Respondents Brief — United States v. Lane

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, FILED

| APR 26 1965

Nos. 84-744 and 84-63} ALEXANDER L. STEVAS,

CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1984

UNITED STATES OF AMERICA, PETITIONER

Vv.

JAMES C. LANE AND DENNIS R. LANE

JAMES C, LANE AND DENNIS R. LANE, PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON WRITS OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

REx E. LEE

Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

ANDREW L. FREY

Deputy Solicitor General

BRUCE N. KUHLIK

Assistant to the Solicitor Generals

JOEL M. GERSHOWITZ

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

1. Whether the court of appeals erred in reversing

defendants’ convictions on the basis of misjoinder un-

der Rule 8 of the Federal Rules of Criminal Proce-

dure without determining whether the misjoinder con-

stituted harmless error.

2. Whether there was sufficient evidence to sup-

port defendants’ convictions for mail fraud under 18

U.S.C. 1341.

(I)

TABLE OF CONTENTS

ES

LEE ESET

ELS SE EOD

A. The factual background .........................................

The El Toro restaurant fire 0.00000...

SS

The flower shop conspiracy ..................0.0.....

Dennis Lane’s perjury ...........................-.-..----

PON

B. The court of appeals’ decision .........0.....00.000000000...

a aessnnesanenss

Argument:

I. A conviction may not be reversed on the basis

of misjoinder under Rule 8 of the Federal

Rules of Crimina! Procedure if the error was

EES SLL

A. Federal appellate courts have a duty to dis-

regard all harmless errors, including mis-

as cmessnbenenunes

B. There is no basis on which to except mis-

joinder froin the harmless error doctrine...

C. The misjoinder of count 1 did not prejudice

the rights of the defendants _.......

II. The evidence was sufficient to support defend-

ants’ convictions for mail fraud on counts 2

EEE TE A

EEL SLOT

eo oe oof Fee lUOOlmUCUMNGUmCUWD

—_

LS]

14

20

37

IV

TABLE OF AUTHORITIES

Cases: Page

Baker v. United States, 401 F.2d 958 _...00 16, 25, 28

Bliss v. United States, 354 F.2d 456 .....00000000 0... 32

Brown V. United States, 411 U.S. 223 00000000... 17, 21

Bruton v. United States, 391 U.S. 128 000000... 18, 21

Chambers Vv. Maroney, 399 U.S. 42 _........0000000000...... 21

Chapman V. California, 386 U.S. 18 -....0000000000..... 17, 20, 26

Coleman v. Alabama, 399 U.S. 1.20.22... eee eeeeeee 21

Gideon V. Wainwright, 372 U.S. 335 2.00.00... 20

Glasser v. United States, 315 U.S. 60 0.000000... 29

Gordon Vv. United States, 358 F.2d 112 —.....0000.. 36

Harrington Vv. California, 395 U.S. 250 0.0000. 17, 21

Hermansen vy. United States, 228 F.2d 495, reh’g

denied, 230 F.2d 173, cert. denied, 351 U.S. 924.. 33

Ingram V. United States, 272 F.2d 567 _................ 16, 22

Kotteakos v. United States, 328 U.S. 750 ......17, 18, 19, 20,

21, 26

Lutwak v. United States, 344 U.S. 604 000000... 18

McElroy v. United States, 164 U.S. 76 ..................... 13, 25

Metheany v. United States, 365 F.2d 90, later ap-

peal, 390 F.2d 559, cert. denied, 393 U.S. 824.... 16

Milton v. Wainwright, 407 U.S. 371 —.....2-2222000.... 17, 21

Moore ¥. Illinois, 484 U.S. 220 ................................. 21

Parker v. United States, 404 F.2d 1193, cert. de-

GF OO 18

Pereira Vv. United States, 347 U.S. 1 -.........-00000....... 29

Schaffer v. United States, 362 U.S. 511 —................ 20

Snyder v. Massachusetts, 291 U.S. 97 ~........00.0..0...... 18

Tumey V. Ohio, 278 U.S. 610 .................................. 20

United States v. Ajlouny, 629 F.2d 830, cert. de-

I TO MI centehtch tveceanierntenctaieicietiiadatutataneteeniisin 15, 28

United States v. Angelilli, 660 F.2d 23, cert. de-

I iiiticenanicetieeerinneiissaitinnintiteenneemenates 33

United States v. Bibby, 752 F.2d 1116 ................ 15, 23, 27

United States v. Bledsoe, 674 F.2d 647, cert. de-

EAE eI ee 16

United States v. Bova, 493 F.2d 33 _....000000000c.. 16

United States v. Buchanan, 633 F.2d 423, cert.

denied, 451 U.S. 912 See eT a 33

Cases—Continued : Page

United States v. Chappell, 698 F.2d 308, cert. de-

EAT Ee Re a 32, 36

United States v. Eagleston, 417 F.2d 11 -........0000... 16

United States v. Elkin, 731 F.2d 1005, cert. de-

nied, No. 83-1848 (Oct. 1, 1984) .....0000 oe. 32

United States v. Ellis, 709 F.2d 688 —......0000000000.. 16

United States v. Gleason, 616 F.2d 2, cert. denied,

Se UD iid iaieidintiateeeintiniete ciinttinisdsimeaniciinste 32

United States v. Gougis, 374 F.2d 758 _...0000 oe. 16

United States v. Graci, 504 F.2d 411 000 16, 25

United States v. Granello, 365 F.2d 990, cert. de-

I Ce I BIE ectectennecctecrenceceanscces 15, 20, 24, 25, 27

United States v. Hasting, 461 U.S. 499 ...12, 17, 18, 20, 23,

26, 27

United States v. Hatcher, 680 F.2d 4388 _....0..0........ 15

United States v. Jones, 712 F.2d 1316, cert. de

I, Re tance 32

United States vy. Ledesma, 632 F.2d 670, cert. de-

Paes see 35

United States v. MacClain, 501 F.2d 1006 ............... 31, 32

United States v. Martin, 567 F.2d 849... 15-16, 28

United States v. Maze, 414 U.S. 395 ........ 14, 31, 34, 35, 36

United States v. Miller, No. 83-1750 (Apr. 1,

ARES aeons Rae 5 e TnD IT a ae 33

United States v. Miller, 664 F.2d 94, cert. denied,

i cde 32

United States v. Moss, 591 F.2d 428 ......000 34

United States v. Ong, 541 F.2d 331 ......000 ee. 27

United States v. Sampson, 371 U.S. 75 .......... 10, 14, 31, 35

United States v. Seidel, 620 F.2d 1006 _...15, 20, 23, 25, 27

United States v. Shelton, 669 F.2d 446, cert. de-

I 34, 36

United States v. Sutton, 605 F.2d 260, on reh’g,

642 F.2d 1001, cert. denied, 453 U.S. 912 ........... 16

United States v. Toney, 605 F.2d 200, cert. denied,

SEES SRAARSR caste ed Siva OO oe 32

United States v. Turbide, 558 F.2d 1053, cert. de-

ETE ES AA TSE APG GN OT 15, 23, 28

United States v. Turkette, 632 F.2d 896, rev’d,

gy SR NEES Rl se ae TS 16, 25

\

VI

Cases—Continued: Page

United States v. Vanderpool, 28 F.2d 1205, cert.

I I CI I ceececsccneccssemtanbehicnsanbersmoreenmnees 32

United States v. Varelli, 407 F.2d 735 —.....0.0.00000000... 15

United States v. Wade, 388 U.S. 218 ........0-000... 21

United States v. Werner, 620 F.2d 922 0.00. 15, 18, 25

United States v. Wrehe, 628 F.2d 1079.........00000....... 32

Ward v. United States, 289 F.2d 877 ........................ 16

Constitution, statutes and rules:

U.S. Const. :

REST RE Sa ae eNRTe eere ET 21

EES Sr ee nr a 21

Act of Feb. 26, 1919, ch. 48, 40 Stat. 1181, 28

ee Oe ceevennnienemnons 17, 25

Comprehensive Crime Control Act of 1984, Pub. L.

No. 98-473, 98 Stat. 1837 et seq.:

§ 218(a) (5), 98 Stat. 2027 _........ ww. 4

Oe i MD Hs SIE cicecrcecinecteccsnvnerenencsenss 4

ET eS Se a ce Ie a 29

EME RRR. eve a mene On, eee mane 2

IS BIE ccicendeictcnecnveisconiedtiness 2, 14, 29, 31, 32, 34, 35, 36

i a essai deaiiien 4

NESSIE oe Ce ERROR Bt 4

TTT a ae ae RO wet owe 4

I 17

Fed. R. Crim. P

EEE Ae ay OT SER SOLER! SAE passim

EE a ee NL TE ORI See Me 8 10, 15

i 9,14, 15

ge Ie ROOT OE OMA. RR es 12, 13, 22, 23, 24

I ald 8, 12, 15, 16, 17, 19, 22, 23, 24

Fed. R. Evid.:

Rule 404(b) ...... i a a a 28

I 32

Miscellaneous:

H.R. Rep. 352, 81st Cong., Ist Sess. (1949)........ 17

8. J. Moore, Moore’s Federal Practice (2d ed.

SEITE ‘ciihessithieibeahaiahiadeednsiniiensinmenendiaiiiioaade 15, 19, 22, 23

VII

Miscellaneous—Continued : Page

Note, Harmless Error and Misjoinder Under the

Federal Rules of Criminal Procedure: A Nar-

rowing Division of Opinion, 6 Hofstra L. Rev.

