Petition for Writ of Certiorari — Neal v. United States

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(1 rFILSBD

96 949 DEC 619%

No.

In The

Supreme Court of the United States

October Term, 1996

EDWIN A. NEAL,

Petitioner,

versus

UNITED STATES OF AMERICA,

Respondent.

Petition for Writ of Certiorari

To the United States District Court

For the Sixth Circuit

PETITION FOR WRIT OF CERTIORARI

Wayne Hartke

Hartke & Hartke

Attorney for Petitioner

7637 Leesburg Pike

Falls Church, Va. 22043

Telephone: 703/734-2810

i

QUESTION PRESENTED FOR REVIEW

Whether the 5th Amendment'§ right

against double jeopardy bars re-trial of a

defendant when the court dismissed the

criminal Indictment, sua sponte, after the

close of the government's case, and the

defendant's attorney stated on the record

contemporaneously that defendant was not

asking for the dismissal of the Indictment

as ruled by the trial Judge.

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW i

TABLE OF CONTENTS ii

TABLE OF AUTHORITIES iii

JURISDICTIONAL STATEMENT 1

STATEMENT OF THE CASE 1

REASONS WHY CERTIORARI SHOULD

BE GRANTED 2

CONCLUSION 23

RULINGS BELOW Appendix

Sixth Circuit Opinion. la

Denial of Petition for Rehearing. 16a

Granting of Extension of time for

filing Petition for Rehearing. 17a

Relevant Trial transcript cites. 18a

APPENDIX la

es. me

iii

TABLE OF AUTHORITIES

Page

Cases

Abdi _v. State of Georgia, 744 F2d 1500,

rehearing denied 749 F2d 733,

certiorari denied 105 S.Ct. 1871, 471

U.S. 1006, 85 L.Ed.2d 164. 23

Cove = 2. 410 8.Ct. 1126, 107

L.Ed.2d 1034. 22

Dunkerley v. Hogan, C.A. Vt. 1978,

579 F2d 141, certiorari denied 99 S.

Ct. 872, 439 U.S. 1090, 59 L.Ed.2d 56. 21

Lee 2 28. , ind. 1977, 97 8.ct. 2141,

432 U.S. 423, 53 L.Ba. 24 80. 20

x v j i rt f the 19th

4 Oe op n

Tilinote, 845 F2d 739; certiorari

denied 109 S.Ct. 136, 488 U.S. 851,

102 L.Ed.2d 108. aay 23

People v. Wiley, 1979, 389 N.E.2d

1283, 27 I11.Dec. 875, 71 I11.App.3d

641. 20

aes 2. 0.8., 110 §.Cct. 11238, 107

L.Ed2d 1034. 22

U.S. v. Bauman, 887 F2d 546,

certiorari denied 110 S.Ct. 1128,

107 L.Ed.2d 1034. 22

U.S. v. Boyd, 566 F2d 929 (1978). 21

iv

U.S. v. Crotwell, 896 F2d 437.

23

, C.A.Pa. 1975, 520

U.S. v. DiSilvio

F2d 247, certiorari denied 96 S.Ct.

447, 423 U.S. 1015, 46 L.Ed.2d 386.

U.S. v. Goland, 897 F2c 405.

v

F2d 135.

21

22

, CA. Atk. 1977, 561

21

Willis v. Kemp, 838 F2d 1510, rehearing

denied 845 F2d 1032, certiorari denied

109 S.Ct. 1328, 103 L.Ed.2d 596.

Statutes

Title 26 U.S.C. Sec. 7203.

28 USCS Sec. 1254(1).

U.S. Constitution

5th Amendment.

22

3, 22

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10 eA mn ml RN aE

1

JURISDICTIONAL STATEMENT

This case was filed in the U.S.

District Court for the Western District of

Kentucky, Louisville Division based on a

criminal Indictment of defendant Edwin A.

Neal pursuant to Title 26 U.S.C. Sec.

7203. Upon the order of the U.S. District

Court Judge dismissing the Indictment, the

United States appealed to the United

States Court of Appeals for the Sixth

Circuit (hereinafter "Sixth Circuit")

whose decision was rendered on August 9,

1996 reversing and remanding the case to

the U.S. District Court. By Order dated

September 10, 1996, the Sixth Circuit

granted an extension of time for

petitioner Neal to file his petition for

rehearing. The petitioner timely filed an

application for rehearing. The Sixth

Circuit rendered its decision on October

3, 1996 noting that it had received the

petition for rehearing en banc, and upon

no vote suggesting rehearing en banc,

referred the matter to the original panel

to be heard as a petition for rehearing.

Thus the petition was considered as a

petition for rehearing, not a petition for

rehearing en banc. By Order dated October

3, 1996, the original panel of the Sixth

Circuit denied petitioner's request for

rehearing. This Court's jurisdiction is

based on 28 USCS Sec. 1254({(1), and Supreme

Court Rule 12.

2

STATEMENT OF THE CASE

The issue is securing the

petitioner's 5th Amendment right against

double jeopardy. The petitioner opposed

the trial Judge's dismissal of the

Indictment (later held as error) and

cannot be twice be placed in jeopardy when

petitioner did not seek the relief found

to be error on appeal.

Petitioner Edwin Neal (sometimes

referred to herein as "defendant Neal" to

aid in understanding quoted citations) was

criminally charged with violating Title 26

U.3.C. Sec. 7203 which requires 4

corporation to file IRS Form 941. That

form identifies corporate tax liability.

After the government closed its case, the

defendant Moved for an Acquittal based on

the insufficiency of the facts presented

into evidence by the government that

petitioner Neal was the designated

corporate official whose tasks included

the filing of the tax forms. The content

of the defendant's motion for acquittal is

the heart of this appeal, and was recorded

in a written transcript.

The trial Judge stated on the record

that he was not granting the Motion for

Acquittal, by rather that he was ruling

that the Indictment itself was defective

as a matter of- law in that no person could

1 References herein to the Transcript

refer to the original Transcript and not

to the appendix page number. The appendix

recites the original transcript page

numbers for the selected quotes.

a ees ener

Lap Lr aA GS ATOR AD EASON H im Ol BS De PE na Aa,

3

have personal liability imposed on him for

violation of the statute at issue.

The government counsel, on the

record, clarified the trial Judge's

ruling, stating specifically that granting

a Judgment of Acquittal would be a ruling

on the insufficiency of the evidence, and

that the Judge was not ruling on the

insufficiency of the evidence. The

government counsel then stated that the

trial Judge's "... proper remedy would be

to dismiss the indictment." See

Transcript at p. 66. The trial Judge

agreed, and specifically stated that he

was not ruling that the evidence was

insufficient, but instead was dismissing

the Indictment.

The defense attorney stated on the

record at the time of the Judge's ruling

that the defendant was not moving for the

dismissal of the Indictment - certainly

opposite the finding that he "asked for"

the Judge's ruling. However, the trial

Judge dismissed the Indictment itself as

legally defective.

The government appealed the dismissal

of the Indictment to the Sixth Circuit

Court of Appeals. The Sixth Circuit Court

of Appeals ruled that the defendant's

Motion for Acquittal was a combined

factual/legal issue, and that the trial

Judge had granted the legal portion of

defendant's motion. This appeal seeks to

correct that error by the Sixth Circuit,

since defendant's Motion for Acquittal was

solely based on the insufficiency of the

facts presented into evidence by the

government, and even specifically stated

4

that petitioner was not moving for

dismissal of the Indictment.

Based on the finding that

petitioner's Motion asked in part for the

legal relief of dismissal of the-

Indictment, the Sixth Circuit determined

that double jeopardy did not bar the

government's appeal, and ruled that the

trial Judge's ruling that the Indictment

was legally deficient was error by the

trial Judge. The Sixth Circuit opinion

further stated that if the defendant had

not requested the dismissal of the

Indictment in its motion, then double

jeopardy would bar retrial.

However, because the Sixth Circuit

found that the defendant had asked for the

legal relief oof dismissal of the

Indictment as one part of the defendant's

supposed "factual/legal combined motion,"

the Sixth Circuit found no bar to retrial

of the defendant and ordered the case

remanded to the trial Court for retrial.

This appeal follows.

Petitioner contends that his motion

was a purely factual motion, and there was

no request for the legal relief of

dismissal of the Indictment. Accordingly,

double jeopardy bars retrial.

5

REASONS WHY CERTIORARI SHOULD BE GRANTED

1% The 5th Amendment Constitutional

right against double jeopardy

would be violated unless the

plain error of the Sixth

Circuit's finding that’ the

defendant's motion for acquittal

was a combined factual/legal

motion is reversed. —

The issue before this Court is one of

Double Jeopardy, an extremely significant

Constitutional right of this criminal

defendant. Petitioner Neal has been once

placed at jeopardy. The jury has been

discharged as a result of the sua sponte

order of the trial Judge. At trial, the

government presented its evidence and

rested. The Judge dismissed the

Indictment as legally insufficient, sua

sponte. The Sixth Circuit ruled that the

dismissal of the indictment by the Judge

was legal error. Sixth Circuit Opinion,

at appendix, p. 1a. 24a.

