Reply Brief — Mandel v. En Banc Court of Appeals for the Fourth Circuit

; In THE

Supreme Court of the United States ~

OctToBER TERM, 1979

Nos. 79-1028 anp 79-1029

MARVIN MANDEL, Et At., Petitioners,

Vv.

EN BANC COURT OF APPEALS FOR THE

FOURTH CIRCUIT, et at., Respondents.

MARVIN MANDEL, Et AL., Petitioners,

v.

UNITED STATES OF AMERICA, Respondent.

On Petirions For A Writ oF MANDAMUS AND ‘

A Writ or CERTIORARI TO THE UNITED STATES

Court or APPEALS FOR THE FourtH Circuit

PETITIONERS’ REPLY BRIEF

Arno_p M. WEINER,

Ricuarp V. Fatcon,

36 South Charles Street,

Wituam G. Hunp.ey, Baltimore, Maryland 21201,

Counsel for W. Dale Hess, Petitioner, Counsel for Marvin Mandel,

Tuomas C. Green, Petitioner, and of Counsel

Counsel for Harry W. Rodgers, III, Petitioner, for Petitioners,

(No. 79-1028 only) EuceNne GRESSMAN,

Micnaet E. Marr, School of Law,

Counsei for William A. Rodgers, Petitioner, University of North Carolina,

Norman P. Ramsey, Chapel Hill, N.C. 27514,

Wiuua F. Garey, Of Counsel for Petitioners.

Counsel for Irvin Kovens, Petitioner,

Cuares G. BernstEIN,

Wa. Braprorp Reyno.ps,

Counsel for Ernest N. Corey, Jr., Petitioner.

(No. 79-1628 only)

The Daily Record Co., Baltimore, Md. 21202 Ss

Pe;

a

TABLE OF CONTENTS

ARGUMENT:

I.

I.

ITI.

i

The grant of a rehearing en banc did

not constitute a withdrawal or vacation

of the panel judgment. In the absence of

a judgment entered by a majority of the

en banc court, the panel judgment re-

mains in full force and effect ................

The trial court’s refusal to instruct the

jury on essential aspects of the alleged

mail fraud, the issue which caused the

en banc court to divide equally, is not

answered by the Government ...............

This case poses serious questions as to

whether the “racketeering” provisions

of the Organized Crime and Control Act

can be applied literally to any business-

man who commits two mail fraud viola-

* AOI ee i ee i ea

The profound constitutional question

posed by revival of “forfeiture of estate”

as mandatory punishment for the rack-

eteering provisions was raised in the

court below. The forfeiture provision in-

question is: a criminal forfeiture, not

one in rem, and its enactment repre-

sents a departure from national policy

which had been in existence since the

establishment of this nation .................

Serious questions are presented by the

lavish and unprecedented use of Rule

803(24), FRE, to supply critical ele-

ments of a criminal case through hear-

say not within any of the recognized

SE Sakis iinsivissatevnccsenecasiesesabnesocus

PAGE

11

15

ii

VI. This is the proper case for the Court to 3

decide whether the Allen charge should

continue to be used in the federal

courts, and, if so, the form and manner

of its permissible use ............--.sersone

Cn en RR aie SDRC TOR Sea: Sears cemy Me VTS "UREN

Allen v. United States, 164 U.S. 492 (1896) ......

Best & Co. v. Maxwell, 217 N.C. 134, 6 S.E.2d

893 (1940), rev'd on other grounds, 311 U‘S.

ABET) noviicc cise ndacac bine npienieinse

TQTED | nisivcnssssesenisovekneiadenngieanattbabbeapsaprinsinvaniaaite

Calero-Toledo v. Pearson Yacht Leasing Co., 416

Rt GD CAI: ccc nctcsctcontccntecnrsnnivinsiebchbteincons

Carmichael v. Eberle, 177 U.S. 63 (1900) ...........

Carolina Power & Light Co. v. Merrimack

Mutual Fire Ins. Co., 240 N.C. 196, 81 S.E.2d

404 (1954) 2... ecscsssossensseesssensenssesessneannereneeneees

Davis v. Davis, 601 F.2d 153 (4th Cir. 1979) .....

Drake Bakeries, Inc. v. Lecal 50, American

Bakery & C. Wkrs., 294 F.2d 399 (2d Cir.

BOE a ciies:siitssicecabidongscssnolonieiilg pedis adbcestoeaeablitakeinecist

Farrand Optical Co., Inc. v. United States, 317

F.2d 875 (2d Cir. 1962) ..0......ccecccsssesencenenessers

Florida Motor Lines, Inc. v. Hill, 126 Fila. 586,

143 So. 261 (1932) Sbebeonaretecessoestaseneeense eeevereseceses

Holy Trinity Church v. United States, 143 1.8.

457 (1892)...

. Moody v. Albemarle Paper Co., 41 ‘Us. 622

(4974) ... - i

PAGE

10

iii

N.L.R.B. v. McClure Associates, Inc. 556 F.2d

Te AOR Re BEY isi; niivenessscecsetibghenokvaindcvves

Panaccione v. United States, 396 U.S. 937 (1969)

People v. Gainer, 139 Cal. Rept. 861, 566 P.2d

DOT COT Dy osivsines cits did sc cccanaseninkestacaaioientenesipers

Pitton v. Atlantic Coast Line R. Co., 198 So. 503,

Ca SIE isp scale odahansinradiatssonsepseonbayciacncanaias

Samuels v. Bowers, 232 N.C. 522, 61 S.E.2d 448

5 | RRR AUER NMR Me Sd neg RUE CR ear we ee

Tenney v. Brandhove, 341 U.S. 367 (1951) ........

United States v. Bailey, 581 F.2d 341 (8rd Cir.

1O7B) ee HARE OI a ie.

United States v. Culbert, 435 U.S. 371 (1978) ...

United States v. Fioravanti, 412 F.2d 407 (3rd

Cir. 1969), cert. den. sub. nom. Panaccione v.

