Opposition Brief — Kapnison v. United States

>) | FILED

re MAR 26 i985

No. 84-971 :

ALEXANDER L. STEVag,

ee a

Sn the Supreme Court of the Mnited States

Octoser Term, 1984

Nick KAPNISON, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Rex E. Lee

Solicitor General

GLENN L. ARCHER, Jr.

Assistant Attorney General

Rosert E. LInDsAy

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

a

QUESTIONS PRESENTED

1. Whether petitioner was deprived of due process of law

by the trial court’s exclusion of deposition testimony of

petitioner’s co-defendant, taken in a civil proceeding to

which the United States was not a party.

2. Whether admission of testimony by petitioner's ex-

wife violated the confidential marital communications

privilege.

3. Whether the trial court selectively enforced the confi-

dential marital communications privilege.

(1)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Chambers v. Mississippi, 410 U.S. 284 ......... 5

Clark v. United States, 289 U.S.1 ............. 8

Government of the Canal Zone v. P. (Pinto),

EE ee 5

Grand Jury Subpoena, United States of

America, Hana Koecher, In re, No. 85-1033

eee y

Malfitano, Appeal of, 633 F.2d 276 ...... saneas 9

Pereira v. United States, 347 U.S. 1 ............ 7

Trammel v. United States, 445 U.S. 40 ......... 7

United States v. Ammar, 714 F.2d 238,

cert. denied, 464 U.S. 936 ..............6-. 8,9

United States vy. Benveniste, 564 F.2d

SS ae 5

United States v. Broome, 732 F.2d 363,

cert. denied, No. 84-118 (Oct. 1, 1984) ........ &

United States v. Entrekin, 624 F.2d 597,

Se WE SU, PE coc cwecaccccccsvece &

(IIT)

IV

Cases—Continued:

United States v. Fisher, 518 F.2d 836,

cert. denied, 423 U.S. 1033 .............244-- 7

United States v. Kahn, 471 F.2d 191,

cert. denied, 411 U.S. 986, rev’d,

Eee ee ee es 8

United States v. Lanci, 669 F.2d 391,

cert. denied, 457 U.S. 1134 .................. 5

United States v. Mendoza, 574 F.2d 1373,

cert. denied, 439 U.S. 988 ..............-005- 8

United States v. Neal, 743 F.2d 1441,

cert. denied, No. 84-5951 (Mar. 25,

eed») eee eee eee 4,9

United States v. Price, 577 F.2d 1356,

cert. denied, 439 U.S. 1068 .................. 8

United States v. Sims, No. 82-1523

Se, Bs OE So chose bdr ccconessnes 8

United States v. Wingate, 520 F.2d 309,

cert. denied, 423 U.S. 1074 ................ 5,6

Wolfle v. United States, 291 U.S.7 ............ 7

Zeigler v. Callahan, 659 F.2d 254 ............ 5,6

Constitution, statutes and rules:

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SD Wi OED ce ccessevitechesceteensereonens 2

V

Page

Statutes and rules—Continued:

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= es 8 A Serer TT erer Terri TT rrr rT 6

Fed. R. Evid. :

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PED LED ccc eccvvcccssccdscceeoses 5, 6

Rule 804(b)\(3) advisory committee note ..... 5

SED 8 60s ceca cvdcdecverdencunees 6

Miscellaneous:

8 J. Wigmore, Wigmore on Evidence

(McNaughton reved. 1961) ...........eee005- 7

Jn the Supreme Court of the Hnited States

OCTOBER TERM, 1984

No. 84-971

NICK KAPNISON, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. al-a25) is

reported at 743 F.2d 1450.

JURISDICTION

The judgment of the court of appeals was entered on

September 4, 1984. A petition for rehearing was denied on

October 22, 1984. The petition for a writ of certiorari was

filed on December 19, 1984. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District Court

for the District of New Mexico, petitioner was convicted on

one count of conspiring to impede the United States in its

collection of income taxes, in violation of 18 U.S.C. 371;

one count of making a false tax return, in violation of 26

(1)

2

U.S.C. 7206(1); six counts of participating in the misappli-

cation of funds of a bank insured by the Federal Deposit

Insurance Corporation, in violation of 18 U.S.C. 656; and

seven counts of participating in a loan kickback scheme, in

violation of 18 U.S.C. 215. Petitioner was sentenced to two

years’ imprisonment on the conspiracy count. In addition,

he was fined $10,000 on the conspiracy count and $5,000

each on the tax count and one of the banking counts.

