U.S. v. Fadel, 87-2105

• Decision Date: 22 April 1988
• Docket Number: No. 87-2105,87-2105
• Citation: 844 F.2d 1425
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. M.K. FADEL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1425

844 F.2d 1425

UNITED STATES of America, Plaintiff-Appellant, v. M.K. FADEL, Defendant-Appellee.

No. 87-2105.

United States Court of Appeals Tenth Circuit.

April 22, 1988.

Joe D. Whitley, Appellate Section, Dept. of Justice, Wayne T. Dance, Asst. U.S. Atty., and Brent D. Ward, U.S. Atty., Salt Lake City, Utah (Samuel Rosenthal, Chief, Appellate Section, Dept. of Justice, Washington, D.C., with them on the brief), for plaintiff-appellant.

Loni F. DeLand, McRae & DeLand, Salt Lake City, Utah, for defendant-appellee.

Before SEYMOUR and MOORE, Circuit Judges, and PHILLIPS ^*, District Judge.

PHILLIPS, District Judge.

I.

On March 25, 1987, a federal grand jury sitting in Salt Lake City, Utah returned a three count indictment charging defendant M.K. Fadel with conspiracy to possess and distribute cocaine in violation of 21 U.S.C. Sec. 846, and two counts of distributing cocaine in violation of 21 U.S.C. Sec. 841(a)(1).

On May 1, 1987 Fadel filed a motion to dismiss the indictment on the grounds of outrageous governmental misconduct and entrapment allegedly arising out of the government's undercover investigation of the case. Prior to the trial of the case, the district court ruled that defendant had been entrapped as a matter of law and dismissed the indictment with prejudice. From this order, the government lodged a timely appeal. We reverse the district court's order and remand the matter for trial.

II.

In support of his motion to dismiss, Fadel filed an affidavit adopting the "Statement of Facts" portion of his motion. Although laced with argument, the Statement of Facts (hereinafter "affidavit") set forth the basic scenario giving rise to Fadel's alleged entrapment. According to Fadel, he and Kay Sugar, the government's confidential informant, were long time friends. Prior to 1986, their friendship was not sexual, and involved minimal contact. In March 1986, while serving as a government informant, Sugar renewed her friendship with Fadel and their relationship became sexually intimate. Sugar subsequently requested Fadel to assist her in obtaining some cocaine which she could sell. According to Fadel, he initially refused to finance her or otherwise involve himself in the venture. Eventually, after repeated requests by Sugar, Fadel agreed to provide financing and make arrangements for a source of supply for the cocaine. Pursuant to this agreement, Fadel purchased cocaine for Sugar on two occasions in early May 1986. Fadel's first cocaine purchase for Sugar occurred on May 3, 1986 and involved one-quarter ( 1/4) ounce of cocaine. Fadel gave Sugar half of this cocaine to sell, with Fadel and Sugar consuming the remaining one-eighth ( 1/8) ounce. Fadel alleged that he did not profit monetarily from this activity. [Affidavit at 5].

At Sugar's request, Fadel then arranged a second drug purchase involving one ounce of cocaine. This purchase occurred on May 6, 1986. According to Fadel, he agreed to this one last investment so that "he could escape the situation after one more loan and the introduction of his source to her [Sugar] so that he was no longer needed as a financier or a delivery boy." ¹ [Affidavit at 5]. Following the delivery of this cocaine, Sugar, who had not yet paid Fadel for the cocaine she had received from him, arranged for Fadel to meet her drug "associate", Mr. Hafen. Hafen, unknown to Fadel, was actually an undercover police officer. Hafen, Fadel and Sugar met at a private nightclub in Trolley Square on May 13, 1986 at which time Hafen paid Fadel $1,800 for the cocaine. Fadel allegedly had no further contact with Hafen and shortly after this meeting ended his relationship with Sugar. Fadel claimed that prior to resuming his relationship with Sugar in the spring of 1986, he "had never distributed cocaine and had only once used the drug." [Affidavit at 3].

Two hearings were held on Fadel's motion to dismiss, the first on May 21, 1987 and the second on June 24, 1987. Prior to the first hearing on May 21, 1987 the government filed no response to Fadel's motion. On the morning of the hearing, the district court permitted the government to file a response to Fadel's motion and present evidence in opposition to the motion. The government's response, other than stating that it "strongly disputed" the defendant's factual contentions, did not specifically address the allegations of Fadel's affidavit. Rather, the government urged that Fadel's motion was premature and inappropriate for pretrial consideration under Rule 12(b) of the Federal Rules of Criminal Procedure. ² The district court rejected this position and proceeded with the hearing.