SE RIED kccicscisscnsepinisigsvnnisionnecunsunniinteiaciintineiinninentsegen 20, 27

R. Traynor, The Riddle of Harmless Error

I ctiikteenncieneicadenicinnicnnninapinthlncnnpinapiainiasmnnmaiintgats 17-18

1 C. Wright, Federal Practice and Procedure:

0) 6 EE 15

In the Supreme Court of the United States

OCTOBER TERM, 1984

No. 84-744

UNITED STATES OF AMERICA, PETITIONER

Vv.

JAMES C. LANE AND DENNIS R. LANE

No. 84-963

JAMES C. LANE AND DENNIS R. LANE, PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON WRITS OF CERTIORARI TO THE UNITED STATES

COURT OF APPZALS FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1a-

20a)* is reported at 735 F.2d 799.

1 The appendices to each petition are identical.

(1)

2

JURISDICTION

The judgment of the court of appeals (Pet. App.

21a) was entered on June 18, 1984. A petition for

rehearing was denied on August 22, 1984 (Pet. App.

22a-23a). On October 11, 1984, Justice White ex-

tended the time in which to file the government’s pe-

tition for a writ of certiorari to November 20, 1984,

and the petition was filed on November 6, 1984. The

defendants’ cross-petition for a writ of certiorari was

filed on December 7, 1984. The petitions were granted

on February 19, 1985 (J.A. 25, 26). The jurisdiction

of this Court is invoked under 28 U.S.C. 1254(1).

STATUTE AND RULES INVOLVED

18 U.S.C. 1341 provides:

Whoever, having devised or intending to de-

vise any scheme or artifice to defraud, or for

obtaining money or property by means of false

or fraudulent pretenses, representations, or

promises, or to sell, dispose of, loan, exchange,

alter, give away, distribute, supply, or furnish

or procure for unlawful use any counterfeit or

spurious coin, obligation, security, or other arti-

cle, or anything represented to be or intimated

or held out to be such counterfeit or spurious

article, for the purpose of executing such scheme

or artifice or attempting so to do, places in any

post office or authorized depository for mail mat-

ter, any matter or thing whatever to be sent or

delivered by the Postal Service, or takes or re-

ceives therefrom, any such matter or thing, or

knowingly causes to be delivered by mail accord-

ing to the direction thereon, or at the place at

which it is directed to be delivered by the per-

son to whom it is addressed, any such matter or

3

thing, shall be fined not more than $1,000 or

imprisoned not more than five years, or both.

Fed. R. Crim. P. 8 provides:

(a) Joinder of Offenses. Two or more offenses

may be charged in the same indictment or in-

formation in a separate count for each offense

if the offenses charged, whether felonies or mis-

demeanors or both, are of the same or similar

character or are based on the same act or trans-

action or on two or more acts or transactions

connected together or constituting parts of a

common scheme or plan.

(b) Joinder of Defendants. Two or more de-

fendants may be charged in the same indictment

or information if they are alleged to have par-

ticipated in the same act or transaction or in

the same series or acts or transactions constitut-

ing an offense or offenses. Such defendants may

be charged in one or more counts together or

separately and all of the defendants need not be

charged in each count.

Fed. R. Crim. P. 52(a) provides:

Harmless Error. Any error, defect, irregu-

larity or variance which does not affect substan-

tial rights shall be disregarded.

STATEMENT

After a jury trial in the United States District

Court for the Northern District of Texas, James C.

(J.C.) Lane was convicted on four counts of mail

fraud, in violation of 18 U.S.C. 1341, and one count of

conspiracy, in violation of 18 U.S.C. 371. He was sen-

tenced to concurrent terms of five years’ imprison-

ment on the first mail fraud count and on the con-

spiracy count, to be followed by concurrent terms of

4

two years’ imprisonment on the other three mail fraud

counts, and fined a total of $9,000. His son, Dennis

R. Lane, was convicted on three counts of mail fraud,

one count of conspiracy, and one count of perjury, in

violation of 18 U.S.C. 1623. Pursuant to the Young

Adult Offender Act, he was sentenced to concurrent

terms of custedy under the Youth Corrections Act

(18 U.S.C. 4216, 5010(b)).? See Pet. App. 8a n.5.

The court of appeals reversed (id. at la-20a).

A. The Factual Background

Defendants were each charged in five counts of

a six-count indictment encompassing three arson-

for-profit schemes (J.A. 13-20). Count 1 charged

J.C. Lane with mail fraud in connection with a 1979

fire in the El Toro restaurant in Amarillo, Texas.

Counts 2 through 4 charged both defendants with

mail fraud in connection with a 1980 fire in a duplex

in Amarillo. Count 5 charged both defendants with

conspiracy in connection with the planned arson of

a flower shop in 1980 in Lubbock, Texas. Count 6

charged Dennis Lane with perjury before a grand

jury investigating the flower shop scheme in 1981.

Defendants’ motions for severance before and during

trial were denied. They were tried jointly and con-

victed on all counts. Pet. App. 8a.

1. The El Toro Restaurant Fire

The evidence at trial showed that J.C. Lane and

three partners opened the El Toro restaurant in

Amarillo in the summer of 1978. They leased the

2 The Young Adult Offender Act and the Youth Correction

Act were repealed by Section 218(a)(5) and (8) of the

Comprehensive Crime Control Act of 1984, Pub. L. No. 98-

473, 98 Stat. 2027.

5

building and restaurant equipment for a term of five

years. Pet. App. 2a; Tr. 35-37. A clause in the lease

provided that it would be terminated under certain

circumstances in the event of a fire (Tr. 37; GX 1).

The restaurant never operated at a profit, suffering

declining sales after September 1978 and sustaining

losses of $20,000 during 1978 and $9,000 during the

two months that it operated in 1979 (Pet. App. 2a,

3a n.1; Tr. 142-151).

J.C. Lane purchased fire insurance for the restau-

rant in November 1978, covering the contents and

improvements for $10,000 each and providing a maxi-

mum of $18,000 for business losses. At about the

same time he contacted Sidney Heard, a professional

“torch,” asking him how much it would cost to burn

the building and stating that he wanted to get out of

his lease and the paffiership.’ Heard set a fire in the

building on February 27, 1979, which did not destroy

it but did damage its contents. Pet. App. 2a; Tr. 237-

242.

The insurance company settled with Lane for

$10,000 on the building’s contents and $9,200 on the

improvements. Drafts in these amounts were issued

by the company on April 23, 1979, and May 3, 1979,

respectively. Pet. App. 2a; Tr. 106-108; GX 9-12.

On June 1, 1979, the insurance adjustor mailed a

memorandum to the company’s regional headquarters

concerning settlement of Lane’s business-interruption

claim. Included with the memorandum was a list of

the restaurant’s monthly income and expenses sub-

’ Evidence of Heard’s prior dealings with J.C. Lane in

connection with two other arsons was excluded by the trial

court (Tr. 229, 370-376). Heard, who testified at trial, had

entered into a plea agreement with the government (Tr. 265-

275, 605-606).

6

mitted and signed by J.C. Lane, falsely claiming a net

monthly profit of $2,500. Pet. App. 2a-3a; Tr. 74-76;

GX 13. This mailing was charged in count 1 of the

indictment (J.A. 14). On November 1, 1979, the bus-

iness-interruption claim was settled for $2,700, and

the insurance company issued to Lane a draft for that

amount on that date. Pet. App. 3a; Tr. 77-78; GX

15.

Dennis Lane was not involved in the restaurant

arson. At the time the evidence relating to this count

was received, the trial judge instructed the jury that

the evidence was not to be considered against him

(J.A. 21). The judge repeated this instruction in her

final charge, together with an instruction regarding

the separate consideration to be given each defendant

and each count (ibid.).

