Petition — McLennan v. United States

Supreme Court, U.

FILED

DEC 30 1977

F106

MICHAEL RODAK, JR., CLERK

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1977

PHILIP A. MCLENNAN and

FRED H. BENDER, PETITIONERS

Ve

UNITED STATES OF

AMERICA, RESPONDENT

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NORMAN SEPENUK

1330 Bank of California

Tower

707 S.W. Washington Street

Portland, Oregon 97205

LESLIE M. ROBERTS

KELL, ALTERMAN & RUNSTEIN

1330 Bank of California

Tower

707 S.W. Washington Street

Portland, Oregon 97205

December 28, 1977

INDEX

OPINION BELOW eeeeeeeneeseneeneeeeeeeeee

JURISDICTION eeeeeeeneecoeeeeeeeeeneeeneee

QUESTIONS PRESENTED

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED ..ccccecsceces

STATEMENT OF THE CASE

A. Dismissal of Copeland

Act and "Kickback"

ChargeS ceccccccccccscscceses

B. The Decision of the

Court Of AppealS ..ccceccces

REASONS FOR GRANTING THE WRIT ......

CONCLUSION eeeeeeeneteneteeeeeeeeneeneeeeee

APPENDIX eoeeeeeneeeeeeeeeeeeeeeeeeneee

CITATIONS

FEDERAL CASES

Bollenbach v. United States

326 U.S. 607 (1947)

Bruton v. United States

391 U.S. I23 (1568)

Estelle v. Williams

425 U.S. 501

34,

(1976) wcccccccee

Finch v. United States

U.S. ’

2909 (1977)

97 S.Ct.

23,

27,

i7

40

35

28

ii

Kepner v. United States

Sa Walla Ee CED é6tonndeeads

Murphy Auto Parts Co. v. Ball

249 F.2d 508 (D.C.Cir.

1957), cert. denied, 355

U.S. 332 (1958)

Price v. Georgia

398 U.S. 330 (1970) .......

Serfass v. United States

420 i PF 337 (1975) eoeeeeee

Slater v. United States

562 F.2d 58 (lst Cir.

1976) e*e eeee4een#steeeeeneese eee

United States v. Alsup

219 F.2d 72 (5th Cir.

1955), cert. denied,

SOG Gala UE b06beeveeesese

United States v. Ball

163 U.S. 662 (1896) eoeeeeeve

United States v. Carbone

“56 F.Supp. 343 (D.C. Mass.

1944) eeeeeeeenseeeeeneteensteeeee

United States v. Carbone

327 U.S. 633 (1946) ... 17,

United States v. Charlick

26 F.Supp. 203 (E.D.

Pa.1939) eeee3u«ee#eeeseeeseeeeseteeee

United States v. Dreyfus

528 F.2d 1064 ean Cie.

1976) eoertreoeeeeeeeeeeeeee 36,

United States v. Freeman

519 F.2d 67 (9th Cir.1975)

28,

27,

18,

18,

37,

28

29

29

22

21

28

21

20

21

38

14

LO TOL TT

iii

United States v. Golder

F.Supp. E.D.Pa.

1935) eeeeeeeeneeneeeeeneeeeeeeeee

United States v. Jackson

418 F.2q 786 (9th Cir.

1969) eeee3eseeeeeeneee#e#es 36, 37,

United States v. Laudini

U. . 3 ) e*eeegee#srfese 18,

United States v. McGraw

F.Supp. N.D.N.Y.

1942) eoeeeeeeeeeeneeeeeeneeeeeeee

United States v. Price

224 F.2d 604 (6th Cir.

1955) eeeeeeseee#eex#seeseee#es#*#ee#e##e#e# 20,

United States v. Wilson

a a er SPER pc ccccceeds

United States v. Wolfson

4 F. qd Cir.

1970) eeee3sese3e#eeseseseese#e#seee#es 36, 37,

CONSTITUTIONAL PROVISIONS

U.S. Const. amend. V eeeeeveees 4, 27,

U.S. Const. amend. Vi eeeeeveeeeee eee

STATUTES

College Housing Act of 1950,

12 U.S.C. §§ 1749, et

Ss G. (1970) eeeeoeeeecvceee 6, 22,

18 U.S.C. § 371 eeeeoeeeeeeeeeee 5, 8,

21

38

20

21

21

27

38

30

30

23

32

Copeland Act, 18 i om § 874 eeeeeeeeee#

eeeeeee 2, 3, 5, 8-18, 20-27, 32, 33,

38

iv

18 Fr § 1001 e*eeeeneeeeeeeeeeee 5,

18 U.S.C. § 1010 eeeeeveevevee ee ee 5, 8,

18 OeBséGe § 3731 eeeeeeeeeeeesee? 3, 4,

28 OGeweGe § 1254 eeeeeeeeneensteneeeeneeee

Act of June 13, 1934, § l, ch.

482, § 1, 48 Stat. 948

(40 U.S.C. § 276b, re-

pealed 1948) eeeeevevneeveeeeene 18,

40 i a § 276c eeeeeeeeeenteeeee 18,

FEDERAL RULES

Fed. R. Evid. 801 eeeeeeeeeeeeeeeneeee

Fed. R. Evid. 803 (24) eeeoveeveneve eee ee

37

23

19

19

14

14

eee ~r eeeeeeeerremmmmmmmmma

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1977

No.

PHILIP A. MCLENNAN and FRED H.

BENDER, Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioners, Fred H. Bender and Philip A.

McLennan, pray that a writ of certiorari issue

to review the opinion and judgment of the

United States Court of Appeals for the Ninth

Circuit entered %ctober 19, 1977, which affirmed

the judgment of the United States District Court

for the District of Oregon.

OPINION BELOW

The opinion of the Court of Appeals is

officially reported at 563 F.2d 943 (see

Appendix, infra). The petition for rehearing

ale

=2-

and suggestion for rehearing in banc was

denied on December 2, 1977.

JURISDICTION

The jurisdiction of this Court is in-

voked under 28 U.S.C. § 1254.

QUESTIONS PRESENTED

1. Petitioners’ non-profit corporations

constructed seven college housing projects

with funds borrowed from the Department of

Housing and Urban Development. Petitioners

received a portion of the architect's fees

from the projects' architect. The question

presented is whether such "kickbacks" are

prohibited by the Copeland Act, 18 U.S.C.

§ 874.

2. Petitioners were indicted, inter

alia, for conspiring to commit a violation

of the Copeland Act, 18 U.S.C. § 874. At the

close of the government's case, the trial

judge dismissed this charge. The Court of

Appeals held this dismissal to be improper.

The question presented is whether inquiry by

a ee

oo

the Court of Appeals into the propriety

of this dismissal violates (a) the consti-

tutional prohibition against double jeo-

pardy, and (b) 18 U.S.C. § 3731, by in

effect allowing the government the right

to review of an order from which it did

not and could not appeal.

3. Evidence concerning the Copeland

Act charge (18 U.S.C. § 874) was conspicu-

ous, and the Act was referred to by name

in testimony. The Court of Appeals held

that the trial court was not required to

instruct the jury as to the meaning of the

Copeland Act or that this charge had been

dismissed. The question presented is,

must a trial court inforin the jury that a

charge has been dismissed after evidence

has been admitted dealing with the charge,

in order to assure the jury's fair under-

standing of the matters before it?

4. Whether certain testimony of

petitioners’ former counsel was inadmissible

hearsay.+

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED

The Fifth Amendment to the United

States Constitution provides, in pertinent

part:

"* * * nor shall any person be

subject for the same offence to

be twice put in jeopardy of life

or limb; * * *,*

18 U.S.C. § 3731 provides, in per-

tinent part:

"In a criminal case an appeal by

the United States shall lie to a

court of appeals from a decision,

judgment, or order of a district

court dismissing an indictment or

information as to any one or more

counts, except that no appeal

shall lie where the double jeopardy

clause of the United States Con-

stitution prohibits further pro-

secution."

1. This question is not relied upon as a basis for

the petition for a writ of certiorari, but is pre-

sented solely as a question which petitioners will

also raise, with the permission of the Court, if

certiorari is granted. The Court of Appeals’ deci-

sion concerning the hearsay rule raises two novel

issues under the new Federal Rules of Evidence:

(1) whether Federal courts may apply a plastic,

common law approach to rules of evidence that are

codified and now subject to Congressional review and

approval; and (2) whether the excited utterance ex-

(Cont. )

i Te

inert e eee

oS-

18 U.S.C. § 874 provides:

“Whoever, by force, intimidation,

or threat of procuring dismissal

from employment, or by any other

manner whatsoever induces any per-

son employed in the construction,

prosecution, completion or repair

of any public building, public

work, or building or work financed

in whole or in part by loans or

grants from the United States,

to give up any part of the compen-

sation to which he is entitled

under his contract of employment,

shall be fined not more than

$5,000 or imprisoned not more than

five years, or both."

STATEMENT OF THE CASE

Petitioners McLennan and Bender were

convicted of (1) making false statements

to the Department of Housing and Urban De-

velopment (HUD) and (2) conspiring to make

such false statements and to defraud the

United States, all in violation of 18

U.S.C. §§ 371, 1001 and 1010. The facts

1 (Cont.) ception may be extended to situations in

which mere conversation is the exciting event, when

the trial court has declined to make the requisite

finding of excitability (contrary to Murphy Auto

Parts Co. V. Ball, 249 F.2d 508, 511- eoLe ULI.

1957), cert. denied, 355 U.S. 332 (1958) (opinion

by Judge Burger)).

=-6-

may be briefly summarized as foilows:

Petiticners' two non-profit cor-

porations--Adult Student Housing, Inc.

(ASH), and Adult Student Housing of

Memphis, Inc. (ASHM)--obtained loans from

HUD under the College Housing Act of

1950, 12 U.S.C. §§ 1749, et seq. (1970),

to design and construct seven college dor-

mitory facilities. Architectural services

on each project were provided by Charles

R. Dahlen, a licensed architect. In con-

nection with each project, Dahlen signed

a standard owner-architect contract with

ASH or ASHM to provide services for a

stated fee. Apart from these contracts,

Dahlen and petitioners had a written

agreement (Deft.Ex.7) whereby Dahlen would

devote his best efforts to providing ar-

chitectural services to entities in which

petitioners had an interest, in return

tor payment or provision of overhead and

services and a monthly draw, as an advance

vers

~E

against fees for architectural services.

