Reply Brief — Eschenbach v. United States (Nos. 07-1287, 07-1286)

FILED |

(4) JUN 2- 2008 |

OFFICE OF THE CLERK

SUPREME COURT, U.S.

No. 07-1287 _

IN THE

Supreme Court of the Gnited States

HENRY A. ESCHENBACH, ET AL.,

Petitioners,

Vie

UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Ninth

Circuit

REPLY BRIEF FOR THE INDIVIDUAL

PETITIONERS

Mike Milodragovich Jeremy Maltby

W. Adam Duerk (Counsel of Record)

MILODRAGOVICH, DALE, Carolyn Kubota

STEINBRENNER & BINNEY Shannon Keast

620 High Park Way Justin Ford

Missoula, MT 59806 O’MELVENY & MYERS LLP

(406) 728-1455 400 S. Hope Street

Los Angeles, CA 90071

(213) 430-6000

Counsel for Defendant-Petitioner Jack W. Wolter

(Additional counsel listed on inside cover)

Ronald F. Waterman David S. Krakoff

GOUGH, SHANAHAN, Gary A. Winters

JOHNSON & W \TERMAN David M. Gossett

33 South Last Chance James T. Parkinson

Gulch MAYER BROWN LLP

Helena, MT 59601 1909 K Street NW

(406) 442-8560 Washington, DC 20006

(202) 263-3000

Counsel yor Defendant-Petitioner Henry A.

Eschenbach

Palmer Hoovestal Elizabeth Van Doren

HOOVESTAL LAW FIRM, Gray

PLLC SOWELL, GRAY, STEPP, &

P.O. Box 747 LAFFITTE, LLC

Helena, MT 59624 P.O. Box 11449

(406) 457-0970 Columbia, SC 29211

(803) 929-1400

William A. Coates

ROE CASSIDY COATES &

PRICE, PA

P.O. Box 10529

Greenville, SC 29603

Counsel for Defendant-Petitioner William J. McCaig

Brian Gailik

GCETZ, GALLIK &

BALDWIN, P.C.

P.O. Box 6580

Bozeman, MT 59771

(406) 587-0618

Thomas C. Frongillo

WEIL, GOTSHAL &

MANGES LLP

100 Federal St. 34th

Floor

Boston, MA 02111

(617) 772-8335

Vernon S. Broderick

WEIL, GOTSHAL &

MANGES LLP

767 Fifth Avenue

New York, NY 10153

(212) 310-8730

Counsel for Defendant-Petitioner Robert J. Bettacchi

C.J. Johnson

KALKSTEIN LAW FIRM

P.O. Box 8568

Missoula, MT 59807

(406) 721-9800

Stephen A. Jonas

Robert Keefe

WILMER CUTLER

PICKERING HALE AND

DoRR LLP

60 State Street

Boston, MA 02109

(617) 526-6144

Counsel for Defendant-Petitioner O. Mario Favorito

Catherine A Laughner

Aimee M. Grmoljez

BROWNING KALECZYC

BERRY & HOVEN P.C.

P.O. Box 1697

Helena, MT 59624

(406) 443-6820

Stepher. R. Spivack

BRADLEY ARANT ROSE &

WHITE LLP

1133 Connecticut Ave.

N.W.

Washington, DC 20036

(202) 393-7150

David E. Roth

BRADLEY ARANT ROSE &

WHITE LLP

One Federal Place

1819 Fifth Avenue North

Birmingham, AL 35203

(205) 521-8000

Counsel for Defendant-Petitioner Robert C. Walsh

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTRODUCTION

ARGUMENT

CONCLUSION

il

TABLE OF AUTHORITIES

Cases

Barapind v. Enomoto,

400 F.3d 744 (9th Cir. 2005)

Bouie v. City of Columbia,

378 U.S. 347 (1964)

Estelle v. Gamble,

429 U.S. 97 (1976)

Mazurek v. Armstrong,

520 U.S. 968 (1997)

Sabri v. United States,

541 U.S. 600 (2004)

Toussie v. United States,

397 U.S. 112 (1970)

United States v. Approximately 64,695 Pounds of

Shark Fins,

520 F.3d 976 (9th Cir. 2008)

United States v. Gen. Motors Corp.,

323 U.S. 373 (1945)

United States v. W.R. Grace,

455 F. Supp. 2d 1133 (D. Mont. 2006)

United States v. W.R. Grace,

No. 06-30192, 2008 U.S. App. LEXIS 10453

(9th Cir. May 15, 2008)

