778 F.2d 1454 (10th Cir. 1985), 85-1530, United States v. Carrigan

Docket Nº:85-1530, 85-1536 and 85-1541.
Citation:778 F.2d 1454
Party Name:UNITED STATES, Petitioner, v. Honorable Jim R. CARRIGAN, Respondent. UNITED STATES, Plaintiff-Appellee, v. Daniel G. LANDRY, Defendant-Appellant. UNITED STATES, Plaintiff-Appellant, v. OTIS ELEVATOR COMPANY and Daniel G. Landry, Defendants-Appellees.
Case Date:December 03, 1985
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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778 F.2d 1454 (10th Cir. 1985)

UNITED STATES, Petitioner,


Honorable Jim R. CARRIGAN, Respondent.

UNITED STATES, Plaintiff-Appellee,


Daniel G. LANDRY, Defendant-Appellant.

UNITED STATES, Plaintiff-Appellant,


OTIS ELEVATOR COMPANY and Daniel G. Landry, Defendants-Appellees.

Nos. 85-1530, 85-1536 and 85-1541.

United States Court of Appeals, Tenth Circuit

December 3, 1985

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[Copyrighted Material Omitted]

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Thomas O'Rourke, Asst. U.S. Atty. (Robert N. Miller, U.S. Atty., with him on brief), Denver, Colo., for petitioner and plaintiff-appellant U.S.

James E. Nesland of Ireland, Stapleton, Pryor & Pascoe, P.C., Denver, Colo., for defendant-appellant Daniel G. Landry.

Before McKAY, LOGAN and SEYMOUR, Circuit Judges.

SEYMOUR, Circuit Judge.

The United States (the Government) and Daniel G. Landry appeal from an order of the district court rejecting what the court described as a proposed plea agreement between the Government and a corporate defendant, Otis Elevator Company ("Otis"), and what the Government characterizes as a motion to dismiss defendant Landry. The Government also seeks a writ of mandamus directing the district court to accept the proposed disposition of the case against Landry. The Government claims that the district court exceeded its authority when it rejected the agreement. We disagree and affirm.


On November 24, 1984 a federal grand jury in Colorado returned an indictment against Otis and Landry, an Otis employee. The indictment 1 charged Otis and Landry each with three counts of submitting false claims to the United States government in violation of 18 U.S.C. Sec. 287 (1982). 2 On February 15, 1985 the Government and the two defendants submitted a proposed plea agreement to the district court. The agreement provided that Otis would plead guilty to all three counts and the Government would dismiss the three counts against Landry. 3 The plea agreement also incorporated

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three settlement agreements between Otis and the United States Departments of Justice, Defense, and Transportation. Copies of these agreements were attached to the plea bargain agreement. The proposed plea bargain agreement was signed by Assistant United States Attorney Thomas O'Rourke, Landry, Landry's attorney James Nesland, and Otis' attorney.

The agreement with the Justice Department provided for the settlement of a civil action based on the false claims that formed the basis of the indictment against Otis and Landry. In exchange for a release from a potential civil claim of $629,000, Otis agreed to pay $900,000 to the United States. The agreements with the Departments of Defense and Transportation bar Otis' Denver division from government contracts with the two agencies for three years, isolate Landry's immediate supervisor from government work, and bar Landry from ever working for Otis or its affiliates. The agreement with the Defense Department also requires Otis to implement specific measures designed to prevent future occurrences of the alleged fraudulent practices underlying the indictment. These measures included a "cost principles awareness program" for Otis' employees and use of independent accountants to review the accounting system of Otis' Denver division.

As part of the proposed plea bargain materials submitted on February 15, the Government included a motion to dismiss the charges against Landry, as required by the plea bargain. 4 The motion to dismiss was presented to the district court along with all of the plea bargain and settlement agreement documents.

On March 22, 1985 the district court held a hearing on the proposed plea agreement. Present at the hearing were Assistant United States Attorney O'Rourke, Landry, and

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Nesland, who represented both Otis and Landry. The district court expressed concern that, under the terms of the proposed agreement, no individuals were to be prosecuted for the fraud against the Government, which totaled $629,000. The court stated:

"In my view, this proposed plea agreement reflects on the impartiality of the whole justice system. And I have trouble feeling that I can maintain the integrity of this court and yet go along with all aspects of this plea agreement.