Petitioners’ corporations received

a total of $961,282 in HUD mortgage loan

disbursements on account of architectural

expenses. In various documents submitted

to HUD from 1971 to 1975, petitioners

stated these funds were paid or payable

for “architectural services." Over

$300,000 of this amount was received by

Dahlen for compensation and expenses of

himself and his office staff. Petitioners

received the balance (approximately

$600,000) prior to November, 1973, by

checks drawn on the architect's account

as consulting fees.?

The indictment charged in substance

that petitioners had knowingly overstated

2. Petitioner McLennan testified these payments

were pursuant to the agreement with Dahlen (Deft.

Ex.7) for services which consisted of materially

assisting the architect on the various projects

and obtaining new business (R.809-817). (Refer-

ences to the reporter's transcript of the pro-

ceedings will be designated R™,)

-8-

the costs of architectural services, in

violation of 18 U.S.C. §§ 1001 and 1010;

conspired to cause Mr. Dahlen, the archi-

tect, to “kick back" a portion of his com-

pensation under the owner-architect agree-

ments, in violation of the so-called

Copeland Act (18 U.S.C. § 874); and con-

spired to defraud the government of its

right to conduct its programs free from

deceit, trickery and illegality (18 U.S.C.

§ 371).

The primary defense to the fraud

and false statement charges was that peti-

tioners lacked the specific intent re-

quired to commit these crimes. As part

of this defense, petitioners claimed that

they had acted on the advice of their attor-

ney, Mr. Burnett. The evidence showed

that, in the spring of 1970, petitioners

had advised Mr. Burnett that they wished

to form a permanent entity, consisting

of the owner-developer, architect, builder,

-9-

attorney and accountant, to construct

and develop real estate on a "team"

basis, sharing revenues from the projects

(R.395-396). Burnett advised petitioner

McLennan that the "Copeland Act" (18 U.S.C.

§ 874) would make it “difficult, probably

impossible" to set up such an organiza-

tion "without getting very elaborate"

(R.399-401). Burnett did not advise peti-

tioners of any other legal objection to

the proposal. In 1972, Mr. McLennan asked

Burnett how petitioners could legiti-

mately share the large architectural fees

generated by the projects, considering

their substantial efforts and services

rendered Dahlen (R.406,805). Burnett

had said that the Copeland Act would not

be infringed "once the money was Mr.

Dahlen's", who "could do with it as he

pleased, but that it had to go through

the tax machine first" (R.424). Peti-

tioner McLennan testified that he felt

-10-

he followed this advice (R.805-806).

According to Burnett, he first

learned the transfers had occurred when

informed of that fact by petitioner

Bender in November, 1973. In response

to the prosecutor's inquiry, Burnett

testified that he said to Bender at that

time, "For Christ's sake, I told you that

was illegal" (R.407-409). Defense coun-

sel objected on hearsay and relevancy

grounds. The objections were overruled.

Burnett's statement ("I told you

that was illegal") referred solely to

illegality under the Copeland Act (R.399-

401). During Burnett's testimony con-

cerning the Act, Judge Skopil stated

in the jury's presence that he would ul-

timately instruct the jury on the meaning

of the Copeland Act (R.400).

A. DISMISSAL OF COPELAND ACT AND

WKICKBACK" CHARGES

Prior to trial, the petitioners

«lle

moved to dismiss that part of Count I

(the conspiracy charge) which charged

them with conspiring to violate the Cope-

land Act (18 U.S.C. § 874), on the grounds

that it could not apply to their trans-

actions with a project architect (Ct. 164-

176). Judge Skopil denied the motion

(Ct.178). Petitioners renewed the motion

at the beginning of trial (R.2-3) and again

at the close of the government's case

(R.623-624), when Judge Skopil granted it

and dismissed the charge, removing all

allegations of illegal "kickbacks" (R. 626).

When all the evidence was in, de-

fense counsel requested the court to

instruct the jury prior to argument that

the court had taken the Copeland Act and

"kickback" portion of the indictment out

of the case, because of references in the

3. References to the Clerk's transcript of record

will be designated "Ct."

4. At the court's direction, all references to

"kickbacks" were deleted as “portions of the indict-

ment which I have * * * ruled out of the case"(R.925).

-12-

testimony and the indictment which the

jury had heard (R.2, 925-927). Judge

Skopil stated that he would inform

the jury about the dismissal in his own

- way but warned defense counsel not to

use dismissal of the Copeland act “as

a weapon" in closing argument (R.928).

The court instructed the jury

that it had "taken a portion of Count I

away from the jury's consideration * * *

purely as a matter of law and has nothing

to do with the factual determination which

you are to make on the other counts." The

court stated it was advising the jury be-

cause "you might have wondered why the

attorneys were not talking about those

matters" (R.937-938). No mention was made

by the court, at that time or thereafter,

that the dismissed portion of the 21-page

indictment concerned the Copeland Act.

In argument, the prosecutor quoted

Burnett's testimony, "I told you that

o1 je

was illegal," and stated that Burnett told

petitioners that having an ongoing rela-

tionship with an architect would be "ille-

gal because of the Copeland Act" (R.970-

971,972-973,974). In closing argument,

defense counsel mentioned without elabora-

tion that the Copeland Act was "out of

the case" (R.998-1047). The prosecutor

recalled the Copeland Act testimony again

in rebuttal, without acknowledging dis-

missal of the charge (R.1062-1064).

B. THE DECISION OF THE COURT OF APPEALS

Petitioners raised two issues on

appeal: (1) whether Burnett's testimony

was inadmissible hearsay and irrelevant; and

(2) whether the District Court erred in

failing to tell the jury the Copeland Act

had been dismissed from the case.

The Ninth Circuit affirmed the con-

viction. Judge Duniway wrote the opin-

ion of the court, Judge Choy specially

concurred in a separate opinion and

-14-

Judge Ely dissented. The panel was in

internal disagreement on both points

raised on appeal.

Judge Duniway held that the Dis-

trict Court's failure to instruct the

jury with respect to dismissal of the

5. The controversy concerning the hearsay point

resulted in two judges concurring that the judg-

ment should be affirmed, but on contradictory

grounds. Judge Duniway found Burnett's testi-

mony to be nonhearsay because it was notice to

the petitioners that Burnett disapproved the

transfers from the architect (which had then

already taken place) and stated that Burnett's

1973 assertion that he had earlier so advised

the petitioners simply made the statement stronger.

Judges Choy and Ely found that the statement

was hearsay and would be inadmissible under F.R.

Evid. 801 and the rule of U.S. v. Freeman,

519 F.2d 67 (9th Cir.1975).

Judge Choy, however, held that the evidence

should nevertheless have been admissible under

either a newly created Federal common law ex~

ception to the hearsay rule, pursuant to FR.

Evid. 803(24), allowing in as substantive evi-

dense any prior statement of a witness; or as

an “excited utterance." Even so, Judge Choy

would have held the admission of the hearsay

without a limiting instruction to have been

plain error if the Copeland Act were rightly

dismissed. 563 F.2d at 954, n. 7.

Judge Ely, in agreement with Judge

Duniway on this point, specifically stated

that the evidence could not be held admissible

as an excited utterance; and Judge Ely found

no legitimate grounds for its admission.

-15-

Copeland Act count was not error.

Judges Choy and Ely specifically dis-

agreed. Judge Choy stated this was error

because the "Copeland Act provided the

Single strongest ground upon which the

government based its contentions that

defendants’ architect-developer arrange-

ment was illegal and that the failure to

disclose it was false and misleading."

As Judge Choy further noted, the "that's

illegal portion of Burnett's testimony

was the prime piece of evidence of both

the illegality of defendants' conduct as

well as their knowledge thereof." 563

F.2d at 954,

Nevertheless, Judge Choy held that

petitioners could not complain of this

error because the trial court had also

erred in dismissing the charge. Judge

Choy found the court free to determine

whether "the defendants in fact received

more generous treatment than they deserved

-16-

by virtue of the dismissal." 563 F.2d

at 954.

Judge Ely, in dissent, emphasized

that the prosecutor cited the Copeland

Act evidence misleadingly in closing

argument. Judge Ely concluded that the

trial court's failure to instruct con-

cerning the Copeland Act dismissal made

it “entirely conceivable * * * that the

conviction eventually rested upon an of-

fense no longer charged." 563 F.2d at 956.

He criticized Judge Choy's approach be-

cause it would encourage attorneys to ig-

nore trial courts" rulings, as on the

dismissal of a charge, "in the hope that

an appellate court would hold that the

trial court's basic ruling was erroneous

and, for that reason, forgive, or hold

harmless, the attorney for conduct that

would otherwise be prejudicial to the

accused and contemptuous of the court."

563 F.2d at 955, n. l.

re

Ste

REASONS FOR GRANTING THE WRIT

I

The court below, through Judge

Choy's concurring opinion, held that the

Copeland Act (18 U.S.C. § 874) was broad

enough to reach "kickbacks" paid by an

architect to the developers of a Federally

funded project. Judge Choy held that

regardless of the legislative history of

the Copeland Act, “the words of the sta-

tute are clear in their generality" and

had to be read literally:

"On the face of the Copeland Act

there is no indication that Con-

gress intended to limit its reach

to the minimum wage context. Nor

is there any ambiguity which would

compel a resort to the legisla-

tive history." 563 F.2d at 954-955.

This holding raises an important

question as to the meaning and scope of

the Copeland Act and conflicts with the

rationale of this Court in decisions con-

struing the Copeland Act (United States v.

Carbone, 327 U.S. 633, 637 (1946); United

-18-

States v. Laudini, 320 U.S. 543, 544-546

(1944)). It is in direct conflict with

a recent decision of the First Circuit

Court of Appeals in Slater v. United

States, 562 F.2d 58 (lst Cir.1976).

The holding of the court below,

based upon a literal reading:-of the sta-

tute, without reference to legislative

history, is inconsistent with this Court's

holding:

"(NJot every person or act fall-

ing within the literal sweep of

the language of the Kickback Act

[Copeland Act] necessarily comes

within its intent or purpose.

That language must always be read

and applied in the light of the

evils which gave rise to the sta-

tute and the aims which the pro-

ponents sought to achieve." United

States v. Carbone, supra, at 637.

The Copeland Act, adopted in 1934,

was styled an act "to effectuate the pur-

poses of certain statutes concerning rates

of pay for labor." Section 1 was codified

as 40 U.S.C. § 276b and Section 2 became

40 U.S.C. § 276c. In 1948, 40 U.S.C.

- on eng TOR

7 re

-19-

§ 276b was repealed and replaced by an

essentially identical statute, 18 U.S.C.