2. The Duplex Fire

In early 1980, J.C. Lane hired Heard to set fire

to a duplex that Lane was moving to a vacant lot in

Amarillo (Pet. App. 3a; Tr. 243-245). The duplex

was owned by Dennis Lane and Andrew Lawson,

doing business as L & L Properties. On January 22,

1980, J.C. Lane obtained a $35,000 fire insurance

policy on the building, which had been purchased for

$500. Pet. App. 3a; Tr. 50-52, 57. The duplex was

burned on May 1, 1980, by Marvin McFarland, an

employee of Heard’s (Pet. App. 4a; Tr. 246-250, 319-

320). A week or two later, J.C. Lane told Heard that,

as the building was not a total loss, he planned to

“ ‘stick it to’”’ the insurance company by submitting

repair invoices for reimbursement (Tr. 250).

On May 9, 1980, the insurance adjustor issued an

initial draft of $7,000 on the policy to Dennis Lane

and his partner Lawson as an advance for repairs to

7

the duplex. At the same time, Lane and Lawson

signed a proof-of-loss form claiming a partial loss of

$7,000 and stating that the “ ‘loss did not originate

by any act, design or procurement on the part of your

insured or this affiant’” and that “‘no attempt to

deceive [the] company as to the extent of the loss has

been made.’” On May 15, 1980, the adjustor mailed

to the insurance company’s headquarters a report on

expected repair costs that had been submitted by

Dennis Lane along with his partial proof-of-loss form.

Pet. App. 4a; Tr. 165-168; GX 34A-34E, 35. This

mailing was charged in count 2 of the indictment

(J.A. 15-16).

On May 21 and 30, 1980, the adjustor issued addi-

tional drafts to the insured for $2,000 and $3,000,

respectively. Dennis Lane submitted to the adjustor

proof-of-loss forms corresponding to each payment.

On May 25, 1980, the adjustor mailed Lane’s $2,000

proof-of-loss form to company headquarters, together

with a memorandum indicating that repairs were in

progress and had exceeded the initial $7,000 advanced

earlier. On August 6, 1980, the adjustor mailed an-

other progress report to headquarters, along with

Lane’s $3,000 proof-of-loss form and an additional

$2,000 proof-of-loss form.* Pet. App. 4a-5a; Tr. 171-

175; GX 37-38, 39A-39C. The August 6 mailing was

charged in count 3 of the indictment (J.A. 16).

On September 16, 1980, the adjustor issued to

Dennis Lane a draft for $12,250, representing final

*It is not clear from the record whether this claim ‘is the

same as that represented by the $2,000 proof-of-loss form

mailed on May 25, 1980. The court of appeals assumed, and

we do not dispute, that the proof-of-loss forms mailed on

August 6, 1980 related to the drafts issued earlier. See Pet.

App. 5a n.3, 15a-16a n.10.

8

settlement of his claims relating to the duplex and

bringing the total amount paid to over $24,000 (Pet.

App. 5a; Tr. 175-176; GX 40). Two days later, the

adjustor mailed a memorandum to company head-

quarters explaining the high total cost of restoration

(the original estimate had been for $14,000) on the

basis of roof damage that had required additional re-

pairs. The adjustor included in his report a number

of invoices supplied by Dennis Lane that listed vari-

ous materials and furniture purportedly purchased by

L & L Properties to repair and refurbish the duplex.

Pet. App. 5a; Tr. 176-183; GX 41A-41N. In fact, the

invoices had been fabricated by J.C. Lane together

with Heard and his secretary (Pet. App. 5a; Tr. 250,

256-262; GX 45-56). The September 18 mailing was

the subject of count 4 of the indictment (J.A. 16-17).

B The Flower Shop Conspiracy

At a meeting with defendants and Lawson several

weeks after the duplex fire, Heard proposed that they

establish and burn a phony flower shop in Lubbock.

The Lanes agreed to participate in the plan. Heard’s

associate, William Lankford, who operated L & L De-

signs, an artificial-flower business in Amarillo, agreed

to stock the Lubbock shop with old flowers and broom-

weed. Heard and Dennis Lane picked out a suitable

building in July 1980, which Lankford stocked in Au-

gust. Pet. App. 5a-6a; Tr. 251-255, 275-277, 286-287.

Lankford prepared fictitious invoices for merchandise

purportedly delivered to the shop. In November 1980,

J.C. Lane insured the contents of the shop for $50,000.

Heard was later arrested and Lankford questioned

with respect to an unrelated crime, and the planned

arson of the flower shop never took place. Pet. App.

7a; Tr. 400-402, 458-459, 475-476, 479. The flower

9

shop conspiracy was charged in count 5 of the indict-

ment (J.A. 17-19).

4. Dennis Lane’s Perjury

In March 1981, a newspaper article connected

Dennis Lane to a scheme to burn the Lubbock flower

shop with Heard. The same day that the article ap-

peared, J.C. Lane cancelled the insurance policy on

the shop. Pet. App. 7a; Tr. 406, 416-417. On May 12,

1981, Dennis Lane appeared before a grand jury in-

vestigating Heard. He testified that Heard had noth-

ing to do with the flower shop or with his own deal-

ings with Lankford. Pet. App. 7a-8a; Tr. 548-549;

GX 92A, at 68. On the basis of this testimony, Dennis

Lane was charged with perjury in count 6 of the

indictment (J.A. 19-20).

B. The Court Of Appeals’ Decision

1. The court of appeals reversed defendants’ ccn-

victions, holding (Pet. App. 9a) that count 1 “should

not have been joined with the others [under Fed. R.

Crim. P. 8(b)] because it was not part of the same

series of acts or transactions as Counts 2 through 6.”

The court reasoned that the El Toro restaurant fire

was entirely separate from the other crimes and that

it was not linked to them by any common scheme or

plan (Pet. App. 9a-13a). The court did conclude,

however, that counts 2 through 6 were properly joined

(id. at 13a).

The court refused to consider the government’s ar-

gument that the error, if any, was harmless. Stat-

ing only that “Rule 8(b) misjoinder is prejudicial

per se in this circuit” (Pet. App. 13a) and that mis-

joinder is “inherently prejudicial” (id. at 10a), the

court remanded for new trials on all counts. Under

10

the court’s ruling (id. at 13a), defendants on remand

may be tried jointly on counts 2 through 6, with a

separate trial for J.C. Lane on count 1.°

2. The court of appeals rejected the Lanes’ con-

tention that the evidence was insufficient to support

their mail fraud convictions on counts 2 through 4,

which involved the 1980 duplex fire in Amarillo (Pet.

App. 15a-18a).° Defendants argued that the charged

mailings could not have been in furtherance of their

fraudulent scheme because each took place after the

insurance company had issued to them the draft re-

lated to the mailed proof-of-loss forms or invoices

(id. at 16a). In rejecting this argument, the court

of appeals relied on this Court’s decision in United

States v. Sampson, 371 U.S. 75 (1962), reasoning

that mailings occurring after payment may be “in

execution of fraud” where they are “designed to lull

the victims into a false sense of security and post-

pone investigation” (Pet. App. 17a). The court of

appeals concluded that the evidence supported a jury

5 Alternatively, although the court of appeals did not ad-

dress the issue, it seems clear under Fed. R. Crim. P. 8(a) that

count 1 could properly be joined with counts 2 through 5 at a

trial of J.C. Lane alone. Accordingly, each defendant may be

tried on all his charges at a trial separate from that of the

other defendant’s.

6 The court of appeals also rejected J.C. Lane’s challenge to

the sufficiency of the evidence supporting his conviction on

count 1 (the restaurant fire) (Pet. App. 13a-15a) and Dennis

Lane’s challenge to the sufficiency of the evidence supporting

his conviction for perjury (id. at 18a-20a), challenges that

they do not renew in this Court (see 84-963 Cross-Pet. 3).

Defendants did not argue in the court of appeals, and do not

now argue, that the evidence was insufficient to support their

convictions for conspiracy in connection with the planned

flower shop arson (see Pet. App. 20a n.13).

11

inference that the charged mailings “were intended

to and did have a lulling effect” because they helped

to convince the insurance company that “the claims

were legitimate” (id. at 17a-18a (footnote omitted) ).’

The court reasoned (id. at 18a):

The Proofs of Loss declared that the “loss did

not originate by any act, design or procurement

on the part of [the] insured” and that no at-

tempt had been made to deceive the insurance

company. [The company] required the insured

to submit the forms; any failure to comply

might have alerted [it] to the possibility of

fraud.

Similarly, the invoices gave the impression of

a perfectly innocent claim. The building sup-

plies and furniture that Lane claimed to have

purchased for the duplex were set out in minute

7 The court of appeals noted (Pet. App. 17a n.11) that the

district court’s instructions accorded with this view of the

law. Defendants did not challenge the jury instructions in

the court of appeals and do not appear to do so in this Court.

The district court instructed the jury that each charged

mailing must be “for the purpose of executing the scheme to

defraud” (J.A. 22) and that “the use of the United States

mails [must be] closely related to the scheme in that the

accused either mailed something or caused it to be mailed in

an attempt to execute or carry out the scheme” (J.A. 23).

