780 F.2d 1305 (7th Cir. 1986), 84-2097, United States v. Jackson

Docket Nº:84-2097, 85-1395.
Citation:780 F.2d 1305
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. George JACKSON and James Jackson, Defendants-Appellants.
Case Date:January 08, 1986
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 1305

780 F.2d 1305 (7th Cir. 1986)

UNITED STATES of America, Plaintiff-Appellee,


George JACKSON and James Jackson, Defendants-Appellants.

Nos. 84-2097, 85-1395.

United States Court of Appeals, Seventh Circuit

January 8, 1986

Page 1306

[Copyrighted Material Omitted]

Argued Sept. 10, 1985.

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William A. Barnett, Chicago, Ill., for defendants-appellants.

Michael T. Mullen, Asst. U.S. Atty., Anton Valukas, U.S. Atty., Chicago, Ill., for plaintiff-appellee.

Before WOOD and ESCHBACH, Circuit Judges, and SWYGERT, Senior Circuit Judge.

HARLINGTON WOOD, Jr., Circuit Judge.

Defendants George and James Jackson were convicted of five counts of mail fraud (18 U.S.C. Sec. 1341), one count of conspiracy to commit mail fraud (18 U.S.C. Sec. 371), and two counts of possession of stolen interstate fuel (18 U.S.C. Sec. 659). The Jacksons appeal their convictions alleging (1) that the government withheld evidence in contravention of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and (2) that certain exculpatory statements were erroneously held to be inadmissible by the district court. We affirm the convictions.


Throughout the time period relevant to this appeal, defendants George and James Jackson operated Sepia Trucking Company, Inc. ("Sepia"), a small family-owned fuel oil trucking firm located in Chicago. Since 1977 George Jackson had served as Sepia's president. James Jackson acted as a consultant for the firm, although he held no title and received no salary from Sepia for his services.

The government's allegations set forth that, among other Sepia personnel, defendants along with David Webb, a former driver for Sepia, were engaged in a fuel-stealing scheme that provided Sepia with the diesel fuel it needed to operate its delivery trucks. Sepia allegedly would send one of its drivers to pick up fuel at one of several oil and gas terminals. The fuel would then be transported to one of Sepia's customers and ostensibly pumped into that customer's storage tanks. However, not all of the fuel that was scheduled to be delivered was actually deposited in these storage tanks. Sepia's trucks were divided into four compartments and, by failing to open the valves to each compartment, Sepia drivers were able to appear as though they were delivering an entire truckload of fuel while in actuality retaining a portion of the fuel. The stolen fuel was then returned to Sepia's yard where it was pumped into a storage tank from which Sepia trucks were fueled.

David Webb testified that he had observed George Jackson steal fuel in this manner from the Amtrak railroad station from September to December 1977. In the spring of 1978, Webb testified that he was assigned to the Amtrak run and was told by George Jackson to bring back fuel exactly as he had been trained. In 1979, when Amtrak severed its relationship with Sepia, Webb was assigned to deliver fuel to the Norfolk and Western Railway Company, Inc. ("Norfolk and Western"). Webb again testified that he was instructed, this time by James Jackson, to keep Sepia's storage tank full so that the company would not run short of fuel. Webb stated that he informed George Jackson each time he returned stolen fuel to the Sepia yard. In late 1980 and early 1981, Norfolk and Western implemented new devices to monitor its fuel consumption and fuel deliveries from suppliers such as Sepia. Webb testified that thereafter he never stole fuel again from Norfolk and Western.

Beginning in early 1981, an investigation of Sepia's scheme was conducted by the FBI. Special Agent Kenneth Veach, who was assigned to the case, elicited help from David Webb. On January 11 and 17, 1983, Webb, using a hidden microphone, recorded

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conversations he had with George and James Jackson regarding Sepia's operation. During these conversations the defendants denied any knowledge of the fuel-stealing scheme. In addition, Agent Veach, in discussions with the Director of Security for the Standard Oil Company, mentioned that Webb might be a possible candidate for employment as a station manager. Standard Oil was contemplating a private undercover investigation of fuel thefts and needed someone to pose as a station manager as part of its investigation. Webb was ultimately hired by Standard Oil in this capacity. For his services Webb received, among other things, a salary of $24,000 per year plus the use of an automobile. The FBI, at Standard Oil's request, provided license plates for the automobile so that Standard Oil could not be identified as the owner of the vehicle.

As a result of their involvement with Sepia, George and James Jackson and David Webb, among others, were indicted and charged with mail fraud, conspiracy to commit mail fraud, and knowing possession of stolen interstate fuel. In exchange for a government promise to withhold recommendation as to a sentence, Webb pled guilty and agreed to testify for the prosecution. George and James Jackson pled not guilty, and, after a jury trial, the Jacksons were found guilty. Judge Marvin E. Aspen sentenced the Jacksons to two and one-half years in prison and placed them on probation for five years.

