Petition for Writ of Certiorari — Williams v. United States

Supreme Court brief1972

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ATI PASE gah ee ee SC steep 1

SUPREME COURT, U. Se.

a a

| Sore Ctl Hat Sa

a raaaass Term, 1971

JAMES W. WILLIAMS, Petitioner.

SSD SAIS OF OCS Rape

‘| PETTTION FOR. WRIT of CERTIORARI TO

SA THE UNITED STATES COURT OF. APPEALS ~~

"FOR THE FIFTH CIRCUIT

A Be ice eh 3

es eas ee a eee 1401 First National Life Building

‘ Houston, Texas 77002 . \

. : Attorney for Petitioner,

an James W. Williams ~

Aiphe Law Bria} Co, One Me Flas, Ho T Mae Sty Howton, Toes 7002 :

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_-°*. SUBJECT INDEX . : a

oo) ae ree -. + Page

\ \ Opinions of the Court Below : | oeate ceeetans atl hiner ee

* Grounds of J urisdiction bs sates ve i eer *

* \ Questions Presented for- Review. Si ees ieanted

: Constitutional and Statutory Provisions Anvolved, 5

Fifth Amendment to the Constitution of the tae

United States ete el eee Trey ities est Bae

_ Sixth’ Amendment: to the Constitution’ of. the- ee as

United States... 0....05. ey saa Nea

28 U.S.C. 1732. Record made in regular ‘ e

course. of business, .?. 2... 2... based \o Pe)

Statement of the Case... 2.2... = 5 are Die/ 6.

Reasons. for Granting the Writ anew 4 aptines a ~ . a

og Eh The ‘Confrontation Issue’ SRP Pe esas ce! Ee pes 9 c

aie Successive Prosecutions and. Res Judicata ot A2

OM. The Public Court of Inquiry pas Ha Vagie

~ Conclusion and. me gts teeny spy Cie ae “bees So,

“LIST OF AUTHORITIES &

_ CASES. os

Abbate v. United States, 359 U.S. 187, 196-201, :

79 S.Ct.-666, 671-674 .. 2002. |. ets

- .Anonymous Nos. 6 & 7. v. Baker, 360 US. 287, ' |

Pte BOGE 4k Sa vcs Lad E Us ae eee) 16

- Ball v. United States, 163 US. 662, 669, 16 ees

~ -§.Ct. 1192, 1194 abel HOISTS Oana SNe 3) * aati

Barber v. Page, 390 U.S. 719, 88 S.Ct. 1318. 10, .

Bartkus v. Illinois, 359 US. 121, 127, 7 S.Ct. ms

SS ere eee a eee 2 ABE

pe op ~ |

> ge e

~I Sy ee we ee Bee

7 x ae 3

CASES — eee Page

California v. Green, 399 U.S. 149, 90 S.Ct. 1930 10, 11-

Callaghan v. Reconstruction Fi inance Corporation, .

297 U.S. 464, 56 S.Ct. 519, 521°. 2.2... one | ane

_ Chapman v. California, 386 US. 18, $7 $C... *

er 0 ASR Se) Scag ie pga eee -. 16

. Cooper v. United States (Sth Cir.), 91 F.2d 195 il

_ Cooper v. United States (8th. Cir.), 9 F.2d 216,. - =

: a te 11

‘Douglas v. Aidan. 380 USS. 415, 85 S.Ct. 1074 ‘oe 12

_ Estes v. Texas, 381 U.S. 352, 85 ‘S.Ct. 1628. ae:

_ <x Parte Bain, 121 U.S. 1, 7 S.Ct. 781 wasn 18.

Ex Parte Nielsen, 131 US. 176, 9 S.Ct. 672. 15.

Ex Parte ‘Snow, 120 U.S.:274, 7 S.Ct. a ee.

‘Green| v. United States, 355. US. 184, 78 St. te eT.

GRA sts Pe aor eae ane Se 13

Greenberg v. United States (ist | , 280 a

SR | gt hs Shs eee ie Oe oe

Greenberg Oe States (1st Cir. 3; 295 F.2d =”

Sea Ae eee re renee ee 11

- Greene v. McElroy, U.S. 474, 79 S.Ct. 1400 - 16

Greenhill v.. United States (Sth Cir.J,, 298 F.2d °

ES oes eae rs leeks ati oe a ee ee ane } ©

Griffin ‘v. California, 380 US. 609, 85. S.Ct. :

ee oe ks Ne hh 16 |

Griffin v. Illinois, 351 U.S. 12, 76 SCt. 585. ae |

Hamilton y. Alabama, 368 U.S.°52, 82 S.Ct. 157 5. ae

Hannah v. Larche, 363 U.S. 420, 80 S.Ct. 1502. = 16

Hopt v. Utah, 118 U.S. 574, 4 S.Ct. ee 10. °

In Re Groban, 352 U.S. 330, 77 S.Ct. 510.....° » - 16

Jenkins v. McKeithen, 395 US. 411, 89 S.Ct:

ant A Se i ae etn 16

Kolbrenner v. United States (Sth - ), 11 F. 2d af ,

BE ene ee ae SS OP hut aes coe: |

‘Malloy.v. Hogan, 378 us. 1, 7, 84 S.Ct. 1488,

RR SO RD Sar, BRS Be eine » 16

_. Mapp v. Ohio, 367 US. 643, 81 S:Ct.. 1684. ° 18

* Marakar v. United States, 370 US. 723, 82 Sa. 2

Cac petewmisnins ear oe. . AS

-_"

one

CASES Jo

" McClelland’ V. Teel 382 US. 928, 86 S.Ct. 307 - 15, 16

McNabb v. United States, 318 US. 332, 63 S.Ct.

608 .... _ 18

_ Olmstead v. United: States, 277 U. S. 438; 48 S.Ct. = ‘

+ SE ae Sree a wane. Sethe Soeerare ehh peng 185

: Orlando v.. United. States (9th Cir.), 387 F.2d baecee

; | Re een pipe a a. Phe ee ay 44°

Palmerx.v. Hoffman, 318. US. 109, 63 S.Ct. 477 10,11 is

~ Paschal v. United States (5th Cir. .), 306 F.2d hae

Te os vc ceeirrie ess 5 ae ee 11 ee

Petite v. United States, 361 US. "529, 80 S.Ct, See tr cg

We She. eee i ee ee 3, 13,14.

Pointer v. Texas, 380 US. 400, 85 S.Ct. 1065. 10,12 —

Price v. Georgia, 398 U.S. 323, 90 S.Ct. 1757. . oe - ae

‘Rideau v. Louisiana, 373: U.S. 723, 83 S.Ct. 1417 - $ .

Rogers v. Richmond, 356 US. 534, 541, 81 : |

GR MIN Is gn 2 ar og Nae i le 16

_ Russell v. United a 369 U. S. 749, 82 S. Ct. ues

OU eee Ree ee, elas ee cele 18

Sealfon v. United States, 332 US. 575, 68 S.Ct. fag

‘.: MELEE are renee er ee ee 15

Shaftesbury’s Case, State Trials, 33: Charles ie .

CIO os ndicrumexcusa® alts bas an 16.

_ Sheppard v. Maxwell, 384 US. 333, 86: S.Ct. es

BREE Re ES FRE So my —

Smith v. Illinois, 390 US. 129, 88 S.Ct. 748. aie aes

‘State/v. Branch, 68 N.C. 186 (2nd Ed. 68 N.C. (ee ae

ESS A A POR aa as ke a x, , eae

Stirone v. United States, 361 US. 212, 80 Sct. Fe

Se MER See mE A, Sere ERO oN ee

United States v. ‘Adains, 281 US. 202, 30 S. Ct.. peaiay

eR SA a ae pee Sore 15 ;

United States v. American “Honda Motor Com-: Riise Se ea

pany (D.C.N.D. Ill.) 273.F.Supp. 810 ....- me Mie:

United States v. Campanaro’ (D.C. Pa.);-63 F. ie ome

MN, IE i ea cs os hos ate AR one

United: States v. Michener, (3rd Cir. Ds i F. 24 :

Ld rene Pay es ee ee

y 4

on CASES ete sone "Page

‘ “United States v. Oppenheimer, 242. US. 85, 37. an ees

So” Sy etc Seer arene ans el “45 aes

United States v. Wade, 388 U.S..218, 87 S.Ct. et ae

1926 © ‘ee. Car et ee ae Peer eee eee 6 oper eae ye a 10. :

oe White v. ‘Maryland, 373 U.S. 59,.83 sch yso 16

UNITED. STATES mame

Fifth Amendment)... 0.2.2.2... . 1... .4,5,8, 15. |

_ Sixth Amendment Ce oe ee i a ML Ck 7 eee ‘

, UNITED. STATES STATUTES __ bee

. 11 USC: $844 ‘and 567 - es eee PENS Some SS. ate

| ASS. FY os. A: Bas ween act wt ae

aera USC. FRM 28 oO RE ees aie

1 URC FER ON os a B..

wWOsa 61 6s 8: mee.

M8 USC. 1001 «7.5.0... Se: 6

re tee Ne aoe

23 U.S.C. 1254(1)-: Toe ees ee pte ofl ae 4 = oe

- 28 U.S.C. 1732(a) | le cn --+.:.-3,5, 6,7, 10, 12

RULES OF THE SECURITIRS AND EXCHANGE COM-*

) MISSION RELATING TO INVESTIGATIONS ee

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Sap Goxiet af c United Sons

ge - Ogtober: Term, ‘1971

eee, ; “| } | | : ae &

hones JAMES W. WALLA Petitioner = * |

Oe adceee UNITED STATES OF pom Sli

et —-

" PETITION FOR WRIT OF. CERTIORARI TO

| “THE UNITED STATES COURT ‘OF. APPEALS

aes - FOR THE FIFTH MRCUIT. - |

- #

‘

James W. Williams, Pétiticner, prays that | a’ writ eee

- certiorari issue Xo review the judgments’ and three opinions: -

of.the United States Court of Appeals for the Fifth Cir-

. euit renderéd in. this proceeding on March’ 26, 1970, Sep- eae

ce tember 16, 1970. ~~ September: 16, (1971. i : ie 5 ha

OPINIONS' OF THE COURT BELOW. a)

The, ‘Court of Appeals wrote three. opinions. The orig- |

inal! opinion, rendered March: 26, 1970, is teported in’

424.F.2d: 344. The second opinion, on petitions for re- -

— by: both. Williat S and is Goyernment, oe a

| he PEG sae

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a Si! ue

September 1 16, 1970, is reported in 431 F.2d 1168. The

third opinion, on rehearing by the court en banc, rendered. *

_ September 16, 1971, is reported in 447 F.2d 1285.

True copies of the opinions, are appended in chrono-

_ logical order be er A, B and C, Pages 21 to 66. «

- GROUNDS OF ‘JuRISDICT ION.

The original opinion and judgment were entered on

March 26, 1970. Williams filed .a Petition for Rehearing

on April 8, 1970. The Government, on April 9, 1970,

. filed motion for a 30-day extension for filing Petition for

Rehearing; this was granted on April 16, 1970. The Gov-

ernment, or May 8, 1970, filed a second motion for an

additional 16-day extension for filing Petition for Rehear-

_ ing; this was granted May 20, .1970.° Thereupon the

Government filed its Petition for Rehearing on sed 23,

1970.

Both Williams and the Government timely filed Sug-

gestions for Rehearing en banc. Thereafter, on- Septem-

- ber 16, 1970, the original panel of the court, with writ-

ten opinion, denied both Williams’ and the Government's

Petitions for Rehearing. However, on the- same date a

majority of the judges in active service ordered oe

_ en banc and supplemental briefing.

‘One year later, on September 16, 1971, ‘SeCien

banc, with written opinion, entered its judgment affirming |

the judgments_of conviction: To this: en banc ruling,

Williams filed Petition’ for Rehearing on September 24,

1971. This Was denied November 4, 1971. (See Ap-

pendages D and E, Pgs. 67 to 69, infra. .

"Jurisdiction of the Supreme Court of the United States

is invoked under 28 U.S.C. 1254(1): - |

‘

‘. QUESTIONS PRESENTED FOR REVIEW

A Government expert witness extrajudicially examined

business books and records identified by hearsay only,

not authenticated by their custodians under the Busi-

ness Records Statute, 28 U.S.C. 1732(a), and not

’ produced in court for use by Petitioner in cross-

Il.

examining the. expert witness. Questions presented:

A. Whether the confrontation clause. of the Sixth

. Amendment prohibits the expert's opinion evi-

dence based on the entri¢s in thes business books

B. Whether-the Sixth, Ariendment guarantees to Peti-

tioner the rights of confrontation by and cross- |

examination of the custodians of the business

books and records? *

A...Whether the “twice put in jeopardy” claus of the

Sixth Amendment prohibits successive prosecu- |

tions based on the same transactions and over-

lapping allegations and evidence? eg et

-B. Whether under the Sixth Amendment the gen-

eral Federal policy recited and a in

Petite v. Uniied States, 361 U.S..529, 80 S.Ct.

450, that several offenses arising -out of the same

transactions should be alleged and tried together

and not made the basis of multiple prosecutions,

with Federal crimes? rel Ss,

Til. ern Hee with. grand jury deliberations the

Securities.and Exchange Commission and a Trustee

_ in, Reorganization intentionally and purposefully in- |

stituted and conducted. in a Federal courtroom a_

_ Public Inquiry, during which some 72 witnesses were

publicly examined. Though Petitioner bore the status

of an accused in the proceedings, the Trustee publicly

endeavored to force Petitioner to testify, and publicly

"commented on his’ refusal, buit. expressly’ denied him

the right:to be represented by counsel and to cross- '

“examine, rebut and defend. The questions presented f

are: ~ . ‘

A. Whether these public proceedings denied Peti-

_tioner due process of law as guaranteed by

Amendment Five to the. Constitution of the

United States? :

- B. Whether these public proceedings diesen Peti-

+ tioner traditional grand jury procedures within the

concept of the right to indictment of a grand

-. _. jury as guaranteed by Amendment Five to the .

_.+ Constitution of the United States?

