Petition — Graves v. United States

( Supreme Court, U.S. |

' FILED |\

|

| Dec igi977~— sf

— MICHAEL RODAK, JR., CLERK

Supreme Court of the United States a

OCTOBER TERM, 1977

No. 77-846

GLEN D. GRAVES, LEWIS WEINSTEIN, AND GRAVES

CONSTRUCTION COMPANY, INC. a/k/a GRAVES

CONSTRUCTION, INC.,

Petitioners,

versus

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

JOHN R. MARTZELL

Martzell & Montero

338 Lafayette Street

New Orleans, Louisiana 70130

Telephone No. (504) 581-9065

Attorney for Petitioner

Lewis Weinstein

C. WILLIAM GERHARDT

1621 Slattery Building

Shreveport, Louisiana 71101

Telephone No. (318) 222-7163

Attorney for Petitioners

Glen D. Graves and Graves

Construction Company, Inc.

SCOFIELDS’ QUALITY PRINTERS. P_ O BOX 53096.N. 0. LA 70153 . 504/822 1611

TABLE OF CONTENTS

Page

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Constitutional Provision Involved ................ 3

FP CTIT TTT CTC ETT TTT 3

Reasons for Granting the Writ .................05. 8

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TABLE OF AUTHORITIES

Cases

Cox v. Louisiana, 379 U.S. 559 (1965) .......... 12,13

Greene v. United States, 454 F.2d 783 (9th Cir.

DED kwiadeddduiinddeceekkediedhs checbbbudseecesd 11

Hampton v. United States, 425 U.S. 484

Tt ace ue ced as debn wakes Ra eEE Odes 6b ee 8,9,10,11,14

Raley v. Ohio, 360 U.S. 423 (1959) ............. 13,14

United States v. Bueno, 447 F.2d 903 (5th Cir.

1971), cert. denied 411 U.S. 949 (1973) ............ 7

Williamson v. United States, 311 F.2d 441 (5th

RS A a: pir eases eee 12

Constitutional]. Statutory Provisions, and

Rules

United States Constitution,

te ee ieee rid deeanenndedie bale OO) 3

ii

TABLE OF AUTHORITIES (Continued)

Page

United States Code

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ED siccreeccesiuaks chendaakas bed kadene 2,4

EE onc ccc cc uacdhiedseedakunssndasueune 2

ED hin cidkucneutyiei-cadcekeeenees iuan 2

Rule 12, Federal Rulesof Criminal Procedure..... 4,7

ee ee ED GEE 06 occ dwedseceeedsacssienes 2

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1977

No.

GLEN D. GRAVES, LEWIS WEINSTEIN, AND

GRAVES CONSTRUCTION COMPANY, INC. a/k/a

GRAVES CONSTRUCTION, INC.,

Petitioners,

versus

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

The petition of Glen D. Graves, Lewis Weinstein, and

Graves Construction Company, Inc. respectfully

prays thata Writ of Certiorari issue to review the judg-

ment and opinion of the United States Court of

Appeals for the Fifth Circuit entered in this

proceeding on August 5, 1977, reversing the district

court’s dismissal of the indictment against

petitioners.

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Fifth Circuit was rendered on August 5, 1977. It

has not yet been reported, but in the pagination of Fifth

Circuit slip opinions, it appears as p. 4956. The opin-

ion is reproduced in the appendix. No opinion was

issued on the denial of rehearing and rehearing en

banc on October 12, 1977. The United States District

Court for the Western District of Louisiana issued no

written opinion.

JURISDICTION

This prosecution was presented by indictment in the

United States District Court for the Western District of

Louisiana under 18 U.S.C. §§2, 371, 1010 of the Criminal

Code. On thedismissal of the indictment by the district

court, the Government appealed to the Fifth Circuit

under the authority of 18 U.S.C. §3731.

The decision of the United States Court of Appeals

for the Fifth Circuit reversing the judgment of the dis-

trict court is dated and was entered August 5, 1977. A

timely petition for rehearing and rehearing en banc

was denied October 12, 1977.

On timely application to Mr. Justice Powell, an

order was entered extending the time to file the peti-

tion for writ of certiorari to and through December 11,

1977. Since December 11, 1977 is a Sunday, the petition

is timely filed on Monday, December 12, 1977. Rule

34(1), Revised Rules of the Supreme Court. By order

dated November 4, 1977, the district court has stayed

further proceedings pending the final disposition of

this Court on the petition for writ of certiorari.

Jurisdiction is here invoked under the authority of 28

U.S.C. §1254(1).

3

THE QUESTIONS PRESENTED

I. Whether a motion to dismiss a prosecution for

violations of regulatory/ penal laws not malum in se,

predicated on due process and federal court super-.

visory objections to the condonation and encourage-

ment of the violations by the affected federal agency,

must fail because the federal agency in question is not

a “law enforcement” agency?

II. Whether the United States Court of Appeals for

the Fifth Circuit erroneously applied “entrapment”

concepts and limitations, in a case in which overin-

volvement by a Government agency in condoning, ac-

quiescing, and encouraging violations was objected to

on due process grounds, and the supervisory protec-

tion of the federal courts over the consequent prosecu-

tion sought?

CONSTITUTIONAL PROVISION INVOLVED

The Due Process clause of the Fifth Amendment to

the United States Constitution provides:

No person shall... be deprived of life, liberty,

STATEMENT OF THE CASE

Petitioners Glen D. Graves, Lewis Weinstein, and

Graves Construction Company, Inc. were indicted in

the Western District of Louisiana for submitting false

statements to the Federal Housing Administration

(hereinafter “FHA’’) in order to obtain mortgage in-

4

surance under Sec. 235 of the National Housing Act of

1968, and for conspiracy. 18 U.S.C. §§2, 371, and 1010.

