Opposition Brief — First Options of Chicago, Inc. v. Kaplan

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No. 94-580 | | oFFice OF THE CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1994

MICHAEL KOEHLER, PETITIONER

Y.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Drew S. Days, III

Solicitor General

Jo ANN HARRIS

Assistant Attorney General

JOHN P. ELWOOD

Attorney

Department of Justice

Washington, D.C. 20530

(202) 514-2217

— —

QUESTIONS PRESENTED

1, Whether the district court correctly applied

Sentencing Guidelines § 2B1.2(b)(4)(A) (Nov. 1992), which

provides a four-level increase to the base offense level for

offenses involving stolen property “[i]f the offense was

committed by a person in the business of receiving and

selling stolen property.”

2. Whether the district court erred by failing to

conduct on its own initiative an on-the-record inquiry

into the fitness of petitioner’s court-appointed counsel,

who was arrested for possession of cocaine six weeks

before petitioner’s trial.

(1)

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TABLE OF AUTHORITIES

Cases:

Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970) .

Brazton v. United States, 500 U.S. 344 (1991) . . .

Burger v. Kemp, 483 U.S. 776 (1987) . . . . .. . . .

Cuyler v. Sullivan, 446 U.S. 335 (1980) . . . . . . . . . .

Goodman v. Lukens Steel Co., 482 U.S. 656 (1987)

Holloway v. Arkansas, 435 U.S. 475 (1978)

Mannhalt v. Reed, 847 F.2d 576 (9th Cir.), cert. denied,

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Strickland v. Washington, 466 U.S. 668 (1984) . . . .

Taylor v. United States, 985 F. 2d 844 (6th Cir. 1993) ..

United States v. Esquivel, 919 F. 2d 957 (5th Cir. 1990) ...

United States v. King, 21 F.3d 1302 (3d Cir. 1994) ..........

United States v. Rosa, 17 F.2d 1531 (2d Cir.), cert.

denied, 115 S. Ct. 211 (1994) ........ —

United States v. Russell, 913 F. 2d 1288 (8th Cir. 1990),

cert. denied, 500 U.S. 906 (1991) ...... ..... ...

United States v. St. Cyr, 977 F. 2d 698 (ist Cir. 1992) .....

United States v. Warshawsky, 20 F.3d 204 (6th Cir.

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Winkler v. Keane, 7 F.3d 804 (2d Cir. 1993), cert. denied,

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In the Supreme Court of the Anited States

OCTOBER TERM, 1994

No. 94-580

MICHAEL KOEHLER, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1a-9a) is

reported at 24 F. 3d 867.

JURISDICTION

The judgment of the court of appeals was entered on

May 25, 1994. A petition for rehearing was denied on

July 1, 1994. Pet. App. 10a. The petition for a writ of

certiorari was filed on September 29, 1994. The juris-

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

STATEMENT

Following a jury trial in the United States District

Court for the Eastern District of Michigan, petitioner

was convicted on one count of conspiracy to transport

(1)

V

stolen automobile parts in interstate commerce and to

use a counterfeit mark to traffic in goods, in violation of

18 U.S.C. 371, 2314, and 2320; and two counts of

knowingly using a counterfeit mark to traffic in goods,

in violation of 18 U.S.C. 2320. He was sentenced to 24

months’ imprisonment, to be followed by two years of

supervised release. The court of appeals affirmed. Pet.

App. la-9a.

1. Petitioner operated a wholesale automobile parts

business based in Lake Mohegan, New York. FBI Agent

Ronald Watson, posing as an auto parts broker, contacted

petitioner concerning parts that petitioner had adver-

tised for sale. In subsequent conversations with Watson,

petitioner indicated that he operated an extensive

business in stolen and counterfeit automobile parts.

Their conversations resulted in four transactions:

Watson purchased 52 stolen car axles from petitioner for

$3,380; Watson sold petitioner a load of spark plugs,

which Watson represented as stolen, for $20,550; Watson

sold petitioner 89 reconditioned air conditioner com-

pressors bearing counterfeit labels for $2,670; and

petitioner gave Watson 107 counterfeit labels and 100

counterfeit boxes to induce Watson to provide additional

air conditioner compressors. See Pet. App. 2a; Gov't C.A.

Br. 5-13.

2. On July 30, 1992, a federal grand jury returned an

indictment against petitioner based on those trans-

actions. The district court appointed Stevens J. Jacobs

as counsel for petitioner. On November 20, 1992, state

authorities arrested Jacobs for possession of cocaine.

