Petition — Johnson v. United States

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NOV 25 1977

—iipitast pepe IR., CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

No. 7 7 746

LEWIS E. JOHNSON,

Petitioner,

versus

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JAMES A. MC PHERSON

Attorney for Petitioner

419 Carondelet Street

New Orleans, Louisiana 70130

Telephone: [504] 581-1973

SCOFIELDS’ QUALITY PRINTERS. P.O. BOX 63096. N Oo LA. 70153 604 822.1611

TABLE OF CONTENTS

Page

.... EE o elkk cc ccsccecclnecnecccccscccces 2

JJ bub b cb cbee ddee ceccoccccccesescedens 2

QUESTIONS PRESENTED ................ eie 3

CONSTITUTIONAL PROVISIONS,

STATUTES AND FEDERAL RULES IN-

T 0 e020 ceuetacec enter 9

, 9

REASONS FOR GRANTING THE WRIT ........ 20

1. Reasons for Granting the Writ with

Respect to the Issue of Systematic Ex-

clusion of Petitioner's Class from the

General Venire and With Respect to

the Denial of an Evidentiary Hearing...... 20

2. Reasons for Granting the Writ with

Respect to the Exclusion of Evidence

of Omitted Tax Deductible Items in

Support of the Defense of Reliance

Upon One's Accountants .................. 26

r d 34

CERTIFICATE OF SERVICE ..................... 35

APPENDIX

eee dess es e eee eee 1a

Opinion of the Court of Appeals 2a

Order Denying Petition for Rehearing ......... 9a

Order Staying Mandate to November 16,

SE ccvotdddasbenedane e eee 10a

Order Granting Stay of the Issuance of

K 66-6006) sddn dsboonte sbosese bes 12a

Affidavit of Jay C. Zainey with Attachments 13a

TABLE OF AUTHORITIES

Cases: Page

Labat v. Bennett, 365 F.2d 698 (5 Cir. 1966) ...21,22,24

Peters v. Kiff, 407 U.S. 493 (1962) .............. 21,23

United States v. Horton, 526 F.2d 884 (5th Cir.),

cert. den. 429 U.S. 820 (1976) ........... 4,5,15,24,26

Constitutional & Statutory Provisions:

United States Constitution

e cohaavicseckesseudesocewe 9

EE = e 9

F. R. Evid.

D ! reren 30

F on 9.30.32.33

r ˙ AA ee 7

P 9.15

Rules of the Supreme Court, Rule 1901) (b) 20

Other Authorities:

IV Moore's Federal Practice, 403.0103]. p. IV-

——

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1977

No.

LEWIS E. JOHNSON,

Petitioner,

versus

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

TO THE HONORABLE, THE CHIEF JUSTICE OF

THE UNITED STATES AND THE ASSOCIATE

JUSTICES OF THE SUPREME COURT:

The petitioner, Lewis E. Johnson, prays that a writ of

certiorari issue to review the judgment of the United

States Court of Appeals for the Fifth Circuit which

was rendered on September 1, 1977, and entered on Oc-

tober 17, 1977, following the denial of a timely Petition

for Rehearing and Petition for Rehearing en banc.

OPINIONS BELOW

There are no written opinions, and only one written

order, by the District Court which relate to the points

raised by this petition.

The opinion of the Court of Appeals for the Fifth Cir-

cuit, reported at 558 F.2d 744, is annexed hereto in the

Appendix at pp. 2a-8a.

JURISDICTION

This is a criminal prosecution which was initiated

in the United States District Court for the Eastern Dis-

trict of Louisiana. Petitioner was convicted of three

counts of violation of 26 U.S.C. §7206(1) relative to

making and subscribing false and fraudulent cor-

porate tax returns for two corporations which he

owned. Each of the points of this petition were raised

in the initial proceedings before the District Court and

upon the appeal before the Court below. On September

1, 1977, the Court below entered a judgment affirming

the judgment of conviction. Appendix at p. ia. On Oc-

tober 17, 1977, the Court below denied a Petition for

Rehearing and Petition for Rehearing En Banc which

had been timely filed in the said Court. Appendix at pp.

9a-10a. On November 2, 1977, the Court below granted

a stay of the issuance of its mandate to and including

November 16, 1977, which stay is to remain in effect

during the pendency of this petition before this

Honorable Court if, during the period of the said stay,

the Clerk of this Honorable Court notifies the Clerk of

the Fifth Circuit Court of Appeals that this petition

has been filed.

The jurisdiction of this Court is invoked under 28

U.S.C. §1254(1).

QUESTIONS PRESENTED |

During the week prior to the commencement of the

trial of this cause, when the venire from which a petit

jury was to be selected for the trial of this case, the

defense conducted an investigation of the prospective

jurors within the means possible to it without

violating the law or legal ethics. The defense deter-

mined that none of the prospective jurors for the trial

of this cause were sole proprietors of their own busi-

ness. This provoked further inquiry by defense

counsel. It was discovered that the local plan for the

selection of Federal juries in the Eastern District of

Louisiana permitted a personal exemption of

operators of so-called one-man businesses. Further

inquiry demonstrated that this personal exemption

was extended to sole proprietors who had employees

in their businesses. On the Friday preceding the com-

mencement of this trial on the following Monday. the

defense filed a Motion to Dismiss Indictment and to

Quash General Venire. (Doc. No. 57, Record on Appeal

Vol. II) On the day the said motion was filed, a pro-

posed Order was tendered to the Court for the special

setting of this motion for hearing prior to the

commencement of the trial. The District Court held

that the issues raised by the motion were insubstan-

tial, that no hearing was therefore necessary, and de-

nied defendant's motion without a hearing. On the

following Monday, prior to the commencement of the

trial, defense counsel orally moved to proffer evidence

at a later date in support of the motion to dismiss and

to quash the general venire. The District Court denied

that request. (Doc. No. 64, Record on Appeal Vol. II.)

Following the trial and conviction of defendant on the

corporate tax returns counts, the defense filed a mo-

tion for a new trial, attaching a number of forms ob-

tained from the Jury Commissioner. an affidavit by

one of defense counsel's associates with respect to an

interview of the Jury Commissioner, and a letter from

Mr. Joseph N. Traigle, Collector of Revenue for the

State of Louisiana, in which the number of sole

proprietorships in the several parishes comprising

the Eastern District of Louisiana was stated to be 46,-

200. A hearing was requested in which evidence would

be allowed to refute certain factual conclusions made

by the United States Court of Appeals for the Fifth Cir-

cuit in United States v. Horton, 526 F.2d 884 (5 Cir.),

cert. den. 429 U.S. 820 (1976). The District Court denied

the request for an evidentiary hearing and the motion

for a new trial. The Court of Appeals held that this

issue did not even warrant further discussion in view

of its opinion in the Horton case. 526 F. ad at 884 n.3.

Petitioner is a wealthy businessman who owns

several closely held corporations and sole proprietor-

ships. He has several employees to perform various

functions within these various businesses. Only one

employee, Mr. Wayne Mason, is involved in all of these

businesses. He is petitioner’s bookkeeper. While he is

responsible for certain administrative functions of

petitioner's business, he is not empowered to make

policy decisions. Therefore, the direction of

petitioner's businesses was truly a one-man function.

He is a member of the class of persons who are grant-

ed a personal exemption and who, by virtue of the

operation of this system of exemption, are excluded

from jury service.

1. The first question presented is whether the

operation of the personal exemption practices in the

Eastern District of Louisiana, which in effect solicits

the owners or operators of one-man businesses and

sole proprietorships to exercise a personal exemption

from jury duty, works to systematically exclude a sub-

stantial identifiable class of persons from jury service

and thereby denies due process of law to persons tried

by juries from which such class has been excluded?

2. The second question presented is whether defen-

dant is a member of the excluded class and was thus

denied equal protection of the laws by virtue of the ex-

cusal of members of his class from jury duty upon the

basis of their exercise of a personal exemption?

3. The third question presented is whether the doc-

trine of stare decisis may be applied to deny a person

an evidentiary hearing to establish the factual error of

certain basic factual conclusions upon which a prece-

dent is based and then to affirm the judgment based

upon the application of that doctrine when it is ob-

vious that the exhibits annexed to the moving papers

tends to, if it does not clearly, refute the factual basis

for the erroneous precedent, in this case, United States

v. Horton, supra.

II.

A series of rulings by the District Court and the clos-

ing argument of the Government cast petitioner in a

prejudicial light and depicted him as a tax evader. The

Government, over objection by the defense, was per-

mitted by the District Court to point to a number of

items which had been misreported or misclassified or

omitted from petitioner’s tax returns and which in-

ferred a tax liability on the petitioner's part. The

petitioner had hired a prominent local accounting

firm to handle all of the accounting details of his busi-

ness and to prepare his several tax returns. These ac-

countants, in preparing petitioner's tax returns, had

missed items of deductions which would have

eliminated any tax liability on petitioner's part at all.

