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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 1980
- **Citation:** 445 U.S. 959

## Text

; 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)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1485%3A3. Public record. Not legal advice.