Smith, In re, 81-1133

• Decision Date: 21 September 1981
• Docket Number: No. 81-1133,81-1133
• Citation: 656 F.2d 1101
• Parties: In Re Edward S. SMITH, Petitioner. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1101

656 F.2d 1101

In Re Edward S. SMITH, Petitioner.

No. 81-1133.

United States Court of Appeals, Fifth Circuit.

Unit A

Sept. 21, 1981.

Kerry P. Fitzgerald, Dallas, Tex., for petitioner.

Anne M. Srebro, Asst. U. S. Atty., Dallas, Tex., for defendant.

On Petition for Writ of Mandamus to the United States District Court for the Northern District of Texas.

Before BROWN and GARZA, Circuit Judges, and PETER H. BEER ^*, District Judge.

GARZA, Circuit Judge:

This case involves the struggle between society's interests in bringing those guilty of violating the law to justice and an individual's interest in preserving his personal reputation. Although our Constitution provides for both interests to exist, oftentimes the judiciary is called upon to balance those interests when a conflict arises between them. Today, after balancing the interests, we find the scales of constitutional liberty tip in favor of the individual.

FACTUAL RESUME

This case arises out of an investigation by the United States Attorney's Office in Dallas of bribery allegations concerning the Army and Air Force Exchange Service (AAFES) at its world headquarters in Dallas. The AAFES purchases billions of dollars of merchandise each year for resale to military personnel throughout the military P.X. system.

For approximately two years, the Assistant United States Attorney had conducted the investigation resulting in twenty-six convictions of bribery and related offenses involving AAFES employees, government contractors, and military sales representatives.

On August 1, 1980, after extensive plea bargaining, Churchill Sales Co., Inc., through its president, waived indictment and entered a guilty plea to a felony information ¹ charging one substantive count of bribery of an AAFES purchasing agent in violation of 18 U.S.C. § 201(b)(1) and § 201(b)(3). This plea was taken before Judge Barefoot Sanders of the Dallas Division in the Northern District of Texas. ²

During the plea hearing, in addition to the procedures required by Rule 11 of the Federal Rules of Criminal Procedure, the Assistant United States Attorney read in open court and filed in the criminal case a factual resume prepared by her for purposes of the plea hearing. ³ The factual resume consisted of one page very briefly and generally summarizing the facts concerning the plea of guilty. The resume stated that Churchill Sales Co. had directly paid a named purchasing agent of AAFES amounts in excess of $15,000.00 for the purpose of influencing procurement orders issued by that purchasing agent on behalf of AAFES. However, in addition to describing the events immediately involved in Churchill's plea of guilty, the resume went on to state that Churchill had paid sums to other unnamed AAFES employees, but also specifically named the head of AAFES among those other employees. During the Rule 11 dialogue between the Court and defendant, no mention was made of other names or of any monies paid to anyone other than those to the AAFES purchasing agent, as alleged in the felony information. The head of AAFES, Mr. Smith, is the petitioner in this case.

A little more than one month later, on September 4, 1980, Martin A. Taylor Co., Inc., through its legal representative, similarly waived indictment and entered a guilty plea to a felony information ⁴ charging bribery of another AAFES purchasing agent. This plea was taken before Judge Sarah T. Hughes. ⁵ As in the earlier plea procedure, the Assistant United States Attorney prepared, read aloud in open court, and filed a factual resume similar to the earlier resume filed which again specifically singled out and named the petitioner as having been paid monies in addition to the purchasing agent named in the felony information. However, this resume also stated that "the last payment to Mr. Smith was in January of 1980." As in the prior Rule 11 dialogue between the Court and the defendant's representative, no mention was made of Petitioner nor was any other AAFES employee accused of taking a bribe except the purchasing agent named in the felony information.

As fate would have it, the attorney for Petitioner, both in the proceedings below and now on appeal before us, happened to be present in Judge Hughes' courtroom after having been appointed by Judge Hughes to represent a criminal defendant in a completely unrelated criminal case. While waiting for his business before the Court, counsel for Petitioner heard Mr. Smith's name mentioned as the Assistant United States Attorney read aloud the resume in the Martin Taylor, Co. case. Taken by surprise and unprepared to represent the interests of the Petitioner (an unrelated party to the criminal case), counsel sat silently in the courtroom and began to ponder what remedy might be available to redress the rights of Petitioner.