Petitioner, in reviewing the tax returns before sign-

ing them, failed to notice the omission of these major

deductible items just as he missed the relatively

minor items of income and the classification of in-

come and expenses which his accountants had made

on the tax returns. The Government, at the commence-

ment of this trial, dropped all charges which would put

in issue the question of tax liability on the part of the

petitioners — or so it thought and the District Court so

ruled. But petitioner, after these charges were

dropped, contended that these items of missed deduc-

tions and items misclassified as income were proba-

tive to his defense of good faith reliance upon his ac-

countants. The rulings of the District Court precluded

petitioner from erasing from the minds of the jurors

the prejudice to his case which occurred from his hav-

ing been portrayed as a millionaire tax evader to the

jurors of much less substantial financial condition.

Having not been allowed to adduce evidence dis-

proving a tax liability through the Government wit-

nesses (his bookkeeper and several accountants), the

defense attempted to cross-examine the Government

IRS agents to demonstrate that certain items of omit-

ted deduction would offset any apparent tax liability.

Since the Government had carefully skirted these

issues so not to bring them within the scope of its

direct examination, it objected to and was sustained in

its effort to prevent the adducement of this evidence.

Throughout the cross-examination of the Government

witnesses, each time the defense would get into areas

damaging to the Government’s case, or to its implant-

ed inference of tax liability, the Government would ob-

ject and be sustained that the cross-examination was

impermissible because it exceeded the scope of the

direct examination in violation of Rule 611(b),

F.R.Evid. Having thus avoided the adducement of

evidence to refute the carefully laid inference of tax

evasion, the prosecutor was able to argue without

evidential refutation that improper deductions were

made by petitioner “at the expense of the taxpayers of

this country.” The Court of Appeals [did] not agree

that this expression implied a tax liability. F. 2d

at It. however, offered no explanation as to how it

might otherwise have reasonably been interpreted.

With regard to the issue of the relevance of the issue of

missed or misclassified items of deduction, while

agreeing that such evidence would ordinarily be

probative to the defense of reliance upon the ac-

countants, concluded that such evidence could not

have had an appreciable impact upon the jury

“because much of the prosecution’s evidence demon-

strated that Johnson withheld relevant information

from his accountants.” — F.2d at ___.. Again, the

Court of Appeals cited no example of any such

evidence. The accountants who were responsible for

petitioner's account testified that they undertook the

obligation to trace down and properly classify items

affecting petitioner’s tax liability and that all of

petitioner's records were available to them. They had

preferences for particular records and did not ex-

amine all of the records which were available to them.

1. The first question presented with regard to these

circumstances is whether the failure to make per-

missible deductions, resulting in a tax overpayment,

is probative evidence in support of the defense of good

faith reliance upon one’s accountants in the prepara-

tion of income tax returns.

2. The second question presented is whether any

improper prejudice could have been suffered by the

Government had this evidence been admitted, and, if

so, whether such prejudice substantially outweighed

the probative value of the excluded evidence.

3. The third question in respect to these issues is

whetner the Court of Appeals’ determination that this

excluded evidence could have had no appreciable im-

pact upon the jury was factually or legally correct.

4. The fourth question with regard to the issues

relative to the reliance defense is whether the District

Court improperly and unequally applied Rule 611(b),

F.R.Evid., to keep out probative and necessary

evidence of good faith reliance while permitting the

Government full range of cross-examination,

irrespective of the said Rule, under the supposed dis-

tinctive guise that the Government's cross-

examination was permissible to prove the bias and in-

terest of the defense witnesses.

5. The final question regarding the excluded

evidence of tax overpayment by virtue of omission of

deductible items is whether the District Court should

have declared a mistrial after having prevented the

defense from adducing evidence of substantial omis-

sions of tax deductible items which would have

proven tax overpayment the prosecutor inferred that

petitioner had a tax liability when it argued that the

taking of improper business deductions by petitioner

were made at the expense of the taxpayers of this

country.”

CONSTITUTIONAL PROVISIONS,

STATUTES AND FEDERAL RULES INVOLVED

The issues presented by this petition involve the

provisions of the Fifth and Sixth Amendments to the

United States Constitution, 26 U.S.C. §7206(1), Rules

403 and611(b), Federal Rules of Evidence, and the Ran-

dom Plan for the Selection of Juries in the United

States District Court for the Eastern District of Loui-

siana. Pertinent portions of the said provisions are

copied in the Appendix at pp. 16a-20a.

STATEMENT

This is a criminal proceeding arising in the United

States District Court for the Eastern District of Loui-

siana. On August 25, 1975, a federal grand jury in-

dicted petitioner, charging him with violations of the

Internal Revenue laws of the United States. Counts 1

and 3 of the indictment charged him with evasion of

personal income taxes for the calendar years 1971 and

1972. Counts 2 and 4 charged him with making false

and fraudulent statements with regard to his personal

income taxes for those same years. Count 5 charged

him with making and subscribing a false and

fraudulent Corporate Income Tax Return for Hendee

Homes, Inc., for fiscal year ended (FYE) May 31, 1972.

Counts 6 and 7 similarly charged him with regard to

the corporate return of Tel Enterprises, Inc., for FYE

May 31, 1971 and May 31, 1972. Prior to trial the

Government dropped the charges in Counts 1-3.

Petitioner was acquitted with regard to his personal

tax return (Count 4). He was convicted on the charges

made in Counts 5-7 relative to the corporate tax

returns of Hendee Homes, Inc. (Hendee) and Tel Enter-

prises, Inc. (Tel). Petitioner appealed the judgment

with respect to the three corporate tax returns. The

Court of Appeals for the Fifth Circuit affirmed the

judgment on September 1, 1977. A timely petition for

rehearing was denied on October 17, 1977. For reasons

stated in a motion addressed to Mr. Justice Powell, as

Circuit Justice for the Fifth Judicial Circuit, counsel

was unable to prepare and file this petition on or

before November 16, 1977, and has been granted until

November 26, 1977, to timely file same.

The two major classifications into which the as-

signments of error have been divided in this petition

arose in the following way.

During the week preceding the trial, the venire of

prospective jurors was published. Defense counsel

obtained a copy of that document and began research-

ing the background of the prospective jurors in order

better to enable him to exercise peremptory chal-

lenges as well as to determine if there was cause for

the challenge of any of the said prospective jurors.

Defense counsel learned that no person on the list of

prospective jurors was similarly situated to the defen-

dant. There were no sole proprietors of small busi-

nesses, or large ones for that matter, who would have

to rely upon accountants for the preparation of their

tax returns. This discovery stimulated inquiry into

the reason for the absence of such people from the

prospective jury venire. Defense counsel ascertained

that it was because the Plan for the Random Selection

of Jurors for the Eastern District of Louisiana provid-

ed a personal exemption to persons of petitioner's

economic and business class. Petitioner then moved

the Court below to dismiss the indictment and to quash

the general venire, as follows (R. Doc. 57):

Defendant, Lewis E. Johnson, through his

undersigned counsel, respectfully moves this

Honorable Court to dismiss the indictment

and to quash the general venire for the rea-

sons and on the grounds that the personal ex-

emption granted prospective grand jurors and

petit jurors who are owners of one-man busi-

nesses works an unconstitutional dis-

crimination against persons similarly

situated with defendant, i.e., sole proprietors

of one or more businesses, as well as violates

the constitutional requirement that such

juries be randomly drawn from a general

venire which is fairly representative of a

cross-section of the community, from which

no substantial identifiable segment has been

arbitrarily excluded.

Petitioner prayed that a hearing be conducted on this

motion, after which the indictment would be dis-

missed, the general venire quashed, and anew general

venire empanelled which would be composed of all

identifiable groups within the community, with no

personal exemption accorded to anyone on the basis of

economic considerations or conditions. (Ibid.) The

District Court determined that the issues raised by

this motion were not substantiai and denied a hear-

ing. (R. Doc. 57, p. 2.) The trial was coramenced the

following Monday, at which time the Court orally de-

nied the said motion. (R. Doc. 64) Petitioner tien mov-

ed for leave to proffer evidence at a later date with ref-

erence to the motion, which motion was denied. (Ibid. )

Following the trial, petitioner moved for a new trial

(R. Doc. 83a) and for an evidentiary hearing with

respect to that motion (R. Doc. 83b) Paragraph 1 of the

Motion for a New Trial stated:

1. The Plan for Random Selection of Grand

and Petit Jurors for the Eastern District of

Louisiana, on its face and as applied to the

general venire from which the petit jury in

this case was drawn, operated in an uncon-

stitutionally discriminatory fashion to deny

defendant equal protection of the laws by vir-

tue of the systematic exclusion of persons who

own and operate their own businesses, as

defendant does, and who have similar tax

problems as defendant. In a tax case, especial-

ly, where the exclusion of an entire economic

class results in the absence of persons on the

jury who have tax problems similar to the

defendant, the exclusion of sole proprietors is

so obviously adenial of equal protection of the

laws that the interests of justice and the order-

ly expedition of pending litigation against the

defendant require that a new trial be accorded.

