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UNITED STATES v. LOFTUS

May 13, 1992

UNITED STATES OF AMERICA, Respondent
v.
ROBERT A. LOFTUS, Petitioner



The opinion of the court was delivered by: WILLIAM J. NEALON

 In McNally v. United States, 483 U.S. 350, 97 L. Ed. 2d 292, 107 S. Ct. 2875 (1987), the Supreme Court rejected the application of the mail fraud statute to schemes designed to defraud citizens of their intangible right to good and honest government. Id., 483 U.S. at 360 (Court limited § 1341 "in scope to the protection of property rights.") The petitioner Robert Loftus, in light of McNally, seeks to vacate his December 6, 1983 conviction by writ of coram nobis. In addition, Loftus requests the return of the $ 10,000 fine paid. The one count indictment, to which Loftus pleaded guilty, alleged that he willfully and knowingly conspired with one Sadie Cosgrove to sign a voter's name to an absentee ballot and then

 
used the mails of the United States for the purpose of executing a scheme and artifice to defraud the Luzerne County Board of Elections and the voters of Luzerne County by means of false and fraudulent pretenses and representations, contained on official absentee balloting materials cast in the May 19, 1981 Primary Election. In violation of 18 U.S.C. § 1341.

 Indictment (filed November 1, 1983). An examination of the indictment demonstrated that it was not susceptible to a finding that an economic harm would result from Loftus' conduct. See United States v. Asher, 854 F.2d 1483, 1494 (3d Cir. 1988)("Essentially, . . . where rights are involved whose violation would lead to no concrete economic harm, and where those rights are the only rights involved in the case, McNally 's proscriptions would prevent upholding conviction on appeal."). Therefore, by Memorandum and Order dated January 9, 1992, this court determined that McNally rendered Loftus' conviction invalid inasmuch as "errors which result in a person's charge and conviction for something not a crime are fundamental," United States v. Stoneman, 870 F.2d 102, 105 (3d Cir. 1989), and that, under the circumstances then existing, the petitioner's failure to appeal from his 1983 judgment of conviction for mail fraud did not bar coram nobis relief. However, notwithstanding the determination that Loftus' conviction was invalid, in order to obtain complete relief under existing law, the petitioner must establish that he continues to suffer collateral consequences as a result of the conviction. Accordingly, a final decision on the petition was held in abeyance pending supplemental submissions on this issue.

 I.

 Loftus filed three supplemental submissions. He enumerates several consequences attached to his mail fraud conviction, viz., that he suffers under the stigma of a felony fraud conviction; that he paid a $ 10,000 fine; that he is ineligible for a position in city government; that he cannot possess a firearm; that he will be subjected to an enhanced sentence if convicted of another offense; that he can be impeached as a witness in a criminal or civil trial; that he cannot serve as a director or officer of a federally insured bank; and, that he cannot obtain licenses to engage in his former occupation as an insurance agent and broker. In an affidavit accompanying his first supplemental brief, Loftus declares, in pertinent part:

 
4. Solely as a result of my . . . conviction for mail fraud, on June 3, 1985, both my insurance agent and my broker licenses were revoked and I was ordered to pay a civil penalty of $ 1,000.00 to the Commonwealth of Pennsylvania. . . .
 
5. At the time of my . . . conviction for mail fraud, I was mayor of the City of Pittston . . . as well as a director and senior vice president of the First Bank of Greater Pittston and as a result of my conviction, I was forced to resign from those positions. My business as an insurance agent and broker and my employment as the mayor of the City of Pittston and as a director and vice president of the bank formed my sole source of earned income all of which I lost as a result of the . . . conviction.
 
6. Because of the . . . conviction, I am no longer eligible to run for public office and a convicted felon cannot serve as an officer or director of a federally insured bank. However, at the present time, because of my age, I would not be eligible to serve as an officer or director of the bank nor do I have any desire to seek public office.
 
7. Because of my status as a convicted felon, I have not applied to the Insurance Commissioner of the Commonwealth of Pennsylvania for reinstatement of my insurance agent and broker licenses. I believe and therefore aver that as long as I remained a convicted felon the Insurance Commissioner . . . would deny any application for reinstatement of said licenses.
 
8. If my petition is granted, I will reapply to the Insurance Commissioner . . . for reinstatement of my insurance agent and broker licenses and I believe and therefore aver that if my conviction is removed, my licenses will be reinstated.
 
9. As is apparent from the Order and Adjudication of Insurance Commissioner . . ., my licenses were revoked because of the fact of my conviction for mail fraud and not because of the conduct underlying that conviction.