United States, 396 U.S. 837 (1969) ...............

United States v. Geders, 585 F.2d 1303 (5th Cir.

DTI ossscidinsecteccduce ig vibeccdclsiencesinpinabuassibteidegntehen

5 5 pear Men RRP BLAA Co ea Dor 2 vn nde x peg

BOM ipachasessddsscsbiihyaiindsaieasentibinepiiriied crunihiessieeies

United States v. James, 590 F.2d 575 (5th Cir.

BPI icc spilt bes dccasvaidevacehs cfeeshdthcape-anetnes Uinconbec’o>

United States v. Kirby, 7 Wall. 482 (1868) ........

United States v. Mandel, 408 F. Supp. 679 (D.

WN MO TOD siasacsnsbilsdiate’ eicsnnp tlie sive eaioinlan iain

United States v. Mandel, 415 F. Supp. 997 (D.

Os RR i iecsciieiclsi ss sicasngastiadagsnsaouchoseisres

United States v. Mathis, 559 F.2d 294 (5th Cir.

ROEES inicio id waded dgiischt nes

United States v. Sawyers, 423 F.2d 1335 (4th Cir.

BITE iciiciichs des ceacitilis veigutedeiamabietuactabaiphsabitasaaNéiceseub’

PAGE

Bars ao:

IV

United States v. Stollings, 501 F.2d 954 (4th Cir. ee

ROTO) ea Ui aca 23

United States v. Thomas, 571 F.2d 285, 290 (5th

CR; BIS citinceiemanesiiancasiccdutagciideepneveleseisvoodsace 15

Weissinger v. United States, 423 F.2d 795 (5th

Che: SO ak a a es. 5

Western Pac. R. Corp. v. Western Pac. R. Co., 345

UG RT CE ives heksk eh svitpeenedteenltSevtnies 3,6

Whalen v. United States, No. 78-5471 (argued

November 27-28, 1979) .........cccccccsscsssiscssccessees 12

Constitutional Provisions, Statutes

and Rules

18 U.S.C

RE aici acets-ocsarsdjiesiccsvenynietsisbindscccssceoUncabets sathcs 13

SE OP cis svsscitlbsisusnsciniindelestsiibssicsisssaaveshadvanbuddeceablane 12, 13, 14

PG sd eR ed SN oO Gece 14

Se UE Fe ip iiicisiceerstevniesisciesetsniigneisvevemisvians 2

Rule BO aiiecki cis acvsctedlblchbasasetetivens Leanusctansmedans tooo 20

Rule 24), Federal Rules of Evidence ............ 15, 16

Texts and Others

S. Rep. No. 91-617, 9ist Cong., Ist Sess. 80

CT. shbcnscepseb aidinivenbiniidleisyarnsvitodanevesiuiigbinoses 14

4 Weinstein, Evidence:

FI isiiisisiilretssiisssiscivesavepivesventnestbcctovsecsat 20

TOE isissicivccnce ssiiniinnicsvichitdictbeiiiaien 20

Supplement to Report of the Committee on the

Operation of the Jury System, Judicial Con-

ference of the United States 2 (1969) ............ 23

In Ta

Supreme Court of the United States

OctToser TERM, 1979

Nos. 79-1028 anp 79-1029

MARVIN MANDEL, Er At., Petitioners,

Vv.

EN BANC COURT OF APPEALS FOR THE

FOURTH CIRCUIT, et at., Respondents.

MARVIN MANDEL, er At., Petitioners,

Vv

UNITED STATES OF AMERICA, Respondent.

On PeEtiTIONS FoR A Writ oF MANDAMUS AND

A Writ or CERTIORARI TO THE UNITED STATES

Court or APPEALS FUR THE Fourtu Circurr

PETITIONERS’ REPLY BRIEF

The fifty-one page brief in opposition is indicative of the

importance that the Government attributes to the ques-

tions raised in both the petition for mandamus and the

petition for certiorari. Petitioners suggest that the vigor

and extensiveness of the dialogue between the Petitioners

and the Government serve to augment the substantiality

and reviewability of the various questions presented.

. Petitioners file this reply not to reiterate any arguments

set forth in their petitions but to clarify some of the

misconceptions. evidenced in the Government’s opposition

brief concerning some of the major questions involved. A

2

number of the questions presented in the petition for

certiorari need. no extended rebuttal. What follows is

designed to place in proper focus those questions which the

Government has rendered askew.

I. THE GRANT OF A REHEARING EN BANC DID NOT CONSTI-

TUTE A WITHDRAWAL OR VACATION OF THE PANEL JUDG-

MENT. IN THE ABSENCE OF A JUDGMENT ENTERED BY A

MAJORITY OF THE EN BANC COURT, THE PANEL JUDG-

There is one issue before this Court which need be

dispositive of this entire proceeding, rendering it unneces-

sary to review and resolve any of the seven questions

presented by the petition for certiorari. That issue is the

subject for the petition for a writ of mandamus. Does an

equally divided en banc court of appeals have any judicial

power to affirm judgments of conviction when a prior panel

judgment vacating those same judgments of conviction

remains outstanding?

The Government’s response (Br. Opp. 15) is that an

affirmative answer to that question is so “well settled” by

“the law on this subject” that the question is without merit

for purposes of review by this Court. That response reflects

a misapprehension of the evidence in this case as well as

“the law on this subject.” |

That the answer to the mandamus question must be in

the negative is demonstrable from the following factors:

1, The Government is incorrect in its contention that

the en banc statute, 28 U.S.C. § 46(c), is concerned only

with the vote necessary for “the threshhold determination”

whether to rehear a case. To the contrary, “the full scope of

$46(c)” is a commitment of “the en banc power to the

majority of active circuit judges so that a majority always

_ Yetains the power to revise the procedure and withdraw

whatever responsibility may have been delegated to the

3

division.” Western Pac. R. Corp. v. Western Pac. R. Co., 345

U.S. 247, 261 (1953).

