The opinion of the court was delivered by: Eduardo C. Robreno, J.
I. BACKGROUND................................................ 2 II. DEFENDANTS' JOINT MOTION TO LIMIT THE SCOPE OF RETRIAL.... 6 A. Constructive Amendment .................................. 7 1. Legal Standard ......................................... 7 2. Bribery Theory of Honest-Services Fraud ................ 9 3. Potential Real Estate Commissions as Things of Value .. 15 B. Double Jeopardy and Collateral Estoppel ................ 18 1. Legal Standard ........................................ 21 2. Rearguing Defendants' Criminal Intent ................. 22 3. Rearguing the Issues as Overt Acts of Conspiracy ...... 31 4. Hardeep Chawla's $1000 Check .......................... 35 III. CONCLUSION............................................... 36
Christopher Wright ("Defendant Wright") was chief of staff to former
Philadelphia City Councilman At-Large John "Jack" Kelly.*fn2
Ravinder Chawla ("Defendant Chawla") was a principal
contributor to the election campaign of Councilman Kelly. Andrew
Teitelman ("Defendant Teitelman") was a lawyer representing Defendant
Chawla's businesses who actively participated in Councilman Kelly's
election campaign (Defendant Wright, Defendant Chawla, and Defendant
Teitelman, collectively, "Defendants").
Defendants were charged in a fourteen-count Indictment. Following a jury trial, the jury returned the following verdict. All Defendants were convicted of Count One, which charged them with conspiracy to commit honest-services fraud. Although all three were charged in Count Three, honest-services wire fraud, which charged them with devising a scheme to exchange a thing of value for Defendant Wright's official action in connection with the Philadelphia River City Development Project ("River City Project"), Defendant Chawla alone was convicted. The scheme allegedly involved Defendants Chawla and Teitelman seeking Defendant Wright's assistance in thwarting the Philadelphia City Council's proposed building-height-restriction ordinance. The scheme also included an email from Defendant Chawla to Defendants Wright and Teitelman offering to engage Defendant Wright as "our consultant" to handle liaison work regarding the River City Project.
All Defendants were convicted of Count Ten, honest-services mail fraud, which charged them with devising a scheme to exchange Defendant Teitelman's free legal services regarding Defendant Wright's eviction for his official acts. The scheme involved a letter, which included an answer to Defendant Wright's eviction complaint that Defendant Teitelman's law-firm associate mailed to a lawyer at Premier Realty Group ("PBRG"), the real estate company pursuing Defendant Wright's eviction. Defendants Teitelman and Chawla allegedly knew about and approved of the scheme.
All Defendants were convicted of Count Twelve, traditional mail fraud, which charged them with devising a scheme to deprive PBRG of money and property by concealment. The scheme involved Defendants Chawla and Teitelman arranging to provide Defendant Wright the free use of an apartment and associated parking space. The mailing alleged in this count was the same discussed above regarding Count Ten.
Defendants Chawla and Teitelman were acquitted of Count Three; and all Defendants were acquitted of Counts Two and Four through Nine, honest-services wire fraud; as well as Count Eleven, honest-services mail fraud. Defendant Chawla was acquitted of Count Thirteen, bribery, and Defendant Wright was acquitted of Count Fourteen, also bribery.*fn3
The Court then sentenced Defendants to terms of imprisonment as follows: Defendant Wright received forty-eight months, Defendant Chawla received thirty months, and Defendant Teitelman received twenty-four months. Defendants appealed. After sentencing and while Defendants' appeal was pending, the Supreme Court decided Skilling v. United States, 130 S. Ct. 2896 (2010), wherein the Court significantly reduced the scope of the honest-services-fraud statute codified at 18 U.S.C. § 1346. Specifically, the Skilling Court held that the statute only covered bribery and kickback schemes. Id. at 2927-35. The Court found that honest-services-fraud theories based on a public servant's failure to disclose a conflict of interest resulting in personal gain were impermissible, because they rendered the statute unconstitutionally vague. Id.
