U.S.A. v. Derman

• Decision Date: 09 February 2000
• Docket Number: Nos. 99-1577,99-1578,s. 99-1577
• Citation: 211 F.3d 175
• Parties: (1st Cir. 2000) UNITED STATES OF AMERICA, Appellee, v. HERBERT DERMAN, Defendant, Appellant. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 175

211 F.3d 175 (1st Cir. 2000)

UNITED STATES OF AMERICA, Appellee, v. HERBERT DERMAN, Defendant, Appellant.

Nos. 99-1577, 99-1578

United States Court of Appeals For the First Circuit

Heard February 9, 2000

Decided May 5, 2000

[Copyrighted Material Omitted] Richard M. Egbert, with whom Mary Ellen Kelleher was on brief, for appellant.

Ariane D. Vuono, Assistant U.S. Attorney, with whom Donald K. Stern, United States Attorney, and Shelbey Wright, Assistant U.S. Attorney, were on brief, for appellee.

Before: Selya, Boudin, and Lynch, Circuit Judges.

LYNCH, Circuit Judge.

Herbert Derman, a lawyer, was charged with eight counts stemming from a marijuana-growing operation on the property of his weekend home along the Massachusetts-New York border. A jury convicted Derman of two counts: conspiracy to manufacture, distribute, and possess with intent to manufacture and distribute marijuana, see 21 U.S.C. § 846, and criminal forfeiture, see 21 U.S.C. § 853. Derman was sentenced to a term of 121 months in prison; five years of supervised release; a fine of $20,000; and forfeiture of his weekend home and property. Derman appeals his conviction and sentence on four grounds: (1) claimed prosecutorial misconduct through a persistent appeal to class prejudice; (2) denial of his motion to suppress evidence obtained during searches of his properties; (3) failure of the court to offer and his trial counsel to request an opportunity for closing arguments on the forfeiture count; and (4) errors regarding the timing of his appeal of the forfeiture sentence. This last issue involves an important point of criminal procedure: we decide when an order of forfeiture, entered after the 1996 amendments to Rule 32, becomes final, thereby triggering the time for appeal. We affirm the judgment and sentence.

I.

Herbert Derman owned property, consisting of two parcels, that straddled the Massachusetts-New York border. Derman, together with his wife, Barbara Derman, had a weekend home on the New York side, in the town of Hillsdale. In 1983, Derman leased a portion of the property on the Massachusetts side, in the towns of North Egremont and Alford, to Marcel Rosenzweig for the purpose of erecting a greenhouse. Rosenzweig erected the greenhouse in the spring of 1984. Above ground the new structure appeared to be a commercial greenhouse, below ground the space was designed for the greenhouse's true purpose: growing marijuana. Marijuana was grown in the underground location until September 1991 when Richard Haber, an indicted co-conspirator, was arrested at the site for possession of a small amount of marijuana. Though the underground operation was not discovered at this time, as a precautionary measure, the operation was moved to Rosenzweig's property in Sandisfield Massachusetts, where it continued until it was exposed on August 17, 1995.

In December 1995, agents obtained and executed search warrants on Derman's New York City apartment, his New York City law office, his Hillsdale residence, his Massachusetts property, and his Vail, Colorado home. Eventually, Derman and six others, including Rosenzweig and Haber, were charged with various federal crimes relating to the marijuana-growing operation.¹

In contrast to his indicted co-conspirators, who pled guilty in accordance with plea agreements,² Derman decided to stand trial. His principal defense was that he had no knowledge of the marijuana-growing operation on his property. Derman's motion to suppress the evidence seized during the searches of his properties was denied on July 23, 1998. See United States v. Derman, 23 F. Supp. 2d 95, 98 (D. Mass. 1998). On July 29, 1998, a jury returned guilty verdicts on counts one and thirteen and not guilty verdicts on the remaining counts. On the government's motion, the court, after issuing three stays to allow Derman time to file a brief, entered a preliminary order of forfeiture on November 6, 1998. On December 15, 1998, Derman filed a motion for leave to file a late notice of appeal of the preliminary forfeiture order. The court denied this motion on January 4, 1999. Two days later, Derman filed another motion, which the court construed as a motion for reconsideration of the motion for leave to file a late notice of appeal. On March 5, 1999, Derman was sentenced and on March 22, 1999, the court denied Derman's motion for reconsideration. He now appeals.

II.