The law regarding double jeopardy is:

Unless the defendant asked for the action

which was later ruled error, double

jeopardy bars any retrial. [Citations

infra.].

Here, the defendant's Motion for

Acquittal was based on the insufficiency

of the facts. The trial Judge dismissed

the Indictment as a matter of law. When

the Judge dismissed the Indictment, the

defense attorney specifically stated that

he as not asking for the Judge's action of

dismissing the Indictment. (See

Transcript, at p. 66).

6

The Sixth Circuit held that

defendant's motion was a combined

factual/legal motion:

"Defendant argued in the

alternative, and the district court

agreed with his legal argument. The

fact that legal and factual arguments

are raised in the same motion should

not bar appellate review of dismissal

as long as the district court

confines itself to the legal issue."

See Sixth Circuit opinion, at p. 6.

The Sixth Circuit was plainly wrong

in ruling that the defendant had asked for

the "legal argument" of dismissal of the

indictment, particularly when defense

counsel specifically stated that he was

"not" asking for that relief. Transcript

at. Te... B...~ es Retriai of this case

violates defendant's 5th Amendment

Constitutional protection against double

jeopardy.

The Sixth Circuit opinion recites

case law confirming that the Motion for

Acquittal was a factual issue only since

that Motion placed at issue "whether

defendant Neal was an officer responsible

for filing the corporate returns:

"Lumetta v. United States, 362 F2d

644, 647 (8th Cir. 1966) (holding that

whether an officer is responsible for

filing a corporation's returns and

therefore liable under Sec. 7203 for

failure to do so is factual

question)." Sixth Circuit opinion,

appearing on appendix page 11a.

Patna Gath

7

A plain reading of the defendant's

Motion for Acquittal shows that it never

asked for the dismissal of the Indictment,

and therefore the Sixth Circuit is plainly

wrong, and its ruling will deprive this

criminal defendant of his Constitutional

right not to be placed in criminal

jeopardy twice.

2. The verbatim, written transcript

of defendant's motion for

acquittal conclusively proves

that defendant's motion was

based on the lack of facts

presented by the government

alone. Having opposed the trial

Judge's sua sponte dismissal of

the Indictment, the defendant

cannot be held to have requested

it, and therefore double

jeopardy bars retrial of this

defendant.

Defendant Edwin Neal was charged with

violating Title 26 U.S.C. Sec. 7203 which

requires a corporation to file IRS Form

941. That form documents the taxes owed

by the corporation for which defendant

Neal worked.

After the government closed its case,

the defendant moved for an acquittal.

2 The defendant's Motion for

Acquittal contained three (3) issues. Two

are irrelevant: venue, and lack of intent.

At issue here is only the first recited

motion: the failure of the government to

present any "facts" in evidence which

established that defendant Neal had the

8

The transcript very clearly states that

the defendant's motion for acquittal was

based on the lack of evidence, i.e., the

facts the government failed to introduce:

"THE COURT: We have a motion for

acquittal.

MR. GREENE [defense counsel]: Yes,

we do.

THE COURT: State your motion.

MR. GREENE: Your Honor, defendant

moves for judgment of acquittal based on

several grounds, one of which is there is

no legal requirement in existence under

the law through the facts adduced so far

that would show Mr. Neal had the duty or

was under the duty

ion.'' Transcript of Bench Conference

and Chambers Proceedings, Pp. 13,

underlining and emphasis added.

While the corporate by-laws would

normally state the officer responsible for

specific duties, they were not introduced

as evidence by the government. See

TZORSCTiNt, @2t p. 6. What were Mr.

Neal's corporate duties? Mr. Neal could

have been responsible for removing the

trash or computer repair, or other

corporate duties, but there was no factual

evidence introduced that defendant Neal

had_ the corporate duty to file the IRS

forms. That was the basis of the defense

attorney's motion for acquittal: facts.

MR. GREENE [defense attorney's

motion]: "The government has not

"duty to file" the IRS forms at issue for

the corporation.

re ee EE pee

UMaine: Me.

9

introduced the by-laws. We have no

idea what they say. It would not be

r » @

reasonable jury to conclude Mr. Neal

Ww J s *

or could have filed the return for

any of these quarters on time; and

the same argument, once that date is

past, there is no ability to violate

this statute; and that would be the

basis of my motion." Transcript at

p. 16, 17, underlining added.

Defense counsel's Motion for

Acquittal never asked for a ruling as a

matter of law that the Indictment must be

dismissed as defective; that was the

Judge's sua sponte action, contrary to the

defendant's motion as stated in the

record. [See further citations, infra. ].

The Judge never ruled on_ the

defendant's motion for acquittal for the

insufficiency of the facts; the Judge said

"state your motion," and the defense

attorney stated its motion for acquittal

based on the insufficiency of the facts.

{[Transcript, at p. 13, additional

citations, infra.]. Instead, the Judge

raised a different issue on his own. The

Judge dismissed the Indictment. The

indictment was dismissed "as a matter of

law" on the Judge's sua sponte grounds

that no one could be found liable

personally under any circumstances - a

position with which the defense counsel

disagreed. Defendant did not ask for the

indictment to be dismissed and

specifically stated in the transcript that

defendant was not moving to dismiss the

indictment:

10

"Mr. Greene [defense counsel]: Can I

interpret Mr. Campbell's statement to

be a motion by the government to

dismiss the indictment because

not_so moved?" Transcript, at p. 66,

underlining added.

The transcript proves’ that the

defense motion was based on the lack of

facts, not a ruling as a matter of law on

the invalidity of the indictment.

Instead of acquitting petitioner, the

Court raised a separate issue, sua sponte.

The Court dismissed the Indictment based

on the Court's opinion that there was no

legal basis for the Indictment to impose

personal liability - it did not grant the

acquittal requested by the defendant.

Fhe The opinion

states that the trial Court's reasoning in

dismissing the Indictment was based on the

trial Judge's review of the Code sections,

and that the trial Judge found that the

law does not impose a "requirement to file

a return." Opinion, at appendix p. 4a

("The district court dismissed the

indictment because...").

The Sixth Circuit's opinion addresses

Double Jeopardy for purposes of appellate

review upon the government's appeal. The

Sixth Circuit misstates the defendant's -

motion as a combined factual/legal motion

~- a defense motion specifically recited on

the written record and verifiable by this

Court as requesting only the relief of

acquittal based on insufficiency of the

facts.

iii iat ila

11

Further, the Sixth Circuit states

(the correct law) that if the dismissal

"was not sought by defendant" then double

jeopardy would attach. See Opinion at

appendix p. 7a, including footnote 2

citations. Therefore, even the Sixth

Circuit itself agrees that if it is wrong

in its conclusion that the defendant

sought the "legal relief" of dismissal of

the Indictment, then double jeopardy would

bar retrial of the defendant.

- Did the

defendant "seek dismissal of the

indictment" as found by the Sixth Circuit,

or not. The transcript is dispositive:

the defendant's motion was based on lack

of governmental facts, not on- the

invalidity of the statute itself (law).

Let us review the defense attorney's

argument. A company has many employees.

Different employees have different duties.

All employees are not required to file tax

forms. Only those who hold a corporate

"duty to file” are the individuals who can

be held liable for the failure to file.

The case at bar appears to be a case of

first impression because Mr. Neal denies

he had the duty to file as a corporate

officer (Or, in other words, the

individual designated by the corporation

as having one task of his employment being

the obligation to file the corporate tax

forms). (See Transcript, at p. 57). The

other cases cited to the trial Judge

involved circumstances in which’ the

individuals admitted they held the

corporate duty to file. (See transcript,

at p. 53, line 15 through p. 54 line 54,

line 13). In other words, this is the

12

first reported case where a defendant

denied that he was the person designated

by the corporation to file the tax

returns, and therefore the defense motion

based on the government's failure to

submit sufficient facts in evidence to

establish defendant Neal as the designated

individual is a matter of first impression

to the trial court. The defense attorney

was attempting to have the Judge rule that

there was a clear. failure by the

government to place facts in evidence, and

if the Judge did not so rule, then the

defense attorney would seek the same

ruling from the jury.

The defense attorney said:

"I think I have submitted jury

instructions that the by-laws would

be controlling to show who had the

Transcript, at jp. 59, underlining

added.

If the defense attorney's motion was

for a ruling as a matter of daw, then

there is no need for the defendant to

refer to "jury instructions." The jury is

the finder of facts; jury instructions are

only relevant if the issue is one dealing

with facts.

There are two (2) separate places

which state the relief sought by the

defendant as being a

insufficiency. First, the motion for

acquittal which specifically refers to the

"lack of evidence" - a factual issue.

(Defense counsel _ states there is no

requirement "... through the facts adduced

13

so far..." that Mr. Neal had the duty ...

to file." Transcript, at p. 13).

Secondly, when the Judge has finished

the extensive discussion of the "legal

issue of dismissal of the indictment,”

defense counsel Greene said "I did not so

move". See Transcript at p. 66.

Pro _ se appellate brief by Mr. Neal.

