903 F.2d 731 (10th Cir. 1990), 89-6096, United States v. Ryans

Docket Nº:89-6096.
Citation:903 F.2d 731
Party Name:UNITED STATES of America, Plaintiff-Appellant, v. Donald Eugene RYANS d/b/a Ryans Moving & Storage and Westside Movers, Defendant-Appellee.
Case Date:May 08, 1990
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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903 F.2d 731 (10th Cir. 1990)

UNITED STATES of America, Plaintiff-Appellant,

v.

Donald Eugene RYANS d/b/a Ryans Moving & Storage and

Westside Movers, Defendant-Appellee.

No. 89-6096.

United States Court of Appeals, Tenth Circuit

May 8, 1990

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David Seidman, Atty., Dept. of Justice, Washington, D.C. (Charles F. Rule, Asst. Atty. Gen., Judy L. Whalley, Deputy Asst. Atty. Gen., and John J. Powers, III, Atty., Dept. of Justice, Washington, D.C., Alan A. Pason, Katherine A. Schlech, Dana M. Campbell and David B. Shapiro, Attys., Dept. of Justice, Dallas, Tex., were also on the brief), for plaintiff-appellant.

William J. Skepnek, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Oklahoma City, Okl. (Kindanne C. Jones, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Oklahoma City, Okl. and C. Kevin Morrison, Tulsa, Okl., were also on the brief), for defendant-appellee.

Ellen Yankever Suni, University of Missouri at Kansas City School of Law, Kansas City, Mo., for amicus curiae Nat. Ass'n of Criminal Defense Lawyers, Inc.

Before HOLLOWAY, Chief Judge, and LOGAN and ANDERSON, Circuit Judges.

HOLLOWAY, Chief Judge.

The government appeals from a pretrial order of the district court granting the defendant-appellee's motion to suppress evidence as to two tape recordings in this criminal proceeding. This court has jurisdiction of the appeal pursuant to 18 U.S.C. Sec. 3731.

I

A.

Defendant-appellee Donald Eugene Ryans ("Ryans") was charged with conspiring, together with unnamed co-conspirators, to restrain and suppress competition in the provision of moving services from Fort Sill, Oklahoma, in unreasonable restraint of interstate trade and commerce, in violation of Section 1 of the Sherman Act. Ryans moved to suppress three tape recordings of conversations between himself and Mr. Hughen, an immunized government informant, on the ground, inter alia, that the conversations were recorded in violation of Disciplinary Rule 7-104(A)(1) of the Code of Professional Responsibility [hereinafter DR 7-104(A)(1), the "disciplinary rule", or the "rule"]. Following an evidentiary hearing, the district court suppressed two of the tapes on the ground that the disciplinary rule had been violated. This appeal followed and this court stayed

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the trial pending the appeal. 1 We conclude that the district court erred in its application of the disciplinary rule in the circumstances of this case and improperly suppressed the recordings, and reverse.

In 1985 the Antitrust Division of the Department of Justice began a nationwide investigation of national moving carriers and agents who were engaged in the transport of household goods for military personnel. In March or April of 1986, attorneys in the Antitrust Division's Dallas, Texas, office instructed Special Agent Granville Long of the F.B.I. in Lawton, Oklahoma, to begin an investigation of movers at Fort Sill, Oklahoma. Shortly thereafter one of the suspected conspirators, Kenneth Hughen, then president of the local movers' association, agreed to cooperate with the government in exchange for immunity from prosecution. (Long Tr. at 19; Hughen Tr. at 68-70.)

Hughen agreed to record telephone conversations with numerous investigation "targets," including Ryans. (Long Tr. at 21.) Government prosecutors instructed Hughen to call members of the movers' association and engage in conversation concerning the alleged agreements and rate setting practices, and to record his conversations. (Hughen Tr. at 82-83.) The prosecutors acted primarily through Agent Long, although the record shows that on at least one occasion the government attorneys met directly with Hughen. (Hughen Tr. at 68-70.) Although Hughen had already agreed to cooperate with the government, the prosecutors issued a grand jury subpoena to Hughen, much like those issued to each of the investigation targets, to conceal his newfound loyalty. This stage of the investigation lasted approximately three months, during which time Hughen recorded some conversations. Three of these were telephone conversations with Ryans.

