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U.S. v. WHITTAKER

United States District Court, Eastern District of Pennsylvania


July 11, 2001

UNITED STATES OF AMERICA
v.
WAYNE WHITTAKER

The opinion of the court was delivered by: Dalzell, District Judge

  MEMORANDUM

Defendant Whittaker was indicted for mail fraud, in violation of 18 U.S.C. § 1341, on the theory that he participated in the "insurance give up" of his leased 1998 Jeep Cherokee to a vehicle chop shop. By a Memorandum and Order dated June 12, 2001, we granted Whittaker's motion to disqualify the Eastern District of Pennsylvania United States Attorney's Office from further participation in this prosecution as a result of certain ethical breaches associated with the fact that one Assistant United States Attorney sent Whittaker a letter stating that he was a "victim" of the same chop shop operation that he is here accused of criminally associating with. The Government has now moved for reconsideration of that disqualification Order.

The Government's Motion

The Government raises four separate arguments in seeking reconsideration of our disqualification Order. First, it argues that, contrary to our findings, the Government's conduct did not violate Pennsylvania Rules of Professional Conduct 4.1, 4.3(c), or 8.4(d). Second, it contends that even to the extent that there was any Rule violation, disqualification is not warranted here, as the actions surrounding the "victim letter" did not create trial prejudice for Whittaker. Third, the Government maintains that the fact that an Assistant United States Attorney may be a witness in this action does not create a ground for disqualification. Finally, the Government contends that, as a fundamental matter, we may not direct which prosecutor presents a case, because to do so would violate the Constitutional scheme of separation of powers.

Standard for Reconsideration

While the Federal Rules of Criminal Procedure do not contain a rule specifically discussing motions for reconsideration, particularly not from the Government, our Local Rule of Criminal Procedure 1.2 adopts for use in criminal cases Local Rule of Civil Procedure 7.1(g), which states that "[m]otions for reconsideration or reargument shall be served and filed within ten (10) days after the entry of the judgment, order, or decree concerned"; see also, e.g., Rankin v. Heckler, 761 F.2d 936, 942 (3d Cir. 1985) ("Regardless how it is styled, a motion filed within ten days of entry of judgment questioning the correctness of a judgment may be treated as a motion . . . under Rule 59(e)."). Absent guidance under the criminal rules, we look to the jurisprudence under Fed.R.Civ.P. 59(e) for guidance in considering this motion.

The purpose of a motion under Fed.R.Civ.P. 59(e) is to "correct manifest errors of law or fact or to present newly discovered evidence," Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985), though a motion for reconsideration is not to be used as a means to reargue a case or to ask a court to rethink a decision it has made, e.g. Wayne v. First Citizen's Nat. Bank, 846 F. Supp. 310, 314 (M.D.Pa.), aff'd, 31 F.3d 1175 (3d Cir. 1994) (table); Glendon Energy Co. v. Borough of Glendon, 836 F. Supp. 1109, 1122 (E.D.Pa. 1993). Indeed, reconsideration of a previous order is an extraordinary remedy to be given sparingly in the interests of finality and conservation of scarce judicial resources, e.g. Pennsylvania Ins. Guar. Ass'n v. Trabosh, 812 F. Supp. 522, 524 (E.D.Pa. 1992); see also Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231 (3d Cir. 1995). Under Rule 59(e), a party must rely on one of three grounds to alter or amend a judgment: "(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court [issued the earlier order]; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice", Max's Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999); see also, e.g., Nissim v. McNeil Consumer Products Co, Inc., 957 F. Supp. 600, 601 (E.D.Pa.), aff'd, 135 F.3d 765 (3d Cir. 1997) (table); Smith v. City of Chester, 155 F.R.D. 95, 96-97 (E.D.Pa. 1994).

It seems clear from the content of the Government's motion that it does not purport to bring to our attention any change in the controlling law or any new evidence. Therefore, the question we must here address is whether the Government has identified a "clear error of law or fact" in our Memorandum and Order of June 12, 2001 or has demonstrated that "manifest injustice" would arise from our failure to reconsider.*fn1 We will consider the Government's arguments in turn.*fn2

Violation of the Pennsylvania Rules of Professional Conduct

A. Rule 4.1

Pennsylvania Rule of Professional Conduct 4.1 provides in part:

Rule 4.1 Truthfulness in Statements to Others

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person. . . .

In our June 12, 2001 Memorandum, we found that the Government's conduct violated Rule 4.1(a), since the Government's subsequent arguments and statements demonstrate that the January 29, 2001 "victim letter" sent to Whittaker by AUSA Robert Reed was "a palpable falsehood", Mem. of June 12, 2001 at 10.