Perhaps the fact that the defendant filed

his appellate brief pro se had some effect

on the Sixth Circuit's mis-statement of

the motion by the defendant. However, a

review of the language of the motion as

contained in the record, verbatim,

conclusively shows that the defendant's

motion was not a combined legal/factual

motion for acquittal as claimed by the

Sixth Circuit, but a purely factual

motion.

Defense ___ motion for __ acquittal

references to "factual" insufficiencies of

the government's case.

If it is true, as the Sixth Circuit

opinion states, that the "defense motion"

contained both legal and factual issues,

and the Judge granted the "defense motion”

on the "legal motion" portion, then

defendant would agree that double jeopardy

would not be violated by a retrial. That

never happened. A plain reading of the

defendant's motion confirms the defendant

sought only an acquittal based on the

factual deficiencies in the government's

rested case. Defendant's motion makes

(repetitious and redundant) references to

the "lack of facts" in the government's

case which conclusively prove that the

14

defendant's motion dealt only with the

government's failure to present any "fact"

which showed that defendant Neal was the

individual in the corporation with a "duty

to file IRS forms."

The entire transcript of the Motion

is attached in the Appendix so that the

context can be reviewed. However, the

following ten (10) exchanges conclusively

establish that the defendant did not have

a combined factual/legal motion for

acquittal, but rather defendant's motion

was purely based on facts alone:

Ts Defendant's verbatim motion

states: " ...there is no legal

requirement in existence under the

law through the facts adduced so far

that would show Mr. Neal had the duty

or was under the duty to file the

returns in question." Transcript, at

p. 13, underlining added.

2. MR. GREENE (defense attorney):

"The government has not introduced

the by-laws. We have no idea what

they say. It would not be reasonable

, @ reasonable

jury to conclude Mr. Neal was the

person responsible for filing..."

Transcript, at p. 16, lines 21-24,

underlining added.

3. “PHE COURT: All right. Then

last is this legal-requirement

argument. I told you all I had some

reservations about this before the

trial was adjourned this morning for

lunch. What is your argument that

the government hasn't shown a legal

LP

argument?

MR. GREENE: I'm sorry, Your Honor.

I thought you were talking to the

government.

THE COURT: No. Its your motion. I

would like you to amplify what your

grounds are before I ask them to

respond.

MR. GREENE: Your Honor, Section

7203 makes it a crime for a person

required to file a tax return to

willfully fail to timely file such

return. So only the person who is

required to file the return can

commit the crime.'' Transcript, at p.

26, 27, underlining added.

Note: Nowhere does defense counsel

state that the Indictment itself is

"legally defective" as the Sixth Circuit's

opinion finds. Defense counsel's

"grounds" are based on the government's

failure to introduce facts to show that

Mr. Neal was the individual employed in

the corporation with the corporate duty to

file IRS forms, as opposed to mopping the

floors or repairing the computers or

ordering supplies.

4. MR. GREENE (defense counsel):

The government has cited Section

7343, which says that when the word,

person, is used in this chapter,

which includes Section 7203, it would

also include the person under the

duty to perform the act.

Now it doesn't explain who that

person under the duty to perform the

act is." Transcript, at p. 27, 28,

underlining added.

16

Note: Defense counsel is conceding

that whoever that person is who has the

"duty" for the corporation is liable under

Section 7203 -— which is directly contrary

to the trial Judge's ruling that the

indictment is legally insufficient. In

other words, the defense attorney is

stating that he believes there is personal

liability imposable under this Indictment,

that the trial Judge should not dismiss

the Indictment as a matter of law. The

defense counsel is focused only on the

factual defense that Mr. Neal was never

designated by the corporation as_ the

employee with the "duty to file tax forms"

as an element of his employment by the

corporation. This citation conclusively

negates the Sixth Circuit's conclusion

that the defendant was making a "legal

argument to dismiss the Indictment." The

exact opposite is shown by the transcript.

5. THE COURT: First of all, with

respect to the term, duty. What is

the position of the government as to

whether this is a

?

MR. CAMPBELL [government attorney]:

Judge, in this context, the word,

The duty of the particular officer or

employee is a factual determination

for the jury to decide if that person

was the person within the corporation

who was responsible for preventing

the corporation's violation."

Transcript, at p. 33, underlining

added.

6. "THE COURT: So you think that

whether or not Mr. Neal had a duty to

17

file these [IRS forms] for the

corporation is a factual matter?

MR. CAMPBELL [government counsel]:

Under 7343, correct."

THE COURT: Are you aware of any

authority under 7343 which defines

the parmeters of the duty under 7343?

In other words, how does one measure

the duty? Does one apply one's

common sense? Does one simply

assemble a bunch of facts and from

that, derive a duty; or is there any

case authority that you're aware of

that describes how and under what

circumstances the duty under 7343 is

to be defined?

MR. CAMPBELL: Judge, I'm not aware

of any cases that define or give

guidance to the Court on how the

word, duty, under 7343 is to be

applied in the trial setting.

THE COURT: Well, we have looked at

a number of cases in which they have

k 4 °

n » £2

other words, whether a person had

control over books and _ records,

corporate records, et cetera; but

this would apply to factual

determinations." Transcript, at p.

35, underlining added.

7. The colloquy between the Court

and government's counsel regarding

the statutory source (Sec. 6672) of

requiring a person to file for a

corporation:

MR. CAMPBELL: That it gives rise

to a requirement for a person who is

a responsible party to make a return

on behalf of the corporation because

18

he accepts responsibility to account

for the taxes.

MR. GREENE [defense counsel]: Does

says: "Anyone

responsibility." Transcript, at p.

38, underlining added.

Again, defense counsel focusing on

the factual issue of the lack of evidence

that Mr. Neal actually had a corporate

responsibility as the one who was to file

the IRS _ forms. Defense counsel is

focusing on the person "with" the

responsibility —- a factual issue. It is

agreed that whoever actually "has" the

corporate responsibility for filing the

tax forms would then be subject to

liability; defense counsel repeatedly

focuses on the factual predicate that

there were no facts introduced by the

government to establish defendant Neal as

the corporate employee "with" the assigned

task of filing the tax forms.

8. Distinguishing this case from

all others tried under this statute:

Mr. Greene (defense counsel): "...

and the two or three cases I found,

7343 was not an issue and people

One was

an attorney, and two were sole

operating officers who essentially

admitted it. We don’t have that

situation here." Transcript, at p.

53, 54, underlining added.

Again, the factual distinction: Mr.

Neal denies he was the corporate official

whose corporate duty was to file tax

19

returns. This is the reaons why defense

counsel stated that this was a case of

first impression — only defendant Neal has

Claimed that he did not have a task

assigned to him by the corporation of

filing its tax forms. Defense counsel

Greene said there were no "lists of

factors to consider" in making this

factual determination because no other

case has ever litigated the factual

dispute of "who is the designated

corporate individual assigned to file tax

forms."

9. "MR. GREENE: Judge, the

question you want to focus on is how

does the duty arise. How did we know

> '

THE COURT: Well, certainly the by-

laws is one factor.

MR. GREENE: The factor though

relates to collection of taxes, not

who had the 4d: i ;

and that is the problem here. There

is no case law on point. There's no

instruction in any of the _ IRS

publications, no regulations, nothing

in the Internal Revenue Code that

says who in the corporation has the

duty to file." Transcript at p. 56,

underlining added.

Note: the by-laws were not introduced

into evidence by the government. See

Transcript, at p. 16, line 21.

10. “MR. GREENE: This is a case of

first impression, that as far as I

know, no one has ever - no one has

ever tried to prosecute someone who

resisted it on the ground of "I'm not

20

h ae « ired. The case law

that I found, the people admitted

they were the person. ...

I wasn't the person required."

Transcript, at p. 57, underlining

added.

There cannot be any doubt’ that

defense counsel Mr. Greene was

consistently arguing that the government

introduced no evidence that defendant Neal

was the corporate officer with the "duty

to file the return" - a factual issue.

Defense counsel is repetitious that his

motion for acquittal is based on a factual

insufficiency.

Th ial 's ruling. After the

Judge's explanation of his reasoning, he

states that he is granting the judgment of

acquittal, but then is corrected by the

government:

"MR. CAMPBELL [government

attorney]: Judge, if I could ask for

clarification. My understanding is

if there is no legal basis for the

indictment, then the remedy is to

dismiss the indictment. Judgment of

acquittal is a finding that there is

an insufficiency of the facts to

support the charge, and I think the

Court is ruling there is no law to

support the charge. So the proper

remedy would be to dimiss’ the

indictment.

THE COURT: Perhaps that's correct.

Perhaps that's correct. I_am_ not

ruling that the evidence _is

insufficient. I am ruling that the

government has not shown that there

aid, ‘

ae ee eee

Siskininnstdabisce

21

is a legal grounding for the charge

here based on what has been shown so

far in this case. So I was prepared

and I am prepar ed to dismiss the

indictment in the case; ...

MR. cary [defense counsel J: Can

aE Mr. m 1 ment

t ion vernm

ism he indi n se I have

?" Transcript, at p. 66,

underlining and emphasis added.