Village of Hoffman Estates v. Flipside, Hoffman

Estates, Inc..,

455 U.S. 489 (1982)

Statutes

18 U.S.C. § 3288

Other Authorities

Andrew Schneider, Big Asbestos Prosecution in

Jeopardy, U.S. Argues, Seattle Post

Intelligencer, June 5, 2007

INTRODUCTION

On the fundamental issue raised by the

individual petitioners, the government’s brief in

opposition (“U.S. Br.”) neither defends the merits of

the Ninth Circuit’s ruling nor claims that its

approach was consistent with the precedents of this

Court or the other federal courts of appeals. Though

conceding that the Ninth Circuit did “refer to”

petitioners’ “knowledge of asbestos,” U.S. Br. 21, the

government does not argue that this was a correct

standard, or one that has been accepted by this

Court or other courts. Rather, implicitly

acknowledging the unprecedented—and

erroneous— nature of the Ninth Circuit’s approach,

the government claims that the Ninth Circuit’s

remarks were merely “dictum.” U.S. Br. 22. But

even a cursory review of the Ninth Circuit’s opinion

shows that the panel relied heavily on the

petitioner’s supposed subjective knowledge of

“asbestos.” This unprecedented use of subjective

intent to assess the notice provided by a statute—

exacerbated by the utter lack of evidentiary

foundation for the panel’s speculation—is a

dramatic and far-reaching departure from precedent

that requires this Court’s immediate review.

As discussed thoroughly in W.R. Grace’s reply, in

which the individual petitioners join, the

government’s other reasons for denying the petitions

are insubstantial, and sometimes border on the

disingenuous. Contrary to the government's primary

argument, the interlocutory posture of this petition

provides no basis for denying review. The issue

presented in this petition is dispositive of the

substantive Clear Air Act (“CAA”) charges and the

2

CAA object of the conspiracy alleged in the

indictment. A pretrial decision affirming the district

court’s definition of “asbestos” would therefore

substantially shorten the trial.

Considerations of fairness, effective judicial

review, and conservation of judicial resources all

favor prompt review. The individual petitioners are

all more than 68 years old and have been under

indictment for more than three years. The

government has estimated that its case-in-chief will

include more than 230 witnesses and almost 750

exhibits. There is no reason that these aging

petitioners should face a long and unnecessary trial

under a manifestly erroneous legal standard. The

CAA charges that depend on this ruling also carry

the risk of substantial cross-over prejudice.

Moreover, if the petitioners were to prevail at trial,

the Ninth Circuit’s erroneous ruling would escape

this Court’s review. Finally, having initiated this

interlocutory appeal, the government cannot credibly

complain about additional delay that may result

from the orderly conclusion of that process.

Certiorari is also warranted to correct the Ninth

Circuit’s distorted reading of 18 U.S.C. § 3288. The

plain language of § 3288 articulates Congress’s

intent in affording prosecutors the ability to correct

flaws in an indictment except where a charge—here,

the conspiracy’s knowing endangerment object—was

not brought within the applicable statute of

limitations. The fundamental due process protection

provided to defendants by the statute of limitations

must be respected in the Ninth Circuit, as in other

federal courts.

3

ARGUMENT

1. The government does not seriously defend the

Ninth Circuit's use of petitioners’ supposed

subjective intent in assessing whether the CAA

provided fair notice that its definition of “asbestos”

includes richterite and winchite. Nor does the

government argue that the Ninth Circuit’s approach

is consistent with the precedents of this Court or

other federal courts of appeals. Rather, it dismisses

the Ninth Circuit’s approach as “dictum,” claiming

that the Ninth Circuit held that “the statute alone

provided fair notice.” U.S. Br. 21-22. But this

statement appears nowhere in the court’s opinion;

rather, the Ninth Circuit’s holding rests squarely on

the petitioners’ putative knowledge. Even if the

holding were considered to be dictum, it is still, as

noted in Grace’s reply, “circuit law.” Barapind uv.

Enomota, 400 F.3d 744, 750-51 & n.8 (9th Cir. 2005)

(en banc). Tellingly, the Ninth Circuit incorporated

its reasoning into its specific holding, finding that

“[a]sbestos is adequately defined as a term and need

not include mineral-by-mineral classifications to

provide notice of its hazardous nature, particularly

to these knowledgeable defendants.” Pet. App. 19a-

20a.

The government claims, relying on a subsequent

Ninth Circuit panel opinion that recites the fair

notice standard applied by other federal courts of

appeals, U.S. Br. 22 n.11 (citing United States v.