Petitioner’s sentences on the remaining counts were sus-

pended in favor of five years’ probation, conditioned on

performance of certain community service requirements.!

1. The evidence at trial showed that petitioner, an Albu-

querque, New Mexico businessman, along with Ben Bron-

stein, the owner of the First National Bank of Clovis, and

Henry Harenberg, the president of the bank, conspired to

obtain loans for various borrowers, received kickbacks

from the borrowers, and divided the kickbacks among

themselves without correctly reporting their respective

incomes. Petitioner or Bronstein would initiate the loans,

petitioner would guarantee or broker the loans and receive

a fee from the proceeds of the loans, and Harenberg would

cause the loans to be approved. The proceeds of the fees

paid to petitioner were divided among the three.

Petitioner was tried separately from his co-conspirators.

Prior to petitioner’s trial, Bronstein filed an affidavit stating

1Petitioner’s co-conspirator Henry Harenberg was convicted at a

separate trial on most of the same counts as petitioner. Harenberg was

sentenced to 18 months’ imprisonment on the conspiracy count and was

fined $10,000 on the conspiracy count and $5,000 each on a tax count

and one of the banking counts; his sentences on the remaining counts

were suspended in favor of five years’ probation, conditioned on per-

formance of certain community service requirements. Co-conspirator

Ben Bronstein pleaded guilty to four counts of the indictment; he was

sentenced, to a two-year term of imprisonment and a total of $20,000 in

fines.

2

| ad

3

that if called to testify he would invoke his Fifth Amend-

ment privilege and refuse to testify on behalf of petitioner.

The government conceded that Bronstein was “unavaila-

ble” within the meaning of Fed. R. Evid. 804(a)(1). Pet.

App. al5. During his trial, petitioner attempted to offer in

evidence the transcript of a deposition of Bronstein, which

had been taken during the course of a civil action then

pending in state court. In that civil action, the First

National Bank of Clovis had sued a borrower who had

defaulted on a loan he had obtained by paying a kickback to

petitioner, Bronstein, and Harenberg. In the deposition,

Bronstein denied working on the loan or receiving any

benefit in connection with the making of the loan. The

district court excluded the deposition from evidence. /d. at

al5-al6.

At trial, a number of witnesses testified against peti-

tioner, including his ex-wife Natalyn Kapnison. The trial

court ruled that Mrs. Kapnison could testify about acts,

petitioner’s statements made in the presence of third parties,

and her own statements, but not about anything petitioner

related to her during the course of their marriage (Pet. App.

a7-a8). Direct and cross-examination were confined to

these matters (id. at a8). At the conclusion of her testimony,

Mrs. Kapnison asserted the marital communications privi-

lege with respect to any confidential communications she

had made to petitioner during their marriage (8 Tr.

1480-1481).

2. The court of appeals affirmed petitioner’s convictions

(Pet. App. al-a25). The court held that Mrs. Kapnison

testified voluntarily and that her testimony did not violate

either the privilege against adverse spousal testimony or the

privilege for confidential marital communications (id. at

a3-al0). The court further held, inter aiia, that the trial

court did not err in denying petitioner’s motion for sever-

ance of some counts (id. at al0-a1 1); that petitioner was not

4

unfairly prejudiced by pretrial publicity (id. at all-al2);

that the trial court properly applied the privilege for confi-

dential marital communications (id. at al3); that charts and

summary testimony of an expert witness for the govern-

ment were properly admitted (id. at al3-al5); that the trial

court properly excluded from evidence the deposition tes-

timony of Bronstein (id. at al5-al8); and that there was

sufficient evidence in the record to support the convictions

(id. at a22-a23).?

