriad
protect
limit,
scope
expand, not
intent to
language
Accordingly,
Id.
congressional
light
of this
section 1001.
limit the
Rodgers do not
section
intent,
reading
of section
a broad
rather,
statute;
both counsel
scope of this
“demonstrably
not arrive at a result
would
at
104 S.Ct.
reading.
Id.
for
broad
intent;
congressional
at odds” with
(stating that
“[Resolution
at
consistently indi-
contrary, the
has
Court
a statute should
whether
cons of
pros and
should be construed
cated that the statute
narrowly is for Con
broadly sweep
Bramblett,
broadly.
348 U.S. at
See
gress”).
(stating that
is no
at 505
75 S.Ct.
“[t]here
history
not communi-
does
legislative
reports
in either the committee
indication
intent to restrict
congressional
cate a
scope of
congressional debate that the
or in
origin of sec-
1001. The
section
scope of
any way re-
to be in
[section 1001]
Bramblett, 348
discussed
1001 is
tion
stricted”).
predeces-
Its
at 505.
U.S.
form,
present
In its
against
claims
false
covered
originally
sor
operative clauses:
military personnel.
consists
three
government
prohibits
clause
a misstatement
purpose
first
made
statements
False
fact;
prohib
clause
“material”
the second
of such claims were
approval
obtaining the
*6
“representation”;
or
Later,
ex-
its a false “statement”
the statute was
prohibited.
also
writings
prohibits
the third
false
claims made for
and
clause
all
include
false
to
tended
“entry.”
or
defrauding
containing
a
“statement”
cheating or
false
purpose of
requires
A
of this statute
as well as
literal
the United States
of
government
clause,
materiality in the first
finding
a
of
obtaining payment
for
of
false statements
sec
1934,
finding of a “statement”
Secretary of the
and a
In
claim.
a false
requirement
with no
that he ond and third clauses
an
so
sought
amendment
Interior
keeping
prior case-
materiality.
of
“hot oil” frauds —frauds
prosecute
could
law,
requirement of
producers
choose
read the
petroleum
we
to
perpetrated
“ ‘to
shipment materiality into
of the clauses so
interstate
all
as
of
through falsification
purview
trivial
from the
pecuniary
no
exclude
falsehoods
which involved
but
”
v.
of
statute.’ United States
government.
to the
Unit-
Chan
loss
property
or
Cir.1985)
92,
1148,
86,
dler,
1151
61
752 F.2d
Gilliland, 312 U.S.
v.
ed States
Abadi,
F.2d
(1941).
(quoting
v.
706
522,
This
United
518,
trusted to a
agency.
B.
United
The Exculpatory No Exception
States v. McGough, 510 F.2d
argues
Defendant
that the “exculpatory
(1975); Chandler, 752 F.2d at 1151. It is
no” exception is a necessary limitation
not necessary to show that the statement
upon the
scope
broad
actually influenced
agency,
only
but
applied
as
to the facts of the
case,
instant
it had the capacity to do so.
exception
exonerates him. The excul
McGough,
602; Chandler,
510 F.2d at
patory
exception
no
appears to have been
F.2d at 1151. A materiality determination
first adopted by a
appeals
court of
in Pa
subject
to de novo review on appeal.