The district court further instructed the jury that a use of

the mails “can not be for the purpose of executing such

scheme as alleged in the indictment * * * if the alleged scheme

in its entirety was completed prior to the mailing alleged in

the indictment.” Ibid. (emphasis added). The district court

also stated to the jury that mailings “which relate to the

acceptance of the proceeds of the scheme or which facilitate

concealment of the scheme are mailings in furtherance of the

scheme” (J.A. 24).

12

detail. The invoices were dated randomly and

torn out of the invoice book at random points to

indicate that L & L Properties was not the sole

customer of the [alleged supplier]. A reasonable

jury could find that all of these details were

intended to lull [the insurance company] into a

false sense of security.

SUMMARY OF ARGUMENT

I

Rule 52(a) of the Federal Rules of Criminal Pro-

cedure requires a reviewing court to disregard

“Ta]ny error * * * which does not affect substantial

rights” (emphasis added). This Court has similarly

made it clear that “it is the duty of a reviewing

court to consider the trial record as a whole and to

ignore errors that are harmless.” United States v.

Hasting, 461 U.S. 499, 509 (1983). There is no ra-

tional basis for holding that this duty does not ex-

tend to violations of Fed. R. Crim. P. 8—indeed, mis-

joinder is a garden variety technical error that,

while sometimes prejudicial to the defense, is not in-

herently associated with prejudice. Those courts of

appeals that review joinder errors for potential prej-

udice have had no difficulty in assessing on a case by

case basis the harmfulness of misjoinders under

Rule 8, just as they have routinely determined

whether a joinder of offenses or defendants that Rule

8 authorizes has in a particular case given rise to

such prejudice that a severance is mandated under

Fed. R. Crim. P. 14. Application of the harmless

error rule to questions of joinder will further the

purposes of both Rule 8 and Rule 52(a) without sac-

rificing any interest of defendants in a fair trial.

13

There is no reason for excepting misjoinder from

the operation of the harmless error requirement.

The Court has applied the harmless error rule even

to most constitutional errors, exempting only a nar-

row class of cases, such as deprivation of the assist-

ance of counsel or trial before a biased tribunal, in

which the error by its nature inescapably taints the

entire proceeding. It would be incongruous indeed to

conclude that misjoinder (which is not a constitu-

tional error) is somehow exempt from this funda-

mental principle of appellate review. The fact that

a trial court has no discretion to refuse a severance

of misjoined charges or defendants is immaterial to

the present inquiry; that may establish the existence

of error without regard to consideration of prejudice,

but of course the presence of error is an inevitable

ingredient of the harmless error doctrine, not a fac-

tor rendering the doctrine inapplicable. Recognition

of the duty to apply the harmless error doctrine here

will not render Rule 8 redundant with Rule 14, nor

is it foreclosed by the Court’s decision in McElroy v.

United States, 164 U.S. 76 (1896), rendered before

the first statute prohibiting reversal of judgments

for nonprejudicial errors.

While the Court may wish to remand this case to

the court of appeals for consideration of the harmful-

ness of the error here, we think it plain that the

joinder of count 1 with counts 2 through 6 did not

materially prejudice defendants in light of the over-

whelming evidence of their guilt, the district court’s

limiting instructions, and the admissibility of the

same evidence on separate retrials.

14

II

The evidence is clearly sufficient to support de-

fendants’ convictions for mail fraud in connection

with the duplex arson. The charged mailings did

not take place after defendants had fully secured the

proceeds of their fraudulent scheme. Even if they

had, the mailings were “for the purpose of executing”

that scheme within the meaniug of 18 U.S.C. 1341

because they helped to lull the insurance company

into believing that defendants’ claim was a valid one

and thereby served to make detection of the scheme

less likely. See United States v. Sampson, 371 U.S.

75 (1962). This Court’s decision in United States v.

Maze, 414 U.S. 395 (1974), is not to the contrary,

because the mailings there increased rather than de-

creased the likelihood that the defendant’s scheme

would be discovered, and so could not have been in

furtherance of that scheme. The policy behind Sec-

tion 1341, to prohibit all fraudulent uses of the fed-

eral mails and thereby to protect the public, clearly

would be contravened by creating the exception from.

its provisions that defendants here seek to establish.

ARGUMENT

I. A CONVICTION MAY NOT BE REVERSED ON

THE BASIS OF MISJOINDER UNDER RULE 8 OF

THE FEDERAL RULES OF CRIMINAL PROCE-

DURE IF THE ERROR WAS HARMLESS

The court of appeals erred in refusing to consider

whether the misjoinder of count 1 under Fed. R.

Crim. P. 8(b)* constituted harmless error. Although

8 Although we believe, as we argued to the court of appeals,

that the joinder here was permissible under Rule 8(b), we

have not presented that largely factual question to this

15

the circuits are divided on the question, the better

reasoned and more recent line of cases supports ap-

plication of the harmless error standard of Fed. R.

Crim. P. 52(a) to misjoinder under Rule 8.’ There

Court. Rather than treating the question solely under Rule 8 (b)

(see Pet. App. 9a), the court of appeals arguably should have

deterinined under Rule 8(b) that the defendants were prop-

erly joined because they “participated in the same act or

transaction or in the same series of acts or transactions,” and

then determined under Rule 8(a) that the offenses charged

against each defendant were properly joined. Count 1 would

plainly have been properly joined on this analysis because the

El Toro restaurant fraud was, under Rule 8(a), “of the same

or similar character” as the duplex fraud and flower shop

scheme. While it is “quite possible” that the Rule’s drafters

intended such an approach, the courts of appeals have con-

sistently analyzed all joinder questions involving multiple

defendants under Rule 8(b) alone. 1 C. Wright, Federal

Practice and Procedure: Criminal § 144, at 494 & n.1 (1982)

(citing cases) ; see also 8 J. Moore, Moore’s Federal Practice

{ 8.05[1], at 8-19 (2d ed. 1984). In considering whether the

harmless error rule applies to misjoinder, it should make no

difference whether the joinder question arises under Rule

8(a) or Rule 8(b). See, e.g., United States v. Ajlouny, 629

F.2d 830, 843 (2d Cir. 1980) (treating issue as one under

Rule 8 and citing precedents addressing both sections of the

Rule), cert. denied, 449 U.S. 1111 (1981).

® For the view that misjoinder may constitute harmless

error, see, e.g., United States v. Ajlouny, 629 F.2d 830, 843

(2d Cir. 1980), cert. denied, 449 U.S. 1111 (1981); United

States v. Werner, 620 F.2d 922, 926 (2d Cir. 1980) ; United

States v. Turbide, 558 F.2d 1053, 1061 (2d Cir.), cert. denied,

434 U.S. 934 (1977) ; United States v. Granello, 365 F.2d 990,

995 (2d Cir. 1966), cert. denied, 386 U.S. 1019 (1967);

United States v. Seidel, 620 F.2d 1006 (4th Cir. 1980);

United States v. Bibby, 752 F.2d 1116, 1121-1122 (6th Cir.

1985) ; United States v. Hatcher, 680 F.2d 438, 442 (6th

Cir. 1982) ; United States v. Varelli, 407 F.2d 735, 747-748

(7th Cir. 1969) ; United States v. Martin, 567 F.2d 849, 854

16

is nothing peculiar to questions of joinder that war-

rants excepting them from the general rule, em-

bodied in statutory directives, that courts of appeals

have a duty to disregard all trial errors that did not

affect a defendant’s substantial rights. Indeed, appli-

cation of the harmless error rule to misjoinder will

further the salutary purposes both of Rule 8 and of

Rule 52(a). This is shown especially clearly in this

case, as it is beyond question that the defendants

were not materially prejudiced by the trial of count

1 together with counts 2 through 6.

A. Federal Appellate Courts Have A Duty To Disre-

gard All Harmless Errors, Including Misjoinder

Rule 52(a) of the Federal Rules of Criminal Pro-

cedure directs that “[a]ny error * * * which does

not affect substantial rights shall be disregarded”

(9th Cir. 1977) ; Baker v. United States, 401 F.2d 958, 972-

974 (D.C. Cir. 1968). Except for the Second Circuit, each

of these courts of appeals reversed a previously taken posi-

tion that misjoinder is prejudicial per se. See, e.g., Ingram

v. United States, 272 F.2d 567 (4th Cir. 1959) ; United States

v. Sutton, 605 F.2d 260, 272 (1979), on reh’g, 642 F.2d 1001

(6th Cir. 1980), cert. denied, 453 U.S. 912 (1981); United

States v. Gougis, 374 F.2d 758, 762 (7th Cir. 1967) ; Metheany

v. United States, 365 F.2d 90, 94-95 (1966), later appeal, 390

F.2d 559 (9th Cir.), cert. denied, 393 U.S. 824 (1968);

Ward v. United States, 289 F.2d 877, 878 (D.C. Cir. 1961).