 Document 24 at P4-9.1

 The petitioner points out that there is a dispute among the circuits with respect to what constitutes collateral consequences sufficient to warrant coram nobis relief and that the Third Circuit has not directly addressed this issue. The Ninth Circuit, in essence, presumes that "collateral consequences flow from any criminal conviction," Hirabayashi v. United States, 828 F.2d 591, 606 (9th Cir. 1987)(citation omitted), while the Seventh Circuit "rejects coram nobis petitions except where there is a concrete threat that an erroneous conviction's lingering disabilities will cause serious harm to the petitioner." United States v. Craig, 907 F.2d 653, 658 (7th Cir. 1990). Loftus urges the court to adopt the less exacting approach of the Ninth Circuit. In the alternative, he maintains that the revocation of his licenses as a broker and an agent satisfy the stringent requirements of the Seventh Circuit. *fn2"

 In response, the Government argues that the approach of the Seventh Circuit is the law in the Third Circuit. Applying the Seventh Circuit's criteria, the Government argues that coram nobis relief is unjustified. With respect to Loftus' assertion that he is ineligible for a position in city government and that he cannot serve as a director or officer of a federally insured bank, the Government maintains that, inasmuch as he is not interested in seeking such positions, *fn3" these factors are insufficient to satisfy the continuing consequences requirement. For a similar reason, the Government contends that the fact that he cannot possess a firearm fails to qualify as a collateral consequence since he does not allege either a desire or a need to possess a firearm. With regard to the petitioner's contentions that he will be subjected to an enhanced sentence if convicted of another offense and that he can be impeached as a witness in a criminal or civil trial, the Government asserts that such factors are speculative and that reliance thereon would undermine the civil disability requirement. Addressing Loftus' claim that he cannot obtain licenses as an insurance agent and broker, the Government advances the position that under the relevant Pennsylvania regulations, his 1983 conviction would not bar him from acquiring these licenses. Further, the Government notes that he has not reapplied for these licenses.

 At the direction of the court, Loftus proffered additional submissions with respect to his prior bank position and his insurance licenses. Loftus states that the bank in which he served as a director has adopted a mandatory retirement policy. The bank, however, has "grandfathered" directors who were on the Board prior to the acceptance of the retirement policy to allow them to remain on the Board after reaching the mandatory retirement age. Contrary to Loftus' initial belief that he could not serve as a director because of his age, it appears that he could come within the scope of the "grandfather" policy and, therefore, he is now interested in such an appointment. *fn4" With respect to the insurance licenses, Loftus acknowledges that his conviction does not constitute prima facie evidence of unfitness under the Pennsylvania insurance regulations since it is more than five years old. Nonetheless, as the Insurance Commissioner holds a "great deal of discretion", Loftus argues that the Insurance Department "is much more likely to grant reinstatement . . . if he comes before the Department out from under the yoke of his unlawful conviction for conspiracy to defraud." Document 27 at 2-3.5 In addition, Loftus maintains that he

 
will not seek reinstatement of his insurance licenses because he reasonably anticipates that if local media holds true to form, his application would bring with it the type of publicity and heartache that attended his prosecution. Obviously, under those circumstances, the denial of his application would create another waive [ sic ] of publicity and heartache.

 Id. at 3.

 The Government responds that the facts underlying Loftus' conviction will always exist and that granting coram nobis relief does not assure Loftus of becoming a director or obtaining his insurance licenses. The pleadings have been closed, and the petition is ripe for disposition. For the reasons that follow, the petition will be granted.

 II.

 In the aftermath of McNally, the writ of coram nobis has attained newfound importance. *fn6" As the Seventh Circuit Court of Appeals observed, however, " coram nobis is a phantom in the Supreme Court's cases, appearing occasionally but only in outline. Morgan (1954) says that it exists, but no case since 1954 returns to the subject, and only one earlier case, United States v. Mayer, 235 U.S. 55, 59 L. Ed. 129, 35 S. Ct. 16 . . . (1914), addressed the appropriate scope of the writ." United States v. Bush, 888 F.2d 1145, 1146 (7th Cir. 1989).

 In United States v. Morgan, 346 U.S. 502, 98 L. Ed. 248, 74 S. Ct. 247 (1954), the petitioner Morgan pleaded guilty to a federal charge in the District Court for the Northern District of New York in 1939. Morgan was given, and then served, a four year sentence. In 1950, Morgan was convicted by a New York state court on a state charge and sentenced to a longer term because the 1939 federal conviction qualified him as a second offender. Morgan, who was incarcerated in a state prison, filed a petition for coram nobis in the District Court for the Northern District of New York. He sought to vacate the 1939 judgment of conviction on the ground that, without competent waiver, he was not provided with counsel.

