96 F.3d 1132 (9th Cir. 1995), 94-50422, United States v. Annigoni

Docket Nº:94-50422.
Citation:96 F.3d 1132
Party Name:96 Daily Journal D.A.R. 11,608 UNITED STATES of America, Plaintiff-Appellee, v. Richard ANNIGONI, Defendant-Appellant.
Case Date:June 08, 1995
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1132

96 F.3d 1132 (9th Cir. 1995)

96 Daily Journal D.A.R. 11,608

UNITED STATES of America, Plaintiff-Appellee,


Richard ANNIGONI, Defendant-Appellant.

No. 94-50422.

United States Court of Appeals, Ninth Circuit

June 8, 1995

Argued and Submitted April 4, 1995.

Amended Sept. 21, 1995.

Order Granting Rehearing En Banc

Jan. 10, 1996.

Argued and Submitted March 21, 1996.

Decided Sept. 23, 1996.

Page 1133

Michael Tanaka, Deputy Federal Public Defender, Los Angeles, CA, for defendant-appellant.

Miriam A. Krinsky and Daniel P. Collins, Assistant United States Attorneys, Los Angeles, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California, Dickran M. Tevrizian, District Judge, Presiding. D.C. No. CR-94-00071-DT.


Opinion by Judge HAWKINS; Dissent by Judge LEAVY; Dissent by Judge KOZINSKI.


This case asks us to reconsider the longstanding principle that automatic reversal of a conviction is the proper remedy where a trial court erroneously deprives a criminal defendant of the right of peremptory challenge.

Following a jury trial, defendant-appellant Richard Annigoni ("Annigoni") was convicted of bank fraud in violation of 18 U.S.C. § 1344. Annigoni appealed his conviction on two grounds. He challenged the district court's pre-trial ruling limiting cross-examination of a government witness, and challenged the district court's refusal, on Batson 1 grounds, to allow him to exercise a peremptory challenge to remove an Asian-American juror from the panel. He argued that the district court had erroneously denied his right of peremptory challenge, and that reversal of his conviction was therefore required.

Page 1134

A three-judge panel of this Circuit affirmed Annigoni's conviction. United States v. Annigoni, 57 F.3d 739 (9th Cir.1995), as amended, 68 F.3d 279. The panel upheld the district court's decision to limit the scope of cross-examination of the government witness. It went on to find that the district court had erred in denying Annigoni's peremptory challenge, but concluded that the error did not require automatic reversal of his conviction. Applying a harmless-error analysis, the panel concluded that the error in Annigoni's case was harmless because Annigoni "failed to show that any juror challengeable for cause sat on his case. He lost one peremptory he should have had. He did not lose an impartial jury." Annigoni, 68 F.3d at 285.

Annigoni petitioned this Court for rehearing en banc pursuant to Federal Rule of Appellate Procedure 40. We granted rehearing to consider whether the erroneous denial of Annigoni's right of peremptory challenge required automatic reversal. For reasons discussed below, we reverse the district court and hold that the erroneous denial of a criminal defendant's right of peremptory challenge requires automatic reversal.


I. Events underlying Annigoni's indictment

Annigoni's conviction arises out of a series of fraudulent financial transactions that secured him a $2.85 million loan on which he and his associates later defaulted. The transactions centered on the purchase of an office building in Anaheim, California. The office building was constructed by El Rancho North, a partnership that financed the project with a $1.45 million loan from Prudential Insurance Company. At the time of the transactions underlying this case, El Rancho still owed Prudential approximately $950,000 on the loan.

In conjunction with co-defendant Ronald Fauria, a senior vice-president of Orange Coast Title Company, and James Perumean, a dentist and real estate investor, Annigoni formed a limited partnership. Annigoni's and Fauria's interests were concealed, while Perumean acted as front man for the limited partnership.

On behalf of the limited partnership, Perumean sought a $2.85 million loan from the United California Savings Bank. In applying for the loan, Perumean represented to the bank that the partnership had the chance to buy the property for $4 million. He told the bank that the partnership needed a $2.85 million loan to acquire title to the property and to pay off the first trust deed holder, Prudential Insurance Company. Perumean represented to the bank that the loan would be secured by that first trust deed. Perumean also represented to the bank that the property was owned by Par Western Interests, Inc., a company Annigoni owned.