Approximately 64,695 Pounds of Shark Fins, 520

F.3d 976, 980 (9th Cir. 2008)), that the law of the

Ninth Circuit is consistent with that of other

circuits. This argument is wrong. Shark Fins was

an in rem forfeiture action involving no individual

4

defendants and presenting no issue of a defendant’s

subjective intent, see 520 F.3d at 980-81. The case

therefore provides no guidance as to whether, in a

case analogous to this one, the Ninth Circuit would

persist in looking beyond the core fair notice

standard and consider subjective intent. The

government has identified no other case in which a

federal court of appeals has authorized such an

approach in general, let alone on a record devoid of

any evidence bearing on that subjective intent. This

petition therefore presents a divergence requiring

this Court’s review.

The government seeks to minimize the extent of

the Ninth Circuit’s deviation from standard practice

(and its unfair impact on the petitioners) by citing

cases suggesting, largely in the context of facial

challenges rather than actual prosecutions, that a

statute need only provide notice to members of a

particular specialized community. See U.S. Br. 19

(citing cases to argue that “asbestos as defined by

the CAS registry has a sufficiently clear meaning in

the relevant industry”). In advancing these argu-

ments, the government, like the Ninth Circuit,

deviates from this Court’s clear directive in Bouie v.

City of Columbia, 378 U.S. 347, 355 (1964). Bouie

held that the adequacy of notice provided by a

statute depends on its own words, not on the “basis

of an ad hoc appraisal of the subjective expectations

of particular defendants,” and that the relevant

question is whether a statute provides fair notice to

a person of common intelligence. Jd. at 355 n.5. The

government is effectively using cases that pre-date

Bouie and/or arose in a different context to advocate

precisely the analysis that Bouie forbids. This

5

argument underscores a persistent confusion among

practitioners and courts regarding the interplay

between Bouie and the cited cases, and favors

further review.’

The government also argues that “the presence of

a culpable intent as a necessary element of the

offense,” U.S. Br. 20, eliminates any fair notice

concerns. This argument is not only wrong but begs

the very question presented in this petition. The

government correctly notes that the CAA charges

require proof that the petitioners knowingly released

“asbestos” and that they knew the releases would

endanger others. Jd. Proof of such knowledge,

however, would have no bearing on whether the

statute, by its own terms, provides fair notice of

which substances constitute “asbestos.” The govern-

ment’s argument confuses the concepts of mens rea

and fair notice. Assume that the statute and related

regulations contained no definition of “asbestos”

whatsoever; even a defendant’s scientific knowledge

that a certain mineral was properly classified as

' The government’s effort to apply Village of Hoffman Estates v.

Flipside, Hoffman Estates, Inc., 455 U.S. 489 (1982), and

similar cases to these facts fails. Even if such approach were

proper, which it is not in light of this Court’s precedents, the

government makes no effort to define the relevant industry in

this case or to show that the individual petitioners have a place

in it. And, unlike in the cases cited by the government, the

definition of asbestos inherently involves analysis of such

things as chemical composition and whether a substance is

fibrous -- two things that require specialized scientific

knowledge -- and will always involve a subjective inquiry. This

approach, advocated by the government, thus leads inevitably

to analysis of the petitioners’ subjective knowledge, without

any record ev ‘dence to support that analysis.

6

“asbestos” would not save the statute from a fair

notice challenge. See Bouie, 378 U.S. at 355 n.5

(“The determination whether a criminal statute

provides fair warning of its prohibitions must be

made on the basis of the statute itself and the other

pertinent law... .” ).

2. The government claims that petitioners will

face no prejudice if this Court declines further

review because the excluded evidence would have

been admissible under the district court’s original

order adopting the EPA definition of “asbestos.” U.S.

Br. 14. This assertion is incorrect and strikingly

inconsistent with both the district court’s order and

the government’s position below. Indeed, if the

government believed it could still prove its case

despite the district court’s ruling, there was no

reason for it to have taken this appeal in the first

place.

In response to the district court’s ruling that it

would not allow presentation of “any sampling data

that commingles the minerals making up what the

government calls ‘Libby umphibole,” without

differentiating between minerals covered by the

Clean Air Act and minerals not covered,” Pet. App.

63a, the government has asserted the importance of

the excluded evidence in both pre-trial and appellate

proceedings. First, the government’s certification

under 18 U.S.C. § 3731 stated:

The sampling evidence and analytical results

excluded by the district court’s August 7 and

August 9, 2006 orders are material to the

government’s required proof that the

defendants released or caused the release of

a hazardous air pollutant, asbestos,

conspired to defraud the United States, and

obstructed the EPA. Moreover, the

foundational requirements for the admission

of the government’s Clean Air Act evidence

established in these orders has the practical

effect of excluding much of the government’s

evidence relevant to the crimes charged in

the Superseding Indictment.