The indictment alleged that petitioners had (a)

fraudulently attempted to secure mortgage insurance

for Sec. 235 home purchasers whom they knew were

not qualified; (b) falsified documents submitted to

FHA concerning the income, assets, liabilities, credit,

employment, and other information pertaining to

prospective mortgages; and (c) failed to comply with

the statutory requirement of obtaining a $200.00 down

payment from each prospective mortgagor and

falsifying documents pertaining thereto.

Before trial petitioners filed a motion to dismiss the

indictment under Rule 12, F.R.Cr.P., alleging among

other things:

(d) If the Federal Housing Administration

knew of, acquiesced in, approved and/or en-

couraged such alleged false statements and

did not have discretionary authority to do so

and said acts were criminal, then the Federal

Housing Administration engaged in

governmental misconduct and Defendants are

denied Due Process of Law as provided by the

Fifth Amendment to the United States Con-

stitution by this Indictment and prosecution.

Testimony at the hearing under the motion showed

petitioner Graves to have operated a home building

company, and petitioner Weinstein to have been

Graves’ attorney and an officer of the company. The

company sold houses to low-income families seeking

FHA financing under Sec. 235 of the National Hous-

ing Act of 1968. Before the iridictment dates, the com-

pany did not accept as potentiai customers any

applicants who fell short of the credit or $200.00 down

payment regulations. Petitioner Graves began to

learn that persons whom his firm had rejected had ob-

tained FHA-approved financing with rival builders

only a short time after his firm had rejected their

applications.

Graves complained to the local FHA officials at the

Shreveport office about the practice, but no action was

taken in response to the complaint. Graves collected

approximately 75 affidavits from homebuyers who

had not furnished the $200.00 down payment, or who

had otherwise failed to comply with the technical

terms of FHA credit and other regulations. On being

confronted with the affidavits, the local FHA officials

responded that technical compliance was_ unim-

portant, and that the Shreveport office had the authori-

ty to waive any and all of those requirements.

Petitioner Graves took his complaint to the regional

office in Fort Worth, Texas, but received no satisfac-

tion there either.

The meetings with the local FHA officials produced

the following advisements, among others, to

petitioner Graves:

He said, “I run thisandI run it the way! want it

run and I waive what I want waived.”

I said, “If you waive down payments for all

these people, I can’t live or survive in a busi-

ness in such a small area where all the

buiiders are building; where you allow these

people to run rampant in total disregard of all

the regulations as far as down payments, as

far as credit, as far as dependents, as far as in-

come, and letting these people buy houses and

you are saying to me to follow the regulations

as I understand them and you are saying this

is none of my business.”

I said, “I tell you, it is my business. If the down

payments are waived for these people, they

must be waived for me.”’ TR. 289-290

. * *

He said, “The regulations state what I say they

state.”

I said, “You are telling me you are all-

powerful, that you have the total and absolute

authority?”

He said, “That's right.” TR 290-291

Q. Will you state whether or not after the

meeting in the spring of 1971 with Mr.

Langford [the head of the loca! FHA office] you

were of the opinion you could sell a house

without getting a down payment?

A. Yes. He made it so crystal clear to me that

the down payment and really none of the ar-

ticles and Section 235 apply to building the

houses, and he stated his job is to build the

houses and get poor people into them.

7

Q. It is only after that day that you had a

belief in your own mind—

A. I said that he is all-powerful and he is the

Government official who heads the program.

Q. Asa result of that conversation, did you

believe you had to have down payments?

A. No, I didn’t think you had to have down

payments. TR. 293

At the conclusion of petitioner's presentation on the

motion, the district court invited the Government to

rebut. The Government declined the invitation. In an-

swer to “the single question of whether there was con-

duct on the part of the Government which was out-

rageous,” the district court granted the motion to dis-

miss.

The Court of Appeals approved the pre-trial hear-

ing procedure under the Rule 12 motion. Slip op. 4960.

And it found as fact that “the government employees

in this case condoned and encouraged the unlawful

practices of the appellees and others.” Slip op. 4964.

But the Court of Appeals felt that a “governmental

misconduct defense,” slip op. 4962, can only be made

out on a “factual predicate required for a Bueno [ Unit-

_ ed States v. Bueno, 447 F.2d 903 (Sth Cir. 1971), cert. de-

nied, 411 U.S. 949 (1973)] defense, i.e., a ‘full circle’ sale

of contraband ....” Slip op. 4963. Alternatively, the

Court of Appeals refused to apply

The defense of “outrageous governmental

misconduct”... to governmental employees

outside the field of law enforcement. Here, the

inducements were alleged to have been made

by individuals employed by the government

in a capacity completely unrelated to crim-

inal law enforcement. The FHA officials had

no authority with respect to enforcement of

criminal laws, and their actions were not

undertaken for the purpose of prosecuting

appellees.

Slip op. 4963.

REASONS FOR GRANTING THE WRIT

Hampton v. United States, 425 U.S. 484 (1976) was

decided on a plurality opinion of three justices, with

Justices Powell and Blackmun concurring, and three

justices dissenting. The plurality and concurrence

joined in an understanding of the discrete defense of

entrapment as focused on the question of predis-

position of the defendant. As Justice Powell stated in

the concurrence, “‘Entrapment’ should now be

employed as a term of art limited to that concept.” 425

U.S. 492 n. 2.

Obversely, the concurring and dissenting justices

joined in the proposition that in a proper case, the due

process clause of the Fifth Amendment and/or the

supervisory power of the federal courts would bar a

prosecution on government involvement factually

removed from the discrete requirements of the entrap-

ment defense. Justice Powell tentatively explored

some of the considerations which might be involved:

[The imitation of “entrapment” to a focus on

predisposition] does not mean, however, that

the defense of entrapment necessarily is the

only doctrine relevant to cases in which ‘the

government has encouraged or otherwise act-

ed in concert with the defendant.

