858 F.2d 1310 (8th Cir. 1988), 87-2566, United States v. Slay

Docket Nº:87-2566 to 87-2568 and 88-1040.
Citation:858 F.2d 1310
Party Name:UNITED STATES of America, Appellee, v. Eugene SLAY, Appellant. UNITED STATES of America, Appellee, v. Leroy TYUS, Appellant. UNITED STATES of America, Appellee, v. James CULLEN, Appellant. UNITED STATES of America, Appellant, v. Eugene SLAY, Leroy Tyus, and James Cullen, Appellees.
Case Date:October 06, 1988
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1310

858 F.2d 1310 (8th Cir. 1988)

UNITED STATES of America, Appellee,

v.

Eugene SLAY, Appellant.

UNITED STATES of America, Appellee,

v.

Leroy TYUS, Appellant.

UNITED STATES of America, Appellee,

v.

James CULLEN, Appellant.

UNITED STATES of America, Appellant,

v.

Eugene SLAY, Leroy Tyus, and James Cullen, Appellees.

Nos. 87-2566 to 87-2568 and 88-1040.

United States Court of Appeals, Eighth Circuit

October 6, 1988

Submitted June 16, 1988.

Rehearing and Rehearing En Banc Denied Dec. 30, 1988.

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Jim J. Shoemake, St. Louis., Mo., Thomas M. Utterback, Washington, Mo., and Barry Short, St. Louis, Mo., for appellant.

James E. Crowe, Jr., Asst. U.S. Atty., St. Louis, Mo., for appellee.

Before ARNOLD, Circuit Judge, ROSS, Senior Circuit Judge, and WOLLE, [*] District Judge.

ARNOLD, Circuit Judge.

Eugene Slay, Leroy Tyus, and James Cullen were convicted in June 1987 of violating the federal mail and wire fraud statutes, 18 U.S.C. Secs. 1341 and 1343, in connection with their roles in seeking the award of a cable television franchise from the City of St. Louis. The jury had been instructed that a scheme to deprive the citizens of St. Louis of their intangible right to good government could constitute "a scheme or artifice to defraud" within the meaning of the mail and wire fraud statutes. Three weeks after the jury returned its verdict, the Supreme Court of the United States rejected the theory that the mail fraud statute protects the intangible right of the citizenry to good government, and read the statute as "limited in scope to the protection of property rights." McNally v. United States, --- U.S. ----, 107 S.Ct. 2875, 2881, 97 L.Ed.2d 292 (1987).

In response to the defendants' post-trial motions following McNally, the District Court 1 set aside the jury's verdicts against Slay, Tyus, and Cullen "due to the fundamental instructional error in this case." United States v. Slay, 673 F.Supp. 336, 351 (E.D.Mo.1987). The Court concluded that "[t]he error in the instructions ... [permitted] the jury to convict defendants for conduct not criminalized by ... the mail and wire fraud statutes...." Id. at 347. After striking all references to the "intangible rights" theory from the indictment against the defendants, the Court found that the indictment still charged an offense, and so denied the defendants' motions to dismiss the indictment. Instead, the District Court ordered a new trial for the defendants on the charges in the indictment which continued to state an offense after McNally. Id. at 353.

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Both the defendants and the government appeal this order. The defendants argue that the District Court struck such a substantial portion of the original indictment that the remaining language no longer expresses the grand jury's intention. The defendants urge that a new trial on the pared-down indictment would therefore violate their Fifth Amendment right to be tried only on an indictment of a grand jury. We hold that our Court does not have jurisdiction over this interlocutory appeal, and so we dismiss the defendants' appeal, without prejudice to their right to raise this contention in a later appeal if they are convicted at the new trial. In its cross-appeal, the government argues that the guilty verdicts should not have been set aside, because the jury must have found a scheme to defraud the City of property rights. The government concludes that the defendants' convictions remain valid, and that the erroneous instruction was harmless error. We disagree, and we affirm the District Court's order granting a new trial.

I.