The following was stated in the motion for an eviden-

tiary hearing in connection with the motion for a new

trial (R. Doc. 83b):

1. A letter, not yet in the record, written to

undersigned counsel by Mr. Joseph N. Traigle,

Collector of Revenue for the State of Loui-

siana, demonstrates that there are an es-

timated 46,200 sole proprietorships in the

Eastern District of Louisiana. Further

evidence may be adduced in connection with

or in support of the disclosures made in the

said letter.

2. A telephone conversation had with Mrs.

Janice K. Barden, Jury Commissioner for the

Eastern District of Louisiana, disclosed that

the “one-man business” personal exemption

is the most exercised personal exemption un-

der the Plan for the Random Selection of

Grand and Petit Jurors forthe Eastern District

of Louisiana. It is urged that, contrary to the

unsubstantiated declaration of fact by the

Fifth Circuit Court of Appeals in United States

v. Horton, 526 F.2d 884, 889 (5 Cir. 1976) that the

exclusion of sole proprietors is not auto-

matic, the effect of the letter sent by the Clerk

of Court advising prospective jurors that they

„will be excused by the Court upon individual

request” if they are a person “actively en-

gaged in operating a one-man business and

the practice of excusing all sole proprietors

who make the request (which is practically if

not all such persons) is to influence sole

proprietors to take a personal exemption from

jury service. The letter from the Clerk and the

records reflecting the persons who were ex-

cused and the reasons therefore are not in the

record by virtue of the refusal to grant defen-

dant a hearing on his previously filed Motion

to Dismiss Indictment. A hearing is neces-

sary to introduce such evidence for examina-

tion by this Court and/or for ultimate ex-

amination by the Cou;i of Appeals.

An affidavit, submitted with the above two motions,

demonstrated that the Jury Commissioner for the

Eastern District of Louisiana, a statistician, had taken

samplings for statistical analysis with respect to the

Master Jury Wheel of 1970 and 1973 and statistically

revealed that 2.8% of the 500 names which were drawn

from the 1970 whee! and statistically studied were

exempted from jury service under the “one-man busi-

ness personal exemption, and that 4% were exempt-

ec under the said exemption with regard to the 1973

Master Jury Wheel. The form lettersent by the Clerk to

prospective jurors and the Juror Qualification Ques-

tionnaire were annexed to the Motion for a New Trial.

(R. Doc. 83a-b.) The letter from Mr. Traigle, State

Collector of Revenue, was also annexed to the said mo-

tion. (Ibid.) The Government opposed petitioner's Mo-

tion for a New Trial (R. Doc. 93) and the Motion for an

Evidentiary Hearing (R. Doc. 91). The District Court

denied both of those motions, permitting only argu-

ment and without an evidentiary hearing on May 12,

1976. (R. Doc. 95) The denial of the pre-trial motions to

dismiss, to quash the general venire and for an eviden-

tiary hearing, as well as the opportunity to make a

proffer in support of the motioh was made the basis of

the Fourth Issue Presented in the Appellant's Brief in

the Court Below. The denial of the Motion for a New

Trial and the Motion for an Evidentiary Hearing was

made the basis of the Fourteenth Issue Presented on

the direct appeal to the Court below. The Court of

Appeals disposed of these substantial issues on the

appeal of this case in the following language (558 F. 2d

at 747 n.3 and accompanying text):

We have carefully examined Johnson's 12

other allegations of error and find them to be

without merit.

3 These assignments of error are as

follows: *** (4) The trial court denied

appellant’s motion to quash the general

venire, to dismiss the indictment, and to

proffer evidence in support of the motion

[We had already decided this issue in Unit-

ed States v. Horton, 526 F.2d 884 (5th Cir.

1976), cert. den., 429 U.S. 820* * *};* * * (12)

The trial court overruled appellant's mo-

tion for a new trial.

No attempt by the Court below was made to review or

harmonize the evidence annexed to petitioner's mo-

tion for a new trial with the assumptions of fact made

by it in the Horton case. (Ibid.)

The primary defense in this case was that petitioner,

in good faith, relied upon his accountants to properly

classify and report items of income as well as deducti-

ble items. Such a defense would be complete against a

charge of 26 U.S.C. §7206(1), since wilfulness of the

misstatement is an essential element of the offense.

On numerous occasions, and by a specific declaration

as to what it would allow, the District Court prevented

petitioner from adducing evidence which would have

shown that his accountants missed items of deduction

as well as items of income. The Court’s prevention of

the adducement of such evidence was apparently

based upon the concept that, after the dismissal of

Counts 1-3 of the indictment this evidence was irrele-

vant and, under Rule 403 of the Federal Rules of

Evidence, was inadmissible even if relevant because

its probative value was outweighed by its potential

prejudicial effect. Regarding this basis for rejecting

petitioner's claim of prejudicial error, the Court below

wrote (558 F.2d at __):

The irrelevancy of Johnson's alleged over-

payment of tax to any issue at this trial is firm-

ly established by cases in this and other Cir-

cuits. We held the following in Schepps v.

United States, 395 F.2d 749 (5 Cir. 1968), cert.

den., 393 U.S. 925:

The appellant has been found guilty, in

two counts, of violating 26 U.S.C. §7206(1),

wilfully making and subscribing a federal

income tax return which he did not believe

to be true and correct as to every material

matter. That the return was false in certain

particulars is not disputed. Although not

charged with nor being tried for income

tax evasion, appellant says that he should

have been allowed to introduce proof

showing that the falsity resulted in no tax

deficiency. This proof was not relevant to

the issue raised by the indictment and it

was not error to reject it, Siravo v. United

States, 1 Cir., 1967, 377 F.2d 469: Silver-

stein v. United States, 1 Cir. 1987. 377 F. 2d

269: Hoover v. United States, 5 Cir. 1966,

358 F.2d 87, 89, cert. den., 385 U.S. 822.

See also United States v. Fritz, 481 F.2d 644 (9

Cir. 1973); United States v. Jernigan, 411 F. 2d

471 (5 Cir. 1969), cert. den., 396 U.S. 927.

These precedents notwithstanding, Johnson

raises two objections to the district court's

refusal! to allow evidence of income tax over-

payment. First, Johnson contends that such

evidence was relevant in his case to the issue

of whether he in good faith relied on his ac-

countants properly to compute and classify

reportable items of income and expense. He

argues that:

Had the appellant not left the accounting

procedures to his accountants and trusted

their computations, surely some of the

deductible items which would have reduc-

ed Appellant's tax liability would have

been picked up by him when he examined

his returns.

Brief for Appellant at 39.

We agree that the failure to make permissi-

ble deductions, resulting in a tax overpay-

ment, logically tends to prove reliance on the

integrity and expertise of one’s accountants.

Although this evidence might thus have aid-

ed the reliance aspect of Johnson's defense. it

could have had no appreciable impact on the

case as a whole because much of the

prosecution’s evidence demonstrated that

Johnson withheld relevant information from

his accountants. Under these circumstances,

Johnson's alleged reliance on his accountants

is irrelevant. Cf. United States v. Signer, 482

F. 2d 394, 398 (6 Cir. 1973).

Even if we assume that reliance evidence is

logically relevant to any issue in the case, our

inquiry cannot end there. Under Federal Rule

of Evidence 403, admissibility is predicated on

more than mere logical relevance:

Although relevant, evidence may be ex-

cluded if its probative value is sub-

stantially outweighed by the danger of un-

fair prejudice, confusion of the issues, or

misleading the jury, or by considerations

of undue delay, waste of time, or needless

presentation of cumulative evidence.

In determining legal relevance, the trial judge

has broad discretion. United States v. Moore,

522 F.2d 1068, 1079 (9 Cir. 1975), cert. den., 423

U.S. 1049 (1976). We may not disturb his ruling

unless he has clearly abused his discretion.

United States v. Dwyer, 539 F. 2d 924, 927 (2 Cir.

1976).

No showing of abuse of discretion has been

made here. Where reliance on the accountants

was relevant, the district court allowed direct

evidence on that point. Because it depends on a

series of inferences, however, evidence of

neglected deductions is only indirectly proba-

tive of reliance. Moreover, it carries several

risks against which Rule 403 was designed to

protect. It could have resulted in unfair pre-

judice to the government's case by appealing

to the emotions of the jury. Indeed, the conduct

of Johnson’s counsel during the trial made

this no small concern of the district court

(Footnote omitted.) Also, the danger of con-

fusing the issues was great because tax

liability was irrelevant to the offenses for

which Johnson was tried. Finally, presenting

evidence of over payment could have resulted

in a waste of time on collateral issues. See ist

Supp. Record, Vol. III, at 308. We conclude that

the district court properly excluded evidence

of neglected tax deductions.