C. Whether the traditional -rule requiring secrecy of |

grand jury proceedings has as one of its purposes

the protection. of the accused ‘against pre-indict-

ment public examination of Government witnesses .

_in a proceeding in which the accused is denied the

right to be represented by counsel and to cross-

- examine, rebut and.defend?

_ D. Whether the Trustee’s publicly forcing Petitioner

to refuse to testify and publicly commenting on

the refusal denied Petitioner due process of law

“as guaranteed - Amendment Five to the Com

stitution of the United States?

- CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Fifth Amendment to the Constitution of the

United States ;

“No person shall be held to answer for a capital,

or otherwise infamous crime, unless on a presentment

or indictment of a Grand Jury * * * nor shall any

person -be subject for the same offence. to be twice

put in jeopardy of. life or limb; * * * nor be deprived

_ of life, liberty, or Property, without due — of

law; * * *”

Sixth Pana ala to the Ceceieieiiiten of the

United States E

“In.all criminal prosecutions, the accused. shali en-

joy the ~ gi . tg be confronted with the ‘witnesses

against him : »

28 U.S.C. 1732. Record made in. regular course

of business.

“(a) In any court of the United States and in-any’ .

court established by Act of Congress, any writing or .

record, whetherin the form of an entry in a book

or otherwise, made as a memorandum or record of

any act, transaction, occurrence, or. event, shall be —

admissible as evidence- of ‘such act, transaction, oc-

currence, or event, if made in regular course of any

business, and if it was the regular course -of such

business to make such memorandum or record at -

the time of such act, transaction, occurrence or event

or within a reasonable time thereafter. °

All other circumstances of the ‘making -of . such

writing or record, including lack of personal knowl-

‘i :

- edge by the entrant or r maker, ‘may 7 shown to affect.

its weight, but such circumstances shall not affect its

admissibility.”

|| «STATEMENT OF THE CASE

The judgment of the Court of. Appeals is on a consoli-

dated appeal from two convictions based on the .facts

resulting in the collapse of Westec Corporation in Houston, -

Harris County, Texas. Williams is the former-Chairmay-

of the Board of said~ corporation, The first conviction

was under 18 U.S.C. 371, 1001, and 1341 and under

15 U.S.C. 77e(a) and 78ff(a). The second conviction was

‘under 15 U. S.C. 78i(a)(1) and (2).

During the trial of the first prosecution (No. 26,829

below) the Government prodiiced the witness Thomas

: Jeffrey to testify as an expert on the material issue of the

valhations of oil and gas properties sold by Westec. Cor-

_ poration. He based his opinion on his extrajudicial ex-

aminatiop and analysis of the entries in purported busi-

tess books and records of these vendees. Jeffrey was told

by persons who did not’ testify. that these were books and

records of. vendees of Westec Corporation but he was not, -

told they were the correct records. (Appx. IV, 1257).

Such books and records were not produced in Court nor

made available to the-defense for use in crons-examination

of Jeffrey. ;

‘The Government did not produce the oni _of the’

books and records to identify and authenticate them. It.

wholly failed to comply with the requirements of the

Business Records Statute, 28 U.S.C. 1732 (a) «Appx.

IV, 1233-1250). Jeffrey was not a custodian of the books. ~

_and records, made none of the entries therein, and’ affirma-

ee: “*

tively testified that his knowledge as to the identity and

’ authenticity of the books:and fecords was based on what —

others had told him, and that he could nat vouch for their

identity or accuracy. (Appx. IV; 1251-1257)...

The Government made-no showing to excuse its not —

producing the books _ and records, their custodians, and /.

_ those persons ‘who made the hearsay statements to Jeffrey. .

It showed no excuse for non-compliance with the Business.

Records Statute. (Appx. IV, 1250-1257). These books.

and records were of corporations owned and controlled by yr

Fred L. Hall, also under Federal indictment. He is a‘

brother of Ernest M. Hall, ‘a Govérnment chief witness |

against Williams: -Less than two imonths after Williams’

conviction, . the charges against Fred L. Hall were dis-

missed on’ motion of the Government. (Appx. I, 2, 4,

13-23, V, 1698-1699)...

Williams objected on the basis of non-compliance with

the Business Records Statute, hearsay, denial ‘of the Con-.

stitutional guaranty~ ‘of confrontation by, and cross-

examination. of, the custodians of the records, and the

failure of the Government to produce and authenticate the.

records for ‘his cross-examination of Jeffrey. ( “en IV,

1241- 1250, 1257).

' After verdict in the first prosecution (No. 26,829 be-

low) the Government prosecuted and- convicted a second

- time (No. 26,830 below). it could have included the

charges of the second prosecution as a separate count

in the prior indictment, for all the charges in both prose-.

cutions arose from.the affairs of Westec Corporation and

its debacle. Both prosecutions involved overlapping alle-

gations and eviderice on Williams’ and others’ - -allegedly

inducing the public to purchase and. retain’ shares of com-

a ———E———EEEEE—————

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Mle Sra sp st ahha tes, f

fie MO. 2 eden act K sitet Asst nes 45

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aay senlacigaaleie

oo bar of the second prosecution Williams inet immunity

from being twice put-in jeopardy, res judicata, immunity .

- from. successive prosecutions, and carving and election of

prosecutions by the Government. (Appx. I, 58-61).

. Eight months before Williams’ indictmgnt the Trustee

in Reorganization of Westec Corporation, and the Securi-

’ ties and Exchange Commission, began a public hearing ©

(alleged. to be a “Court. of Inquiry”’*) under Sections .

21(a)\and 167 of the Bankruptcy Act, 11 U.S.C. §§44

-and 567. It continued for approximately eleven months,

encompassing the Grand Jury deliberations. Most of the

time this public hearing was conducted in a United States

‘Courtroom in Houston, - Texas. (Appx. I, 63, 69- 70,

73, 154-155). .

‘During the public “Court of Inquiry” some seventy- two

(72) witnesses were publicly examined. Their evidence . -

" produced some eight thousand; seven hundred and thirty-

’ six (8,736) pages of testimony and a myriad of 200,000

exhibits. (Appx. I, 155, 161; 350-351). Great quantities

of the proof were adverse to Williams and tended to in-°

criminate him unless rebutted and tested and qualified by

cross-examination. ‘The proceedings necessarily generated

maassive and ‘widespread publicity injurious to him.

At. all: times: during the public “Court of Inquiry”

Williams bore the status of an accused. The attornéy for

_ the Trustee publicly castigated Williams, and publicly en-

-' deavored to call Williams to publicly testify, thus forcing

' Williams to publicly claim Fifth Amendment immunity.

- (Williams Pre-trial Ex. 14, P: 9-19).

*A descriptive phrase used by Williams in the courts below.

. oe : ae

Williams made ‘repeated requests anil motions for the ©

rights . to ‘cross-examine, rebut and. defend. ‘These were

, Tepeatedly affirmatively denied. Alternative motions that —

if he was to be denied - these Tights the proceedings be

-held’ in a closed private nearing were denied. (Appx. I,

63-68). ; y, :

The Rules of the Securities and Exchange Commission

Relating to Investigations, Rule 7 (d) provided for allow-

* ig cross-examination and: rebuttal evidence to persons

similarly situated to Williams. (Appx. I, 73-74, 78, .17 -

C.F.R. 203.7(d).). However, the S.E.C. attorney joined -

with the ‘Trustee in denying these rights to Williams. ,

(Appx. I, " 67-68). This attorney could identify only one

‘previous time of such-a public $.E.C. hearing with: denial

of these rights, in the year 1935. (Appx. I, 350). He ad-—

-mitted the hearings could have ‘been. conducted privately.

_ (Appx. I, 350). .

Williams raised the issue by “several. motions prior to

and during the “Court of Inquiry” and by: pleas in-bar .

to both prosecutions. & Appx. I, 40-49, 63- 78).

REASONS FOR. GRANTING THE WRIT

“{ -\ THE CONFRONTATION ISSUE

Because of the Government's wide and increasing use

‘of expert testimony in criminal prosecutions, it is of major.

Constitutional importance to the administratfn of crim-

_inal ‘justice that this Court determine whether ‘the con-

frontation guaranty of the Sixth Amendment prohibits -

opinion testimony by, an expert witness based on hearsay. _

- That the Court of Appeals wrote three opinions, with con-.~

flicting conclusions, supports this contention. ~

: x:

> . ' ri ;

. . !

bé s . . : ° ) ‘ ;

Sims Now NB gat MSS Diy RNS AID al i A ict

Williams was denied confrontation and cross-examina-

tion of the custodians of the books and records which:

the expert witness Jeffrey examined extra judicially and

on which he based his opinion. These records were

neither produced in court nor identified" in court, nor ;

authenticated under .the Business Records Statute 28

U.S.C. 1732(a). The minority opinion below held this 7

_ to be error in the light of California v.. Green, 399 USS.

149, 90 S.Ct. 1930, and other opinions by the Supreme

- Court. (Appendage B, see also Appendage A). The

majority opinion below interpreted California v. Green to

-create an exception as to expert testimony and.to allow.

an expert opinion to be based.on hearsay. (Appendage C).

Consequently, this Supreme Court should decree the bear-

ing of California: v. Green on opinion evidence based on

hearsay.. -¢ ine

"In Hopt v. Utah, 110 US. 574, 4 S.Ct. 202, this Court ee

. held that the foundation for a physician’s expert opinion —

could not be established by hearsay. The majority decision .

below by the Court of Appeals departs. from and conflicts

_. with Hopt. It conflicts also with the confrontation con-

cepts\ decreed i in Barber v. Pagé, 390 U.S. 719, 88 S.Ct.

~ 1318; Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065;

Douglas v. Alabama, 380 U.S. 415, 85 S.Ct..1074, and

United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926.

There was- no proof that entries in the ‘books and

records examined by Jeffrey were made in the regular ..

course of business nor that it was the regular course of

‘ business to make such entries. Consequently, the books

and records wefe not authenticated as required by the

Business Records Statute, 28 U.S.C. 1732(a). The result

is that the majority opinion below conflicts with Palmer hy

Hoffman, 318 U.S. 109, 63 S.Ct. 477, which interpreted ?

tie. statute (then 28 U. S. Cc. 695).. The necessary intent

of the statute and the inherent holding in. Palmer v. Hoff-.

« man is that the custodians of the books and records must

be subjected to. confrontation and cross-examination on

. thése regular course of business issues. :

Prior to the decision below, the ‘Fifth Circuit itself had —

consistently held that expert opinions could not be based::

on hearsay and that when an opinion was based on books

and. records prepared by others the books and records must —

be produced, identified, and authenticated i in court by the

custodians of the: records. Paschal v. United States (Sth

. Cir.), 306. F.2d 398; Greenhill v:; United States (Sth

me ah 298 F.2d_ 405; Cooper | v. United States (Sth/Cir.),

91 F.2d 195;. Kolbrenner v. -United’ States (5th' Cir.);

11 F.2d 754. Its‘ final ruling en banc. conflicts: ‘with’ its oh

own many precedents.

- The majority: opinion below conflicts with marty hold-. |

_ ings of other. Courts of. Appeal that books and records -

-. on which opinion evidence is based. must, be produced, -

identified and authenticated in court: Cooper v. United

States (8th Cir.),-9 F.2d 216,.213; United States v,

' Michener (3rd Cir.), 152 F.2d 880; Greenberg v. Unitéd

_ States (1st Cir.), 280 F.2d 477; Greenberg v. United-

’ States (1st Cir.), 295 F.2d 903; also United States v,

Campanaro. (D. C, Pa.), 63 F.Supp: 811. It i is important

‘ that this ‘Court reconcile this conflict of aperee between

the -Circuits. ss

“The custodians of the records on which the expert wit- |

ness Jeffrey relied were not subjected to the demeanor

tests decreed in Barber v. Page, 390 U.S. 719,:88 S.Ct.

1318 and California v. Green, 399 U.§. 149, 90 S.Gt.

1930. . a icitae the on = bélow decrees an:

)

exception .to the demeanor doctrine as: to expert festi- -

* mony that has ‘not yet been authorized by this .Supreme

Court, and which ‘exception conflicts with ‘Douglas y.

Alabama, 380 °U.S.. 415, 85 S.Ct. 1074, which pro-

’ hibited use of documents not tested by confrontation by the ©

maker of the documents. The* existence or no of such an ~

exception is a major, Constitutional issue needing the

- consideration and. decision of this’ Supreme Court, for. ‘it

affects: the fundamental. rights of. Wwalame and others simi-

ise arly situated.

‘Denial to Williams of the right to be confronted. by |

ie and to ¢ross-examine’ the custodians of the records, to °

have the. records identified and authenticated under the.

Business Records. Statute, 28 U.S.C: 1732 (a), and to' |

- have the records availAble for cross-examination of the

expert witness: Jeffrey is “Constitutional error of- the first -

magnitude”. Smith v. Illinois,: 390. U.S. 129, 88 S.Ct. 748;

Brookhart v. Janis, 384 US. 1, 86 S.Ct. 1245; Pointer v:.

Texas, 380 U.S; 400, 85 S.Ct» 1065. Error of. such

‘magnitude should not be allowed to stand. It affects not | |

_ only. Williams, ° but also those new, and in the future .to .

be, similarly situated. ° : |

ra a) a’

: ; II, oe

SUCCESSIVE PROSECUTIONS AND

Meee JUDICATA’

The charges against Williams in the gecond prosecution

"could .have ‘been included as an additional count of the

-indictmeni on which he’ was first tried. He thei would

-have -been burdened with only: one deftnse. The District —

Court ‘would have been burdened” with ‘only one: \trial.

- Both, Williams and the Government. would have had less

_ expense’ and. sail labor.

" Successive prosecutions based on the same acts not only ©

~ harass and overburden the’ Défepdant; they additionally

unnecessarily® clog. court calendars, ‘senselessly deplete —

revenues ailocated to administration of. criminal justice,

and make for inefficient and disorderly law enforcement.

See Petite v. United States,.361 U.S. 529, 80 S.Ct. 450,

and Marakar: v. United States, 370 U.S, 723; 82 S.Ct.

1573, which are. further treated, infra, p. 14

Injystice to’ a Défendant. ‘of harassment. by* successive ’

prosecutions was elaborately treated by Mr. Justice Brennan

_in his-separate opinion in Abbate v. United States,'359 US.

