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UNITED STATES OF AMERICA v. IAN NORRIS

November 30, 2010

UNITED STATES OF AMERICA
v.
IAN NORRIS



The opinion of the court was delivered by: Eduardo C. Robreno, J.

MEMORANDUM

TABLE OF CONTENTS

I. INTRODUCTION...............................................2

II. BACKGROUND.................................................3

III. MOTION FOR A JUDGMENT OF ACQUITTAL UNDER RULE 29...........6

A. Legal Standard........................................6

B. Discussion............................................8

1. Import of Defendant's Acquittal on the Objects of the Charged Conspiracy...........................9

2. Sufficiency of the Evidence to Establish a Conspiracy Conviction for Either of the Charged Objects.........................................11

i. The Evidence Pertaining to Section 1512(b)(1).................................12

a. Appropriate legal standard............13

b. Sufficiency of the evidence based on the applicable legal standard.............23

ii. The Evidence Pertaining to Section 1512(b)(2)(B)..............................28

3. Validity of the Charge for Which Defendant was Convicted.......................................33

IV. MOTION FOR A NEW TRIAL UNDER RULE 33......................36

A. Defendant's Argument that the Verdict is Against the Weight of the Evidence...............................37

1. Legal Standard..................................37

2. Discussion......................................38

B. Defendant's Argument that Fundamental Errors were Committed During Trial...............................44

1. Legal Standard..................................45

2. Errors in the Jury Instructions....................................45

i. Failure to Identify the Overt Acts Defendant Took in Furtherance of the Conspiracy......47

ii. Alleged Constructive Amendment of the Indictment via the Preliminary

Instructions...............................50

iii. Failure to Give an Instruction on the Right to Withhold Testimony......................53

iv. Alleged Error in the "Nexus" Requirement Instruction................................55

v. Failure to Distinguish in the Instructions Between "Influencing" and "Preventing"...............................57

vi. Failure to Give a Missing Witness Instruction................................60

3. Attorney Testimony in Violation of Defendant's Attorney-Client Privilege.......................63

4. Failure to Comply with Discovery Obligations.....................................70

i. Legal Standard.............................71

ii. Discussion.................................72

5. Prosecutorial Misconduct in the Antitrust Division's Closing Argument and Rebuttal........................................76

i. Reference to Facts Outside the Record.....................................77

ii. Turning the Verdict into a Referendum on the Prosecutor's Work on the Case.......................................80

V. CONCLUSION................................................86

I. INTRODUCTION

Defendant, Ian Norris ("Defendant"), is a national of the United Kingdom who is subject to prosecution in the United States under an extradition agreement. On September 28, 2004, a federal grand jury returned the second superseding indictment ("Indictment") against Defendant. The Indictment followed an investigation of an international conspiracy to fix the price of carbon products. It charged Defendant with four counts: (1) Count One-violating the Sherman Act; (2) Count Two-conspiring, in violation of 18 U.S.C. § 371, to violate 18 U.S.C. § 1512(b)(1) and 18 U.S.C. § 1512(b)(2)(B); (3) Count Three-violating 18 U.S.C. § 1512(b)(1); and (4) Count Four-violating 18 U.S.C. § 1512(b)(2)(B). Because Defendant's extradition order barred prosecution under the Sherman Act, Defendant was only tried on Counts Two, Three, and Four. Following a seven day trial, the jury found Defendant guilty on Count Two, but acquitted Defendant on Counts Three and Four. Presently before the Court is Defendant's motion for a judgment of acquittal or, in the alternative, a new trial.

For the reasons discussed below, the Court will deny Defendant's motion.

II. BACKGROUND

Because the Court has already outlined the background surrounding this case, see United States v. Norris, --- F. Supp. 2d ----, No. 03-632, 2010 WL 2553620 (E.D. Pa. June 22, 2010) ("Norris I"), it is unnecessary to recite those facts at any length. In short, Defendant was charged with obstructing justice in violation of Section 1512(b)(1) and Section 1512(b)(2)(B) and conspiring to do the same:

The Indictment alleges that, in carrying out this conspiracy, the Defendant and his co-conspirators: (1) provided false and fictitious relevant and material information in response to the grand jury investigation; (2) prepared a written "script" which contained false information which was to be followed by anyone questioned by either the Antitrust Division or the federal grand jury; and (3) distributed the script to others who had information relevant to the grand jury investigation with instructions to follow the script when answering questions posed by either the grand jury or the Antitrust Division. Moreover, the Indictment alleges that the conspirators removed, concealed, or destroyed from business files any documents which contained evidence of an anticompetitive agreement or reflected contacts between or among competitors, and persuaded, directed and instructed others to do the same.