States,
ternostro v. United
0132 have incrimi- 5)a answer would truthful On the indictment. count that missed nated declarant. holding its restated court rehearing, without answer no’ F.2d at 1224. ‘exculpatory 851 Equihua-Juarez, “the that mis- affirmative, or overt aggressive adopt this test for to several We decline defendant does part of on statement First, the criteria are some of reasons. the stat- scope of within not come are we unable on rationales which based ute_” Fifth Circuit Later Id. fourth and fifth example, the accept. For was based the doctrine fifth premised stated on amendment cases are criteria the statute purpose has held that no court on concerns. While both amendment, right against self-incrimi- the fifth 1001 amendment violates fifth held therefore purportedly safeguard Circuit Fifth criteria these nation. in apply when a section 1001 not against did doctrine “uncomfortably affirmatively mislead a which come circumstances attempts person violating the fifth amendment. at 298. De- investigator. Id. close” government Alzate-Restreppo, 890 v. could States he come United not contend does fendant (Patel, J., (9th Cir.1989) Nel- F.2d 1061 exception that a sim- within Paternostro’s son, J., judgment); Unit- concurring Thus is not a statement. answer ple “no” 1142, 1144 F.2d Myers, v. 878 ed States applicability not decide need we Tabor, Cir.1989); v. 788 (9th States United situation.6 to that statute Cir.1986); (11th United 719 F.2d (9th Rose, 1364 Court 570 F.2d urges this v. States Defendant Cir.1978). assumes sec- This rationale exception estab exculpatory no adopt the choice for Circuit, creates a Hobson’s tion 1001 Ninth see United by lished charged guilt or be admit individual: F.2d 1222 851 Equihua-Juarez, 844 F.2d at Cogdell, felony offense. See by the Fourth Cir.1988), adopted (9th statute ... was not (stating that “[t]he Cogdell, 844 States v. United suspected of persons compel intended to Cir.1988). This test consists F.2d investigators to assist criminal crimes parts: of five guilt”). establishing their must be unrelated 1) statement the false concerns, how Fifth amendment or a claim to a privilege claim to a ever, and fifth justify the fourth fail to government; against An individual has of this test. criteria responding 2) the declarant must against self-incrimi privilege constitutional agency a federal initiated inquiries nation, right to he no constitutional but has department; Bryson v. statement. give an untruthful impair 3) must the false statement 64, 74, States, U.S. United entrusted law to functions the basic (stating L.Ed.2d *8 agency; the ques answer the may to citizen decline “[a] he cannot tion, honestly, but inquiries must not or answer it 4) government’s willfully an knowingly and impunity adminis- exercise of a routine constitute falsehood”); 844 F.2d Cogdell, swer with responsibility; and trative 1054, (2d Cir.1986) (cita- Capo, F.2d 1069 approved 791 an Circuit in also has The First dicta underlying omitted). negative responses principle this to exception mere tions Chev inquiries simple negative response States v. government United exception in is that denied, Cir.1975), oor, (1st cert. 425 knowledge F.2d 178 requisite 526 proof as cannot serve (1976). 935, 1665, 176 L.Ed.2d 96 S.Ct. 48 U.S. required to convict under sec- willfulness responses “negative, oral It reasoned govern- steps 1001 absent tion affirmative questioning.... were 'statements’ within not requirements reporting known. make ment to meaning Id. at 184. The 18 U.S.C. 1001.” 670, (7th King, F.2d 675 States 613 See United v. Circuit, excep declining apply in Second Bush, Cir.1980) (distinguishing States v. United repre affirmative defendant made tion where sentations, Cir.1974), (5th because defendant F.2d 813 503 adopt excep it did stated if simple negative merely give exculpatory did not tion, narrowly, ruling it would construe "we initiated the contact answers simple beyond a ‘no’ does statement government). with the exception." United v. within the not fall
1321
(Wilkins,J., dissenting
part).
at 186
in
literally,
read
[this
could make ‘vir-
statute]
posited by
Hobson’s choice
some
tually any
courts
statement,
false
sworn or un-
applying
exception
flawed;
this
is
sworn,
an indi
oral,
written or
made to a Govern-
”
need
assist an investigating
vidual
ment employee
offi
a felony.’
...
United
felony charges.
or face
A
option
cer
third
States v.
Perez,
Medina de
799
540,
F.2d
to an
available
individual: remain
(9th
silent 543-44
Cir.1986) (quoting United
and invoke
fifth
privilege
amendment
Bedore,
States v.
1109,
F.2d
(9th
455
1110
against self-incrimination,
(Wil
id. at
Cir.1972)).
Yet, we do not think these con-
kins, J., dissenting
part),
here,
simply
legitimize
cerns
the creation of the Ninth
not mail the documents. While we ac Circuit’s broad exception to this statute.
knowledge the canon of construction that The statute does contain language which
allows a court to construe a statute so as to reasonably
application;
limits its
only “ma-
avoid a
infirmity,
constitutional
DeBartolo
terial” statements are violations. The false
Corp. Bldg.