Jacobs informed the district judge of the arrest, noting

that he had discussed the matter with petitioner (who

was present in court) and that petitioner had not wanted

Jacobs to disclose the arrest to the court. The judge

granted a continuance in petitioner’s case and allowed

Jacobs to participate in an in-patient drug treatment

p Petitioner later signed a disclosure statement

declaring that he was aware of the charge against Jacobs

and that he wished to continue to utilize Jacobs as his

counsel. On February 8, 1993, petitioner's trial commen-

ced before a different district judge, and ten days later

petitioner was convicted on all counts charged in the

indictment. At no time before or during the trial did

petitioner voice any concerns about his attorney’s arrest

or representation. Pet. App. 3a; Gov’t C.A. Br. 2-3.

3. Following his conviction, petitioner obtained new

counsel, who filed a motion for a new trial pursuant to

Fed. R. Crim. P. 33. Petitioner’s new attorney contend-

ed that petitioner had received ineffective assistance of

counsel at trial because of his attorney’s drug use and

arrest. Pet. App. 3a-4a. The district judge denied the

motion, stating that Jacobs’ “performance was not

deficient. I personally watched him. I think that there

was an adequate development of the evidence. The

adversarial system was not compromised. [Jacobs]

offered the best defenses that he had available to him.”

5/12/98 Tr. 16. Petitioner filed a second motion for a new

trial, which was also denied. See Pet. App. 4a.

At sentencing, the district court determined that peti-

tioner’s base offense level was four. See Sentencing

Guidelines 88 2B1.2, 2X1.1 (Nov. 1992). The court then

adjusted the base offense level to take account of the

specific offense characteristics. The court imposed an

eleven-level increase, because the retail value of the auto

parts involved in this case exceeded $350,000. See

Guidelines 88 2B1.1(b)(1)(L), 2B1.2(b)(1) (Nov. 1992). The

court imposed an additional four-level increase, because

petitioner was “in the business of receiving and selling

stolen property.” Guidelines § 2B1.2(b)(4)(A) (Nov. 1992).

The court granted a three-level reduction, because

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petitioner had not completed all the acts necessary to

achieve the objects of the conspiracy. See Guidelines

§ 2X1.1(b)(2) (Nov. 1992). Those adjustments yielded a

total offense level of 16. That offense level, combined

with petitioner’s Criminal History Category of I, yielded

a sentence range of 21 to 27 months’ imprisonment. See

Pet. App. 4a; 7/29/93 Tr. 14.

4. On appeal, petitioner argued that the district court

erred by failing to undertake a pre-trial inquiry into

whether his assigned counsel was able to conduct a

competent defense and into whether petitioner wished to

continue being represented by an attorney who had been

arrested on drug charges. The court of appeals con-

cluded that the argument was procedurally barred,

because petitioner first raised the issue in an untimely

Rule 33 motion for a new trial. The court also rejected

the argument on the merits, concluding that: (a)

petitioner was aware before trial of his attorney's arrest

and of the possibility of obtaining a continuance to obtain

new counsel; (b) there was no indication before trial that

the attorney’s arrest would create a conflict of interest

with petitioner, because their cases were factually

unrelated and were being prosecuied by different

sovereigns; and (c) petitioner had received effective

assistance of counsel. Pet. App. 4a-6a.

Petitioner also challenged the district court’s calcul-

ation of his sentence. Petitioner contended that the

stolen-property transactions that led to his conviction

were isolated incidents insufficient to support imposition

of the “in the business” offense level adjustment set out

in Guidelines § 2B1.2(b)(4)(A) (Nov. 1992). The court of

appeals rejected that argument. The court ruled that

those transactions, taken in the context of petitioner’s

tape-recorded statements to Watson, indicated that

petitioner “operated a sophisticated ongoing business

5

dealing in stolen automobile parts” that justified the

adjustment. Pet. App. 8a-9a (citing United States v.

Warshawsky, 20 F.3d 204, 215 (6th Cir. 1994)).

ARGUMENT

1. Petitioner renews his contention (Pet. 4-6) that the

district court erroneously applied Guidelines § 2B1.2(b)

(4)(A) (Nov. 1992), which provides a four-level adjust-

ment to the base offense level for offenses involving

stolen property if the offense was committed “by a

person in the business of receiving and selling stolen

property.” Petitioner argues that the stolen property

transactions that the government proved at trial were

insufficient to warrant imposition of the “in the

business” adjustment. The court of appeals correctly

rejected that contention, and its decision does not

conflict with the decision of any other courts of appeals.

The district court’s offense level adjustment in this

case is amply supported by the evidence. As the court of

appeals explained (Pet. App. 9a), the government showed

that petitioner had engaged in multiple stolen-property

transactions and that he had made numerous admissions

concerning his knowledge and ongoing involvement in a

1 Petitioner also challenged the sufficiency of the government’s

evidence to support one of the counts of conviction. The court of

appeals rejected petitioner’s contention that the evidence was

insufficient to show that he had transferred the counterfeit labels

and boxes “as consideration for anything of value.” See 18 U.S.C.