This prosecution arises from the submission of a competitive bid for the award of the cable television franchise in the City of St. Louis in 1983. According to the indictment, the St. Louis ordinance governing the award of a cable television franchise required any application for such a franchise to provide the names, addresses, and occupations of the officers and major stockholders of the applicant corporation. Indictment, No. 86-0067, CR(1), p 1-2. The ordinance further required the applicant to disclose "all agreements and understandings ... between the applicant and any other person with respect to the proposed franchise ...," and provided the penalty that "[i]f a franchise should be granted to a person posing as a straw party for or representative of another undisclosed person, such franchise shall be deemed void...." Indictment p 3. The indictment charges that the defendants participated in a scheme to submit an application for the franchise on behalf of Archway Cablevision, Inc., which falsely represented Archway's ownership and concealed the actual ownership and control interests of defendant Slay and an unindicted co-conspirator, Sorkis Webbe, Sr. Indictment, p 11. The indictment also charges that the defendants arranged for bribes to be paid to members of the St. Louis Board of Aldermen to gain support for Archway Cablevision's fraudulent application. Indictment p 11(m). In the language of the original indictment, defendants Slay, Tyus, and Cullen are charged, along with Tom Zych, President of the Board of Aldermen, with having:

intended to devise a scheme and artifice to defraud:

The City of St. Louis and its citizens of their right to the conscientious, loyal, faithful, disinterested and unbiased services and actions in the performance of official duties of certain members of the Board of Aldermen of the City of St. Louis and their right to have those duties performed free from corruption, extortion, bribery, partiality, willful omission, dishonesty, official misconduct, conflict of interest and fraud; and

The City of St. Louis, its officials and employees, including the Mayor, the City Counselor, the Board of Aldermen and the Comptroller, of their right to be aware of all material and relevant facts when analyzing and entering into contracts with entities seeking the award of a cable television franchise for the City of St. Louis, in particular Archway Cablevision;

and to obtain money and property, specifically a cable television franchise from the City of St. Louis....

Indictment p 11. The original indictment thus charged the defendants with devising a scheme which would deprive the citizens and elected officials of St. Louis of both their intangible rights to good government and full disclosure and property in the form of a cable television franchise.

Unlike the indictment, the jury instructions were phrased in the disjunctive, so that the jury could convict the defendants if it found either "[t]hat the defendants ... intended to devise a scheme or artifice to defraud the City of St. Louis" of the honest

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services of its officials and employees, or that "the defendants ... intended to devise a scheme to obtain property from the City of St. Louis by means of false or fraudulent pretenses, representation, or promises or the deceitful concealment of material facts...." Instructions Nos. 37 and 39. The Court specifically instructed the jury that

[a] scheme to deprive the citizens of the City of St. Louis of the conscientious, loyal, faithful, disinterested and unbiased services and actions of a member of the Board of Alderman ..., comes within the meaning of the term 'scheme or artifice to defraud' as that term is used in the mail and wire fraud statutes.

(Instruction No. 40), and that

... when a defendant has a duty to disclose correct ownership interest information, a scheme to conceal from public officials ... such information, if it is material and relevant to decisions which they are required to make in their official capacities about entering into a cable television franchise, also comes within the meaning of a 'scheme or artifice to defraud' as that term is used in the mail and wire fraud statutes.

Instruction No. 40-A. In particular, the Court instructed the jury that "[t]he object of the scheme need not be money or any form of tangible property, but may also be intangible rights." Instruction No. 41.

In a general verdict, the jury convicted Slay, Tyus, and Cullen on five counts of mail and wire fraud, but acquitted co-defendant Tom Zych of the same charges. Three weeks later, however, the United States Supreme Court invalidated the "intangible right to good government" theory of mail fraud prosecutions. In granting the defendants' motion for a new trial, the District Court struck all sections of the original indictment which articulated the invalidated "intangible rights" theory. 673 F.Supp. at 351.

II.

The defendants argue that the indictment should now be dismissed in its entirety. Relying on Ex parte Bain, 121 U.S. 1, 7 S.Ct. 781, 30 L.Ed. 849 (1887), the defendants claim that the striking of the invalid portions of the indictment has substantially changed its terms, so that the remaining charges no longer reflect the grand jury's intention. The defendants conclude that a new trial on the edited indictment would violate their Fifth Amendment right to be tried only on a presentment or indictment of a grand jury.

We lack jurisdiction over this interlocutory appeal. The federal appellate courts have jurisdiction only over appeals from "final decisions of the district courts," 28 U.S.C. Sec. 1291, with some exceptions not here relevant, and the defendants' case has not yet been finally decided by the District Court. In general, the rule of finality imposed by Sec. 1291 "... prohibits appellate review until conviction and imposition of sentence." Flanagan v. United States, 465 U.S. 259, 263, 104 S.Ct. 1051, 1054, 79 L.Ed.2d 288 (1984) (citation omitted).

There are rare exceptions to the final-judgment rule of appellate jurisdiction in criminal cases, in which a pre-trial ruling may be considered a "final decision" for purposes of Sec. 1291, see Flanagan, 465 U.S. at 265-66, 104 S.Ct. at 1054-55. The Supreme Court has specifically held, however,...

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