U.S. v. Bay, 87-1439

• Decision Date: 10 June 1988
• Docket Number: No. 87-1439,87-1439
• Citation: 852 F.2d 702
• Parties: UNITED STATES of America, Respondent, v. BAY, Larry E., Petitioner. . Submitted under Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 702

852 F.2d 702

UNITED STATES of America, Respondent, v. BAY, Larry E., Petitioner.

No. 87-1439.

United States Court of Appeals, Third Circuit.

Submitted under Rule 12(6)

June 10, 1988.

Decided July 12, 1988.

Rehearing Denied Aug. 18, 1988.

David B. Byrne, Jr., Robison & Belser, P.A., Montgomery, Ala., for petitioner.

Edward S.G. Dennis, Jr., Walter S. Batty, Jr., Bucky P. Mansuy, U.S. Attorney's Office, Philadelphia, Pa., for respondent.

Before BECKER, GREENBERG and HUNTER, Circuit Judges.

OPINION OF THE COURT

JAMES HUNTER, III, Circuit Judge:

This case is before this court on remand from the Supreme Court, --- U.S. ----, 108 S.Ct. 1724, 100 L.Ed.2d 189. The panel, in a memorandum opinion filed December 28, 1987, affirmed Bay's convictions and rejected all of Bay's arguments on appeal. One of the issues appealed was the district court's refusal to instruct the jury on the defense of entrapment. The court based its ruling on the law of this circuit that a defendant who admits committing the charged act but denied mens rea, as did Bay, may not assert the entrapment defense. See United States v. Hill, 655 F.2d 512 (3d Cir.1981). Because this panel was bound by the rule of Hill, the district court was affirmed on this issue.

Bay petitioned for certiorari, and while the petition was pending, the Supreme Court decided Mathews v. United States, --- U.S. ----, 108 S.Ct. 883, 99 L.Ed.2d 54 (1988). In that decision, the Court resolved a split among the circuits, and held that a defendant need not admit mens rea in order to assert entrapment, thereby implicitly overruling Hill. The Court thereafter granted Bay's petition, vacated this court's decision, and remanded for further consideration in light of Mathews. We will now remand to the district court for a limited hearing to determine the legal question of whether Bay can produce sufficient evidence to warrant presenting the entrapment defense to a jury. Aside from the issue of entrapment, we reject all other issues raised in Bay's appeal for reasons stated in our original memorandum opinion.

BACKGROUND

This case arises out of a grand jury investigation of corruption among government contractors. In late 1985, the Defense Personnel Support Center ("DPSC") solicited bids on a trouser contract. One of the bids came from Coastal Industries, of Selma, Alabama ("Coastal"), with which Larry Bay was affiliated. Another bid was submitted by T.H. Apparels, Inc. of Gardena, California ("T.H. Apparels"). The grand jury, empaneled and sitting in the Eastern District of Pennsylvania, was investigating charges that during the first half of 1986, Coastal had arranged a $22,000 payment to T.H. Apparels in order to get them to withdraw their low bid. This arrangement seems to have involved as an intermediary B.G. Colton, an officer of H. Landau and Co., of Bala Cynwyd, Pennsylvania. Apparently, Colton sent to Coastal a false invoice for a non-existent shipment of cloth. In return, Coastal sent Colton a check made out to the fictitious "B.G. Mills," which Colton deposited into his personal bank account. Over several months, Colton then distributed most of that money to representatives of T.H. Apparel, and kept part of it for himself. Coastal was eventually awarded a portion of the contract, receiving total payments of over $2.5 million.

Larry Bay became involved in the investigation in April 1986, when he was contacted by FBI agents. The agents informed Bay of their identity, the nature of their investigation, and warned him of his Miranda rights. Bay refused to answer questions and informed the agents that he was represented by counsel. On October 24, 1986, Bay was served with a subpoena ordering him to appear before a grand jury on November 4, 1986. Prior to his appearance, Bay and his lawyer met with representatives of the U.S. Attorney, and Bay's attorney stated that Bay intended to refuse to answer questions. On November 4, 1986, Bay appeared before the grand jury, with his attorney outside the room. Bay was advised that he was a "subject" but not a "target" of the grand jury investigation, and advised of his rights. Bay then invoked his Fifth Amendment rights to refuse answering questions.

Continuing its investigation, the grand jury subpoenaed Coastal on January 5, 1987, requiring the production of, inter alia, records of transactions with H. Landau and Co. and with B.G. Mills. Unknown to Bay, by that time Emanuel Landau ("Landau"), the president of H. Landau and Co., had agreed to cooperate with the government in its investigation; both he and his company later entered guilty pleas After speaking with Bay's wife, Landau called his attorney and the FBI, and was advised to call Bay and tape record the conversation. Landau did so, and turned the tape over to the FBI. He was then instructed to make further taped phone calls to Bay on January 8 and 19, in an effort to draw more information out of Bay. During these conversations, Bay seems to have been attempting to get Landau's aid in having Colton cover up the scheme to pay off T.H. Apparel; the plan was to have Colton ship goods to Coastal which would match the description on the invoice sent the previous year. The three recorded conversations formed the basis for the three counts in Bay's indictment.

in charges related to the corruption at the DPSC. Not knowing of Landau's cooperation with the government, on January 7, 1987, Bay's wife called Landau and asked him to call Bay in about an hour, and to use a "clean" phone.

A trial was held, and after the close of evidence, the court instructed the jury on May 21, 1987. The charge did not include an instruction on entrapment which Bay had requested, because Bay would not admit to every element of the charged offenses, which the court required as a condition for the instruction.

The jury subsequently returned a verdict of not guilty on Count I (based on the January 7 conversation), guilty on Count II (the January 8 conversation), and guilty as to the first statement of Count III (the January 19 conversation) but not guilty as to the second statement.

On July 20, 1987, the district court denied Bay's motion for judgment of acquittal n.o.v. and entered a judgment of conviction. On the same day, the court sentenced Bay to pay a fine of $10,000 and a special assessment of $100, and to serve five years' probation, including six months in a half-way house and 300 hours of community service. Bay filed a timely notice of appeal on July 28, 1987.

DISCUSSION

Mathews enlarged the range of cases in which courts must allow the entrapment defense, but it did not do so unconditionally. As the Court wrote: "We hold that even if the defendant denies one or more elements of the crime, he is entitled to an entrapment instruction whenever there is sufficient evidence from which a reasonable jury could find entrapment." 108 S.Ct. at 886. Our inquiry in the current case thus requires two steps: first, whether the record discloses sufficient evidence from which the jury could have found entrapment; and, second, whether Bay can show that he could have adduced sufficient evidence had he been given the opportunity to do so. Because we hold that the evidence actually presented did not warrant instructing the jury on entrapment, the...