Thereafter the Jacksons filed an appeal that was ultimately dismissed by this court for want of prosecution. In February 1985, defendants moved for a new trial on the basis of newly discovered evidence. The district court denied this motion and the defendants now appeal this denial. 1


The defendants' first contention is that their due process rights were violated by the government's failure to disclose the true nature of Webb's employment relationship with Standard Oil in violation of Brady v. Maryland, supra. Under Brady and its progeny, the prosecution's suppression of material evidence favorable to the defendant, even if such evidence is not requested by the accused, is a violation of due process. United States v. Allain, 671 F.2d 248, 255 (7th Cir.1982) (citing United States v. Agurs, 427 U.S. 97, 96 S.Ct. 2392, 49 L.Ed.2d 342 (1976) ). To make a successful claim under Brady, the defendants must establish (1) that the prosecutor suppressed evidence; (2) that such evidence was favorable to the defense; and (3) that the suppressed evidence was material. E.g., United States v. Sink, 586 F.2d 1041, 1051 (5th Cir.1978), cert. denied, 443 U.S. 912, 99 S.Ct. 3102, 61 L.Ed.2d 876 (1979).

The government does not deny that it failed to disclose all of the knowledge it had regarding Webb's specific employment relationship with Standard Oil. Indeed, the government admits that it failed to disclose that Agent Veach had introduced Webb to Standard Oil as a possible candidate for the company's undercover scheme and that the FBI had helped Standard Oil obtain license plates for the automobile that was provided for Webb's use. 2

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Nor does the government seriously contest that this undisclosed evidence is not favorable to the defendants. The only issue raised, therefore, is whether the undisclosed information is material. Even given the government's suppression of favorable information, the defendants are entitled to a new trial only if they can establish the materiality of the unrevealed evidence. United States v. Esposito, 523 F.2d 242, 248 (7th Cir.1975), cert. denied, 425 U.S. 916, 96 S.Ct. 1517, 47 L.Ed.2d 768 (1976) (citing Moore v. Illinois, 408 U.S. 786, 92 S.Ct. 2562, 33 L.Ed.2d 706 (1972) ). Accord United States v. Solomon, 688 F.2d 1171, 1178 (7th Cir.1982).

In United States v. Agurs, 427 U.S. 97, 96 S.Ct. 2392, 49 L.Ed.2d 342 (1976), the Supreme Court noted three distinct standards for ascertaining whether information in the government's possession is material and therefore required to be disclosed to a defendant. The first standard of materiality was held applicable where the "undisclosed evidence demonstrates that the prosecution's case includes perjured testimony and that the prosecution knew, or should have known, of the perjury." Id. at 103, 96 S.Ct. at 2397 (footnote omitted). In this situation, the Court ruled that the suppressed evidence was material "if there [was] any reasonable likelihood that the false testimony could have affected the judgment of the jury." Id. (footnote omitted). See Giglio v. United States, 405 U.S. 150, 154, 92 S.Ct. 763, 766, 31 L.Ed.2d 104 (1972); Napue v. Illinois, 360 U.S. 264, 271, 79 S.Ct. 1173, 1178, 3 L.Ed.2d 1217 (1959); United States ex rel. Wilson v. Warden Cannon, 538 F.2d 1272, 1277 (7th Cir.1976). The Court ruled that a second standard of materiality applied to cases in which the defendant made a "pretrial request for specific evidence." Agurs, 427 U.S. at 104, 96 S.Ct. at 2397. In such a case, undisclosed evidence was deemed material if its disclosure "might have affected the outcome of the trial." Id. A third standard of materiality was held to be applicable where the defendant either made no request for exculpatory information or the request was so broad that the government was given "no better notice" of what the defendant was seeking "than if no request [had been] made." Id. at 106-107, 96 S.Ct. at 2398-99. In such a case, undisclosed evidence was held by the Court to be material only if it would create "a reasonable doubt that did not otherwise exist." Id. at 112, 96 S.Ct. at 2401.

The Supreme Court has since further developed its holding in Agurs. In United States v. Bagley, --- U.S. ----, 105 S.Ct. 3375, 87 L.Ed.2d 481 (1985), the Court, in a divided opinion, suggests that only one standard of materiality applies to the latter two situations described by Agurs; namely, the " 'no request,' 'general request,' and 'specific request' cases of prosecutorial failure to disclose evidence favorable to the accused...." Id., 105 S.Ct. at 3384. See United States ex rel. Smith v. Fairman, 769 F.2d 386, 393 (7th Cir.1985). In these cases, Justice Blackmun, joined by Justice O'Connor, noted that "[t]he evidence is...

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