ARGUMENT

1. Petitioner contends (Pet. 11-14) that the exclusion of

co-conspirator Bronstein’s deposition testimony deprived

him of due process of law. Petitioner did not allege below

that exclusion of the testimony amounted to a constitu-

tional violation. See Appellant’s C.A. Opening Br. 60-68; 13

R. 2482-2483. In any event, his contention is without merit.

Bronstein’s deposition was taken in a civil proceeding

involving the First National Bank of Clovis and one of its

borrowers. The United States was not a party to that pro-

ceeding. In the course of his deposition Bronstein denied

that he had participated in the processing of the loan at issue

in the civil case or that he had derived any benefit from the

loan.

*Judge Logan and District Judge Jenkins, sitting by designation,

concurred, but declined to join in Judge Barrett's application of the

“crime-fraud” exception to the confidential marital communications

privilege, citing their concurring opinions in United States v. Neal, 743

F.2d 1441 (10th Cir. 1984), cert. denied, No. 84-5951 (Mar. 25, 1985).

Judges Logan and Jenkins concluded that petitioner's claim based on

the privilege was without merit because the testimony he challenged did

not involve confidential marital communications. Pet. App. a24-a25.

In Neal, the same panel rejected a claim that the confidentia! marital

communications privilege had been violated. As in this case, Judge

Barrett rested his conclusion on application of the crime-fraud excep-

tion to the privilege, while Judges Logan and Jenkins concluded that

the testimony involved did not involve confidential marital communi-

cations.

5

It is clear that Bronstein’s deposition testimony was not

admissible under Fed. R. Evid. 804(b)(1); indeed, peti-

tioner does not contend otherwise. Rule 804(b)(1) provides

that former testimony is not excluded by the hearsay rule “if

the party against whom the testimony is now offered, or, in

a civil action or proceeding, a predecessor in interest, had an

opportunity and similar motive to develop the testimony by

direct, cross, or redirect examination.” The plain language

of the rule precludes the use of prior testimony when the

party against whom the evidence is offered did not have a

meaningful opportunity in the prior proceeding to develop

that testimony. See, e.g., United States v. Lanci, 669 F.2d

391, 394 (6th Cir.), cert. denied, 457 U.S. 1134 (1982);

Government of the Canal Zone vy. P. (Pinto), 590 F.2d

1344, 1353-1354 (Sth Cir. 1979); United States v. Wingate,

520 F.2d 309, 315-316 (2d Cir. 1975), cert. denied, 423 U.S.

1074 (1976). Since the United States was not a party to the

civil proceeding in which Bronstein’s deposition was taken,

it had no opportunity to cross-examine him. Thus, the

deposition testimony constituted inadmissible hearsay as

against the government.

Petitioner nevertheless contends that the Bronstein depo-

sition testimony should have been admitted because it bore

sufficient indicia of reliability. In support of that conten-

tion, he relies on Chambers vy. Mississippi, 410 U.S. 284

(1973); United States v. Benveniste, 564 F.2d 335 (9th Cir.

1977); and Zeigler v. Callahan, 659 F.2d 254 (ist Cir.

1981). However, Chambers and Benveniste both involved

declarations against penal interest. Such declarations gen-

erally are regarded as reliable because persons do not nor-

mally make statements that are damaging to themselves

unless they believe them to be true. See Chambers, 410 U.S.

at 299; Fed. R. Evid. 804(b)(3) advisory committee note.

Bronstein’s self-serving deposition testimony, in which he

merely denied his involvement in the crime, clearly does not

6

bear the same indicia of reliability as a declaration against

interest. Compare, e.g., United States v. Wingate, 520 F.2d

at 316.

Nor does Zeigler v. Callahan support petitioner’s con-

tention. There the court of appeals held that, assuming the

admissibility of grand jury testimony of an absent witness

who denied his involvement in the crime, the trial court’s

failure to admit that testimony was harmless error in light of

the strength of the government’s evidence and because it

was most unlikely that the jury would have believed the

absent witness’s self-serving account. 659 F.2d at 270. Here,

as in Zeigler, admission of the testimony at issue would not

have affected the outcome of the case. Numerous witnesses

testified concerning petitioner’s participation in the kick-

back scheme, while both petitioner and Harenberg testified

that they had not engaged in any wrongdoing. Admission of

Bronstein’s similar self-serving denials would have added

little to petitioner’s defense.’