The first telephone call to Ryans occurred on May 19, 1986, five days after Ryans had been served with a federal grand jury subpoena duces tecum. A transcript of the conversation reveals that the two men discussed, among other things, the problems associated with complying with the subpoenas and the need for legal representation. 2 Hughen delivered the tape of the May 19 interview to Agent Long on May 29, 1986. (Long Tr. at 31/ Hughen Tr. at 99.)

The second tape recording was made on June 5, 1986. (Hughen Tr. at 100-101.) A transcript of this conversation also reveals that Ryans' legal representation was discussed. Ryans stated that he had met with and had obtained advice from his lawyer concerning the subject of the investigation.

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Indeed, in response to some prompting by Hughen, Ryans disclosed the substance of that advice. See Tr.Conv. at 26:8-29:18; 33:22-34:13. The June 5 tape was delivered to agent Long on June 12, 1986. (Hughen Tr. at 108.)

The third taped conversation between Hughen and the defendant occurred on June 18, 1986, six days after Long received the second tape and one day after Ryans delivered documents to Agent Long in compliance with the grand jury subpoena. (Long Tr. at 47-48.) A transcript of this conversation reveals that defendant Ryans reported to Mr. Hughen about his meeting with Agent Long the previous day and again discussed advice that he had received from counsel. Tr. Conv. at 42:18-21; 55:13-18; 61:24-63:4; 64:6-22.

Mr. Hughen's inquiries into the substance of Ryans' attorney-client communications were, according to agent Long, contrary to the instructions that he had given to Hughen sometime during the investigation. 3 (Long Tr. at 40-42.) Agent Long testified that sometime in May 1986 he advised one or more of the government prosecutors of his concerns regarding Mr. Hughen's performance as an informant. Id. The district court found that the government attorneys were aware that the recordings were being made and were informed of their contents. Order at 5.

B.

Ryans was charged on January 19, 1989, in a one-count indictment with alleged price-fixing in violation of the Sherman Act, 15 U.S.C. Sec. 1. Prior to trial Ryans moved to suppress introduction of the tapes on the ground that the conversations were recorded in violation of DR 7-104(A)(1). The district court denied the motion to suppress as to the first of the recordings, but granted Ryans' motion as to the second and third recordings.

The court found that "[a]t the time these [second and third] tapes were made, it was clear that defendant Ryans had retained counsel regarding the investigation for which the recordings were made", id. at 9, and that the government prosecutors knew, either directly or indirectly through Agent Long, that Ryans was represented by counsel. Id. The court further found that Mr. Hughen was acting under the direct control and supervision of Agent Long and that he "participated actively in the conversations and deliberately elicited information from the defendant in the absence of counsel regarding the alleged conspiracy and communications between the defendant and his counsel...." Order at 8. The court concluded that the government attorneys investigating the case had breached their ethical obligations under the disciplinary rule.

The court then considered the available remedies, ranging from simple admonishment of the attorneys involved to dismissal of the indictment. The court thought that United States v. Thomas, 474 F.2d 110 (10th Cir.), cert. denied, 412 U.S. 932, 93 S.Ct. 2758, 37 L.Ed.2d 160 (1973), might be controlling and accordingly imposed the intermediate remedy of suppression. (Order at 9.) The government appeals.

II

The issue presented on appeal is whether the government's use of an informant to initiate and record conversations with a suspect prior to indictment, but after the suspect has retained counsel in connection with the subject matter of the criminal investigation, violates Disciplinary Rule 7-104(A)(1) of the Code of Professional Responsibility. 4 DR 7-104(A)(1) provides that

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During the course of his representation of a client a lawyer shall not:

(1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.

Model Code of Professional Responsibility DR 7-104(A)(1).

Ryans contends, and the district court held, that the second and third tape recordings were made in violation of DR 7-104(A)(1) because at the time those tapes were made, Ryans was represented by counsel within the meaning of the rule, and that the government either directly or indirectly knew that Ryans was represented by counsel. Since Hughen was acting on behalf of the United States Attorney's office, all of his communications with Ryans were in violation of the rule and therefore should not be admitted in evidence. The government argues that Ryans was not represented by counsel within the meaning of the rule, and that in any case the disciplinary rule is not intended to prohibit investigative contact with a person--even if represented by counsel--prior to the accusatory phase of the criminal process. By analogy to the Sixth Amendment, the government argues that the rule should not attach until adversary proceedings have commenced.

With the exception of the district court's finding that Ryans did not waive the attorney-client privilege, see note 13 infra, we accept the factual findings made below. With that exception, we believe the...

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