§ 874, which prohibits inducing kickbacks

from:

"* * * any person employed in the

construction, prosecution, comple-

tion or repair of any public build-

ing, public work, or building or

work financed * * * by * * * the

United States * * *,"

40 U.S.C. § 276c, the other section of

the Copeland Act, is a regulatory statute:

"The Secretary of Labor shall make

reasonable regulations for contrac-

tors and subcontractors engaged in

the construction, prosecution, com-

pletion or repair of * * * buildings

or works financed * * * by * * *

the United States, including a pro-

vision that each contractor and sub-

contractor shall furnish weekly a

statement with respect to the wages

paid each employee during the pre-

ceding week * * *," (Emphasis added.)

These two sections of the Act must

be read in pari materia, so that "any per-

son employed," etc., means, here, wage

earners in the employment of contractors

and subcontractors, whom the Act was in-

tended to protect. See, United States v.

-20-

Laudini, supra, at 546-547.

The purpose of the Act was to pro-

hibit kickbacks in order to effectuate

minimum wage scales. United States v.

Carbone, supra, at 638-639. In Carbone,

the proof was that contractors agreed to

hire only laborers who would pay union

dues. The Copeland Act was ruled inappli-

cable--though literally encompassing the

case--because the situation was not in

the class of evils contemplated by Con-

gress. In United States v. Laudini, supra,

the Court also based its interpretation

of the scope of the Act on the purpose

of the legislation. 320 U.S. at 547-548.

Cf. United States v. Price, 224 F.2d 604

(6th Cir.1955) ("It is equally obvious

both from the legislative history and the

Supreme Court decisions, that the scope

of the language is not so broad as a li-

teral reading would suggest." 224 F.2d

at 607) (Judge Stewart) .° The inquiry

6. Additional reported cases under the predeces-

(Cont. )

awe

@2)-

here is whether it was only the wage

earner employed at physical construction

who was the subject of Congressional con-

cern. The apparent purpose of the Act

was the enforcement of minimum wages in

order to bolster the economy as a whole.

Congress (we suggest) did not enact this

legislation with a purpose to regulate

contracts for the services of profes-

sionals who are involved in planning Fed-

eral projects and who are not subject to

minimum wage regulation. In any event,

this case raises an important issue as

to the scope and meaning of the Copeland

6 (Cont.) sor to 18 U.S.C. § 874 relate only to

contractor-laborer factual situations, e.g., United

States v. Charlick, 26 F.Supp. 203 (E.0.Pa.1939);

United States v. Carbone, 56 F.Supp. 343 (D.C.

Mass.1944); United States v. McGraw, 47 F.Supp.

927 (N.D.N.Y. ’ e term "contract of employ-

ment," in 18 U.S.C. § 874, has been defined as "the

agreement between the contractor and the workman."

United States v. Golder, 11 F.Supp. 870 (E.D.Pa.

). the only reported cases after recodifi-

cation as 18 U.S.C. § 874 also involved workmen:

United States v. Price, 224 F.2d 604 (6th Cir.

; and United States v. Alsup, 219 F.2d 72

(5th ie, ers cert. denied, U.S. 982, 75

S.Ct. 572.

o22@

Act, which should be resolved by this Court.

In Slater v. United States, supra,

the First Circuit, in a decision directly

in conflict with the holding below, con-

firmed that a "narrow" interpretation

should be given this statute (556 F.2d

at 61). The court reversed a conviction

based on receipt of payments from an inde-

pendent contractor.’ It held essentially

that the Copeland Act kickback prohibition

applies only to employees who are protected

by Federally regulated wage scales.®

7. There was conflicting evidence in petitioners'

case whether Dahlen was an employee, working for

wages denominated as a "draw" under his agreement

with petitioners (Deft.Ex.7), or whether he rendered

services pursuant to the seven standard owner-archi-

tect contracts submitted to HUD, which establish

Dahlen as an independent contractor. The Copeland

Act charge alleged the latter contracts as Dahlen's

“contract of employment"; therefore, Slater is

clearly on point. How2ver, Slater does not actually

turn on the employee or independent contractor dis-

tinction per $e» but rather, on the determination

that legislative history showed the Act confined

to policing of minimum wage scales and not con-

cerned with, inter alia, persons such as indepen-

dent contractors.

8. We further note that 12 U.S.C. § 1749a, (Cont.)

ee re ene

oe ere

-23-

II

In Finch v. United States, U.S.

__, 97 S.Ct. 2909 (1977), the Court held

that, after jeopardy attached, a dismissal

based on the determination that the defen-

dant cannot be prosecuted for the crime

charged concludes the prosecution and re-

trial is barred by the Double Jeopardy

Clause.

Here, the government was in effect

granted review of the District Court's

dismissal of the Copeland Act charge.”

In a holding decisive of the outcome of

the appeal, Judge Choy found that the

trial court's failure to explain the

dismissal of the Copeland Act was error,

prejudicial to the defense of the fraud

8 (Cont.) which applies to the College Housing

Act involved in this case, extends such wage

scale protection only to “laborers and mechanics

employed by contractors or subcontractors."

12 U.S.C. § 1749a(f).

9. The government made no attempt to appeal under

18 U.S.C. § 3731 and, in its brief below, conceded

its inability to do so (Govt.Br., p. 49).

-24-

and misstatement charges which were sub-

mitted to the jury;?° but Judge Choy held

that this error, which prejudiced peti-

tioners, did not require a reversal of

these convictions because the dismissal

of the Copeland Act charge was itself an

error favoring petitioners:

"The double jeopardy clause and

18 U.S.C. § 3731 (appeal by Uni-

ted States) may well forbid the

Government from appealing the dis-

missal of the count for purposes

of reinstating the indictment as

to it. * * * We are free, however,

to examine the propriety of the

dismissal to determine whether,

instead of being prejudiced by an

10. Judge Choy indicated that two distinct errors

were each sufficient to require a new trial if the

Copeland Act were properly dismissed: (1) the in-

adequate explanation to the jury of the dismissed

charge, to enable the jury to distinguish the sig-

nificance of testimony concerning a "Copeland Act"

and to properly reach an intelligent verdict on

remaining charges; and (2) the admission of Bur-

nett's hearsay statement, without a limiting

instruction.

No point in the case, justifying affirmance,

won the concurrence of two judges. However, while

rejecting the rationales proposed by his colleagues,

Judges Choy and Duniway each voted to affirm, and

each issued an opinion in support of doing so.

Under new Ninth Circuit Rule 21, an opinion autho-

rized for publication, as here, may be cited as

precedent.

@25@

alleged improper omission from

the jury charge, the defendants

in fact received more generous

treatment than they deserved by

virtue of the dismissal and, there-

fore, now have no cause to com-

plain that an improper dismissal

was not clearly explained. Cf.

U.S. v. Lemon, 550 F.2d 467,469-70

(9th Cir.1977); U.S. v. King, 552

F.2d 833,849 (9th Cir.1976) cert.

denied, 430.U.S. 966 * * * (1977)."

563 F.2d at 954.

The two cases cited as analogous by

Judge Choy do not support his stated pro-

position of law that an appellate court

can for any purpose review the dismissal

Or acquittal of a criminal charge. They

deal with invited error or waiver doctrines

not involving dismissal of a charge. Here,

the prejudicial errors were not a fore-

seeable component of the request to dis-

miss the Copeland Act charge; and that

conclusion follows from Judge Choy's ini-

tial characterization of the jury instruc-

tion relative to the dismissal as erro-

neously incomplete. 563 F.2d at 954,24

11. Judge Choy's determination turns on the (Cont.)

-26-

Judge Choy agreed with Judge Ely

that the unexplained Copeland Act material

and the argument based on that evidence

prejudiced the jury's consideration of

remaining charges. In effect, Judge Choy

held it to be harmless error that the jury

was permitted to convict petitioners on

the mis-impression that it was acting on

a Copeland Act charge, because "a properly

11 (Cont.) impression that petitioners won an ad-

vantage, and therefore should be estopped to complain

of disadvantage which fortuitously arose because of

the trial court's erroneous handling of the Copeland

Act dismissal. Yet the prosecution had a one-sided

advantage in using the Copeland Act evidence while

petitioners’ counsel was restrained from counter-

ing its impact. Therefore, the trial court's tardy

grant of petitioners’ motion, coupled with errone-

ous instructions upon it, was fatal to the defense--

not advantageous to it in any way. Had the Cope-

land Act remained in the case, the defense could

be unrestrained in distinguishing proof upon it

from other charges and would have had notice of

the necessity of entering a defense on the Cope-

land Act charge during the presentation of its case.

Had the court granted the motion before trial,

when the defense first moved for dismissal, the

government could have appealed or not appealed.

If the latter, surely it could not later have ar-

gued that the charge was improperly dismissed.

If it had appealed and won, the defense would have

had the benefit of full notice of the charges and a

right to adequate instruction of the jury, allowing

the jury to judge each charge separately.

o27<

instructed jury" might have found guilt

on the Copeland Act charge. 563 F.2d at

954. Therefore, petitioners were, after

all, subjected to criminal penalties based

on the reviewing court's determination

of Copeland Act liability.

The writ should be granted to deter-

mine whether the Double Jeopardy Clause

forecloses appeal of such a dismissal

order for any purpose to impose or affirm

criminal penalties. That question is now

the primary unanswered component of the

body of recent Double Jeopardy Clause cases

developed in Serfass v. United States, 420

U.S. 377 (1975); United States v. Wilson,

420 U.S. 332 (1975); Finch v. United States,

supra; and related cases.

Conflict in principle with the Court's

previous decisions accentuates the desir-

ability of review. The fundamental cases

construing the Double Jeopardy Clause es-

tablish that "the protection is not, * * *

-28-

against the peril of a second punish-

ment, but against being again tried for

the same offense." United States v. Ball,

163 U.S. 662 (1896). Review of the merits of

an acquittal, even in an appellate court,

constitutes double jeopardy. Kepner v.

United States, 195 U.S. 100 (1903). The

Finch case equates a dismissal after jeo-

pardy has attached with acquittal, if the

dismissal is based on the determination

that the defendant may not be convicted

for the offense charged,

This case is analogous to Price v.

Georgia, 398 U.S. 330 (1970), which teaches

that merely the renewed accusation of crime

offends the Constitution, where it may

adversely affect the defendant. In Price,

the defendant on a murder charge, con-

victed of manslaughter, was reindicted

for first degree murder upon remand after

reversal of his conviction. The second

jury also failed to convict of first

- AAT Im TO Om tae par ee em

ee ~

-29-

degree murder. This Court found the mere

possible influence of that charge upon a

remaining manslaughter charge constituted

a forbidden burden and was not merely

harmless error. 398 U.S. at 331.