187, 196-201,.79 S.Ct. 666, 671-674. Its potential-viola-

tion /of due process. was ‘commented on by Mr. Justice

e: Frankfurter i in. Bartkus v. Illinois, 359. U.S. 121; 127, 79

S.Ct. 676, 680: “. . . at some.point the cruelty. of harass-

ment by multiple prosecutions by a state would offend -

. due: process.” The majority of this Court has heretofore

decreed that “thé State with all its resources -and power

should not be allowed to make repeated attempts to. con+ —

Vict an individual—compelling him to live in a contin-

Hing state of anxiety and. insecurity... .” Green v..United - ~

States, 355 U.S. ‘184, 78 S.Ct. 221. ae aa

Mr. Chief Justice Burger’s opinion ‘in ‘Price’ v. Georgia,

398 U.S. 323, 90 S.Ct. 1757, expressly decrees that “The .

‘twice puti in, jeopardy’ ‘language of. the Constitution. thus

relates to a potential, i.t:, the risk that | an accused for a

"second time will be ‘convicted of the ‘same offense’ for

* “which he was initially, tried.” See also. Ball v. United States, .

163 U.S. 662, 669, 16 5.Ct. 1192,-1794, — q

This Court has consistently dismissed, on mol ion of the

Government, ‘second convictions on the same t nsactit

ment: ‘tha!

on the. “general policy of the Federal Governm

Sai ae ~

several offenses arising out of a single transaction should

be alleged and tried together arid should not be made the

basis of-multiple prosecutions, a policy dictated by con-

sideration both of fairness to defendants and of efficient

and orderly law enforcement’.” Petite v. United States, .

361 U.S. 52, 80 S.Ct. 450; Marakar v. United States, 370

U.S. 723, 82°S.Ct. 1573. Similar dismissals have been -

_ entered by Circuit and District Courts. Orlando v. United

States (9th Cir.) 387 F.2d 348; United States v. American

Honda Motor Company (D.C.N:D. Calif.) 271 F.Supp.

979, 988; United States v. American Honda Motor. Com-.

pany (D.C.N.D. Ill.) 273 F.Supp. 810. The time is ripe

for this Court to decree as law this “general policy” of ©

the Federal Government. The -rights of Defendants and

.the need of the public for efficient and orderly law en-

forcemerit should be the rule of this Supreme Court and

not left-to the discretion of the Department of Justice.

The Government's - failure and refusal’ to apply this

“general policy” to Williams is*“invidious discrimination”

against him. and denies him equa] justice under law, the -

equal protection of law. In Griffin v. Illinois, 351-U.S.

12, 76 S.Ct. 585, this Court clearly stated the Constitu-

tional goal of uniform justice: “Both equal protection and

due process emphasize the central aim of our entire ju-

dicial system—all people charged with crifne must, so far

as the law is concerned, ‘stand 6n an equality before the

bar. of justice.in every American court’.” Constitutionally, *

the Department of Justice should not be allowed to dis-

criminate as to the application or no of “a policy dictated ©

by consideration both of fairness to defendants and of

efficent and orderly law enforcement.” Petité v. United

_ States,- supra.

-- ! _

As both prosecutions -against Williams arise froma the

same acts, contain overlapping charges and must be sus- .

" tained by overlapping evidence, the defense of res judicata

included in the Fifth Amendment guaranty against double |

jeopardy, bars the second prosecution. Sealfon v. United

States, 332 U.S. 575, 68 S.Ct. ‘237. See ‘also Ex Parte

Snow, 120 U.S. 274, 7 S.Ct. 556; Ex Parte Nielsen, 131°

US. 176, 9 S.Ct. 672; United States v. Oppenheimer, 242 .

‘U.S. 85, 37 S.Ct. 68: and United Seates 1 v. Adams, 281

US. 202, 50 S.Ct. 269.

THE PUBLIC COURT OF INQUIRY |

The Trustee's and S.E.C.’s public examination of the

Government witnesses’ in a Federal courtroom, with

Williams bearing’ the status of an accused, but his being -

denied the right to be represented by counsel and to cross-

_ €xamine, rebut and defend, raises setious Constitutional

issues. - McClelland v: Texas, 382 U.S. 928, 86 S.Ct. 307

(“It is clear that-grave Constitutional questions ‘are. raised

_ by conducting stich-a proceeding.”

Thére is-the question. of whether this . ““Court of In-

quiry” in a very real sense was Williams’ trial, whether any ;

'- subsequent trial could be but a hollow. formality. Rideau

v. Louisiana, 373 U.S. -723,-83 S.Ct. 1417. See also

- Estes.v. Texas, 384 U.S. 352, 85 S.Ct. 1628 and Sheppard

". v. Maxwell, 384 U.S. 333, 86 S.Ct., 1'507.+ Included “is

the question-of whether the Trustee’s calling Williams to

testify, publicly forcing him to refuse to testify, and pub-

licly commenting on his‘ refusal is a flagtant violation of

the holding that the Government cannat comment on

the’ failure or refusal of a Defendant to testify. Chapman

pape

wn Pee

Ror: tte a gerw

16 ;

Ve . California, 386 US. 18, 87 S.Ct. 824; Griffin v. Cali-

fornia; 380 U.S.: 609, 85 S.Ct. 1229. The Trustee in

Reorganization was a public officer; an officer of the Court.

‘Callaghan v. Reconstruction Finance Corporation, 297

- US. 464,56. S.Ct. 519, 521.

Related is the question. of whether the public “Court of

Inquiry” in a° Federal courtroom, in which Williams was

_ denied the right to defend was a use of the inquisitorial

system of justice forbidden by the Fifth Amendment, which —

requires the accusatorial process. Malloy v. Hogan, 378

U.S. 1, 7, 84 S.Ct. 1489, 1493; Rogers v. Richmond,

‘356 U.S. 534, 541, 81 S.Ct. 735, 739. es

- Presented also is the question of whether ubder the cir- -

. cumstances the “Court of Inquiry” was a

ceeding. in which Williams was guaranteed d entitled

to procedural due process under the. holdings | in Jenkins

vy. McKeithen, 395 U.S: -411, 89 S.Ct. 1843} White v.

Maryland, 373 US. 59, 83. S.Ct. 1050, and Hamilton v.

Alabama, 368 U.S. 52, 82 S.Ct. 157. Bearing on this

question is whether the holding of Greene v. McElroy, 360

_ U.S. 474, 79 S.Ct. 1400, or Hannah v. Larche, 363 U.S.

420, 80 S.Ct. 1502, controls on the proceeding conducted.

See also ‘Anonymous Nos. 6 & 7 vy. Baker, 360 U.S. 287,

_ 79 S.Ct. 1157 and An Re Groban, 352 USS. 330, 77

S.Ct. 510.

Of great magnitude is whether public examination of

_ the Government witnesses without granting the right to

defend infringes on the guaranty of indictment by a

Giand*Juty. See McClelland v. Texas, 382 U.S. 928,

86 S.Ct. 307. Basic Anglo-American tradition is that the

Government witnesses be examined in‘private. See Shaftes-

bury’s Case, State Trials, 33 Charles [1 (1681) wherein

e-trial pro-

a Grand Jury refused to indict the Earl of Shaftesbury -

because King’s counsel insisted on its hearing the evidence.

in public.’ (“. . . it is-desired by the King’s counsel that -

_ the evidence may be ‘publicly given . . . it.is the opinion”

of the jury that they ought to examiné the witnesses in

private, and it has been the constant practice. of our an-

cestors and predecessors to do it.”). u - £

This latter question was “squarely presented to ‘the Su- —

_preme Court of North Carolina in State v. Branch, 68

N.C. 186 (2nd Ed. 68 N.C; 133). It quashed the ifdict-

ment clearly stating the rationale as follows?” : s

“ .. . the pretection of a grand jury amounts to

nothing if the citizen is to’ be first exposed to scandal

and disgrace by a public examination of the witnesses

on she part of the State. . . if upon the public examina-

tion of the witnesses for the State, he has no right to

cross-examine and no right to offer witnesses to contra- _

dict the witnesses of the State, or to prove their bad char- .

acter, and to be defended by counsel, it would be better

for him to have a trial at once, upon information, where

he has the right ‘to confrent the accusers and witnesses

with Other testimony and to have counsel for his de-

fenses, instead of being, in the first place, put in the °

condition. of a victim tied to “a. stake”, while his —

- reputation is being tortured to death. If the witnesses

for the State are to be examined in “public”, upon.

the inquiry of the grand jury, in all fairness the

. accused should be allowed to cross-examine and to

offer witnesses to contradict or explain, and to have

the benefit of counsel. ’ 1

“Why examine the witness for the State in public -

without the tight of cross-examination and of con-

‘fronting the witnesses, unless it be to expose the’ ac-

_cused to: scandal and disgrace, else to browbeat the

: ee ee . . ta wiles Oh ait

Pets A aiPANS EE BROT 2a OE wed origin ed Reks peted

dlenapeonfstd rus ik

‘grand jury “i influence : ‘the finding’ not in respect

to the case but in respect - “to the fact?” (Emphasis

added)

_ The record shows that the sid “Court of Inquiry”

encompassed the grand jury proceedings as to Williams.

Consequently, this petition squarely presents the question .

of whether the “Court ‘of Inquiry” violated. the - high

Federal. standards fof secrecy in grand jury proceedings.

_ This Court should take’ and determine the issue, for it has

consistently placed great sanctity on protection of citizens

_by the guaranty of indictment by grand jury. Russell v.

United States, 369 U.S. 749, 82 S.Ct. 1038; Stirone v.

United States, 361. U.S. 212, 80 S. Ct. 270; Ex Parte Bain,

121 US. 1,7 S.Ct. 781.

These “grave Constitutional questions” ( McClelland \ Vv.

Texas, supra) involve flagrant breaches of due process. :

It is therefore respectfully suggested that this Court should

' take this petition “for the preservation of the purity of

‘ its own, temple” to. sustain “the -imperative of judicial

. integrity”, to avoid “making the Courts themselyes accom-

plices in wilful disobedience | of law”, for. “The Court

protects itself.” Olmstead v. United States, 277 US. 438,

| 48 S.Ct: 565 (Dissents of Messrs. -Justices Holmes and

Brandeis) ;. Sorrells v. United States, 287 U.S. 435, 53

S.Ct.-210 (Mr. Justice Roberts); McNabb v. United.

‘States, 318 U.S. 332, 63 S.Ct. 608; (Mr. Justice Frank-

furter); Mapp v. Ohio, 367 U.S. 643, 81 S.Ct.-1684 (Mr. .

Justice Clark).

" CONCLUSION AND PRAYER

On ‘the. facts and authorities submitted, it is urged that

this, Petition for Certiorari presents substantial Consti-

tutional questions for consideration by this Honorable

Supreme Court of the United ‘States and that these ‘ques-

tions .should be resolved to the relief of the Petitioner.

and others similarly situated.

WHEREFORE, -Petitioner ‘prays that this Petition for

Certiorari be granted to correct the errors of the Honor-.

- able Court of Appeals for the- Fifth Circuit and of the

Honorable Unifed States ceatelet Court for the Southern

District of Texas.

a ip Pe Respectfully submitted, - -

"J. Epwes Smira >

“Attorney for Petitioner,

1401 First National Life Building

Houston, Texas oS

APPENDAGE AU

ite States Gor Court at Appeals

FOR. THE FIFTH re -

No. 26829 and 26830.

‘UNITED STATES OF "AMERICA,

Plaintiff-Appellee,

versus

se AMES W. WILLIAMS,

Defendant-Appellant.

Appeals from the United States District Court for the

Southern District of Texas

(March 26; 1970)

a @4

Before RIVES, GOLDBERG and GODBOLD,

ircuit Judges.

RIVES, Circuit Judgé: James W. Williams eit from

two judgments of conviction in closely related criminal cases.

Williams was formerly Chairman of the Board of Westec,’

and both criminal

. financial collapse of

estec which resulted in suspension

of its stocKkfrom tradiAg on the American Stock Exchange. . .

on August 26, 1966,‘and one month later.in an order ap-

pointing a trustee of Westec in reorganization — _

_ in the Southern District of Texas.

‘... 1. Western Equities, ie until. “a 1966, then retiamed | Westec

Corporation—for convenience called Westec in. this. opinion.

s . ; &

- |

é ; |

2 : ae MS

yosecutions were precipitated by the.

= a 22°

Case No. 107? was commericed i by Grand Jury indict-

: ment and was tried to-a jury for nearly a month, from

June: 17 to July. 11, 1968, resulting i in a’ verdict and judg-:

ment of guilty on thirteen counts, and in ‘sentence bo bee

served of ten years’ imprisonment. lh: ’

Case No. 233° was commenced by criminal isiformia--

tion filed by the United States Attorney on September 12, °

1968 (two months .after the jury’s verdict in Case No.

107). The information contained only one count, and

_ was tried to the court without a jury on a stipulation of

- + facts,* resulting in-a judgment of conviction. and ‘a sen--

tence to be served of an additional’ five years’ eaprioon-

ment, or a total of 0.4 years. :

: In Case No. 107, “Count One charged Williams. with.

_ * conspiracy with three co-defendants to violate 15 USC. .

_ 77e(a), 78ff(a) and 18 U.S.C. 1001 and 1341; the other

_____ twelve counts of which the Jury found Williams guilty

:_ charged substantive violations of the mail fraud ‘stat-

d ut@ 18 U.S.C. 1341. In Case No. 233, the one couiit

‘ . ‘criminal information alleged a conspiracy in violation’

- °° «of 18. U, S.C. 371 by Williams and others to manipulate |

ae unlawfully the price of the common stock of ‘Westec ir

violation of 15 U.S.C. 78i(a) (1) (2). \

. By various challenges, claimed defenses, and iin

- . tO the indictment and to the information,- objections to

the evidence, and a _Tequested instruction. to the jury,

“

P ,

SOTA tg Me aie

2. Case numbered 26; 829 in this Court, 68-H- 107 in ie Aistrict

court, for convenience referred to in this opinion as Case No. 18Y.