For cases still adhering to that position, see, e.g., United

States v. Turkette, 632 F.2d 896, 906 & n.35 (1st Cir. 1980),

rev’d on other grounds, 452 U.S. 576 (1981); United States

v. Bova, 493 F.2d 33 (5th Cir. 1974) ; United States v. Bledsoe,

674 F.2d 647, 654, 657-658 (8th Cir.), cert. denied, 459 U.S.

1040 (1982); United States v. Eagleston, 417 F.2d 11, 14

(10th Cir. 1969) ; United States v. Ellis, 709 F.2d 688, 690

(11th Cir. 1983); see also United States v. Graci, 504 F.2d

411, 414 (3d Cir. 1974).

—->

17

(emphasis added). To similar effect, 28 U.S.C. 2111

enjoins federal appellate courts to “give judgment

* * * without regard to errors or defects which do

not affect the substantial rights of the parties.” *°

In United States v. Hasting, 461 U.S. 499, 509

(1983), this Court made it clear that “it is the duty

of a reviewing court to consider the trial record as

a whole and to ignore errors that are harmless.”

See also, e.g., Brown v. United States, 411 U.S. 223,

230-232 (1973); Milton v. Wainwright, 407 U.S.

371 (1972); Harrington v. California, 395 U.S. 250

(1969) ; Chapman v. California, 386 U.S. 18 (1967);

Kotteakos vy. United States, 328 U.S. 750 (1946).

The harmless error rule as expressed in Fed. R.

Crim P. 52(a), 28 U.S.C. 2111, and this Court’s de-

cisions admits of no exception for claims of improper

joinder. To carve out such an exception, requiring

a new trial even though the asserted misjoinder was

harmless error, would be inconsistent with the bene-

ficial purposes of both Rule 52(a) and Rule 8. As

the Court noted in Hasting, the purpose of the harm-

less error rule is “ ‘to conserve judicial resources by

enabling appellate courts to cleanse the judicial proc-

ess of prejudicial error without becoming mired in

harmless error.’” 461 U.S. at 509, quoting R. Tray-

10 Congress intended that 28 U.S.C. 2111 would assure that

the harmless error rule apply in appellate as well as trial

courts. H.R. Rep. 352, 81st Cong., Ist Sess. 18 (1949). Both

Rule 52(a) and Section 2111 are based on former 28 U.S.C.

(1946 ed.) 391, which provided that judgment be given

“without regard to technical errors, defects, or exceptions

which do not affect the substantial rights of the parties.”

Significantly, both Rule 52(a) and Section 2111 omit the

limitation that only “technical” errors be subject to the

harmless error standard. See generally Hasting, 461 U.S. at

509-510 n.7.

18

nor, The Riddle of Harmless Error 81 (1970); see

Kotteakos, 328 U.S. at 758-760. In the context of

a criminal prosecution, the harmless error rule rec-

ognizes that “justice, though due to the accused, is

due to the accuser also. The concept of fairness must

not be strained till it is narrowed to a filament. We

are to keep the balance true.” Snyder v. Mussachu-

setts, 291 U.S. 97, 122 (1934) (Cardozo, J.); see

also Bruton v. United States, 391 U.S. 1238, 135

(1968) (“‘A defendant is entitled to a fair trial but

not a perfect one,’ ” quoting Lutwak v. United States,

344 U.S. 604, 619 (1953) ). The interests of society,

victims, and witnesses are served by according final-

ity to convictions reached after trials that, though

imperfect, were not infected by materially prejudicial

error. See Hasting, 461 U.S. at 507.

The purposes of the joinder rules, to “conserve

state funds, diminish inconvenience to witnesses and

public authorities, and avoid delays in bringing those

accused of crime to trial” (Bruton, 391 U.S. at 134),

are fully consistent with the goals of the harmless

error doctrine—both are designed to promote effi-

ciency without sacrificing the rights of defendants.

See Parker v. United States, 404 F.2d 1193, 1196

(9th Cir. 1968) (footnote omitted), cert. denied, 394

U.S. 1004 (1969) (joinder “expedites the adminis-

tration of justice, reduces the congestion of trial

dockets, conserves judicial time, lessens the burden

upon citizens who must sacrifice both time and money

to serve upon juries, and avoids the necessity of re-

calling witnesses who would otherwise be called upon

to testify only once”) ; United States v. Werner, 620

F.2d 922, 928 (2d Cir. 1980) (“trial convenience and

economy of judicial and prosecutorial resources [are]

considerations of particular weight when the Govern-

19

ment and the courts have been placed under strict

mandate to expedite criminal trials [under the]

Speedy Trial Act’’).

To remove such a significant category of cases as

those involving allegations of misjoinder™ from op-

eration of the harmless error rule would thus be at

odds with the intent behind both Rule 52(a) and

Rule 8. Indeed, the Court’s discussion of the harm-

less error standard in Kotteakos v. United States,

supra, which raised joinder as well as variance issues

(328 U.S. at 756 n.6, 774-775), demonstrates the

applicability of the harmless error doctrine to viola-

tions of Rule 8. The Court in Kotteakos clearly as-

sumed that the harmless error requirement is appli-

cable to questions of joinder, for it stated (328 U.S.

at 775) that the harmless error statute “carries the

threat of overriding the requirement of [the joinder

statute] * * *, unless the application of [the harm-

less error statute] is made with restraint.” The

Court concluded (ibid.) that the harmless error and

joinder rules “must be construed and applied so as

to bring them into substantial harmony, not into

square conflict.” That harmony is not achieved by

nullifying the harmless error principle, but by scru-

tinizing cases of misjoinder carefully; but if errors

in joinder, like almost any other errors, have not

affected the substantial rights of the defendants, re-

‘1 Professor Moore has observed (8 J. Moore, supra,

{| 8.02[1], at 8-2 to 8-3 (footnote omitted) ) :

The criteria for joinder of offenses and defendants are

spelled out in three deceptively simple sentences of Rule

8. None of the Federal Rules has given rise to so much

misunderstanding, yet few of the Rules are so vital.

Certainly the Court should be chary of mandating automatic

reversal in an area where error is so common.

20

versal is improper. In Schaffer v. United States, 362

U.S. 511, 517 (1960), as in Kotteakos, the Court

appeared to recognize that the harmless error rule

is applicable to improper joinder, though the Court

found that the rule “is not even reached * * * since

here the joinder was proper under Rule 8(b) and

no error was shown.” See United States v. Granello,

365 F.2d 990, 995 (2d Cir. 1966) (“[i]n the Schaf-

fer case the Court implied that the harmless error

rule is applicable to questions of improper joinder’’),

cert. denied, 386 U.S. 1019 (1967).

B. There Is No Basis On Which To Except Misjoinder

From The Harmless Error Doctrine

1. In Hasting, the Court noted that “certain er-

rors may involve ‘rights so basic to a fair trial that

their infraction can never be treated as harmless

error’” (461 U.S. at 508 n.6, quoting Chapman v.

California, 386 U.S. at 23). Such fundamental

rights include the right to counsel” and the right to

an impartial judge.” But the joinder standards of

Rule 8, which are not even of constitutional magni-

tude,"* obviously do not rise to the level of these fun-

12 Gideon V. Wainwright, 372 U.S. 335 (1963).

18 Tumey V. Ohio, 273 U.S. 510 (1927).

14 “TN Jo federal court has raised misjoinder to an error of

constitutional dimension.” Note, Harmless Error and Mis-

joinder Under the Federal Rules of Criminal Procedure: A

Narrowing Division of Opinion, 6 Hofstra L. Rev. 533, 540

(1978) (footnote omitted). See, e.g., United States vy. Seidel,

620 F.2d at 1013 (misjoinder only “a violation of a mere

procedural rule’) (footnote omitted) ; see generally Schaffer

v. United States, 362 U.S. 511 (1960). The Court’s discussion

of the harmless error standard for nonconstitutional viola-

, 21

damental rights. Moreover, while improper joinder

may give rise to constitutional violations, such as

Bruton problems, those violations themselves, like

other constitutional errors, are subject to the harm-

less error rule. See Brown v. United States, 411

U.S. at 281; Harrington v. California, 395 U.S. at

252-254; see also Moore v. Illinois, 434 U.S. 220, 232

(1977) (introduction of evidence from unconstitu-

tional identification may be harmless); Milton v.

Wainwright, 407 U.S. at 372 (introduction of im-

properly obtained confession may be harmless) ;

Chambers v. Maroney, 399 U.S. 42, 52-53 (1970)

(introduction of evidence seized in violation of the

Fourth Amendment may be harmless); Coleman v.

Alabama, 399 U.S. 1, 10-11 (1970) (denial of coun-

sel at preliminary hearing may be harmless) ; United

States v. Wade, 388 U.S. 218, 242 (1967) (tainted

in-court identification may be harmless).