2. It follows that once a valid opinion and judgment

have been rendered by a panel, only a majority of the

active circuit judges has en banc power to rehear the case

and to vacate, alter or reverse the panel’s prior opinion or

judgment.

3. The only en banc power exercised in this case by a

majority of the active circuit judges of the Fourth Circuit

was the order granting rehearing en banc. That order did

not purport to alter or set aside the panel’s opinion and

judgment of January 11, 1979. The legal effect of the order

granting rehearing en banc was that described by the

Florida Supreme Court when confronted with an identical

situation, Florida Motor Lines, Inc. v. Hill, 126 Fla. 586,

143 So. 261, 262 (1932), where it was said that:

Thus the original judgment of this court that the

judgment of the circuit court be reversed was merely

suspended, and not annulled, vacated, or set aside, as

might have been done by a special and affirmative

order to that effect entered at the term during which

the rehearing was granted.

It should be added that the Florida court felt that the legal

effect of such a rehearing order was “controlled by the

majority ratio decidendi of . . . Carmichael v. Eberle, 177

US. 63.”

4. The Government nowhere denies that the panel

judgment of January 11, 1979, which vacated the judg-

ments of conviction, is still extant today, merely being in a

state of indefinite suspension.

5. It cannot be said that a majority decision to rehear an

appeal is ipso facto, a decision to set aside the judgment

previously entered by a panel. To suggest that a vote to

grant rehearing is necessarily a vote to set aside a panel

4

judgment is to ignore the clear pronouncement of this

Court that “voting on the merits of an in banc case is quite

different from voting whether to rehear a case in banc. . .”

Moody v. Albemarle Peper Co., 417 U.S. 622, 627 (1974)

(emphasis in original). —

6. In keeping with the principle of the Moody case, it is

well established that, in the absence of an explicit

provision in an order or local rule entered by majority

‘merits of the case and does not disturb the judgment

previously entered by the panel. See Bulluck v. Washing-

ton, 468 F.2d 1096, 1122 (D.C. Cir. 1972). As we noted in

our petition, and as the Court held in Bulluck, when

rehearing is granted without vacating the panel judgment,

and when the en banc court fails to enter a majority

judgment, the panel judgment must remain in full force

and effect.

7. While the Government would have this Court believe

that some other rule prevails generally in other courts of

appeals, and that an order granting rehearing automati-

cally vacates the panel judgment (Br. Opp. 16-20), some of

the very cases cited by the Government hold otherwise. In

the Second Circuit, for example, after an en banc.court

found itself equally divided on the merits, the judges voted

separately on the question whether to vacate the panel

judgment, doing so only by majority vote. Drake Bakeries,

Inc. v. Local 60, American Bakery & C. Wkrs., 294:°F.2d

399, 400 (2d. Cir. 1961). In Farrand Optical :Co., Inc. v.

United States, 317 F.2d 875 (2d Cir. 1962), cited bythe

Government, the court granted rehearing en banc, keeping

the -panel judgment extant. The en banc -court, finding

itself equally divided on one issue, remanded. the. case:to

the panel for further consideration of its outstanding

judgment. Only the dissenters from this action.adopted the

’ view -espoused “by | ithe "Government seege. ide ithe Hah

5

Circuit, moreover, prior to the recent adoption of its local

rule, it was generally recognized thet an order simply

granting rehearing did not operate to vacate the panel

judgment. Only after the en banc court had considered the

case and reached a decision on the merits was the panel

judgment withdrawn, sometimes in its entirety and some-

times only in part. See United States v. James, 590 F.2d

575, 577 (5th Cir. 1979); United States v. Geders, 585 F.2d

1303 (5th Cir. 1978); Weissinger v. United States, 423 F.2d

795, 796 (5th Cir. 1970).

8. In an effort to find some kind of en banc action

vacating the panel judgment, the.Government is forced to

read such action into the order granting rehearing en

banc. But that attempt is futile by virtue of the undenied

fact that a majority of the judges of the Fourth Circuit

have never established any local rule or internal] operating

procedure of the Court which automatically accords such

effect to an order granting rehearing en banc. Often it will

defer vacating a panel decision until the en banc court has

reheard the appeal and the majority of the active judges

have determined to reach a result at variance with that of

the panel. See, e.g., Davis v. Davis, 601 F.2d 153, 154 (4th

Cir. 1979). But in the instant case, no en banc majority

had ever entered an order or given any indication

whatever that the panel opinion and judgment were

deemed vacated, annulled or set aside.

9. The Fourth Circuit has discretion, of course, to adopt

a local rule, by majority vote, which would provide that a

vote to rehear an appeal will also be a vote to vacate the

panel judgments. It cannot do so by ad hoc determination,

however, or by some unannounced and undeclared policy.

This Court declared long ago that, “It is essential, of

course, that a circuit court, and the litigants who appear

before it, understand the practice — whatever it may be —

whereby the court convenes itself en banc,” and that, “. . .

6

(W)hatever the procedure which is adopted, it should be

clearly explained, so that the members of the court and

litigants in the court may become thoroughly familiar

with it . . .” Western Pac. R. Corp., supra, at 260-61, 267.

a

10. In this case, the failure of the Fourth Circuit to

order that the panel judgment was being vacated or

reversed in effect made the actual rehearing procedure an

exercise in confusion. Neither the Government nor the

Petitioners were advised whether the arguments before

the en banc court should be addressed only to the limited

issues decided by the panel or should recanvass the issues

raised on the original appeal. Nor were the litigants ever

advised as to which judgment was before the en banc for

reconsideration — i.e., the judgment of the panel or the

judgments of conviction entered by the trial court.

11. Out of this confusion emerges one decisive fact:

there is nothing in the record to indicate that the panel

judgment, which vacated the judgments of conviction, was

ever vacated or set aside by a majority of the active judges.

