U.S. v. Arteaga, DAVILA-AGUDEL

• Decision Date: 23 July 1997
• Docket Number: 95-30042,RAMIREZ-CASTR,DAVILA-AGUDEL,95-30038,ARRANGO-LAVERD,Nos. 95-30018,95-30051 and 95-30061,D,s. 95-30018
• Citation: 117 F.3d 388
• Parties: 47 Fed. R. Evid. Serv. 417, 97 Cal. Daily Op. Serv. 4495, 97 Cal. Daily Op. Serv. 5805, 97 Daily Journal D.A.R. 7474, 97 Daily Journal D.A.R. 9353 UNITED STATES of America, Plaintiff-Appellee, v. Clara Patricia ARTEAGA, also known as Melissa Sandoval, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Jose Fernando ARTEAGA, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Carlos Albertoefendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Jennyefendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Beatrizefendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 388

117 F.3d 388

47 Fed. R. Evid. Serv. 417, 97 Cal. Daily Op.

Serv. 4495,

97 Cal. Daily Op. Serv. 5805,

97 Daily Journal D.A.R. 7474,

97 Daily Journal D.A.R. 9353

UNITED STATES of America, Plaintiff-Appellee, v. Clara Patricia ARTEAGA, also known as Melissa Sandoval,

Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Jose Fernando ARTEAGA, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Carlos Alberto DAVILA-AGUDELO, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Jenny ARRANGO-LAVERDE, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Beatriz RAMIREZ-CASTRO, Defendant-Appellant.

Nos. 95-30018, 95-30038, 95-30042, 95-30051 and 95-30061.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 7, 1996.

Decided June 13, 1997.

As Amended on Denial of Rehearing July 23, 1997.

Mervyn Hamburg, Department of Justice, Washington, DC, Steven Skrocki, Assistant United States Attorney, Anchorage, AK, for plaintiff-appellee United States of America.

Dawn Reed-Slaten, Powell & Slaten, Anchorage, AK, for defendant-appellant Clara Patricia Arteaga.

Scott A. Sterling, Jensen, Harris & Roth, Anchorage, AK, for defendant-appellant Beatriz Ramirez-Castro.

Brent R. Cole, Marston & Cole, Anchorage, AK, for defendant-appellant Jenny Arrango-Laverde.

John C. Pharr, Anchorage, AK, for defendant-appellant Carlos Alberto Davila-Agudelo.

Richard Clem, Minneapolis, MN, for defendant-appellant Jose Fernando Arteaga.

Appeal from the United States District Court for the District of Alaska; John W. Sedwick, District Judge, Presiding. D.C. Nos. CR-94-055-03-JWS, CR-94-00055-JWS, CR-94-00055-08-JWS and CR-94-055-05-JWS.

Before GOODWIN, BRUNETTI and KOZINSKI, Circuit Judges.

KOZINSKI, Circuit Judge.

We travel the poorly-charted byways of the hearsay rule in a case where the trial judge--facing a barrage of defense objections--ruled that much of the prosecution's evidence could not be considered by the jury for the truth of the matters asserted.

Background

Appellants Jose Fernando Arteaga and Jenny Arrango-Laverde were convicted of money laundering, 18 U.S.C. § 1956(a)(1)(A)(i), as part of a scheme in which proceeds of cocaine sales in Alaska were wired to California. ¹ They challenge the sufficiency of the evidence against them. The record contains sufficient proof that Arteaga was involved in a conspiracy to sell cocaine; that any funds he wired to Laverde were proceeds of that operation; and that Laverde was aware that the money was "dirty." ² It is not, however, clear that the defendants were involved in the transactions charged in the indictment. The government--inexplicably--offered no proof that the writing on the relevant documents was the defendants', nor did any witness place defendants at locations where the transfers were initiated or completed.

The evidence of the transactions consisted mainly of Western Union records, including a series of "to-send-money" forms. A "to-send-money" form, filled out by the customer at a Western Union counter, lists the sender's name, address and telephone number, the name of the intended recipient and, of course, the amount of money being wired. After the customer completes this form, a clerk enters the information into a computer for transmittal to the receiving location. ³ There the payee completes the left side of a "to-receive-money" form, entering the sender's name, the recipient's name and other information needed to identify the transaction. The clerk may or may not ask to see the recipient's I.D., ⁴ and may or may not record identifying information in the spaces provided for that purpose on the right side of the form. To complete the transaction, the clerk issues a Western Union check, which the recipient can endorse and cash on the spot. Microfilm copies of the endorsed checks are retained by Western Union for five years.

Copies of two "to-send-money" forms were found in Arteaga's apartment on September 15, 1993; one indicated that $500 was sent from Carlos Torres (allegedly an Arteaga alias) to Linda Arce (allegedly an Arrango-Laverde alias) ⁵ earlier that day. See Figure 1.

