U.S. v. Cheek, 88-1582

• Decision Date: 21 August 1989
• Docket Number: No. 88-1582,88-1582
• Parties: -564, 89-2 USTC P 9509 UNITED STATES of America, Plaintiff-Appellee, v. John L. CHEEK, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1263

882 F.2d 1263

65 A.F.T.R.2d 90-564, 89-2 USTC P 9509

UNITED STATES of America, Plaintiff-Appellee, v. John L. CHEEK, Defendant-Appellant.

No. 88-1582.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 6, 1988.

Decided Aug. 21, 1989.

Kristina M.L. Anderson, Asst. U.S. Atty., Anton R. Valukas, U.S. Atty., David J. Stetler, James R. Ferguson, Asst. U.S. Attys., Crim. Receiving, Appellate Div., Chicago, Ill., for U.S.

Cynthia Giacchetti, Tuite, Mejia & Giacchetti, Chicago, Ill., for John L. Cheek.

Before COFFEY, MANION and KANNE, Circuit Judges.

KANNE, Circuit Judge.

Defendant-appellant John L. Cheek appeals his conviction of three counts of tax evasion, one count of false claims against the government for income tax withheld, and six counts of willful failure to file individual tax returns. He challenges his conviction on numerous grounds. Chief among these grounds are the arguments that the district court erred in instructing the jury on his theory of defense, and that the district court's reinstruction of the jury was improper. For the reasons discussed below, we affirm.

I. Facts

Defendant John L. Cheek is a pilot for American Airlines, where he has worked since 1973. From 1969 to 1979, he properly filed tax returns. For the tax years of 1980 through 1986, however, he did not file tax returns, except for 1982, when he filed a frivolous return. From January, 1980, to January, 1981, he filed frivolous W-4 forms claiming an increasing number of withholding allowances, eventually claiming as many as 60. Thereafter, he claimed on his W-4 form that he was exempt completely from taxation.

During this time, Cheek also filed civil suits against American Airlines and the Internal Revenue Service. The suit against American Airlines claimed that taxes were wrongly withheld by American from his wages. In his suit against the IRS, Cheek claimed, for various reasons, that he was not required to pay any income tax. In one of these cases, not only did the district court find Cheek's position frivolous, but also fined him $10,000.00 (subsequently reduced on appeal to $5,000.00) for bringing this suit. See Cheek v. Doe, 828 F.2d 395 (7th Cir.), cert. denied, 484 U.S. 955, 108 S.Ct. 349, 98 L.Ed.2d 374 (1987). Cheek also appeared at the criminal tax trials of other persons.

On March 9, 1987, Cheek was indicted with three counts of tax evasion for the tax years 1980, 1981, and 1983 (in violation of 26 U.S.C. Sec. 7201), one count of false claims against the government for income tax withheld in 1982 (in violation of 18 U.S.C. Sec. 287), and six counts of willful failure to file income tax returns for the tax years 1980, 1981, 1983, 1984, 1985 and 1986 (in violation of 26 U.S.C. Sec. 7203).

Before closing arguments in the trial, Judge Plunkett conducted a jury instruction conference. Among the instructions he discussed was proposed Government Instruction No. 38. This instruction read:

A person's opinion that the tax laws violate his constitutional rights does not constitute a good faith misunderstanding of the law. Furthermore, a person's disagreement with the government's tax collection system and policies does not constitute a good faith misunderstanding of the law.

The trial judge then modified this instruction. Given to the jury as Jury Instruction No. 32, this instruction now read:

An objectively reasonable good faith misunderstanding of the law negates willfulness. An objectively reasonable good faith misreading of the law may be based upon the defendant's own legal research or an attorney's advice. Good faith reliance does not require that the defendant's research come to a correct determination of the law, nor that the attorney's advice be correct. It requires that the defendant honestly and reasonably believe his research or the advice, and believe that it is correct and relies upon it.

Disagreement with the law does not constitute a good faith misunderstanding of the law because it is the duty of all persons to obey the law whether or not they agree with it. Persistent refusal to acknowledge the law does not constitute a good faith misunderstanding of the law.

Also given to the jury was Instruction No. 53, Cheek's theory of defense instruction. The court had drafted this instruction for Cheek. It discussed, among other things, Cheek's belief that he was not a taxpayer, that his wages did not constitute income, and that he was not required to file tax returns.