In seeking reconsideration of this finding, the Government argues that AUSA Reed's conduct cannot constitute a violation of Rule 4.1(a) because Reed's conduct was not "knowing". In support, the Government observes that the "Terminology" section of the Pennsylvania Rules of Professional states that "`Knowingly', `Known', or `Knows' denotes actual knowledge of the fact in question. A person's knowledge may be inferred from circumstances." The Government goes on to argue that there is no evidence that AUSA Reed specifically knew that he was sending a letter to Whittaker, and that his action was therefore not "knowing". The Government also points in this regard to our findings that AUSA Reed had no "specific intent to deceive", Mem. of June 12, 2001 at 12, and that the Government did not have "bad faith or malintent", Mem. of June 12, 2001 at 21.*fn3

We cannot find that the Government has identified a clear error of law or fact with respect to Rule 4.1(a). We begin by rehearsing some of the evidence. At the May 24, 2001 hearing, AUSA Reed testified that he knew, from his ongoing investigation into chop shops, that twenty percent of all vehicles "chopped" were in fact "insurance give ups", vehicles whose owners turned the vehicles over to the chop shop, N.T. at 23-24. In the process of preparing the "victim letters", which were sent to those individuals whose vehicles had been chopped, AUSA Reed told the paralegal who was working on the victim letter project not to send victim letters to those identified as potential insurance fraud perpetrators, and in furtherance of this showed the paralegal a list of the possible "insurance give up" individuals N.T. at 34-35. After the victim letters were prepared, AUSA Reed did not examine the names on each letter, N.T. at 36.

While it is certainly true that the "Terminology" section of the Pennsylvania Rules contains the definition of "knowing" discussed above, this definition does not clearly place AUSA Reed's conduct outside Rule 4.1(a)'s purview. First, and as the Government concedes, the definition contained in the "Terminology" section notes that "knowledge can be inferred from circumstances". More significantly, the Supreme Court of Pennsylvania, in considering whether an attorney may be properly disciplined for a misrepresentation, has found that "the requirement is met where the misrepresentation is knowingly made, or where it is made with reckless ignorance of the truth or falsity thereof. . . . [R]ecklessness may be described as the deliberate closing of one's eyes to facts that one had a duty to see or stating as fact, things of which one was ignorant," Disciplinary Counsel v. Anonymous Attorney A, 714 A.2d 402, 407 (Pa. 1998) (discussing elements of a prima facie violation of Pennsylvania Rule of Professional Conduct 8.4(c)).*fn4 Applying this standard*fn5, we observe that on AUSA Reed's own testimony, he was in possession of a list of those people who were suspected of being perpetrators of "insurance give up" schemes. AUSA Reed also testified that he subsequently failed to consult that list prior to transmitting the "victim letters"; indeed, he testified that he never reviewed the names on the letters that were actually sent. On these facts, we cannot conclude that finding a violation of Rule 4.1(a) on the "recklessness" standard discussed above was a clear error of law or fact.*fn6

B. Rule 4.3(c)

Pennsylvania Rule of Professional Conduct 4.3 provides in part:

Rule 4.3 Dealing [with] the Unrepresented Person and Communicating with One of Adverse Interest

(c) When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer should make reasonable efforts to correct the misunderstanding.

In our June 12, 2001 Memorandum, we found that the false nature of the "victim letter" also constituted a violation of this Rule, Mem. of June 12, 2001 at 10-11.

In seeking reconsideration of this finding, the Government argues that the evidence shows that the Government attorneys did indeed comply with this Rule. In particular, the Government relies on the undisputed fact that when Whittaker's counsel contacted AUSA Miller concerning the victim letter, AUSA Miller advised him to disregard the letter, as it was "a mistake" that had been "inadvertently sent", N.T. at 55-56. While the Government goes on to concede that a formal written retraction might have been the "better practice", it contends that Rule 4.3 is "most often" invoked where a party has attempted to elicit information through a pretense and never clarified the matter.*fn7 The Government maintains that because it, upon contact from Whittaker's counsel, immediately stated that the letter was an error, its conduct cannot be in violation of Rule 4.3(c).

To the extent that the Government contends that this episode was not in fact an effort to inveigle information from Whittaker, we agree, as we stated in our earlier decision, Mem. of June 12, 2001 at 19 n. 13. However, as we detailed in our earlier Memorandum, we cannot agree that the oral representation to counsel that the victim letter was a mistake amounts to a "reasonable effort to correct the misunderstanding" given the unqualified nature of the statements in the letter. Of course, it bears noting that the Government initiated no effort, much less a reasonable one, to correct anything here.