Nor is the prejudice that may result from mis-

joinder so difficult to ascertain that it must be pre-

sumed always to be present.” Trial courts routinely

tions in Kotteakos v. United States, supra, further suggests

that improper joinder does not, in itself, violate the Constitu-

tion. Finally, there is of course no constitutional provision

directly addressing joinder. If misjoinder is ever unconstitu-

tional in a particular case, therefore, it could only be because

the ensuing prejudice is so great as to deny a defendant a

fair trial in contravention of the Fifth Amendment. But

where no prejudice has arisen, no constitutional violation

could possibly have occurred.

1’ Contrary to defendants’ argument (84-744 Br. in Opp.

8), Rules 8 does not represent a determination that a defend-

ant will be prejudiced in every case where its requirements

have been contravened in the slightest degree. At most, the

Rule is based on a prediction of when, in general, the danger

of prejudice will outweigh the gains joinder achieves in trial

22

inquire into the possible prejudice flowing from

joint trials in determining whether to grant a sever-

ance under Fed. R. Crim. P. 14, and appellate

courts just as routinely perform that inquiry in re-

viewing Rule 14 rulings. Where the dangers that

Rule 8 is designed to guard against have materialized

in the form of actual prejudice to a defendant’s sub-

stantial rights, misjoinder will result in reversal.”

efficiency and convenience. See 8 J. Moore, supra, { 8.02.

Rule 8 does not speak to the presence of material prejudice

in specific cases. Rather, just as Rule 14 allows for severance

in a particular case on the grounds of prejudice where Rule

8 permits joinder, Rule 52(a) mandates affirmance in the

absence of prejudice where a joint trial has taken place in

violation of Rule 8.

16 Fed. R. Crim. P. 14 provides:

If it appears that a defendant or the government is

prejudiced by a joinder of offenses or of defendants in

an indictment or information or by such joinder for trial

together, the court may order an election or separate

trials of counts, grant a severance of defendants or pro-

vide whatever other relief justice requires. In ruling ona

motion by a defendant for severance the court may order

the attorney for the government to deliver to the court

for inspection in camera any statements or confessions

made by the defendants which the government intends

to introduce in evidence at the trial.

17 The joinder rule is intended in part to avoid “mass trials.”

See Ingram v. United States, 272 F.2d at 570-571. But where

a defendant has received a fair trial, where he has not been

prejudiced by misjoinder, there is no call for reversal. Cer-

tainly the avoidance of “mass trials” is not furthered in any

sensible way by a rule of automatic reversal for violations of

Rule 8. One might just as well urge that the purposes of the

hearsay rules or of the Fifth Amendment mandate that all

violations of thier standards result in reversal. This Court

23

But where a court is confident that no prejudice has

arisen—where, for example, the evidence of guilt is

overwhelming or the evidence admitted at the joint

trial would also be admissible at separate trials—

the harmless error rule is appropriately invoked.

Those circuits that have applied Rule 52(a) to mis-

joinder have engaged in the same sort of careful in-

quiry into the possibility of prejudice that has char-

acterized the proper application of the harmless er-

ror rule in other contexts. See, e.g., United States v.

Bibby, 752 F.2d 1116, 1122 (6th Cir. 1985); United

States v. Seidel, 620 F.2d 1006, 1009-1011 (4th Cir.

1980) ; United States v. Turbide, 558 F.2d 1053, 1061-

1063 (2d Cir.), cert. denied, 434 U.S. 934 (1977);

see also 8 J. Moore, Moore’s Federal Practice

{| 8.04[2], at 8-18 to 8-19 (2d ed. 1984) (application

of Rule 52(a) to misjoinder “is acceptable and even

desirable * * *[;] [d]efendants will suffer * * * only

if, in the name of ‘efficiency,’ the [harmless error]

doctrine is not carefully and strictly construed”).

2. In support of the view that the harmless error

standard is inapplicable to misjoinder, defendants

argue (84-744 Br. in Opp. 6-7) that application of

Rule 52(a) in these circumstances would effectively

make Rule 8 redundant with Rule 14, which expressly

addresses the issue of prejudicial joinder (see note

has of course consistently rejected such an approach, most

recently in Hasting (461 U.S. at 507):

The court [of appeals] appears to have decided to deter

future similar [prosecutorial] comments by the drastic

step of reversal of these convictions. But the interests

preserved by the doctrine of harmless error cannot be so

lightly and casually ignored in order to chastise what the

court viewed as prosecutorial overreaching.

24

16, supra). But this fallacious objection misses the

crucial fact that the rules are addressed to proce-

dures in the district court, where they are quite

clearly distinct in operation: Rule 8 requires the

court to grant a motion for severance unless its

standards are met, without regard to the question of

prejudice, while Rule 14 gives the court discretion

to grant such a motion in the case of joinder that,

though proper under Rule 8, is prejudicial. This dif-

ference goes to the question whether there has been

error at all—an indispensable prerequisite to any ap-

plication of the harmless error rule—not to the quite

distinct question whether the error requires setting

aside the convictions. Consequently, it is wholly fal-

lacious to contend that the difference in the rules is

eviscerated simply because, on appeal, a reviewing

court will not set aside a conviction for a violation

of Rule 8 in the absence of prejudice.

Moreover, even when Rule 52(a) is applied to vio-

lations of Rule 8, an important distinction remains

between appellate review of the denial of Rule 8 mo-

tions and of those brought under Rule 14: the for-

mer are reviewed as a matter of law, with affirmance

proper only if the government has carried the burden

of establishing the harmlessness of any error, while

the latter are reviewed under the highly deferential

abuse-of-discretion standard, with the defendant hav-

ing to shoulder the burden of a clear demonstration

of substantial prejudice. For these reasons, Rule 14

cannot be said to create an implicit exception to the

application of the harmless error standard with re-

spect to misjoinder. As Judge Friendly stated in

United States v. Granello (365 F.2d at 995), “[w]Je

see no reason why the undoubted truth that an ap-

peal claiming misjoinder under Rule 8(b) raises a

question of law in the strict sense, whereas an ap-

25

peal from denial of severance under Rule 14 nor-

mally raises only one of abuse of discretion, should

carry exemption from the harmless error rule * * *

as a corollary.” See also United States v. Seidel, 620

F.2d at 1014-1015; United States v. Werner, 620

F.2d at 926; Baker v. United States, 401 F.2d 958,

973 (D.C. Cir. 1968).

3. Finally, this Court’s decision in McElroy v.

United States, 164 U.S. 76 (1896), while often cited

for the proposition that misjoinder is prejudicial per

se,* in fact does not establish such a rule. In that

case, which was decided prior to either the adoption

of the Federal Rules of Criminal Procedure in 1946

or the enactment of the harmless error statute in 1919

(see Act of Feb. 26, 1919, ch. 48, 40 Stat. 1181, 28

U.S.C. (1946 ed.) 391)), the government argued

that the finding of misjoinder did not require rever-

sal of the convictions of those defendants who had

been charged in all counts “because there is nothing

in the record to show that they were prejudiced or

embarrassed in their defence by the course pursued”

(164 U.S. at 81). The Court rejected this argument

on the ground that “[i]t cannot be said * * * that all

the defendants may not have been embarrassed and

prejudiced in their defence, or that the attention of

the jury may not have been distracted to their in-

jury in passing upon distinct and independent trans-

actions” (ibid.). Thus, McElroy rests upon the con-

clusion that the misjoinder there might have been

prejudicial and so could not be presumed harmless.

See United States v. Granello, 365 F.2d at 995. To

whatever extent it might be thought that McElroy

18 See, e.g., United States v. Turkette, 632 F.2d at 906 n.35;

United States v. Graci, 504 F.2d at 413.

26

does establish a rule of per se reversal that survives

subsequent legislation barring reversal for harmless

errors, the decision should be reexamined in light of

the Court’s more recent precedents on both the harm-

less error and the joinder rules (see pages 16-20,

supra).

C. The Misjoinder Of Count 1 Did Not Prejudice The

Rights Of The Defendants

While this Court, if it agrees with us that mis-

joinder is subject to harmless error evaluation, may

prefer to remand to the court of appeals for consid-

eration of the harmfulness of the misjoinder of

count 1, we believe there can be no question that it

did not materially prejudice defendants’ rights in the

circumstances of this case.” See Hasting, 461 U.S.

at 510 (this Court has authority to evaluate harm-

less error claims even where court of appeals has not

done so). To begin with, any error in joining count

~ 1 to the others was at most marginal. Although there

may not have been a single overarching conspiracy

encompassing all three fraudulent arson schemes

(see Pet. App. 12a), their close relation in terms of

time, method, and participants suggests that it was

only the court of appeals’ narrow reading of Rule 8

that resulted in its conclusion of misjoinder here.”