The jury began its deliberations on the morning of November 10. At 3:00 that afternoon, it sent out a note asking for a transcript of Cheek's testimony in which he discussed his beliefs. The court denied this request. At about 4:15 p.m., the jury sent out a second note. This note stated in part:

We have a basic disagreement between some of us as to if Mr. Cheek honestly and reasonably believed that he was not required to pay income taxes ... Page 32 [the modified Government Instruction No. 38] discusses good faith misunderstanding and disagreement. Is there any clarification you can give us on this point? Page 53 [presumably Jury Instruction No. 53] is the one we cannot get by as to his belief.

In the ensuing discussion about this note, the government pointed out to the court that in revising Government Instruction No. 38, the court had eliminated the statements that a person's opinion that the tax laws violate his constitutional rights and a person's disagreement with the government's tax collection do not constitute a good faith misunderstanding of the law. Judge Plunkett's response to the jury's note included a supplemental instruction with these missing statements.

At 7:10 p.m. that day, the jury sent out another note saying that it still could not reach a decision because "we are divided on the issue as to if Mr. Cheek honestly and reasonably believed that he was not required to pay income tax." When the jurors resumed deliberating on November 12, the government moved for the court to clarify its instructions to the jury before it resumed its deliberations. Judge Plunkett agreed with this request, and gave the jury a second additional instruction. This instruction stated that "an honest but unreasonable belief is not a defense [to the charges] and does not negate willfulness," and that "advice or research resulting in a conclusion that wages of a privately employed person are not income or that the tax laws are unconstitutional is not objectively reasonable and cannot serve as the basis for a good faith misunderstanding of the law defense." Coupled with this instruction was the Silvern instruction (commonly referred to as the "dynamite" or "blasting" charge), which the court previously had given to the jury. ¹

Two and-a-half hours later, the jury returned with its verdict. With this verdict, it included several notes that it wanted the court to read after the verdict was read. Before reading any of the notes, the court clerk read the guilty verdict aloud, and the judge polled the jury. Each of the jurors affirmed that the guilty verdict was his or her own. After reading the notes, the judge polled the jurors once again. None of them indicated any disagreement with the verdict.

The first note, signed by all twelve jurors, stated that they found defendant "guilty as charged on all counts" and that some jurors wished to express their personal opinions--opinions "not meant to affect in any way their verdict of guilty." It said that these notes were given to the judge as "a complaint against the narrow and hard expression under the constraints of the law." Another one of these notes said: "I know the gentleman is guilty of a crime. However, I honestly believe he believed so deeply in his cause that he has risked everything for this cause and truly does not believe that he is breaking the law." The last note said: "(A) 'Honest and Sincere in his Cause'--He is Guilty " and "(B) Not 'Objectively Reasonable' He is Guilty."

Cheek now raises numerous challenges to his conviction. Only two of these merit discussion in detail. These are Cheek's challenge to the notion that the standard of whether his belief that he was not breaking the law was valid was one of "objective reasonableness," and his argument that it was error for the district court to have reinstructed the jury.

II. Discussion

A. Instructions to the Jury

1. Use of the "Objectively Reasonable" Standard

All of the crimes of which Cheek was convicted require willfulness. In United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976), the Supreme Court held that "willfully in the context of the Internal Revenue Code" simply means "a voluntary, intentional violation of a known legal duty." Id. at 12, 97 S.Ct. at 23. Under the proper circumstances, however, a good faith misunderstanding of the law may negate willfulness. See, e.g., United States v. Bressler, 772 F.2d 287, 290 (7th Cir.1985), cert. denied, 474 U.S. 1082, 106 S.Ct. 852, 88 L.Ed.2d 892 (1986). Cheek argues that the district court erred in instructing the jury that such a good faith misunderstanding of the law must be "objectively reasonable." Cheek contends that every other circuit that has ruled on the issue of whether a good faith misunderstanding of the law must be objectively reasonable has decided to the contrary, and has adhered to a subjective standard of reasonableness. See, e.g., United States v. Whiteside, 810 F.2d 1306, 1310 (5th Cir.1987); United States v. Phillips, 775 F.2d 262, 264 (10th Cir.1985); United States v. Aitken, 755 F.2d 188, 191 (1st Cir.1985); Cooley v. United States, 501 F.2d 1249, 1253 n. 4 (9th Cir.1974), cert. denied, 419 U.S. 1123, 95 S.Ct. 809, 42 L.Ed.2d 824 (1975); Yarborough v. United States, 230 F.2d 56, 61 (4th Cir.), cert. denied, 351 U.S. 969, 76 S.Ct. 1034, 100 L.Ed. 1487 (1956); Battjes v. United States, 172 F.2d 1, 4 (6th Cir.1949); see also United States v. Kraeger, 711 F.2d 6, 7 (2d Cir.1983) (good faith misunderstanding of the law negates...