 The Supreme Court concluded that the District Court had the power to vacate Morgan's 1939 conviction. Id. at 511. The Court cautioned, however, that "continuation of litigation after final judgment and exhaustion or waiver of any statutory right of review should be allowed through this extraordinary remedy only under circumstances compelling such action to achieve justice." Id. The Court continued:

 
In the Mayer case this Court said that coram nobis included errors "of the most fundamental character." Under the rule of Johnson v. Zerbst, 304 U.S. 458, 468, 82 L. Ed. 1461, 58 S. Ct. 1019, decided prior to [Morgan's] conviction, a federal trial without competent and intelligent waiver of counsel bars a conviction of the accused. Where it cannot be deduced from the record whether counsel was properly waived, we think, no other remedy being then available and sound reasons existing for failure to seek appropriate earlier relief, this motion in the nature of the extraordinary writ of coram nobis must be heard by the federal trial court. Otherwise a wrong may stand uncorrected which the available remedy would right. Of course, the absence of a showing of waiver from the record does not of itself invalidate the judgment. It is presumed the proceedings were correct and the burden rests on the accused to show otherwise.
 
Although the term has been served, the results of the conviction may persist. Subsequent convictions may carry heavier penalties, civil rights may be affected. As the power to remedy an invalid sentence exists, we think [Morgan] is entitled to an opportunity to attempt to show that this conviction was invalid.

 Morgan, 346 U.S. at 512-13 (internal footnotes and citations omitted).

 Courts of Appeals, in the dearth of case law, have extrapolated from Morgan the prerequisites of the writ and have generally required an invalid conviction that resulted from a fundamental error as well as continuing disabilities to the petitioner from the defective conviction. See United States v. Stoneman, 870 F.2d 102, 105-106 (3d Cir. 1989) (writ of coram nobis "is used to attack allegedly invalid convictions which have continuing consequences, when the petitioner has served his sentence and is no longer 'in custody' for purposes of 28 U.S.C.A. § 2255. The petitioner must show that he is suffering from continuing consequences of the allegedly invalid conviction.")(citing Morgan, 346 U.S. at 512-13); United States v. Marcello, 876 F.2d 1147, 1154 (5th Cir. 1989)(" Coram nobis is appropriate only where the petitioner can demonstrate that he is suffering civil disabilities as a consequence of the criminal convictions and that the challenged error is of sufficient magnitude to justify the extraordinary relief.")(citations omitted); United States v. Keane, 852 F.2d 199, 203 (7th Cir. 1988)(petitioner "must demonstrate that the judgment of conviction produces lingering civil disabilities" and that "the error is the type of defect that would have justified relief during the term of imprisonment."); United States v. McClelland, 941 F.2d 999, 1002 (9th Cir. 1991)(the requirements to qualify for coram nobis are "'(1) a more usual remedy is not available; (2) valid reasons exist for not attacking the conviction earlier; (3) adverse consequences exist from the conviction sufficient to satisfy the case or controversy requirement of Article III; and (4) the error is of the most fundamental character.'")(citation omitted). With respect to the collateral consequences component of the coram nobis test, the Courts of Appeals have adopted divergent standards, *fn7" and the Fourth and Sixth Circuits have granted coram nobis relief without discussing the requirement of collateral consequences. *fn8"

  *fn7"

 III.

 As the petitioner recognizes, the Court of Appeals for the Third Circuit requires collateral consequences in addition to a fundamental error for coram nobis relief. The question presented here is whether he has advanced sufficient continuing consequences to grant coram nobis relief. In United States v. Osser, 864 F.2d 1056 (3d Cir. 1988), the Court of Appeals stated:

 
It appears to us that an assertion that a conviction was based on conduct not covered by a criminal statute class is of a "fundamental character." See Davis v. United States, 417 U.S. 333, 346-47, 41 L. Ed. 2d 109, 94 S. Ct. 2298 . . . (1974).
 
Even so, other factors must be taken into account. The interest in finality of judgments is a weighty one that may not be casually disregarded. Where sentences have been served, the finality concept is of an overriding nature, more so than in other forms of collateral review such as habeas corpus, where a continuation of confinement could be manifestly unjust.
 
Morgan indicated that coram nobis relief is not available if a sentence has been executed unless the conviction carries continuing penalties. Morgan, 346 U.S. at 512-13. . . . The collateral consequences that must exist to justify coram nobis have been the subject of some discussion among the Courts of Appeals. For example, we noted in Cariola that the denial of the right to vote or the subsequent imposition of a sentence heavier than would otherwise have been ...

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