Other than the argument detailed above, the Government offers no authority to demonstrate that the conduct at issue here is not within the purview of Rule 4.3(c). Its arguments therefore do not amount to a showing that our finding was a clear error of law or fact.*fn8

C. Rule 8.4(d)

Pennsylvania Rule of Professional Conduct 8.4(d) provides that "[i]t is professional misconduct for a lawyer to: . . . (d) engage in conduct that is prejudicial to the administration of justice." In our June 12, 2001 Memorandum we found that the Government's behavior here constituted a violation of that Rule, since "its repeated*fn9 unprofessional conduct" "has here prejudiced the administration of justice and undermined public confidence in a most sensitive part of our legal institutions," Mem. of June 12, 2001 at 18.

The Government raises a series of arguments to support the contention that its behavior did not in fact violate Rule 8.4(d). The Government first argues that the commentary to the Rule demonstrates that the Rule does not address conduct such as that seen here, and it then goes on to discuss a case from the Pennsylvania Supreme Court and one from our Court of Appeals that the Government maintains equally demonstrate the inapplicability of Rule 8.4(d).*fn10 We consider these authorities.

The commentary to Rule 8.4 states, inter alia, that:

Traditionally, the distinction [between illegal conduct reflecting adversely on the fitness to practice law and that which did not so reflect] was drawn in terms of offenses involving "moral turpitude." . . . [A] lawyer should be professionally answerable only for offenses that indicate lack of those characteristics relevant to law practice. Offenses involving violence, dishonesty or breach of trust are in that category. A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate indifference to legal obligation.

As an officer of the court, a lawyer should be particularly sensitive to conduct that is prejudicial to the administration of justice. An example of a type of conduct that may prejudice the administration of justice is violation of an applicable order of court.

The Government also cites to Office of Disciplinary Counsel v. Price, 732 A.2d 599, 604 (Pa. 1999).*fn11 There, the Pennsylvania Supreme Court considered a disciplinary case involving an attorney who had himself signed Department of Public Welfare forms that were supposed to have been completed by a physician*fn12 and who also had filed court documents containing false allegations of wrongdoing against two District Justices and an Assistant District Attorney. In discussing the standard for assessing whether conduct violates Rule 8.4(c)*fn13, the court adopted the analysis from Anonymous Attorney A discussed above:

When the alleged misconduct is misrepresentation in violation of Rule 8.4(c), a prima facie case is made where the record establishes that the misrepresentation was knowingly made, or made with reckless ignorance of the truth or falsity of the representation. Office of Disciplinary Counsel v. Anonymous Attorney A, [714 A.2d 402, 407 (Pa. 1998)]. Recklessness may be described as "the deliberate closing of one's eyes to facts that one had a duty to see or stating as fact, things of which one was ignorant." Id.

Price, 732 A.2d at 604.

The Government also refers us to United States v. One 1973 Rolls Royce, 43 F.3d 794 (3d Cir. 1994). In that case, a panel of our Court of Appeals was required to interpret, as a matter of first impression, the "willful blindness" language in 18 U.S.C. § 881(a)(4)(C), the drug forfeiture statute. The panel found that:

In our leading case on willful blindness, United States v. Caminos, 770 F.2d 361, 365 (3d Cir. 1985), we held that the deliberate ignorance requirement is met only if "the defendant himself was subjectively aware of the high probability of the fact in question, and not merely [if] a reasonable man would have been aware of the probability." Id. at 365. Under this definition, willful blindness is a subjective state of mind that is deemed to satisfy a scienter requirement of knowledge. Although courts and commentators have yet to come to a consensus on a definition of wilful blindness, the Caminos formulation basically adopts the mainstream conception of willful blindness as a state of mind of much greater culpability than simple negligence or recklessness, and more akin to knowledge.

One 1973 Rolls Royce, 43 F.3d at 807-08 (footnotes omitted). The Government appears to argue that One 1973 Rolls Royce demonstrates "the familiar recognition that sanction for misconduct is warranted only where the offense was committed knowingly or with willful blindness," Gov't's Mem. of Law at 18.

We cannot find that the Government's arguments demonstrate any clear error in our finding of a violation of Rule 8.4(d). To begin with, the commentary to Rule 8.4 makes no statement that would foreclose application of Rule 8.4(d) here. While the commentary, as quoted above, points out that not all improper conduct by an attorney should be imputed to his professional fitness, it would not seem that this caveat applies here, where we address actions directly associated with the prosecution of a case. To the extent that the commentary does directly address the "conduct . . . prejudicial to the administration of justice" that is the subject of Rule 8.4(d), the commentary merely gives one example of violative conduct, and does not contain any discussion that would show our application to be in clear error.