The undeniable fact leads to the ultimate conclusion that

the judgments of conviction were never before the en banc

court for consideration or action thereon. The majority rule

embedded in the en banc power conferred by § 46(c)

deprives an equal division of the en banc court of the

power to effect a withdrawal of the panel judgment and of

the power to act directly on the judgments of conviction

absent such a withdrawal. As was said by the Florida

Supreme Court in Pitton v. Atlantic Coast Line R. Co., 198

So. 503, 507 (Fla. 1940), where it again dealt with an

7

appellate court may, under such circumstances, order

that the judgment of reversal theretofore rendered

shall stand unaltered by the court, being equally

divided with regard to the correctness thereof and

that said judgment of reversal shall be certified to the

court below without opinion.

See also, Bulluck, supra, at 112; Carmichael, supra, at 66;

Samuels v. Bowers, 232 N.C. 522, 61 S.E.2d 448 (1950);

Best & Co. v. Maxwell, 217 N.C. 134, 6 S.E.2d 893 (1940),

rev'd on other grounds, 311 U.S. 454 (1940); Carolina

Power & Light Co. v. Merrimack Mutual Fire Ins. Co., 240

N.C. 196, 81 S.E.2d 404 (1954).

Il. THE TRIAL COURT’S REFUSAL TO INSTRUCT THE JURY ON

ESSENTIAL ASPECTS OF THE ALLEGED MAIL FRAUD, THE

ISSUE WHICH CAUSED THE EN BANC COURT TO DIVIDE

EQUALLY, IS NOT ANSWERED BY THE GOVERNMENT.

A remarkable metamorphosis has taken place in the

Government’s opposition brief, pp. 23-29. The issue that

the Government claimed below to be so extraordinarily

important as to warrant a rehearing en banc, the one issue

that created the deep and even division among the en banc

Fourth Circuit judges, has now become a mere “conten-

tion” by the Petitioners that “is without merit and does not

warrant further review” (Br. Opp. 24).

This issue concerns the trial court’s adamant réfusal to

give a bribery instruction in connection with the mail

fraud counts, or to instruct relative to the defense theory

as to Governor Mandel’s specific intent to defraud. At the

trial, the prosecution steadfastly insisted that bribery was

not involved in the mail fraud charges and succeeded in

convincing the trial judge not to give a bribery instruction.

On the appeal to the Fourth Circuit, the Government

began what Judge Widener called a “complete flip-flop”

(Pet. App. 10a) and an exercise in “sophistry” (Pet. App.

lla), a campaign, which it continues before this Court (Br.

8

Opp. 25, n.19), to convince the world that it never really

abandoned the theory of the indictment that bribery was

the essence of these mail fraud charges. This accounts for

the Government’s present argument to this Court that the

trial judge need not have given a bribery instruction

relative to the mail fraud counts since he did define

bribery for purposes of the racketeering counts and thus it

would be unnecessary “repetition” (Br. Opp. 27).

The Government does not deny that “the essence” of the

mail fraud charges, as interpreted prior to trial, was that

‘the Governor had schemed to defraud the citizens of his

lawful services by accepting bribes in exchange for official

action. United States v. Mandel, 415 F. Supp. 997, 1005 (D.

Md. 1976). However, the Government is uncomfortable

with the fact that, at trial, it succeeded in convincing the

trial judge that the mail fraud charges in this case did not

concern themselves with bribery; that bribery was only

mentioned in the racketeering count as an alternate

means of committing the racketeering violations; and that

the jury could convict the defendants of racketeering, as

well as mail fraud, without any need of finding bribery.

The true substance of the instructions was understood

by all of the participants at trial. It was no accident that

the trial judge refused to give a bribery instruction in

connection with the mail fraud charges and that the

Government was able to argue to the jury that, under the

court’s instructions, the defendants could be convicted of

all charges without any finding of bribery. The chief

prosecutor, in his final address to the jury, stated that:

The Court will charge you about the quid pro quo and

he will tell you that you will need a specific intention

te exchange a benefit for some official duty by a public

official in order for there to be a bribery under the

9

I will not detail that. The Judge will do that. What I

want to explain to you or emphasize to you is that the

whole concept of bribery is relevant only in Counts 21

and 23 [the racketeering counts] and that even as to

those two counts you, in fact, can convict and should

under the law convict even if you don’t find those two

briberies, if you find any two of the 20 mail fraud

violations (R. 1989-91). [Emphasis supplied.]

Consistent with this argument, the trial judge carefully

omitted any reference to bribery as essential to the alleged

scheme to defraud the State of the “loyal and faithful”

services of the Governor and the concept of a scheme to

defraud was defined only in the most general terms (R.

177-79).

Before this Court, the Government has simply reiterated

the arguments that were rejected by the panel and by half

of the en banc court. Such rejected arguments cannot mask

the important context in which the trial court failed to

give essential instructions as to the need to find bribery or

actual knowledge of the identities of the owners of

Marlboro. As Judge Widener noted (Pet. App. 11a-13a),

this matter involves not only violations of accepted

principles of proper jury instructions but seriously impli-

cates the Petitioners’ right to a fair trial. This, then, is a

matter with merit that does warrant further review.

Ill. THIS CASE POSES SEKIOUS QUESTIONS AS TO WHETHER

THE “RACKETEERING” PROVISIONS OF THE ORGANIZED

CRIME AND CONTROL ACT CAN BE APPLIED LITERALLY

TO ANY BUSINESSMAN WHO COMMITS TWO MAIL FRAUD

VIOLATIONS.