3. Case numbered 26,830 in this Court, 68-H-233 in the district

court, for convenience referred to in this opinion as Case No. 233. "

4. We are informed that this procedure was adopted to preserve : oe

issues of law+—See. Martin v. United States;: 5 Cir. 1968, 389 F.2d \

895. ; pitta

——

- \

‘ z :

° ‘ \

’ -* - ? .

' : - ; é

2. ? : . ~ \

° : ; .

.* s

. ae :

Kgl

oa g . : ° > : | - oe z 4 ~ /

Williams preserved seven. issues for’ review on a

‘which .we will consider in the. order in which. they are

briefed by the parties. 3 "5 or ;

‘or | Denial of ‘Confrontation: by’ Noy Pridection SHE 34,

ee Got - "Of Records, 20 | a

v - Out of its logical, or chronological order ~Williams wears ot

. ___ presents as his -first issue on appeal: that he was denied.

- his Sixth Amendment guaranty of confrontation: when,

over his objection, an, expert witness was allowed to

= give opinion evidence: baséd on extra-judicial | investiga-

tion of records not themselves introduced in evidence.

In Case’ No. 107, each: of the’ thirteen counts'of the | .*

indictment on. which Williams ‘was_ convicted contained _

averments as. to which evidence was retyvant to ‘prove

the value of the net future earnings as of January

1, 1967. of certain’ ‘producing: oil and gas properties. .

- In effect, the indictment charged that “Westec ‘had sold

oil and gas, properties to corporations controlled. by

co-conspirators at prices gréater ‘than their ‘fair market —

‘value. To support those allegations, the witness Thonras

Jeffrey testified. as an expert on the valuation ate I

properties to. the following opinions: |

ve.

“A. My estimate ‘of the future net earnings of

“— Properties as of 1-1 67 was $500, 032. |

Rae “A. My estimate as -of Yensiang: ‘Ast, 1967, of the >

future net earnings from Wilcrof, Incorporated, oil

and gas ee was $44, 469.” | fn |

No question was raised as -to Jeffrey’ ~ qualifications ae

as an L but Williams repeatedly and: Bravccrcus Pe

‘aie

objected because the. records ‘of the two corporations =~

“upon which the witness’ based his opinion pascal re

themselves offered in evidence. As aptly expressed by

' ‘defense counsel: “*°* * a prdper. predicate has not been

laid’ for, such an opinion. They have not produced the ©

records cdncerning the earnings and the production upon”

which he is basing his opinion, nor the. other supporting —

data and records that he said he had used in reaching»

his opinion. ‘That is not in evidence to this date.”” The «”

oi able and careful ‘district nea overruled’ the objection .

: — the. following reasoning:” :

“Well, with respect, first,.to Jeffrey, that rightly or

wrongly does not trouble me because Jeffrey is an

expert witness, and while it might Have been done _ ° Ae

_ differently, in my view all Mr. Jeffrgy had*to say

was that I have’ studied the question and ] have an

opinion and that is my opinion. The rest of it js

ice! - “Aagin a te clése ‘of the witness Jeffrey’s: testimony: }

, i One other question, and your opiniop-is based upon these

— things that other people told. you and #¢éords that, othér people

showed you and information other people gave ‘a about which

‘IT have been interrogating you? af

“A. Yes.

- “Mr. Smith: If the Court a at this we more io st

.this opinion and his evidence as to the evaluations on the bases

that the Government did not lay a proper predicate. His opin-

ions are unquestionably based upon hearsay and that to- permit

the evidence. to go before this jury’is a denial to Jim’ Williams

of the right of confrontation guaranteed under the Constitution ©

to see in open court the people who furnish these records and

os told them these facts.

i» “And it has been proven here ‘that one of those men in each

_-* jnstance was Mr. Fred Hall, and that to permit this not be

stricken from the ‘record is to deny him constitutional: right of -

_. confrontation’ and cross examination’ of the witnesses. knowing |

Sa the facts, to test them as to whether or not it is b the truth.

Bh en Court; Overruled.” °

6.. Stated in a discussio# with the attorneys in chambers. = &

*¢ -

s *

v ‘ . ye , {a s

probing to nas or S texting the validity of his opin-

ion, ‘and whatever is said or an in ‘his investigation

investigation as peated to his opinion on value.”

The two. oeieals. made by the witness Jeffrey were’

marked as Government Exhibits X-4 and X:5. The issue

_- may be more sharply defined by the proceedings when

~ the Government offered those ‘exhibits in evidence, which

-proceedings are. quoted in the margin —

eu Wake Dimmitt: At this. dine, Your Honor, the. government will

offer. into. evidence ment Exhibits X-4 and X-5.-

“Mr. Smi our Honor, I want to register. an objection to Gov-

ern $<Exhibit X-4 and X-5, that the government has. not: laid -

1€ cell predicate for’ the admission of these documents into evi-

rates that they ‘have- not proved or prolluced the documents .and

; ds upon which his report, upon whiclA these reports are based,

nor any -of_the logs, production records, drilling records or anything -

else that he obtained from Wilcrof, Incorporated, ‘or from ‘Irving

Petroleum Company, Incorporated, and that for such reason these.

exhibits would be based on hearsay and evidence to which, or matters

' to which’ this defendant’ has“been denied the right of cross examina-

tion, and~as to matters. to which this. defendant has, undér the Con-

stitution,’ been. denied the.right to gonfront im open court the wit-

nésses who: prepared such records and who submitted such records -

to this man fqr examination.

“The Court: May I see the documents? -

“Sustain the objection to the exhibits. I have adinitted: the. opinion

“of the witness because ‘he, has. qualified himself: Atleast he has

answered the questions. to the jury as to the extent’ “of his: qualifica-*~

tions, which would entitle him--to express an opinion.. The . fuality of -

the opinion is a matter’ of weight.

“But these decuments are not necessary, and might’ "have ‘some z

.is simply a mea sure_ Of the ompleteness or validity -

‘or accuracy or howeVer you care to. put it, of ‘his

-hearsay aspects. I will exclude them.’ The option of the witnesses. =

in. the record as to the ultimate question, . *,-

“Mr. Dimmitt: Recognizing the Court’s ° full cognizance of this,

Your Honor, we would limit the offer only fo the fact that such an:

evaluation was performed and not as.to. the truthfulness of ail : the

matters .contained therein, which may have’ ‘some hear ig in At and

so’ limit the government offer. §, . Sis A act |

* .“The ‘Court: ‘Any comment? ~ . * ss Uy OA

: are ”»

©, 4 Gal.Rev. 1, 33, 34 (1969). .

AHEGHT EE git UGe

cont ee paul | j-4e if fy 33. 8 S48 | “$

eT Ht | i Hy Ih dHade

at By | Hy ae lal a, tn dh

a AT ie dae ee be

TE pei i ttt

0 Aa pte Rab iy trl

a Hie bate cue i

TAs Aiea Bead a

facts, he should be allowed to give them as the basis

of the -opinjon he has expressed. If he had made

. International Paper Company v. Cnited States,‘5 Cir.

1955, 227 F.2d 201, 209. .- Hf oe eee

_ .. Likewise, the ‘Tenth Circuit has héld that: “The rule

is well established that an exert, may testify as to value,

though his conclusions are based in. part, or even en-

tirely, upon hearsay evidence.” H. &.H.-Supply Co. v.

United: States, 10 Cir. 1952, 1,94 F.2d 553, 556.

The Government cites also United States v. Alker, 3 -

Cir. 1958, 260 F.2d 135, 155, 156, where a criminal tax

fraud conviction was affirmed, but in that case the Sixth

Amendment confrontation issue was not discussed of

decided. * : ;

The Supreme Court hgs long recognized that the right

’ of confrontation “must occasionally givé way to con-

siderations of public. policy and the necessities of the.

case.” Mattox v. United States,“1895, 156 U.S. 237, 243. ,

Judge Tuttle for this Court'in Matthews y. United

States, 5 Cir. 1954, 217 F,2d 409, 418, discussed ably _

jthe effect of the Sixth Amendntemt right of confrontation

on the admissibility of evidence under exceptions to the-

hearsay rule, concluding: seg

—_

“While the’ Sixth Amendment. tune not prevent’

_ creation of new exceptions to the* hearsay rule based

- upon real necessity and adequate guarantees of trust-

worthiness, it. does embody those requirements as

. essential to ail exceptions -to the rile, present or

future. ‘ _ @ %

See also the very fuil Glacestion in 5 nen on Evi-

dence, 3d ed. §1397.

We come to the question of ehether the facts and

circumstances of this: case. are such that Williams’ right

of confrontation must “give Way to considerations of

‘ . public policy and the necessities of thé case.’ — v.

United States, supra, :

The witness Jeffrey testified that all data as to cere

analyses, Well records, operating costs and the price of

oil and gas were obtained from the records of the two ~

companies. The. witness simply accepted those records

as correct and could not téstify di y that they actu-

. ally were correct. | ss .

e.: % Who told you that. they were the correct records? .

“A. No one’ told me they were the correct records. |

“Q.How then do ) ‘Know they were the corpect |

records?

>: “A. T used my own’ st tellgeent from the records

. ‘available as to correctness of the records.”

There was no proof that the records on which the wit- .

ness relied were made and kept in such fashion. as to

_ meet the requirements of the” Federal Business ‘Records -

yf Act, 28 U.S.C. §1732. We cannot escape the conclusion _ ;

that Williams. was denied his constitutional right to con-

front and cross-examine the witnesses who’ prepared and

_ were the custodians of the records on which Jeffrey relied. ©

29°

- AS pre Supreme Court said in Pointer v. ‘Texas, 1965,

+380 U.S. 400, 405: :

“There are fow subjects, “enilf, upon which “this

Court and other courts have been more «nearly

‘unanimous than in their expressions of belief thay the ©

“right -of confrentation and cross-examination: is an

essential and fundamental requirement for the, kind

of fair trial which As this country’s constitutional

goal. ite se . , Y

* Other - ‘ane Supreme Court. ante have empha-- -°

sized the essential and fundamental importance to a fair

trial of thé right of confrontation and ¢ross-examinatign.””

The fact that Jeffrey had the, records from’ which

‘ the appraisals were. made did not impose any duty on °

Williams to require that the records be brought in.

Williams had theretofore repeatedly objected to’ the wit-

néss” " testimony as to value. until the records om which

that testimony admittedly was based had been introduced . .

in evidence. Jeffrey could not testify. to the “correctness”

af the records any more than he did, that is, that he used’

his own best. ,judgment as to their correctness. Fhe burden

_ rested on the Government to prove the authenticity of

_the records and tha burden could not’ be. shifted to the

defendant: In this case the defendant repeatedly and con-

sistently insjsted on his right to confront and cross-ex-

amine the witnesses who might testify as to the _corrget-

ness ‘of the pertinent records. There was never any indi-

cation of waiver of. that right. That circumstance distin-

‘guishes the present.case from Bruce v. United States,

5 Cir. 1965, 351 F.2d 318. 7.

10. Doug ¥ Alabama, 1965, 380 U s. 415; Brookhart v. Janis,

1966, 384 U.S ; Barber v. Page, 1968,.390 U.S> 719. «

YE DOC 0

Wilkams was deprived of hiss ¢ constitutional right to.

confront and cross-examine the witnesses who might be

offered by the Government to authenticate the- records

of the two companies on which the witness Jeffrey relied .

_”. in miaking his value appraisals. For that error the judg--

ment of convietion in Case No. 107 must be reversed. |

iH. Misuse and Abuse of the tiie

Powers Granted the Trustee in Sections: ~

21(a) and-167 of the Bankruptcy Act,

| }1. U.S.C. §§ 44 and 567. ,

Williams terms- the bankruptcy examination a public

“‘' of Inquiry,” which encompassed the period of

Grand Jury deliberations resulting in his indictment

and brings into application the rulings of the Supreme

Court in Estes v. Texas, 1965, 381 U.S. 532, and

Sheppard v. Maxwell, 1966, 384 U.S. 333, ami Rideau

v. Louisiana, 1963, 373 U.S. 723. We find no real merit

in the contention. =

The applicable eadpiaste Statutes are means of dis-

‘covering useful information and not ‘of adjudicating guilt.

The examinations “were necessarily extensive and search-

’ ing and the hearings were public, and properly so. There

was, however, no showing of such undue publicity as

~ would prejudice the Grand Jury in its deliberations, or as

might deny Williams his right to a fair-trial. We agree with

the district court,that there was no sufficient proof that the

Trustee misised his office-for the purpose of precipitating

' the criminal indictment or for prejudicing William’ right -

_ to’ a fair and impartial trial. In short, the evidence -

Sey ‘. . @&-

11.. See Martin v.. Texas, 1965, 382 U.S. 928, 929; Martin v

Beto, 5 Cir. 1968, 397 F.2d 741. -

simply fails to ‘sustain, Williams’ contention. that the sind 7

. Tuptcy examination wrongfully or improperly prejudiced

his constitutional rights. With Case No. 107 being re-

versed and remanded, the long. period intervehing after the

_ bankruptcy examination and before any new trial makes

it extremely unlikely that Williams’ rights -will be preju-

diced by. any publicity connected with those examinations.

III. Successive Prosecutionssand Rot Judicata. *

Williams argues that, since the Government could have

proceeded by separate count in No. i107 for. the offense ..

charged ir No. 233, his prosecution in No. 233 after he

had- been found guilty in No. 107 aniounted to harass-—

ment. He urges that one or more of his short spécial pleas :

in bar to No. 233" should have ‘been sustained.

-The claim of conspiracy to defraud by means-of false

and fraudulent statements and the mail frauds of which

Williams was convicted in No. 107 were different from: the.

conspiracy to unlawfully mianipulate the price of the

Westec stock charged in No.- 233, and different evidence

was required to prove guilt. We can find no harassment,

unlawful splitting of conspiracies,” former jeopardy, res

ta, or other special defense in bar of . <a dened

of No. 233. ;

“1. The plea of former jeopardy.- -

. The plea of reg- judicata.

. The plea, of- Governmental election.

.- The plea of Governmental *carving.

. The plea against splitting of conspiracies.

. The plea against successive prosecutions.