2320(d)(2). Pet. App. 7a-8a. Petitioner does not challenge that

ruling here.

6

stolen auto parts business.’ Petitioner’s conversations

with Watson demonstrate that the stolen-property

transactions were not isolated incidents, but were part of

his continuing business. The courts below agreed that

the evidence was sufficient to establish that petitioner

was “in the business,” and there is no warrant for this

Court to reconsider that matter. See, e. g., Goodman v.

Lukens Steel Co., 482 U.S. 656, 665 (1987).

2 For example, petitioner advised Watson during their first

telephone conversation that he could move parts nice and

quietly” and did not sell to dealers so as to avoid “flack.” See

Gov't C. A. Br. 36. During subsequent conversations, petitioner

displayed eagerness to obtain additional stolen goods. He

expressed an interest when Watson told him that he had a contact

who could obtain parts stolen from an auto plant, and petitioner

later told Watson to “stay on top of” his source in case additional

stolen parts became available. Id. at 9-10, 35. Petitioner saw a

sample of one of these stolen parts on Watson’s desk and told

Watson that, depending on the price and quantities available, he

would be interested in purchasing a number of them. Id. at 36.

Petitioner’s statements also demonstrated considerable expertise

and experience in the stolen parts market. He conversed with

Watson about such topics as the need to take precautions to avoid

discovery and the advantages of stealing parts from scrap yards.

Id. at 7-8.

8 Other courts of appeals have reached comparable conclusions

based on similar evidentiary records. See United States v. Rosa,

17 F.3d 1531, 1551-1552 (2d Cir.) (“Rosa also revealed familiarity

with the need to resell goods that bore serial numbers outside of

New York * * *. Further, numerous recorded conversations

demonstrated that Rosa was willing to deal in a broad variety of

stolen goods for resale * * *. The court could reasonably infer

from this evidence that [the defendants] were ‘in the business’ of

reselling stolen goods.”), cert. denied, 115 S. Ct. 211 (1994); United

States v. Russell, 913 F.2d 1288, 1294 (8th Cir. 1990) (evidence that

defendant had told an informant that he could supply stolen goods

“eould reasonably lead the district court to conclude that

7

Petitioner contends that the Sixth Circuit’s decisions

in this case and in United States v. Warshawsky, 20 F.3d

204 (1994), conflict with the First Circuit’s decision in

United States v. St. Cyr, 977 F.2d 698 (1992), and the

Third Circuit’s decision in United States v. King, 21

F.3d 1302 (1994). According to petitioner, the First and

Third Circuits apply a “nuanced multi-factored analysis”

(Pet. 4), while the Sixth Circuit “seized upon only a

single factor—whether the defendant himself stole the

property he later sold—to determine the applicability of

the enhancement” (Pet. 5). Petitioner’s characterization

of the Sixth Circuit’s decision is debatable, but in any

event the outcome in this case would be the same under

any of the cases petitioner cites. The evidence here—

which showed that petitioner “operated a sophisticated

ongoing business dealing in stolen automobile parts”

(Pet. App. 9a)—is sufficient to satisfy the First and

Third Circuit’s “totality of the circumstances” test. See

King, 21 F.3d at 1306-1308; St. Cyr, 977 F.2d at 703; see

also Warshawsky, 20 F.3d at 215; United States v.

Esquivel, 919 F. 2d 957 (5th Cir. 1990).

Moreover, even if this case presented a square conflict

among the courts of appeals, there would be no warrant

for the Court to review the matter. As this Court

observed in Braxton v. United States, 500 U.S. 344, 348-

349 (1991), the Sentencing Commission has a statutory

duty “periodically [to] review and revise” the Guidelines,

28 U.S.C. 994(0), and is responsible for “mak[ing]

whatever clarifying revisions to the Guidelines conflict-

[defendant] was in the business of selling stolen property”), cert.

denied, 500 U.S. 906 (1991).

8

ing judicial decisions might suggest.” Braxton, 500 U.S.

at 348.

2. Petitioner also contends (Pet. 7-13) that the

district court erred in failing to conduct sua sponte a

pre-trial inquiry into whether his assigned counsel was

fit to conduct a competent defense and whether

petitioner wished to continue being represented by him.

Petitioner does not appear to contest the court of

appeals’ conclusion that his challenge was procedurally

barred because petitioner first raised it through an

untimely Rule 33 motion for a new trial. See Pet. App.

4a-5a. In any event, the court of appeals correctly

rejected petitioner’s argument on the merits.

The record in this case demonstrates that petitioner

had no qualms with his trial counsel’s representation

until after his conviction. Petitioner concedes that he

was aware of his attorney’s arrest before trial. Pet. 7.