The second ground urged in the Court below to sus-

tain petitioner's claim that the exclusion of evidence

of substantial omitted deductions constituted reversi-

ble prejudicial error was that, by denying the

petitioner the opportunity to adduce such evidence,

the prosecutor was enabled to argue to the jury that

improper business deductions were made “at the ex-

pense of the taxpayers of this country.” Tr. Pros. Arg.

at 22. Petitioner argued that the quoted comment im-

plied, if it was not explicit, that petitioner had a tax

liability or deficiency as a direct result of the omission

of certain items of reportable income. Petitioner

moved for a mistrial on account of that statement. On

the appeal, the Court below said: We do not agree that

this expression implies a tax liability. But, however it

is interpreted, any prejudicial effect that it might have

had was cured by the district court’s instruction to the

jury: whether ‘a tax is due or owing by the defendant is

immaterial to the charges before you in this case

The Court below quoted the remainder of the district

court's charge at that time, as follows:

Accordingly, whether the Government has or

has not suffered a pecuniary loss or monetary

loss as a result of the alleged false return is not

relevant and need not be considered by you in

your deliberation. (Footnote omitted.)

Petitioner, having been denied the opportunity to

refute just such an assumption as that which surfaced

in the argument (and which had laid just below the

surface throughout this trial of a millionaire plumber

on charges of tax fraud), did not have the prejudicial

effect of the comment removed. The jury was not told

that petitioner had no tax liability. It was not told that

petitioner had been prohibited from proving that he

had no such liability.

REASONS FOR GRANTING THE WRIT

1. Reasons for Granting the Writ with

Respect to the Issue of Systematic Exclu-

sion of Petitioner’s Class from the General

Venire and With Respect to the Denial of an

Evidentiary Hearing.

Rule 19(1)(b), Rules of the Supreme Court of the

United States, provides. in relevant part, as follows:

1. A review on writ of certiorari is not a

matter of right, but of sound judicial dis-

cretion, and will be granted only where there

are special and important reasons therefor.

The following, while neither controlling nor

fully measuring the court's discretion. in-

dicate the character of reasons which will be

considered:

(b) Where a court of appeals has rendered a

decision in conflict with the decision of

another court of appeals on the same matter:

*** or has decided an important question of

federal law which has not been, but should be,

settled by this court; or has decided a federal

question in a way in conflict with applicable

decisions of this court; or has so far departed

from the accepted and usual course of judicial

proceedings, or so far sanctioned such a

departure by a lower court, as to call for an ex-

ercise of this court’s power of supervision.

We respectfully submit that this case presents a clear

case meeting each of the above-quoted examples of the

proper exercise by this Honorable Court’s discretion

to grant a writ of certiorari to review the judgment of a

Court of Appeals. This first issue of the petition

warrants plenary review by this Honorable Court and

a reversal of the judgment below for the following

reasons.

A. The judgment in this case is irreconcilable with

the decision of another Panel of the Fifth Circuit ina

State case, Labat v. Bennett, 365 F.2d 698 (5 Cir. 1966),

and with the principles announced by this Court in

Peters v. Kiff, 407 U.S. 493 (1962), as well as other

cases.

In Labat v. Bennett, supra, a Panel of the Fifth Cir-

cuit Court of Appeals, in a case arising on a petition

for habeas corpus relief, held that a system of exclu-

sion of prospective jurors who exercised a personal

exemption as a daily wage earner’ denied equal

protection of the laws to members of the excluded

class who were indicted and put to trial before a jury

drawn from a general venire from which members of

their economic class were excluded. The present case

presents the opposite side of the same coin. By exclud-

ing from jury service persons who are sole

proprietors working in their own businesses, in acase

in which the accused is a member of the excluded

class, the same legal principles are involved.

It is conceded that a daily wage earner might not suf-

fer as great a loss as would the owner of a business

who had to be away from it in order to serve on the

jury. But by the same token, he could much better af-

ford to contribute his civic service than could the daily

wage earner who is, under the teaching of the Labat

case, forced to render such service. People of greater

means, especially those who own and run their own

businesses, should not be accorded special privileges

over people of lesser means when it comes to the duty

to render civic duties such as jury service. Moreover,

if such persons are permitted to escape jury duiyina

case involving another member of their economic

class, then the sole proprietor tried before such a jury

stands in the same position as State-tried daily wage

earners formerly stood. We submit it is both ironic and

incomprehensible that the Fifth Circuit would have

taken different views in these similar types of cases.

Perhaps the law’s recent concern forthe impoverished

has resulted in a subconscious effort to see that the

wealthy are not accorded special privileges. We would

not quarrel with such an attitude. But we do urge that it

would be improper to refuse to apply the law equally

in the case of both poor and wealthy men. The Court

below has not done that and, by not having done so, it

has itself departed, as well as it has sanctioned the

departure by the lower court, from the usual and

accepted principles of justice which lie at the founda-

tion of our American system of legal justice for all.

The exclusion of members of petitioner's class from

jury service not only violates equal protection but due

process principles of constitutional law. In Peters v.

Kiff, supra, this Court held that due process of law is

denied if any substantial identifiable segment of the

community is excluded from jury service. This Court

held that a person need not be a member of the exclud-

ed class in order to invoke the requirement that no

class be excluded from jury service. There has been

some contention in the lower courts that petitioner is

not the operator of a “one-man business” within the

meaning of the Plan for the Random Selection of

Grand and Petit Jurors forthe Eastern District of Loui-

siana. Had the District Court granted the requested

evidentiary hearing, we could have shown (1) that the

personal exemption is accorded “sole proprietors”

and not just owners of “one-man businesses who had

no employees [See 45 of the affidavit annexed to

petitioner’s motion for a new trial, R. Doc. 83(a)]; (2)

that sole proprietors are virtually invited to claim an

exemption and that, even if one should infrequently

not do so, the availability of a substantial number of

such prospective jurors would be substantially re-

duced by operation of the system employed; and (3)

that the persons exempted from jury service under the

“one-man business” exemption form a substantial

identifiable segment of the community which is sys-

tematically excluded from grand and petit juries in the

Eastern District of Louisiana. Therefore, it was not

necessary that petitioner be a member of the excluded

class before he had standing to complain of the exclu-

sion.

B. The Fifth Circuit has decided an important ques-

tion of Federal law which has not been, but which

should be, decided by this Court.

In United States v. Horton, 526 F.2d 884 (5 Cir.), cert.

den., 429 U.S. 820 (1976), the Fifth Circuit decided that

“the exclusion of sole proprietors is not automatic. On

the contrary, it is necessary for such persons to re-

quest that they be excused from jury duty.” 526 F.2d at

889. Unlike its decision in Labat v. Bennett, supra, the

Fifth Circuit seemed to say that a system of personal

exemption, rather than statutory disqualification, is

an insufficient basis for establishing an improper

class exclusion on the grand or petit jury. As pointed

out in the Motion for an Evidentiary Hearing, the “one-

man business” personal exemption is the most exer-

cised personal exemption under the Plan for the Ran-

dom Selection of Grand and Petit Jurors for the East-

ern District of Louisiana. (R. Doc. 83(b), J 2) The fact

that a prospective juror must claim the exemption has

no legal significance. If he is automatically excluded

upon his claim of exemption, then due process is

violated if the basis for the exclusion is improper. We

submit that there is no greater basis for excluding the

owners of one-man businesses than there is for

excluding daily wage earners who have even less

means for their support than do sole proprietors. This

Court should accept this case for review upon a peti-

tion for writ of certiorari, following which it should

declare that the system of personal exemptions grant-

ed members of the excluded class violates due process

— — — . —

and. in the case of one such as petitioner who is a mem-

ber of the excluded class, it also violates the

provisions assuring equal protection of the laws.

C. The question presented should also be con-

sidered by this Honorable Court by virtue of the re-

curring nature of the objection to juries from which

this class of persons has been excluded by operation of

the exemption granted by the Plan for Random Selec-

tion of Grand and Petit Jurors for the Eastern District

of Louisiana. No attempt has been made to ascertain

how many Districts other than the Eastern District of

Louisiana have provided for the exemption herein

assailed. The Eastern District of Louisiana appears to

be the only District from which an appeal of this issue

has been taken. But with the federal crackdown on the

so-called “white-collar crimes” which now appears to

be in vogue, it is obvious that the issue will be one of a

recurring nature. No lawyer who is defending a

businessman against charges of white collar crime”

could justify not challenging a system of jury selec-

tion which excluded from jury service the very

economic class most likely to understand his

positions. Moreover, the defendant in a white collar

crime is often a member of the class excluded by the

operation of the personal exemption system herein

challenged. A businessman is most qualified to judge

what constitutes ordinary business practices and, for

that reason, their absence on juries selected to try such

alleged offenses is especially conspicuous to both the

lawyer and the client. This absence should be

prohibited by this Honorable Court in the same spirit

that it has acted to preserve and protect the rights of

the impoverished and others against whom class dis-

criminations inherently lie. A businessman tried

before a jury of non-businessmen is certainly in the

position of being tried before a class of person$ who

inherently discriminate against him.

D. The denial of a hearing, when the petitioner of-

fered to refute with evidence the factual assumptions

made in the Horton case, seems clearly to be a depar-

ture from sanctioned judicial procedures. The doc-

trine of stare decisis yields to new evidence which

refutes the foundation for the past precedent. The Hor-

ton case was not supported by the type of evidence

which petitioner herein sought to adduce. Petitioner

should have been accorded the opportunity to prove

the Horton decision was incorrect.

