UNITED STATES of America, v. William H. SPINNER, III, Appellant.
No. 98-7353.
United States Court of Appeals, Third Circuit.
Argued March 25, 1999. Filed June 16, 1999.
180 F.3d 514
Before: BECKER, Chief Judge, LEWIS, and WELLFORD,* Circuit Judges.
* Honorable Harry W. Wellford, Senior Circuit Judge for the United States Court of Appeals for the Sixth Circuit, sitting by designation.
Viewed in its totality, it is clear this payment was not made in the ordinary course of business. Accordingly, the preferential payment was a preference, creating an actual conflict of interest, and thus, disqualifying RSW as counsel for the debtor.8
to take such further action as is consistent with this opinion.9
IV. Conclusion
For the reasons set forth above, we find the District Court erred in holding that the stock transfer was not a preference under
Accordingly, we will reverse the District Court‘s order and direct the District Court to remand to the Bankruptcy Court with instructions to disqualify RSW and successor firms as counsel for First Jersey, and
LEWIS, Circuit Judge.
Appellant William H. Spinner, III, appeals the judgment of conviction of the United States District Court for the Middle District of Pennsylvania. Because the District Court lacked jurisdiction over the indictment, we will reverse Spinner‘s conviction аnd vacate this case to the District Court so that Spinner may be reindicted on Count I of the indictment and for further proceedings with respect to Count II.
I.
In Count I of an indictment filed on June 10, 1997, Spinner was charged with access devicе fraud in violation of
Peter B. Foster (argued), Pinskey & Foster, Harrisburg, PA, Attorney for Appellant.
Dennis C. Pfannenschmidt, Theodore B. Smith, III (argued), Office of United States Attorney, Harrisburg, PA, Attorneys for Appellee.
II.
“Happily, the rule that the indictment, to be sufficient, must contain all the elements of a crime ... is still a vital part of our Federal criminal jurisprudence.” United States v. Wander, 601 F.2d 1251, 1259 (3d Cir.1979) (quoting United States v. Knox Coal Co., 347 F.2d 33, 37 (3d Cir.1965)). To confer federal jurisdiction in this case, the interstate commerce element of the crime with which Spinner was charged must be alleged in the indictmеnt. The United States, however, failed to allege the interstate commerce element of the crime in the indictment. It admits that “Count I of the indictment fails to allege that any of the transactions affected commerce.” Appellant‘s Br. at 19. Nonetheless, it maintains that this is harmless
The Supreme Court has stated that a defendant has a “substantial right to be tried only on charges presented in an indictment returned by a grand jury. Deprivation of such a basic right is far too serious to be treated as nothing more than a variance and then dismissed as harmless error.” Stirone v. United States, 361 U.S. 212, 217, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960). The fact that thе United States charged interference with interstate commerce in Count II of Spinner‘s indictment is not a sufficient basis on which to find federal jurisdiction:
The charge that interstate commerce is affected is critical since the Federal Government‘s jurisdiction of this crime rests only on that inference. It follows that when only one particular kind of commerce is charged to have been burdened a conviction must rest on that charge and not anоther, even though it be assumed that under an indictment drawn in general terms a conviction might rest upon a showing that commerce of one kind or another had been burdened.
Id. at 218. Without alleging an effect on interstate commerce in the first count, then, the indictment in this case was jurisdictionally defective.
When, as in this case, an indictment fails to allege all elements of an offense, the defect may be raised by the court sua sponte. We have held that “[f]аilure of an indictment sufficiently to state an offense is a fundamental defect ... and it can be raised at any time.” Wander, 601 F.2d at 1259; see also
Furthermore, notice alone cannot form a sufficient basis to validate a jurisdictionally defective indictmеnt. In United States v. Hooker, 841 F.2d 1225 (4th Cir.1988) (en banc), the Fourth Circuit Court of Appeals held that “an effect on interstate commerce” was an essential element of a RICO offense without which an indictment was insufficient. It further held that notice alone was insufficient to validate the indictment: “The inclusion of all elements ... derives from the Fifth Amendment, which requires that the grand jury have considered and found all elements to be present.” Id. at 1230.
Finally, Spinner did not waive this jurisdictional defect by entering a guilty pleа. In United States v. Caperell, 938 F.2d 975 (9th Cir.1991), the Ninth Circuit Court of Appeals held that “[a]lthough a guilty plea generally waives all claims of constitutional violation occurring before the plea, ‘jurisdictional’ claims are an exception to this rule.” Id. at 977 (quoting United States v. Montilla, 870 F.2d 549, 552 (9th Cir.1989), amended at 907 F.2d 115 (9th Cir.1990) (“Claims that ‘the applicable statute is unconstitutional or that the indictment fails to state an offense’ are jurisdictional claims not waived by the guilty plea.“)); see also United States v. Rivera, 879 F.2d 1247, 1251 (5th Cir.1989); O‘Leary v. United States, 856 F.2d 1142, 1143 (8th Cir.1988) (per curiam); United States v. Di Fonzo, 603 F.2d 1260, 1263 (7th Cir.1979). While a defendant‘s guilty plea may be thought to waive a jurisdictional dеfect, see United States v. Bentz, 21 F.3d 37, 39 n. 2 (3d Cir.1994), we are faced here not with a defendant who pleads guilty and then wishes to challenge the facts that give rise to federal jurisdiction (such as an effect on interstate commerce), but with an indictment that does not allege those facts. It is only in the former case that courts have found jurisdictional challenges waived by a guilty plea. See id. While a challenge to jurisdiction-defeating factual allegations requires a court to go beyond the fact of the indictment, no such difficulty arises here. See Caperell, 938 F.2d at 977-78.