The defense counsel moved for a

judgment of "acquittal." Even the

government counsel agrees that a judgment

of "acquittal" is a finding of an

insufficiency of the facts. The trial

Judge specifically rejected that he was

granting an acquittal - the specific

relief sought by defense counsel in its

motion. Instead, the Judge ruled that he

3 Defendant constantly underlines the

word "motion" because the Sixth Circuit

claims that the defendant's motion

contained both legal and factual

arguments. The Sixth Circuit opinion

states: "Defendant argued in the

alternative, and the district court agreed

with his legal argument. The fact that

legal and factual arguments are raised in

the same motion ..." Sixth Circuit

opinion at p. 6, underlining added.

Thus, if this Court reviews’ the

defendant's motion and finds that there is

no motion from the defendant containing

any legal argument - as defendant has

presented here — then the Sixth Circuit's

entire opinion fails and must be reversed,

with double jeopardy attaching, barring

22

was "dismissing the Indictment." The

defense counsel never asked for a

dismissal of the Indictment and

specifically stated that he has "not so

moved."

The Sixth Circuit committed plain

error in its finding that the defendant

had asked for the legal relief of

dismissal of the Indictment. The record

is directly contrary to such a conclusion.

D 1 r

f n he Once it is clear that

defendant Neal did not ask for the legal

relief of dismissal of the indictment, it

follows that the 5th Amendment bar against

placing criminal defendants _in double

jeopardy applies to this case.

Where defendants did nothing to

initiate dismissal of a case, but

rather, it was the sole unprompted

act of the trial judge in response to

the absence of the state's witnesses,

this clause precluded retrial, and

the same was true whether the trial

judge's action was viewed as

acquittal or as dismissal resulting

any retrial of the defendant.

4 The Sixth Circuit's opinion

acknowledges that .£ the defendant did not

ask for the relief found on appeal to be

legal error, then defendant "would have a

valid argument" that double jeopardy bars

re-trial. See Opinion, at p. 6. This

point is therefore given small attention

Since it is virtually conceded.

23

from judicial indiscretion. People

v. Wiley, 1979, 389 N.E.2d 1283, 27

I1l.Dec. 875, 71 I11.App.3d 641.

Where a midtrial dismissal is

granted on the ground, correct or

not, that defendant simply cannot be

convicted of the offense charged,

further prosecution is barred by this

clause. Lee v. U.S., Ind. 1977, 97

S.Ce. Brea), Gee @.8. 23, 83 L.8a. 24

80.

Upon the improper sua _ sponte

declaration of a mistrial by the

trial judge, retrial is precluded by

the double jeopardy clause.

Dunkerley v. Hogan, C.A. Vt. 1978,

579 F2d 141, certiorari denied 99

§.Ct. 872, 439 U.S. 1090, 59 L.Ed. 2d

56.

When a mistrial is declared sua

sponte by the court, defendant is

precluded from deciding whether or

not to take the case from the jury, a

decision in which the defendant has a

Significant interest. U.S. Vv.

Rartsn, Cin. Ath. T977, $61 Fad 135.

Where a mistrial is declared, not

in response to a motion by defendant,

but by the trial court sua sponte,

this clause requires that a more

stringent test be applied in

determining whether reprosecution is

permissible. 2, v¥. pisilvio,

C.A.Pa. 1975, 520 F2d 247, certiorari

denied 96 S.Ct. 447, 423 U.S. 1015,

46 L.Ed.2d 386.

24 \

Clearly jeopardy attached in the case

at bar. Jeopardy attaches when the jury

is empaneled and sworn._ U.S. v. Boyd, 566

F2a 929 (1978), at p. 932, additional

citations omitted. In the case at bar,

the government had concluded all of its

evidence and rested. (See Sixth Circuit

opinion, at p. 2, 3).

Defendant's Constitutional right to :

There can be no doubt, after

reading the entire transcript that the

defense motion was not based on the

argument that the Indictment itself was

"legally defective" as ruled by the trial

court. That finding was the Court's and

h

the Court's alone. The defendant is

entitled to a single trial of criminal

charges before a single tribunal.

The double jeopardy clause

protects the defendant's valued right

to have a trial completed by a

particular tribunal. U.S.C.A. Const

Amend. 5, U.S. v. Bauman, 887 F2d

546, certiorari denied 110 S.Ct.

1128, 107 L.Ed.2d 1034; Talamas v.

u.2., 110 §.Ct. 1128, 07 %.Ba2G

1034; Cary vy. U.S., 110 S.Ct. 1126,

107 L.Ed.2d 1034.

The defendant is Constitutionally

entitled to proceed to verdict once

jeopardy has attached. A sua sponte

declaration of mistrial without the

defendant's consent would deny him

that right and retrial would

eonstitute double jeopardy. Willis

v. Kemp, 838 F2d 1510, rehearing

denied 845 F2d 1032, =certiorari

25

denied 109 S.Ct. 1328, 103 L.Ed.2d

596.

A defendant goes free when a

mistrial occurs, provided the

defendant neither requested nor

consented to the mistrial. U.S. Vv.

Goland, 897 F2d 405.

Defendant did not "consent" to a

mistrial within the meaning of double

jeopardy requirements, simply because

he called the court's attention to

alleged improper conversations

between a witness and the prosecuting

attorney on which the wmistrail

declaration was based. Lovinger v.

i n inois, 845

F2d 739; certiorari denied 109 S.Ct.

136, 488 U.S. 851, 102 L.Ed.2d 108.

When a mistrial is declared,

double jeopardy clause precludes a

retrial of the defendant unless the

defendant consented to the mistrial.

U.S. v. Crotwell, 896 F2d 437.

Formal objection to a declaration

of a mistrial is not necessary to

show lack of consent of the

defendant. Abdi v. State of Georgia,

744 F2d 1500, rehearing denied 749

F2d 733, certiorari denied 105 S.Ct.

1871, 471 U.S. 1006, 85 L.Ed.2d 164.

26

CONCLUSION

The defendant's Motion for Acquittal

clearly stated that "... through the facts

adduced so far..." defendant Neal did not

have the "duty to file" the corporate

returns. (See 6th Cir. opinion, at

appendix p. 3a). The 6th Circuit went on

to conclude that the government, upon

inquiry by the Judge, was unable to

identify any "regulations" requiring a

corporate filing -— completely unrelated to

the defense attorney's stated motion for

acquittal on the lack of any fact showing

that defendant Neal was never named by the

corporation as the person who was to file

any tax forms - an admitted factual

defense.

As is clear from the repetitious,

redundant references to jury instructions,

factual issues, and even the government's

own agreement that the issue of "who had a

duty to file a corporate tax form" was a

factual issue (see citations in para. 5

above), the Sixth Circuit must have been

confused in saying that defendant's motion

included the request for legal dismissal

of the Indictment itself. Nowhere in the

transcript does defendant's motion ask for

dismissal of the Indictment; defendant

even stated that he was not asking for

that legal relief. (Citation supra.).

Most likely, defendant Neal's pro se

appeal brief failed to articulate clearly

enough to the Sixth Circuit the difference

between a factual motion for acquittal, as

opposed to the sua sponte Court's legal

ruling involving the non-existence of IRS

regulations on which the entire Indictment

sailed

27

itself was dismissed. The 6th Circuit

notes that the pro _se brief by defendant-

appellee Neal said that he had "no input

whatsoever as to the [judge's] decision to

dismiss the indictment." (See Sixth

Circuit opinion, at p. 6). In reading the

transcript, it is clear that the trial

Judge initiated the dismissal of the

indictment, and clearly stated that he was

not ruling on the defense motion of a

factual insufficiency of the evidence.

However, it is also clear that the trial

Judge engaged in an extended discussion

with the government counsel on the legal

insufficiency of the indictment. To the

extent that the defense counsel may have

had any comment on the Judge's initiated

legal issue, there can be no doubt that

the defense did not ask for a dismissal of

the Indictment -— defense counsel stated so

specifically.

In fact, the defense counsel

articulated the basis of why there could

be criminal liability for any individual -

provided that the individual was the

corporate designee, the individual with

the "duty to file tax forms for the

corporation." (See para. 4, supra.).

That is, the defense attorney articluated

the argument against the trial Judge's

dismissal of the Indictment.

Even the government agrees that the

determination of "who" has the "duty to

file tax forms" for a corporation is a

"factual" issue. (See para. 5, supra. for

citation).

Defendant is asking only for a review

of the motion made by the defendant to

28

confirm that it was only a factual motion,

not a combined factual/legal motion. It

is irrelevant whether the factual motion

by defendant is correct or incorrect for

purposes of double jeopardy. The only

relevant issue is confirming that the

defendant never asked for the legal relief

of dismissing the Indictment. Since the

defendant opposed the Judge's sua sponte

dismissal of the Indictment, double

jeopardy applies and bars retrial of this

defendant. This defendant was entitled to

a ruling by the one jury previously

empaneled to a ruling on the case.

Retrial by the government of _ this

defendant before a second jury would place

this defendant in jeopardy before a

different jury when the dismissal was not

requested by this defendant.

