U.S. v. Kennedy

• Citation: 225 F.3d 1187
• Decision Date: 20 September 2000
• Docket Number: No. 98-1421,98-1421
• Parties: (10th Cir. 2000) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. WILLIAM R. KENNEDY, JR., Defendant-Appellant
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1187

225 F.3d 1187 (10th Cir. 2000)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. WILLIAM R. KENNEDY, JR., Defendant-Appellant.

No. 98-1421

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

September 20, 2000

Appeal from the United States District Court for the District of Colorado (D.C. No. 97-B-816) [Copyrighted Material Omitted] Sean Connelly (Thomas L. Strickland, United States Attorney; Stacey L. Ross, Assistant United States Attorney, with him on the brief), Assistant United States Attorney, Denver, Colorado, for Plaintiff-Appellee.

Craig L. Parshall (James Rouse, Englewood, Colorado; Daniel T. Smith, Denver, Colorado, with him on the briefs), Fredericksburg, Virginia, for Defendant-Appellant.

Before TACHA, HOLLOWAY and BRORBY, Circuit Judges.

BRORBY, Circuit Judge.

Petitioner William R. Kennedy, Jr. appeals from the district court's denial of an evidentiary hearing and other relief regarding Mr. Kennedy's petition to vacate, set aside, or correct his sentence under 28 U.S.C. § 2255, alleging prosecutorial misconduct and ineffective assistance of counsel. We exercise jurisdiction under 28 U.S.C. §§ 1291 and 2253, and deny Mr. Kennedy's request for a certificate of appealability and dismiss his appeal.

I. BACKGROUND

On July 2, 1992, Mr. Kennedy was charged in two separate indictments by a federal grand jury. United States v. Kennedy, 29 F. Supp.2d 662, 665 (D. Colo. 1998). In one of the indictments, the grand jury charged Mr. Kennedy committed mail and wire fraud, racketeering and money laundering, from 1984 through 1988. The grand jury found Mr. Kennedy, acting as the president of Western Monetary Consultants, Inc. (Western), was involved in "a massive Ponzi scheme to defraud numerous precious metals investors." United States v. Kennedy, 64 F.3d 1465, 1468 (10th Cir. 1995). The other indictment charged Mr. Kennedy with crimes arising from his failure to report funds received from Kuwaiti officials. Kennedy, 29 F. Supp.2d at 665-66. These funds were to be used to support efforts to end the occupation of Kuwait by the Iraqi army. Id. at 666. Only the indictment charging Mr. Kennedy with crimes arising from his involvement in the precious metals scheme led to the convictions at issue in this appeal.

In Mr. Kennedy's trial for his involvement in Western's operations, the prosecution argued Mr. Kennedy intended to defraud his customers when, rather than purchasing the precious metals the customers ordered, he (1) lost their money by speculating in the future's market; (2) used it to fund conservative causes and organizations; and (3) spent it on operating expenses, executive compensation and generating new sales. Mr. Kennedy's theory of defense was that he was unable to fill precious metals orders because he had mismanaged the company. After a seven week trial, the jury found Mr. Kennedy guilty of one count of racketeering in violation of 18 U.S.C. §§ 1962(c) and 1963; nine counts of aiding and abetting mail fraud in violation of 18 U.S.C. §§ 2 and 1341; and seven counts of aiding and abetting money laundering in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) & (2). Kennedy, 64 F.3d at 1469; Kennedy, 29 F. Supp.2d at 666. The court sentenced him to twenty years in prison. This court affirmed Mr. Kennedy's conviction on direct appeal, but indicated Mr. Kennedy could pursue his ineffective assistance of counsel claim in a collateral proceeding. Kennedy, 64 F.3d at 1474-75, 1481 (10th Cir. 1995).

Mr. Kennedy subsequently filed the 28 U.S.C. § 2255 petition at issue alleging various claims including ineffective assistance of counsel and claims relating to prosecutorial misconduct. The district court determined all of the claims Mr. Kennedy asserted were procedurally barred except his claims of ineffective assistance of counsel and the prosecutorial misconduct claims relating to the prosecution's alleged intrusion into Mr. Kennedy's relationship with his attorney. As to these remaining claims, the district court denied Mr. Kennedy's request for an evidentiary hearing concluding "the petition, files, and record of this case conclusively demonstrate that he is not entitled to § 2255 relief," and denied his habeas petition. Kennedy, 29 F. Supp.2d at 686. Mr. Kennedy subsequently filed a timely notice of appeal and a request for a certificate of appealability. After oral argument in the present appeal, Mr. Kennedy filed a motion with this court requesting leave to supplement the record on appeal to include an affidavit which was not before the district court.

