U.S. v. Cohen

• Citation: 510 F.3d 1114
• Decision Date: 26 December 2007
• Docket Number: No. 06-10145.,No. 06-10199.,No. 06-10201.,06-10145.,06-10199.,06-10201.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lawrence COHEN, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Irwin A. Schiff, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Cynthia Neun, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

510 F.3d 1114

UNITED STATES of America, Plaintiff-Appellee, v. Lawrence COHEN, Defendant-Appellant.

United States of America, Plaintiff-Appellee, v. Irwin A. Schiff, Defendant-Appellant.

United States of America, Plaintiff-Appellee, v. Cynthia Neun, Defendant-Appellant.

No. 06-10145.

No. 06-10199.

No. 06-10201.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 5, 2007.

Filed December 26, 2007.

Chad A. Bowers (argued), Las Vegas, NV, for appellant, Lawrence Cohen.

Michael V. Cristalli (argued), Las Vegas, NV, for appellant, Cynthia Neun.

Sheldon R. Waxman (argued), South Haven, MI, for appellant, Irwin Schiff.

Mark Determan (argued), United States Department of Justice, Tax Division, Washington, D.C., for the appellee.

Appeal from the United States District Court for the District of Nevada; Kent J. Dawson, District Judge, Presiding. D.C. No. CR-04-00119-KJD.

Before: SIDNEY R. THOMAS, RICHARD C. TALLMAN, and SANDRA S. IKUTA, Circuit Judges.

TALLMAN, Circuit Judge:

These consolidated appeals follow the convictions and sentences of a well-known recidivist tax protestor, Irwin Schiff, and two of his acolytes, Cynthia Neun and Lawrence Cohen. After Schiff's last release from prison in 1991 for income tax evasion, he opened a store in Las Vegas, Nevada, where he sold books, audio tapes, videos and instructional packages, many created by him, explaining how to "legally stop paying income taxes."¹ Cohen and Neun worked at the store, and, together with Schiff, they provided "consultation services" to clients who wished to avoid paying federal income taxes. They encouraged their clients to file "zero returns," federal individual income tax returns containing a zero on every line related to income and expenses, and, in most cases, seeking an improper refund of all federal income taxes withheld during the tax year for which it was filed.

Following a twenty-three day joint trial in which Schiff represented himself, the jury returned guilty verdicts with respect to many of the counts in the indictment. In particular, Cohen was convicted of one count of aiding and assisting in the filing of a false federal income tax return in violation of 26 U.S.C. § 7206(2), for which he received a thirty-three month sentence.² At trial, the district court summarily convicted Schiff of fifteen counts of criminal contempt pursuant to 18 U.S.C. § 401³ based on his unruly courtroom behavior. Schiff's total sentence for those convictions was twelve months in prison to be served consecutively to his tax evasion and conspiracy sentence.

Cohen argues that his conviction must be overturned because the district court wrongfully excluded the expert testimony of his psychiatrist who would have offered evidence of Cohen's mental state. We agree, and we reverse Cohen's conviction, vacate his sentence, and remand for a new trial.

Schiff challenges the contempt convictions and the resulting sentences. We vacate the contempt convictions due to the district court's failure to properly file contempt orders for each of those convictions as required by Federal Rule of Criminal Procedure 42(b) and our precedent. We remand to allow the district court to file those orders in proper form, to then reinstate the contempt convictions and reimpose punishment for Schiff's contumacious behavior.

I

A

Schiff's convictions for criminal contempt arose primarily from his refusal to heed repeated warnings by the trial judge to cease arguing to the jury his erroneous views of the law. Schiff often instructed witnesses to read passages from his books explaining his characterization of the voluntary nature of the federal income tax. For example, one witness read, "There is no question that it is . . . all correct. Paying and filing income tax[ ] are, by law, voluntary." Schiff frequently couched misstatements of the law in questions to witnesses. For example, Schiff asked one witness, "Were you aware that none of those sections [of the Internal Revenue Code] said you . . . were required to file a tax return?" On another occasion, Schiff asked a witness whether she was aware that "there's no provision in the law that allows the IRS to put on liens[.]" Schiff also asked a witness whether a passage from one of Schiff's books "tr[ies] to establish the fact that income in the ordinary sense is not exactly income in the tax sense." Schiff's defiance also took the form of his persistent refusal to cease particular lines of questioning after the district judge had previously ruled them improper and misleading.