425 U.S. 493 n. 2.

In those cases [involving facts akin to those in

Hampton] the Court was confronted with

specific claims of police “overinvolvement”’

in criminal activity involving contraband.

Disposition of those claims did not require the

Court to consider whether overinvolvement of

Government agents in contraband offenses

could ever reach such proportions as to bar

conviction of a predisposed defendant as a

matter of due process. Nor have we had occa-

sion yet to confront Government over-

involvement in areas outside the realm of con-

traband offenses.

425 U.S. 493.

Judge Friendly recently expressed the view:

“[T]here is certainly a [constitutional] iimit

to allowing governmental involvement in

crime. It would be unthinkable, for example,

to permit government agents to instigate

robberies and beatings merely to gather evi-

dence to convict other members of a gang of

hoodlums. Governmental ‘investigation’

involving participation in activities that

result in injury to the rights of its citizensis

a course that courts should be extremely

10

reluctant to sanction.’ United States v.

Archer, 486 F 2d, at 676-677 (Footnote

omitted).

425 U.S. at 493 n. 4.

The discussion of predisposition, for example,

often seems to overlook the fact that there may

be widely varying degrees of criminal

involvement. Taking the narcotics traffic as

an example, those who distribute narcotics —

the “pusQers” — are the persons who, next to

those who import or manufacture, merit the

full sanction of the criminal law. Yet, the crim-

inal involvement of pushers varies widely.

The hardcore professional, in the “business”

on a larjye scale and for years, is to be con-

trasted with the high-school youth whose

“pushing” is limited to a few of his class-

mates over a short span of time. Predisposi-

tion could be proved against both types of

defenders, and under the flat ru’e enunciated

today by the plurality the difference between

circumstances would be irrelevant despite the

most outrageous conduct conceivable by

Government agents relative to the circum-

stances. A fair system of justice normally

should eschew unbending rules that foreclose,

in their application, all judicial discretion.

425 U.S. 494 n. 5.

I recognize that, if limitations on police in-

volvement are appropriate in particular

situations, defining such limits will be dif-

ficult. But these difficulties do not themselves

11

justify the plurality’s absolute rule. Due

process in essence means fundamental

fairness, and the Court’s cases are replete with

examples of judgments as to when such

fairness has been denied an accused in light of

all the circumstances .... The fact that there

is sometimes no sharply defined standard

against which to make these judgments is not

itself a sufficient reason to deny the federal

judiciary’s power to make them when

warranted by the circumstances... .Muchthe

same is true of analysis under our super-

visory power. Nor do I despair of our ability in

an appropriate case to identify appropriate

standards for police practices without rely-

ing on the ‘chancellor's’ ‘‘fastidious

squeamishness or private sentimentalism”

425 U.S. 494 n. 6.

I emphasize that the cases, if any, in which

proof of predisposition is not dispositive will

be rare. Police overinvolvement in crime

would have to reach a demonstrable level of

outrageousness before it could bar conviction.

This would be especially difficult to show with

respect to contraband offenses, which are so

difficult to detect in the absence of undercover

Government involvement....

425 U.S. 495 n. 7.

Extraordinarily high level police involvement in

contraband activities, Greene v. United States, 454

F.2d 783 (9th Cir. 1971), is not the only example from

¢

~

12

the existing jurisprudence in which due process and

supervisory considerations have been involved. In

Williamson v. United States, 311 F.2d 441 (5th Cir.

1963), an ex-convict contacted Treasury Department

agents and offered his services. The informer was

employed on “a contingent fee arrangement to

produce evidence against particular named defen-

dants as to crimes not yet committed.” 311 F.2d 444.

The court held the government conduct to be in-

tolerable.

In Cox v. Louisiana, 379 U.S. 559 (1965) the leader ofa

civil rights demonstration was convicted for picket-

ing near a courthouse. No constitutional infirmity

was found in the Louisiana statute. The police chief

had given the demonstrators permission to con-

gregate on the sidewalk across the street from the

courthouse. The trial court found that the demon-

stration violated the statute. This Court reversed the

conviction.

In dissent, Justice Black violently objected that “a

police chief cannot authorize violations of his State's

criminal laws.” 379 U.S. 582. Similarly, Justice Clark

observed, “I never knew until today that a law enforce-

ment official — city, state or national — could forgivea

breach.of the criminal laws.” 379 U.S. 588. The Court,

however, held that Cox’s reliance on the official's

“administrative” decision prevented the conviction.

This is not to say that had the appellant, en-

tirely on his own, held ademonstration across

the street from the courthouse within the sight

and hearing of those inside, or a fortiori, had

he defied an order of the police requiring him

13

to hold this demonstration at some point fur-

ther away out of the sight and hearing of those

inside the courthouse, we would reverse the

conviction as in this case.

379 U.S. 571-572.

The Court observed, ‘“‘Obviously telling

demonstrators how far from the courthouse steps is

‘near’ the courthouse for purposes of permissible

peaceful demonstration is a far cry from allowing one

to commit, for example, murder, or robbery.” 379 U.S.

569.

Raley v. Ohio, 360 U.S. 423 (1959) was a prosecution

for failing to answer questions put to the defendant at

state legislative hearings. Ohio law conferred on such

testificant transactional immunity. The legislative

committee gave the defendant assurances that under

the law, they had the right to assert their privilege

against self-incrimination — an erroneous assurance

under the law. Over state arguments that “some of

appellants might have behaved the same way

regardless of what the Commission told them,” 360

U.S. 439 — i.e., “predisposition” — a unanimous Court

reversed the convictions. The Court held:

While there is no suggestion that the Commis-

sion had any intent to deceive the appellants,

we repeat that to sustain the judgment of the

Ohio Supreme Court on such a basis after the

Commission had acted as it did would be to

sanction the most indefensible sort of entrap-

ment by the State — convicting a citizen for

exercising a privilege which the State clearly

had told him was available tohim....AState

14

may not issue commands to its citizens, un-

der criminal sanctions, in language so vague

and undefined as to afford no fair warning of

what conduct might transgress them... . In-

explicably contradictory commands in stat-

utes ordaining criminal penalties have, in the

same fashion, judicially been denied the force

of criminal sanctions .... Here there were

more than commands simply vague or even

contradictory. There was active misleading

.... The State Supreme Court dismissed the

statements of the Commission as legally

erroneous, but the fact remains that at the in-

quiry they were the voice of the State most

presently speaking to the appellants. We can-

not hold that the Due process Clause permits

convictions to be obtained under such cir-

cumstances.