The Government concedes that the stated purpose of the

Organized Crime Control Act, of which RICO is a central

part, “is to eradicate organized crime” (Br. Opp. 35). It

also concedes that this statute, made applicable in so many

words to “any person” who engages in a pattern of

10

racketeering activity, “does not require proof that the

defendant is connected with organized crime.” (Ibid)

These concessions pose a classic confrontation between

two opposing principles of statutory construction. Are the

words “any person” to be read literally, or must they be

confined to “any person” who falls within the organized

crime classification discernible from the conceded legisla-

tive purpose? That question cannot be answered quickly or

easily. RICO is a uniquely convoluted criminal statute. It

creates no independent federal offense.’ Rather, it imposes

criminal sanctions on “any person” who is connected with

a legitimate enterprise which is somehow affected by the

profits or activities attributable to a prior predicate

“pattern of racketeering activity.”

In short, RICO “piggy backs” itself upon proof that

someone has engaged in an organized or systematic

pattern of two or more state or federal offenses — a

pattern that Congress found to be the hallmark of

criminal activity.” See Holy Trinity Church v. United

States, 143 U.S. 457, 459 (1892), and its progeny.

The literal construction suggested by the Government

ee a ae ee on ee

i

;

5

ll

the mails on two or more occasions in furtherance of a

single scheme to defraud, can also, without more, be

charged and convicted under RICO as a racketeer. There

presumably is an irrebuttable presumption that anyone

charged with two or more separate criminal offenses has

done what organized criminal elements so frequently do —

i.e., engage in an organized pattern of criminal activity.

Presumably, the “organized” activity of a businessman is

generated by the “pattern” of mail fraud charges that the

innovative prosecutor can so easily devise. The injustice,

oppression and absurdity implicit in such a literal reading

of “any person” serve as a warning against easy adoption

of the literal principle in reading and applying RICO. And

that fully justifies the grant of certiorari to explore the

proper approach to the interpretation of this critical RICO

language.

IV. THE PROFOUND CONSTITUTIONAL QUESTION POSED BY

REVIVAL OF “FORFEITURE OF ESTATE” AS MANDATORY

PUNISHMENT FOR THE RACKETEERING PROVISIONS WAS

RAISED IN THE COURT BELOW. THE FORFEITURE PROVI-

SION IN QUESTION IS A CRIMINAL FORFEITURE, NOT ONE

IN REM, AND ITS ENACTMENT REPRESENTS A DEPAR-

TURE FROM NATIONAL POLICY WHICH HAD BEEN IN

EXISTENCE SINCE THE ESTABLISHMENT OF THIS NATION.

The Government in effect concedes that a RICO offense

involves nothing significantly more or different in this

case than the commission of two or more mailings in

furtherance of a single scheme to defraud. That being true,

a critical question arises as to the propriety of imposing

multiple punishments for what in essence is primarily a

single mail fraud offense.

1. The Government’s main response to this issue (Br.

Opp. 37-38) is that the Petitioners did not raise the point

in the Court of Appeals and thus are barred from pursuing

it before this Court. That assertion by the Government is

ineccurate. At pages 29-31 of their Supplemental Brief for

12

Appellants on Rehearing In Banc, the Petitioners set forth

in detail their contention that multiple punishments in

this RICO context are impermissible both under the

Blockburger and Iannelli tests. That brief and that argu-

ment were before the en banc Fourth Circuit when it

rendered its decision affirming the judgments of conviction

by an equally divided vote. And since that en banc court,

by a majority vote, stated that it would have affirmed as

against all of the contentions of the Appellants other than

the issue as to which there was equal division, the Fourth

Circuit must be deemed to have considered and reviewed

this multiple punishments claim.

2. The Government commendably has noted (Br. Opp.

38) that this issue resembles the question currently

pending for decision before this Court in Whalen v. United

States, No. 78-5471 (argued November 27-28, 1979). Under

established procedures, action on the instant petition

respecting this issue should at least be deferred until the

Court has resolved the question as posed in Whalen.

3. The Government exhibits confusion and misconcep-

tion about the nature of the forfeiture dictated by § 1963 of

RICO (see, Br. Opp. 39-42), but that very confusion and

misconception add to the substantiality of the constitution-

al problems posed by this RICO revival of the outmoded

concept of forfeiture of estate. The Government has created

a dialogue about this constitutional matter that deserves

full consideration and resolution by this Court.

The Government has consistently argued in this case

that a RICO forfeiture is directed at a racketeer’s interest

in legitimate business enterprises “acquired or operated by

racketeering methods” (Br. Opp. 40). Hence, it is said, a

RICO forfeiture is identical with, or substantially like, a

traditional in rem forfeiture of property used in the

conduct of criminal enterprises, as to which there are no

,constitutional problems.

13

The Government’s view of the nature of a RICO

forfeiture, however, finds no support in the statutory

provision, the legislative history or the judicial pronounce-

ments dealing with RICO forfeitures. Basically, the Gov-

ernment suffers from a myopic view of the racketeering

activities outlawed by RICO. Section 1962 of RICO does

not criminalize the use of a business enterprise in the

commission of any of the predicate crimes constituting a

“pattern of racketeering activity.” Instead, § 1962 makes it

illegal to exploit the pattern of predicate crimes in such a

way as to infiltrate or operate a legitimate business

enterprise. The racketeer’s resulting interest in the enter-

prise — which is the interest forfeitable under § 1963 — is

the end rather than the means by which the predicate

crimes have been committed.

The district court that imposed the forfeiture sanction in

this case properly conceived of this sanction not as an in

rem forfeiture of business interest used in the commission

of the predicate mail fraud crimes but as a proceeding

“against the defendant himself in personam.” United

States v. Mandel, 408 F. Supp. 679, 682 (D. Md. 1976).

The RICO forfeiture provision has consistently been

treated by all but Government counsel as a criminal

forfeiture of property, as a punishment directed at the

convicted racketeers rather than at the property itself.

Every court that has addressed the problem has concluded

that a RICO forfeiture is a criminal forfeiture in the

historical common law sense, one that perceives the

“serious constitutional questions” alluded to in Calero-

Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689

(1974). And every such court has noted that Congress

ee ree Ot a ee eee

14

effect this highly questionable form of forfeiture of estate.