13. See Powe y. United States, 5 Cir. 1926, 11 F.2d 598.

ot:

M4 -?

CVA OT Hee ye

iy SARA

ee 5 gf eer

ei :

| IV. “Multiplicity of Conspiracies 3

Count One of. Case No. 107 charged a conspiracy, wit

that it was a part of the conspiracy, intér alia, to make

use of ‘the mails to sell ‘securities, “to carry and cause ©

to be carried through the mail§” securities, and to devise

a scheme and artifice to defraud by use ‘of the mails,

and that among the means. by which ‘the defendants would

and did ‘carry out the conspiracy was: the use of the mails —

' in furtherance of ‘a scheme and artifice to defraud. The

other twelve counts in Case No. 107.also charged that .

the defendants devised a scheme and artifice to defraud,

and the final -paragraph of each of said counts charged a

. Separate particularized use of the mails for the purpose

of executing the aforesaid scheme and artifice to defraud.

The distinction between the conspiracy count and the

twelve substantive counts is-made clear by the. discussion

in Isaacs v. United States, 8 Cir. 1962, 301 F. 2d 706, 725.

“The substantive stuns proscribed by Title 18

U:S.C.A. §§ 1341 and 1343°(mail fraud and fraud

by wire). are ‘closely related td a conspiracy, . pro-. .

scribed by Title 18 U.S.C.A. § 371..The distinguish-

ing featyre is that the former may be conceived by -

one person, and the mails or wire must be used for. ~

purpose of executing the scheme,-while a conspiracy ©

requires -an agreement of two or more to violate the

law, and at least one overt act in furtherance of the

conspiracy.” |

> As the Supreme Court ssid 3 in » Colianah v, United States,

1961, 364 USS. seed, sie

“The Sacdincttiniiaias between a substantive offense. .

and a conspiracy to commit is a posttigte of our law.

‘It has been long and consistently recognized by the

‘ e

| Court that. the commission. of the iabatiative offense

and a conspiracy. to commit it are separate and-dis-

tinct offenses.’ Pinkerton v. United States, 328 US.

640, 643. See also: Pereira v. United States, 347

- US. I, i... is

Williams ‘could be snonetll under Count One, the con-.

" spiracy count, only by proving an agreement, express Or .

implied, between -himself and one or more of his co-

conspirators to commit’ the unlawful act and proof was.

_ not necessary that that act was ever actually committed. - °

-. As to the twelve substantive counts, the situation is re-

versed. ,An agreement between Williams and one or more

" - of his co-defendants need not be proved, but. proof is.

essential that Wilkams ‘actually committed the unlawful

Me, 6 ee

‘The. indictment in Ng. 107 charges only one corispitacy

and not multiple conspifacies, as in Powe v. United Statgs,

5 Cir. 1926, 11 F.2d 598. '

Williams next’argues that the twelve sicciieethiag counts,

-- though formally asserted under. the mail fraud ‘statute,

18 U.S.C. § 1341, in fact charged the offense ap een

in a 15 U.S.C. § acai whtich reads:

“(a) Unless a registration statement is in effect as

to a seturity, it shall be unlawful for any — di-

reclly or indirectly— }

-“(1) to make use of any means or instruments of *

transportation or communication in interstate com-

merce: or of the mails to sell such security through

the use or medium of any prospectus or otherwise; or

“(2) to carry or cause to be carried through the

mails or in interstate commerce, by any meansgor~ _

instruments of transportation, any such security for

the purpose ‘of ‘sale or for delivery after sale.”

ee de ad RCs a

ig. es

ee 34 24 ?

- That statute, unlike ‘section. 77q(a), clearly makes. each |

mailing the gist of the crime.” Likewise, each’ mailing in ,

. violation of the mail fraud statute, 18 U.S.C. § 1341, is

a separate offense.’ The penalties for the offenses are -

‘similar,’ :and the sentence in this case was within the

' range permitted by_either. We need not decide whether

- the offense charged inthe twelve substantiye counts in

Case No. 107 should have been laid under the Securities

Act, 15 U. S.C. § 77e(a) or under the Mail Fraud Statute,

18 U.S.C. § 1341, for. any error in that regard isnot so —

7 material as.to be ground for reversal of the conviction. x

_ Rule Hed, » FOR. Crim. P. oe

V: Ae Venue.

Williams insists that if the charges in the twelve counts

which purport. to charge substantive ’ violations. of . the

«mail fraud ‘statute ‘had. been brought independently of

that statyte, constitutional venue would lie in the District

of Columbia where the documents Were filed. He relies.

for that insistence on tax evasion cases.’’ In those cases, ’.

however, the .offense was not tomplete until the false .

Statements were filed. Congress’. “so carefully indicated

the locus of the crime.” Travis, supra, 364° U.S. at 636. |

The language of 15 USS. C. § 77e( ), which thas been here-

tofore quoted, “iS eritirely differént — “to carry or-cause’ ~

to be carried through the mails, ‘ete, "Saat language,, to

14. United States v. Hughes, S.D.N.Y. 1961, 195. ‘F.Supp. 795,

799; United States v. Allen, S.D.N .Y. 1961, 28 FRB. 329.

15. Badders v. United States, 1916, 240 US. 391, 394.

16. _ Compare 18 U.S.C. § 1341 with 15 U So: $774.

17. Sansone v. United States, 1965,-380 US. 343, 354, 85 S.Ct.

- 1004, 1011; Travis v. United States, 1961, 364 U.S.2631, 81 S.Ct.

358; United States v. Lombardo, 1916, 241 US. 73, 36 S.€t. 508.”

\ ,

\ % ‘

, our minds) more nearly comports with ‘the. wording of t oa

. mail fraud statute, 18 U. S.C. § 1341, and a \

Sitacy count, venue s lies stints the agtee-

‘ment ade or whete an overt“act was —— “ss

| > an VIL Vaguentss in the Indictment.

_ This objection does not\warrant extended discussion.

Clearly, we think the B-aien sufficiently apprised the

defendant of what he must ‘be: ‘prepared to meet and en-

“abled him, in case of future prasecution, to plead with

- accuracy tlie defense ‘of. former acquittal. or conviction:

United States v. DeBrow, 19 1953, 346\US. 374, ee

a. - 7 vi “Refusal . of Instruction.

=. waa a

The district court refused Williams’ Tequest to charge

the a as follows: .

. “The law required that Wiestec Céegdetion: file

with the Securities and Exchange Commisston and

that Westec oahy send through: the mails-or—~—---—-

other modes of transportation in interstate commerce |

'. . various reports and documents such as annual reports, .

‘semi-annual reports, and ‘quarterly reports. You arein- ..

structed therefore, that you cannot convict the De- .

fendant, James W. Williams, for doing. or causing to .-_.

. be done, as an officgr of Westec Corporation, mérely_ :

oe » that’which the law required him to do.” |

The authority relied on for that instruction is 7 . -

er States, 1960, 363 US. 370, 390-392: ane. legally

- ' 18. Bellard v. United, States, 5 Cir: 1966, 356 F.2d° 437, 438; :

Miller v. er 5 Cir. 1965; 354 F.2d 206, 208. :

read e . R el.

pe ge |

5% lled mailing in Parr’ were “mailings of valid ‘and

? correct tax assessments, not of false documents.

‘The substantive counts ‘in Case. No. 107. charge that -

it was. part of the schemé- and artifice to defraud that

the defendants would. mail to the Securities and Ex-

change Commission, American Stock Exchange, finan-

“cial institutions, brokerage companies, and” thé share-

holders and prospective shareholders of Westec the annual,

semi-annual and quarterly reports of Westec;which re-

"ports contained false, ‘fraudulent and misleading, state- -

ments and representations concerning the operating results .

of Westec and financial condition of ihaciisay

The indictment esi takes up, the seve yal reports and. |

describes the alleged” omissions: .and fals statements in” '

each report. Certainly ‘the Parr decision ¢annot have the |

effect -of according immunity to any persn for filirig false

‘reports merely because the law requires feports be filed...

~. The requested instruction might well have conveyed: such

‘a “‘meariing to ‘the j jury. Ta say the least, it was highly mis-. a

leading. The district court erent. fefused the instruc- ° ie ‘

’ tion.

In case nites: 26, $29 it this Court" the ideuaes :

of conviction is reversed ‘and the cause is remanded for

| S further proceedings not inconsistent with this opinion. In,

case numbered. 26, 830° ‘in this Court ‘the judgment. ‘..:

affirmed.

Case No. 26, 829 REVERSED AND REMANDED. me

Case No. 26, 830. AFFIRMED. | rs ies

gf : .

37 nS ; ee

ee ae nies \ aes —— x

~~ a APPENDAGE B

IN THE -

"FOR —_ Ideals ‘CIRCUIT

i 2 - Mite States Court af Aprils.

t. . . ” anes F : a é

_— i - e - .

_ No. 26829 and 26830 atari,

"UNITED STATES OF AMERICA, 2.

ne. 2

ent : _versus

Steals AMES: WILLIAMS, i pea ciee

- Defendant. “Appellant.

: 3

_A ae: from the United States Sisrice Powe for the _

isthe ) Southérn District m7 Texas j ere ie

we eae eng : eB: ‘ pane \

(Septenber ‘16, a.

an (ON PETITIONS FOR RamaRiNG le

is 4 ae ; 2 ah

Before. RIVES, GOLDBERG, and G®DBOLD?

y Se Circuit Judges. ~

PER Sn The Government wetitions for: rehiear-

- - ing in Case No. 26829: and: Williams petitioris for ‘re-

hearing in Case No. 26830. ‘We. consider = ae

| Separately and ~. them. both. ~

}

. \r sas es =e

__ aestimony, if erfor, does not call for\reversal as to counts

"of the indsetment other than ‘courts yine, ae eae apes

I, “The Admission of Jeffrey's. Testimony. .

©. Over explicit and repeated. objections .of the defend-

ant Willjams, -the. Government was permitted to prove

_. by its expert witness Jeffrey his estjmates of the net

future earnings, as of January |, 1967, af two producing

¢ ; oil ‘and “gas properties, the Irving properties and” the

*- Wiftrof properties; when thé records upon which Jeffrey

. . based those estimates were riot proved to be corrett or.

i oS ee

““lVing Petroleum “Investment, Inc. and Wilcrof,. ~~

ae eS ate ee

an tee ee GS. .

We reversed the judgmeth of conviction in No.2682S:

7 becausé the admission of in testimony of the Witness

ee ee

Bly age HE ne

an Ae | it he

a ct fi il tals

ete i s Hy i a a33 i 3 |

a Lt 4 ne HIBS asyll i278 3

r ul che 8. fail He 3 aaal : a z.

ieee a Bune el if i if :

ai F Hl ee anh Hb

40 Sains | BS

“Other ‘methods of appraisal are- used if there is

sufficient production. history so that the established .

production. of the trend is noticeable.

“For instance, if a- -well has been. producing for .

a number of years and hag shown a consistent decline .

in production, -then it is possible to extract that to

an economic limit ahd determine. the reserves.. That

‘is when the operating expenses exceeded the income,

. at which- time the production is no. longer possible: -

“After determining ‘the. reserves, records of. per-

formance are examined to. determing what the operat-

- ing. cost of these’ properties have been, and what.

the selfing price of the oil is and what thé selling -

’ price of-the- gas is,:and then economic projections _

of future iricome are prepared, using estimates ‘[sic]

rates of production by year with. the selling price

of oil and gas per barrel or per thousand cubic*feet

. of gas to determine the gross income of the property

for each year, and then severance’ taxes, ad valorem

taxes and the operating- expenses are deducted from

the, gross ‘operting income to arrive at the net op- -

_ erating income; aiso any future capital expenditures

are deducted frem the gross income. ~~

“And after determining the flow ‘or the cash flow

of- net incomie ,by years, it is customary to discount :

future net income by years, using some discount

-factor which is ‘usually, based on the going rate of

interest that a ‘person would have ta pay to borrow

.. Money, and this is called, the discounted future net

* income, or sometimes called the present net worth - —

of future net income. | a

“Then, after obtaining the present net wont of

future fet income, or discounted future net income,

there are various methods of arriving af. fair market

_ Value. of the property. from — figure. -°

. 41

. Sone” arbitrary ftection of that figure ‘is psually

taken: as- the fair market value, depending upon the

needs or the financial position or the requirements

of the purchaser. A. property may be worth-more to

one purchaser than to another, depending .on his

ability to borrow money on this particular property

or ‘depending on the rate of return that he desires

on - his investment. °

of a.very detailed analysis, I take it, inspection of

histories, past financial data -available- to. you, and

the steps you take’ thereupof. ta ‘make-Your evalua-

tions, I anticipate that you leave out quite a-num-

’ ber of factors, price per barrel of oil being deter-

mined bythe gravity of the oil, the matketability of

the oil of that particular lease, and its position within -

the field, and its access to pipelines? ~~ . :

“A. Yes. Of course, when a property is * eval-

* uated, it is usually known what the going price Beg

for crude or gas’ is in -that particular field at. that -

time. Sometimes it is customary of sometimes - the a

-evaluation | engineer will take into consideration

_ - future escalations in the price of oil and gas, but

' ordinarily that “is not done with-ail. It's sometimes

. done with gas, Where gas contracts ee for esca-

-.Jation in the price a. gas in n the future.* ;

es 2

“k “k y

“O. In performing. ‘your geologic and engineering.

. functions of this appraisal, and outlining the: steps. of |

a formal: evaluation and appraisal-as you -did tothe

' jury, were these functiéns and each of these steps

- performed in the evaluation of these properties?

af Yes. _ :

3. Appendix, Vol. Iv, pp. 1234 to 1237."

o®

“Q. Mr. Jeffrey, you have given. a quick summary .

NT es hE TS er ME OE OI ee Bn eS. ied ee Oe an EO me ee

ee 42.

“<). Now; genirally, whiat were the genetal docu-

mentations of financial data, geologic reservoir in-

' \ + formation, well iogs, related itéms with reference to

-* your basis for the evaluation and eet would

- you generally describe it? “ ° :

“A. The production, past production performance

of the various leases~was obtained from State. re-.

ports, reports which: are filed -by the operators of

‘the leases with: thé state in which the leases are fo-

vet Thé electrical logs were obtained. from the _

records of Wilcrof, Incorporated, and Irving Petro-

— Investment, Incorporated.