"And the reason is that the United States is charging here, and apparently there is an agreement, at least by the corporation, that somebody defrauded the United States of $629,000 through contract fraud. As I read this proposal, every individual concerned--connected with this fraud will walk free without any prosecution. It's familiar law to all of us, of course, that a corporation can only act through its agent or its employees, officers or directors. And what concerns me is what message we are sending to the public and to the taxpayers....

"[I]f somebody really did steal $629,000 of government money through fraud, as charged, it's a mockery to me to come in here and ask that I accept a plea agreement that accepts the minimum of a $30,000 fine for that dimension of an offense.

"So I'm troubled by some unanswered questions here. Was any kind of an arrangement made between the corporation and Landry? There is nothing that speaks to that question at all. Did Mr. Landry get retirement and severance pay to walk away from this? Did he get any kind of punishment? The prosecutor's statement says that he's the one that's responsible.

"If he isn't, then he should--the case against him should be dismissed. But somebody ought to say that. It seems inconsistent to me to say in the prosecutor's statement that he's the one that did it and then say we are not going to prosecute him when there is this much involved. What do people in the public think?


"So my questions are for you. I think we have got to settle them before I am going to accept this plea agreement or any other plea agreement in this case.


"So it's my order that the plea agreement tendered in its present form is rejected under Rule 11(e). The case is set for trial April 23, 1985. The parties are accorded one week to confer and to see if they can work out a plea agreement that is acceptable to the Court. But I'm not engaging in any plea bargaining, never have and never will, but I think you are entitled to some guidance.

"It seems to me minimally a fair plea agreement ought to involve some accountability of some guilty individual, not just a corporation, number one, some form of accountability. Number two, there ought to be some accountability to the people that own this corporation. Somebody ought to have an obligation to make some report to the stockholders saying what was done here and who did it. It seems to me that's a fundamental responsibility that's involved as far as the people that really own this corporation.

"... If you think you have got something worked out, I'll be available to confer, as long as both sides, all parties, are represented by counsel, and to let you know whether what you have worked out would be acceptable.

"But in its present form the plea agreement is rejected."

Rec., vol. IV, at 5-8.

Attempting to respond to the court's ruling, O'Rourke offered several reasons for the proposed plea agreement. He argued that the Government had already received $900,000 from Otis in the civil settlement, which O'Rourke termed "ample restitution." Id. at 9. He also noted that a trial of Otis would result in "a battle of experts on accounting issues." Id. Finally, he argued

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that the Government had achieved a significant public interest objective by obtaining a corporate guilty plea to criminal charges of fraud from a corporation. Although O'Rourke admitted "that Mr. Landry acted as the corporation," he defended the dismissal of charges against Landry as a necessary "tradeoff." Id. To this the court responded:

"If you say it's a tradeoff, that may well be, but the problem I am having is the gross disproportion between the $629,000 the government says was taken from the government, and the $30,000 maximum fine for the three charges to which the corporation is going to plead guilty."

Id. at 10. The court refused to reconsider its ruling and reiterated that "the plea agreement, in its present form, is rejected." Id. at 13. At no time during the March 25 hearing did either defendant tender a guilty plea.

On March 27, the parties appeared before the district court for another hearing on the proposed plea agreement. At this hearing the Government and Landry urged the district court to reconsider its March 25 ruling and argued that the proposed dismissal of the charges against Landry constituted a motion to dismiss under Rule 48(a) of the Federal Rules of Criminal Procedure. 5 The district court was troubled by this tactic and expressed its concern with "whether [the Government] can change the authority of the Court to accept a plea agreement or reject a plea agreement under Rule 11(e) by merely invoking Rule 48(a)." Rec., vol. V, at 4. The following exchange then occurred between the court and Landry's attorney Nesland:

"THE COURT: Well, is the--is the Otis plea contingent on the treatment you seek being given to Mr. Landry, is that what we are talking about?

"MR. NESLAND: It's part of that plea bargain, yes, it is, Your Honor.

"THE COURT: It's a question of whether I accept or reject the plea bargain package, isn't it?

"MR. NESLAND: Pardon?

"THE COURT: Then the question to me is whether I accept or reject the plea bargain package?

"MR. NESLAND: But, Your Honor, you have already pointed out that the only aspect of the plea bargain that you find difficulty with is the aspect which contemplates a dismissal of the charges at--

"THE COURT: And you say it's all in one package?

"MR. NESLAND: That's correct, it is in one package. And ... [the] question of whether or not you accept or reject that aspect of the plea bargain is governed by Rule 48 and the Court's discretion under that...

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