See CR-05-07-M-DWM Dkt. No. 731 at 2 (D. Mont.

Aug. 23, 2006) (footnote omitted). In its oral

argument before the Ninth Circuit, the government

similarly acknowledged that the district court’s

ruling would prevent it “from presenting facts and

data that came from .. . EPA’s asbestos sampling in

Libby ... .” Andrew Schneider, Big Asbestos

Prosecution in Jeopardy, U.S. Argues, Seattle

Post Intelligencer, June 5, 2007, available at

http://seattlepi.nwsource.com/local/318479_grace05.h

tml. The government’s current assertion also

conflicts with the district court’s observation that its

rulings “will likely render inadmissible much of the

government’s proof relating to the Clean Air Act

allegations.” United States v. W.R. Grace, 455 F.

Supp. 2d 1133, 1140 n.3 (D. Mont. 2006).

The excluded evidence is dispositive not only of

the three counts (out of seven) that relate to the

CAA, but also likely the conspiracy count insofar as

proof of the CAA object depends on the same

evidence. Despite the government’s present

assertions to the contrary, this evidence is of the

utmost importance to the government’s case and a

8

reversal of the Ninth Circuit’s decision would

dramatically alter the composition of this case.

3. As explained in the individuals’ petition, Pet.

31-38, certiorari is also warranted to review the

Ninth Circuit’s incorrect and pernicious misreading

of § 3288. The government’s arguments to the

contrary are unpersuasive.

In particular, the government ignores the critical

flaw in the Ninth Circuit’s ruling: under its

interpretation of § 3288, the government can bring

an untimely indictment—that is, one that does not

allege that the defendants committed the crimes for

which they are indicted within the relevant statute

of limitations—suffer dismissal on that ground, and

then use the six-month grace period afforded by

§ 3288 to resuscitate the prosecution by identifying

and alleging an act within the original limitations

period. As a practical matter, under this analysis,

§ 3288 would never preclude the government from

filing a superseding indictment in a conspiracy case

if the original indictment was dismissed on statute-

of-limitations grounds. But that result directly

contradicts the plain language of § 3288—which

specifies that “[§ 3288] does not permit the filing of a

new indictment . .. where the reason for the

dismissal [of the original indictment] was the failure

to file the [original] indictment ... within the period

prescribed by the applicable statute of limitations” —

and would render that provision a nullity. Critically,

the government never explains when this clause

might have any effect were it not to apply in the

context of this case.

9

Rather than addressing this fundamental point,

the government principally adopts the Ninth

Circuit’s novel and unsupportable distinction

between a claim that is “time-barred” because the

government failed to allege an overt act within the

statute-of-limitations period, and a claim that is not

timely filed. See U.S. Br. 23 (calling the flaw in the

initial indictment a “pleading deficiency”). But that

meaningless distinction merely obscures the true

error below.’ See Pet. 32-33. A claim is barred by a

statute of limitations if the government has not

alleged that the defendant committed that crime (in

the context of a conspiracy claim, an overt act in

support of the conspiracy) within the relevant time

period. That was precisely the flaw with the initial

indictment here. The mere fact that the government

might have been able to obtain an indictment

alleging a timely claim when it obtained the initial

indictment does not remedy its failure to do so.

Because it did not, the plain text of § 3288 precludes

the government from getting another bite at the

apple.

Thus, should the opinion below stand, criminal

defendants in the Ninth Circuit will be stripped of a

fundamental due process safeguard. See Toussie v.

United States, 397 U.S. 112, 114-115 (1970).

4. Because the government has no response to

the substantive issues raised by petitioners, it relies

? Contrary to the government’s assertion, U.S. Br. 23 (citing

F.E.R. 549), the district court did not hold that this claim was

timely filed. The government has quoted what appears to have

been a question from the district court at oral argument and

suggested this was the court’s ruling.

10

heavily on its claim that interlocutory review is

inappropriate. The government argues that this

Court should deny this petition to permit eventual

review on a complete record and avoid further delay.

Neither of these assertions is meritorious. This

Court has emphasized that “there is no absolute bar

to review of nonfinal judgments of the lower federal

courts.” Mazurek v. Armstrong, 520 U.S. 968, 975

(1997) (per curiam) (citing Estelle v. Gamble, 429

U.S. 97, 28 (1976); United States v. Gen. Motors

Corp., 323 U.S. 373, 377 (1945)). This Court has

granted review of criminal cases prior to trial. See,

e.g., Sabri v. United States, 541 U.S. 600 (2004)

(deciding criminal case in this posture over the

Government’s opposition).