= \ Sal data as to cog: analyses and well records -

- were obtained from the records.of Wilcrof, Incor- ©

' porated and Irving Petrgleum Investment.

-*Data as to the price of oil and gas was obtained

of the two companies.

- “Data -as.to -the operating costs during the year

. 1966 were obtained from actual operating Statements

. which were. in the possession of Wilcrof, incarpo-

re _ tated and Irving Petroleum {nvestinent. ~ .

* from pipeline run statements which : are in the records

“Q- And-based on these various records that you .

have just outlined before the Jury, were subsequent -

. calculations needed by you to arrive at your opin-~

* . _ jon? 2°

“A. Yes. CS (tip oes

*Q.- And. were these sileataalia anew on the *

data: that came from these records you have just

- named? | ven

“A. Yes.

“©. And this is 3 an - opinion- - that you poe a- - |

pressed in egg evaluation appraisal, is it not?

AS Yes.™ . . ‘

4. “Appendis, Vol. IV, pp. 1244, 1242,

a |

PP a

er rp ee ere sf re ~~. OP tae ee yaaa Sees. >

. - - é - 3

* :

‘ pared and were t

‘Thus the factual bases. used by Jefffey in preparing

his estimates came fram’ reports filed: by the. ‘operators .of

the leases as to the past: production performarice of the

various leases and- from the records of the two companies

as to the electrical logs, core atialyses, well records,

prices of oil and 22s, and operating costs. ©

We held that. Williams wads denied his constitutional :

right to confront and cross-examine the witnesses who pre-

custodians of the records on-which

ng other hurdies to be surmounted be-

“of value might become admissible;

Jeffrey, relied.

fore Jeffrey’s-estJ

" we- pointed oup that, “ [t]hera. was no proof that the records

on which witness religd. were made’ and kept in such

‘fashion ay’to meétt the“requirements of the Federal Busi;

ness rds Act, 28 USC $1732." .. te

onetheless, the Gévernment insists that’ Jeffrey’s ¢ ex:.

pert ,opinion of value as to-.each of the properties | was

‘properly. ‘admitted, arguing: a

“(A) It is submitidd that this -test is ‘a mis-

- applied and that the ‘proper test under. the circum- -

‘stances is.not whéther-the records themselves qualify

for admission under an exception to the hearsay rule;

.- but whether the‘records are such’ as are ordinarily,

- cgnsulted ‘and refiéd ‘upon urider the pr&ctices, usages,

and - Standards of the appraisal: profession. in like.

s. We would cail attention also that the production salle: ‘filed

with the @ate by the operatérs of the leases do not qualify for ad-

. missién under’ the official records statute, 28 US.C. $1733:

“(i} Books or records of account or minutes’ of’ proceedings”

of any department or agency of the United States shall be ad-

missible to prove the act, transaction or occurrence a$ a memo-

randum of which the same’ were made or kept.” ;

That much is conclusively demonstrated. by the rationale of Matthews vs

“+ y. United States, 5 Cir, 1954; 217 F.2d 409,

‘- aye . *:

Re er — eG ee

’

tases. (B) To impose a general requirement upon an.

expert witness that he consult only such*sources as

themselves would be admissible under the rules of evi-

rule would go far to excluding all expert opinion

. from. cfiminai trials. -In particular, it would wreak

“havec. with medical and psychiatric testimony which

plays a large’ and doubtless ° an -inereasing..role in ~

present-day criminal practice.’ * [Gov't’s petition sic

6 rehearing, p. 2.) ‘ :

[The references (A) as (B) have’ been inserted to “facili-

_ tate ready referencg,] * ‘fh

In thus proceeding from (A) ‘to ¢B) the. Government

has indéed .made “one giant “leap,” for,-whatever might

.. be the merits or -demerits of such a holding, the’ present

decision. doesnot impose any “general requirement” as

. to the sources which may be consulted by an expert wit-

ness. The Government’s contention -on this score has .

caused us in the foregoing part of this opinion to extend

‘at some length our reférences to the record so that nett

may be no misunderstanding as. to what i is here decided.

*. Actually our decision - fits neatly" into” what the Gov-

ernment itself- contends” to be a correct ‘Statement of the:

kaw: en aa ee ee rar 5 *

_ “If the .witness has gone. to only one hearsay source

. and seeks merely to summarize the content of

_ that source, then he is acting” aS a suiamary witness,

not an expert. Since he’ is introducing the content —

of the extra-judicial statements: or writings to prove

truth; his testimony, like its source, is ‘hearsay and is,

inadmissible unless the source qualifies under an ex- -

ception to the hearsay rule. When, however, the wit-

ness. -has gone to many. sources—although, some" OF

dence and particularly witheut vfolating the hearsay _

~ [Govit's eae for rehearing PD. 3-4]° - .

. all be hearsay in nature—and rather than introduc-

- °. Ing mere summaries of ach. source he uses them all,

alone with his own professional experience,. to arrive

at his opinién, that‘opinion is régarded as evidence.

in its own right and not as an attempt to ) introduce

hearsay i in disguise.” :

The. eanea shows that Jefitey went to only one hear-

‘say source. for the ‘past production performance’. of ‘the

‘various leases, namely the: reports - filed withthe state.

‘by the operators, and to: only one hearsay source for the.

électrical logs, core analyses, well records, prices of oil

and gas, and. operating costs, namely the: records of the

two companies. The fact that his testimony was: admitted | ;

in the form of ari expert’s opinion does not by some magi-

eal lederdemain remove the sjigima of inadmissible” hearsay aS:

with. which its source was infected. _t

This we do dot think that ‘the Government ‘has succesé-

- fully met the objection to Jeffrey's testimony as heargay. ~

Assumting,. ar guendo, that it has done so,-we think that zn

the Govérnment is clearly in error when it argues that

” there are no “different and more stringent requirements of

adntissibility upon expert opinion ev ‘idepce: in criminal

cases than apply i in civil cases,” and that the right of* con-

“frontation | is B10) different or more far-reaching than the

6.- In support of this claimed distinction, the Sionbiatan: discusses

the folowing authorities: 3 Wigmore on Evidence; 3rd ed. p. §2;

Standard Oil. of California. v. Mey 5 ke Het, 251. F.2d 188;

Hannan v. United States, D.C. Cir 1942, -131°1F.2d 1; H. & H

Supply Co. v.. United, States, 10 Cir. 1952,.194 F.2d 553; Hammond .

Lumber Co.. v. Los “Angeles Coutity, 1930, 28& P. 896; Johnson v. °

. Lowell, 1922,:240 Mass. “546. It is. not our purpose to: rule upon

whether the quoted statement is.an entirely correct statement -of the ‘-

law. One, we do agree in. substance with the first two sentences, .

P ee fe ‘y!

Fr ~ am

217 F2 at 418. - : °

=" 46 -

hearsay rule (Government’ S -suggestion for, rehearing ey -

banc, p. 2). To-sapport that thesis the. ‘Government lifts

’ out of coritext ‘a part of the opinion in Maithews v. United:

States, ‘supra _ (Government S Petition: for Rehearing,

Oe raha hcky “hag. P|

- “Tt has sailiaiame been nila that [the right of con-

frontation] may not be. invoked to exclude evidence . |

. Qtherwise admissible urder well-established exceptions

to the hearsay rule, and undoubtedly Wigmore’ is

correct in saying, with respect to the Constitutional. -

right to confrontation, 5 Wigmore, Evidence, $1397:

‘“*The- rule sanctioned’ by the Constitution is.

the Hearsay rule as to cross-examination, with. all

the ‘exceptions that may legitimately be found, -

developed, or created therein

s ‘

" That uotation: was not necensen’s to the- decision: in.

Matthews. - It overlooked the’ much earlier Qpinion in

_Mattox v. United States, 1895, 156 U. >. 251, 242, 243,

where the eee Lowe ‘stated:

oe “The primary ‘object. of ‘the constitutional pro- 4 :

. Vision in. question “was to prevent depositions or ex

. parte affidavitsy such’ as were sometimes admitted in

_ Civil cases, being used against the prisoner in lieu of -

a personal examination‘ and. cross-examination of the

witness tn which the accused has an opportunity; not

only of testing the -recollection and sifting the con-

science-of. the witness, but of compelling him ta stand

face to face with the jury in order that they may look at

-: him,eand judge by *his demeanor upon the stand and

the manner in which he gives his testimony ewhether

-he is dangle of belief. a ee added. )..

eee eee

“ &, ne . :

+ Since the: date of our decision in.Mattheivs, _ supra, the...

- Supreme Court has held ;that,\“The right to confronta- -.

‘tion is basically a trial right, It includes both the opportu-

nity to cross-examine .and the ‘occasion. for the. jury to

"weigh the demearior of,the witness,” B&rber'y. Page; 1968,

390 U.S. ‘719, 725. Again, as recently as June 23, ‘1970, a

°’ “the Court said: to | -:

< Beco Sree be canceded that hearsay rules

iid the Confrontation. Clause are generally designed

- to protect’ similar values, it is quite.a different thing

'. Confrontation Clause is nothing more mor less than a

‘tions ‘as they existed historically at common, law.

gruence; indeed, we ‘have more than once found’ a

violation of confrontation ‘values. éven though the

statements in issué were admitted under an ar gual.

reCognized hearsay exception. See. Barber v. Page,

~ 390.-U.S. 719, 20 L.Ed.2d 255, 88 S.Ct. 1318.

- (1968); Pointer.v. Texas, 380. U.S. 400; 13 L.Ed. 2d

923, 85 S.Ct. 1065 (9965). 7 =

- California v. ‘Green, 1970, — US. Beta L.Bd.2i

489, 495.

The. opinion in Green ‘ate beyond doubt that’ the pur- |

cross-examination, naan mise that right.”

‘“Caetenabetie: (1). ‘insures that the wiles will givé

the seriousness of-the matter. and guarding agdinst -

. the lie by- the’ possibility of-a penalty for perjury; fz

forces the witness to submit to cross-examination, the

, saben legal engine ever invented for the discovery ae

r: ‘am

to suggest that the overlap is complete and that the -.:

codification. of, the rales of hearsay. and their excep-

Our.: ‘decisions shave never. established such a con-

“poses” of confrontation, -While they include the right. of -

wy.

| ‘ bs ; r ane agi ae A ha’

. 8 the :

ne a Pa aan ; y Y

G | of. triith’; 3) permits ‘the jury that is to decide’ the

‘ee défendant’s fate to observe the demeanor of the wit-

be _* hess in making his’ statement, thus aiding the - jury.

Pa _ in assessing his credibility?’

ie ; ; ’

e: peony, t Fe ce 26 L.Ed, dat 497. : : ar ss

'» We adhere to the A that. Williams: -was denied “

his constitutional right to confront and cross-examihe in

: the presence of the. trial jury. ‘the witnesses who prepared

“~ . and were. the. custodians of the Tecords on which Sc ia

e. a saat 7 * :

Sa Gh aaa

ae ty SP get Baie ae

: ©

_ nt ‘The pena, | eles of “Iefitey's

| aes ’ " Testimony Redfires that Williams’ Con-

a. on ah viction be Reversed i in Toto. Ears me

"Jeffrey. testified, over Williams’ objection, to ities amounts

. of his. estimates of the future.net’earnings of the Irving

_ and the Wilcrof: oil and gas. properties as of Jahuary: i.

1967. The indictmentgas returned by the.grand jury con-

i tained twenty counts fApp.: 13-37),-the last five of which ‘

: did not mention Wliams Sut. named, as defendants, —

: -: Ernest M. Hail, Jr. ‘aad Fred L. Hall. Counts, 4 and 5 were

'~ . dismissed. Williams was atraigned and pleaded not guilty

. to Counts 1 through 3 and 6 through 5 (App, 2). Count.

wk charged Williams -and- three codefendants with-con-

' spiracy. Counts.2 and 3 and 6.through 15:charged Wil:

liams With substantive ‘violations of the ‘mail fraud statute.

‘He was tried eng convicted on those 13 counts. A te-

examination of those counts convinces us that ‘each’ con- *

| _ tained allegations as to which evidence was relevant to

' . *prove the net future. earnings as of January. 1, 1967 or.

the producing. oil and gas properties, in question. Indeed *

that ‘was the, er taken by a in his. brief on

Riles feos mnnrinmnaesera sea $ orice ste

asain ee ete pane ee BY: ees

Bea Son ora ban Sp ee ge ee

Lid het N67: er Re NE ts AL PRM RO ine PO ohana be ee

. . .

‘a . . Se eS A245 SPST NRTA ABT Rca LENA a MLLER

FIERA ABD 0 SEER NSLS BERG I LEO LE ESI RA LE LE RIC ELE EO VED LENE ERE AG

DP tue fae eae

-e 7 utes 3 ee he ae PES a

| ; otiginal hearing (pp. 8 and 9):7 and ics cieiaiigs had

not controverted that position Y ce to its petition’ for te- ++.

ffrey’s* testimefiy related to.

hearing. We conclude" that J

3 allegations i in the main body ‘of. each of the thirteep, counts

_on, which Williams. was convicted.

The. Government’s petition for x sccating in Case’ Yo. .

; 26829 is oa ‘denied.

i *

No: 26830

we affirmed thie judgment of conviction in No. 26830. *

y ke record - in that: casé. apptoaches | the ultimate. ir

brevity. It consists of a single count criminal ae

'. filed by the United Statés ‘Attorney - App. 53-59),

one-line special pleas. quoted in footndté 12 to our ofiginal ;

opinion (App. fo). and a brief: stipulation. signed by the -

Attorney, the’ defendant Willfanis and :

United States

Williams’ attorney (Appendix A to the Government's. An- .

swer to Williams’ motion ‘for’ fchearing). By that stipula-

tion the ia agreed: - Be foe ot ae 4 :

- ae ey. That all of the ‘facts alleged in the attached |

“Criminal Information (being styled United. States: ae

* America: vs. James. W.. Williams, Criminal No. 68-H- 4

. 233), which said information is incorporated herein |

.. by reference; are true and correct, and that upon this”

Stipulation ‘the Court may ,find that all such. facts are

-.- conclusively proved beyond: a. reasonable doubt and

ere binding on the parties hereto and that the Court _~

may find the defendant. JAMES W. ‘WILLIAMS*

“guilty. as: charged without further evidence.

ce a

7. Allegations charged in Count 2 were adopted by reference in

= ‘subsequent counts. . Fair's

8. Referred to in-our original opinion ‘as Case No. 233, see -foot- .

noté 3° to original Opinion:

en:

| 30°. - -} |

“2. That the defendant, JAMES W.. WILLIAMS,

- désires to present no additional evidence other. than

_ this stipulation on his. plea of not guilty to the offense

charged in said Criminal Information.