Florida
& Constr.
documents here were clearly
Gulf
material to
Council,
568,
Trades
485 U.S.
ascertaining the tax liability of Duerr. He
1392, 99
(1988),
L.Ed.2d 645
a statute that
using
price
false
of the lots to
“uncomfortably
comes
close” to a constitu
conceal a substantial amount of income.
violation
trigger
tional
does not
applica
Unlike the mere denial
guilt
by a sus-
tion of this canon.
pect,
government
would
very
likely
rely
on the documents
submitted
de-
We also conclude that
fourth
criteri-
fendant.
on fails to
Supreme
account for the
Court’s
guidance in Rodgers.
Supreme
Court
Besides
statutory
language,
expressly recognized that
criminal in-
“[a]
Congress appears to have relied primarily
vestigation surely falls within
meaning
upon the discretion
prosecutor
aof
in limit
matter’_”
“any
Rodgers, 466 U.S. at
ing
potential
application of this section.
Thus,
C.
concurring:
argues that
also
Defendant
fully agree
principles
since
I
enunciat-
not false statements
were
documents
up
by
majority
drawn
at the
in this case.
I write
ed
they were
However,
however,
separately,
to indicate that under
transactions.
of the
time
writings
apply
we
the “ex-
of documents
no circumstances should
speaks
statute
exception
statements
a case in
“any
culpatory
false ...
no”
which
contain
which
person seeking
documents contained
the benefit of this doc-
entry.” These
... or
They
purchase
investigation
a
when the
recited
trine was not under
false entries.
not reflect
made.
which did
relevant statement was
payments
price and
transaction,
falsely
but which
actual
agree
“exculpatory
no” doc
I
sub
so. These statements
to do
purported
links to Fifth Amendment concerns
trine’s
to the IRS
submitted
sequently were
accept
are weak. Even if I were to
Hence,
fall
these statements
defendant.
doctrine, the Fifth Amend
rationale for the
purview of section
within the
only
normally applies
when the indi
ment
claiming
right
subject
is the
vidual
III.
interrogation.
Miranda v. Ari
Cf.
AFFIRM
foregoing reasons we
For
436,477,
1602, 1629,
zona, 384 U.S.
the District Court.
judgment
(“Our
(1966)
decision is not
1323
draft,
helped
himself
to IRS for the sole
I
purpose of protecting others to avoid sub-
The overall thrust of the majority opinion
stantial
liability.
tax
This case involves his
first,
twofold:
that applying
“plain
attempt
to conceal his own fraud and to meaning” of
1001,
18 U.S.C.
§
evidence
protect another as well.
supports a conviction of
defendant,
Steele, of a violation of
provision;
that
and
my view,
under the circumstances of
second,
that without deciding whether
case,
Steele at
indirectly repre-
least
some formulation of the “exculpatory no”
sented
agent
Hall that the documents he
doctrine could be acceptable, the formula-
accurately
furnished
described the land
tion of the doctrine
upon
relied
by defen-
evidence,
transaction. There is no
contrary
dant and applied in the Ninth and Fourth
speculation
to mere
surmise,
and
that Hall
1
Circuits
is not acceptable and cannot be
had
know,
basis himself to
or even to
applied in this case.
suspect,
that
the information furnished
On the contrary, it appears
that,
to us
was false and fraudulent. There was no
giving effect to section
by
terms,
1001
its
evidence that
“suspected”
Hall
Steele at
the evidence does
support
a conviction
deceiver,
the time to be a
partici-
fraud
that,
defendant and
in any event, the
pant,
a tax evader.
and
The dissent con-
“exculpatory no” doctrine
applied
as
tends
“important
question
should
Ninth Circuit
Circuit,
and Fourth
should be
be whether he
thought he was a
[Steele]
adopted by this court
applied
in this
suspect,” but
authority
no
is cited for this
case.
proposition. I conclude this is not determi-
native; rather,
important
question is
II
whether
by
Steele
his actions intended to
deceive the investigating agent.
agree
We
with the majority opinion’s
statement of the rules
statutory
inter
Steele’s offense under the statute was to
pretation
application.
“Plain meaning”
falsify and conceal a material
fact
controls unless this will create a result
IRS investigation of
person,
another
and to
clearly contrary to the intent of those who
make a knowing false statement
repre-
drafted the statute. We
agree
also
sentation in the documentation
aof
sale.
opinion’s summary of
leg
activity
This
comes
proscribed
within the
history
islative
agree that,
section 1001
language of
1001
encompasses
§
being a
statute,
criminal
it must be “con
use of
writing.
the false
strictly.”
strued
United States v. Bram
blett,
503,
virtually
509,
504, 508,
dissent
U.S.
acknowledges
(1955).