Id. at *2. The scripts Defendant participated in creating sought to cast as legitimate price-fixing meetings between Morgan, the carbon products company for whom Defendant served as CEO during the time in question, and three of its competitors; namely, (1) Carbone; (2) Schunk; and (3) Hoffman.

Defendant's trial began on July 13, 2010. The Antitrust Division called nine witnesses in support of its case:

(1) Robin Emerson; (2) Melvin Perkins; (3) Donald Muller; (4) Jack Kroef; (5) Thomas Hoffman; (6) Heinz Volk; (7) Sutton Keany; (8) William Macfarlane; and (9) Helmut Weidlich. Perkins, Kroef, Muller, Macfarlane and Emerson were Morgan employees who worked with Defendant in varying capacities. Volk and Weidlich were Schunk employees. Hoffman was responsible for Hoffman's United States operations. Keany was the attorney who conducted an investigation into Morgan's price-fixing involvement after Morgan's United States subsidiary, Morganite, was served with a grand jury subpoena on April 27, 1999.

After the Antitrust Division rested, Defendant moved for a judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29(a). The Court denied Defendant's motion.

Thereafter, Defendant called one witness, Michael Cox, who was also a Morgan employee during the time in question. On July 22, 2010, the Court charged the jury. As to Count Two, the verdict form the Court provided asked the jury to determine whether Defendant was guilty of conspiracy to obstruct justice for either of the following two reasons:

(a) knowingly corruptly persuading or knowingly attempting to corruptly persuade other[] persons with intent to influence their testimony in the grand jury proceeding in the Eastern District of Pennsylvania; or (b) knowingly corruptly persuading or knowingly attempting to corruptly persuade other persons with intent to cause or induce those other persons to destroy or conceal records and documents with the intent to impair the availability of those records and documents for use in the grand jury proceeding. (Doc. no. 149.)

Three business days later, on July 27, 2010, the jury returned a verdict finding Defendant guilty on Count Two of the Indictment. Thus, the jury found Defendant conspired to violate either Section 1512(b)(1) or Section 1512(b)(2)(B). The jury, however, acquitted Defendant on the substantive charges of violating both of those statutes as charged in Counts Three and Four. Pointing to this apparent inconsistency and raising a variety of other issues for this Court to resolve,*fn1 Defendant now moves for a judgment of acquittal under Rule 29 of the Federal Rules of Criminal Procedure or, alternatively, a new trial under Rule 33 of the Federal Rules of Criminal Procedure. The respective arguments are addressed in turn.

III. MOTION FOR A JUDGMENT OF ACQUITTAL UNDER RULE 29

A. Legal Standard

In deciding a motion for a judgment of acquittal under Rule 29, the court views the evidence introduced at trial in the light most favorable to the Government and upholds the jury's verdict so long as any rational trier of fact "'could have found proof of guilt beyond a reasonable doubt based on the available evidence.'" United States v. Smith, 294 F.3d 473, 476 (3d Cir. 2002) (quoting United States v. Wolfe, 245 F.3d 257, 262 (3d Cir. 2001)). "The court is required to 'draw all reasonable inferences in favor of the jury's verdict.'" Id. (quoting United States v. Anderskow, 88 F.3d 245, 251 (3d Cir. 1996)). The court Marson v. Jones & Laughlin Steel Corp., 87 F.R.D. 151, 152 n.* (E.D. Wis. 1980) ("(1) The story of the creation of the world is told in the book Genesis in 400 words; (2) The world's greatest moral code, the Ten Commandments, contains only 279 words; (3) Lincoln's immortal Gettysburg address is but 266 words in length;

(4) The Declaration of Independence required only 1,321 words to establish for the world a new concept of freedom. Together, the four contain a mere 2,266 words." (emphasis added)). Nevertheless, in the interests of justice and given that the Antitrust Division was afforded an opportunity to surreply, the Court will grant Defendant's motion for leave to file the reply memorandum and consider the arguments advanced therein.

Where, as here, the indictment charges a conspiracy to commit several federal crimes, the jury's verdict will be upheld so long as the jury could rationally find the defendant conspired to commit at least one of the crimes at issue. See Griffin v. United States, 502 U.S. 46, 59-60 (1991) (concluding a general guilty verdict on a multiple-object conspiracy charge may stand even if there is insufficient evidence as to one object of the alleged conspiracy); Mod. Crim. Jury Instr. 3d Cir. 6.18.371C ("The government . . . must prove that [the conspirators] agreed to commit at least one of the object crimes . . . ."). Thus, to prevail on his motion for a judgment of acquittal, Defendant must establish that no rational jury could find beyond a reasonable doubt that Defendant conspired to violate either Section 1512(b)(1) or Section 1512(b)(2)(B). That is, that Defendant conspired to either (1) knowingly corruptly persuade or knowingly attempt to corruptly persuade other persons with the intent to influence their testimony in the relevant grand jury proceedings; or (2) knowingly corruptly persuade or knowingly attempt to corruptly persuade other persons with the intent to cause or induce those persons to destroy or conceal records and documents for use in the relevant grand jury proceedings.