Because the questions presented in this petition

are dispositive of several counts in the indictment, a

decision affirming the district court’s construction of

the statute would substantially narrow the scope

and shorten the length of trial. As the Ninth Circuit

noted in its recent en banc decision addressing the

government’s first interlocutory appeal, the

complexity of this “case poses special challenges to

the parties in preparing for trial and to the court in

managing the litigation.” United States v. W.R.

Grace, No. 06-30192, 2008 U.S. App. LEXIS 10453,

at *38 (9th Cir. May 15, 2008) (en banc). By

granting review and clarifying the proper definition

of “asbestos” before trial, this Court will promote

judicial economy and reduce the burden of trial on

the individual petitioners, all of whom are over 68

years of age, as well as on prospective witnesses.

The government’s desire to have witnesses and

victims observe the trial cannot trump the aging

1]

petitioners’ right not to stand trial, especially a trial

of this magnitude, on patently flawed charges. The

government’s concerns about delay do not ring true,

as the government set the delay in motion by filing

an interlocutory appeal in the first instance.

If the petitioners proceed to trial now and prevail,

the Ninth Circuit’s erroneous reasoning will escape

this Court’s review and remain the law governing all

parties subject to its jurisdiction.

CONCLUSION

For the foregoing reasons, this Court should

either summarily reverse the decision below or set

the case for plenary review.

Respectfully submitted,

Mike Milodragovich Jeremy Maltby

W. Adam Duerk (Counsel of Record)

MILODRAGOVICH, DALE, Carolyn Kubota

STEINBRENNER & BINNEY Shannon Keast

620 High Park Way Justin Ford

Missoula, MT 59806 O’MELVENY & MYERS LLP

(406) 728-1455 400 S. Hope Street

Los Angeles, CA 90071

(213) 430-6000

Counsel for Defendant-Petitioner Jack W. Wolter

12

Ronald F. Waterman David S. Krakoff

GOUGH, SHANAHAN, Gary A. Winters

JOHNSON & WATERMAN David M. Gossett

33 South Last Chance James T. Parkinson

Gulch MAYER BROWN LLP

Helena, MT 59601 1909 K Street NW

(406) 442-8560 Washington, DC 20006

(202) 263-3000

Counsel for Defendant-Petitioner Henry A.

Eschenbach

Palmer Hoovestal Elizabeth Van Doren

HOOVESTAL LAW FIRM, Gray

PLLC SOWELL, GRAY, STEPP, &

P.O. Box 747 LAFFITTE, LLC

Helena, MT 59624 P.O. Box 11449

(406) 457-0970 Columbia, SC 29211

(803) 929-1400

William A. Coates

ROE CASSIDY COATES &

PRICE, PA

P.O. Box 10529

Greenville, SC 29603

Counsel for Defendant-Petitioner William J. McCaig

s

Brian Gallik

GOETZ, GALLIK &

BALDWIN, P.C.

P.O. Box 6580

Bozeman, MT 59771

(406) 587-0618

13

Thomas C. Frongillo

WEIL, GOTSHAL &

MANGES LLP

100 Federal St. 34th

Floor

Boston, MA 02111

(617) 772-8335

Vernon S. Broderick

WEIL, GOTSHAL &

MANGES LLP

767 Fifth Avenue

New York, NY 10153

(212) 310-8730

Counsel for Defendant-Petitioner Robert J. Bettacchi

C.J. Johnson

KALKSTEIN LAW FIRM

P.O. Box 8568

Missoula, MT 59807

(406) 721-9800

Stephen A. Jonas

Robert Keefe

WILMER CUTLER

PICKERING HALE AND

Dorr LLP

60 State Street

Boston, MA 02109

(617) 526-6144

Counsel for Defendant-Petitioner O. Mario Favorito

14

Catherine A Laughner Stephen R. Spivack

Aimee M. Grmoljez BRADLEY ARANT ROSE &

BROWNING KALECZYC WHITE LLP

BERRY & HOVEN P.C. 1133 Connecticut Ave.

P.O. Box 1697 N.W.

Helena, MT 59624 “ Washington, DC 20036

(406) 443-6820 (202) 393-7150

David E. Roth

BRADLEY ARANT ROSE &

WHITE LLP

One Federal Place

1819 Fifth Avenue North

Birmingham, AL 35203

(205) 521-8000

Counsel for Defendant-Petitioner Robert C. Walsh