Moving to the Pennsylvania Supreme Court's decision in Price, and as we have discussed above in connection with Rule 4,1(a), we find that AUSA Reed's conduct does not clearly fall outside the "recklessness" standard, given his possession of the list of investigation targets and his decision not to review the names on the victim letters that were sent out. Similarly, to the extent that its analysis of the standards applicable to 18 U.S.C. § 881(a)(4)(C) are relevant to our inquiry, we cannot find that One 1973 Rolls Royce demonstrates that Rule 8.4(d) does not apply here. Further, none of the materials that the Government cites relate to prosecutorial conduct; we find this significant, since our concerns for prejudice to the administration of justice in this case arise from the fact that it was an Assistant United States Attorney who engaged in the behavior.*fn14

We now move to consider the Government's arguments that, irrespective of whether a Rule violation occurred, disqualification is not proper here.

Absence of Trial Prejudice to Whittaker

The Government first maintains that an ethical violation does not support disqualification "absent prejudice to the opponent or to the integrity of the justice system," Gov't's Mem. of Law at 22. In particular, the Government argues that it is not our function to enforce disciplinary rules, but instead we may only disqualify counsel where the misconduct has affected the matter before the court. In support of this contention, the Government cites In re Estate of Pedrick, 482 A.2d 215 (Pa. 1984), in which the Pennsylvania Supreme Court held that while trial courts could disqualify counsel "in order to protect the rights of litigants to a fair trial", trial courts were not to "use the [Rules of Professional Conduct] to alter substantive law or to punish attorney misconduct," Pedrick, 482 A.2d at 221.

We cannot find that this argument demonstrates clear error in our findings. As we stated in our June 12, 2001 Memorandum, our power to disqualify counsel arises not from the Pennsylvania Supreme Court or the Pennsylvania Rules of Professional Conduct*fn15 but rather from the "inherent powers of any federal court" to supervise "the admission and discipline of attorneys practicing before it," In re Corn Derivatives Antitrust Litig., 748 F.2d 157, 160 (3d Cir. 1984).*fn16 The Government's reliance on the standards applicable to Pennsylvania state courts is therefore misplaced.*fn17

Effect of Possible Testimony at Trial

By a United States Attorney's Office Employee

The Government next argues that the fact that AUSA Reed may be called to testify at trial does not support disqualification pursuant to Rule 3.7, citing, inter alia, to United States v. Aponte, No. 96-137-01, 1996 WL 612839 at *2-*3 (E.D.Pa. Oct. 25, 1996). The references to Rule 3.7 in our June 12, 2001 were restricted to one in a description of Whittaker's contentions, Mem. of June 12, 2001 at 4, and to a remark that any Rule 3.7 problem was avoided by our decision to disqualify the United States Attorney's Office, Mem. of June 12, 2001 at 22 n. 17. As our decision to disqualify was not predicated on the Rule 3.7 issue, we cannot see how the Government's argument here serves to demonstrate clear error of law or fact in our holding, and we will therefore move on.

Separation of Powers

The Government's last argument in seeking reconsideration is that "except in the most extraordinary circumstances," we "may not disqualify a prosecutor absent actual prejudice to the defendant, lest separation of powers be offended," Gov't's Mem. of Law at 29.*fn18 The Government contends that our concerns that an independent review of the case is necessary to ensure that this action should be prosecuted, Mem. of June 12, 2001 at 20, 22, do not permit us to order the disqualification of the United States Attorney's Office. In particular, the Government argues*fn19 that the United States Attorney is in fact committed to prosecuting this case and that this decision is properly left to the sole discretion of the United States Attorney. The Government cites to several Supreme Court decisions in support of this, including Bordenkircher v. Hayes, 434 U.S. 357, 364, 98 S.Ct. 663, 668 (1978), Wayte v. United States, 470 U.S. 598, 607, 105 S.Ct. 1524, 1530 (1985), and Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 807, 107 S.Ct. 2124, 2137 (1987), arguing that "so long as the prosecutor has probable cause to believe that the accused committed an offense . . . the decision . . . to prosecute and what charge to file or bring before a grand jury, generally rests entirely in his discretion," Bordenkircher, 434 U.S. at 364, 98 S.Ct. at 668, that "the decision to prosecute is particularly ill-suited to judicial review," Wayte, 470 U.S. at 607, 105 S.Ct. at 1530, and that decisions such as those regarding targeting of investigations and the bringing of charges are "made outside the supervision of the court," Young, 481 U.S. at 807, 107 S.Ct. at 2137. The Government further notes that there may be disputes within a United States Attorney's Office regarding a case, but that this process is not subject to judicial review and a court may not second-guess the United States Attorney's final decision.*fn20