B. Discussion

Defendant contends that no rational jury could find him guilty for conspiracy under this standard. Defendant advances three overarching arguments in support of this contention: (1) that Defendant's conviction is inherently suspect in view of the jury's acquittals on the two substantive counts comprising the objects of the conspiracy; (2) that the evidence does not suffice to establish conspiracy convictions for the objects of the charged conspiracy; and (3) that the jury may have convicted Defendant of a legally inadequate charge. These arguments are considered in that order.

1. Import of Defendant's Acquittal on the Objects of the Charged Conspiracy

As a preliminary matter, Defendant argues that "special scrutiny is required where a defendant is acquitted of the substantive charges alleged to be the object of the conspiracy" because such acquittals suggest the government did not fulfil its obligation "to prove the intent necessary to commit the underlying substantive offense." (Def.'s Mot. for Acquittal or, in the Alternative, a New Trial, at 12, 13.) Defendant urges this is particularly true in this case because the overt acts of the conspiracy charged in the Indictment are similar to the facts supporting the substantive offenses for which Defendant was acquitted. In essence, then, Defendant suggests the Court should be skeptical of the jury's verdict because it is inconsistent.

However, it has never been the case that an inconsistent jury verdict is, in itself, cause for judicial skepticism. On the contrary, it is well settled that inconsistent jury verdicts in criminal cases are not subject to a heightened standard of review. See United States v. Powell, 469 U.S. 57, 64 (1984) ("'[T]he most that can be said . . . is that the [inconsistent] verdict shows that either in the acquittal or the conviction the jury did not speak their real conclusions, but that does not show that they were not convinced of the defendant's guilt.'" (quoting Dunn v. United States, 284 U.S. 390, 393 (1932))); see also United States v. Vastola, 989 F.2d 1318, 1329 (3d Cir. 1993) ("[J]ury verdicts cannot be set aside solely on the ground of inconsistency.").

Indeed, in United States v. Powell, the Supreme Court held that acquittals on charges of cocaine possession and conspiracy to possess cocaine did not require reversal of the defendant's conviction for "using the telephone in 'committing and in causing and facilitating'" the conspiracy and possession for which the defendant was acquitted. 469 U.S. at 60, 69. In so holding, the Court noted:

[I]nconsistent verdicts-even verdicts that acquit on a predicate offense while convicting on the compound offense-should not necessarily be interpreted as a windfall to the Government at the defendant's expense. It is equally possible that the jury, convinced of guilt, properly reached its conclusion on the compound offense, and then through mistake, compromise, or lenity, arrived at an inconsistent conclusion on the lesser offense. Id. at 65.

This rule is no different in conspiracy cases. In United States v. Vastine, for example, the defendant attacked the jury's verdict arguing that a conspiracy conviction should be set aside insofar as the defendant was found not guilty on the substantive offenses. 363 F.2d 853, 854 (3d Cir. 1966). As in this case, the conspiracy charge in Vastine charged the defendant with conspiracy to commit the substantive offenses for which the defendant was acquitted. Id. Nevertheless, the Vastine Court refused to reverse the jury's verdict and rejected the defendant's challenge. Thus, the fact that the jury acquitted Defendant on the objects of the charged conspiracy neither triggers any heightened standard of review nor requires this Court to enter a judgment of acquittal.

2. Sufficiency of the Evidence to Establish a Conspiracy Conviction for Either of the Charged Objects

Defendant next argues that the evidence was not sufficient for a rational jury to find Defendant guilty on the conspiracy charge. The grounds raised by Defendant are substantially similar to those made in the Rule 29 motion this Court denied after the Antitrust Division rested. Although the Court's denial of that motion does not preclude the Court from granting the instant Rule 29 motion, see generally Fed. R. Crim.

P. 29, the Court will deny Defendant's motion for the same reasons it denied Defendant's earlier motion for a judgment of acquittal; namely, because the facts at trial sufficiently support the conclusion that Defendant conspired, within the meaning of 18 U.S.C. § 371, to violate either Section 1512(b)(1) or Section 1512(b)(2)(B).