2. Petitioner also contends (Pet. 14-18) that admission of

testimony by his ex-wife violated the privilege for confiden-

tial marital communications.‘ Petitioner does not specify

*Petitioner suggests (Pet. 13-14) that the courts are divided concern-

ing admissibility under various hearsay exceptions (e.g., Fed. R. Evid.

804(b)\5)) of grand jury testimony and testimony given at a preliminary

hearing. This case does not involve those categories of testimony.

Moreover, petitioner's counsel did not seek to introduce the Bronstein

testimony on grounds other than Rule 804(b)\ 1). See 13 Tr. 2482-2484;

Fed. R. Evid. 103(a); Fed. R. Crim. P. 51. In any event, the cases cited

by petitioner are not in conflict; the outcomes rested primarily on the

courts’ differing evaluations of the reliability of the testimony in each

case. Here the government's lack of opportunity to cross examine

Bronstein, the self-serving nature of his testimony, and the absence of

significant corroborating evidence establish that Bronstein’s testimony

did not bear sufficient indicia of reliability to be admissible, even if

petitioner's counsel had sought its admission under Rule 804(b)5).

‘Petitioner and his ex-wife were married during the time of the events

described in the indictment.

7

what portions of his ex-wife’s testimony he regards as hav-

ing violated the privilege. However, in the court of appeals

he objected primarily to Mrs. Kapnison’s testimony about

the splitting of the loan fees among Bronstein, Harenberg,

and petitioner (see Pet. App. a8-a9). This Court has recog-

nized the existence of a privilege for confidential marital

communications. See Trammel v. United States, 445 U.S.

40, 45 n.5, 51 (1980). The court of appeals correctly con-

cluded, however, that the privilege does not apply in the

circumstances of this case.*

The privilege may shield the acts of a spouse from disclo-

sure if those acts were intended to be communicative and

confidential. See, e.g., 8 J. Wigmore, Wigmore on Evidence

$ 2337, at 657-658 (McNaughton reved. 1961). But the

privilege does not prevent a witness-spouse from testifying

about noncommunicative acts she has observed or about

conversations that took place in the presence of third par-

ties. See, e.g., Pereira vy. United States, 347 U.S. 1, 6-7

(1954); Wolfle v. United States, 291 U.S. 7, 14-15 (1934).

The trial court in this case specifically ruled that Mrs.

Kapnison would not be allowed to testify about anything

petitioner related to her outside the presence of third parties

during the course of their marriage; the court concluded

that Mrs. Kapnison “can testify as to acts. She can testify as

to statements that were made in the presence of others * * *.

She also may testify as to anything that she may have said,

but not in a manner that would repeat what [petitioner] had

‘Even if the privilege might have applied in this case, it is doubtful

whether petitioner preserved it. At the trial of co-conspirator Haren-

berg, which was held approximately a month before petitioner’s trial,

Mrs. Kapnison testified to several private conversations with petitioner.

Petitioner did not invoke the privilege in an attempt to prevent his

ex-wife from testifying at Harenberg’s trial. Thus, it is at least arguable

that petitioner waived his privilege. Compare United States v. Fisher,

518 F.2d 836, 840-841 (2d Cir.), cert. denied, 423 U.S. 1033 (1975).

told her or would indicate the answer or statement that

[petitioner] had made to her.” Pet. App. a7-a8. That ruling

was enforced throughout the trial (id. at a8). Mrs. Kapnison

testified, inter alia, that she attended meetings with Bron-

stein, Harenberg, and petitioner at which she participated

in distributing the loan fees and that she herself withdrew

large amounts of cash from the bank and distributed pro

rata shares of the loan fees to Bronstein and Harenberg (id.

at a8-a9). Judges Logan and Jenkins concluded (id. at

a24-a25) that Mrs. Kapnison’s testimony did not involve

any confidential communications. That fact-bound conclu-

sion, which is fully supported by Judge Barrett’s descriptioa

of Mrs. Kapnison’s testimony (id. at a8-a9), does not war-

rant review by this Court.