At this point the government requested a recess and approximately twenty-five minutes later presented the testimony of Charles Hafen, the undercover police officer who participated in the investigation. At the conclusion of Hafen's testimony, the prosecutor stated that "at this time the government would submit that it has adequately rebutted the allegations in the affidavit such as to create a factual issue for the jury." [Transcript ("Tr.") of May 21 hearing at 29-30]. The prosecutor, when asked by the trial judge if he had any other witnesses, stated that he did not believe it was necessary to call other witnesses and rested. Id. at 30. The defendant presented no additional testimony, relying solely on the affidavit of Fadel. Prior to taking a brief recess to allow counsel to prepare for argument, the trial judge informed counsel to be prepared to discuss Fadel's affidavit in detail, identifying the factual disputes created by the testimony of Hafen. Id. at 32.

Upon the court's return, the government requested the opportunity to present the testimony of Sugar, who was then present in the courtroom. Defense counsel objected to this request. The prosecutor again stated that he believed the record sufficiently created a factual dispute requiring resolution by the jury and that he was requesting to reopen the record only out of an abundance of caution. Id. at 40. In response to this request, the trial judge expressed his concerns about the manner in which the government had proceeded and refused to permit the prosecutor to submit a proffer of Sugar's testimony. Id. at 46-47. Rather than hearing the testimony of Sugar, the trial judge took the government's request to reopen under advisement. Id.

The district court did not rule on the government's request for over a month. On June 23, at 4:16 p.m., the district court granted the government's request to reopen and scheduled a second hearing for the next day at 1:00 p.m. [Record on Appeal, Doc. # 34]. At the June 24 hearing the government did not produce Ms. Sugar as a witness. The prosecutor stated that he and the investigator did not believe she could be located on such short notice and acknowledged that they had made no attempt to contact Sugar for purposes of the hearing. [Tr. of June 24 hearing at 6-7]. Instead, the government sought to call Carl Schettler, Fadel's co-defendant who on June 22, 1987 had entered a plea of guilty to Count three of the Indictment. Schettler had been a fugitive until May 26, 1987, and was thus unavailable to testify at the previously held hearing on May 21, 1987. The prosecutor stated that Schettler, Fadel's alleged source of supply and coconspirator, was prepared to directly address the issue of Fadel's predisposition. Id. at 3-4, 11. Defense counsel objected to the government calling Schettler. Id. at 11.

The district court refused to let anyone other than Sugar testify, and dismissed the indictment with prejudice, stating:

Well, I'm going to grant the motion. I'm going to dismiss it and I'm going to dismiss it with prejudice. And I'm going to do it based upon the failure of the United States Attorney to do his job. And I'm going to reserve the right to write something in that particular area. I don't know what other sanctions may be available when an opportunity is presented to do a job, not once, not twice, but three times. The first time it's set and then a fourth time. That's enough. That's enough.

Id. at 12.

The district court subsequently issued a memorandum opinion ["Mem. Op."] filed on July 8, 1987. In that opinion, the trial judge stated that he was dismissing the indictment because the "government has not disputed the defendant's affidavit with respect to his lack of a predisposition to engage in the criminal activity." [Mem.Op. at 15]. The district court specifically rejected officer Hafen's testimony, finding that any comments made by the defendant about his willingness to start with small quantities and later sell kilos did not reflect a willingness to deal in drugs, but rather the statements of an inexperienced individual who wanted Hafen to believe that he was a drug dealer. Id. at 16-17. Because the government had not produced Ms. Sugar to testify at the pretrial hearing, the district court concluded that Fadel's cocaine sales to Sugar had been induced by her.

The district court, however, squarely rejected defendant's claims of outrageous government conduct arising out of Sugar's sexual relationship with the defendant, noting that the Ninth Circuit had recently dismissed similar contentions in United States v. Simpson, 813 F.2d 1462 (9th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 233, 98 L.Ed.2d 192 (1987). ³

On appeal the government contends (1) the district court clearly erred when it found that the government had not disputed Fadel's allegations concerning his lack of predisposition to commit the offenses; (2) the district court abused its discretion by refusing to permit the co-defendant, Carl Schettler, to testify at the June 24, 1987 hearing; and (3) the district court made several erroneous evidentiary rulings at the pretrial hearing, including the exclusion of hearsay testimony.

Because we hold that the testimony of officer Hafen in and of itself was sufficient to create a factual question on the issue of Fadel's predisposition,...