Doherty v. American Motors Corp.

Decision Date24 February 1984
Docket NumberNo. 80-1655,80-1655
Citation728 F.2d 334
PartiesAlbert J. DOHERTY, Plaintiff-Appellee, v. AMERICAN MOTORS CORPORATION, a foreign corporation, Defendant-Appellant.
CourtU.S. Court of Appeals — Sixth Circuit

Dennis M. Haffey, Brian M. Haffey, George Bashara argued, Detroit, Mich., for defendant-appellant.

William J. Weinstein argued, Joel Lee Hoffman, Weinstein, Kroll & Gordon, Southfield, Mich., for plaintiff-appellee.

Before EDWARDS and ENGEL, Circuit Judges, and WEICK, Senior Circuit Judge.

ENGEL, Circuit Judge.

The record in the jury trial from which the defendant American Motors Corp. (AMC) appeals demonstrates in classical fashion the moral and ethical problems which arise when a corporation and its officers allow themselves to become enmeshed in unlawful activities and, once discovered, seek to extricate themselves. The hoped-for gains, in retrospect, seem paltry indeed, compared to the ultimate cost in effort, money, and reputation. A major American corporation found itself indicted for violation of federal law. It was obliged by the circumstances to enter negotiated pleas and, in the civil litigation reflected in this appeal, to confront an adverse jury award in favor of the plaintiff which totaled in excess of $1,000,000. Because we hold that the plaintiff failed to present prima facie proof of conspiracy under 42 U.S.C. Sec. 1985(2) (Supp. V 1981), we vacate the judgment entered upon the general jury verdict and remand for further proceedings.

To give focus to the issues, the facts will be initially addressed in summary fashion with more detailed development included in the discussion of the individual issues which have been raised on appeal.

I.

Plaintiff Albert J. Doherty joined American Motors Corporation in 1961 as the Director of AMC's Far Eastern operations. Doherty's initial function was to supervise all AMC distributors and dealers in the area, and he was stationed from time to time in several different locations throughout the Far East. In 1969 or 1970, however, Doherty's responsibilities were restricted to overseeing sales to the United States military forces in the Far East. He operated primarily out of the Philippines.

On August 13, 1973, American Motors Corporation, two of its employees, Doherty and John Houtaling, and three others were indicted in the United States District Court for the Western District of Tennessee. The indictment charged AMC, Houtaling, and Doherty with bribery of, and conspiracy to bribe, a United States government official in connection with the sale of nineteen automobiles to the United States Naval Base at Sangley Point in the Philippines. On December 16, 1974, after trial had been in progress for one week, AMC, Doherty, and Houtaling each entered negotiated pleas of nolo contendere. These pleas were not opposed by the government, and thereafter United States District Judge Bailey Brown accepted the pleas and imposed fines of $15,000 on AMC and $3,000 each on Doherty and Houtaling. AMC paid both its own fines and those imposed on the two individual defendants.

Doherty continued in the employment of AMC until being involuntarily "retired" by AMC five months later. In August, 1975, approximately nine months after his plea and sentencing, Doherty moved to set aside the plea of nolo contendere in the district court claiming that his plea was not freely and voluntarily made but was the result of coercion, fraud and misrepresentation, duress, intimidation, and undue influence on the part of AMC. After a hearing on October 17, 1975, Judge Brown denied the motion, expressing his opinion that the nolo plea was voluntarily made, and finding that its primary inducement was Doherty's concern for the possibility of a prison sentence if the trial continued and he was convicted. Although Doherty appealed this decision to this court, the appeal was dismissed on May 24, 1976 for want of prosecution. Thereafter, Doherty filed a complaint in the United States District Court for the Eastern District of Michigan alleging that his nolo plea was induced by threats, coercion and intimidation from AMC. Federal question jurisdiction was premised upon claims of an AMC asserts that the district court's refusal to set aside Doherty's nolo contendere plea in the criminal bribery proceedings collaterally estopped him from challenging the voluntariness of his plea in these proceedings. Thus, AMC maintains, the district court here should have directed a verdict in AMC's favor on the basis that the voluntariness of Doherty's plea was established as a matter of law. AMC also claims that each of Doherty's other theories of recovery is flawed. Particularly, it claims that his cause of action under 42 U.S.C. Sec. 1985(2) must fail for three reasons. First, there is no proof of racial or other class-based animus. Second, the conspiracy requirement of "two or more persons" under the statute cannot be satisfied. Third, the actual conduct proved does not amount to an unlawful deterrence from "attending or testifying" in court for the purposes of the civil rights statute. AMC also asserts that Doherty's purported causes of action under common law tort, conspiracy and fraud must fail for want of sufficient proof. Finally, AMC complains that the award of exemplary damages was improper under Michigan law, both because it was excessive and because the damages were punitive and not compensatory in nature.