The Court should grant the writ

and hold that the same principles apply

to any judicial review of the merits of

a dismissal order which constitutes a bar

for double jeopardy purposes.

The result here implicates other

constitutional principles. No action of

petitioners waived jury trial on the

factual allegations supporting the dismissed

charge.!2 Nevertheless, Judge Choy holds

that possible guilt, of a charge which

can now never be determined on its merits,

justifies a faulty conviction on other,

distinct charges. To justify criminal

sanctions based on an accusation untested

12. The motion for dismissal on legal grounds does

not in itself waive a demand for jury trial on fac-

tual issues. Serfass v. U.S., supra, at 389.

-30-

by a full trial, and which petitioners

had no opportunity to refute, violates

the assurances of the Fifth and Sixth

Amendments as to that charge. Further-

more, the result in the court below may

be viewed as a relaxation of the pre-

sumption of innocence, reiterated by this

Court in Estelle v. Williams, 425

U.S. 501, 503-505 (1976). If the

petitioners are in fact presumed innocent

of Copeland Act charges until a jury finds

otherwise, the determination that the

charge might have been properly submitted

to the jury would hardly seem adequate

to excuse an improperly obtained con-

viction on charges that were submitted

to the jury.

As a separate consideration, the

Court should grant the writ in the exer-

cise of its supervisory power. The out-

come of the case, based on Judge Choy's

rationale, encourages prosecutors to dis-

|

ee eee

-3l-

regard the trial court's authority in

hopes of securing review and retrospec-

tive sanction for continued comment

on a dismissed charge. Accordingly,

Judge Ely criticized the Choy opinion

as “contrary to the most basic tradi-

tional concept of an orderly trial."

563 F.2d at 955, n. l.

III

This Court is asked to determine

whether a trial court must inform the

jury about the dismissal of a charge ini-

tially read to the jury and about which

there has been important testimony. The

holding of the Ninth Circuit, per Judge

Duniway, is that the trial court need not

do so. The issue merits the Court's

attention because it presents a recurrent

problem in trial courts, with constitutional

overtones; yet the case law is in confu-

sion on articulated standards. The result

here is counter to recognition by other

=32<

Circuits of a duty to protect the ver-

dict from the influence of a charge

which should not have been brought.

Confusion in the jury's apprehen-

sion of the charges submitted to it com-

promises constitutional rights of due

process. If the jury is uncertain of the

grounds upon which it may convict, then

the defendant must be uncertain of the

charge against which he must defend. The

defendant may be convicted of a crime not

charged, as Judge Ely felt may well have

happened in this case.}3

13. Judge Skopil instructed the jury as to the

elements of the charges submitted to the jury.

The abstract form of these instructions and the

difficulty of the concepts involved, particularly

in regard to conspiracy and fraud on the govern-

ment (18 U.S.C. § 371), might have left the jury

with insufficient guidance. The charge on con-

spiracy to defraud the government might lead the

jury to convict, based on a belief that the de-

fendants violated the Copeland Act, even had they

followed Judge Skopil's instructions precisely:

"Thus, in order for you to find the

defendants guilty cf Count I of the indictment,

if you find that the defendants formed an agreement

as described, you must then find that the object

of that agreement was at least one of the following:

eee (Cont. )

=33<

The constitutional shoal pre-

sented parallels the problem of joinder

of defendants, where the confusion of

evidence admissible against a co-defendant

brings pressure on the right to a sepa-

rate determination of guilt. Just as

that issue has been addressed by this

Court in, e.g., Bruton v. United States,

391 U.S. 123 (1968), the frequently en-

countered question raised here should

also be resolved.

13 (Cont.) "3. To defraud the Department of

Housing and Urban Development of its right to

have its program for student housing construc-

tion under the College Housing Act of 1950 be

administered, implemented, and operated honestly,

fairly, and free from deceit, trickery, and dis-

honesty." R. 1087.

In accordance with the court's order dis-

missing the Copeland Act kickback charge, al]

allegations referring to “kickbacks” were re-

moved from the indictment given the jury at

the close of the trial (R.925).

However, in argument, the prosecution at

one point suggested an equation between kick-

backs and "deceit" or "trickery" (R.987-988).

Moreover, as Judge Ely observed, continued re-

ference to the Copeland Act after Judge Skopil

stated that he had removed certain matters

from the case suggested that violation of that

Act was still within the issues before the jury.

563 F.2d at 956.

O}jE ELE eS...

-34- -35-

In the Opinion of the Court, argument: that the instruction could

below, Judge Duniway holds that there be construed in such a way as to be appro=

was no error in inetrentions te the priate for the offense charged. The Court

jury because no instructions given by did not agree that the instruction could

, be construed so as to be accurate; how-

the court were in themselves erroneous. .

M 7

563 F.2d a- 909. This limited view of ever, Justice Frankfurter's comment on

the court's responsibility is discordant this argument is pertinent to the present

with this Court's dictum that even correct ss

"A conviction ought not to rest

on an equivocal direction to the

jury on a basic issue. Anda

charge deemed erroneous by three

circuit judges of long exper-

ience and who have a sturdy view

of criminal justice is certainly

not better than equivocal.”

326 U.S. at 613.

but "equivocal" instructions are insuf-

ficient on important points of law.

Bollenbach v. United States, 326 U.S. 607,

613 (1947). In Bollenbach, the Court of

Appeals had held the trial court erred in

charging the jury that possession of sto- This Court should reaffirm this position

len bonds raised a presumption of trans- and hold that a charge, which two circuit

port of the bonds interstate; but the judges held misleadingly incomplete, was

" s " _—

Court of Appeals affirmed on the theory not better than equivocal" and was in

that the jury must have found that the sufficient to protect basic rights.

defendant was at least an accessory after As a further reason for granting

the fact. Having rejected that justifi- the writ, the Court may consider the con-

cation as obviously inadequate, the Supreme flict in principle between the holding

Court addressed the government's second here and measures other Circuits have

-36-

held necessary to guard against the pre-

judicial influence of a dismissed charge.

In United States v. Wolfson, 437 F.2d 862

(2d Cir.1970), the Second Circuit found

it reversible error that a jury was not,

until the end of trial, given instruction

against considering charges which were

dismissed at the close of the government's

case and which involved proof of legal

transactions with “sinister implications."

Similarly, in United States v. Jackson,

418 F.2d 786 (6th Cir.1969), the Sixth

Circuit held that reversal was necessary

where there was a possibility the trial

court's instructions were insufficient to

prevent jury consideration of inadmissible

evidence on a dismissed charge.

In United States v. Dreyfus, 528 F.2d

1064 (5th Cir.1976), the Fifth Circuit

held as a matter of law that the splitting

of architectural fees with a developer of

HUD financed projects does not violate

i

=37~-

18 U.S.C. § 1010 as misrepresentation of

architectural costs. Because of tne

prejudicial implications of testimony on

that charge, the Court of Appeals reversed

the conviction of other charges which were

tried at the same time. The court empha-

sized the particular danger of unfair pre-

judice because the crucial issue in the

case was illegal purpose, and the trial

involved “complex business transactions

and subtle points of law." The court

stated:

"When an appellate court rules

that certain counts should never

have been put before a jury, it

must not be unmindful of the po-

tential for confusion in the minds

of the jurors." 528 F.2d at 1071-

1072.

In Jackson and Wolfson, the jury

was given specific instruction to dis-

regard the dismissed charge and evidence

on it; yet, because of the possibility

of prejudice, even such a charge was

held insufficient. Here, petitioners

-38-

were denied even an instruction intel-

ligibly communicating that petitioners

were not guilty of violating the Copeland

Act. In Jackson, Wolfson and Dreyfus,

the courts stated that evidence on the

deleted charges was inadmissible on the

remaining charges. Here, Judge Duniway

holds that no separable piece of evi-

dence could be determined as utterly

irrelevant to the remaining charges; how-

ever, this does not confront the funda-

mental criticism lodged by Judge Ely:

"It is entirely conceivable * * * that

the conviction eventually rested upon an

offense no longer charged." 563 F.2d

at 956.14 The result here is in marked

contrast, if not direct conflict, with

the results reached by the Second, Fifth

14. Moreover, as Judge Choy expressly noted,

at least the Burnett testimony containing an

accusation of illegality under the Copeland

Act manifestly would have demanded a limiting

instruction but for the inclusion of the Cope-

land Act charge. 563 F.2d at 954, n. 7.

-39-

and Sixth Circuits.

CONCLUSION

For the reasons stated, this writ

should be granted and the judgment of

the Court of Appeals for the Ninth Cir-

cuit should be reversed.

Respectfully submitted,

NORMAN SEPENUK

LESLIE M. ROBERTS

Kell, Alterman & Runstein

Vad: h. Pele

Leslie M. Roberts

Of Attorneys for Peti-

tioners

aT ef eee a ae ee ee ee

-AN-

APPENDIX

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv

PHILIP A. MCLENNAN AND FRED H.

BENDER, Defendants-Appellants.

No. 76-2365

APPENDIX Oct. 19, 1977

[563 F.2d 943 (1977)]

Appeal from the United States District

Court for the District of Oregon

Before: DUNIWAY, ELY and CHOY,

Circuit Judges

DUNIWAY, Circuit Judge:

Defendants McLennan and Bender

appeal from judgments convicting them of

(1) making false statements in a matter

within the jurisdiction of a department

or agency of the United States, (2) making

false statements for the purpose of influ-

encing the action of the Department of

Housing and Urban Development (HUD), and

-4l-

(3) conspiring to make such false state-

ments and to defraud the United States,

all in violation of 18 U.S.C. §§ 371,

1001, and 1010 (1970). We affirm.

FACTS

During the years 1971 through 1975,

defendants, through two non-profit cor-

porations, applied for loans from HUD

under the College Housing Act of 1950,

12 U.S.C. §§ 1749 et seg. (1970), for the

purpose of designing and constructing

seven college dormitory facilities in four

states. The Act provided for loans cover-

ing “project costs" incurred by a bor-

rower and concurred in by HUD and prohi-

bited profit-making by a borrower. Archi-

tectural costs were limited to those

actually "necessary" for the construction

of the particular project being funded.

From October, 1971, to April, 1975,

the defendants received a total of

$961,282 from HUD, which they repeatedly

-42-

represented in loan applications, through

owner-architect agreements, in fund requi-

sitions and in final project costs de-

certifications, as being paid or payable

to the project architect, Charles Dahlen.