E. For the foregoing reasons, the writ should be

granted to review this element of the decision below.

The difference in the record below distinguishes this

case from the case which was presented to this

Honorable Court in Horton v. United States, 429 U.S.

820 (1976). We respectfully submit that the exhibits an-

nexed to the Motion for New Trial are wholly adequate

to justify this Honorable Court in reviewing this issue

on the merits and concluding that petitioner was de-

nied due process and equal protection of the laws. If

this Court should not agree, then at the very least this

Honorable Court should remand this case to the Dis-

trict Court for a hearing and it should maintain juris-

diction over this case to review the factual findings of

the district court.

2. Reasons for Granting the Writ with

Respect to the Exclusion of Evidence of

Omitted Tax Deductible Items in Support

of the Defense of Reliance Upon One’s Ac-

countants.

Se ⏑—ñͤ *

The Court below “agree[d] that the failure to make

permissible deductions, resulting in a tax over-

payment, logically tends to prove reliance on the in-

tegrity and expertise of one’s accountants.” But the

Court held that the excluded evidence “could have had

no appreciable impact on the case as a whole because

much of the prosecution’s evidence demonstrated that

Johnson withheld relevant information from his ac-

countants.” The Court below, from this interpretation

of the evidence, concluded that the defense of reliance,

hence the evidence sought to be adduced in its support,

was irrelevant.

We respectfully challenge the finding by the Court

below that “much” of the prosecutor’s evidence

demonstrated that Johnson withheld relevant infor-

mation from his accountants. Had the Court said that

“some” of the evidence tended to show that, we would

not quibble. But the jury would then have been the one

to determine the impact of the omitted deductions

upon the reliance defense, not the Court of Appeals.

The source of the evidence to which the Court below re-

ferred was an accountant who now works for the

Department of Agriculture, who worked for the firm of

accountants which was responsible for keeping

petitioner's accounts and for preparing his tax

returns. Petitioner’s bookkeeper testified that

petitioner told him to classify certain political cam-

paign contributions as “campaign” expenses and that

the bookkeeper classified them as sales campaign”

expenses of Hendee Homes, Inc. But that same witness

testified that when he learned they were political cam-

paign expenses he started so labeling them on the

ledgers. The person who reclassified these expenses

was petitioner’s own employee. The accounts were all

available to the accountants as the testimony of the

Senior Accountant in charge of the accounts for

petitioner demonstrates.

The firm of accountants was paid over $100,000 in a

three-year period for keeping petitioner’s accounts in

order and for preparing his tax returns. That firm un-

dertook the responsibility to trace all of petitioner's

income and expenses and to properly report it.

Together with the items of income which it failed to

find and report, the said accounting firm omitted to

report items of allowed tax deduction which would

have offset any requirement for Hendee Homes, Inc. to

have paid taxes at all for the FYE 1972. Other substan-

tial deductible items were not allowed in evidence.

To refute the belief that “much” of the prosecution's

evidence demonstrated withholding of relevant infor-

mation from the accountants, petitioner needs refer

only to the testimony of the Government witness, Mr.

Gaudin, a senior accountant in the firm hired by

petitioner. Mr. Gaudin was in charge of all of

petitioner's accounts, although the senior partner in

the firm, Mr. Duplantier, made the direct contacts with

petitioner. The other accountants dealt principally

with petitioner’s bookkeeper.

Mr. Gaudin testified that his firm “rendered an opin-

ion” on the Hendee Homes corporation, which in-

volved an audit of that corporation. (ist Supp. Rec.,

Vol. 3, p. 24) He also audited Tel Enterprises. (Id., at 23)

Laurel Gardens was financed under the FHA 236 plan

and required a certified audit and cost edification. (Id.,

at 28). The CPA firm had access to all of petitioner's

cancelled checks and check stubs (Id., 29. 30), but it

preferred to look to invoices in order to classify the

items of expense. (Id., 31) There was a constant flow-

ing of materials back and forth between petitioner's

office and the accountants. (Id., 32) In addition to the

checking activity, the accountants went to banks and

other lending institutions to obtain documentation

upon which to properly account for the financial

transactions in which petitioner was involved. (Id., 32,

46) Mr. Gaudin assigned an accountant to scan the

credit card purchases for personal expenses. (Id., 47;

see, also, Record on Appeal, Vol. III, pp. 23, 26) Mr.

Behrent, instead of scanning the invoices, examined

the check spread prepared by petitioner's book-

keeper. Even by this method, which undermined the

system by which Mr. Gaudin undertook to establish

all of petitioner’s income, the accountant picked up

substantial personal expenditures on credit card pur-

chases which were then charged to petitioner as a

wage. (ist Supp. Rec., Vol. ITI, p. 22-23, 25)

Petitioner's accountants were advised of every bank

and other financial institution with which petitioner

dealt. The same accountant who was to have exa-

mined the credit card invoices (but looked at the check

spread) also was to have examined the accounts at the

Citizens Homestead where petitioner earned $600 in-

terest income. The accountant, who incidentally is the

one who now works for the USDA, did not analyze the

account and missed the interest income. (Id., 46) This

interest income was reflected only as an accounting

transaction in the Homestead and by the IRS Form

1099 mailed to petitioner at the end of the year.

Significantly, the accountants admitted they pre-

ferred analyzing the accounts rather than relying on

1099's. (Id., 31) The record is replete with other ex-

amples of ineffective investigation or in breakdowns

in the procedures established with respect to

petitioner's accounts. There is no evidence that

petitioner was aware of the nature of the accountants’

performance — or lack of it. We respectfully submit

that the opinion of the Court below is clearly incorrect

with regard to its determination that the defense of

reliance was not adequately established by the

evidence. The credibility of the sources of the sup-

posedly contradictory views was strictly for a jury,

and not the Court of Appeals, to assess the impact and

weight to be accorded it. The defense was thus

eviscerated by the rulings of the trial court, without

legal justification.

The Court below took the alternative position that if

the evidence was relevant to the issues of wilfulness

and intent that Rule 403 of the Federal Rules of

Evidence permitted its exclusion. We respectfully

submit that this ruling of the Court below sanctioned

such an abuse of discretion by the trial court that the

supervisory jurisdiction of this Court is appro-

priately invoked.

We respectfully submit that Rule 403, F.R.Evid., is

Clearly inapplicable to this case and that, in the

absence of its applicability, the exclusion of relevant

evidence which “logically tend[ed] to prove reliance

on the integrity and expertise of one’s accountants”

F.2d ___) is an abuse of discretion under Rule 402,

F.R.Evid., which provides:

All relevant evidence is admissible, except

as otherwise provided by the Constitution of

the United States, by Act of Congress, by these

rules, or by other rules prescribed by the

Supreme Court pursuant to statutory authori-

ty. Evidence which is not relevant is not ad-

missible.

No discretion exists to exclude relevant evidence ex-

cept that which is deemed inadmissible under the Con-

stitution, laws or rules of the United States Supreme

Court.

The Court below expressed concern that the admis-

sion of the evidence here at issue “could have resulted

in unfair prejudice to the government’s case by

appealing to the emotions of the jury. F.2d ___.

We respectfully submit that the petitioner was unfair-

ly characterized as a tax evader, both in the absence of

evidence to the contrary and by the prosecutor's com-

ment in his closing argument that petitioner had made

improper business deductions “at the expense of the

taxpayers of this country,” and that, if the evidence

here in issue would have had any effect other than to

prove good faith reliance upon the accounts, it would

have served to dispel the prejudice suffered by

petitioner.

Of course, if the Government would be deprived of

its opportunity to prejudice petitioner by inference

and innuendo, heightened by the denial of the oppor-

tunity to counter those false inferences, the

Government’s case (or at least its improper efforts)

would be prejudiced. But the judgment be ow fails to

consider that it is not “any” prejudice, only unfair“

prejudice, which authorizes the exercise of discretion

to exclude relevant evidence. The exclusion, even

then, must be predicated upon a balancing process in

which it is determined that the danger of unfair pre-

judice outweighs the probative value of the relevant

evidence. We feel that the Government would not have

been “unfairly” prejudiced by the evidence. The omis-

sion of deductible items is just as probative of intent as

the omission of taxable items is. The mental assess-

ment of intent is the same in either case.

The Committee’s Notes following Rule 403,

F.R.Evid., explain that “unfair prejudice” means an

“undue tendency to suggest decision on an improper

basis, commonly, though not necessarily, an

emotional one.” There was no attempt here to get the

jury to decide the issue of intent upon some appeal to

whatever emotion might have been aroused by

evidence that petitioner owed no taxes. It is doubtful

that such evidence could have provoked any

emotional response at all, except to offset the pre-

judice inherent in a prosecution where a millionaire

defendant is depicted as a tax evader.