unlawful conspiracy to deter Doherty from attending and testifying truthfully as a witness and a party in a United States court, in violation of the Civil Right Act of 1861. 42 U.S.C. Sec. 1985(2). Doherty also invoked the pendent jurisdiction of the court over Michigan state law claims of tort, conspiracy, and fraud. After an extensive trial, the jury returned a verdict in favor of Doherty and against AMC in the amount of $149,000 actual damages and $910,600 exemplary damages. This appeal followed.

II.

AMC's first defense on appeal is that under the doctrine of collateral estoppel, Doherty was prohibited from asserting in this action that his earlier plea of nolo contendere was coerced and, hence, involuntary.

AMC concedes that the plea itself is not a bar to Doherty's claims. On the contrary, a plea of nolo contendere is a confession only for the purpose of the criminal prosecution and does not bind the defendant in a civil action for the same wrong. Berlin v. United States, 14 F.2d 497 (3d Cir.1926); United States v. One Chevrolet Stylemaster Sedan, 91 F.Supp. 272, 275 (D.Colo.1950). With certain exceptions not applicable here, Rule 410 of the Federal Rules of Evidence further provides that evidence of a plea of nolo contendere is not admissible against the defendant who made the plea. As the Notes of the Advisory Committee in the proposed rules observe:

Pleas of nolo contendere are recognized by Rule 11 of the Rules of Criminal Procedure, although the law of numerous states is to the contrary. The present rule gives the effect of the principal traditional characteristic of the nolo plea, i.e., avoiding the admission of guilt which is inherent in pleas of guilty.... Exclusion of offers to plead guilty or nolo has as its purpose the promotion of disposition of criminal cases by compromise ... (citations omitted).

Fed.R.Evid. 410 advisory committee note.

AMC does argue, however, that the issues raised by Doherty in this civil action were already adjudicated in the criminal action. In denying AMC's motion for summary judgment in the district court, District Judge John Feikens correctly analyzed this argument as follows:

Defendant urges in its motion that, while the plea of nolo contendere itself is not a bar to plaintiff's claims, the denial of the motion to set aside the plea does operate as collateral estoppel. It contends that the issues of coercion, duress, fraud, and voluntariness were fully litigated and adjudicated by the court in denying the motion. I find it unnecessary to determine what issues were distinctly raised and directly determined by the court in denying the motion, because the distinctly different standard of proof We agree.

in that proceeding renders the doctrine of collateral estoppel inapplicable.

Judge Feikens continued his explanation by observing that it is well established that different standards of proof may render the doctrine inapplicable in a subsequent case even between the same parties. See United States v. National Association of Real Estate Boards, 339 U.S. 485, 492-93, 70 S.Ct. 711, 715-716, 94 L.Ed. 1007 (1950); Polcover v. Secretary of the Treasury, 477 F.2d 1223 (D.C.Cir.) cert. denied, 414 U.S. 1001, 94 S.Ct. 356, 38 L.Ed.2d 237 (1973). See also 1B J. Moore, Moore's Federal Practice, 0.418 (2d ed. 1983). In ruling that different standards of proof applied to the setting aside of a nolo plea and to the establishment of whether the act of pleading nolo contendere was voluntary, we note that the burden of proof upon the plaintiff was only to establish such duress, coercion, or involuntariness by a preponderance of the evidence. While the authorities differ in their description of the burden of proof upon a moving party to set aside a plea of nolo contendere after it has been accepted, the cases, as pointed out by Judge Feikens, generally rely on Federal Rule of Criminal Procedure 32(d) which provides:

(d) Withdrawal of Plea of Guilty.

A motion to withdraw a plea of guilty or nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea.

Thus, under Rule 32(d) it is clear that the burden is upon the movant to establish that manifest injustice has occurred. See United States v. Michaelson, 552 F.2d 472 (2d Cir.1977); Sherburne v. United States, 433 F.2d 1350 (8th Cir.1970); United States v. Giuliano, 348 F.2d 217 (2d Cir.1965)....

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