“3. All motions filed heretofore by J AMES W.

WILLIAMS in criminal causes: numbered 68-H-15

and 68-H-25, shall apply as if filed in the above:

_ captioned and numbered cause and ‘the rulings of the

~ Court shall be.the same and = herein. Defendant

does not waive his pleas i in bar.”

Admittedly, No. 26829 (mail frauds and conspiracy to -

_ defraud) and No. 26830. (conspiracy to unlawfully

manipulate the:piice of Westec stock) each had its genesis

in ‘the collapse of Westec. However, they involved dif-:

ferent crimes, different facts, and required different evi-

dence for conviction. Former jeopardy, therefore, did not a

bar Williams’ prosecution in No. 26830. Blockburger v.

United States, 1932; 284 U.S. 299, 304; United States v.

Ewell, 1966, 383 U.S. 116, 125. That would be true

even under the views expressed in, Mr. Justice Brennan’ Ss

Separate opinion ih Abbate v. United States, 1959, 359

U.S. 187, 196-201, for the two prosecutions here in-

' volved are not parts of a single transaction but are for

” different acts. Likewise, Williams can take no comfort

from Mr. Justice’ Brennan’ S concurring opinion in Ashe v.

_ Swenson, 1970, 397 US. 436, 448-460; see also Waller

v, Florida, 1970, 397 U.S. 387.

‘Sin. -Petite.¥. United States, 1960, 361 US: 529,. and

- “Marakar v. United States, 1962, 370 U.S: 723, judgments

of conviction were vacated when the Court granted the

Government’s motions made “on the ground: that it is the- —

general policy of the Federal Government. ‘that several -

{

a | 51

offenses arising out of a on transaction should. ‘be

alleged and tried together and should not be made the:

basis of multiple prosecutions, a policy dictated by con-

siderations both of fairness to defendants and of efficient

and orderly law enforcement.’ ” 361 US. at 530. The Gov-

ernment insists that that policy’ involves the exercise of . —

| executive. discretion not’ subject to judicial review and,

in any event, that the policy is not applicable. Under the.

facts and ‘circumstances of these cases, we conclude that

_ the policy has not been violated, and certainly not in such

manner as-to deny Williams the equal — of ¢ the

law or due process of law. )

The petition for rehearing i in No. 26830 is therefore

denied as is also the anise for rehearing i in No. sone.

PETITIONS DENIED. , Se a

i. ae

APPENDAGE re

z | Mted States Court of Appeals

FOR THE FIFTH CIRCUIT -

No. 26829’ wonegd

UNITED STATES OF AMERICA,

‘ Plaintfl-Appelle,

yersus Ss ————————

my JAMES W. WILLIAMS,

Defendant-Appellant.

“Appeals from the United States District Court for the

Southern District of, Texas

(September 16, 1971)

Before BROWN, Chief Judge, and RIVES, WISDOM,

GEWIN, BELL, THORNBERRY, COLEMAN, GOLD-

BERG, AINSWORTH, GODBOLD, DYER, SIMPSON,

| MORGAN, CLARK, INGRAHAM, and RONEY,

Circuit Judges.

MORGAN, Circuit Judge: This case raises an im-~

- portant question cQncerning the admissibility of expert

‘witness testimony in criminal prosecutions. Becduse- of

._ the importance~of the issue, we have placed this* appeal

en banc: pursuant to Rule 35 of the Fédéral Rules’ of -

_ Appellate Procedure. aa O23

_- -James W. Williams, formerly Chairman of the Board

| of. Westee Corporation, was convicted of conspiracy to

violate 15 US.C. 8§ 77c(a), 78ff(a) and (18 ‘US.C.

§§ 1001, 1341, ‘and also of twelve substantive violations

of the mail fraud statute, 18 USC. § 1341, after a

jury trial in the United States District Court for : the

Southern District of Texas." These’ criminal charges

Westec Corporation? it ee Dea Dae es

"The. indictment against Williams “Alleved, in par}, that

he had caused Westec to sell oil and gas pi to

corporations. controlled’ by conspirators at prices greater ~

than their fair market value: In support of these allega-

tions, the Government called the. witness Thomas Jeffrey

to testify as an expert concerning the value-of ‘the prop-

erties involved. . ae

~ "Williams objected to the admission of ‘Jeffrey’s testi- -

mony because it was based upon an ‘investigation . of

1. Williams was séntenced to a total.of ten’ years’ imprisonment,

five years for the conspiracy, and consecutive-five-year terms'on the

substantive counts, to.run concurrently with each other. Subsequently,

Williams was tried and convicted of a separate charge of conspiracy

to unlawfully manipulate. the price of Westec’s common stock, in

Williams was sentenced to an additional five years’ imprisonment to

run consecutively to the sentences imposed for the mail fraud viola- ’

—..* mt ‘e 45

2. Westec’s stock was suspended from trading on the American

. Stock Exchange on August, 26, 1966. Shortly thereafter, the United

States Securities and Exchange Commission “began ‘an investigation of

~ Westec’s affairs. On-September 27, 1966, the United States District.

Court for the Southern District, of Texas entered an order placing

- the corporation in reorganization proceedings.

54°

documents and business records not’ themsélves intro-

duced in evidence. On appeal, a panel of this court ac-

cepted this argument and reversed the conviction, hold-

ing that “Williams was: denied his constitutional right to

| confront and cross-examine the. witnesses who prepared

’ . and were.the custedians of the records on which Jeffrey

relied”. Williams v. United States, 5 Cir., 1970, 424 F.2d

344.° Subsequently, the Government filed .a timely petition

for rehearing and a suggestion for rehearing en banc. The

panel denied the petition for rehearing with a per curiam

--r opinion which further elaborated the basis for’ its ruling: -

“United States v. Williams, 5 Cir.,. 1970, 431 F.2d 1168.- -

* On‘the same date, the full’ Court granted the Govern- ..

ment’s’ petition for rehearing en banc ‘on btiefs without .

oral argument (431 F.2d 1175). We hold ‘that the- orig-

inal panel of this court erred in reversing the tonviction.

The decision of ‘the panel is overruled and the decision

of the District Court is in all respects affirmed. *

The admission of expert witness testimony based upon

records not themselves introduced in evidence potentially

‘Taises questions with respect both to the constitutional

_*right of confrontation and to the appropriate federal hear- -

say rule. : : Prior to the recent Supreme Court opinion in

California. v. Green, 399 U:S. 149, 26 L.Ed.2d 489, 90

S.Ct. 1930 (1970), it was thought by some. commentators

that the Sixth Amendment confrontation clause served

to constitutionalize the common law hearsay rule; that-the .

protection afforded by the confrontation ‘clause was identi-

cal to that afforded by the hearsay rule and subject to the

eS &.

4%.. Te eal aaa .of this court properly affirmed the District

Court with respect to the. other arguments made by Williams .on

appeal. This én banc rehearing: is confined solely to the issue of the -

_s admissibility " Jeffrey’s ba a Zo

‘same exceptions.* Green, however, clatified the rela ion-

‘ship between these two guarantees, making it clear {hat

the right of confrontation and the rule against Hearsay pre=—

sent. two distinct, albeit related _questions.—Mr.. Justice.

White, writing for the comt;noted that: |

While it may readily be conceded that hearsay rules

_,and the-confrontation clause are generally designed to’

_ protect similar values, it is quite a different thing to

suggest that the-overlap is complete and that the con-

frontation clause is-nothing more or less than a codifi-

cation of the rules of hearsay’ and their exceptions rf Zi

they existed’ historically ‘at common law. Our

cisions have never established ‘such a congruencgy . .

. 399, U.S. 149;'155, 26 L.Ed.Qd 489, 495.

In terms of the reliability of evidence, the cdileiitliaii | ;

clause merely ‘establishes ‘a constitutional Minimum as to.

the character of criminal proceedings.” Evidence ‘may _ be 2

. constitutionally: admissible under the confrontation’ clause

and still run afoul of the appropriate federal héarsay rule.°

4. See e.g. V Wigmore on Evidence §1397 (3d ed.-1940).

Speculation as to the Sour’s decisghin P of the hearsay rule was

" fueled’ by the Supreme Court's: decisigh’in Pointer’ v. Tex#s, 380 US.

‘400 (1965), in which the court read’ into. the Fourteenth Amendment :

the confrontation clause of the Sixth:Amendment, while making no

attempt to distinguish that clause from the rule against hearsay. See

- generally, Note, Confrontation and the Hearsay: Rule, 75 Yale-L.J.

1434: (1966); Comment, Federal Confrontation: A Not. Very Clear

Say on Hearsay, 13 U.C.L.A. L. Rev. 366 (1966). .. .. >

_§.- The confrontation. clause serves: other. interests in addition to.

the assurance of. evidentiary reliability. [t also, for examp ,-protects -

the right to be present. at. trial when incriminating evidenge is intro-

duced. and the right to have the trier of fact’ observé the demeanor

.of witriesses. See, The Supreme Court, 1 969. Term, 84 Harv. L. Rev.

108-17 (1970). -

6. In Green, the court observed that “merely because the evidence. -

is admitted in violation of a-long-gstablished ‘hearsay rule does not —

tye

ee gh os gyi

- Hence, , while the original. panel -of this court ‘based ~

‘its decision principally upon the. confrontation clause,

we find it necessary -to. consider separately . whether

Jeffrey’s’ testimony violated the confrontation clause or :

the hearsay rule. First, however, we shall describe in

greater: detail the testimony of the yeu witness J effrey.

Jeffrey: Ss Testimony

The testimony of. J effrey concerned the value of two |

Bio a oil aid gas properties known as the Irving

; ° properties and the Wilcrof properties. J effrey was an in-

dependent consulting: petroleum engineer. In his testi-

mony Jeffrey described his professional background and»

_ then explained the. procedures employed in appraising the

value of -oil and gas, pr ies. This testirnony is quoted

at length in the Sd gn manent opinion overruling the:

: ‘petitions for rehearing and will not be ye emma here. .

- ‘Jeffrey testified that, on the basis of the appraisal pro-

cedures which he had described, he. estimated the value

of a Irving property’ to have been slightly less than

$500,000 and the value of the Wilcrof property to have

been approximately $44,469. In reaching these estimates,

“Jeffrey made a personal inspection of the properties and

- consulted the following sources of information: (a) the

* past production performance of the leases obtairied from |

reports which are filed by the operators of the leases with -

the State, (b) core analyses data and well records obtained

from the records of: the two companies, (c) data as to

the price of oil and gas obtained from pipeline. run staté-'

poh err the records of the two. somipanice, and (d)

lead to ‘the conclusion that confrontation rights have been denied”,

" 399 US. at 156, 26 L-Ed. ad at 495- 96.

* emer

9 He ile

data as. to operating costs for.the year ‘1966 from ‘the

~ billing records from the operators of the leases. ea

Williams repeatedly objected. to’ the admission of this

expert testimony because tlie records of the two. cor-

porations upon -which Jeffrey based‘ his opinion were not

themselves offered in evidence. The. district judge over-

ruled these objections and permitted J effrey to give his |

opinions as to the: value of the properties. At the end of

. the direct examination, the Government Offered into evi- a

. dence the two appraisal’ reports, marked Government Ex-

hibit X4. and X5,«which Jeffrey -had prepared. Defense.

counsel objected that the exhibits were hearsay and the

court jupheld the objection excluding the reports. Jeffrey.

was ‘then cross-examined at length by the defense. Durihg-

a cross-examination, numerous factors which might reduce the |

weight of Jeffrey’s expert opinion were developed, includ- °.

: ing the sources of information. upon. which 2. had relied.

Il. The Coniroisanion Claisse

‘The first question before the court is whether ie ad- |

- Williams’ Sixth Amendment right of confrontation. .In

_its per curiam opinion denying the motion for rehearing,

. the original panel of this court relied on California -v.

. Green, supra, to support its decision that the admission ~

of J effrey’s. testimony violated the confrontation clause.

This reliance by the panel on Green was misconceived. In-

deed, Green makes it clear that there is no Sixth Aménd-

“ment obstacle to the admission of Jeffrey’s testimony. -

In Green, the Supremé Court held: that the -admission - .

of the prior inconsistent statement~of a witness as sub-

_» Stantive eviderice in a-crimirial case did not violate the

- confrontation rights of the actused so long as the wit.

nesg was present at trial and available for cross-examina:

_ tion. The relevance of Green to the case at bar is that it

Ht,

represents the most recent effort by the Court to elaborate Kes

the nature of the’ right “of confrontation. ;

the Court observed aes of pit e {o

Our own decisions se oy to hale: deccputbsd at an

- early date that ‘it ‘is literal right to “confront”

_. the- witness -at the time of the trial‘ that forms ‘the

core of the values furthered ey: the. gpa “

Clause . a

alt 399 US. at 157, 26 L.Ed 2d 2 496.

‘In its opinion, :

‘In support of- this statement, the ‘Court quoted with: ap-

proval from Mattox v. United, States, 156 U.S. 237, 242- eo

43, 39 L.Ed. 409, bier 15. ot. 337 (1895):

The primary pee of ihe PEI provision ~

-in question was to prevent depositions - or ex parte

_affidavits, such as were:sometimes admitted: ip civil

‘cases, being used against the prisoner in. lieu of a

personal examination -and cross-examination of the

witness in which the accused has an-opportunity, not °. - a

only *of testing the recollection and sjfting the con-

science of the witness, but of compelling him to stand

_ face to face with the jury in order that they: may °

look at him, and judge by-his demeanor upon the

- stand and the manner in which he aby his _testi-

| mony whether he is. worthy of belief .