99 L.Ed.
proposed
its
adoption
agree
We further
“exculpatory
the majority
that,
no” doctrine would
under the
“eliminate situations”
holding in
Rodgers,
United States v.
through judicial
redrafting of
1001 based
U.S.
S.Ct.
III BROWN, BAILEY Senior Circuit A.
Judge.
The majority opinion, nevertheless, rec-
We respectfully
ognizes
dissent.
meaning
Equihua-Juarez,
1. United
v.
(4th Cir.1988);
States
851 F.2d 1222
States v.
United
de
Medina
(9th Cir.1988);
Cogdell,
Perez,
United
1986).
844 F.2d
1325 light legislative history,3 to hold that criminalize such conduct. We believe, also supplying document, the of a request at the however, that the same result would follow government of a agency, that is known to for the same reason if a disclaimer were is, ipso facto, be false a crime under sec- spontaneous neither nor emotional. tion 1001. Under majority opinion, the the The majority opinion agrees with the would defendant have violated 1001 statement in United States v. Medina de if, example, even for he had had no interest Perez, 799 F.2d 543-44 Cir.1986) in the land sale to Duerr and had had no (quoting United Bedore, States v. 455 F.2d part preparation in the of the documents (9th Cir.1972), that “if read liter- but, accountant, as Duerr’s posses- had had ally, could [this make ‘virtually statute] documents, sion of the knew they that any statement, false sworn unsworn, or false, were and had Agent mailed them to oral, or written made to a Government Hall at request. Hall’s ” employee felony.’ ... a The answer to It Agent was Hall who the con- initiated this obvious problem in applying the stat- tact, defendant, not and defendant did not is, according ute to the majority opinion, represent Agent to Hall that the doc- not that we narrow its application in ac- uments accurately described the land trans- cordance legislative history, but rath- Moreover, action. Agent it was de- Hall’s er that we rely on prosecutors the to wisely sire documents, to use the defendant’s, not exercise their discretion bring and not some that was reason for their delivery to cases that by are covered the “plain mean- Hall. opinion cites no case in ing” of the statute. This appears to us to which section applied 1001 was in the same be ineffective and inappropriate substi- one, similar situation to this and the tute, context, in this for of legislative history set out in the majority accepted principle of a interpreta- strict opinion support does not applica- such an tion of this criminal statute in light tion of section 1001.4 legislative its history. The majority opinion appears recog- to nize, without relying on the doctrine of IV no,” “exculpatory that conduct that would It position is the of the government by covered the “plain meaning” defendant “suspect” was not a statute when he is not criminalized. by Agent and, contacted states: Hall at “They Hall’s the statements in the [i.e. request, supplied him copies documents sent to were spon- not IRS] taneous, support documents. In position, emotional of its disclaimers by uttered suspect government original which an in its experienced to brief investiga- pages cited give tor 41-45 of transcript would little credence and on in which and its brief for one would be rely.” to the en banc unlikely agree government’s court cited We exhib- implication with the pages such it and conduct is 41-45 of the transcript. not by criminalized because, section 1001 Exhibit is the superseding in- criminal light of the legislative history and the against formation filed Duerr after Duerr Congress concerns meet, intended to agreed it is cooperate; transcript pages 41- highly unlikely Congress intended to part are the testimony of Duerr aas recognized by 3. As is majority opinion, correctly stated facts of the transaction last substantive amendment to this statute in only sending if his reason for documents practice 1934 was induced filing false personal. Hall was It seems to us that there covering shipment documents oil com- implication was no of correctness here as there merce but which govern- no loss caused to would not have been had defendant submitted nothing ment. It had do to with documents not partnership pursuant these documents to a sub- required to be filed are furnished to the Moreover, poena. evidence that the doc- government government’s request. uments would have been sent to Hall concurring but the fact for asked majority opinion, Hall Judge them. statute, Judge agree This is a contrary Wellford dant "used” the represented Nelson criminal it is that the defen- only accepted impliedly documents if he doctrine to it stretch to cover this Agent Hall that the fourth count of the indictment. however, difficult, lenged.” It is Neither this criminal see witness. government testimony challenged affords how defense counsel could have nor information *13 that defendant contention only the support for a statement the truth of which the suspect. a was not government would know. however, finds oth- opinion, The that, majority opinion The also states had contention government’s for support er confessed, unlikely Duerr not it was that suspect when he was not a defendant