The process of determining the admissibility of

potentially prejudicial relevant evidence is a balanc-

ing process in which, in order properly to elect to ex-

clude the evidence on that ground, the evidence must

be so unfairly prejudicial to the opposing side that the

prejudice clearly overshadows the probative value of

the evidence. One of the primary elements in the

balancing process is the determination of the question

whether the prejudice could be overcome by

cautionary instructions to the jury. In the language of

the redactors of the Rule, “In reaching a decision

whether to exclude on grounds of unfair prejudice,

consideration should be given to the probable effec-

tiveness or lack of effectiveness of a limiting instruc-

tion.“ Committee’s Note, IV Moore’s Federal Practice,

§403.01[3], p. IV-67; Weinstein's Evidence p. 403-3. The

Court below felt that the prosecutor's comment that

the taking of improper deductions by petitioner had

been done “at the expense of the taxpayers of this

country” was cured by a district court’s instruction to

the jury. Even if this were so; which we doubt and

strongly contest, it escapes us how such a charge to

the jury could not have cured any prejudice to the

Government by the allowance of this evidence.

The Court below also expressed its belief that the

trial court’s ruling was correct because the issue of tax

liability was irrelevant to the offenses for which

petitioner was being tried. But the issue of good faith

reliance went to the proof of a lack of intent — one of

the essential elements of the alleged crime. The “con-

fusion of issues” was allowed to occur when the

Government was allowed to suggest a tax liability on

petitioner’s part, indirectly by admitting evidence

only of omitted taxable items and excluding omitted

items of deduction, and directly when the prosecution

argued that these improper deductions were made “at

the expense of the taxpayers of this country.” The ad-

mission of the excluded evidence would have clarified,

rather than have confused, the issues by relieving the

inherent prejudice resulting from the inferred motive

of tax evasion for the alleged false reporting. The

“confusion” and “misleading the jury” elements of

Rule 403, F.R.Evid., are, for all intents and purposes,

the same. Weinstein's Evidence §403({04].

As a final attempt to justify the trial court's ruling,

the Court of Appeals said that “presenting evidence of

overpayment could have resulted in a waste of time on

collateral issues. F. 2d at The issue of intent

is not collateral.“ It is a necessary element of the

offense. The defense has as much right to take the

necessary time to negate proof of essential elements

as the prosecution has to attempt to prove the ex-

istence of that essential element. The sources of this

testimony, for the most part, were the same witnesses

as those who were called on other points — prin-

cipally Government witnesses. The adducement of

this highly probative defensive evidence would have

been neither a waste of time nor in reference to a

collateral] issue. Since the omissions and the fact of the

income were not denied by the petitioner during the

trial, the issue of intent was the central contested issue

on this trial. The defense was virtually hamstrung by

the rulings of the Trial Court which denied him the use

of such probative evidence in support of his reliance

defense which was warranted by the circumstances of

this case.

For the foregoing reasons, this issue of the petition

also warrants plenary consideration by this

Honorable Court, after which the judgment below

should be vacated and this cause remanded for a new

trial.

CONCLUSION

For the foregoing reasons, it is respectfully submit-

ted that this petition for a writ of certiorari should be

granted.

Respectfully submitted,

JAMES A. MC PHERSON

Attorney for Petitioner

419 Carondelet Street

New Orleans, Louisiana 70130

Telephone: [504] 581-1973

CERTIFICATE OF SERVICE

I, James A. McPherson, Attorney for Lewis E. un-

son, petitioner herein, and a Member of the Bar of the

Supreme Court of the United States, hereby certify

that on the ___ day of November, 1977, I served three

copies of the foregoing Petition for a Writ of Cer-

tiorari on the Solicitor General of the United States, by

mailing copies in a duly addressed envelope, airmail

postage prepaid, to his office in the Justice Depart-

ment in Washington, D.C.

All parties required to be served have been served.

JAMES A. MC PHERSON

Attorney for Petitioner

419 Carondelet Street

New Orleans, Louisiana 70130

Telephone: [504] 581-1973

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 76-2447

D. C. Docket No. CR-75-524 A (I)

UNITED STATES OF AMERICA.

Plaintiff-Appellee,

versus

LEWIS E. JOHNSON,

Defendant-Appellant.

Appeal from the United States District Court for the

Eastern District of Louisiana

Before WISDOM, SIMPSON and TJOFLAT, Circuit

Judges. ,

JUDGMENT

This cause came on to be heard on the transcript of

the record from the United States District Court forthe

Eastern District of Louisiana, and was argued by

counsel];

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment

of the said District Court in this cause be, and the same

is hereby, affirmed.

September 1, 1977

Issued as Mandate:

UNITED STATES of America,

Plaintiff-Appellee,

versus

Lewis E. JOHNSON,

Defendant-Appellant.

No. 76-2447.

United States Court of Appeals,

Fifth Circuit.

Sept. 1, 1977.

Appeal from the United States District Court for the

Eastern District of Louisiana.

Before WISDOM, SIMPSON and TJOFLAT, Circuit

Judges.

SIMPSON, Circuit Judge:

Lewis E. Johnson was convicted on three counts of

making and subscribing false and fraudulent cor-

porate income tax returns for two corporations which

he controlled. Title 26 U.S.C. 5 720601) (1970). In

appealing his conviction he has raised 14 arguments

in favor of reversal. We find none of them meritorious

and affirm. Two of the points raised on appeal warrant

comment.

Both the original indictment and a superseding in-

dictment to which Johnson pleaded not guilty and

went to trial contained seven counts charging

violations of law as to income taxes. Counts I and III

charged him with income tax evasion on his In-

dividual Income Tax Returns, Forms 1040, for calen-

dar years 1971 and 1972, in violation of Title 26, U.S.C.

§ 7201. Counts II and IV charged him with making

false and fraudulent statements on his Individual In-

come Tax Returns for the same years, in violation of

Title 26, U.S.C. § 7206(1). Counts V. VI and VII, on

which Johnson was convicted, charged him with mak-

ing and subscribing false and fraudulent corporate in-

come tax returns, of corporations controlled by him, in

violation of Title 26, U.S.C. § 7206(1). Prior to trial. on

motion of the United States, the district court dis-

missed Counts I, II and III, thus removing the issue of

tax evasion from the trial. The jury acquitted

appellant as to Count IV.

Many of Johnson's objections to the fairness of his

trial stem from the dismissal of the tax evasion

charges because, he contends, he was thereby

prevented from introducing evidence to establish that,

during the period in question, he actually overpaidhis

taxes by neglecting to make permissible deductions.

Because he was tried only for wilfully making false

statements on his and his corporations’ tax returns,

his tax liability or overpayment was irrelevant. John-

son maintains that he was prejudiced because

evidence submitted by the government led the jury to

believe that he had underpaid his taxes and the trial

judge would not allow him to counter this suggestion.

The irrelevancy of Johnson's alleged overpayment

of tax to any issue at his trial H firmly established by

cases in this and other Circuits. We held the following

in Schepps v. United States, 395 F.2d 749 (5th Cir. 1968),

cert. denied, 393 U.S. 925, 89 S.Ct. 256, 21 L.Ed.2d 261:

The appellant has been found guilty, in two

counts, of violating 26 U.S.C., § 7206(1), wilful-

ly making and subscribing a federal income

tax return which he did not believe to be true

and correct as to every material matter. That

the return was false in certain particulars is

not disputed. Although not charged with nor

being tried for income tax evasion, appellant

says that he should have been allowed to in-

troduce proof showing that the falsity resulted

in no tax deficiency. This proof was not rele-

vant to the issue raised by the indictment and

it was not error to reject it, Siravo v. United

States, 1 Cir., 1967, 377 F.2d 469; Silverstein v.

United States, 1 Cir., 1967, 377 F.2d 269; Hoover

v. United States, 5 Cir., 1966, 358 F.2d 87, 89,

cert. denied, 385 U.S. 822, 87 S.Ct. 50, 17 L.Ed.2d

59.

See also United States v. Fritz, 481 F.2d 644 (9th Cir.

1973): United States v. Jernigan, 411 F.2d 471 (5th Cir.

1969), cert. denied, 396 U.S. 927, 90 S.Ct. 262, 24 L.Ed.2d

225.

These precedents notwithstanding, Johnson raises

two objections to the district court's refusal to allow

evidence of income tax overpayment. First, Johnson

contends that such evidence was relevant in his case

to the issue of whether he in good faith relied on his ac-

countants properly to compute and classify repor-

table items of income and expense. He argues that:

Had the appellant not left the accounting

procedures to his accountants and trusted

their computations, surely some of the deduc-

tible items which would have reduced

Appellant's tax liability would have been

picked up by him when he examined his

returns.

Brief for Appellant at 39.

We agree that the failure to make permissible deduc-

tions, resulting in a tax overpayment, logically tends

to prove reliance on the integrity and expertise of

one’s accountants. Although this evidence might thus

have aided the reliance aspect of Johnson's defense, it

could have had no appreciable impact on the case as a

whole because niuch of the prosecution’s evidence

demonstrated that Johnson withheld relevant infor-

mation from his accountants. Under these cir-

cumstances, Johnson’s alleged reliance on his ac-

countants is irrelevant. Cf. United States v. Signer, 482

F.2d 394, 398 (6th Cir. 1973).