To quote but from one of the judicial authorities cited by

the Government (Br. Opp 41), United States v. L’Hoste,

609 F.2d 796, 813, n.15 (5th Cir. 1980),

The forfeiture penalty incorporated in section 1963

differs from other presently existing forfeiture provi-

sions in federal statutes. Under other statutes, the

forfeiture proceeding is in rem against the property,

since the property being forfeited is itself considered

the offender, and the forfeiture is no part of the

punishment for the criminal offense. By enacting

section 1963, however, Congress revived the concept

of forfeiture as a criminal penalty against the indi-

vidual, since the proceeding is in personam against

the defendant and the forfeiture is part of the

punishment. See S. Rep. No. 91-617, 91st Cong., Ist

Sess. 124-25 (1969).

See also, United States v. Huber, 603 F.2d 387, 396 (2d

Cir. 1979), relied upon by the Government (Br. Opp.

41-42), where the Second Circuit commented that, “RICO

is apparently the first modern federal statute to impose

forfeiture as a criminal sanction directly on an individual

defendant” and that, “what is innovative about RICO is .

. . . that it imposes [forfeiture] directly on an individual

as part of a criminal prosecution rather than in a separate

proceeding in rem against the property subject to forfei-

ture.”

As these courts have recognized, Congress was fully

aware and was intent on reviving “the concept of criminal

forfeiture” that had been outlawed by statute (18 U.S.C.

§ 3563) since 1790, that no federal statute prior to RICO

had “provided for a penalty of forfeiture as a punishment

for violation of a criminal statute of the United States,”

ard that § 1963 of RICO therefore “would repeal 18 U.S.C.

§ 3563 by implication.” S. Rep. No. 91-617, 91st Cong., 1st

Sess. 80 (1969).

15

None of the courts that have perceived the true nature of

a RICO forfeiture have provided any satisfactory answers

to the constitutional problems posed by the Petitioners. As

RICO prosecutions proceed apace with the ever-present

sanction of forfeiture of estate for those convicted as

racketeers, the need for an authoritative resolution of

constitutional validity of the forfeiture becomes more

pressing.

V. SERIOUS QUESTIONS ARE PRESENTED BY THE LAVISH

AND UNPRECEDENTED USE OF RULE 903(24), FRE, TO

SUPPLY CRITICAL ELEMENTS OF A CRIMINAL CASE

THROUGH HEARSAY NOT WITHIN ANY OF THE RECOG-

NIZED EXCEPTIONS.

It is true, as the Government states, that the residual

exception of Rule 803(24), FRE, allows tl: «ntroduction of

hearsay declarations not within recognized exceptions if

they are accompanied by “equivalent circumstantial

guarantees of trustworthiness” and if the court makes the

three explicit findings required by the Rule (Br. Opp.

42-43). The Government has failed to mention, however,

that the trial judge admitted the questionable hearsay in

the present case without making any of the findings which

the Rule requires (Tr. 6235), and that, by its summary

order, the en banc court similarly failed to make any such

determination. In its solitary attempt to justify the

disputed evidence, moreover, the Government misread the

record, and its arguments should therefore be disregarded.

The failure to make the determinations required by Rule

803(24) should have rendered the evidence inadmissible as

a matter of law. Cf. United States v. Thomas, 571 F.2d 285,

290 (5th Cir. 1978). The special nature of the residual

exception imposes on the courts the responsibility to be

certain that it “be used very rarely and only in exceptional

Se See ey ¢ Seeee tenes ee Se

oné of the other exceptions:” and that it not be a means for

Fes> Py

16

“major judicial revisions of the hearsay rule.” Fed. R. Evid,

Rule 803(24), Conf. Rept.; 28 U.S.C.A. Historical Note.

There are added considerations in a criminal case for

requiring strict adherence to the safeguards of the Rule.

United States v. Mathis, 559 F.2d 294, 299 (5th Cir. 1977).’

To allow hearsay to be admitted under the residual

exception without compliance with the plain dictates of the

Rule is to sanction the very misuse which is to be

scrupulously guarded against.

Furthermore, there is no authority for admitting the

questionable hearsay in the present case. The Fourth

Circuit failed to follow its own precedent, as established in

N.LRAB. v. McClure Associates, Inc., 556 F.2d 725 (4th

Cir. 1977), and none of the cases cited by the Government

(Br. Opp. 43-46) would permit the type of hearsay involved

here. See United States v. Bailey, 581 F.2d 341, 349 (3rd

Cir. 1978). This case affords the Court the opportunity to

require careful and sparing application of the residual

exception and to forestall widespread disregard of evidenti-

ary safeguards through careless use of Rule 803(24).

The Government does not deny that the hearsay testi-

mony elicited from the State Senators hostile to Governor

Mandel was the crucial evidence in connection with the

charge that the Governor had performed official acts in

exchange for participation in business enterprises. It was

2 The Court noted in Mathis that, although Rule 803(24) was

designed to encourage further development of federal evidenti-

ary law, “Yet tight reins must be held to insure that this

provision does not emasculate our well developed body of law

and the notions underlying our evidentiary rules.” The Court did

not hesitate to reverse the ruling of a trial judge admitting

hearsay when it was found that, “The ruling was not in

harmony with the general purpose of the Federal Rules.” The

Court went on to declare that, “In the criminal case, let it not be

forgotten that there is an added consideration to be given weight

in favor of the preference for live testimony,” and that, “This

consideration flows from the Sixth Amendment right of confron-

tation.” 559 F.2d at 299.