19 Because violation of Rule 8 is not an error of constitu-

tional dimension (see note 14, supra), the harmfulness of

the error in this case is to be assessed under the normal

standard of Kotteakos (see 328 U.S. at 764-765) rather than

under the strict reasonable-doubt standard established by

Chapman for constitutional violations.

20 Although it has been suggested that those circuits that

refuse to apply the harmless error rule to misjoinder have, in

unacknowledged compensation, broadened the scove of per-

27

Moreover, the testimonial and documentary evi-

dence against defendants, consisting of 29 witnesses,

including the Lanes’ “torches” (Heard and Lank-

ford) and more than 100 exhibits, was overwhelming

and countered by little more than Dennis Lane’s de-

nials and J.C. Lane’s character defense. There is

simply no reasonable probability in light of this evi-

dence that the joinder of count 1 materially con-

tributed to their convictions. See, e.g., Hastings, 461

U.S. at 512 (error was harmless in light of the

“overwhelming evidence of guilt and the inconsist-

ency of the scanty evidence tendered by the defend-

ants”) ; United States v. Ong, 541 F.2d 331, 338 (2d

Cir. 1976) (“where untainted evidence of guilt is

substantial, a greater demonstration of prejudice

from an erroneous failure to sever must be made be-

fore the error will be considered to require rever-

sal”). This conclusion is buttressed by the district

court’s instructions that the evidence in count 1—

which was distinct and easily segregated from the

evidence relating to the other five counts (see gen-

erally United States y. Bibby, 752 F.2d at 1122)—not

be considered against Dennis Lane and that the jury

give separate consideration to each defendant and

each count (J.A. 21). See, e.g., United States v.

Seidel, 620 F.2d at 1010; United States v. Granello,

365 F.2d at 995.

Finally, if any doubt remains as to the harmless-

ness of the joinder of count 1, it is dispelled by con-

sideration of the evidence that would be admissible

at separate trials on remand: the new trials of de-

fendants would, in fact, be so substantially similar to

missible joinder (see Note, supra, 6 Hofstra L. Rev. at 563),

the court of appeals in this case combined a crabbed reading

of Rule 8 with automatic reversal.

28

the trial that they have already had that any con-

clusion of prejudice can only be deemed wholly im-

plausible. At a joint trial of counts 2 through 6, evi-

dence of the El Toro restaurant arson and fraud

would still be admissible to establish J.C. Lane’s

intent or for similar purposes under Fed. R. Evid.

404(b). See, e.g., United States v. Ajlouny, 629 F.2d

830, 843 (2d Cir. 1980), cert. denied, 449 U.S. 1111

(1981) ; United States v. Martin, 567 F.2d 849, 854

(9th Cir. 1977). Defendants would receive limiting

instructions just as they did at the trial that has

already taken place. Any possibility of transference

of guilt is remote in light of the substantial involve-

ment of both defendants and would not be reduced

on their joint retrial. See, e.g., United States v.

Turbide, 558 F.2d at 1061; Baker v. United States,

401 F.2d at 972.”

In short, defendants were convicted on overwhelm-

ing evidence following a lengthy trial. The court of

appeals reversed for a technical violation of the join-

der requirements without any determination of the

harmfulness of the error. At a time when the crim-

inal justice system is already overburdened,” such a

21 In any event, reversal of J.C. Lane’s convictions on counts

2 through 5 is wholly unsupportable, as those counts could

have been tried with count 1 (at a trial of J.C. Lane alone)

or with count 6 (at a trial with Dennis Lane). Surely, no

cognizable prejudice arose simply because counts 2 through 5

were tried with both of the other counts.

22 Incredibly, defendants argue (84-744 Br. in Opp. 9-10)

that application of the harmless error rule will add to the

burdens facing the courts. The effort expended by the courts

of appeals in assessing the harmfulness of trial errors pales

next to the time and resources that must be dedicated to

retrials if reversals need not be predicated on actual prejudice

to defendants.

29

result, which does nothing to contribute to the fair-

ness of the process, makes little sense indeed.

Il. THE EVIDENCE WAS SUFFICIENT TO SUPPORT

DEFENDANTS’ CONVICTIONS FOR MAIL FRAUD

ON COUNTS 2 THROUGH 4

The court of appeals correctly rejected (Pet. App.

15a-18a) defendants’ contention that the evidence was

insufficient to show that the mailings charged in

counts 2 through 4 of the indictment (J.A. 14-17)

were “for the purpose of executing” (18 U.S.C. 1341)

their fraudulent scheme. The charged use of the mails

need not be “an element” of the scheme. Rather, it is

enough that the mailing be “incident to an essential

part of the scheme.” Pereira v. United States, 347

U.S. 1, 8 (1954). The evidence at trial, viewed in

the light most. favorable to the government, see, e.g.,

Glasser v. United States, 315 U.S. 60, 80 (1942),

plainly satisfies this test.

Defendants do not now contend that they did not

engage in a scheme to defraud their insurance com-

pany by deliberately burning their duplex in order to

receive the proceeds of the fire insurance policy. Nor

do they deny that the proofs of loss and invoices they

caused to be mailed to the company were fraudulent.”

Rather, they argue only (84-963 Cross-Pet. 4-10) that

the mailings could not have been for the purpose of

executing their scheme because each mailing took

place after they had received the payment from the

23 A defendant “causes” a mailing under 18 U.S.C. 1341

where the use of the mails “can reasonably be foreseen, even

though not actually intended [by him].” Pereira, 347 U.S. at

9. Under 18 U.S.C. 2(b), it is of course not necessary that the

defendant himself have actually used the mails (347 U.S.

at 8).

30

company relating to the documents mailed. This ar-

gument is erroneous both on the facts and on the law.

1. Defendants had not received the proceeds of

their fraud when the charged mailings took place.

The proof-of-loss forms charged in counts 2 and 3

were mailed well before the final and largest payment

on the policy was made in September 1980. These

mailings were substantially connected to the last pay-

ment, as the proofs of loss (which averred that the

loss had not been caused by the insured) related to

the entire claim, which was not settled until the Sep-

tember 18, 1980 payment. Indeed, the first payment

was only an advance for repairs that purportedly

continued until the final settlement (see pages 6-7,

supra). Moreover, the indictment charged that these

mailings were in furtherance of the entire fraudulent

scheme relating to the duplex arson, and not merely

in furtherance of obtaining the particular payments

directly related to the proof-of-loss forms (J.A, 14-

16). The scheme obviously was still continuing when

the mailings charged in counts 2 and 3 took place.

The convictions on these counts are therefore amply

supported by the evidence.

Although the September 1980 mailing charged in

count 4 took place two days after defendants had re-

ceived the final draft in payment from the insurance

company, they had not yet fully secured the proceeds

of that payment at the time of the mailing. Raymond

Thompson, the property manager for the insurance

company’s claims department (Tr. 208), testified that

the drafts issued by the company, unlike checks, are

not payable on demand but only upon authorization

from the home office when they arrive at the com-

pany’s bank for collection (Tr. 212-213). If “there

was something wrong with the claim” (Tr. 218), pay-

31

ment could have been stopped by the company even

after the draft had been issued. The cashier at de-

fendants’ bank (Tr. 364) testified that if the drafts

deposited by defendants had been dishonored by the

insurance company’s banks, the amounts would have

been charged against defendants’ account (Tr. 395).

Had defendants already withdrawn all or part of the

funds, their account would have been put in overdraft

status, allowing the bank to recover the funds from

defendants (Tr. 396). Accordingly, defendants had

not irrevocably received the proceeds of the final pay-

ment at the time of the mailing charged in count 4.

Had the mailing not taken place, the insurance com-

pany could have refused to honor the draft and de-

fendants could not have retained the funds in ques-

tion. See United States v. MacClain, 501 F.2d 1006,

1012 (10th Cir. 1974) (mailing was in furtherance

of fraudulent scheme where victim could have stopped

payment on previously tendered check had mailing not

occurred ).

2. Even assuming that defendants had obtained

the funds in question before each charged mailing,

the jury was still entitled to find that the mailings

were in furtherance of the fraudulent scheme. There

is no per se rule that mailings occurring after pay-

ment has been received cannot be “for the purpose of

executing” a scheme to defraud under Section 1341.

To the contrary, this Court has held that letters de-

signed to lull victims into a false sense of security,

postpone their complaints, and delay discovery of the

defendants’ scheme are within the statute. United

States v. Sampson, 371 U.S. 75 (1962) (subsequent

mailings assured victims that the services they had

paid for would be performed); see United States v.