that Agent Hall or the would have IRS ever supplied the by Hall and contacted learned the true terms of this land sale. may opinion states that it documents. this inference on bases Hall’s give not infor- Duerr did that inferred be testimony that he could not have learned until after defen- government to the mation personal these terms from defendant’s to Hall. the documents supplied dant had return, return, partnership tax tax and inferred, however, this may be if this Even supplied to him defen- the documents possibility that the out the rule not does However, there were other sources dant. some information had received government as, such as we have of this information ex- than Duerr. For other a source from stated, partners in land the defendant’s this then that the defendant’s appears ample, it transaction, wife, Pelphrey Pelphrey’s and testified as a Pelphrey, who partner, personal their income tax return on case, had witness government reported. the cash was which their share of time of the transaction at the knowledge case, any majority opinion while truthfully did not re- the documents that specify that he knew at does not whether defendant’s not Pelphrey testified it. flect being “suspect” documents did not reflect undercuts contention that the a his time paid on the $40,000 in cash that Duerr section 1001 does not cover his con- end, Pelphrey put his share of front duct or his contention the doctrine of ($19,500) safety deposit in a box. the cash “exculpatory applies, no” we assume that it partnership knew that also Pelphrey seen, is the latter. As will be under the payment; the cash reflect did not return the doctrine that we would forumlation of return, nevertheless, Pelphrey’s personal being being “suspect” apply, his or not a testified, he re- did reflect the cash he part a of the consideration.6 not this at Pelphrey told his wife about ceived. Tr. 263-302. of the transaction. the time V Hall never testified that Certainly Agent drug the IRS nor enforce- neither he nor recognized by majority opinion, As is implicated information that ment had “exculpatory doctrine has no” been Duerr confessed. defendant until adopted by several circuits various for- it is the formulation of the mulations but infer- majority opinion also bases its Circuit, by the Fourth Ninth and followed suspect was not a the defendant ence that Circuit,7 upon by that was relied that, during argument on the assertion majority opinion here. The at trial and at the conclusion of the court to the trial of this case do case, does not hold that facts prosecutor repre- government’s formulation, clearly they not fit this do that defendant was not to the court sented “The statement was not chal- fit.8 target See, by majority opinion, pursuant supra 7. note 1. 5. As indicated drugs, relating to illicit Duerr was to statutes indicted, others, along originally with several trial, charge 8. the district court refused At conspiracy and substantive violations. requested, concerning jury, defen- as defendant “exculpatory In- dant’s defense based on stead, no." that, being appears to us if defendant’s It charged jury simply the court "suspect” should be a factor determina- guilty plaintiff under 1001 if he would be rely can on the doctrine of tion whether he a false ... document within "made and used ... no,” question "exculpatory important should department agency....” jurisdiction of a thought suspect, he was a be whether he government him a whether pect. considered sus- doctrine, The “exculpatory no” recog- as The majority opinion also disapproves of nized circuits those and as out in set this formulation of the “exculpatory no” majority opinion, consists parts, of five doctrine because the fourth criterion per- each and all of which must be satisfied if a mits the defense to applied to criminal defendant is to be allowed to rely on the investigations but not to a “routine exer- defense: cise of administrative responsibility.” In
1) the false statement must be Rodgers, unrelated the majority opinion points out, to a claim to a privilege or a claim the Court held that section 1001 may be against government; applied in the context of a criminal investi- *14 2) gation. the declarant must be responding to answer to this that, concern is inquiries by initiated a while the agency “exculpatory federal no” doctrine cannot department; applied be to a “routine exercise of admin- istrative 3) responsibility” and may the be applied false statement must not impair in context of the basic a criminal investigation, functions by entrusted law it to cannot applied to a agency; criminal investiga- tion unless the other four criteria 4) are satis- government’s inquiries must not fied. say, That is to the holding in Rodgers constitute a routine of exercise adminis- that section 1001 was properly applied in trative responsibility; and the context of that criminal investigation 5) a truthful answer would have incrimi- does not infer that the doctrine of “excul- nated the declarant. patory no” applied cannot be in the context majority opinion approve refuses to aof criminal investigation where the other this formulation of “exculpatory no” be- four criteria are met. cause, opines, it the fourth and fifth crite- are, ria in part, least wrongly based on VI