Applying Skilling to this case, the Third Circuit first found that the
evidence was sufficient to sustain all of
Defendants' convictions. United States v. Wright, 665 F.3d 560, 570,
575 (3d Cir. 2012). However, the Third Circuit interpreted Skilling to
render the Court's honest-services-fraud jury instruction, which
instructed the jury that liability may lie under either a
"conflict-of-interest" theory or "bribery" theory, incorrect. Id. at
570-72. Furthermore, because the evidence of honest-services fraud
overlapped with the evidence submitted on the traditional fraud
counts, the Third Circuit found that "prejudicial spillover" tainted
the traditional fraud convictions. Id. at 577. Therefore, the Third
Circuit vacated the four counts of conviction and remanded the case
for a new trial. Id. at 577-78. Defendants petitioned for panel
rehearing, which the Third Circuit denied. See United States v.
Wright, No. 09-3467 (3d Cir. Mar. 2, 2012) (order denying petition for
In preparation for retrial and with the view of narrowing the proofs that the Government may offer at that time, Defendants filed the instant Motion to Limit the Scope of Retrial (ECF No. 360). The Government responded (ECF No. 361), and, shortly thereafter, Defendants filed a reply memorandum (ECF No. 363). On January 18, 2013, the Court held a hearing to consider the parties' arguments. The matter is now ripe for disposition.
II. DEFENDANTS' JOINT MOTION TO LIMIT THE SCOPE OF RETRIAL
Defendants raise three arguments in their joint motion. First, Defendants contend that the Government cannot retry them on a bribery theory of honest-services fraud because doing so would constructively amend the Indictment.*fn4 Second, Defendants contend that the Government should be precluded from arguing that any potential real estate commissions were "things of value" offered to Defendant Wright by his co-defendants, because such an argument would also constructively amend the Indictment. And third, Defendants contend that the Double Jeopardy Clause, specifically collateral estoppel, prohibits the Government from relitigating nine issues that the jury necessarily decided in the first trial.
For the reasons stated below, the Court will reject the constructive amendment claims, prohibit relitigation of the $1000 check as an overt act, and permit relitigation of the remaining issues.
A. Constructive Amendment
A defendant may not be convicted of an offense different from that charged in the indictment. "An indictment is constructively amended when evidence, arguments, or the district court's jury instructions effectively 'amend the indictment by broadening the possible bases for conviction from that which appeared in the indictment.'" United States v. McKee, 506 F.3d 225, 229 (3d Cir. 2007) (quoting United States v. Lee, 359 F.3d 194, 208 (3d Cir. 2004)); see also United States v. Daraio, 445 F.3d 253, 259 (3d Cir. 2006) (holding that a constructive amendment occurs when the charging terms of an indictment are altered during trial without a formal amendment). A constructive amendment violates the Fifth Amendment's guarantee of indictment by grand jury. McKee, 506 F.3d at 229. The key analysis is "whether the defendant was convicted of the same conduct that was charged in the indictment"; if he "is convicted of the same offense that was charged in the indictment, there is no constructive amendment." United States v. Vosburgh, 602 F.3d 512, 532 (3d Cir. 2010).
A variance, by comparison, occurs when "the charging terms [of the indictment] are unchanged, but the evidence at trial proves facts materially different from those alleged in the indictment." United States v. Castro, 776 F.2d 1118, 1121 (3d Cir. 1985) (quoting United States v. Somers, 496 F.2d 723, 743 (3d Cir. 1974)). Although the presumption of prejudice applies when assessing a constructive amendment, the harmless-error standard applies to variances in an indictment. McKee, 506 F.3d at 231 n.7 (quoting United States v. Syme, 276 F.3d 131, 154 (3d Cir. 2002)). The defendant has the burden of proving that the variance "surprised or otherwise . . . prejudiced the defense." Daraio, 445 F.3d at 262.