360 U.S. 438-439.

It is noteworthy that the police official in Cox was

not involved in the defendant’s misconduct. And of

course, the committee members in Raley were not

state employees in the field of law enforcement. In

neither of these due process cases were the crimes for

which the defendants were convicted malum in se. Nor

were the government officials motivated by a desire to

prosecute.

The issues raised in the confluence of the con-

currence and dissent in Hampton, supra, are impor-

tant to the ongoing administration of justice ina high-

ly regulated society. This case presents the due

process and supervisory control issue in the context

of administrative regulations which are malum

15

prohibitum; where there has been no finding of

government corruption in the sense of bribery or ex-

tortion causing the violations; and indeed, where the

local government agency may have “condoned and en-

couraged the unlawful practices of the appellees and

others” in order to save (albeit misguidedly) the very

purpose of the government program — “his job wasto

build the houses and get poor people into them.” Anin-

quiry limited to acts of law enforcement officials bent

on prosecution (Court of Appeals approach) straight-

jackets the due process analysis, and immobilizes the

Court in its supervisory function.

The factual context in which this case arises is com-

mon to many highly regulated areas of federal law,

with their concomitant morasses of regulations.

Reliance on the directives of administrative officials

(who themselves have violated no criminal law, even

though their directives may be wrong or illegal) isa

bread and butter proposition for businessmen work-

ing with the federal government. The Court should

take the opportunity presented by this case to resolve

these important questions.

CONCLUSION

WHEREFORE, the Court should grant the petition

for writ of certiorari to review the decision of the Unit-

ed States Court of Appeals for the Fifth Circuit re-

versing the dismissal of the indictment against

petitioners.

16

Respectfully submitted:

JOHN R. MARTZELL

Martzell & Montero

338 Lafayette Street

New Orleans, Louisiana 70130

Telephone No. (504) 581-9065

Attorney for Petitioner

Lewis Weinstein

C. WILLIAM GERHARDT

1621 Slattery Building

Shreveport, Louisiana 71101

Telephone No. (318) 222-7163

Attorney for Petitioners

Glen D. Graves and

Graves Construction

Company, Inc.

CERTIFICATE OF SERVICE

I hereby certify that I have, on this __. day of

December, 1977, served three copies each of the forego-

ing petition on all interested parties by depositing

same in a United States mailbox, airmail postage

prepaid, addressed as follows:

Thomas W. Turner, Esq.

Special Attorney

U.S. Department of Justice

Criminal Division

Fraud Section

Washington, D.C. 20530

17

Andrew Frey, Esq.

Deputy Solicitor General

Office of the Solicitor

General

Washington, D.C. 20530

D. H. Perkins, Esq.

Assistant U.S. Attorney

Western District of La.

Federal Building

500 Fannin Street

Shreveport, Louisiana 71101

JOHN R. MARTZELL

la

APPENDIX

UNITED STATES of America,

Plaintiff-Appellant,

versus

Glen D. GRAVES, Lewis Weinstein, and Graves Con-

struction Company, Inc., a/k/a Graves Construction,

Inc.,

Defendants-Appellees.

No. 76-3526.

United States Court of Appeals,

Fifth Circuit.

Aug. 5, 1977.

Appeal from the United States District Court for the

Western District of Louisiana.

Before TUTTLE, TJOFLAT and HILL, Circuit

Judges.

JAMES C. HILL, Circuit Judge:

The United States brings this appeal from the

pretrial dismissal of an indictment charging

appellees with conspiracy to submit false statements

to the Federal Housing Administration (“FHA”) and

the completed substantive offenses.' The Government

1 The indictment alleged violations of 18 U.S.C. §§ 371, 1010 and 2.

2a

-

alleged that appellees had (a) fraudulently attempted

to secure mortgage insurance under section 235 of the

National Housing Act of 1968 for buyers whom they

knew were not qualified; (b) falsified documents sub-

mitted to FHA concerning the income, assets, lia-

bilities, credit, employment and other information

pertaining to prospective mortgages; and (c) failed to

comply with the statutory requirement of obtaining a

$200 down payment from each prospective mort-

gagor and falsified documents pertaining thereto.

Prior to trial, the appellees filed motions to dismiss

the indictment on the ground that FHA knew of, ac-

quiesced in, approved, and encouraged the submis-

sion of false statements such as those alleged in the in-

dictment. Characterizing the alleged actions of FHA

officials as “outrageous governmental misconduct,”

the appellees sought dismissal of the indictment on

the ground of entrapment as a matter of law. Ata hear-

ing on the motion, the Government objected to pre-

trial consideration of the entrapment issue and con-

tended that entrapment could not be proven by show-

ing misconduct by FHA officials who were not

connected with the enforcement of criminal laws.

Even after the district court permitted extensive

testimony by defense witnesses, the Government de-

clined: to call rebuttal witnesses and continued to

assert that consideration of the entrapment defense

was premature. Citing United States v. Bueno, 447 F.2d

903 (5th Cir. 1971), cert. denied, 411 U.S. 949, 93 S.Ct.

1931, 36 L.Ed.2d 411 (1973), the district court then dis-

missed the indictment. We reverse.