17

the only evidence which could be said to have supported

the notion that the Governor secretly brought about the

override of his own veto shortly after the other defendants

had purchased Marlboro, and it was employed by the

prosecution to counteract the considerable body of direct

and unquestionably admissible evidence that the Governor

had no part whatever in the override. This same direct

evidence operated to deprive the Government’s hearsay

testimony of any meaningful corroboration, leading in-

escapably to the conclusion that the hearsay in this case

was not attended by circumstantia] guarantees of trust-

worthiness equivalent to those which attend the recog-

nized exceptions to the hearsay rule.* ,

The contrary hearsay was elicited primarily from the

Governor’s most vociferous antagonists; it was attributed

in large measure to unidentified declarants; and it was

derived entirely from offhand remarks which were claimed

to have been made in passing during the hectic and

- * The record showed that the Governor ordinarily mounted no

organized lobbying effort to sustain his vetoes, but that,

18

fast-moving events of a legislative opening day (R. 1009,

1013-14, 1108-09, 1120, 1122; Tr. 4588, 4593-95, 4883). At

best, the statements amounted to nothing more than

rumor and speculation, and they originated from a setting

in which, as acknowledged by the Government’s own

witnesses, unverifiable rumor abounds (Tr. 4883).‘

Despite the great importance that it assumed for the

Government’s case, the hearsay attributed to Senator

Staten was so ambiguous that it was inherently lacking in

trustworthiness and it could hardly have furnished a

reliable basis for the jury to draw conclusions about the

activities of the Governor. The evidence indicated that the

comment was only made once, while Senator Staten was

hurrying to the Senate chamber, and, although two

Senators claimed to have heard it, they testified as to five

different versions as to what they might have heard. They

‘ In some instances, as in the case of Senator Coolahan, the

hearsay contradicted the public statements which had been

made by the witness years earlier on the opening day of the

1972 session. Senator Coolahan was permitted to testify that he

had been part of a general discussion on the floor prior to the

start of the session (R. 1247). He said that he could not tell who

had participated in the discussion; that it might have been those

who sat near him, five of whom he named; but that “it could

have been others” (R. 1249). Based on the “conversations that

were going on among the Senators on the floor, none of which he

could specify, Coolahan said that he had made the “observation”

that “the Governor did not care whether he was overridden. . .”

(R. 1249-55). Senator Lapides, a self-confessed “political enemy

of the Governor,” testified that he had engaged in unspecified

conversations with “members of the press” and “probably . . . 50

people that particular day” (R. 1111). Lapides was allowed to

state that, based on his discussions, including those with

members of the press, he came to the “general feeling” or the

“belief” that “the Governor wanted the veto overridden, his own

veto overridden . . .” and that, “through others,” the Governor

was “actively seeking to have the veto overridden” (R. 1104-07).

Similar testimony, not specifically described in the previous

briefs, was elicited from Senators Mason (R. 1229-30, 1234),

Abrams (R. 1360-63) and Thomas (R. 1168, Tr. 5250-52).

19

also hastened to add that they did not know if Staten was

speaking for the Administration at the time (R. 1081-82),

and that they did not stop to inquire whether his remark

was anything more than speculation (R. 1062).°

We now explore the various errors which flaw the

Government’s argument “of ample corroboration” for the

“out-of-court declarations.” First, asserting that the Gov-

ernor’s legislative aides “customarily” lobbied in support of

vetoes, the Government finds suspicious the “conspicuous

absence of lobbying for the racetrack bill” (Br. Opp. 44).

The testimony of the experienced legislators, however,

including those called by the Government, was that the

Governor did not ordinarily lobby to sustain his vetoes and

that the racetrack bill was not of such exceptional

importance as to justify departure from general practice

(Tr. 5343-44, 7658, 7697, 7748-50, 7911).°

Second, the Government finds suspicious the fact that

the racetrack bill was overridden in the Senate “by a

surprisingly large majority” that included “Mandel’s

closest supporters.” The implication of this statement is

* Senator Crawford, to whom the statement was allegedly

made, quoted Staten, variously, as having said that the Gov-

ernor “would like the veto overridden,” or that the Governor

“wouldn’t mind having it overridden,” or that the Governor

“didn’t care” about the veto (R. 1061, 1976-78). Senator Thomas,

who claimed to have been present when Staten made his

remark, testified that “Senator Staten was walking through the

lounge and commented that the racing bill would be overridden,

words to that effect,” adding that, “I don’t remember the exact

words” (R. 1166). Since the remark was susceptible of so many

interpretations, some innocent and others less so, and since

there was no indication from the remark itself as to whether

Staten was quoting the Governor or simply voicing speculation

derived from any one of innumerable sources, this hearsay, on

its face, was of the least reliable sort.

* Senator Clark, a four-term veteran of the Senate and one of

the Government’s principal witnesses, testified that he could not

recall a specific instance when a Governor had lobbied actively

for a veto to be sustained (Tr. 5343-44).

20

that the Senate override of the racetrack bill was a

“surprising” event on the opening day of the 1972

legislative session; that the vote to override was extraordi-

narily large; and that, absent some prodding by the

Governor, those Senators who were usually his supporters

could not have been expected to have voted to override.

The assertion is divorced from the realities that the Senate

overrode the Governor on six of eight vetoes on the same

day; that the margin of the vote on the racetrack bill was

narrower than that of most of the others; that those

persons identified as the Governor’s supporters had voted

consistently for most of the overrides; that the many

overrides were due to an unusual display of independence

which accompanied the opening of the 1972 session; and

that, in the case of the racetrack bill, sixteen witnesses,

half of them called by the Government, explained, persua-

sively, that their votes were brought about by factors

which had nothing to do with the Governor (See p. 17

above).

Third, it is misleading to analogize the hearsay testi-

mony to “present sense impressions” (Br. Opp. 45). The

argument flies in the face of the principal limitation of

present sense impression testimony, i.e., that a witness

may not recount “a statement of. . . belief to prove the

fact . . . believed.” See, Rule 803(3), FRE. The purpose of

this safeguard is to protect the factfinding process from

speculation and to preserve the very integrity of the

hearsay rule. 4 Weinstein, Evidence, {{§803(1)[1],

803(3)[05]. In this case, the Government seeks to use

professions of present sense impression in a manner which

is contrary to this basic limitation and for the express

purpose of proving the cause of the impressions.