Green, ‘then, makes it aaa that the confrontation: guaran-

‘tee focuses upon “the right of the accused ‘to confront |

and prabe each of ‘his accusers :— a narrow, adversary

activity”.”

7. The Siediie Court, 1969 Term, 84 iy. L. Rev. 108, 112

(1970). ws

pee ge ane

“|

dent that the admission of Jeffrey’s' testi

‘violate -that guarantee. J effrey Was personally available

"for ¢ross-examination by the appell nt

: opportunity for the defense to probe t

accuracy of the sources reli

59. Sees ae

e ‘ . & ; 3 °

Given this view of the. confrontation clause,

mony did not

‘There ,was. ample

reasoning processes b ich he arrived at’ his valuation.

In light « of the Teasoning of -.Green, we conclude that

Jeffrey’ S presence at the trial and his availability for cross-

- examination satisfied the constitutional right of confronta~.

tion regardless of whether his testimony | fell withjn one of -

the traditional e céptions to ‘the hearsay tule. (Had the i

Government attempted to introduce the appraisal’ reports

in evidence without calling the expert who had ' prepared

them, and offering an opportunity for cross-examination,

_* then Williams’ right of confrontation would have been in-

fringed, but this 4 ds not the case. at bar. '

ladbed, the intensity of the cross-examination which the

, witness - ‘Jeffrey actually received . Suggests that Williams’ 3

right of confrontation was fully protected. Counsel for .

the defense. elicited from | Jeffrey several statements that

-. could. be. viewed as reducing the weight of his testimony.

For example, Jeffrey acknowledged that he could not. be

bsolutely certain that the records he examined were cor-

_ réctt.He further testified that he ‘had not himself surveyed

the land and that he could-not be sure that the surveys

which he examined were correct. J ffrey testified* that ‘he

properties. Pines hy yt nes a

authenticity and |

-upon b Jeffrey and the-

_ had done what is customary in his p Fiat ‘with regard:

- to verifying’ and accepting the various reports of the two

companies’ which he haq used in “his valuation of ;the

OS EPA

\ Il. The Federal Hearsay Rule

\Having established that there is no constitutional im-

pediment to the ‘introduction of Jeffrey’s testimony, there

- remains the question of whether the expert testimony’ _

ated the applicable federal hearsay rule. We » conchade

t it did not. 2

"Expert witness testimony is a * widely-recognized ex- .

céption to the rule against hearsay testimony. It has

"Jong been’ the rule of evidence in the federal courts that

an expert witness can express an opinion as to value

even though his opinion is based in part or solely upon

hearsay sources. United States v. Alker, 3 Cir., 1958, 260

F.2d 135; Birdsell v. United States, 5 Cir., 1965, 346

F.2d 775, 779-80, cert.. den. 382 US. 963; Brown vy.

, United States, D.C. Cir., 1966;. 375 F.2d 310, 318;

H & H Supply Co. v. United States, 10 Cir., 1952, 194

F.2d 553. The rationale for this exception to the rule

against hearsay is that the expert, because of his pro-

fessional knowledge and ability, is competent to judge for

himself the reliability of the records and statements on

which he ‘basés his expert opinion." Moreover, the Opinion —

Of expert witnesses: must invariably rest; at least in: part,

- upon sources that can never be proven in court. An ex-

pert’s opinion is derived not only from records and data,

but from education and from a lifetime of experience.’ .

Thus, when the expert witness has consulted numerous -

sources, and uses that. information, together with his‘own -

professional knowledge and experience, to arrive at his

opinion, that opinion | is‘regarded as evidence in- its own

‘sight and not as hearsay i in disguise.

f~ 8.. Cf., C. McCormick, Handbook of the Law of Evidence. $15

(1954); Rheingold, The Basis of Medical Testimony, 15 Vamd. L.

Rev. 473, 489 (1962).

wR,

_ This rule of law was most recently stated in the Fifth

Circuit in Birdsell v. United States, supra. This was a

’ criminal prosecution in ‘which the state offered the testi-

mony of a psychiatrist which was based upon a personal

interview with the patient and upon a study of hospital

“records and ‘psychological. tests performed “by ather

physicians. The defense argued that the testimony was

inadmissible because the records on which the testimony

was based were inadmissible under the Business Records

Act, 28 U.S.C. 1732. The Fifth Circuit rejected this argu-

ment, holding that:

. there is abundant-aythority that -an expert wit-

- ean dhe te eddie for Gtaeenaminnten op te

“trial miay use such records as the basis-for an opinion

without the proponent having to call every person .

-who made a recorded observation.

* 346 F.2d at, 779. |

This case firmly established the principle, which we re-

iterate here today, that an expert's testimony peed not be

based solely upon records which are themselves introduced

- in evidence so long as the sources of information are of .

tons or infetences upon the subject:.

In H & H Supply Co. v. United States; supra, the

Tenth Circuit permitted the admission of expert wit-

ness testimony on facts that are strikingly similar té the

’ Case-at bar. This was a condemnation case involving

the value of certain oil leases. The Government called two

professional petroleum engineers to give their expert opin-

ion-as to the value of the oil leases. Like Jeffrey in the

case at bar, these petroleum erigineers ‘consulted hearsay

oat

Pee My tar PF

Pt, ee ee ee

sources in formulating their opinions: These included not

| - only an examination of the claimant’s books and recdrds_

but also. an on-the-scene examination of the property, a

geological - -study of the land in question and of nearby

land, conversations with employees of’ the claimant, an

examination of records of the Osage Indian Agency, ‘ex-

amination of records of companies owning adjacent oil °

- Teases, etc. Over ‘objections that the testimony was hear-

say, the court admitted the evidence, observing:

The testimony of the petroleum engineers with re-

spect to the sources of .their information was not

. Offered for the purpose. of establishing the truth of

the information received by them. They. were testi-

fying as valuation experts and the sole purpose of

| this testimony was to establish the sources upon

; which pl relied. in reaching thetr coaclusions as

to values .

194 F.2d 553, . 555.

: Appellant asserts that this case. and other civil cases

are inapposite because this is a criminal prosecution.

. This argument is mistaken. While itis true that the

confrontation. clause has applicability only in. criminal

cases, the same cannot be said for the hearsay. rule.

The rule against: hearsay*has as its purpose the assur- |

- ance of evidentiary reliability. This purpose is equally

served in civil as well as criminal cases. We know of

no authority for the general proposition that a more

- Stringent hearsay rule must be applied in criminal than

in civil cases. The Constitution protects the defendant

in criminal prosecutions through the confrontation clause

and the presumption of innocence. These are in no way

undermined . by’ applying the samp hearsay standards in -

criminal as in civil cases.

The federal hearsay rule to which we adhere in this

case is the same as that adopted in the Proposed Rules

of Evidence for the United States District Courts and,

Magistrates (1969). by the Committee on Rules of Prac-

tice and Procedure of the Judicial Conference of the

United States. The proposed rules provide as follows:

| Rule 7-03. Opinion Testimony. by Experts,

The facts or data in the particular case upon which

_ an expert bases an.opinion or inference may be

those perceived by or made Known to him at or be-

fore the hearing. If of a type reasonably relied on

by experts in forming opinions or inferences upon |

the subject, the facts or data need hot be admissible

in evidence. ‘capt

The Advisory Committee’s Notes state that this rule‘ con-

templates ‘the “presentation of data to the expert outside

in criminal as‘well as civil cases °

of court”. The proposed rules are drafted to apply equally .

‘Applying these principles to the case at bar, we can

only*conclude that the trial judge properly admitted Jef-

frey’s testimony. Jeffrey’s credentials as an éxpert were

never assailed. Nowhere has it been argued that the -

ords consulted by Jeffrey were other than of fhe

customarily relied on by experts in valuing oil propefties.

Jeffrey so testified and this testimony was never chalenged.

Appellant argues that’ Jeffrey was not a true expert |

witness, but rather was a “summary” witness who merely

9. For a tseful discussion cof proposed Rule 7-03, see Green,

Highlights of the Proposed Fedexel Rules of Evidence, 4 Ga. L. Rev.

.1, 33-34 (1969). ipa

. \-

. °

Seite. Hylidae Mpschey Itptibll vidbs ba liseen

-. reer

summarized the contents of the records of the corpora-

tions. Appellant contends that the testimony of. a summary

witness is admissible only if the original records which

the witness is summarizing are themselves introduced in

evidence. Cf. McDaniel v., United ‘States, 5 Cir., 1965,

‘343 F.2d 785; Greenhill, v. United States, 5 Cir., 1962,

298 F.2d 405. |

However, we need not reach the question of whether

a summary. witness must -first introduce the on

‘which he bases—his—testimony because it>is clear that

Jeffrey was not such a summary witness. A reading of

Jeffrey’s testimony indicates that it involved far more than

a mere summation of the records of the two corporations.

~ Jeffrey. testified that his initial step in appraising the two

properties. was the gathering of -all available information.

_He inspected the properties and the equipment, and talked

to the operating personnel of the leases. He obtained and -

examined electrical logs, core analyses and well records

‘ of the two corporations. He acquired the past production

petformance of the various leases from State reports. Bill-

ing records from the operators of the leases were examined

to determine production costs. Oil and gas prices were

established from pipeline run statements. |

Having consulted all of these variegated sources, Jeffrey _

"then applied the concepts derived from his professional

experience to reach an opinion as to value. He pr jected

the future gross income of the leases using estima ates

of production and the ‘selling price of oil’ and gas, and —

then adjusted this figure to net income by deducting esti-

mated expenses, taxes, and capital expenditures. The esti-.

mated future net income’ was. then discounted to ascertain

its present value. Following customary practice, Jeffrey

65.

then selected an “arbitrary® fraction of the present value -

of the future net income as representing the fair market

value of the leases. Jeffrey testified that this arbitrary

fraction was based’ upon the needs and financial position

of the purchaser. -The application of these concepts to

produce an expert opinion as to value involved far more ss

than the meré recapitulation of: the contents of records.

On the contrary, Jeffrey consulted many sources, and then.

formed an independent judgment which reflected his skill °

and knowledge as an expert. |

- Were we to accept the evidentiary rule advanced by’

the appellant and accepted by the original panel of this

court, we would create a serious barrier to the: use of

expert testimony in the federal courts. The same logic

which would bar Jeffrey from consulting the core analyses,

-€lectric logs and well records of the two companies would

. equally bar a physician from relying upon lab reports and

the like unless the technician who conducted ‘the test was -’

/ also produced. Similarly, a real estate expert would be

barred from. testifying as to, the value of real property

unless he‘ proved in court the transactions on which he

based his expert judgment. We think that such an eviden-

_tiary rule would be unwise. As previously noted; the

‘modern trend, as reflected in the Proposed Rules of Evi-

dence, for the district courts is towards eliminating such

- Testrictions on expert testimony.

For the foregoing reasons, we reverse the decision of

the panel of this court on the issue of the admisibility of .

Jeffrey's testimony.. The judgment of the district court is

. in all respects affirmed. : ;

AFFIRMED. ._

, . ° . . : e v

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be aked PP Ne PE at ack vt Pa & x ,. ” a ‘ ? . \ "

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~ 66

. ae

RIVE, Circuit Judge, Siting: with whom J udges

_ GOLDBERG and GODBOLD join:.

re ssennnttalie dissent for the reasons: expressed in the |

panel’s original opinion’ reported in 424 F.2d 344, andg

its opinion Wenying the petitions for fehearing, reported

in 431 F.2d 1168.

‘APPENDAGE D

Sate): a2;

‘itn Sta 2 outta A ppeals

FOR THE aah 6 CIRCUIT ~

October Teim, 1970

Nos. 26829 and 26830

: :

-D. c. Docket Nos. CR: 68-H-107 &.

CR 684-333

/ _ UNITED STATES OF AMERICA,

3 . Plaintidt-Appeliee

"versus

JAMES W: WILLIAMS,. i

. ake eo _Defendant-Appellant.

rea A Ppeals from the United. States District Court for the.

es g Southern District of. vam

Before BROWN. Chief J udge, eid’ RIVES, -WISDOM,-

GEWIN, BELL, THQRNBERRY, COLEMAN, GOLD: —

BERG, AINSWORTH, GODBOLD.,. DYER, SIMPSON,

en CLARK, INGRAHAM, and RONEY,

Circuit pudge. ,

_ JUDGMENT ON PETITION FOR REHEARING

' EN BANC

This = came on to be. heard on defendant -appellant’ S

‘ petition for rehearing en banc without oral argument:

: ee ; et “9 ek

Ce en

ON CONSIDERATION WHEREGR, It is now ordered

and adjudged by this Court that tlie opinions and judg- ~~

ments of the panel of this Court of March 26, 1970 are

_, hereby withdrawn; and that this cause”in all reagects be,

and the same is hereby, affirmed. -

_ September 16, 1971

a RIVES, Circuit Judge, diteenting . with ‘whom Judges ~

GOLDBERG and Cope» join: Wie

Issued As Mandate:

69 ’

; APPENDAGE, Ee | |

| IN THE: ° oe

Mien States Cmirt of peal |

FOR THE FIFTH CIRCUIT. i.

)

_ UNITED STATES OF AMERICA, ‘ |

gm) Plaintiff-Appeliee,

«Versus,

J JAMES W. WILLIAMS,

4 ‘Defendant-Appellant. ;

on a

8 . .

A ppeals from the United States: District Court for the |

Southern we of. T exas ,

_ (November 4, 1971),

ON PETITION & OR REHEARING -

arene BROWN, Chief Judge, and RIVES, WISDOM,

~GEWIN, BELL, THORNBERRY, ‘COLEMAN, GOLD-

BERG, AINSWORTH, GODBOLD, DYER, SIMPSON,

_ MORGAN, CLARK, INGRAHAM, and RONEY,

Circuit Judges, as

ao PER CURIAM: |

- IT IS ORDERED that the pelition- for rohdaring” filed

in the above entitled and numbered causes bg and the

—_ is hereby DENIED. _

’ Judges Rives, Goldberg and Godbold dissent from the

denial of ma Petition for ccheaning.

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