WHEREFORE, defendant Neal requests

that this Court grant certiorari, and find

that double jeopardy bars retrial of this

defendant.

Respectfully submitted,

EDWIN A. NEAL, DEFENDANT

BY COUNSEL

Mr. i_iatns Hartke

Hartke & Hartke

Attorney for Petitioner

7637 Leesburg Pike

Falls Church, Va. 22043

Telephone: 703/734-2810

APPENDIX

U. S. Court of Appeals for the

Sixth Circuit Opinion.

Denial of Petition for Rehearing.

Granting of Extension of time for

filing Petition for Rehearing.

Relevant Trial transcript cites.

16a

17a

18a

la

No. 94-6002

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

) ON APPEAL

Plaintiff-Appellant, ) from the

) United States

Vv. ) District

) Court for the

EDWIN A. NEAL, ) Western

) District of

Defendant-Appellee. ) Kentucky

Decided and Filed August 9, 1996

Before: NORRIS and SUHRHEINRICH,

Circuit Judges; WELLS, District Judge*

*The Honorable Lesley Brooks Wells,

United States District Judge for the

Northern District of Ohio, sitting by

designation.

SUHRHEINRICH, Circuit Judge. The

principal issue in this appeal is whether

jeopardy attaches to a district court's

dismissal of an indictment upon

defendant's motion for acquittal based on

both a legal and factual ground. Because

the district court relied exclusively on

the legal ground raised by this defendant,

we hold that double jeopardy does not bar

appeal by the government. We therefore

have jurisdiction over the government's

appeal of the district court's dismissal

2a

of the indictment, which we REVERSE for

reasons to be discussed.

I.

Defendant founded United Security

("United"), with two other individuals in

1985. Defendant began exercising greater

control over United's financial affairs,

including tax matters, beginning in 1988.

It is undisputed that defendant signed ang

filed United's quarterly tax returns

("Form 941s" or "returns") for the periods

ending in September 1988 and December

1988. He also signed all four 1989

quarterly returns. Several of the 1989

returns were filed late, and one of the

checks submitted was dishonored by the

bank. United apparently filed no return

at all for the first quarter of 1990.

The government indicted defendant in

April 1993 for failure to timely file Form

941s for four quarters in violation of 26

U.S.C. Sec. 7203, which imposes penalties

on any "person" who fails to file a tax

return when so required. Defendant's

first trial began on September 21, 1993.

During the second day of trial, defendant

withdrew his plea of not guilty and

entered a guilty plea to all counts. The

district court accepted his guilty plea.

Form 941 is the Employer's Quarterly

Tax Return, which documents federal income

taxes and contributions under the Federal

Insurance Contributions Act withheld from

employee wages by an employer. 26 C.F.R.

Sec. 31.6011(a)-1, 31.6011(a)-4 (West

1995).

3a

Shortly thereafter, defendant hired new

counsel, and filed a motion to withdraw

his guilty plea. The district court

allowed defendant to withdraw his plea and

scheduled the case for trial.

Defendant went to trial for a second

time on May 17, 1994. Defendant moved for

acquittal at the close of the government’s

case. The district court called a

conference in chambers, at which defendant

stated the grounds for his motion. A

written record of the conference is before

us. Defendant explained that his motion

was "based on several grounds, one of

which is there is no legal requirement in

existence under the law through the facts

adduced so far that would show Mr. Neal

had the duty or was under the duty to file

the returns in question."

The district court then asked the

government to clarify the legal basis for

the indictment, specifically the

requirement that the "person" referred to

in Sec. 7203 file a return at all. The

government responded that the duty to file

a return was found in 26 U.S.C. Sec. 6672

or, alternatively, in 26 U.S.C. Sec.

6011(a). Upon review of these sections,

however, the district court found that

neither actually imposes a requirement to

file a return. Section 6672 imposes civil

penalties for persons who fail to pay or

account for taxes, if they are required to

do so. 26 U.S.C.A. Sec. 6672 (West Supp.

1996). Section 6011(a) merely specifies

that when a person is required by

regulations to file a return, the return

must be filed according to the forms and

regulations prescribed by the Secretary.

4a

26 U.S.C.A. Sec. 6011(a) (West Supp.

1996). Frustrated by the government's

inability to demonstrate the legal basis

for prosecution, the district court

dismissed the indictment:

[CjJounsel for the government have

quite honestly indicated they don't

have any regulations that they can

show this Court that would require a

person in the position of Mr. Neal to

file a return...

The district court dismissed the

indictment because the government was

unable to identify any underlying

regulations requiring the corporation

itself to file Form 941s, such that a

corporate officer could be prosecuted as

the "person" required to file the forms on

behalf of the corporation. This appeal by

the government followed.

il.

Although the double jeopardy issue is

raised as a defense, we address it first

because it concerns our jurisdiction to

hear this appeal. Defendant argues that

the government's appeal violates’ the

Double Jeopardy Clause because the

district court dismissed the indictment

sua sponte without the defendant's

acquiescence. The government counters

that the trial court's dismissal was based

on a purely legal theory advanced in a

motion brought by defendant, and therefore

the appeal does not violate double

jeopardy. We review de novo whether

double jeopardy bars appeal. United

States v. Ursery, 59 F3d 568, 570 (6th

5a

Cir. 1995), rev'd on other grounds, -—-

U.S.--, 1996 WL340815 (June 25, 1996).

The Double Jeopardy Clause prohibits

(1) a second prosecution for the same

offense after acquittal; (2) a second

prosecution for the same offense after

conviction; and (3) multiple punishments

for the same offense. Id. at 571 (quoting

United States v. Halper, 490 U.S. 435, 440

(1989)). In jury trials, jeopardy

attaches when the jury is empaneled and

Sworn. Crist vv. Sreets, 437 09.3. 26,

(1978); Downum v. United States, 372 U.S.

734 (1963).

Notwithstanding, it is well accepted

that double jeopardy does not bar all

appeals after a jury has been empaneled.

See, e.g., United States v. Cameron, 953

F2d 240, 243 (6th Cir. 1992)(holding that

retrial of defendants following grant of

mistrial justified by manifest necessity

did not violate double jeopardy). The

Supreme Court has heid that in criminal

cases, post—attachment appeals are

generally available to the government when

dismissal rests on a ruling of law sought

by the defendant, unmixed with any factual

basis for dismissal. United States v.

Scott, 437 U.S. 82, 96-97 (1978); see also

United States v. Martin Linen Supply Co.,

430 U.S. 564, 571 =(1977)(holding that

double jeopardy is only barred by

acquittal when the ruling, whatever its

label, actually represents a ruling in the

defendant's favor of some or all of the

factual elements of the offense charged).

The Supreme Court has not directly

addressed the procedural posture presented

by this case; whether double jeopardy bars

6a

a government appeal when a defendant

brings a motion for acquittal based on

legal and factual arguments and the court

dismisses the indictment relying

exclusively on the legal ground raised by

the defendant.

Two circuit decisions, however,

reinforce our conclusion that appeal is

not barred in this case because no factual

issues were resolved in defendant's favor.

Untied States v. Affinito, 873 F2d 1261,

1264-65 (9th Cir. 1989); United States v.

Torkington, 874 F2d 1441, 1444 (11th Cir.

1989). In Affinito, for example, the

defendant had based his motion for

acquittal on an intervening Supreme Court

decision, which the defendant claimed had

nullified the legal basis for the

indictment. Affinito, 873 F2d at 1262.

The district court had granted the

defendant's motion, styling it an

acquittal even though the motion had been

based purely on a legal theory. Id.

The appellate court noted that

although the district court characterized

its order as an acquittal, the trial court

"did not resolve factual elements in

appellee's favor." Id. at 1264.

Therefore, double jeopardy did not bar

appeal because "the trial court's ruling

was unrelated to the factual guilt or

innocence." Id. Further, the lower court

had acted at defendant's prompting, i.e.,

the filing of a motion for acquittal. The

Ninth Circuit concluded that the case was

within the purview of the Supreme Court's

Scott and Martin Linen decisions and that

the government was entitled to a new

trial. Id. at 1265. See also Torkington,

7a

874 F2d at 1444-5 (allowing appeal where

grant of motion for acquittal was based

solely on prosecutorial misconduct rather

than on insufficiency of the evidence).

As in Affinito and Torkington, the

district court here did not resolve any

factual issue in defendant's favor.

Defendant's motion for "acquittal"

actually contained both a legal and a

factual claim. The district court

ultimately dismissed the indictment on the

purely legal ground that there was no

underlying duty to file Form 941s.

Defendant claims on appeal that he

had "no input whatsoever as to the

[judge's] decision to dismiss the

indictment."" If this were true, defendant

would have a valid argument that dismissal

was not sought by defendant, thus removing

our case from the scope of the Scott and

Martin Linen holdings into the murkier

area of appeals from actual sua sponte

dismissals. We disagree, however, with

Scompare United States v. Dahlstrunm,

655 F2d 971 (9th Cir. 1981), cert denied,

455 U.S. 928, 973-75 (1982)(holding that

appeal was barred where "judge was the

instigator and the primary mover of the

events ...[leading] to the dismissal" on

legal grounds) with United States v.