3a

I. The Pretrial Hearing.

Testimony adduced at the hearing showed that

appellee Graves, during 1971, operated a home build-

ing company known as Graves Construction Com-

pany. Included among his customers were persons

who sought FHA financing pursuant to section 235 of

the National Housing Act of 1968, which applied only

to low income families meeting certain standards.

Prior to February or March, 1971, appellee Graves did

not accept as potential customers any applicants who

were unable to furnish the required $200 down

payment.2 Graves later discovered that persons whom

his firm had rejected had obtained FHA-approved

financing with rival builders only a short time after

his firm had rejected them. He complained to the local

FHA officials about this practice, but no action was

taken by them in response.

At this point, Graves exercised self help to protect

his interests in the 235 program. After making in-

quiries of several individuals who had been approved

by other builders, he secured approximately 75 af-

fidavits from home buyers who had not furnished the

builder with the requisite $200 down payment or had

otherwise failed to comply with applicable FHA

regulations. When confronted with these statements,

the FHA officials responded that the absence of the

down payments was unimportant and that any of the

FHA requirements could be waived.

2 Prior to that time appellee Graves complied fully with FHA

regulations each time he submitted to FHA a customer's applica-

tion for mortgage insurance under section 235. Among the re-

quirements was the furnishing of a statement that the applicant

had available for adown payment or had paid a minimum of $200 of

unborrowed money.

da

Thereafter, appellee began accepting customers for

FHA approved housing even though they did not have

the required $200 down payment. The applications

forwarded to FHA for these customers contained false

statements that the down payment was available or

had been paid. In defense of his actions, Graves testi-

fied at the pretrial hearing, taking the position that he

was guilty of no wrongdoing because FHA officials

had sanctioned his practices and those of his com-

petitors.

II. Did the Appellees’ Motion Present

a Jury Question?

The appellant United States first presents the

threshold question whether the district court erred by

entertaining before trial the appellees’ motion to dis-

miss on the ground of governmental misconduct.

Since the defense is akin to entrapment, the Govern-

ment argues, the question should have been present-

ed to the jury for consideration. The appellees counter

with the argument that an allegation of governmental

misconduct is distinguishable from an entrapment

defense in terms of the proof required. They contend

that the focus of an entrapment defense is the

predisposition of the defendant to commit the crime,

whereas the focus in a governmental misconduct case

is solely upon the actions of the government agents.

They contend further that their motion to dismiss was

“capable of determination without the trial of the

general issue,” as contemplated by Rule 12(b),

Fed.R.Crim.P., thereby permitting its pretrial disposi-

tion by the court.

5a

This case does not present what might be described

as a “classic” entrapment defense. In the typical en-

trapment situation the defendant alleges that law en-

forcement officers have enticed him to commit an un-

lawful act which he had no predisposition to commit.

In such a case, the entrapment defense “focus[es] on

the intent or predisposition of the defendant tocommit

the crime,” United States v. Russell, 411 U.S. 423, 429,

93 S.Ct. 1637, 1641, 36 L.Ed.2d 366 (1973), rather than

upon the conduct of the Government’s agents. In the

absence of a conclusive showing, this “subjective” ap-

proach? permits the jury to determine as a question of

fact the defendant’s predisposition to commit the

crime.

Thus, the question is for the jury, unless the

evidence is so clear and convincing that it can be

passed on by the trial judge as a matter of law. Sher-

man v. United States, 356 U.S. 369, 377, 78 S.Ct. 819, 2

L.Ed.2d 848 (1958); Coronado v. United States, 266 F.2d

719 (5th Cir. 1959) cert. denied, 361 U.S. 851, 80S.Ct. 112,

4 L.Ed.2d 90 (1959). In Sherman the court stated as

follows:

Furthermore, it was the position of Mr. Justice

Roberts that the factual issue of entrapment —

now limited to the question of what the

government agents did — should be decided by

the judge, not the jury. Not only was this

rejected by the Court in Sorrells, [Sorrells v.

U. S., 287 U.S. 435, 53 S.Ct. 210, 77 L.Ed. 413] but

3 That the proper focus of a classic entrapment defense is upon

the defendant's predisposition, rather than the conduct of the

Government, was most recently reaffirmed in Hampton v. United

States, 425 U.S. 484, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976).

6a

where the issue has been presented to them,

the Courts of Appeals have since Sorrells

unanimously concluded that unless it can be

decided as a matter of law, the issue of whether

a defendant has been entrapped is for the jury

as part of its function of determining the guilt

or innocence of the accused.

356 U.S. at 377, 78 S.Ct. at 823 (footnote omitted)

(emphasis supplied).

It has also been said that the “issue of entrapment is a

question for the jury unless as matter of law the defen-

dant has established beyond a reasonable doubt that

he was unlawfully entrapped.” Goss v. United States,

376 F.2d 812, 813 (5th Cir. 1967) (per curiam). The notion

that entrapment is generally a question for the jury

finds support in Rule 12(b). The defendant's predis-

position to commit an unlawful act will seldom be

“capable of determination without the trial of the

general issue.”

In the instant case, however, the appellees do not

assert a Classic entrapment defense, i. e., they do not

argue that the government encouraged criminal acts

in order to obtain a prosecution. Rather, they argue

that the FHA officials were so involved in the corrup-

tion alleged that the law enforcement officials, repre-

senting an altogether different agency of government,

should be precluded from bringing this prosecution.

Although the appellees perfunctorily assert the lack

of any predisposition to commit the offenses alleged,

the core of their entire defense is the alleged mis-

7a

conduct of FHA officials. Their motion presented the

question whether this conduct violated due process

principles, as suggested in Russell, supra, to such an

extent that judicial processes could not be invoked

against them. Since their defense was predicated en-

tirely on alleged governmental misconduct, and not

upon the subjective predisposition of the appellees, it

was an appropriate question for the court to resolve on

a pretrial motion. To paraphrase Rule 12(b), the ques-

tion presented could be answered without trial of the

general issue. Moreover, the issue raised in appellees’

pretrial motion was essentially a question of law,

namely, whether the conduct of the FHA officials con-

stituted outrageous governmental misconduct within

the meaning of Russell, supra and Hampton v. United

States, 425 U.S. 484, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976).