These arguments do not demonstrate clear error in our prior holding. Most fundamentally, our disqualification Order, which directs the Government to appoint a special attorney to evaluate and prosecute the case, does not invoke any type of judicial review over the discretionary functions of the prosecutors. Rather, we seek to ensure that this discretion is properly exercised by an attorney unconnected with the breaches that have occurred in this case. This could be accomplished by the Attorney General's appointment of a special prosecutor from a United States Attorney's Office from, say, one of the Districts contiguous with this one — hardly an act of judicial intrusion into the Article II Branch. While it is true that the deliberative process inside the United States Attorney's Office remains generally outside judicial review, in this case we face the unusual situation where an evident difference of opinion within the office*fn21 has become a matter of the public record, and this circumstance warrants some level of judicial attention and the limited relief we have imposed here.*fn22

Finally, the Government argues that through our disqualification order we wrongly take on "the executive's prerogative to prosecute crime as it sees fit," and "upset[s] the common and beneficial practice in which prosecutors who have pursued a broad set of crime continue to pursue all related matters to their conclusion," Gov't's Mem. of Law at 32, and that consequently our Order violates the Constitutional separation of powers. In support of this position, the Government cites a number of federal cases from other Circuits and Districts. It argues that disqualification "is a drastic measure which courts should hesitate to impose except when absolutely necessary," Matter of Grand Jury Subpoena of Rochon, 873 F.2d 170, 176 (7th Cir. 1989), and that "[a] federal court that imposes sanctions on executive conduct that is otherwise permitted by the Constitution, a federal statute or a rule will most likely be invading the executive sphere," Rochon, 873 F.2d at 174 (quoting United States v. Gatto, 763 F.2d 1040, 1046 (9th Cir. 1980)). The Government also cites to several district court cases for the proposition that a showing of actual prejudice is necessary to trigger disqualification, e.g. United States v. Santiago-Rodriguez, 993 F. Supp. 31 (D.P.R. 1998), Bullock v. Carver, 910 F. Supp. 551 (D.Utah 1995).

While we would not dispute that the instant situation raises separation of powers concerns at the margin, the Government's argument on separation of powers grounds fails to demonstrate clear error in our prior holding. First, the cases the Government cites certainly do not hold that a district court may never disqualify a United States Attorney's Office, but instead mandate that caution is warranted in such circumstances. In this vein, none of the cases the Government cites addresses a situation where the Court found that an Assistant United States Attorney had violated state rules of professional conduct, as we have here. Consequently, our decision to disqualify is not clearly at odds with the principles set forth in Rochon and the other cited cases.

Moreover, all of these cited cases predate the enactment of 28 U.S.C. § 530B, the statute that renders Government attorneys subject to state disciplinary rules. While this legislation does not of course serve to mitigate Constitutional separation of powers concerns, its provisions will doubtless increasingly give rise to cases, like this one, in which the tension between Court's inherent power to discipline attorneys and those Constitutional concerns is more apparent than it has been previously. We might therefore expect the McDade Amendment to alter the playing field with respect to such concerns, and consequently pre-McDade Amendment jurisprudence on the disqualification of Government attorneys is not clearly applicable to the post-McDade Amendment landscape.

Finally, we observe that none of the cases the Government cites is controlling precedent from our Court of Appeals or the Supreme Court. Therefore, to the extent our decision cannot be completely reconciled with their holdings, this fact alone does not demonstrate the existence of clear error in our prior holding.

Conclusion

We reiterate that the conduct of the United States Attorney's Office in this episode was extraordinary. Indeed, it was the first incident of its kind involving that Office that we have seen in the hundreds of criminal cases entrusted to us. It may be that since in general the conduct of the United States Attorney's Office is exemplary, and is on the whole better than that of the standard run of counsel appearing before us, those instances in which the Office falls short, like that we face here, are perhaps thrown into sharper relief. However, we do not find this possibility troublesome given the responsibilities of that Office and the weight that this Court typically accords to representations of Assistant United States Attorneys. Indeed, as implied in our June 12 Memorandum, the enviable record of those prosecutors, coupled with the high stakes their cases invariably involve, subject them in the post-McDade ethical world to the highest standards under state professional conduct rules, a result we should think the Government, on reflection, would welcome.

We will deny the Government's motion for reconsideration.

ORDER

AND NOW, this 11th day of July, 2001, upon consideration of the Government's motion for reconsideration (docket number 49), and defendant's response thereto, and for the reasons stated in the accompanying Memorandum, it is hereby ORDERED that the Government's motion is DENIED.


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