Under Section 371, a defendant is guilty of conspiracy where:

[T]wo or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more such persons do any act to effect the object of the conspiracy . . . . 18 U.S.C. § 371. Accordingly, to convict a defendant of conspiracy, the jury must find beyond a reasonable doubt: (1) "an agreement, either explicit or implicit"; (2) "to commit an unlawful act"; (3) "with intent to commit an unlawful act"; and

(4) "intent to commit the underlying offense." Brodie, 403 F.3d at 134 (internal marks omitted) (quoting United States v. Kapp, 781 F.2d 1008, 1010 (3d Cir. 1986)). With these elements in mind, the analysis that follows considers whether, viewing the facts at trial in the light most favorable to the Antitrust Division, a rational jury could find beyond a reasonable doubt that Defendant conspired to violate either Section 1512(b)(1) or Section 1512(b)(2)(B).

i. The Evidence Pertaining to Section 1512(b)(1) The Indictment charged Defendant with conspiring to violate Section 1512(b)(1) by agreeing with others "to corruptly persuade and attempt to corruptly persuade other persons known to the Grand Jury with intent to influence their testimony in an official proceeding." (Indictment ¶ 13.) Defendant asserts that the evidence was insufficient to establish such a conspiracy because the evidence did not show (1) an agreement to influence grand jury testimony; or (2) the requisite intent to commit the underlying offense. Relying on United States v. Schramm, 75 F.3d 156 (3d Cir. 1996), Defendant principally contends that he could not be guilty because the evidence at trial demonstrated-at most-an agreement to lie to the Antitrust Division or to Morgan's lawyers. This evidence, Defendant reasons, does not suffice because it does not show that Defendant targeted the grand jury investigation in the Eastern District of Pennsylvania. See id. at 159 (holding that a defendant subject to a conspiracy prosecution must know that the agreement "had the specific unlawful purpose charged in the indictment").

Although presented as a novel legal issue for this Court's consideration, Defendant's argument boils down to how one interprets the facts proven at trial: Defendant believes they do not tend to show the conspiracy charged. This belief is rooted, in part, in a faulty conception of what a violation of Section 1512(b)(1) entails. The Court thus begins by laying out the appropriate legal standard.

a. Appropriate legal standard

Defendant's first argument that there was no evidence of an agreement is based on the terms "other persons" and "Grand Jury" as used in the Indictment. (See Indictment ¶ 13.) Emphasizing these terms, Defendant asserts that the evidence at trial merely demonstrated an agreement amongst the co-conspirators as to what they would say if questioned by the Antitrust Division or their own lawyers. Thus, according to Defendant, there was no evidence of an agreement to corruptly persuade other persons to influence the grand jury proceedings in the Eastern District of Pennsylvania.

Defendant's second argument that the evidence did not sufficiently demonstrate the intent necessary to commit the underlying offense is grounded in Defendant's insistence that United States v. Aguilar, 515 U.S. 593 (1995) governs and requires a defendant to know his or her actions will affect an official proceeding for a Section 1512(b) violation to lie.*fn2 In that case, the Supreme Court held that the intent required for a violation of 18 U.S.C. § 1503 was not established where the defendant made a false statement to an investigating agent who had alerted the defendant to the existence of a grand jury investigation. The Court held as much because the connection between the defendant's statement and the grand jury investigation was tenuous; the statement was a mere lie to an investigating agent who had "not been subpoenaed or otherwise directed to appear before the grand jury." Aguilar, 515 U.S. at 601. Applying Aguilar, Defendant contends he could not have had the intent required because he and his co-conspirators did not know their actions would influence grand jury testimony.

As noted, the legal underpinnings upon which both of Defendant's Section 1512(b)(1) arguments depend are flawed. First, Defendant's contention that there was no agreement to corruptly persuade another person to influence grand jury proceedings draws too narrow an interpretation of Section 1512(b)(1). Indeed, by stating the conspiracy charge cannot lie because the evidence merely showed that Defendant and his co-conspirators agreed to mislead the company lawyers or the Antitrust Division, Defendant appears to assume that Section 1512(b)(1) cannot be violated by deliberately using such parties as a conduit to ultimately influence testimony at contemplated grand jury proceedings.*fn3 But there is no reason it could not be.

Ronda, 455 F.3d 1273, 1288 (11th Cir. 2006) (quoting United States v. Veal, 153 F.3d 1233, 1248 (11th Cir. 1998)).

After all, the statute expressly provides "an official proceeding need not be pending or about to be instituted at the time of the offense." 18 U.S.C. § 1512(f)(1). For this reason, a defendant violates Section 1512(b)(1) when he or she corruptly persuades another person with the intent to influence testimony in an official proceeding-not when the testimony of the party in question is actually used in the official proceeding.*fn4 Cf.

United States v. DiSalvo, 631 F. Supp. 1398, 1402 (E.D. Pa. 1986) (discussing statutory change in Section 1512 from proscribing persuasion of "any witness" to "any person"), aff'd, 826 F.2d 1057 (3d Cir. 1987). And, as the statute itself reveals, a defendant who seeks to influence testimony at a proceeding by corruptly persuading that person through another could be guilty under the statute. See 18 U.S.C. ยง 1512(b)(1) (defendant violates the statute if he or she "corruptly persuade[s] ...


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