Kennings, 861 F2d 381, 385 (3rd Cir.

1988) (holding that double jeopardy did not

bar appeal of a sua sponte dismissal where

defendant did not initiate the proceeding,

but “actively supported the judge's legal

claim that the government's case against

him must fail").

8a

defendant's contention that he had "no

input" in the trial court's decision.

Defendant argued in the alternative, and

the district court agreed with his legal

argument. The fact that legal and factual

arguments are raised in the same motion

should not bar appellate review of

dismissal as long as the district court

confines itself to the legal issue.

Because there was no fact-based acquittal,

double jeopardy does not bar the

government's appeal. We may therefore

properly consider the merits of the

government's argument. 19 U.S.C.A. Sec.

3731 (West Supp. 1995).

B. Government's Appeal

The government first argues that the

district court erred in dismissing the

indictment basically because other

circuits have affirmed convictions of

corporate officers for failure to file

corporate returns. Although this is the

ultimate issue in the government's case,

the government's argument once again

glosses over the district court's central

concern and the basis for the dismissal:

the source of the underlying legal

obligation on the part of the corporation

itself to file Form 941s such that a

responsible corporate officer might be

liable for failing to carry out such a

duty on behalf of the corporation. Our

review is de novo. United States v.

Brown, 915 F2d 219, 223 (6th Cir. 1990).

Code

9a

Section 7203 of the Internal Revenue

("Code"), the statute under which

defendant was charged, provides in

relevant part:

26 U.

Any person required under this title

to pay any estimated tax or tax, or

required ... to make a return, keep

any records, or supply any

information, who willfully fails to

pay such estimated tax or tax, make

such return, keep such records, or

supply such information...shall...be

guilty of a misdemeanor and...fined

not more than $25,000 ($100,000 in

the case of a corporation), or

imprisoned not more than 1 year...

S.C.A. Sec. 7203 (West Supp. 1995).

On appeal, the government proffers

another section of the Code and its

accompanying regulations as the source of

a corporation's duty to file Form 941s.

Section 6011(a) of the Code state that:

26 U.

When required by regulations...any

person made liable for any tax

imposed by this title...shall make a

return...

S.C.A. Sec. 6011(a)(West Supp. 1995).

In accompanying regulations, Sec.

31.6011(a)-1 requires:

every employer required to make a

return under the Federal Insurance

Contributions Act...shall make a

return for each subsequent calendar

quarter...Form 941 is the form

. . i at

10a

prescribed for making the return

required by this subparagraph.

26 C.F.R. Sec. 31.6011(a)-1.

Section 31.6011(a) is potentially

confusing because it reads circularly: an

employer is required to make a return if

it is required to make aé_e return.

Nonetheless, it is clear upon a close

reading of the regulation that the word

"return" is used interchangeably to mean

both (1) a remittance of taxes withheld

from employees, and (2) a specific form or

statement documenting information required

by the Secretary. Applying these meanings

to Sec. 31.6011(a), an employer who has to

"make a return" (send a remittance) of

taxes withheld shall "make a return" (file

a statement) on Form 941. Defendant does

not contest that United was an employer

required to withhold FICA and income

taxes. See 26 C.F.R. Sec. 31.3121(d)-2

(defining employer); 26 U.S.C. Secs. 3102,

3402, and 3403 (requiring FICA and income

tax withholding and making employer liable

for payment of the taxes withheld).

Because United was required to remit

withheld taxes, it was also required to

file Form 941s. United was therefore

subject to the statutory mandate of Sec.

6011(a) that it “make a return or

statement according to the forms and

regulations prescribed by the Secretary."

Although it was not the basis for the

district court's ruling the government

also argues that the term "person" as used

in Sec. 7203 encompasses responsible

corporate officers. This question is

easily answered by Sec. 7343 of the Code,

lla

made applicable to Sec. 7203 by the

express terms of Sec. 7343:

The term "person" as used in this

chapter includes an officer or

employee of a corporation, or 4

member or employee of a partnership,

who as such officer, employee, or

member is under a duty to perform the

act in respect of which the violation

occurs.

26 U.S.C.A. Sec. 7343 (West 1989).

Furthermore, other circuits have

acknowledged that "person" as used in Sec.

7203 encompasses corporate officers

responsible for filing the returns of the

corporate "person." Lumetta v. United

States, 362 F2d 644, 647 (8th Cir.

1966)(holding that whether an officer is

responsible for filing a corporation's

returns and therefore liable under Sec.

7203 for failure to do so is factual

question); Ryan v. United States, 314 F2d

306, 309 (10th Cir. 1963)(affirming

conviction under Sec. 7203). See also

United States v. Jasper, 352 F.Supp. 254

(D.Del. 1972)(holding that corporate

officers can be "persons": for the purpose

of Sec. 7203 because Sec. 7343 explicitly

includes corporate officers in its

definition of "person"); United States v.

Ettorre, 387 F.Supp. 582 (E.D.Pa.

1975)(relying on Jasper in imposing

liability under Sec. 7203). We agree with

these courts that corporate officers can

be prosecuted under Sec. 7203 for failure

to file the returns of a corporation.

Had the district court been presented

an adequate explanation of the

12a

regulations, it probably would have not

dismissed the indictment and would have

proceeded to the factual question of

whether defendant in this case could be

prosecuted as the individual required to

file the corporation's returns. Thus,

the government did in fact have a legal

basis for charging defendant under Sec.

7203, and the indictment was ingorrectly

dismissed by the district court.

C. Defendant's Challenge to Denial

of Motion for Acquittal

We now turn to defendant's other

argument. He maintains that in any event,

the evidence was insufficient to sustain

his conviction, and that the district

’The district court at one point

stated:

This opinion of Jasper[352 F.Supp. 254

(D.Del. 1972] does not even address the

issue of requirement to file. It only

addresses whether or not the defendant is

a person as used in [Sec. 7203]; and as we

have indicated here, it is probable that

the definition of a person is fact driven.

But the legal obligation or requirement to

file the return must be as a result of a

legal obligation on the part of the

Internal Revenue Code or regulations

adopted under it.

8see also Slodov v. United States,

436 U.S. 238, 243 n.2 (1978) (assuming

without analysis that 26 C.F.R. Sec.

31.6011(a)-1 and (a)-4 impose duty to file

Form 941s; Brewery, Inc. v. United States,

33 F.3d 589, 591-92 (6th Cir. 1994)(same).

13a

court should have granted his motion for

acquittal. Before considering the merits

of this argument, we must determine

whether defendant's failure to file a

cross appeal precludes consideration of

this issue. A cross appeal is potentially

required because if we were to hold that

defendant's motion for acquittal should

have been granted, we would be converting

his dismissal without prejudice into a

dismissal with prejudice, expanding the

relief granted by the district court.

As a general rule, a cross appeal

must be filed where an appellee wishes to

attack part of a final judgment in order

to enlarge his own rights or reduce those

of his adversary. Charles A. Wright, et

al., Federal Practice and Procedure, Sec.

3904 (1992)(citing United States v.

American Ry. Express Co., 265 U.S. 425,

435 (1924); Francis v. Clark Equip. Co.,

993 F2d 545, 552 (6th Cir. 1993). The

requirement to file a cross appeal, when

applicable is mandatory and jurisdictional

in this circuit. Ford Motor Credit Co. v.

Aetna Casualty & Sur. Co., 717 F2d 959,

962-63 (6th o> ee 1983) (citing

Massachusetts Mut. Life Ins. Co. v.

Ludwig, 426 U.S. 479, 480 (1976)).

Although applied more frequently in

civil cases, the general rule has been

applied in criminal cases as well. United

States v. Lieberman, 971 F2d 989 (3d Cir.

1992). For example, the Third Circuit

noted the applicability of the rule in a

criminal case where a defendant challenged

the district court's ruling on grouping of

multiple counts. Id. at 996-97. The

appellate court stated:

|

.

|

14a

While a party may not seek more

extensive relief on appeal than it

received in district court without

filing a cross-appeal, an appellee

may proffer alternative arguments to

support the district court's decision

without filing a cross-appeal.

Id. at 997 n.5 (citations omitted). The

Third Circuit ultimately held that the

defendant's challenge was not precluded by

his failure to file a cross appeal,

because it was merely an alternative

argument to justify the district court's

downward departure as opposed to a request

for more extensive relief. We find the

Third Circuit's approach persuasive and

apply it to the case before us. ce.

United States v. El-Zoubi, 993 F2d 442,

450 (5th Cis. 1993) (holding that

government waived challenge to

misapplication of sentencing guidelines in

defendant's favor by failing to cross

appeal.

Unlike the defendant in Lieberman,

defendant in our case seeks more extensive

relief than the district court ordered

below. Defendant seeks modification of

the denial of his motion for acquittal.

This would be an "enlargement of rights”

because it would transform the district

court's dismissal without prejudice into a

dismissal with prejudice. Therefore,

because defendant did not file a cross

appeal, we do not have jurisdiction to

consider his argument that the district

court erred in denying his motion for

acquittal.