Thus, it was properly a question for the court and not

the jury.

Although this is a question of first impression in our

Circuit, we note that the Eighth Circuit has adopted a

rule substantially similar to that fashioned today. In

United States v. Quinn, 543 F.2d 640 (8th Cir. 1976), the

court affirmed the trial court’s refusal to submit to the

jury that aspect of the defendant's entrapment defense

alleging outrageous governmental misconduct:

Whether a person has been entrapped in [the

conventional] sense of the term is ordinarily a

question of fact for the jury with the burden be-

ing on the government to prove an absence of

entrapment. In the instant case, as we have

seen, the factual aspect of the defendant’s

claim of entrapment was submitted to the jury,

8a

and the jury resolved it adversely to the defen-

dant.

Recent cases have recognized, however, that

apart from any question of predisposition of a

defendant to commit the offense in question,

governmental participation may be so outra-

geous or fundamentally unfair as to deprive

the defendant of due process of law or to move

the courts in the exercise of their supervisory

jurisdiction over the administration of crim-

inal justice to hold that the defendant was “en-

trapped” as a matter of law. ... (citations

omitted) A claim of entrapment on the basis of

outrageous government involvement does not

present any question for a jury to decide but

solely a question of law for the court. Thus, the

district court did not err in refusing to submit

that aspect of the defendant's entrapment

defense to the jury.

543 F.2d at 647-48 (emphasis supplied) (cita-

tion omitted).

Despite the court's refusal to give the governmental

misconduct instruction, it permitted the defendant's

“classic” entrapment defense to go to the jury. Hence,

the court drew the distinction we make today between

the subjective predisposition question in a typical en-

trapment case and the legal question presented by a

governmental misconduct defense. A plurality of the

Supreme Court also has concluded that the govern-

mental misconduct theory of entrapment is not a jury

question. In Hampton, supra, five justices agreed that

under Russell, supra, a jury instruction encom-

passing such a defense was improper.‘ We therefore

conclude that it was proper for the district court to

entertain the appellees’ pretrial motion to dismiss on

the ground of governmental misconduct.

III. Did the Appellees Demonstrate

“Entrapment as a Matter of Law?”’

Upon the Government's failure to present rebuttal

testimony during the pretrial hearing, the district

court held that United States v. Bueno, 447 F.2d 903 (Sth

Cir. 1971), cert. denied, 411 U.S. 949, 93 S.Ct. 1931, 36

L.Ed.2d 411 (1973), was authority for dismissal of the

indictment. In Bueno this court held that entrapment

exists as a matter of law where a defendant sells con-

traband to one Government agent that has been fur-

nished to him for distribution purposes by another

Government agent or informer. Furthermore, we held

that where a defendant has testified to facts tending to

establish such a defense, the government may notrely

on weaknesses in the defense, but must come forward

with contrary proof. If the Government produces

evidence that contradicts the defendant's testimony,

4 The defendant in that case did not request a standard entrap-

ment instruction, but he did request the following:

The defendant asserts that he was the victim of entrap-

ment as to the crimes charged in the indictment.

If you find that the defendant's sales of narcotics were

sales of narcotics supplied to him by an informer in the

employ of or acting on behalf of the government, then you

must acquit the defendant because the law as a matter of

policy forbids his conviction in such a case.

Furthermore, under this particular defense, you need not

consider the predisposition of the defendant to commit the

offense charged, because if the governmental involvement

through its informer reached the point that I have defined

in your own minds, then the predisposition of the defen-

dant would not matter.

10a

the case should be submitted to the jury with proper

instructions.

Since in the instant case the Government declined to

present evidence to rebut the governmental miscon-

duct defense, we must decide whether the district court

was correct in holding that Bueno governs this case.

At the outset, we must accept this court's prior deter-

mination that Bueno remained valid after the

Supreme Court's decision in Russell, supra. In United

States v. Workopich, 479 F.2d 1142 (5th Cir. 1973), we

noted that the Government in Russell had supplied the

defendant with an ingredient that was itself legal,

harmless and lawfully obtainable but was used to

manufacture contraband. In contrast, the unrefuted

testimony in Bueno established that the Government

supplied the contraband itself. Since in Workopich the

Government furnished United States currency that

was legal in itself, the court determined that Russell

rather than Bueno controlled.

In United States v. Oquendo, 490 F.2d 161 (5th Cir.

1974), the court also concluded that Bueno remained

viable after Russell. Thus, even after Russell, this cir-

cuit applied the rule that where entrapment is an

issue, the defendant may be acquitted for lack of

predisposition, or, even though disposed, where one

undercover agent supplies him with the contraband

which he sells to another agent. See United States v.

Mosley, 496 F.2d 1012 (5th Cir. 1974). Subsequent to the

Russell decision, however, the Supreme Court decided

lla

United States v. Hampton, supra, in which a plurality®

of the court held that a classic entrapment defense is

never available to a defendant who was predisposed to

commit the crime charged. Nonetheless, five justices

agreed that a court, in its supervisory capacity or un-

der due process principles, could conceivably bar a

conviction of a predisposed defendant because of out-

rageous police conduct.® Thus, the vitality of Bueno

has again become questionable after Hampton.