Even if we assume that reliance evidence is logical-

ly relevant to any issue in the case, our inquiry cannot

end there. Under Federal Rule of Evidence 403,

admissibility is predicated on more than mere logical

relevance:

Although relevant, evidence may be excluded

if its probative value is substantially out-

weighed by the danger of unfair prejudice,

confusion of the issues, or misleading the

jury, or by considerations of undue delay,

waste of time, or needless presentation of

cumulative evidence.

In determining legal relevance, the trial judge has

broad discretion. United States v. Moore, 522 F. 2d 1068,

1079 (9th Cir. 1975), cert. denied, 423 U.S. 1049, 96 S.Ct.

775, 46 L.Ed.2d 637 (1976). We may not disturb his rul-

ing unless he has clearly abused his discretion. Unit-

ed States v. Dwyer, 539 F.2d 924, 927 (2d Cir. 1976).

No showing of abuse of discretion has been made

here. Where reliance on the accountants was relevant,

the district court allowed direct evidence on that point.

Because it depends on a series of inferences, however,

evidence of neglected deductions is only indirectly

probative of reliance. Moreover, it carries several

risks against which Rule 403 was designed to protect.

It could have resulted in unfair prejudice to the

government's case by appealing to the emotions of the

jury. Indeed, the conduct of Johnson’s counsel during

the trial made this no small concern of the district

court. Also, the danger of confusing the issues was

great because tax liability was irrelevant to the of-

fenses for which Johnson was tried. Finally, presen-

ting evidence of overpayment could have resultedina

i The district court repeatedly admonished Johnson's counsel

for appealing to the sympathy of the jury in a manner unrelated to

the merits of the case. The Court at one point sustained an objec-

tion to an attempt to elicit from Mr. Johnson information about his

contributions to a religious school: “Counsel, I think you well

know that attempts to evoke sympathy on the basis of religious ac-

tivities is wholly improper to the merits of this case. You have

repeatedly gone into this, notwithstanding the Court's rulings. .

is: Supp. Record Vol. IV, at 251. In his closing argument. Johnson's

counsel noted that his client had gone to war for his government,

“subjected himself to the enemy's bullets”, and that now the same

government had turned his life “into a nightmare Id., Vol. V. at

46. The district court was moved to comment to Johnson's counse!:

“you were able to turn tears on and off like a faucet during your

closing argument if there can be such a thing as erudition in

tears. you certainly displayed it Jd. at 163, 165. This comment oc-

curred during the argument of post- trial motions, and thus not in

the jury's presence.

waste of time on collateral issues. See ist Supp.Rec-

ord, Vol. III, at 308. We conclude that the district court

properly excluded evidence of neglected tax deduc-

tions.

Johnson's second contention in this regard is that

the district court erred in overruling his motion for a

mistrial when the prosecutor, in his closing argument

implied a tax liability on Johnson’s part. Specifically,

Johnson objected to the prosecutor's statements that

improper business deductions were made at the ex-

pense of the taxpayers of this country“. See

Tr.Pros.Arg. at 22. We do not agree that this expres-

sion implies a tax liability. But, however it is inter-

preted, any prejudicial effect that it might have had

was cured by the district court’s instruction to the

jury: whether a tax is due or owing by the defendant is

immaterial to the charges before you in this case The

instruction continued:

Accordingly, whether the Government has or

has not suffered a pecuniary or monetary loss

as a result of the alleged false return is not

relevant and need not be considered by you in

your deliberation.?

We have carefully examined Johnson’s 12 other

allegations of error and find them to be without merit.

2 ist Supp.Record, Vol. V, at 103. We note also that in his closing

argument Johnson's counsel stated: But bear in mind, this case is

not about any taxes that are alleged to be due by Mr. Johnson. No

claim, you read these indictments, there is no claim for any

amount of taxes Id. at 41.

3 These assignments of error are as follows: (1) The trial court

denied appellant's motion for pretrial discovery of corporate

employees’ and fiduciaries’ grand jury testimony; (2) The trial

During oral argument, counsel for appellant

stressed United States v. Schilleci, 545 F.2d 519 (5th

Cir. 1977) as his strongest point. In Schilleci we held

that, on the “unique factual situation presented”, the

combined effect of several errors required reversal of

the convictions, even though none of the errors stand-

ing alone constituted grounds for reversal. Id. at 526.

Because we have found no error in the instant case,

Schilleci, with its emphasis on cumulative error, is

not pertinent.

The judgment of conviction appealed from is

AFFIRMED.

court denied appellant's motion to dismiss the superseding indict-

ment; (3) The trial court denied appellant's motion for a temporary

restraining order and permanent injunction against conducting

an I.R.S. survey of prospective jurors; (4) The trial court denied

appellant's motion to quash the general venire. to dismiss the in-

dictment, and to proffer evidence in support of the motion [We had

already decided this issue in United States v. Horton, 526 F. 2d 884

(5th Cir. 1976) cert. denied, 429 U.S. 820, 97 S.Ct. 67,50 L.Ed.2d 81); (5)

The trial court admitted evidence of acts outside the scope of the

period in the indictment to prove system, pattern, motive, and in-

tent: (6) The trial court allowed the jury to use a transcript of a tape

recorded conversation for purposes of identifying speakers, not as

evidence [We note that the procedure adopted by the trial court

amply satisfied the requirements set out in United States v. Onori,

535 F.2d 938 (5th Cir. 1976)]}: (7) The trial court allowed the entire

tape recording to be played for the jury: (8) The trial court admit-

ted two certified newspaper clippings to establish that certain

events had occurred: (9) The trial court restricted cross-

examination of government witnesses to matters within the scope

of direct; (10) The trial court allowed the government to present

evidence through a summary witness; (11) The trial court restrict-

ed cross-examination of the summary witness; (12) The trial court

overruled appellant's motion for a new trial.

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

October 17, 1977

TO ALL PARTIES LISTED BELOW:

NO. 76-2447 — U.S.A. v. LEWIS E. JOHNSON

Dear Counsel:

This is to advise that an order has this day been

entered denying the petition for rehearing on behalf of

appellant, Lewis E. Johnson, and no member of the

panel nor Judge in regular active service on the Court

having requested that the Court be polled on reliearing

en banc (Rule 35, Federal Rules of Appellate

Procedure; Local Fifth Circuit Rule 12) the petition for

rehearing en banc has also been denied.

See Rule 41, Federa: Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

EDWARD W. WADSWORTH,

Clerk

/s/ BRENDA M. HAUCK

Deputy Clerk

10a

cc: Mr. James A. McPherson

Messrs. Gerald J. Gallinghouse

Cornelius R. Heusel

Robert N. Habans, Jr.

Mr. Stephen A. Mayo

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

November 2, 1977

Mr. James A. McPherson

Attorney

419 Carondelet St.

New Orleans, LA 70130

No. 76-2447 — USA v. Lewis E. Johnson

MANDATE STAYED TO AND INCLUDING

November 16, 1977

(SEE ORDER ENCLOSED)

Dear Counsel:

The court has this day granted a stay of the issuance of

the mandate to the date as shown above. If during the

period of the stay there is filed with the clerk of this

court a notice from the clerk of the Supreme Court that

the party who has obtained the stay has filed a petition

for the writ in that court, the stay shall continue until

final disposition by the Supreme Court. Upon the fil-

ing of a copy of an order of the Supreme Court denying

the petition for writ of certiorari the mandate shall

issue immediately under Rule 41, FRAP.

lia

Under revised Rule 21(1) of the Supreme Court effec-

tive July 1, 1970, a record is no longer required in con-

nection with an application for writ of certiorari, and

therefore will not be routinely prepared by this office

(38LW 3502).

A copy of the opinion, judgment and denial of rehear-

ing are still required by the Supreme Court to be incor-

porated as an appendix to your petition. Enclosed are

copies of the said documents which have been entered

in this cause.

Very truly yours,

EDWARD W. WADSWORTH,

Clerk

/s/ SUSAN M. GRAVOIS

Deputy Clerk

enc.

ce: Mr. Cornelius R. Heusel

Mr. Robert N. Habans, Jr.

Mr. Stephen A. Mayo

12a

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

76-2447

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

LEWIS E. JOHNSON,

Defendant-Appellant.

Appeal from the United States District Court for the

Eastern District of Louisiana

ORDER:

The motion of APPELLANT for stay of the issuance

of the mandate pending petition for writ of certiorariis

GRANTED to and including November 16, 1977, the

stay to continue in force until the final disposition of

the case by the Supreme Court, provided that within

the period above mentioned there shall be filed with

the Clerk of this Court the certificate of the Clerk of the

Supreme Court that the certiorari petition has been

filed. The Clerk shall issue the mandate upon the filing

of a copy of an order of the Supreme Court denying the

writ, or upon the expiration of the stay granted herein,

13a

unless the above mentioned certificate shall be filed

with the Clerk of this Court within that time.