fifth amendment concerns. We believe that support to “exculpatory no” doc- For the reasons stated herein, we re- trine it is unnecessary rely to on fifth spectfully dissent. amendment concerns. We believe that the doctrine can and should be for invoked the MERRITT, Judge, Chief dissenting. (as reason that the majority opinion recog- I Judge concur in dissenting Brown’s nizes) if applied literally, section 1001 opinion and add this comment respect would criminalize as a felony every false to footnote in five the majority opinion. statement, written, oral or sworn or un- This footnote relates to the dissenting opin- sworn, knowingly made federal prepared by Judge ion Brown. government employee if the statement had to do with a matter within jurisdiction opinion does now make of employee’s department. We do not clear that the crime committed under here that, believe in view of legislative histo- section 1001 was the “use” of the false ry, it was the intent Congress to enact by mailing documents them to Agent Hall legislation sweep that would broadly. that and impliedly representing that the doc- appears It to us that the “exculpatory no” uments accurately described the transac- doctrine as has it evolved in Ninth tion. The majority opinion now further Circuit and in Circuit, followed the Fourth finding concludes that that the doc- fairly eliminates situations Congress uments were “material” a amounted to never Moreover, intended criminalize. finding that impliedly represent- by doctrine, so applying this the courts can ed that the accurately documents described by avoid a case case ad hoc so, consideration the transaction.1 This is in making a states, determination whether section because the documents would not 1001, though appearing to apply to a defen- be “material” impli- unless the defendant conduct, dant’s actually applies. edly represented documents accu- 1. The trial question court determined that jury charged and the was that the documents court, materiality jury, not for the were "material." an public attorney or an or even appears It accountant transaction.
rately reflected advisor, taxpayer to do will ever advise a however, would the documents me, certify he can in fact to the anything had unless if defendant even “material” have been being offered to truth of the documentation representation. a such expressly disavowed the Internal Revenue Service. agent had added a sentence short, if defendant needlessly delay, compli- further This “I do not will letter to Hall: covering his snarl, cate, hopelessly what has been accurately that these represent would, reasonably system effective of the collec- transaction,” there describe in the four states that tion of the taxes repre- clearly, not have been even more comprise our circuit. yet the doc- accuracy and sentation “material” to have been would uments Judge suggest- join I Brown also they relate investigation would because taken the Ninth and ing that the view the transaction. investigation of is far more realistic Fourth Circuits position than the self-regulation Therefore, the find- world to me that it seems inference, I not, by majority. realize being taken “materiality” ing does *15 my little to convince col- impli- presents this defendant finding that the include a however, strongly I do feel leagues, accu- documents represented that the edly Moreover, taking a majority’s opinion we are with the rately reflected the transaction. step rather than forward. event, step backwards as is demonstrated dissenting opinion, because Judge Brown’s represent that impliedly did not accurately described proof
transaction, absence of there is an within he “used” the documents 1001. meaning of 18 U.S.C. § HANRAHAN, E. Homer Petitioner-Appellee, MARTIN, Jr., F. BOYCE dissenting. Judge, THIERET, Warden, H. James persuasive in his join Judge Brown I Respondent-Appellant. express only further dissent. I write No. 90-3292. concerning points this personal several disagree with the say, I case. Needless Appeals, United States Court that Steele’s conduct majority’s conclusion Circuit. Seventh I 1001. punishable under 18 U.S.C. Argued Feb. 1991. do not the facts of this case believe that 1001. In its a violation of section establish May 1991. Decided specify fails to opinion, the Denied Rehearing In Banc Rehearing and any degree certainty the conduct Aug. constituted a violation defendant that so, major- failing to do section 1001. guessing as to what
ity public left the has by sec- they is criminalized conduct believe tion 1001. taxation, system of citizens
Under our respon- country are entrusted with calculating the amount and sibility of both taxation paying income taxes. Our their tax system inoperable, as are the would be systems many other countries world, if this were not Under the case.
majority’s coverage view of the counselor, no careful he a certified