Since the United States failed to allege an essential element of the crime in the indictment, we have no choice but to reverse and vacate Spinner‘s conviction so that he may be properly indicted and remand for further proceedings.
WELLFORD, Circuit Judge, concurring:
It is for the judges of this circuit to decide whether defendant‘s guilty plea in this case constituted a waiver of the indictment dеficiency discussed. This court indicated in a footnote, a few years ago, that a guilty plea may (not that it necessarily does) waive a jurisdictional defect:
[W]e need not reach the issuance of whether a guilty plea waives jurisdictional as well as nonjurisdictional defects. Compare United States ex rel. Shank v. Pennsylvania, 461 F.2d 61, 62 (3d Cir.1972) (asserting that guilty plea waives all nonjurisdictional defects), cert. denied, 409 U.S. 1110, 93 S.Ct. 917, 34 L.Ed.2d 691 (1973), and United States ex rel. Jenkins v. Hendricks, 405 F.2d 182, 183 (3d Cir.1968) (same), with United States v. Mathews, 833 F.2d 161, 164 (9th Cir.1987) (asserting that guilty plea “establishes the factual basis for jurisdiction“) (cited in United States v. Parker, 874 F.2d 174, 178 (3d Cir.1989)).
United States v. Bentz, 21 F.3d 37, 39 n. 2 (3d Cir.1994).
The Supreme Court has used broad language to indicate that a criminal defendant may forfeit (or waive) a constitutional right in a criminal case:
“No procedural principle is more familiar to this Court than that a constitutionаl right,” or a right of any other sort, “may be forfeited in criminal as well as civil cases by the failure to make timely assertion of the right before a tribunal having jurisdiction to determine it.” Yakus v. United States, 321 U.S. 414, 444, 64 S.Ct. 660, 88 L.Ed. 834 (1944).
United States v. Olano, 507 U.S. 725, 731, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993).
Another circuit has recently used broad language in cоnsidering this issue in the context of the jurisdiction of the court:
Martin‘s argument rests on the concept that a guilty plea does not waive jurisdictional defenses to the crime at issue. United States v. Nash, 29 F.3d 1195, 1201 (7th Cir.1994). But the nexus with interstate commerce, which courts frеquently call the “jurisdictional element,” is simply one of the essential elements of
§ 844(i) . Although courts frequently call it the “jurisdictional element” of the statute, it is “jurisdictional” only in the shorthand sense that without that nexus, there can be no federal crime under the bombing statute. Kanar v. United States, 118 F.3d 527, 530 (7th Cir.1997). It is not jurisdictional in the sense that it affects a court‘s subject matter jurisdiction, i.e., a court‘s constitutional or statutory power to adjudicate a case, here authorized by18 U.S.C. § 3231 . See Steel Co. v. Citizens for a Better Env‘t, — U.S. —, —, 118 S.Ct. 1003, 1010, 140 L.Ed.2d 210 (1998). This court has recognized for decades that, despite defendants’ tendency to “confuse[] facts essential to be alleged as elements of the crime with jurisdictional requirements arising as a matter of law,” once a defendant plеad guilty in “[a] court which has jurisdiction of the subject matter and of the defendant, as did the court in the instant case,” the court‘s judgment cannot be assailed on grounds that the government has not met its burden of proving “so-called jurisdictionаl facts.” United States v. Hoyland, 264 F.2d 346, 352-53 (7th Cir.1959); La Fever v. United States, 279 F.2d 833, 834 (7th Cir.1960). Even if the government fails to establish the connection to interstate commerce, the district court is not deprived of jurisdiction to hear the case. See generally Steel Co., 118 S.Ct. at 1010-13.
Defendant Spinner entered into a guilty plеa pursuant to a plea agreement in this case whereby he pleaded guilty to count one in exchange for dismissal of count two. There was, at sentencing, a full discussion of the nature of both charges, including the count twо defrauding of “certain financial institutions by fraudulent use of access devices.” The district court explained that “he must establish for the record your involvement in these charges.” (Emphasis added.)
Although I am inclined to believe that defendant may have waived his objection to the interstate aspect deficiency in count one, I am prepared to concur in the majority‘s determination as to that count, but I also believe that matter may be remanded to the district court to consider whether defendant should be put to trial on count two (if he pleads not guilty), or whether defendant may choose to enter a guilty plea. The parties, represented by counsel, аgreed that defendant was in fact guilty of the factual bases stated by the United States Attorney with respect to the charges. If, on technical grounds, we set aside the guilty plea to count one not based on any objection made by defendant to the district court, I believe the matter should in fact be remanded to the district court for further proceedings as to count two. This court has sua sponte negated the plea agreement; defendаnt should be called upon to answer to the count two charges in fairness. I believe the defendant had real notice of the true nature of the charges made against him.
I concur with the majority that Spinner may also be reindicted by means of a technically sufficient charge as to the factual basis of the count one charge.