/s/ Bryan Simpson

UNITED STATES CIRCUIT

JUDGE

AFFIDAVIT

UNITED STATES OF AMERICA )

STATE OF LOUISIANA ) ss.

PARISH OF ORLEANS )

BEFORE ME, the undersigned authority, personally

came and appeared:

JAY C. ZAINEY,

who, being by me first duly sworn, deposed and said:

1. That in connection with the preparation for hear-

ing of a Motion for a New Trial filed on behalf of the

defendant in United States v. Lewis E. Johnson, Cr. Ac.

No. 75-524, Section A(I), E. D. La., he met with Mrs.

Janice K. Barden, Jury Commissioner for the Eastern

District of Louisiana, on April 5, 1976 in Room 414 of

the Louisiana Wildlife and Fisheries Building, 400

‘Royal Street, New Orleans, Louisiana, which houses

the records of the United States District Court for the

Eastern District of Louisiana with regard to matters

concerning jury selection.

14a

2. That Mrs. Barden, a statistician, has been the

Jury Commissioner since the creation of that post and

has taken samplings for statistical analysis with

respect to at least the Master Jury Wheel of 1970 and

1973.

3. That in 1970, 22,130 names were put in the Master

Jury Wheel, from which a random 500 names were

drawn and statistically studied, yielding the follow-

ing:

Persons Qualified 234 (46.8%)

Persons Not Qualified* 266 (53.2%)

Persons Excused 159 (31.8%)

Persons Exempt or Not

Located 107 (21.4%)

One Man Business

Exemptions 14 (2.8%)

* “Not qualified” includes all exemptions

4. That in 1973, 20,122 names were put in the Master

Jury Wheel, from which a random 500 names were

drawn and statistically studied, yielding the follow-

ing:

Persons Qualified 251 (50.2%)

Persons Unqualified 249 (49.8%)

Persons Excused 200 (40%)

Persons Exempt 48 (9.6%)

One Man Business

Exemptions 20 (4%)

Not located 1 (0.2%)

5. That Mrs. Barden advised affiant on one occa-

sion about a contractor who had four to six employees

15a

who was excused by the Court. Mrs. Barden could not

definitively state that this person was excused for any

reason other than a “one-man business” personal ex-

emption.

6. That a request was made subsequent to the said

interview for a copy of all Juror Qualification Ques-

tionnaires which demonstrated a claim of exemption

for one man business operators, together with the

Court’s Order permitting their excuse, which evidence

was denied unless subpoenaed by the Court.

7. The further investigation of the records of the

Jury Commissioner, and the discovery and production

of evidence supportive of defendant’s Motion for a

New Trial and the appeal from the denial of defen-

dant’s Motion to Dismiss Indictment is effectively

foreclosed if the defendant is denied an evidentiary

hearing and the corollary right to a subpoena of Mrs.

Barden and a subpoena duces tecum for the production

of all records relevant to this matter.

/s/ JAY C. ZAINEY

JAY C. ZAINEY

SWORN to and SUBSCRIBED

before me this 9th day

of April, 1976.

/s/ DAVID H. ALFORTISH

NOTARY PUBLIC

My Commission is Issued for Life.

16a

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

OFFICE OF THE CLERK

Nelson B. Jones 400 Royal St., Rm. 306

Clerk New Orleans, La. 70130

Dear Prospective Juror:

Your name has been selected at random from the list

of registered voters for prospective jury service in

this Court.

The Jury Selection and Service Act of 1968 requires

that the attached questionnaire be filled out and

returned to the Clerk’s office within 10 days. There is

enclosed for your convenience in returning the ques-

tionnaire, a self-addressed envelope which requires

no postage. Failure to do this within the 10 days will

make you liable to be summoned to report to this office

to execute said questionnaire, and failure, without

good cause, to respond to such asummons could result

in your being fined up to $100.00 or imprisoned up to 3

days in jail, or both. Misrepresentation in the ques-

tionnaire of any material fact requested, if made to

secure or avoid jury service, may subject you to

criminal penalties.

THIS IS NOT A SUMMONS for jury service. If you

are later chosen for such service you will be notified to

report at a stated time and place. Jurors will receive

mileage and, unless they are Government employees,

$20.00 per day for each day of service.

17a

EXEMPTIONS — The following persons are exempt

from jury service:

Active members of the Armed Services

Policemen and firemen.

Public officers, Federal, State, Parish or City.

Federal law enforcement officers.

EXCUSES — The following persons will be excused

by the Court upon individual request:

Persons actively engaged in operating a one-man

business.

Mothers with children under 10 years of age where

there is no one else but the mother to care for

them. .

Lawyers, doctors, dentists and ministers of the

Gospel when actively and regularly engaged in

the practice of their profession.

Persons over 70 years of age.

The following persons may be excused by the

Court upon request and a proper explanation

and/or doctor’s certificate:

Persons suffering from a disabling physical dis-

ability.

Persons suffering from a disabling mental dis-

ability.

Persons who would suffer an extreme hardship if

required to serve.

Before anyone may be exempted or excused,

however, the questionnaire must be answered in full

and returned to this office.

If you are unable to fill out this form yourself you

should have someone else fill it out for you, setting out

the reason for such action.

Yours very truly,

/s/ NELSON B. JONES

NELSON B. JONES

JUROR QUALIFICATION QUESTIONNAIRE

UNITED STATES DISTRICT COURT

TES. (SE REVERSE IF

erwsstare Oves 0

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DO YOU HAVE ANY PHYSICAL OR MENTac ee e Clves Clwo

IMPAIHING YOUR CAPACITY TO SERVE AS JUROR’

F “VES” PLEASE EXPLAIN (6 sttach evidence of your inf

WERE YUU EVER CONVICTED OF A STATE OR FEDERAL

RIME PUNISHABLE BY IMPRISONMENT FOR MORE THAN

Ont VEAR’ 1) ves 141 ~o

@ went YOUR CIVIL @1GHTS RESTORED’

ves ö

0 ARE ANY CHARGES PENDING AGAINST YOU FOR

VIOLATION OF A STATE OR FEDERAL CRIME PUNISH

ABLE BY IMPRISONMENT FOR MORE THAN ONE tan

Oves 1180

4 82 — LLL een IN AC Tivt

8 — — of rn 110. we meee — uc tows

A as E1THER ELECTED TO PUBLIC OF wees on O ot — es FORCE OF . —

RECT.

Y APPOINTED BY ONE ELECTED TO OF Fice STATES

YOU MAY BE

EXCUSED BY

THE COURT

FROM SERVICE

AS A JUROR

N YOU TALL

withun A CATE

GURY LISTED

‘RE OK ON

AN ENCLOSED

PAPER IF LIST

1S HERE, MARK

THAT EXCUSE

WHICH APPLIES

TO YOu IF You

QEMAND TO SE

EXCUSED FOR

THAT REASON.

(OF LIST OF Ex.

CUSES APPEARS

ON ENCLOSED

SHEET FOLLOW

INSTRUC TIONS

THE RE)

| SWEAR AND APFIRM THAT AL’ ANSWERS ARE TRUE TO THE GEST OF MY KNOWLEDGE 6 GEL IEF

19a

UNITED STATES DISTRICT COURT

PLEASE NOTE: Unless shown elsewhere.

the address of the U.S. Court which sent you

this questionnaire is shown in the top right

corner on reverse side.

Dear Prospective Juror:

Your name has been drawn by lot and you are being

considered for jury service in the United States Dis-

trict Court. Trial by jury is akeystone of our system of

justice. Jury service is therefore both an opportunity

and an obligation of every American. Jurors will

receive mileage and, unless they are Federal Govern-

ment employees, $20.00 per day for each day of service.

This is not asummons for jury service. It is a way of

obtaining some information about you from which we

can determine whether you are qualified to serve.

Please answer each question, sign and return the form

within ten days. If we find you qualified, you may be

summoned at a later date.

If you are unable to fill out this form, someone else

may do it for you provided that person indicates below

why it was necessary for him to do it instead of you.

If you do not return this questionnaire form within

ten days you are liable to be summoned to report at

your expense for completion of the questionnaire at

this office.

There are certain grounds for excuse or exemption

from jury service. If vou are exempt or claim a right to

20a

be excused, give us that information under sections E.

and F. If you show under section C. that you have a

physical or mental infirmity, please attach a letter

from your doctor, if possible. Do not ask to be excused

by telephone.

If your address changes after you have returned this

questionnaire, please notify us promptly by letter.

CLERK,

UNITED STATES DISTRICT

COURT

JOSEPH N. TRAIGLE

Post Office Box 201

Baton Rouge, Louisiana 70821

March 13, 1976

We have surveyed the records of the state of

Louisiana and find the following.

It is estimated that 46.200 sole proprietorship type

businesses exist in the district composed of the follow-

ing parishes: Orleans. Jefferson, St. Bernard, Pla-

quemines, St. Tammany, Washington, St. James, St.

John. St. Charles. Tangipahoe, Terrebonne,

Lafourche.

Joseph N. Traigle

Collector of Revenue

State of Louisiana

/s/ JOSEPH N. TRAIGLE

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.