In reality, Dahlen was not an independent

contractor as HUD was led to believe,

but rather a salaried employee of the

defendants. After paying Dahlen's salary

and expenses, the defendants divided the

remainder of the money received from HUD

for architect's fees, roughly $600,000,

between them. These criminal charges

resulted from their false statements that

this money was to pay or was paid to the

architect. Defendants' primary defense

was that they acted in good faith, thus

lacking the specific intent required to

violate the applicable statutes. As part

of that theory, they claimed that at all

times they had acted on the advice of

their counsel and accountants.

-43-

On this appeal, the defendants

raised two sone (1) whether certain

testimony was inadmissible hearsay and

irrelevant; and (2) whether the district

court erred in its instruction to the

jury concerning the dismissal of part of

the indictment.

I. The Alleged Hearsay Statement.

Defendants challenge the admission

of certain testimony of their former attor-

ney on the grounds that it was (1) inad-

2/

missible hearsay, and (2) irrelevant.

The defendants’ former attorney,

Burnett, testified about the advice which

he had given them. The statement made by

Burnett, which is now being challenged,

was elicited in the following exchange on

1. Three issues were originally raised in this

appeal. However, at oral argument on January 12,

1977, the defendants’ attorney “waived for all

purposes" the issue challenging the instruction

given on "motive" and "intent." Therefore, we

will only deal with the two remaining issues.

2. Defendants waived the attorney-client pri-

vilege to allow their former attorney to testify.

|

-44-

direct examination by the government.

Q. Now, were you aware, in 1971,

that funds were being paid from

an account in the name of Charles

Dahlen to Mr. Bender and Mr.

McLennan?

A. No.

Q. Were you aware of that in 1972?

A. No.

Q. Did you become aware of that

in 1973?

A. In late 1973, yes.

x eke

Q. When you did learn from Mr.

Bender about these transfers, do

you specifically recall what it

was that you said to him?

A. Yes.

Q. And what was it?

A. "For Christ's sake, I told you

that was illegal." (Reporter's

Transcript 407, 409)

Defendants claimed that their good

faith reliance upon the advice of counsel

negated the fraudulent intent that was

an essential element of the charge. Ad-

vice of counsel is no defense unless the

-45-

defendant gave his attorney all of the

facts, and unless counsel specifically

advised the course of conduct taken by

the defendant. Bisno v. United States,

cert. denied, 1962, 370 U.S. 952.

Under these rules, the questions

and answers about Burnett's awareness

of the facts in 1971, 1972, and 1973

were clearly relevant. Moreover, because

Burnett was speaking of what he knew,

and when, his answers were not hearsay.

Defendants do not disagree.

They concentrate their fire on the

last answer quoted above. It was clearly

relevant and damaging to their defense of

good faith reliance upon their attorney's

advice. The issue is whether it was ad-

missible. Judge Skopil in his order deny-

ing the defendants’ motion for a new trial

concluded that the statement was not hear-

say because it was offered to prove some-

-46-

thing other than the truth of what was

said, Fed. R. Evid. 80l(c), and there-

es

fore was admissible. He was right.

In late 1973, defendants' auditors

raised questions about what defendants |

had done and were doing with the moneys

that, according to defendants' certifi-

cations to HUD, were to go to the archi-

tect. One of the defendants thereupon

called in Burnett, and the incident that

is quoted resulted. At that time, moneys

were still to be received from HUD, and

thereafter the defendants again certi-

fied to HUD that a named percentage of

the moneys claimed were to go to the archi-

tect. Two of the counts in the indict-

ment, Counts VII and VIII, relate to those

false certifications.

The exclamation was not a mere

assertion by the attorney that he had

told the defendants something in the

past. In the circumstances in which it

-47-

was made, the attorney having been called

in for advice, and one of the defendants

having just told him what they were doing,

the statement would clearly tell the

defendants: "I'm telling you now that

is illegal," or so a jury could find.

The reference to the previous advice,

and the attorney's obvious surprise and

dismay strongly reinforce his opinion,

making his statement even stronger than

if he had merely said, "That is illegal."

The statement was relevant as present

notice; it was not merely an assertion

of past notice to the defendants.

Moreover, the statement was not

offered or admitted to prove the truth

of what Burnett said--that defendants'

actions were illegal or that in the past

he had told them "That is illegal"--but

simply to show that the statement con-

cerning illegality had been made. When

the defense is advice of counsel, the

-48-

advice given, whether correct or not,

and whether recitals in it are true or

not, is always admissible. Usually

the defense of advice of counsel is raised

where the conduct involved is illegal.

Thus, almost by definition the advice

relied upon will have been erroneous but

given and relied upon in good faith. The

words spoken are the advice given. Ad-

vice is customarily given in words, and

when advice is the question, the words

which constitute the advice are classic

examples of verbal acts, admissible be-

cause they were spoken, whether true or

false. Such verbal acts are not hearsay.

They come in to bring home notice to the

defendant in a case like this. United

States v. Kutas, 9 Cir., 1976, 542 F.2d

527, 528. See also Phillips v. United

States, 9 Cir., 1965, 356 F.2d 297, 301,

cert. denied, sub nom, Walker v. United

States, 1966, 384 U.S. 952. Thus, if

owes

-49-

the attorney had added: "I told them that

I had discussed this with several attor-

neys expert in these matters, and that

they all agreed with me that that is il-

legal," that too would be admissible,

whether or not the witness' statement of

what he had done and what he had been

told was true. It would still be a state-

ment by the attorney of the advice he had

given.

United States v. Freeman, 9 Cir.,

1975, 519 F.2d 67, also supports this

conclusion. In that case, Freeman was

appealing her conviction for “bail

jumping" which was based upon her failure

to appear in district court on a speci-

fic date. A major issue in the district

court was whether she knew that she had

been ordered to appear on that date. Her

attorney was asked, under oath, whether

he had previously stated to the court

that he had told his client when she was

-50-

scheduled to appear. We said:

Counsel was not asked whether he had

advised appellant of the order that

she appear on May 20th; instead, he

was asked whether, on that date, he

had stated to the court that he had

done so. An affirmative response to

the former question, insofar as it

constituted evidence of utterances

and writing offered to show the

effect on the hearer or reader,

would not have been subject to

attack as hearsay. See, e.g.,

McCormick, Evidence § 249 ed.

1972)

519 F.2d at 69.

In Freeman, the statement was not

elicited to show its effect upon the

court but rather to show that Freeman

knew the date of the court appearance.

The statement was relevant only if it

showed that the attorney did tell Free-

man, his client, when to appear. At

issue was the very truth of the matter

asserted. Here, the statement was of-

fered to show its effect upon the defen-

dants. Here, it is the fact that the

statement was made, not its truth, that

is relevant and material. That is pre-

ED A el tac seca RM at Os ity Me

=@Sl-

cisely the distinction recognized by

the court in Freeman, supra. Our case is

like the case that would have been be-

fore the court in Freeman if in that case

"[c]lounsel was .. . asked whether he had

advised appellant of the order that she

appear on May 20th. .. . An affirmative

response to [that] question . .. would

not have been subject to attach as hear-

say."

Moreover, the fact that the state-

ment was made was also compelling evi-

dence that before November, 1973, Bur-

nett was not aware that the defendants

had been personally appropriating the

architect's fees. It shows the attor-

ney's lack of knowledge about the defen-

dants' activities. From this the jury

could conclude that the defendants had

not fully informed their lawyer of all

the material facts when they were soli-

citing his advice, thus undermining their

@$2-

defense of reliance on the advice of

counsel. Williamson v. United States,

1908, 207 U.S. 425, 453; Bisno, supra,

at 720. Because Burnett's testimony was

offered to show both defendants' and

Burnett's knowledge, it was not hear-

3/

say, and its admission was proper.

The defendants also argue that

even if the statement was admissible to

show intent, the court should have in-

structed the jury that it was not to be

considered for the truth of the matter

stated. Defense counsel, although

objecting to the answer and moving for

a new trial, never asked that the court

3. Burnett had advised McLennan and. Bender how

to avoid violating the Copeland Act (a charge

which was dismissed from the case, see, infra,

Part II). His testimony, and in particular, the

statement being challenged here, was referring

to his advice regarding that Act. Because the

evidence was not being admitted to prove that

McLennan and Bender were, indeed, violating

the Copeland Act, but merely to show what ad-

vice their attorney had given them, the dismis-

sal of the Copeland Act charge did not affect

the admissibility of that statement.

eB eee el RE BEN Ge tet ait ty Sa ee

aie a a et a? ne ee

-53-

give such a limiting instruction. Fed.

R. Evid. 105. He argues now that such

a request would have been "futile" be-

cause the trial court had ruled that

the statement was not hearsay. We fail

to see the "futility" of such a motion.

The court had said nothing about a limit-

ing instruction because he had not been

asked to give one. Nothing prevented

counsel from making such a request. In

the usual case, the court is not required

to give such an instruction sua sponte.

Benson v. United States, 9 Cir., 1968,

402 F.2d 576, 581. The law places upon

counsel the duty to ask for it. Sica v.

United States, 9 Cir.1963, 325 F.2d 83l,

836, cert. denied, 1964, 376 U.S. 952.

See United States v. Campbell, 9 Cir.,

1972, 466 F.2d 529, 531, cert. denied,

1972, 409 U.S. 1062; Petley v. United

States, 9 Cir., 1970, 427 F.2d 1101,

1106, cert. denied, 1970, 400 U.S. 827.

-54-

In this case, Burnett was sub-

ject to cross-examination and, indeed,

at the end of his testimony specifically

asked for and received permission to

explain the context in which the state-

ment was made. (Reporter's Transcript

at 430-432.) While a limiting instruc-

tion could have been given if requested,

we cannot find that its omission was

plain error. F. R. Crim. P. 52(b).

Finally, the trial judge had broad

discretion to determine relevance.

United States v. Salazar-Gaeta, 9 Cir.,

1971, 447 F.2d 468. There was no abuse

of that discretion in this case. The

statement was clearly relevant.