Maze, 414 U.S. 395, 403 (1974). The courts of ap-

32

peals have also consistently upheld convictions under

Section 1341 on the theory that subsequent mailings

furthered the defendants’ schemes because the mail-

ings lulled victims into believing that they had not

been defrauded. See, e.g., United States v. Elkin, 731

F.2d 1005, 1008-1009 (2d Cir. 1984), cert. denied,

No. 83-1848 (Oct. 1, 1984); United States v. Jones,

712 F.2d 1316, 1320 (9th Cir.), cert. denied, 464 U.S.

985 (1983); United States v. Chappell, 698 F.2d 308,

311 (7th Cir.), cert. denied, 461 U.S. 931 (1983);

United States v. Wrehe, 628 F.2d 1079, 1082-1083

(8th Cir. 1980); United States v. Toney, 605 F.2d

200, 206-207 (5th Cir. 1979), cert. denied, 444 U.S.

1090 (1980); United States v. Vanderpool, 528 F.2d

1205, 1207 (4th Cir. 1975), cert. denied, 424 U.S.

922 (1976); United States v. MacClain, supra; Bliss

v. United States, 354 F.2d 456, 457 (8th Cir. 1966)

(Blackmun, J.).**

The jury was properly instructed in accordance

with this theory that mailings “which facilitate con-

cealment of the scheme are mailings in furtherance of

the scheme” (J.A. 24), although mailings that occur

after “the alleged scheme in its entirety had been

completed” do not violate the statute (J.A. 23). See

page 11 note 7, supra. Under these instructions,

the jury could surely have concluded that the scheme

had not ended with the September 16, 1980 payment,

but continued at least through the September 18 mail-

ing to the insurance company of the fraudulent in-

4 Cf. United States v. Miller, 664 F.2d 94, 98 (5th Cir. 1981),

cert. denied, 459 U.S. 854 (1982) (co-conspirator’s statement

made to allay third party’s suspicions was in furtherance of

conspiracy and therefore admissible under Fed. R. Evid.

801(d) (2) (E)); United States v. Gleason, 616 F.2d 2, 23

(2d Cir. 1979), cert. denied, 444 U.S. 1082 (1980) (same).

33

voices that formed the basis for that payment.” De-

fendants can reasonably be charged with having fore-

seen the subsequent mailing to the insurance company,

which followed the company’s normal business prac-

tice. And the mailing plainly contributed to the suc-

cess of defendants’ scheme; had it not taken place,

the company might well have immediately investi-

gated the circumstances of the claimed loss and dis-

covered defendants’ fraud. Indeed, following the mail-

ing the company conducted an on-site inspection of

the duplex in order to verify defendants’ claims and

took action in November 1980 to obtain reimburse-

ment when it appeared that some items of the claim

were not supported (Tr. 220-221).

The courts of appeals have upheld mail-fraud con-

victions in similar circumstances. In United States

v. Angelilli, 660 F.2d 23 (2d Cir. 1981), cert. denied,

455 U.S. 910 (1982), the defendants fraudulently

appropriated part of the proceeds from the sales of

debtors’ property and then mailed letters to creditors

with the remaining proceeds, falsely stating that the

creditors were receiving all of the funds obtained in

the sales. The court of appeals reasoned (id. at

36-37) that the defendants’ subsequent communica-

tions with their victims were a necessary part of

the scheme that served to lull the creditors into think-

25 The indictment properly charged that the mailings were

“for the purpose of executing” defendants’ fraudulent scheme

(J.A. 15, 16, 17). There was no need for the indictment to

state specifically that the letters were intended to “lull” the

insurance company. Hermansen v. United States, 228 F.2d

495, 499, reh’g denied, 230 F.2d 178 (5th Cir.), cert. denied,

351 U.S. 924 (1956); see also United States v. Buchanan,

633 F.2d 423, 426 (5th Cir. 1980), cert. denied, 451 U.S. 912

(1981) ; see generally United States v. Miller, No. 83-1750

(Apr. 1, 1985), slip op. 6-8.

34

ing that they had not been defrauded. Here as well,

the mailing to the insurance company headquarters

was a necessary part of the scheme, without which

the company would have taken steps to recover its

payments and to investigate the claim (Tr. 215-221).

Similarly, in United States v. Shelton, 669 F.2d 446

(7th Cir.), cert. denied, 456 U.S. 934 (1982), the

court of appeals held (669 F.2d at 458) that stock

certificates mailed to investors after they had parted

with their money were within Section 1341. The

stock certificates in Shelton, like the proof-of-loss

forms and invoices here, represented to the victims

the object for which they had expended their funds.

Had they not received this evidence of their expendi-

tures, the victims would more likely have initiated

action leading to discovery that they had been de-

frauded. Finally, in United States v. Moss, 591 F.2d

428 (8th Cir. 1979), the defendant was charged with

defrauding an insurance company. Even though the

defendant had already obtained an insurance policy,

the mailing to him of a policy amendment was held

to come within Section 1341. The court of appeals

reasoned (591 F.2d at 437) that the company would

not have processed claims without the policy amend-

ment, and that its mailing was therefore in further-

ance of the scheme to defraud. Here as well, defend-

ants’ fraud could not successfully have been perpe-

trated without mailing of their proof-of-loss forms

and invoices to the insurance company. See also cases

cited at page 32, supra.

United States v. Maze, supra, is not to the con-

trary. There, the defendant had fraudulently used a

stolen credit card. He was charged with violating

Section 1341 on the basis of invoices mailed to the

eard’s issuing bank for payment. The Court rea-

35

soned (414 U.S. at 403) that the mailings could not

have lulled the defendant’s victims, but rather “in-

creased the probability that [he] would be detected

and apprehended.” The defendant “probably would

have preferred to have the invoices misplaced * * *

and never mailed at all” (id. at 402). Here, by

contrast, the proof-of-loss forms and invoices served

to hide defendants’ fraud by making it appear that

a legitimate fire and loss had taken place. Had the

mailings not occurred, the insurance company would

have investigated the matter, increasing the chance

of defendants’ discovery. This is precisely the oppo-

site of what took place in Maze, where the bank

would not have been aware of the fraudulent pur-

chases if the invoices had never been mailed to it.

Rather, this case is controlled by United States v.

Sampson, supra. The subsequent mailings there, like

the ones here, “were designed to lull the victims into

a false sense of security, postpone their ultimate com-

plaint to the authorities, and therefore make the

apprehension of the defendants less likely than if

no mailings had taken place’ (Maze, 414 U.S. at

403 ).*°

*6In United States v. Ledesma, 632 F.2d 670 (7th Cir.),

cert. denied, 449 U.S. 998 (1980), the court of appeals errone-

ously relied on Maze in holding (632 F.2d at 677-678) that

the mailing of a proof-of-loss form after receipt of the insur-

ance company’s check did not violate Section 1341. The court

of appeals failed to discuss Sampson and only adverted (with-

out discussion) to the possibility that subsequent mailings

may conceal a fraud (632 F.2d at 677-678 n.11). Nor did the

court mention the possibility that payment on the check could

have been stopped or the funds recovered by the insurance

company. To our knowledge, neither the Seventh Circuit nor

any other court of appeals has ever relied on Ledesma to

reverse a conviction under Section 1341. To the contrary, the

36

No sound policy supports defendants’’ proposed lim-

itation on the mail fraud statute. Certainly mailings

that further a fraudulent scheme but occur after

funds have been obtained are no less a danger to the

public or a misuse of the Post Office than are similar

mailings that take place before victims have parted

with their money. Nor does the “lulling” theory ren-

der the statutory language a nullity—both this Court

and the courts of appeals have reversed convictions

because mailings were not made “for the purpose

of executing” a scheme to defraud, while recognizing

the validity of the doctrine that subsequent mailings

may violate the statute. See, e.g., United States v.

Maze, supra; Gordon v. United States, 358 F.2d 112,

114-115 (5th Cir. 1966). Finally, it is important

that Section 1.11, “traditionally * * * a first line of

defense” against fraudulent activity (Maze, 414 U.S.

at 405 (Burger, C.J., dissenting) ), be preserved at

least in the full scope of its historic reach against

all uses of the mail that further fraudulent schemes.

There is no justification for allowing “the ever-inven-

tive American ‘con artist’ ” (id. at 407 (Burger, C.J.,

dissenting) ) such a broad exemption from the stat-

utory prohibition as defendants seek to establish.

Seventh Circuit, like the other courts of appeals, has repeat-

edly affirmed the viability of the lulling theory at issue here.

See, e.g., United States v. Chappell, 698 F.2d at 311; United

States v. Shelton, 669 F.2d at 458.

37

CONCLUSION

The judgment of the court of appeals should be

reversed insofar as it holds that the misjoinder of

count 1 was reversible error and affirmed insofar

as it holds that the evidence was sufficient to support

respondents’ convictions on counts 2 through 4.

Respectfully submitted.

REX E. LEE

Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

ANDREW L. FREY

Deputy Solicitor General

BRUCE N. KUHLIK

Assistant to the Solicitor General

JOEL M. GERSHOWITZ

Attorney

APRIL 1985

® ov. &. Soveenmenr reintine orrice; 1985 461531 10211