FIGURE 1

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

A corresponding Western Union "to-receive-money" form lists the person who claimed the money as "Linda Arce" and her "I.D. presented" as "B4004156." See Figure 2. ⁶

FIGURE 2

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

A Western Union computer printout verifies that the money was sent. See Figure 3.

FIGURE 3

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

In order to connect Laverde to the name Linda Arce, the prosecution introduced a facsimile of a valid California driver's license bearing Laverde's picture, the name "Linda Arce Fernandez" and the number B4004156. The prosecution also introduced the testimony of an apartment manager in Anchorage, together with a rental application ⁷ naming Linda A. Fernandez as co-applicant for an apartment. Fernandez's I.D. was listed as California driver's license number B4004156. Additionally, the manager identified Laverde as the person who called herself Linda Fernandez, and he testified that after renting the apartment, she lived there with Arteaga for about a week.

The government offered the Western Union "to-send-money" and "to-receive-money" forms into evidence. Defendants argued that customer-provided information on the forms was hearsay, not subject to any exception, and should be excluded.

Hearsay

The notations on the forms appear to fit the definition of hearsay: they were out-of-court statements offered, at least initially, "for the truth of the matters asserted." For example, the statement "$500" on the form was offered to prove that $500 was sent. ⁸ The statement "Linda Arce" was offered to prove that Linda Arce--or someone calling herself Linda Arce ⁹--received the money.

However, there are several theories under which the customer-provided information would not be hearsay under the Federal Rules. Most significantly, under Rule 801(d)(2)(A), a party's own statement, if offered against that party, is not hearsay; likewise, under 801(d)(2)(E), the statement of a party's co-conspirator, if made in furtherance of the conspiracy and offered against the party, is not hearsay. ¹⁰ Absent other objections, statements made by Laverde would therefore have been admissible against Laverde under 801(d)(2)(A) and against Arteaga under 801(d)(2)(E), and vice versa.

The district court did not seek shelter in Rule 801(d)(2). ¹¹ Instead, it ruled that some portions of the Western Union records could be considered for their truth under the business records exception to the hearsay rule. Fed.R.Evid. 803(6). However, that exception is premised on the reliability of records that an employee has a business duty to keep; it does not permit introduction of statements made by customers unless the employee was responsible for verifying the statements. United States v. Ordonez, 737 F.2d 793, 805 (9th Cir.1984) (a document is not admissible as a business record if the source of information indicates a lack of trustworthiness); see also Fed.R.Evid. 803, Advisory Committee Notes to Paragraph 6 ("If ... the supplier of the information does not act in the regular course [of business], an essential link is broken; the assurance of accuracy does not extend to the information itself, and the fact that it may be recorded with scrupulous accuracy is of no avail."). Courts that have applied this principle to Western Union records have generally held that customer-supplied information on "to-send-money" forms, which is not verified, should be excluded, while information on "to-receive-money" forms, which generally is verified, should be admitted. ¹²

Eventually, the court acknowledged the limitations of the business records exception and announced its intention to admit the evidence instead under the "catch-all" exception to the hearsay rule. Fed.R.Evid. 803(24). Since the "catch-all" exception applies only to statements that carry certain "guarantees of trustworthiness," id., which were missing here, this was another questionable decision.

Whether this ruling was correct, however, is moot, because the court--possibly to put wrangling over defendants' hearsay objections to rest--eventually informed the jury that it could not consider the customer-provided information on any Western Union forms for the truth of the matters asserted. The court stated:

The [hearsay] objection is overruled; however, I will admit the exhibit, which is now admitted, subject to a limiting instruction. As with the other exhibits in this series, ladies and gentlemen, it may contain information obtained from sources outside the Western Union system, which you may not consider for the truth of that information.

Because hearsay problems arise only when information is being considered for its truth, the judge's decision to admit the records under a hearsay exception, but not allow the jury to consider the key statements for their truth, was largely self-defeating. ¹³ Indeed, if a statement cannot be considered for its truth, no hearsay problem arises, and the judge need not invoke a hearsay exception to admit it. ¹⁴

Nonetheless, the government, perhaps afraid of having the records excluded entirely, warmly embraced the court's instruction. The prosecutor assured the court: "Any of that information that is provided by the customer, we are not offering for the truth of the matter asserted." Later, the government repeated that it "has no objection to a limiting instruction as to ... all the Western Union documents that will be coming in." (emphasis added).

The government realized too late it was shooting its case in the foot. It now argues that the customer-provided information should have been admitted for its truth. See Government's Consolidated Brief at 36-37 (arguing that the forms and checks...