It is suggested that the witness'

answer could be admitted as an excited

utterance. This seems doubtful on the

record before us. According to McCormick,

there are two conditions precedent to

the admission of a hearsay statement un-

owe wPike

shred. Hoe

-55-

der the "excited utterance" exception:

"First, there must be some occurrence

or event sufficiently startling to

render normal reflective thought pro-

cesses inoperative. Second, the state-

ment of the declarant must have been

a spontaneous reaction to the occurrence

or event and not the result of reflective

thought." McCormick on Evidence § 297,

2d Ed. p. 704. Thus, when a hearsay

statement is offered under this excep-

tion, the trial court must make a pre-

liminary factual determination that the

declarant was so excited or distraught

at the moment of utterance that he did

not reflect (or have an opportunity to

reflect) on what he was saying. Judge

Skopil made no such determination here.

The record is hardly sufficient for us

to do so. Moreover, as McCormick notes,

"Most courts .. . would probably be

extremely skeptical regarding whether

-56-

one merely informed of an event could

become so excited upon hearing of it

as to lose the power of reflective

thought." Id. at p. 705.

It is also suggested that Free-

man was wrongly decided, because self-

quoting is not hearsay. But this panel

cannot overrule Freeman. Only the court

in banc can do that. This case is not

a good vehicle for that purpose. Freeman

itself recognizes a distinction under

which, as has been shown, the testimony

here in question was admissible.

II. Alleged Error in Jury Instructions.

Count I of the indictment original-

ly contained a portion alleging a vio-

lation of the Copeland Act, 18 U.S.C.

4/

§ 874 (1970). The indictment did not

4. 18 U.S.C. § 874 (1970) states:

Whoever, by force, intimidation, or threat

of procuring dismissal from employment, or by

any other manner whatsoever induces any person

employed in the construction, prosecution, com-

pletion or repair of any public building, public

work, or building or work financed in whole (Cont. )

ee ee ee ae

iti hee Stn nr in sd NEA I Nis atl da te NE ME WR me Nat ah ld

-57<-

mention the Copeland Act by name. It

merely cited § 874. The defense moved

to dismiss that part on the ground that

the Copeland Act did not apply to the

facts alleged by the government. Ini-

tially, the trial judge denied the mo-

tion and thus, during the presentation

of the government's case, there were

some references by witnesses and counsel

to the Copeland Act. In addition, the

indictment which was read to the jury at

the beginning of the trial also con-

tained the Copeland Act charge, although

the name of the Act was not ee

4. (Cont.) or in part by loans or grants from

the United States, to give any part of the com-

pensation to which he is entitled under his con-

tract of employment, shall be fined not more than

$5,000 or imprisoned not more than five years,

or both."

5. The part of the original indictment which

referred to the provisions of the Copeland Act

stated:

"c, The defendants, by deception and by

other means and in other manners, did induce

Charles R. Dahlen, a person employed in the con-

struction, prosecution, completion or repair of

building or work financed in whole or in (Cont.)

-58-

At the close of the government's case,

defense counsel again moved to dismiss

that portion of the case, and at that

time, the motion was granted, and the

trial judge dismissed that portion of

the conspiracy count (Count I 4 2. c.)

which contained the Copeland Act charge.

At defense counsel's request, the

judge stated that he would inform the

jury about the dismissal of that part

of the indictment, and he warned defense

counsel that the dismissal was not to

be used as a weapon in closing argument.

Immediately before final arguments, the

court instructed the jury that it had

"taken a portion of Count I away from

the jury's consideration... purely

5. (Cont.) part by loans or grants from the

United States, namely student housing construc-

tion under the College Housing Act of 1950, to

give up part of the compensation to which he was

entitled under his contract of employment as set

forth in Owner-Architect Agreements; in viola-

tion of Title 18, United States Code, Sectio

874," (Clerk's Transcript at 3-4) ;

— ee OR ee ee ee ee

a

Bitte ln ce As S es EA AS te Be Me

-59-

as a matter of law, and [it] has

nothing to do with the factual deter-

mination which you are to make on the

other counts" (Reporter's Transcript at

937-938). No mention was made by the

court that the dismissed sawesil ot the

indictment concerned the Copeland Act,

or that it referred to "kickbacks."

McLennan and Bender contend that

the court's explanation of the dismis-

sal of those charges was inadequate

because it did not inform the jury of

the substance of the deleted charge to

help the jury sift out the irrelevant

evidence. The argument is a red herring.

The fact is that all of the evidence

which was admitted was relevant under

the charges that remained in the case.

There was no evidence that was rele-

vant only to the Copeland Act charge.

Indeed, defense counsel at oral argu-

ment was unable to point to any evi-

-60-

dence presented which was relevant

solely to the Copeland Act allegation.

Thus the type of instructions to the

jury that defendants now mention were

unnecessary. Defendants do not claim

either (a) that the court gave any

instructions that would be appropriate

Only to the Copeland Act, thus per-

mitting the jury to convict under that

Act, or (b) that any of the instruc-

tions that the court did give, relating

©o the charges that remained before the

jury, were errnoeous. How, then,

could the defendants be prejudiced?

Defense counsel argues that the

problem was not irrelevant evidence

but rather that references to the

"Copeland Act" implied to the jury

that an ongoing relationship of this

type between the developers and the

architect was per se illegal. The

thrust of this argument takes us back

re ee Oe eee eee See edt ee ee ee ed

i

-6l-

to Burnett's statement discussed in

the first part of this opinion. De-

fense counsel is contending that the

jury considered the statement as true

and as an indication that the defen-

dants' actions were illegal under the

Copeland Act. He also argues that the

court failed to explain to the jury that

(1) the Copeland Act was no longer a

part of the case and (2) because the

trial court had determined that the Act

did not apply to this type of relation-

ship, the defendants' activities did

not violate it. That omitted explana-

tion, counsel argues, left the unwarranted

and prejudicial implication of illegali-

ty before the jury. This, too, is a

red herring.

The prosecutor's opening argu-

ment covers 50 pages of the transcript.

Never once did he argue the substantive

offense proscribed by the Copeland Act.

-62-

Never once did he argue that what de-

fendants did violated the Copeland Act.

His entire argument was directed to the

remaining charges--false statements to

the government that enabled the defen-

dants to get from the government over

$600,000 to which they were not entitled.

The Copeland Act deals with "kickbacks"

and would apply only if the defendants

had required the architect to pay to

them money that he had received from

the government. The prosecutor never

argued that that is what happened. The

court gave no instructions on that

subject.

In opening his argument, the pro-

secutor mentioned the Copeland Act only

once, in reference to attorney Bur-

nett's testimony that he told the defen-

dants that an arrangement whereby the

architect would be on salary, doing the

work for less money than they told the

eS

-63-

government it cost, couldn't work and

would be illegal because of the Copeland

Act. Defense counsel did not object

then or at any time. The argument was

legitimate because Burnett did mention

the Copeland Act, and the defendants

went ahead in spite of his advice. But

the prosecutor did not suggest that

defendants could be convicted under the

Copeland Act.

In his closing argument, defense

counsel mentioned the Copeland Act twice.

Once, he referred to a contract that was

in evidence, and here is what he said:

Well, ladies and gentlemen, I

would, of course, suggest to you

that you do read it and I would

like to put this agreement in

context, too. This agreement

was drawn by Mr. Burnett. It

was drawn, in part, to avoid Cope-

land Act problems and, inciden-

tally, ladies and gentlemen, the

Copeland Act is no longer part of

the case. That is one of the

charges that are no longer before

you. It is not a part of this

case, but it was drawn in part

to avoid the so-called Copeland

@64<

Act problem, anti-kickback

problem, so to speak. [R. T.

998}

The second time what he said, referring

to Burnett's testimony, was this:

I said to him:

xe

Q. Now, in setting up these en-

tities, I take it you were con-

cerned with making sure that the

defendants didn't do anything

improper?

A. Certainly.

Q. Or run afoul of the law?

A. Certainly.

Q. Especially the so-called

Copeland Act?

And as I mentioned, that Copeland

Act is not part of this case. And

there was a problem with the Cope-

land Act and he was trying to im-

plement the total developmental

entity approach just for this

dream of Mr. McLennan's. ([R. T.

1046-47]

Thereafter, the Copeland Act was not men-

tioned again by anyone, including the

prosecutor in his closing argument.

As the case was finally submitted

=65-

to the jury, it was based entirely upon

these contentions: The defendants em-

ployed an architect, Dahlen, upon a

monthly salary plus expenses, which to-

gether totalled approximately $300,000.

However, on various documents submitted

to HUD, they repeatedly represented that

the architect was entitled to either a

percentage of cost or named sums of

money totalling approximately $900,000.

They covered up the fraud by setting up

a "revenue" account in Dahlen's name,

on which they could draw but on which

he had no right to draw, and into which

they put the moneys that they had re-

ceived for architect's costs. From

this account, they paid to the architect

his $300,000, and they paid to then-

selves $600,000. It was a sophisticated

and highly successful fraud. And they

concealed it from their attorney as

well as from the government. The case

-66-

was proved to the hilt. It was not a

close case.

It is not correct to say that most

of the government's evidence related to

the Copeland Act charge. It is not

correct to say that that Act provided

the strongest single ground for the charge

that defendants' arrangement with the

architect was illegal, and that conceal-

ing it was false or misleading. It is

not correct to say that Burnett's dis-

mayed statement was the strongest evi-

dence of illegality and of defendants'

knowledge. In fact, the Copeland Act

charge was a minor part of the case.

The Act is referred to only in the con-

spiracy count, Count I, and then only

in the portion quoted in footnote 5,

Supra, a subparagraph of 7 lines in a

count of 14 pages that stated in de-

tail just what the defendants had done.

None of the remaining counts refers to

-67<

the Copeland Act. Counts I through V

refer to 18 U.S.C. § 1010--false state-

ments to HUD. Counts VII and VIII refer

to 18 U.S.C. § 1001, the genecel false

statement section.

It is apparent that the Copeland

Act language in the indictment was a

protective charge, one intended to

forestall a defense that the deposit of

money in the Dahlen revenue account was

in fact a payment to Dahlen, who could

then do with it as he pleased, so that

payments to defendants from that account

were by Dahlen to them, instead of a

coverup for their simply keeping the

money. The evidence, however, is that

Dahlen never got the money in the first

place, although the defendants repre-

sented to the government that he was

to get it. That is the gist of the

charge; that is the theme of the indict-

ment; that was the theme of the prose-

dismissal of the Copeland Act reference

in Count I. Defense counsel never

suggested any particular or specific

language on the subject. Before the

case was argued to the jury, the court

instructed them as follows:

There is one matter that I do

desire to take up with you prior

to the time that they start their

argument, and as a matter of law,

the Court has taken certain por-

tions of the indictment away from

the jury's consideration and those

matters will not be considered by

you.