During the first eight days of trial, the district judge dealt with Schiff's misconduct by sustaining the government's objections and sometimes explaining to Schiff the legal basis for doing so. Schiff nonetheless persisted. On the ninth day of trial, following yet another transgression, the district judge warned Schiff at a sidebar conference that if his insolence continued, he would risk a contempt citation and sanctions.

Schiff still did not heed the warnings. The next day, Schiff suggested to the jury during his questioning of a witness that the law does not prohibit the concealment of one's assets from the government. He also improperly suggested that the government lacked the power to investigate criminal violations of the Internal Revenue Code. He continued to ask similar questions even after two objections by the government were properly sustained.

At that point, the understandably exasperated district judge summarily held Schiff in criminal contempt and sentenced him to one day in jail, "deferred until the conclusion of this trial. The next time it will double and it will continue to double until you . . . respect the rulings of the Court." Despite fair warning as to the consequences of persisting in this manner, Schiff's contumacious behavior continued, and he was thereafter sanctioned fourteen more times during the trial. On each of these occasions, the district judge simply stated "sanctions" so as not to "let the sanctions overly influence the jury."

At Schiff's post-trial sentencing hearing, the district judge reduced the sentence for ten of the fifteen sanctions to one month each:

So, on the first sanction, it was one day; on the second sanction, it was two days; on the third, four days; on the fourth, eight days; on the fifth, sixteen days for a total of approximately one month cumulatively as of sanction number five. Thereafter, what I have decided to do is impose one month for each successive sanction resulting in a total of twelve months as the sentence for contempt citations during trial.⁴

The district court briefly explained on the record its reasons for remitting this sentence, but did not file contempt orders for any of the convictions. Schiff was not afforded the opportunity to address the court with respect to his contempt convictions. Nor does it appear from the record that the court notified Schiff in advance of the sentencing hearing that his contempt convictions would be addressed.

B

Schiff raises three challenges to his contempt convictions and sentence. First, he argues that the district court erred by failing to file contempt orders as required by Federal Rule of Criminal Procedure 42(b). Second, he asserts that the sentence violates his right to due process under the Fifth Amendment because he did not receive notice or an opportunity to be heard at the post-trial sentencing hearing. Third, he maintains that the sentence violated his Sixth Amendment right to a trial by jury because his sentence exceeded six months. We address each of these arguments in turn.

We review summary contempt convictions for abuse of discretion. United States v. Flynt, 756 F.2d 1352, 1362 (9th Cir.), modified, 764 F.2d 675 (9th Cir. 1985). Federal Rule of Criminal Procedure 42(b) authorizes a district court to "summarily punish a person who commits criminal contempt in its presence if the judge saw or heard the contemptuous conduct and so certifies . . . . The contempt order must recite the facts, be signed by the judge, and be filed with the clerk." (emphasis added).

Here, the district court did not file the requisite contempt orders. The government argues that we should excuse the oversight because the district court "made the reasons for the sanctions abundantly clear on the record." The government relies on United States v. Marshall, 451 F.2d 372, 377 (9th Cir.1971), for the proposition that the "[t]he function of the certificate [of contempt] is not to give notice to the defendant or to frame an issue to be tried, but solely to permit an appellate court to review the judge's action." In the government's view, where, as here, the district court enunciates on the record the basis for the summary contempt conviction, a separate certificate is not required.

The government is mistaken. Our case law establishes that the district judge must file a contempt order setting forth in detail the factual basis of the contempt conviction and certifying that the district judge personally witnessed the conduct giving rise to the conviction. See id. at 374-75 (emphasizing that contempt orders are "`more than a formality,'" and finding the contempt orders at issue insufficient because they contained "[c]onclusory language and general citations to the record"); see, e.g., In re Contempt of Greenberg, 849 F.2d 1251, 1254 (9th Cir.1988) (rejecting the government's argument that the district judge's failure to certify that he "`saw or heard'" the conduct giving rise to the contempt conviction could be cured by looking to the trial transcript and inferring that the court must have seen or heard the conduct). The government's recommendation that we forgive the district court's failure to issue contempt orders and accept oral findings as a substitute runs contrary to the explicit language of Rule 42(b) as well as every case of which we are aware to have considered this issue. See United States v. Robinson, 922 F.2d 1531, 1534-35 (11th...