Two previous panels of this court have declined to

decide whether Hampton eliminated the so-called

Bueno defense. In United States v. Puma, 548 F.2d 508

(5th Cir. 1977) the court stated as follows:

Without discussing what vitality, if any,

Bueno has in the wake of Hampton v. United

States, 425 U.S. 484, 96 S.Ct. 1646, 48 L.Ed.2d 113

(1976), we find the instant case clearly distin-

guishable. The per se rule of Bueno was called

for because the offenses for which conviction

was obtaine.u were made possible “through the

5 See plurality opinion of Mr. Justice Rehnquist, in which Chief

Justice Burger and Mr. Justice White joined, and the concurring

opinion of Mr. Justice Powell, with whom Mr. Justice Blackmun

joined. Justice Powell stated that ‘“[he] agree{d) with the plurality

that Russell definitively construed the defense of “entrapment” to

be focused on the question of predisposition. “Entrapment” should

now be employed as a term of art limited to that concept. (citation

omitted). This does not mean, however, that the defense cf entrap-

ment necessarily is the only doctrine relevant to cases in which

the Government has encouraged or otherwise acted in concert

with the defendant. 425 U.S. 486 n. 2, 96 S.Ct. 1648 (1976) (Powell,

concurring).

6 See the concurring opinion of Mr. Justice Powell, with whom

Mr. Justice Blackmun joined, and the dissenting opinion of Mr.

Justice Brennan, with whom Mr. Justice Stewart and Mr. Justice

Marshall concurred. a

12a

creative activity of the government. The

Defendant would not have had the heroin to

sell if it had not been purchased by the In-

former.” 447 F.2d at 906. Here, on the other

hand, the DEA became involved after the con-

spiracy had begun. Theconspiracy was not in-

stigated by the “creative activity of the

government.” The DEA only allowed the con-

spiracy to play itself out until the con-

spirators could be ascertained and ap-

prehended. 548 F.2d at 510.

Subsequently, the court hinted, but did not decide, that

Hampton may have extirpated Bueno:

The Court’s decision in Hampton v. United

States, 425 U.S. 484, 96S.Ct. 1646, 48 L.Ed.2d 113

(1976), handed down after the trial of this case,

may well have eliminated the Bueno defense.

In Bueno the Court found entrapment as a mat-

ter of law when unrebutted testimony showed

that a Government informer had supplied il-

legal drugs to a defendant who then sold them

to a Government agent. In that “full circle”

transaction, the evil was

~ the government buying heroin from itself,

through an intermediary, the defendant,

and then charging him with the crime.

447 F.2d at 905. Bueno was questioned after the

Supreme Court's decision approving some-

thing akin to full circle conduct in United

States v. Russell, 411 U.S. 423, 93 S.Ct. 1637, 36

L.Ed.2d 366 (1973). This Circuit, however,

13a

distinguished Russell on the ground that the

substance supplied in Russel! was legal, and

was only one ingredient of the drugs the

Government agent purchased. United States

v. Oquendo, 490 F.2d 161, 163 (5th Cir. 1974).

Hampton, however, rejected that distinction

and found no entrapment “per se” even though

a full circle transfer of illegal drugs had taken

place.

United States v. Evers, 552 F.2d 1119, No. 76-

1755 (5th Cir. 1977).

In Evers the court expressed doubt whether the defen-

dant ever had a Bueno defense since his purchase of il-

legal drugs from a Government agent had not been

followed by a sale of the drugs to another agent.’

We too find it unnecessary to decide whether Bueno

survived Hampton. Whatever the fate of Bueno, it is

now clear that the expression “entrapmentasa matter

of law,” as used in that case, has become a misnomer

with respect to predisposed defendants. There is still

available in appropriate cases a governmental mis-

7 The court stated in pertinent part as follows:

The cases in this Circuit following Bueno and finding

entrapment as a matter of law have been “full circle”

cases. United States v. Gomez-Rojas, 507 F.2d 1213 (5th

Cir.), cert. denied, 423 U.S. . 96 S.Ct. 41, 46 L.Ed.2d 42

(1975); United States v. Mosley, 496 F.2d 1012 (5th Cir. 1974);

United States v. Oquendo, 490 F.2d 161 (5th Cir. 1974). While

at least one federal district court has held a “half circle” to

constitute entrapment, United States v. Chisum, 312

F.Supp. 1307 (C.D.Cal.1970), and another Circuit has sug-

Bueno would apply to “half circle” cases, United

States v. Jett, 491 F.2d 1078, 1081 (ist Cir. 1974), there is con-

siderable doubt that defendants ever had a Bueno defense.

especially after the decision in Russell. United States v.

Evers, No. 76-1755, 552 F.2d at 1122 (5th Cir. 1977).

14a

conduct defense grounded on the dual principles of

due process and the supervisory powers of the court,

but such a defense does not fall within the narrow con-

fines of “entrapment” as that term has been explicated

in Russell and Hampton.

In light of the foregoing discussion, we proceed to an

analysis of the instant case. The district court dis-

missed the indictment because the Government re-

fused to rebut the defendant's governmental miscon-

duct defense. As indicated above, that procedure has

been followed in this Circuit when the defendant estab-

lishes the factual situation presented in Bueno and the

Government fails to rebut the defendant's allegations.

The facts of the instant case, however, present none of

the abuses addressed by the Buenorule. There is no in-

dication that the FHA employees here induced Graves

to commit unlawful acts for the purpose of prosecut-

ing him for those acts. They acted in concert with him,

but he did not become immune from prosecution

because they condoned or even encouraged his unlaw-

ful activity. Were we to uphold the appellees’ defense,

anyone dealing with corrupt government bureau-

crats could expect to join them in crime without fear of

prosecution. Hence, to the extent that Bueno is still

valid, appellees did not even fall within its protective

wall: \

In addition, we conclude that this is not the case

presaged by the Supreme Court when it stated: “We

may some day be presented with a situation in which

the conduct of law enforcement agents is so outra-

geous that due process principles would absolutely

bar the government from invoking judicial process to

15a

obtain a conviction, cf. Rochin v. California, 342 U.S.