Derman's appeal concentrates on the charge of prosecutorial misconduct through a persistent appeal to class prejudice. His accusation focuses not only on statements by the prosecutor, the usual subject of misconduct allegations, but also on the government's trial strategy, which, Derman says, combined inappropriate prosecutorial statements with the introduction of class-biased evidence. Derman points, in particular, to nine instances during the trial:

1. the admission into evidence of a photograph of Barbara Derman in a ski outfit with mountains in the background and a witness's identification of Mrs. Derman in the photograph;

2. the questioning of Derman's secretary about "Derman's life-style back in the early 1970s when [she] began to work for him;"

3. the questioning of another secretary about Derman's property, possessions, and vacations;

4. the admission into evidence of a part of a videotape of Derman's Hillsdale home, which had been searched;

5. the admission into evidence of certain photographs from a photo album, as well as the cover page to the album, which was labeled "Special Memories" and which identified the locations photographed in the album, including some other than the locations in the admitted photographs;

6. the testimony of a Drug Enforcement Administration agent that the photo album contained photographs depicting all of the locations named in the "Special Memories" list 7. the cross-examination of Barbara Derman regarding the locations identified in the "Special Memories" list;

8. the introduction into evidence of receipts from Cartier jewelers and another jeweler and the questioning of Barbara Derman regarding these items;

9. the references in the prosecutor's closing argument and rebuttal to vacations and jewelry and the statement that "if there is one thing that this case has shown[, it] is that the Dermans needed and wanted to get more money."

At trial, Derman objected to items 1,³ 2, 3,⁴ and 8 on various grounds and to items 4 and 5 on the basis of class bias. At trial, Derman did not make the allegation he now makes that the prosecution engaged in a course of conduct at trial that was based on class prejudice.

The government contends that the prosecutor's comments during the trial "focused directly on Derman's claim . . . that he had no motive, financial or otherwise, to engage in a drug conspiracy." Further, it says that "[e]vidence of Derman's lifestyle was specially relevant . . . to show how he used the proceeds." The government also contended at oral argument that Derman's attorney opened the door to this line of inquiry when he asked rhetorically in his opening argument, "where is the money?"

Courts have found prosecutorial misconduct for introducing class bias when prosecutors have engaged in actions that might inflame the passions of the jury to such an extent as to call into doubt the fairness of the trial. The Second Circuit, in United States v. Stahl, 616 F.2d 30 (2d Cir. 1980), reversed a judgment of conviction in a jury trial where the record indicated that the prosecutor "intend[ed] to arouse prejudice against the defendant because of his wealth and engaged in calculated and persistent efforts to arouse such prejudice throughout the trial . . . [and] made several statements . . . that were not supported by the evidence and may, in some instances, have been intentionally misleading." Id. at 32. Similarly, the Sixth Circuit, in Sizemore v. Fletcher, 921 F.2d 667 (6th Cir. 1990), upheld the issuance of a writ of habeas corpus in a case where the prosecutor "made repeated and deliberate statements clearly designed to inflame the jury and prejudice the rights of the accused, and the court [did] not offer[] appropriate admonishments to the jury." Id. at 670; see also Read v. United States, 42 F.2d 636, 645 (8th Cir. 1930) (reversing guilty verdict in misappropriation of funds case). As this court stated in United States v. Rothrock, 806 F.2d 318 (1st Cir. 1986), "[a]rgument, especially the government's, should not degenerate into an appeal to prejudice." Id. at 323.

That said, the line between statements that are "appeals to class prejudice [that] are highly improper and cannot be condoned" and statements regarding class that are "relevant to the issues at hand" is not easily drawn. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 239 (1940). It is especially difficult to draw when an accused's motivation is at issue, and when, as here, the alleged motivation is financial. Derman says that the government crossed the line and that his conviction should be reversed and his sentence vacated.⁵

We have no need to worry about the remedy because there was no misconduct. The statements by the prosecutor, during the trial and during closing arguments, went to the motive for the alleged crimes and did not impermissibly stray into class bias. Derman's motive was not only essential to the government's case, but also crucial to the defense, as is evidenced by defense counsel's question, in his opening argument, "where is the money?," and by his statement, in his closing, "There is no money, they can't find any money."

Additionally, the district court judge was sensitive to the potential prejudicial effect of the evidence admitted.⁶ With this in mind, he limited the introduction of the number of photographs of Barbara Derman, he restricted the extent to which the photo album could be used, and he curtailed the use of the videotape. Further, he made an offer to give a limiting instruction on some of the admitted evidence, an...