15a

Itt.

Because the district court

incorrectly dismissed the indictment

against defendant, we REVERSE the July 1,

1994 order of the district court and

REMAND for further proceedings.

16a

No. 94-6002

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

) FILED

Plaintiff-Appellant, ) SEP 10 1996

)

Vv. ) LEONARD GREEN,

) CLERK

EDWIN A. NEAL, )

)

)

Defendant—Appellee.

BEFORE: NORRIS and SUHRHEINRICH, Circuit

Judges; and WELLS, District Judge.*

Upon consideration of the appellee's

motion for extension of time until 9/13/96

to file a petition for rehearing,

It is ORDERED that the motion be and

it hereby is GRANTED. The petition should

be received in the clerk's office by

9/13/96.

ENTERED BY ORDER OF THE COURT

s/ Leonard Green, Clerk

17a.

No. 94-6002

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

) FILED

Plaintiff-Appellant, ) OCT 03 1996

)

v. ) LEONARD GREEN,

) CLERK

EDWIN A. NEAL, )

)

Defendant-Appellee. )

BEFORE: NORRIS and SUHRHEITNRICH, Circuit

Judges; and WELLS, District

Judge.

The court having received a petition

for rehearing en banc, and the petition

having been circulated not only to the

original panel members but also to all

other active judges of this court, and no

judge of this court having requested a

vote on the suggestion for rehearing en

banc, the petition for rehearing has been

referred to the original panel.

The panel has further reviewed the

petition for rehearing and concludes that

the issues raised in the petition were

fully considered upon the original

submission and decision of the case.

Accordingly, the petition is denied.

ENTERED BY ORDER OF THE COURT

s/ Leonard Green, Clerk

RRRRRRRRR Lesley Brooks Wells,

United States District Judge for the

Northern District of Ohio, sitting by

designation.

18a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

Vv. ) Criminal No.

) 93-00039-—01-L

EDWIN A. NEAL, )

)

Defendant. )

TRANSCRIPT OF BENCH CONFERENCE

A R ROCEEDIN

KKKKKKKK

BEFORE HONORABLE CHARLES R. SIMPSON

III, UNITED STATES DISTRICT JUDGE, WESTERN

DISTRICT OF KENTUCKY AT #£LOUISVILLE,

KENTUCKY, ON JUNE 30, 1994.

KKKKKKKK

(NOTE: Page references noted hereafter are

to the page of the actual transcript,

designated by a "Tr."' followed by the page

of the actual transcript. Only relevant

portions of the transcript are reproduced

here].

Tr. 13: THE COURT MET WITH COUNSEL

IN CHAMBERS AT THE HOUR OF 1:40 P.M., ON

JUNE 30, 1994, FOR THE FOLLOWING

DISCUSSION:

THE COURT: We have a motion for

acquittal.

MR. GREENE: Yes, we do.

THE COURT: State your motion.

19a

MR. GREENE: Your honor, defendant

moves for acquittal based on several

grounds, one of which is there is no legal

requirement in existence under the law

through the facts adduced so far that

would show that Mr. Neal had a duty or was

under the duty to file the returns in

question.

Also it does not appear that venue is

proper in this court ...

Tr.14: Thirdly, in order to find Mr.

Neal guilty, the jury has to believe

beyond a reasonable doubt that Mr. Neal

knew that he was the person under the

Guty...

Tr. 16: MR. GREENE: The government

has not introduced the by-laws. We have

no idea what they say. It would not be

reasonable for a jury to conclude, a

reasonable jury to conclude Mr. Neal was

the person responsible for filing or could

have filed the return for any of these

quarters on

Tr. 17: time; and the same argument,

once that date is past, there is no

ability to violate this statute; and that

would be the basis of my _- motion.

Transcript at p. 16, 17, underlining

added.

Tx. 26: ‘THE COURT: Ali right. Then

last is this legal-requirement argument.

I told you all I had some reservations

about this before the trial was adjourned

this morning for lunch. What is your

argument that the government hasn't shown

a legal argument?

MR. GREENE: I'm sorry, Your Honor.

I thought you were talking to the

government.

i ASEAN ia

PANT Chai oe tes <

20a

THE COURT: No. Its your motion. I

would like you to amplify what your

grounds are before I ask them to respond.

MR. GREENE: Your Honor, Section 7203

makes it a crime for a person required to

file a tax return to willfully fail to

timely file such return. So only the

person who is required to file the return

can commit the

as. @¢: exrion.

Tr. 27: MR. GREENE: The government

has cited Section 7343, which says that

when the word, person, is used in this

chapter, which includes Section 7203, it

would also include the person under the

duty to perform the act.

Now it doesn't explain who that

person under

Tr: 28: the duty to perform the act

is.

TS. 333 THE COURT: First of all,

with respect to the term, duty. What is

the position of the government as_ to

whether this is a legal or factual

definition of the word, duty?

MR. CAMPBELL: Judge, in this

context, the word, duty, is a factual

determination; and the reason that I say

that is that the last clause refers to a

violation which occurs. The violation

which occurs is the violation of the

corporation or the employer. That is the

violation. The duty of the particular

officer or employee is a factual

determination for the jury to decide if

that person was the person within the

corporation who was responsible for

preventing the corporation's violation.

21a

ft. - 333 THE COURT: So you think

that whether or not Mr. Neal had a duty to

file these for the corporation is a

factual matter?

MR. CAMPBELL: Under 7343, correct.

THE COURT: Are you aware of any

authority under 7343 which defines the

parameters of the duty under 7343? In

other words, how does one measure the

duty? Does one apply one's common sense?

Does one simply assemble a bunch of facts

and from that, derive a duty; or is there

any case authority that you're aware of

that describes how and under what

circumstances the duty under 7343 is to be

defined?

MR. CAMPBELL: Judge, I'm not aware

of any cases that define or give guidance

to the Court on how the word, duty, under

7343 is to be applied in the trial

setting.

THE COURT: Well, we have looked at a

number of cases in which they have talked

in terms of duty; and the cases seem to

comment on facts, in other words, whether

a person had control over books and

records, corporate records, et cetera; but

this would apply to factual

determinations.

Tr. 38: MR. CAMPBELL: That it gives

rise to a requirement for a person who is

a responsible party to make a return on

behalf of the corporation because he

accepts responsibility to account for the

taxes.

MR. GREENE: Does not say he has

responsibility. It says: "Anyone with the

responsibility..."

THE COURT: I'll hear from you in a

minute.

22a

Ts. Bot Mr. Greene: There's all

sorts of case law on the issue. There is

zero case law on the issue of who failed

to file the return. That's why when I

heard that, I was amazed that anyone could

be prosecuted for failure to file a 941;

and I was amazed to find any cases that

anyone could be prosecuted for 941; and

the two or three cases I found,

fr. $4: 7343 was not an issue and

people admitted they were the ones who had

the duty to file the return. One was an

attorney, and two were sole operating

officers who essentially admitted it. We

don't have that situation here.

THE COURT: Are you saying 6672

provides a penalty?

MR. GREENE: It does not create a

responsibility. The responsibility is

created on the basis of 6671(b), kind of a

circular reasoning type thing. A person

under the duty to perform the act —- but

how do you determine who that person is?

And the case law under 6672 says that

person is the one who controls the purse

strings.

sa Be MR. GREENE: Judge, the

question you want to focus on is how does

the duty arise. How did we know Mr. Neal

had the duty? And the answer is, if we're

going to use this 6672 as a model or

analysis, then we would have to look at

the by-laws of the corporation, which are

not in evidence, almost say sine quo non.

The Court: Well, certainly the by-

laws is one factor.

MR. GREENE: The factor though

relates to collection of taxes, not who

had the duty to file the return; and that

is the problem here. There is no case law

23a

on point. There's no instruction in any

of the IRS publications, no reguiations,

nothing in the Internal Revenue Code that

says who in the corporation has the duty

to file.

Tr. 57: MR. GREENE: This is a case

of first impression, that as far as I

know, no one has ever —- no one has ever

tried to prosecute someone who resisted it

on the ground of I'm not the person

required. The case law that I found, the

people admitted they were the person.

THE COURT: I agree with you, there

is no authority directly on point that the

prosecution anywhere has been able to

find. The government has not been able to

find any.

MR. GREENE: I wasn't the person

required.

Tr. 58: MR. GREEN: There's also a

duty to account for the money to the

employee. But let's assume that is one of

the three things included in the 6672.

6672 does not

Sr. Fe; create that duty. It

presupposes the duty, and we go back to

what creates the duty.

THE COURT: The cases talk about

that, they use the reasonable,

responsible-person analysis to come up

with a person that has that duty.

MR. GREENE: We're just focusing on

one aspect, account for, and pay over. If

we say account for is the same thing as

filing the return, Slodov case indicates

there are separate functions. They don't

have to be done by the same person. So my

argument is that there is no basis in the

law that creates the duty to file a

tig ist st A ae PNR RI aie Raia ne a a

24a

return. You have to essentially look at

the by-laws as the only - and that's what

the -—- I think I have submitted jury

instructions that the by-laws would be

controlling to show who had the duty to do

what in the corporation.