In fact, Par Western did not own the property, but manipulated escrow accounts at Orange Coast Title Company to mislead the bank. The scheme worked as follows: Par Western arranged to acquire the property on the same day it was due to be sold to the limited partnership. Fauria set up a double escrow account at the title company to handle two closings on the property simultaneously. In the first escrow, Par Western purportedly delivered title to the limited partnership. The bank simultaneously transferred the $2.85 million in loan proceeds to a second escrow. Of that $2.85 million, $1.84 million was paid to the property's true owner, El Rancho North; the rest of the cash was disbursed to Annigoni's wife, in-laws, and lawyers, as well as to Fauria.

Contrary to Perumean's representations to the bank, the limited partnership never paid off the first trust deed. Duped by false documents, the bank did not discover the fraud until two years later, when the borrowers defaulted on the loan.

Appellant Annigoni and co-defendant Fauria were indicted for defrauding a bank in violation of 18 U.S.C. § 1344 and for aiding and abetting in the making of a false statement to a federally-insured bank in violation of 18 U.S.C. § 1014.

II. Jury selection

The rehearing of this appeal arises out of the district court's denial of one of Annigoni's

Page 1135

peremptory challenges during jury selection. In the proposed voir dire questions Annigoni submitted to the district court, he included the following question: "Have you, or has anyone close to you, ever joined a limited partnership?" When the district court posed that question to the jury panel, potential juror Jue Hom raised his hand and the following colloquy ensued:

THE COURT: Tell me a little bit about that experience.

MR. HOM: I have a joint partnership with the brokerage house--Merrill Lynch.

THE COURT: You invested in one of the Merrill Lynch limited partnerships?

MR. HOM: Yes.

THE COURT: All right. Was that in oil and gas or real estate, or what type of investment was it?

MR. HOM: Mostly it's properties.

THE COURT: And your investment in that is strictly as a passive investor?

MR. HOM: Yes, sir.

The district court next asked the jury pool whether any of them had been involved in litigation. Two potential jurors raised their hands, including Mr. Hom, who engaged the court in the following colloquy:

MR. HOM: Yes, on that investment through Merrill Lynch, I don't know if they have any allegation going on at this time which I don't know anything about--in the partnership.

THE COURT: All right. Do you suspect that there was any litigation regarding that investment? Have you received any notices about it?

MR. HOM: Not one in the past three months or so.

THE COURT: All right. How about in the past year?

MR. HOM: I have taken no action on that.

When the defense attempted to exercise a peremptory challenge against Mr. Hom, the government objected pursuant to Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986), which prohibits the use of peremptory challenges in a racially discriminatory manner. 2 During a sidebar conference, the following colloquy occurred:

THE COURT: All right, what's your reasons?

MR. ANDRES (Counsel for Fauria): He has conservative investments. He has--I think he has various limited partnerships and investments. Because of his investment background, I think that it would be in my client's best interest to have him excused from this jury.

THE COURT: He's Asian.

MR. ANDRES: I understand that, and I think the Prosecution has kicked off number three, who was an Asian lady first strike out of the box. I don't think we've struck any Asian prospective jurors.

MS. SUN (Counsel for Annigoni): Your Honor, can I just add to that? I believe the exchange between the Court and Mr. Hom was as follows--he indicated he hadn't received any notices about legal action within the last three months. The Court then said, "Within the last year?", and I think his answer was, "I didn't take any action about those", which suggests to me that he did get more information and, perhaps, just wasn't willing to share. That made him, to me--that gave me some concern about the extent of those kinds of activities that he's engaged in.

MS. LUM (the Prosecutor): Your Honor, I don't--I didn't interpret his answer that way. I don't think he's been involved in any litigation and there have been numerous minorities that have been on the panel and that have been struck by the Defendants.

Page 1136

The fact that he is involved in limited partnerships--and it was in a very, very tangential way--he barely knew what it involved. I don't think that's sufficient reason to challenge.

THE COURT: I'm not going to allow the exercise of the peremptory challenge because I think it's racially motivated.

As a result of the district court's refusal to allow Annigoni to use one of his peremptory strikes, Mr. Hom was seated as a member of the jury that convicted Annigoni of bank fraud.

On appeal, the panel quickly disposed of the issue Annigoni raised: whether the district court erred when it denied the defense's attempt to exercise a peremptory strike against Mr. Hom. 3 Noting that the district court's sole finding on the issue of discrimination was its observation, "He's Asian," the panel concluded that it was error to deny Annigoni a...

To continue reading