Fourth, the Government had stated, incorrectly, that the

“availability of the declarants” was a strong indication of

the reliability of the hearsay (Br. Opp. 46). The statement

21

overlooks the fact that the prosecutors urged the trial

court to receive the hearsay precisely because many of the

declarants could not be identified and because of failures of

recollection among those who might have been the declar-

ants (First Trial Tr. 3496-97). The Government notes that

more than half of the surviving legislators testified in this

trial (Br. Opp. 46). It fails to note further, however, that

not one of these witnesses acknowledged that he was the

declarant for any of the hearsay described by others, and,

most significantly, that each of the witnesses explained

that his own vote had been due to factors independent of

the Governor and contradictory of the conclusions sug-

gested by the hearsay (See p. 17 above).

The Government seems to argue that the best interests

of the judicial process are served by allowing a federal

criminal trial to be turned into a free-wheeling discussion

in which the principal actors are encouraged to recount

their own versions of some legislative drama. This Court

should accept review of the present case to reaffirm the

wisdom, expressed long ago in Tenney v. Brandhove, 341

U.S. 367, 378 (1951), that, “In times of political passion,

dishonest or vindictive motives are readily attributed to

legislative conduct and [are] as readily believed,” and that,

“Courts are not the place for such controversies.”

VI. THIS IS THE PROPER CASE FOR THE COURT TO DECIDE

WHETHER THE ALLEN CHARGE SHOULD CONTINUE TO BE

USED IN THE FEDERAL COURTS, AND, IF SO, THE FORM

AND MANNER OF ITS PERMISSIBLE USE.

The Government suggests no valid reason for this Court

to defer further a resolution of the uncertain status of the

Allen charge in the federal courts. The extraordinary

intensity of the jury deliberations in this case, and their

almost unprecedented length, suggest strongly that this is

the time and case for the propriety of the Allen charge to

be reviewed. This case also presents the opportunity to

22

explore the many ramifications implicit in the giving of

such a charge because of the closeness of the issues, the

jury’s first announcement that it was unable to find any of

the defendants guilty of a scheme to defraud and the trial

judge’s gratuitous departure from the form of charge

suggested by the ABA.

The Allen charge, often called the “dynamite charge,”

has had a controversial history ever since its rather

cursory approval more than 83 years ago in Allen uv.

United States, 164 U.S. 492, 501-02 (1896). The instruc-

tion itself was only summarized “in substance” by the

Court in that case, and has not since been assessed or

reviewed by this Court.

The charge, with all its formulations in various lower

court opinions, has been subjected to a withering barrage

of attacks largely on grounds that it is coercive and

inaccurate. Many courts have proscribed its use in any

form. The latest count shows that three federal circuits

and at least 23 state courts have totally disapproved the

instruction, the disapproving Circuits being the Third, the

Seventh and the District of Columbia Circuits. And the

most recent state court to register a decree that an

Allen-type instruction “should never again be read in a

California courtroom” is the Supreme Court of California.

People v. Gainer, 139 Cal. Rept. 861, 868-70, 566 P.2d 997,

1004-06 (1977).

Ever since its origin in 1896, the Allen charge has

persisted “not so much as an object of commendation as it

is a product of toleration.” United States v. Fioravanti, 412

F.2d 407, 415 (3rd Cir. 1969), cert. den. sub nom.

Panaccione v. United States, 396 U.S. 837 (1969). Cer-

tainly the objections raised in the Gainer opinion merit the

final burial of the charge. And those considerations

undoubtedly played a role in the recommendation of the

23

Judicial Conference of the United States that, as a matter

of judicial policy, the Allen charge should no longer be

given in the federal courts. See Supplement to Report of

the Committee on the Operation of the Jury System,

Judicial Conference of the United States 2 (1969).

At the same time, however, the Judicial Conference

expressed its tolerance for the modified Allen charge

recommended by the A.B.A. Project on Minimum Stan-

dards for Criminal Justice. While the Government seeks

solace in the ABA tolerance of a modified Allen charge, the

trial judge in the instant case plainly exceeded the

carefully limited bounds of that recommended charge by

gratuitously instructing the jury that the case is “an

important one” to the Government and the defendants and

that “its presentation to you has involved expense and

expenditure of time by both the Government and the

Defendants” (R. 311). He thereby committed error which

should not go unnoticed and which merits careful review.

United States v. Sawyers, 423 F.2d 1335, 1343 (4th Cir.

1970); United States v. Stollings, 501 F.2d 954, 956 (4th

Cir. 1974).

The absence of uniformity on an important question of

federal judicial administration serves the interests of no

one. Until this Court acts to bring order, the present state

of uncertainty will persist.

\

\s

24

, CONCLUSION

For these various reasons, supplementing those pre-

viously advanced by the Petitioners, both the Petition for

Mandamus and the Petition for Certiorari should be

granted.

Respectfully submitted,

ARNOLD M. WEINER,

Ricnarp V. Fatcon,

36 South Charles Street,

Baltimore, Maryland 21201,

Counsel for Marvin Mandel,

Petitioner, and of Counsel

for Petitioners,

EuGeNE GRESSMAN,

School of Law,

University of North Carolina,

Chapel Hill, N.C. 27514,

Of Counsel for Petitioners.

Wituiam G. Hunpb.ey,

Counsel for W. Dale Hess, Petitioner,

Tuomas C. GREEN,

Counsel for Harry W. Rodgers, III, Petitioner,

(No. 79-1028 only)

Micuaet E. Marr,

Counsel for William A. Rodgers, Petitioner,

Norman P. Ramsey,

WiuuraM F. Gartevy,

Counsel for Irvin Kovens, Petitioner,

Cuar.es G. BernsTEIN,

Wo. Braprorp REyNo ps,

Counsel for Ernest N. Corey, Jr., Petitioner.

(No. 79-1028 only)