THE COURT: Well, this is a very

difficult case. This is not just a simple

failure-to-file issue, I think. Anyway

let me consider these cases, and I will

give you a ruling in a short period of

time.

AFTER RECESS

THE COURT: I have kicked this thing

around from one end to the other; and

essentially, as I see it, the government

seeks to hold the defendant liable under

7203 as a person who is required to make a

return by the application of 6672, to the

defendant as a person required

Tr. $0: to collect truthfully,

account for, and pay over any tax imposed.

The government takes the position

that 6672 imposes an obligation to file a

return and articulates that that is

something that must be read into the

truthfully-—account-for portion of the

first phrase of Subsection (a) of 6672,

and I find that just very difficult to

accept. I am looking at the statutes and

the cases that construe this section,

starting with Slodov, which indicates that

it 2s not seguirzrea: that a oarty

responsible under 6672 must perform all

three of the enumerated duties; but it

does indicate that persons responsible

under 6672 must be responsible for

25a

collection of the third-party taxes.

Now we know that these words to some

extent have particular meanings. We have

looked at the legislative history of 6672.

The word, collect, in there is meant to

signal that these are not direct taxes but

collections from third-party taxpayers,

which are required.

We found no authority for’ the

proposition that truthfully account for

encompasses an obligation to file a

return. I have looked at one late case

from the Sixth Circuit, Kinnie v. United

States, at 994 F2d 279, which says:

"Two requirements must be met before

one can be liable under Section 6672.

ee} t- The taxpayer must be a

responsible person under the statute

and, two, have willfully failed to

pay over the taxes due."

This again shows that 6672, in

essence, is a payment—or-—collection

statute.

I have even taken to consulting the

unabridged dictionary to try to find out

what account for is, also Black's Law

Dictionary. Black's Law Dictionary

contains a citation for the proposition

that account for means to pay over the

money to the person entitled thereto.

There are many nuances of the word,

account for, in the unabridged dictionary.

But looking at the context of this, the

word, collect, means that the person who

has the obligation under 6672 is a person

required to obtain this money from third

26a

parties, that is, in this case, employees

and to pay over the tax =imposed.

Truthfully account for must mean that the

person who collects it and is responsible

for paying over must be _ accountable

truthfully for what he has collected.

I recognize that the government says,

well, one can evidence the truthfulness of

the accounting by filing a return; but it

is my feeling, from looking at _ the

legislative history - part of it is

recounted here in the Slodov case —- that

had Congress wished to impose a

aa. 2? requirement of filing a

return in 6672, they would have doe so

clearly. This is in my judgment

contextually not a requirement of filing

of a return but the requirement that the

person who collects from third parties

must be accountable for what he collects

and must pay the money to the government.

But it does not specifically require the

filing of a return.

There would be a certain analytical

problem, I would also think, in indicating

that in 6672, there is a requirement to

file a return because if that is the case,

the 7202 would criminalize the failure to

file a return as a felony; and 7203 would

arguably criminalize it as a misdemeanor

without any distinction in the elements

whatsoever.

In other words the decision to charge

under 7202 and 7203, it is strictly up to

the prosecutor without any dollar amount

specified as to what was or was not a

felony or a misdemeanor. I think that

27a

would be an impossible situation.

I have scoured the books. I have

scoured some articles. The cases -

nothing in the cases that I have been able

to find would suggest that 6672 requires

specifically the filing of a return.

Therefore, I must reject the government's

notion that the requirement that Mr. Neal

has to file a return that is necessary

under 7203

Tr. 63: is found that that — I must

reject the government's contention that

that requirement is found in 6672.

The government also has mentioned

6011(a) in its brief, and we've talked

about this to some extent; and I indicated

earlier that in my view, 6011(a) requires

the — makes a person who is liable for a

tax, obligated to file a return; but that

obligation is only when required by

regulations prescribed by the secretary

and its — counsel for the government have

quite honestly indicated they don't have

any regulations that they can show this

Court that would require a person in the

position of Mr. Neal to file a return if

he should be liable for the tax; and I

indicated that I thought it was possible

he might be shown to be liable for the

penalty under 6672 under the responsible-

person theory but that there aren't

regulations that buttress 6011(a) that

have been brought to my attention.

I am uncomfortable with my ruling

because it seems to me to be somewhat

shocking to this Court that there doesn't

seem to be a legal underpinning for

28a

somebody who is a corporate official from

willfully failing to timely file 941

forms, but I just don't see the legal

requirements shown under the statute under

which this individual is charged.

The notion that the aiding and

abetting

Tr. 64: saves the government's case,

I think, is eminently rejected right off.

It is true that aiding and abetting is

something that need not be specifically

charged in addition to a_ substantive

offense. But in this case, it would have

to be shown that Edwin Neal aided and

abetted himself since he is the one that

is charged here.

To say that we can forget about the

charge of Mr. Neal and contend that the

corporation failed to file its taxes and

that Mr. Neal aided and abetted the

corporation would be to change the whole

concept here of this case and _ the

substantive aspect of it. So I do not

feel we can simply tack on aiding and

abetting here. The corporation is not a

co-defendant charged with failing to file

its taxes. Mr. Neal is the only one

charge here.

So I don't see how we can simply

impose an aiding and abetting on anything

except the charge that is in the

indictment; and since I am finding that

that does not bear fruit for the United

States, I don't see how we can instruct or

consider that Mr. Neal may have aided and

abetted anyone other than himself.

In other words the cat is trying to

29a

chase its tail to throw in aiding and

abetting and to enlarge or otherwise alter

the aiding and abetting to indicate that

Mr. Neal aided and abetted the

corporation, which is not charged here

just changes the whole tenor of the

accusation

Tr. 65: in this indictment; and I

don't think that that is proper.

So on that basis I recognize that

there is the case of United States v.

r, which is from the district court

in Delaware, which found that a person

who, a defendant who admitted he was

solely a person responsible for

supervising, managing all aspects of the

corporate business and was the president

and sole operating officer, was a person

who was obligated to file under 7203. But

I don't find that there is any analysis in

that decision at all. It simply says:

"under these circumstances there is

no question the defendant was 4

person required by law to make and

file the employer's quarterly tax

returns for the corporation."

we — fe eee eee

That may be, but we have already parsed

the statute out, and we have not found in

our analysis a legal requirement to file a

return.

at tt

This opinion of Jasper does not even

address the issue of requirement to file.

It only addresses whether or not the

defendant is a person as used in the

statute; and as we have indicated here, it

is probable that the definition of a

allel

eet a RRR ERE” ATR

30a

person is fact driven. But the legal

obligation or requirement to file the

return must be as a result of a legal

obligation on the part of the Internal

Tr. 66: Revenue Code or regulations

adopted under it.

So I am left with no choice in this

matter but to grant the judgment of

acquittal j;at the conclusion of the

prosecution's case. Now ...

MR. CAMPBELL: Judge, if I could ask

for clarification. My understanding is if

there is no legal basis for the

indictment, then the remedy is to dismiss

the indictment. Judgment of acquittal is

a finding that there is an insufficiency

of facts to support the charge, and I

think the Court is ruling there is no law

to support the charge. So the proper

remedy would be to dismiss the indictment.

THE COURT: Perhaps that's correct.

Perhaps that's correct. I am not ruling

that the evidence is insufficient. I am

ruling that the government has not shown

that there is a legal grounding for the

charge here based on what has been shown

so far in the case. So I was prepared and

I am prepared to dismiss the indictment in

the case; and, you know, I would certainly

invite anybody -that wants to to appeal

because I think this is an area that there

is virtually no law. And if you want to

get the Sixth Circuit read on it, then you

can do it.

MR. GREENE: Can I interpret Mr.

Campbell's statement to be a motion by the

31a

government to dismiss’ the indictment

because I have not so moved?

Tr. 67: THE COURT: I don't know.

MR. CAMPBELL: Judge, we are not

moving to dismiss the indictment. I think

there is a legal issue, and the Court is

ruling as a matter of law and not as a

matter of fact.

THE COURT: Well, I don't know the

nuance of acquittal. This used to be a

motion for directed verdict until they

changed the name. Whatever it is, I am

not dismissing the indictment. I'm

releasing the defendant from any bond that

he's under and discharging the jury, and

that's about the best I can do in a review

of the legal situation here this

afternoon. My law clerk has spent some

time looking at this. That is the best

explication I can give. There cannot be

found any authority that I have been able

to seize that would indicate that 6672

requires the filing of a return and that

is together with my indication of 6011(a)

the basis for my determination here.

If there is any requirement in 6672

for the filing of a return, it is so

abstruse that this Court cannot find it.

So there you have it.

MR. GREENE: Thank you, Judge.

THE COURT: Thank you for the

opportunity of ruling. I will call the

jury in after you all clear out. If you

would go ahead and clear out of the

courtroom.

32a

MR. TAFT: Whatever.

MR. GREENE: Thank you, Judge. I

will be packed up in a minute. Thank you.

AT 4:40 P.M., THE PROCEEDINGS WERE

ADJOURNED.

KKK KKK