II. DISCUSSION

A. Motion to Supplement the Record on Appeal

We first address Mr. Kennedy's request to supplement the record before this court. The evidence Mr. Kennedy wishes to include in the record on appeal consists of an affidavit from Keith Danley. In 1989 and 1990, Mr. Danley was a paralegal and law clerk at the law firm of Brown, Arvanitis & McDonnell (Brown & McDonnell), a firm that represented Mr. Kennedy. After taking the bar exam, Mr. Danley left Brown & Donnell and became an employee of Mr. Kennedy in October 1990. In his motion to supplement the record, Mr. Kennedy alleges Mr. Danley acted as his attorney in connection with both civil and the potential criminal matters arising from Mr. Kennedy's actions as president of Western. He asserts the prosecution intentionally invaded that relationship to gather information used against Mr. Kennedy in the criminal prosecution at issue in this case and in formulating its trial strategy. Mr. Kennedy asserts Mr. Danley's affidavit supports these allegations. However, the evidence which Mr. Kennedy seeks to introduce was not a part of the record before the district court.

Federal Rule of Appellate Procedure 10(e) authorizes the modification of the record only to the extent it is necessary to "truly disclose[] what occurred in the district court." Fed. R. App. P. 10(e). This court will not consider material outside the record before the district court. See In re Capital Cities, 913 F.2d 89, 96 (3d Cir. 1990). In Anthony v. United States, 667 F.2d 870, 875 (10th Cir. 1981), cert. denied, 457 U.S. 1133 (1982), we stated Rule 10(e) "allows a party to supplement the record on appeal" but "does not grant a license to build a new record." Id. (citing cases). Because the affidavit was not before the district court, Rule 10(e) does not countenance supplementing the record in this instance. See Allen v. Minnstar, Inc., 8 F.3d 1470, 1475-76 (10th Cir. 1993); United States v. Walker, 601 F.2d 1051, 1054-56 (9th Cir. 1979).

Nevertheless, Mr. Kennedy argues this court should exercise its "inherent equitable authority" to enlarge the record on appeal. Mr. Kennedy points to our decision in Allen v. Minnstar, Inc., as authority for this argument. In Allen, we concluded the district court did not err by denying the appellant's request to add to the record portions of a deposition which were not before the district court when it ruled on the appellees' motion for summary judgment. Allen, 8 F.3d at 1474. In making this determination, we quoted from Jones v. Jackson Nat'l Life Ins. Co., 819 F. Supp. 1385, 1387 (W.D. Mich. 1993). Id. While denying a motion to supplement the record on appeal because the proposed evidence was not before the court at the time its final decision was made, the Jones court noted the court of appeals may have "an 'inherent equitable power' to supplement the record exceeding the power provided in Rule 10(e)," but concluded any such power is not to be exercised by the district court. Jones, 819 F. Supp. at 1387 (citations omitted). Although in Allen we included the above statement from Jones, we did not address the issue of whether this court may, and under what circumstances should, allow the augmentation of the record on appeal to include evidence not before the district court. See Allen, 8 F.3d at 1474-1476. Rather, we simply determined supplementation was not appropriate under the circumstances. See id. Even so, Mr. Kennedy urges us to adopt the reasoning of other courts of appeals concerning the "inherent equitable power" of the court of appeals to supplement the record on appeal.

In support of his argument, Mr. Kennedy urges us to follow the reasoning of the Eleventh Circuit in Ross v. Kemp, 785 F.2d 1467 (11th Cir. 1986), where the court recognized its "inherent equitable authority" to supplement the record on appeal to include material not before the district court. Id. at 1474-75. The Ross court set forth the following non-exclusive list of factors it would consider when deciding to supplement the record on appeal: 1) whether "acceptance of the proffered material into the record would establish beyond any doubt the proper resolution of the pending issue;" 2) whether remand for the district court to consider the additional material would be contrary to the interests of justice and a waste of judicial resources; and 3) whether supplementation is warranted in light of the "unique powers that federal appellate judges have in the context of habeas corpus actions." Id. at 1475. The Ross court determined the movant had not established the first factor, and had not established the threshold issue of whether his failure to present the information before the district court was the result of excusable neglect. Id. at 1476. However, the Ross court concluded based on the facts of that case, the interests of justice demanded remand to the district court to determine whether to allow Mr. Ross to supplement the record and if so, to determine whether an evidentiary hearing was warranted. Id. at 1477-79.¹

We are not persuaded by Mr. Kennedy's argument. Although Ross is not controlling precedent in this circuit, we agree with the Eleventh Circuit that, under some circumstances, we have an inherent equitable power to supplement the record on appeal. However, we conclude the present case is not one which would come under that rare exception to Rule 10(e), and is distinguishable from Ross.

The Ros...