Under Rule 7(c)(1) of the Federal Rules of Criminal Procedure, an "indictment . . . must be a plain, concise, and definite written statement of the essential facts constituting the offense charged . . . [and cite to] the statute . . . that the defendant is alleged to have violated." Fed. R. Crim. P. 7(c)(1). There are two constitutional requirements for an indictment: "'first, [that it] contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, [that it] enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense.'" United States v. Resendiz-Ponce, 549 U.S. 102, 108 (2007) (quoting Hamling v. United States, 418 U.S. 87, 117 (1974)). An indictment complies with Rule 7(c)(1), provided that it sets forth sufficient factual detail to allow a defendant to prepare his defense even in the absence of explicitly alleging all of the elements of the offense. United States v. Hodge, 211 F.3d 74, 76-77 (3d Cir. 2000); Gov't of the V.I. v. Moolenar, 133 F.3d 246, 249 (3d Cir. 1998).
2. Bribery Theory of Honest-Services Fraud Defendants argue that the language of the Indictment, as it relates to honest-services fraud, does not charge a bribery theory of honest-services fraud. Specifically, Defendants note that Count One, the conspiracy count, fails to mention bribery at all and instead alleges that Defendants Chawla and Teitelman provided benefits to Defendant Wright "in order to gain his assistance on their development projects and other issues." Indictment ¶ 15, ECF No. 1. Defendants argue that "in order to" is not the proper charging language for bribery, claiming that such language only alleges motive or purpose and not intent on the part of Defendants Chawla and Teitelman. Defendants compare this language to the Indictment's description of the $1000 check that Hardeep Chawla allegedly gave to Defendant Wright as a "bribe," claiming that the different language signals the Government's intent not to include a bribery theory of honest-services fraud in the Indictment.
In support, Defendants cite United States v. Bryant, 655 F.3d 232 (3d Cir. 2011), and United States v. Kemp, 500 F.3d 257, 281 (3d Cir. 2007), as examples of the Third Circuit's construction of indictment language "in exchange for" or "intending to influence" as adequate descriptions of the payor's intent in a bribery relationship. Thus, Defendants argue that an indictment must include the term "exchange," and that "in order to" is insufficient. Furthermore, Defendants argue that the Indictment says nothing about Defendant Wright's motive, purpose, or intent as the recipient of benefits.*fn5
The Government responds that the term "in order to" is functionally the same as Defendant's preferred language-"in exchange for" or "intending to influence." The Government also cites the Indictment's language that Wright "undertook official acts to benefit defendants" as sufficiently alleging his improper intent. Indictment ¶ 17. The Government concludes that arguing a bribery theory of honest-services fraud would not constitute a constructive amendment to the Indictment.
Bribery involves a "quid pro quo-a specific intent to give or receive something of value in exchange for an official act." United States v. Sun-Diamond Growers of Cal., 526 U.S. 398, 404-05 (1999). However, "[t]he quid pro quo can be implicit, that is, a conviction can occur if the Government shows that [the defendant] accepted payments or other consideration with the implied understanding that he would perform or not perform an act in his official capacity . . . ." United States v. Antico, 275 F.3d 245, 257 (3d Cir. 2001), abrogated on other grounds by Skilling, 130 S. Ct. at 2928. "The official and the payor need not state the quid pro quo in express terms, for otherwise the law's effect could be frustrated by knowing winks and nods." Evans v. United States, 504 U.S. 255, 274 (1992). Furthermore, under the "stream of benefits" theory of bribery, "it need not be shown that any specific benefit was given in exchange for a specific official act." Kemp, 500 F.3d at 281.
Here, the Indictment satisfactorily alleges a bribery theory of honest-services fraud. Contrary to Defendants' argument, in approving an indictment's language of an "exchange" as adequately describing a payor's specific intent in Kemp and Bryan, the Third Circuit did not require that talismanic language be used in an indictment. Instead, the court looked at the indictment as a whole to determine whether "the factual allegations . . . were sufficient to alert [the ...