165, 72 S.Ct. 205, 96 L.Ed. 183 (1952).”’

We can discern no due process rights of the

appellees which were offended by this prosecution. In

Hampton, the Supreme Court made the following

observation, which applies with equal force to this

case:

The limitations of the Due Process Clause of

the Fifth Amendment and of those portions of

the Bill of Rights which it has been held to in-

corporate, come into play only when the

government activity in question violates

some protected right of the defendant. Here, as

we have noted, the police, the government in-

former, and the defendant acted in concert

with one another. If the result of the govern-

mental activity is to “implant inthe mind of an

innocent person the disposition to commit the

alleged offense and induce its commission,

... Sorrells, supra, 287 U.S., at 442, 53 S.Ct.

[210] at 221, 77 L.Ed.2d, at 417, the defendant is

protected by the defense of entrapment. If the

police engage in illegal activity in concert

with a defendant beyond the scope of their

duties the remedy lies, not in freeing the

equally culpable defendant, but in prosecut-

ing the police under the applicable provisions

of state or federal law. See O’Shea v. Littleton,

414 U.S. 488, 503, 94 S.Ct. 669, 679, 38 L.Ed.2d

674, 687 (1974); Imbler v. Pachtman, 424 U.S.

409, 428-429, 96 S.Ct. 984, 994, 47 L.Ed.2d 128

(1975). But the police conduct here no more

16a

deprived defendant of any right secured to him

by the United States Constitution than did the

police conduct in Russell deprive Russell of

any rights. (emphasis in original).

425 U.S. at 490, 96 S.Ct. at 1650.

Moreover, we do not believe that the type of conduct by

FHA officials alleged in this case requires this court,

as suggested in Hampton, to exercise its supervisory

powers to bar conviction.

The appellees not only failed to establish the factual

predicate required for a Bueno defense, i. e., a “full cir-

cle” sale of contraband, they raised the novel conten-

tion that the defense of “outrageous governmental

misconduct” applies to governmental employees out-

side the field of law enforcement. Here, the in-

ducements were alleged to have been made by in-

dividuals employed by the government in a capacity

completely unrelated to criminal law enforcement.

The FHA officials had no authority with respect to en-

forcement of criminal laws, and their actions were not

undertaken for the purpose of prosecuting appellees.

The appellees cite three cases for the proposition

that a defendant may assert an entrapment defense

against government employees who are not law en-

forcement officers: United States v. Tatar, 439 F.2d

1300 (9th Cir. 1971); cert. denied, 404 U.S. 866, 92 S.Ct.

69, 30 L.Ed.2d 109 (1971); United States v. Kabot, 295

F.2d 848 (2d Cir. 1961), cert. denied, 369 U.S. 803, 82 S.Ct.

641, 7 L.Ed.2d 550 (1962); Lunsford v. United States, 200

F.2d 237 (10th Cir. 1952). In each of these cases, tax-

17a

payers had attempted to procure favorable deter-

mination of their tax liability by bribing revenue

agents who were auditing their returns. The agents all

reported the incidents to their superiors and agreed to

cooperate in efforts to obtain evidence of bribery. In all

three cases m entrapment was found, and in Lunsford

the entrapment charge given by the trial court was de-

clared by the Tenth Circuit as “plain, understandable

language.”’ None of these cases considered the issue of

whether entrapment could be based upon the conduct

of the revenue agents, but it is clear that the agents

were attempting to obtain evidence for use in a crim-

inal prosecution.

The FHA officials here were acting in no such

capacity. Unlike the agents in the trilogy of cases cited

by appellees, the government employees in this case

condoned and encouraged the unlawful practices of

the appellees and others. The prosecution of the

appellees occurred despite their efforts and not

because of any “entrapment” or governmental mis-

conduct affecting the rights of the appellees.

We are aware that inducement from a private citizen

cannot be deemed sufficient to support a claim of en-

trapment. United States v. Maddox, 492 F.2d 104 (5th

Cir. 1976), cert. denied, 419 U.S. 851, 95 S.Ct. 92, 42

L.Ed.2d 82 (1974). It is likewise apparent that entrap-

ment can occur as a result of efforts of informers who

are merely private citizens but acting under

governmental direction. See United States v.

Groessel, 440 F.2d 602 n. 1 (5th Cir. 1971), cert. denied,

403 U.S. 933, 91 S.Ct. 2263, 29 L.Ed.2d 713 (1971), citing

Sherman v. United States, 356 U.S. 369, 373-74, 78 S.Ct.

819, 2 L.Ed.2d 848 (1958). Where a government infor-

18a

mant is acting in the capacity of a law enforcement of-—

ficer, however, his actions must be governed by the en-

trapment defense. Since the FHA officials here were

disregarding the law, and not enforcing it, such a case

is inapposite to our inquiry.

REVERSED and REMANDED.

A true copy

Test! EDWARD W. WADSWORTH

Clerk, U.S. Court of Appeals, Fifth Circuit

By /s/ SUSAN M. GRAVOIS

Deputy

New Orleans, Louisiana

OCT. 20, 1977

19a

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

October 12, 1977

TO ALL PARTIES LISTED BELOW:

NO. 76-3526 — U.S.A. v. GLEN D. GRAVES, ET AL.

Dear Counsel:

This is to advise that an order has this day been

entered denying the petition for rehearing, on behalf of

appellees, Glen D. Graves, et al., and no member of the

panel nor Judge in regular active service on the Court

having requested that the Court be polled on rehearing

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, Federal Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

EDWARD W. WADSWORTH,

Clerk

/s/ BRENDA M. HAUCK

Deputy Clerk

cc: Messrs. Thomas W. Turner

Mervyn Hamburg

Messrs. James E. Wilson

D. H. Perkins

Mr. William Gerhardt

Mr. John R. Martzell