As you recall, this was an eight-

count indictment. It was read to

you at the start. Mrs. Hui read

it to you. I, as a matter of law,

have taken Count VIII away from

the jury's consideration. That is

a matter of law that the Court had

to determine. It's no concern to

you, as far as the facts are con-

cerned, with reference to the re-

-68-

cutor's argument; that is what this

case is really about.

The court was never asked by the

defense to instruct the jury "compre-

hensively" or “in detail" about the

maining counts,

-6§9-

So I wanted to advise you of that

in view of the fact that those

matters are not now before the

jury, you might have wondered why

the attorneys were not talking

about those matters, but they

have been taken away from you,

purely as a matter of law, and

has nothing to do with the factual

determination which you are to

make on the other counts. [R.T.

937-38]

Defense counsel did not object.

When the prosecutor's opening argu-

ment is considered in its entirety, the

one reference to the Copeland Act was

properly used to support the general

theory that the defendants did not, in

good faith, follow their attorney's ad-

vice, and it was a minor part of the

argument. As I have already indicated,

the statement was admissible for that

purpose, and the burden of asking for

a limiting instruction which would have

alleviated this "problem," of which coun-

sel now makes so much, rested with the

defense.

=70=

Even assuming that the jury might

have drawn an improper conclusion from

the reference to the Copeland Act, the

problem was eliminated by the trial

court's instructions. Judge Skopil told

the jury only what it must find to con-

vict under the charges remaining in the

indictment. At no point was the jury

told what findings would justify a con-

viction under the Copeland Act. All

that the jurors knew about the applicable

law was what the trial judge clearly and

correctly explained to them. To those

instructions there was no objection. In

addition, a copy of the indictment, with

all references to the dismissed charges

deleted was given to the jury. There

was no objection. There was no possible

prejudice,

Under the circumstances, it is un-

necessary to consider whether the charge

under the Copeland Act was improperly

aFie

dismissed.

Affirmed.

CHOY, Circuit Judge, concurring

specially:

I agree that the convictions of

McLennan and Bender should be affirmed.

I would reach that result, however, for

reasons different from those advanced

by Judge Duniway.

Hearsay

I am unpersuaded by Brother Duni-

way's attempt to distinguish the con-

tolling precedent of United States v.

Freeman, 519 F.2d 67 (9th Cir.1975).

Here, as there, the involved statements

contained the words "I told" (or "stated"

or “advised"), and thus at least that

portion of the declarant-witness' out-

of-court utterance cannot be said to have

been offered merely for the nonhearsay

purpose of proving notice, for previous

notice in this context is the very truth

=72@

of the matter asserted: that the state-

1/

ment was in fact previously uttered.

On the assumption that Freeman was cor-

1. Judge Duniway's misreading of Freeman may

stem from the focus of its attention in that

opinion. He quotes the following language:

Counsel was not asked whether he had ad-

vised appellant of the order that she appear on

May 20th; instead, he was asked whether, on

that date, he had stated to the court that he

had done so. An affirmative response to the for-

mer question, insofar as it constituted evidence

of utterances and writings offered to show the

effect on the hearer or reader, would not have

been subject to attack as hearsay. See, e.g.;

McCormick, Evidence § 249 (2d ed. 1972).

519 F.2d at 69. He overlooks, however, the

very next sentence:

But an affirmative response to the latter

inquiry-the response here given-was clearly evi-

dence of out-of-court statements offered to prove

the truth of the matters asserted therein.

Id. (footnote omitted).

It is possible that the result in Freeman

may reflect a desire to limit evidence of a wit-

ness' effort to buttress his statement with

testimony that he had repeated it before. If so,

Whether Ms. Freeman's attorney stated what he did

to the court in the bail-jumping proceeding may

well have been irrelevant, and possibly should

have been excluded on that basis. But that ob-

jection is clearly not one based on hearsay prin-

ciples. The hearsay problem would arise only when,

and if, third parties to whom the declarant had

spoken were called to corroborate his testimony.

=73<

rectly decided, therefore, Burnett's

testimony in the instant case was hear-

say. Even as such, however, I would hold

that it is admissible under the excited

utterance exception, Fed.R.Evid. 803(2).

See United States v. Bell, 351 F.2d 868,

F.2d 947 (1966) (decided prior to the

effective date of the Federal Rules of

Evidence).

More fundamentally, however, upon

reflection I now question the validity

of the holding in Freeman that a declarant-

2/

witness' self-quoting is in fact hearsay. —

Although commentators maintain that, as °

a general principle, under the “orthodox

approach," such self-quotation is techni-

cally hearsay if offered for the truth

of its contents, see 4 J. Weinstein &

2. The Freeman court went even further in that

it apparently found some statements to have been

hearsay by adoption, for the witness’ testimony

in one instance consisted only of the answer "yes"

to the prosecutor's question.

-74-

M. Berger, Weinstein's Evidence 4 801(d)-

(1) [01], at 801-64 to -65 (1975) [here-

after cited as Weinstein] and authori-

ties cited therein, I have found no case

Other than Freeman which so holds, and

Freeman itself cited none. The reason

for this precedential void may be that

characterization of declarant-witness

self-quoting as hearsay--and its resul-

tant exclusion on that basis--usually

may be avoided by offering the state-

ment not to prove the truth of the matter

asserted therein, but rather to prove

notice or knowledge on the part of some-

one alleged to have heard (or read) the

statement. Because of the "I told" com-

ponent of the statements in Freeman,

however, such treatment was unavailable,

and the evidence there was held to be

3/

hearsay. I believe that, if the holding

3. Judge Duniway characterizes Burnett's self-

quote as a "classic exampl[e]" of a verbal act,

@75=

in Freeman was correct on this issue,

it compels the same result here.

I would reject the assumption in

Freeman and do away with its rule that

makes declarant-witness self-quoting

hearsay (1) because it is so rarely en-

countered (possibly only in the context

of "I told" or equivalent statements),

(2) because the problem is so easily

avoidable by a properly framed question

which elicits identical information, and

3. (Cont.) States v. Kutas, 542 F.2d 527, 528

(9th Cir.1976), and Phillips v. United States,

356 F.2d 297, 301 (9th Cir.1965), cert. denied

sub nom. Walker v. United States, 384 U.S. 952

. I have difficulty with this analysis.

The hearsay issues in the cited cases are re-

solved not by the verbal act exception to the

hearsay rule. See Kutas, 542 F.2d at 528 ("[t]Jhe

documents in question were received... for

the jury's consideration in determining whether

one or more of the defendants knew... .").

While application of the verbal act concept is

less than uniform, see generally 4 Weinstein at

801-59 to -60, it is at least questionable whether

the cited authorities render it apposite here.

Moreover, resort to verbal act analysis obscures

the fact that notice is clearly at issue here,

and that the notice exception is unavailable

where the truth of the "I told" component of

which is not, in turn, hearsay, citing United (Cont. ) the statement is the truth of the matter asserted.

=76-

(3) because, in any event, the rule is

4/

without foundation either in logic or

the policy considerations which underlie

the hearsay safeguards, for the declarant-

witness is present at trial, under oath,

subject to cross-examination, and he

5/

affirms the statement as his. See

4. An absurd result obtains: A witness can,

without any possible hearsay objection, relate

what he has seen, yet he cannot relate what his

memory tells him his own mouth said. It is as if

one's eyes' sensory input to the brain is admis-

sible, but testimony as to one's mouth's sensory

input to the brain is forbidden.

5. Such is apparently also the understanding of

the federal Advisory Committee on Proposed Rules

as expressed in a somewhat ambiguous commentary

to Rule 801, which became effective after the

trial in Freeman:

Considerable controversy has attended

the question whether a prior out-of-court state-

ment by a person now available for cross-examina-

tion con erning it, under oath and in the pre-

sence of the trier of fact, should be classed

as hearsay. If the witness admits on the stand

that he made the statement and that it was true

he adopts the statement and there is no hearsay

roblem. The hearsay problem arises when the

tenses on the stand denies having made the state-

ment or admits having made it but denies its truth.

Fed.R.Evid. 801(d)(1), Note (prior statement by

witness)(emphasis added). Later in the same Note,

however, the Committee cuts back on the =

Cont. )

aJ7<

generally McCormick on Evidence § 245

(2d ed. Cleary 1972). I would hold

that, in all cases, declarant-witnesses

self-quoting is not hearsay, or that,

if it is technically hearsay under the

definition of Federal Rule of Evidence

80l(c), it should be admitted pursuant

to the “federal common law" hearsay ex-

ception provisions of Rule 803(24)

5. (Cont.) thrust of the foregoing language, and

it seems to limit the admission of a witness’

prior statement as substantive evidence to the

two contexts of present Rule 801(d)(1)(A) and

(B)--prior inconsistent statements given under

oath, and prior consistent statements offered

to rebut a charge of recent fabrication or im-

proper motive--and not to differentiate between

whether a third party is testifying as to what

the then-present declarant had said or whether

the declarant himself is testifying as to what

he said.

The Note and commentators suggest that the

reluctance to permit the admission of prior out-

of-court statements of a witness notwithstanding

his present availability for cross-examination

under oath grew from a fear that such a rule would

lead to trial by fraudulently prepared deposition

testimony. See, e.g., 4 Weinstein at 801-68 to

-69. Such an apprehension, however, goes more

to condemning the ethics of the federal bar than

to violations of the policies underlying the

hearsay protections. Compare note 1 supra.

-78-

owing to its independent indicia of

reliability and to serve the “interests

of eaten See 4 Weinstein at 803-

250.

The Copeland Act Count

I also cannot agree with Judge

Duniway's conclusion that the failure of

the trial court to instruct the jury in

detail about the dismissal of the Cope-

land Act count was not error. Clearly,

6. Rule 803(24) provides that the following is

not excluded as hearsay:

A statement not specifically covered by

any of the foregoing exceptions but having equi-

valent circumstantial guarantees of trustworthi-

ness, if the court determines that (A) the state-

ment is offered as evidence of a material fact;

(B) the statement is more probative on the point

for which it is offered than any other evidence

which the proponent can procure through reason-

able efforts; and (C) the general purposes of

these rules and the interests of justice will

best be served by admission of the statement

into evidence. However, a statement may not be

admitted under this exception unless the pro-

ponent of it makes known to the adverse party

sufficiently in advance of the trial or hearing

to provide the adverse party with a fair oppor-

tunity to prepare to meet it, his intention to

offer the statement and the particulars of it,

ro ates the name and address of the declar-

ant.

