Allen v. U.S.

• Decision Date: 16 February 1989
• Docket Number: No. 88-5250,88-5250
• Parties: James M. ALLEN, Petitioner-Appellee, v. UNITED STATES of America, Respondent-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 969

867 F.2d 969

James M. ALLEN, Petitioner-Appellee, v. UNITED STATES of America, Respondent-Appellant.

No. 88-5250.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 21, 1988.

Decided Feb. 16, 1989.

Tyree B. Harris (argued), Harris & Harris, Nashville, Tenn., for James M. Allen, petitioner-appellee.

Joe B. Brown, U.S. Atty., James C. Thomason, III, Asst. U.S. Atty. (argued), Office of the U.S. Attorney, Nashville, Tenn., for the U.S., respondent-appellant.

Before JONES and NORRIS, Circuit Judges, and CONTIE, Senior Circuit Judge.

ALAN E. NORRIS, Circuit Judge.

James M. Allen was convicted of mail fraud and conspiracy to commit mail fraud in violation of 18 U.S.C. Secs. 1341 and 371. Those convictions were affirmed by an en banc panel of this court in United States v. Blanton, 719 F.2d 815 (6th Cir.1983), cert. denied, 465 U.S. 1099, 104 S.Ct. 1592, 80 L.Ed.2d 125 (1984), prior to the Supreme Court's decision in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). He was sentenced to two years' imprisonment and fined $8,000. Relying upon McNally, Allen sought from the district court a writ of error coram nobis to set aside those convictions, and restitution of the fine he had paid. It is from the granting of that relief by the district court that the government appeals.

I

Along with the former Governor of Tennessee, Leonard Ray Blanton, and Clyde Edward Hood, a special assistant to Blanton, Allen was charged in a twelve-count indictment with eight counts of mail fraud (18 U.S.C. Sec. 1341), and one count of conspiracy (18 U.S.C. Sec. 371). The conduct undergirding the charges was the use by defendants of their positions to obtain preferential treatment for friends of Blanton concerning the operation of state licensed liquor stores. The scheme in which Allen was said to be involved would have violated state laws against public officials having an interest in a liquor store, against one person having an interest in more than one store within a municipality, and against public officials receiving bribes. He also was said to be involved in subverting the operation of the state's Alcoholic Beverage Commission so that liquor licenses could be issued to friends of the Blanton administration.

II

The mail fraud statute seeks to punish persons who, having devised a scheme to obtain money or property by fraud, use the mails to accomplish the scheme. ¹ In McNally, the Supreme Court construed the statute as reaching only schemes designed to defraud of money or property. In that case, former Kentucky officials were involved in a scheme to divert, from the insurance agency actually earning them to agencies designated by the defendants, commissions paid by the state for workers' compensation policies. The indictment "alleged that [defendants] had devised a scheme (1) to defraud the citizens and government of Kentucky of their right to have the Commonwealth's affairs conducted honestly, and (2) to obtain, directly and indirectly, money and other things of value by means of false pretenses and concealment of material facts." McNally, 483 U.S. at ----, 107 S.Ct. at 2878, 97 L.Ed.2d at 298. The Court analyzed the legislative history of the mail fraud statute, as well as cases interpreting it, and concluded that Congress intended the statute to reach only schemes designed to defraud of money or property, and not "the intangible right of the citizenry to good government." Id. at ----, 107 S.Ct. at 2881, 97 L.Ed.2d at 300-02. The defendants' mail fraud convictions were reversed because "the jury was not required to find that the Commonwealth itself was defrauded of any money or property." Id. at ----, 107 S.Ct. at 2880-81, 97 L.Ed.2d at 302.

Prior to McNally, it was well-settled, as a matter of case law from the federal circuits, that the mail fraud statute reached schemes designed "to defraud citizens of their intangible rights to honest and impartial government." United States v. Asher, 854 F.2d 1483, 1488 n. 10 (3d Cir.1988) (collecting cases). McNally, however, specifically proscribed mail fraud prosecutions under an intangible rights theory. McNally, 483 U.S. at ----, 107 S.Ct. at 2881, 97 L.Ed.2d at 302.

Shortly after McNally, the Supreme Court explained that while the mail fraud statute proscribed prosecutions under the intangible rights theory, property protected by the statute could be either tangible or intangible in nature. Carpenter v. United States, 484 U.S. 19, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987). In Carpenter, the Court upheld the mail fraud conviction of a Wall Street Journal reporter on the theory that his acquisition of the Journal's confidential information deprived it of an intangible property right. The Court reasoned that the intangible nature of an interest "does not make it any less 'property' protected by the mail and wire fraud statutes." Carpenter, at ----, 108 S.Ct. at 320, 98 L.Ed.2d at 283. "Carpenter stands for the narrow principle that McNally was not intended to exclude from the purview of section 1341 fraudulent schemes and artifices merely because the property interest involved was normally defined as an intangible one." United States v. Baldinger, 838 F.2d 176, 179 (6th Cir.1988).

One result of McNally has been a flood of litigation seeking to set aside mail fraud convictions. See Asher, 854 F.2d at 1490 (collecting cases). Convictions have been upheld where the indictment, proofs, and the jury instructions require a deprivation of something of economic value, as well as of intangible rights. Asher, 854 F.2d at 1494. Even then, courts may not affirm convictions if the defendant has been prejudiced by an improper jury instruction. United States v. Jacobs, 475 F.2d 270, 282-84 (2d Cir.), cert. denied, 414 U.S. 821, 94 S.Ct. 116, 131, 38 L.Ed.2d 53 (1973); see also United States v. Ochs, 842 F.2d 515, 523 (1st Cir.1988) (collecting cases). In the present case, the district judge concluded that neither the indictment nor the jury instructions charged a crime after McNally, and therefore reversed Allen's convictions.

III

Our starting point is to determine whether the indictment charged a crime after McNally. In order for an indictment to be sufficient, it must contain the elements of the offense charged and fairly inform a defendant of the charges against which he must defend. Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974); see also Baldinger, 838 F.2d at 181. The indictment must also enable the defendant to plead a judgment under the indictment as a bar to any subsequent prosecution for the same offense. Russell v. United States, 369 U.S. 749, 764, 82 S.Ct. 1038, 1047, 8 L.Ed.2d 240 (1962). Courts utilize a common sense construction in determining whether an indictment sufficiently informs a defendant of an offense. Project, Seventeenth Annual Review of Criminal Procedure: United States Supreme Court and Courts of Appeals 1986-1987, 76 Geo. L.J. 521, 761 (1988) (collecting cases).

The government charged in the indictment that Blanton, Hood, and Allen conspired to devise a scheme to defraud the citizens of Tennessee "of their right to conscientious, loyal, faithful, disinterested and unbiased services" of Blanton and Hood....