After each of these plea hearings, the news media carried many accounts concerning the AAFES bribery scandal, and, as was to be expected when any person in a position of responsibility and power ⁶ is implicated in such a scandal, the news media reported that, as a matter of public and official courtroom record, Mr. Smith had been paid bribe monies by various businesses dealing with AAFES.

PROCEEDINGS BELOW

After several months of adverse publicity for Petitioner, on December 16, 1980, Petitioner's attorney filed a motion in both the abovementioned criminal cases asking the District Courts to either strike any mention of Petitioner's name from the factual resumes and record or to seal the record in those proceedings. Although neither motion was filed under seal or requested an in-chambers hearing, both motions requested that the motions themselves be sealed if the requested relief was granted. These motions were also reported in the news media.

Petitioner's motions set forth the facts and urged that the specific mentioning of Mr. Smith's name in connection with the bribery allegations was irrelevant to the Rule 11 inquiry and particularly unnecessary since Mr. Smith had not been mentioned in either of the felony informations upon which the plea hearings were based. The motions also alleged that Mr. Smith had been singled out solely for publicity purposes and that such actions were unethical. ⁷ The motions also noted that Mr. Smith had voluntarily testified before and cooperated with the Federal Grand Jury investigation and that he had not been indicted. The motions further alleged that the factual resumes had injured Mr. Smith's name and reputation in violation of his constitutional rights and because the Assistant United States Attorney could not be held legally accountable for her conduct and because no other remedy existed for redressing these accusations, the motions prayed that the District Courts exercise their equitable powers and grant the requested relief despite the fact that no formal rules provided for such a procedure in a criminal case. ⁸

On the 7th and 12th of January, 1981, hearings upon the motion in Criminal Case No. CR 3-80-198 were held before Judge Hughes. At these hearings the Court took judicial notice of the factual resume mentioning Mr. Smith by name. Evidence was also introduced concerning the widespread news coverage linking Mr. Smith with the AAFES scandal through the earlier plea hearings and factual resumes. After the initial facts were brought to the Court's attention, Judge Hughes asked counsel for Petitioner why he had allowed several months to elapse prior to filing the motion. Counsel quite candidly admitted that he neither knew of or could find any standard procedure to address and remedy the situation involving his client. ⁹ During argument of the motion, the government suggested the damage to Mr. Smith's reputation had already been done and that any relief of which the Court could grant would be a "fruitless gesture." Without elaboration, the Court apparently agreed with the government's argument and denied the motion from the bench. On the next day, January 13, 1981, Judge Sanders entered a similar order denying relief in Criminal Case. No. CR 3-80-165.

Three days after Judge Sanders' ruling, Petitioner Smith notified the Personnel Division of AAFES of his intention to retire at the end of the business day on April 12, 1981 the last day of 30 years of service for Smith. Upon retirement Smith was to receive his normal retirement pay commensurate with his employment grade plus an additional retirement annuity because of his participation in the Executive Management Program (EMP). ¹⁰ Approval for his retirement was soon acknowledged.

On March 12, 1981, Smith's attorney filed a petition in this Court seeking a Writ of Mandamus to compel the District Courts to strike and/or seal all references made to Smith in the criminal cases. On April 1, an administrative panel of this Court ordered the Clerk of the District Courts to temporarily seal the records in both cases pending oral argument and resolution of this case. However, on the same day, the Commander of AAFES issued notice to the Petitioner that he was being suspended from the EMP. The only reasons given for the suspension were that Petitioner had been accused of wrongdoing in the two factual resumes previously discussed. After several months of AAFES administrative actions, amended and additional motions, and several orders entered by the administrative panel of this Court, the status of Petitioner remains essentially as it was on April 1 he has been retired with his regular retirement but his EMP benefits are being held in abeyance pending further AAFES proceedings.

DUE PROCESS

Petitioner Smith contends that the accusation of a criminal offense, by inclusion of his name in the factual resume, has so damaged his name, reputation, and economic interests that the government's actions have violated his liberty and property interests contrary to the due process protection afforded by the Fifth Amendment of the United States Constitution. Petitioner's counsel conceeds that no relief...