He did not dispute Jacobs’ statement in open court that

Jacobs had discussed the drug issue with petitioner. See

11/23/92 Tr. 2, 5-6. Petitioner signed a disclosure

statement before trial stating that petitioner was aware

of the charge against Jacobs and that he did not wish

Jacobs to discontinue acting as petitioner’s counsel. Pet.

App. 3a. Petitioner made no objection to Jacobs’

representation until April 26, 1993, more than two

months after the jury returned its verdict. Id. at 4a-5a.

4 Since the district court’s decision in this case, the Sentencing

Commission has recodified the “in the business” offense level

adjustment by consolidating it with Guidelines § 2B1.1 and revising

the background commentary. See United States Sentencing

Comm’n, Guidelines Manual, App. C, at 303-304 (Nov. 1993)

(amend. 481, eff. Nov. 1, 1993). Those changes may resolve any

tension that might exist among the lower courts concerning

application of the “in the business” adjustment.

9

The record also demonstrates that petitioner received

adequate representation. The court of appeals properly

concluded that “there was no indication that [Jacobs’]

drug arrest would create a conflict of interest between

Koehler and [his] attorney.” Pet. App. 6a.“ Further-

more, the courts below both concluded that petitioner

had received effective assistance of counsel at trial. Ibid.

5 This is not a case in which defense counsel was implicated in

the very crimes alleged against his client, which presents the risk

that “a vigorous defense might uncover evidence of the attorney’s

own crimes, and the attorney could not give unbiased advice to his

client about whether to testify or whether to accept a guilty plea.”

Mannhalt v. Reed, 847 F.2d 576, 581 (9th Cir.), cert. denied, 488

U.S. 908 (1988). Nor is this a case in which the same authorities

prosecuted both defense counsel and his client, so that counsel

could conceivably compromise representation of his client to obtain

favorable treatment in his own case. Taylor v. United States, 985

F.2d 844, 846 (6th Cir. 1998) (per curiam). Rather, Jacobs’ crime

was factually unrelated and was prosecuted from the outset

exclusively by state authorities. Accordingly, there is no basis in

the record for concluding that petitioner and Jacobs had divergent

interests “with respect to alny] material factual or legal issue or to

a course of action.” Winkler v. Keane, 7 F.3d 304, 307 (2d Cir.

1993) (quoting Cuyler v. Sullivan, 446 U.S. 335, 356 n.3 (1980)),

cert. denied, 114 S. Ct. 1407 (1994).

6 Petitioner bases his ineffective assistance contention on five

claims of attorney error. See Pet. 11 n.* * *. He raised only one

of those claims—concerning Jacobs’ failure to request an

instruction that a defendant could not conspire with a government

agent—before the district court. Gov’t C.A. Br. 26; see Mot. for

New Trial 2-4 (Apr. 26, 1993); Renewed Mot. for New Trial July

1-2 (July 22, 1993). The district court evaluated that claim under

the test set forth in Strickland v. Washington, 466 U.S. 668, 688,

694 (1984), and rejected it, finding that petitioner “has failed to

prove either of the elements necessary to find ineffective

assistance of counsel.” Op. and Urder Deny. Renewed Mot. for

New Trial 4 (July 29, 1993). By failing to raise the other four

claims in the district court, petitioner has failed to preserve them

10

This Court has recognized that the district courts and

the courts of appeals have primary responsibility for

resolving claims of ineffective representation. See

Burger v. Kemp, 483 U.S. 776, 785 (1987). When those

courts have found that trial counsel has performed his or

her duties competently, this Court is properly reluctant

to “substitut{e] speculation for their considered

opinions.” Ibid.

There is no merit in petitioner’s suggestion (Pet. 11-

12) that this Court should impose a per se requirement

that lower courts conduct an on-the-record inquiry into

the fitness of counsel whenever those courts learn that

court-appointed counsel has been implicated in a felony.

The lower courts are capable of dealing with the unusual

situation presented here on a case-by-case basis. The

per se rule proposed by petitioner would add little to the

Sixth Amendment protections that defendants currently

enjoy. See, e. g., Strickland v. Washington, 466 U.S. 668

(1984); Cuyler v. Sullivan, 446 U.S. 335 (1980); Holloway

v. Arkansas, 435 U.S. 475 (1978). At the same time, it

would require reversal in cases, such as this one, in

which the courts below concluded that the defendant

received adequate assistance of counsel. As petitioner

concedes, the duty he seeks to impose on the courts

presents “an issue of apparent first impression and thus

has not generated any conflict among the circuit courts

of appeal.” Pet. 12. There is no reason for the Court to

address the issue at this time.

for review. See, ¢.g., Adickes v. S.H. Kress E Co., 398 U.S. 144,

147 n.2 (1970).

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Drew S. Days, III

Solicitor General

Jo ANN HARRIS

Assistant Attorney General

JohN P. ELwoop

Attorney

DECEMBER 1994