Assuming arguendo that Mrs. Kapnison’s testimony

concerned confidential marital communications, it never-

theless was admissible under the “crime-fraud” exception to

the privilege. Under that exception, confidential marital

communications are not protected by the privilege if the

are made in furtherance of joint criminal activity of th , SPovSeS, —

e.g., United States v. Sims, No. 82-1523 (6th Cir. Feb. 28,

1985), slip op. 8-9; United States v. Broome, 732 F.2d 363,

365 (4th Cir. 1984), cert. denied, No. 84-118 (Oct. 1, 1984);

United States v. Ammar, 714 F.2d 238, 257-258 (3d Cir.),

cert. denied, 464 U.S. 936(1983); United States v. Entrekin,

624 F.2d 597, 598 (Sth Cir. 1980), cert. denied, 451 U.S. 971

(1981); United States v. Price, 577 F.2d 1356, 1364-1365

(9th Cir. 1978), cert. denied, 439 U.S. 1068 (1979); United

States v. Mendoza, 574 F.2d 1373, 1379-1381 (Sth Cir.),

cert. denied, 439 U.S. 988 (1978); United States v. Kahn,

471 F.2d 191, 194-195 (7th Cir. 1972), cert. denied, 411 U.S.

986 (1973), rev’d on other grounds, 415 U.S. 143 (1974). Cf.

Clark vy. United States, 289 U.S. 1, 15 (1933) (describing

crime-fraud exception to attorney-client privilege). Con-

trary to petitioner’s suggestion, there is no disagreement

among the courts of appeals concerning the existence of this

- 9

exception to the marital communications privilege.* This

Court recently declined to grant review on this issue in a

case decided by the same panel that decided this case. Neal

v. United States, No. 84-5951 (Mar. 25, 1985). See page 4

note 2, supra. The present case, in which (as in Neal) only

one member of the panel relied on the crime-fraud excep-

tion, clearly does not call for a different disposition.

3. Petitioner contends finally (Pet. 17-18) that the dis-

trict court violated his due process rights by selectively

enforcing the confidential marital communications privi-

lege, thereby preventing him from confronting his ex-wife.

He also suggests (id. at 11) that Mrs. Kapnison’s answers to

certain questions constituted a waiver of the privilege, but

that she was then permitted to use the privilege to prevent

petitioner from testifying about confidential communica-

tions. Those contentions are without merit.

Petitioner’s claim of selective enforcement rests on the

incorrect premise that his ex-wife was permitted to testify in

violation of the marital communications privilege. As we

explained above (page 7), the trial court strictly enforced its

ruling barring Mrs. Kapnison from disclosing any confi-

dential marital communications. Moreover, petitioner had

ample opportunity to confront his ex-wife; his counsel

cross-examined Mrs. Kapnison at considerable length. See

8 R. 1352-1472. And contrary to petitioner’s present

‘In support of his contention that there is a conflict among the circuits

on this point, petitioner cites Appeal of Malfitano, 633 F.2d 276 (3d Cir.

1980). However, the court in Malfitano declined to adopt a crime-fraud

exception only with respect to the separate privilege against adverse

spousal testimony. See also In re Grand Jury Subpoena, United States

of America, Hana Koecher, No. 85-1033 (2d Cir. Feb. 28, 1985), peti-

tion for rehearing pending. As petitioner acknowledges (Pet. 14-15),

subsequent to Malfi tano the Third Circuit expressly recognized a

crime-fraud exception to the confidential marital communications _

ilege. United States v. Ammar, 714 F.2d at 257-258.

10

‘

contention, Mrs. Kapnison did not waive the confidential

marital communications privilege during her testimony. In

cross-examining Mrs. Kapnison, petitioner’s counsel him-

self took particular care to ensure that the privilege

remained intact. See 8 R. 1381-1383, 1458-1459, 1462. In

any event, petitioner has identified no specific prejudice

that he suffered as a result of the alleged selective enforce-

ment. In this Court, as in the courts below (see Appellant’s

C.A. Opening Br. 46-52; 13 R. 2543-2544), petitioner has

made no proffer concerning communications to which he

might have testified if his ex-wife had been barred from

asserting the confidential marital communications privi-

lege. Thus, he has failed to present an adequate foundation

for his selective enforcement claim.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitied.

Rex E. Lee

Solicitor General

GLENN L. ARCHER, JR.

Assistant Attorney General

RosBert E. LINDSAY

Attorney

MARCH 1985

DO}J-1985-03