=79-

most of the evidence offered by the

Government related to this count. The

Copeland Act provided the single strong-

est ground upon which the Government

based its contentions that defendants'

architect-developer arrangement was il-

legal and that the failure to disclose it

was "false" or "misleading". Moreover,

as placed before the jury, the "that's

illegal" portion of Burnett's testimony

was the prime piece of evidence of both

the illegality of defendants’ conduct

as well as their knowledge ef

But, once again, I concur in the

7. If the Copeland Act does not apply, I would

hold that the failure of the court below to

limit the admission of Burnett's testimony to

proof of notice of possible illegality--which

failure allowed it to appear that defendant's

own counsel on the involved projects was testi-

fying that defendants' conduct was "illegal"--

was plain error under Federal Rule of Civil

Procedure 52(b). If the Act does apply, however,

it would provide a sufficiently strong basis

for calling the arrangement illegal, and the

failure to give a limiting instruction, though

still error, would not be so egregious that we

should recognize it without a proper contem-

poraneous objection.

-80-

result, for I believe that a properly

instructed jury could find that defen-

dants' architect-developer agreement did

involve a "kickback" in violation of the

Copeland Act and that the trial court,

therefore, was in error in dismissing

the Copeland Act count. The double jeo-

pardy clause and 18 U.S.C. § 3731 (appeal

by United States) may well forbid the

Government from appealing the dismissal

of the count for purposes of reinstating

the indictment as to it. See United

States v. Martin Linen Supply Co., 45

United States v. Morrison, 45 U.S.L.W.

3276 (U.S. Oct. 12, 1976); United States

v. Jenkins, 420 U.S. 358 (1975); United

States v. Wilson, 420 U.S. 332 (1975).

We are free, however, to examine the pro-

priety of the dismissal to determine

whether, instead of being prejudiced by

an alleged improper omission from the

-8l-

jury charge, the defendants in fact

received more generous treatment than

they deserved by virtue of the dismis-

sal and, therefore, now have no cause

to complain that an improper dismissal

was not clearly explained. Cf. United

States v. Lemon, No. 76-1443 at 316-17

(9th Cir. March 8, 1977) (slip opinion);

United States v. King, Nos. 75-2424,

75-2934, at 24 (9th Cir. Dec. 16, 1976)

(slip opinion), cert. denied, 45 U.S.L.W.

3690 (U.S. April 18, 1977).

While it may be true, as the

district court apparently held, that the

legislative history of the Copeland Act

reveals that it was passed in order to

prevent contractors from avoiding those

minimum wage laws which govern federal

construction, see United States v. Car-

bone, 327 U.S. 633, 638-39 (1946) (dis-

cussing in detail the Copeland Act's

legislative history), the words of the

=82<

statute are clear in their generality:

Whoever, by force, intimidation,

or threat of procuring dismissal

from employment, or by any other

manner whatsoever induces any per-

son employed in the construction,

prosecution, completion or repair

of any public building, public work,

or building or work financed in

whole or in part by loans or grants

from the United States, to give

up any part of the compensation

to which he is entitled under his

contract of employment, shall be

fined not more than $5,000 or im-

prisoned not more than five years,

or both.

18 U.S.C. § 874. We must observe the

admonition of the Supreme Court--repeated

recently in Santa Fe Indus., Inc., v.

Green, 45 U.S.L.W. 4317, 4320 (U.S. March

23, 1977), quoting Blue Chip Stamps v.

Manor Drug Stores, 421 U.S. 723, 756

(1975) (Powell, J. concurring) --that

""{t)he starting point in every case in-

volving the construction of a statute is

the language itself.'" On the face of

the Copeland Act, there is no indication

that Congress intended to limit its reach

-83-

to the minimum wage context. Nor is

there any ambiguity which would compel

a resort to the legislative history.

See Ex parte Collett, 337 U.S. 55, 61

(1949); Packard Motor Car Co. v. NLRB,

330 U.S. 485, 492 (1947); United States

v. American Trucking Ass'ns, Inc., 310

U.S. 534, 543 (1940); United States v.

Sabatino, 485 F.2d 540, 544 (2a vas tie

8

cert. denied, 415 U.S. 948 (1974). #I

would, therefore, heed the sardonically

expressed teaching of Mr. Justice Frank-

furter that

this is a case for applying the

canon of construction of the wag

who said, when the legislative

history is doubtful, go to the

statute[, }

Greenwood v. United States, 350 U.S. 366,

374 (1956), quoted in Van Hoomissen v.

8. I am cognizant that, in the criminal context,

ambiguity with respect to a statute's ambit

should be resolved in favor of lenity. Rewis v.

United States, 401 U.S. 808, 812 (1971). I,

however, find no ambiguity in the Copeland Act.

Compare Sabatino, 485 F.2d at 544.

-84-

Xerox Corp., 503 F.2d 1131, 1133 (9th

Cir.1974), and hold that the Copeland

Act count was improperly dismissed.

On these grounds, I would Affirm,

/s/ Herbert L. C. Choy

United States Circuit Judge

ELY, Circuit Judge (dissenting)

I respectfully dissent. The re-

sults reached by my Brothers in their

respective opinions are not acceptable

to me.

HEARSAY

Like Judge Choy, I agree that

Freeman, however ill-considered, is

controlling here. I do not agree,

however, that Burnett's statement was,

in any event, admissible under the

"excited utterance" exception to the

hearsay rule. Fed. R. Evid. 803(2).

In my judgment, the record does not

lead to the firm belief that Burnett

spoke "under the immediate and uncon-

-85-

trollable domination of the senses

- « « e" 6 Wigmore, Evidence § 1747 at

195 (Chadbourn rev. 1976). Accordingly,

I would reverse under the compulsion of

Freeman.

COPELAND ACT

Again, like Judge Choy, I cannot

agree with our Brother Duniway's conclu-

sion that the District Court's failure

to instruct the jury comprehensively in

respect to the dismissal of the Copeland

Act (Act) count of the indictment resulted

in no more than harmless error. Unlike

my Brother Choy, however, I cannot con-

scientiously agree to affirm, even

assuming arguendo, that the District Court

erred in dismissing the Copeland Act count

1/

of the indictment. This is especially

1. Judge Choy insinuates that the offense charged

under the Copeland Act was erroneously dismissed

and that, hence, the appellants are in no posi-

tion to complain about those remarks of the pro-

secutor that were pertinent only to that Act.

As I see it, this approach-~is-not only illogical,

but also it is contrary to the most basic tradi-

-86-

so because of the prosecutor's re-

ferences during his closing argument to

the Copeland Act (R.T. 970-71), to Bur-

nett's statement in respect to the ille-

gality under the Act of the developer-

architect relationship (R.T. 970-71,

973-74, 1063-64), and to illegal kick-

backs (R.T. 987-88). Thus, I submit that

my Brother Duniway's statement that "only

one" possibly prejudicial remark was made

by the prosecutor is inaccurate, as well

as quite lame. Even if we assume that

only one unfair blow was struck, it was

a fatal blow. :

1. (Cont.) tional concept of an orderly trial.

Even if a trial judge issues erroneous rulings.

ethical trial counsel are obliged to abide by

those rulings. The approach taken by my Brother

Choy, if adopted, could lead to intolerable con-

sequences. It would encourage an attorney,

believing that the trial court had erred (e.g.,

in dismissing a charge based upon a specific

statute, as here), to defy the judge by uttering

forbidden comments in the hope that an appellate

court would hold that the trial court's basic

ruling was erroneous and, for that reason, for-

give, or hold harmless, the attorney for conduct

that would otherwise be prejudicial to the

accused and contemptuous of the court.

a87J<

As Judge Choy emphasizes, the

"that's illegal" portion of Burnett's

testimony was the single most damaging

part of the evidence concerning the il-

legality of the appellants' conduct and,

of course, their alleged knowledge there-

of. The district judge, acting properly

within his discretion, had sternly ad-

monished defense counsel not to utilize

the dismissal of the Qenetent Act count

as a “sword” during closing argument.

As the proceedings developed, however,

this was a “sword” that defense coun-

sel sorely needed to defend his clients

against the prosecutor's continued offen-

sive use of Burnett's exclamation that

the developer-architect relationship vio-

lated the Act. Whether or not the pro-

secutor intended only to impress the

jury with the thought that the appellants

had not followed the advice of their

attorney, the pivotal consideration is

-88-

that the jury had no way of knowing

whether the Act mentioned by the pro-

secutor was the basis of the count that

had been dismissed. To me, it is logi-

cal to infer that the prosecutor's re-

ference to the Act during closing argu-

ment, after the trial judge had mentioned

that certain aspects of the indictment

had been dismissed, would lead the jury

to believe that the Copeland Act count

of the indictment remained in force. I

find nothing in the eventual instructions

to the jury to dispel such a notion.

Moreover, I do not consider defense

counsel's two references to the Act (R.T.

998, 1046-47) to be an adequate substi-

tute for proper jury instructions. The

remarks of an advocate do not bind the

jury, but the court's instructions do,

strictly and literally. It is entirely

conceivable, therefore, that the convic-

tion eventually rested upon an offense

-89-

no longer charged.

I cannot say that the prosecutor

spoke with malice, either when he re-

ferred tothe Act, or when he repeatedly

emphasized Burnett's expletive. On the

other hand, I have found no precedent

allowing a prosecutor to comment, during

his summation, on a previously dismissed

count of an indictment. To permit his

doing so, particularly when defense

counsel has been so sternly warned not

to refer to it, seems to me to be

thoroughly wrong. The prosecutor's im-

proper comment on the Act, fortified and

emphasized by subsequent references to

Burnett's inadmissible damaging state-

ment and to the kickbacks, grievously

prejudiced the defendants and, in my

opinion, could not possibly have been

cured by any instruction to the jury.

The appellants, in fairness, should be

tried anew.

-90-

I would reverse.

/s/ Walter Ely

United States Circuit Judge

CERTIFICATE OF SERVICE

I hereby certify that I served the

foregoing Petition for a Writ of Certio-

rari to the Court of Appeals for the Ninth

Circuit on the counsel for respondent by

enclosing a copy thereof in an envelope,

postage prepaid, addressed to:

The Hon. Robert H. Bork

Solicitor General of the

United States

Department of Justice

Washington, D. C. 20530

Mr. Sidney I. Lezak

United States Attorney

P. O. Box 71

Portland, Oregon 97207

and depositing the same in the United

States mails at Portland, Oregon, on

December 28, 1977, and further certify

that all parties required to be served

have been served.

\Vagh:h &

Leslie M. Roberts

Of Attorneys for Petitioners

ve