U.S. v. Farnsworth

Citation456 F.3d 394
Decision Date08 August 2006
Docket NumberNo. 06-1425.,06-1425.
PartiesUNITED STATES of America, Appellant v. Arthur L. FARNSWORTH.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
456 F.3d 394
UNITED STATES of America, Appellant
v.
Arthur L. FARNSWORTH.
No. 06-1425.
United States Court of Appeals, Third Circuit.
Argued April 27, 2006.
Filed August 8, 2006.

[456 F.3d 395]

Patrick L. Meehan, United States Attorney, Robert A. Zauzmer, Assistant United States Attorney, Chief of Appeals, Ara B. Gershengorn, (Argued), Amy L. Kurland, Assistant United States Attorneys, Office of the United States Attorney, Philadelphia, PA, for Appellant.

Peter Goldberger, (Argued), Pamela A. Wilk, Law Office of Peter Goldberger, Ardmore, PA, for Appellee.

Before AMBRO and FUENTES, Circuit

[456 F.3d 396]

Judges, and IRENAS,* District Judge.

OPINION OF THE COURT

FUENTES, Circuit Judge.


On the morning that Arthur L. Farnsworth's trial for tax evasion was scheduled to begin, the District Court announced its intention to give a jury instruction that the Government strongly opposed. When the District Court declined to reconsider its ruling, the Government immediately appealed and obtained a stay of the proceedings after a jury was selected but before it was sworn. The Government urges us to reverse the District Court's ruling or, in the alternative, to issue a writ of mandamus instructing the District Court to give a different jury instruction. Because we hold that we do not have jurisdiction and that a writ of mandamus is not appropriate, we will dismiss the Government's appeal.

I. Background

On November 4, 2004, a federal grand jury returned a three-count indictment charging Arthur L. Farnsworth ("Farnsworth") with income tax evasion, in violation of 26 U.S.C. § 7201. Specifically, the indictment charges Farnsworth with willfully attempting to "evade and defeat income tax due and owing by him to the United States of America" for the calendar years 1998 through 2000 by (1) failing to make an income tax return as required by law; (2) failing to pay to the Internal Revenue Service ("IRS") the income tax due; and (3) concealing and attempting to conceal his true and correct income. The indictment further charges that Farnsworth transferred ownership of his assets to fraudulent trusts, encumbered his assets, and hid his money in overseas bank accounts.

Farnsworth's trial was scheduled to begin on Monday, January 30, 2006. Three days before trial, the District Court held a pre-trial conference to address outstanding motions and proposed jury instructions. During the conference, the District Court discussed whether the indictment charged Farnsworth with both methods of tax evasion—attempted evasion of the assessment of taxes and attempted evasion of the payment of taxes— as well as whether proof of an assessment is necessary to prove attempted evasion of payment.1 The District Court sought additional briefing on these issues, which was provided by both parties on Sunday, January 29, the day before the trial was to begin.

On the day of trial, prior to jury selection, the District Court orally addressed the issues raised at the previous Friday's conference. First, the District Court ruled that the indictment charged Farnsworth with both methods of tax evasion. Second, the District Court ruled that, based on its reading of Third Circuit case law, it would instruct the jury that in order to prove attempted evasion of payment the Government must show that there had been either a self-assessment or an assessment by the IRS. In discussing its ruling on this issue, which gives rise to the Government's appeal, the District Court explained:

The . . . issue is whether or not the law in the Third Circuit requires an assessment,

456 F.3d 397

either a self-assessment or an assessment from the IRS [,] in order for there to be an evasion of payment charge. And I've read the government's submissions in that regard. The government recognizes the language in the Third Circuit which would require an assessment in order to maintain an evasion of payment charge.

[The] Government also points out law in other circuits[,] especially United States v. Dack[, 747 F.2d 1172 (7th Cir. 1984) (per curiam)]. We're bound by the law of the Third Circuit and if there's any weakness in the reasoning [I]'ll leave that for the government to argue directly to the Court of Appeals. But [I] do rule that evading payment does require in the Third Circuit an assessment, either self assessment or assessment by the Internal Revenue Service.

Ordinarily, . . . [I] would make a determination as to whether or not the evidence establishes a claim for evasion of payment under Rule 29, but the defendant has raised it up front and that is the Court's ruling and what does the Government intend to do in view of the Court's ruling in that regard? You have to establish that there was an assessment in order to proceed on the evading payment charge which I have concluded is in the indictment, of course along with evading assessment.

(JA 36-37 (emphasis added).) The Third Circuit decisions relied upon by the District Court were United States v. McGill, 964 F.2d 222 (3d Cir.1992), and United States v. McLaughlin, 126 F.3d 130 (3d Cir.1997).

After a lunch break, the Government asked the District Court to reconsider its determination that proof of either a self-assessment or a formal assessment by the IRS is necessary to prove attempted evasion of payment. The Government also informed the District Court that there was no evidence that Farnsworth self-assessed or that the IRS had made a formal assessment for the years charged. The District Court responded by stating the following:

[T]he defendant has argued that the Government has no case for willfully attempting to evade the payment of tax because an assessment would be required to establish[] a tax due. And, then subsequent to that[,] an evasion . . . . And, defendant asserted that there was no such assessment either by way of self-assessment to the filing of returns or assessment through the Internal Revenue Service.

In connection with that point I stated in court this morning, . . . that I believed that that form of misconduct as a violation of this offense, namely the form that deals with evading—evading payment, would require an assessment of some type.

(JA 50-51.)

The District Court also rejected the Government's argument that the ruling essentially excised the attempted evasion of payment charge from Farnsworth's indictment. To that end, the District Court reiterated that it: had dismissed no part of the indictment; had not stricken or redacted any language from the indictment; had construed the indictment broadly in the Government's favor; had excluded no evidence the Government might wish to present; had not determined or even suggested that any of the Government's proposed evidence might be held irrelevant; and had not held the evidence the Government might present at trial to be insufficient to prove any offense. (JA 63-65.) As the District Court explained: "[I] have made no ruling other than the fact that the indictment is both broad enough and specific enough to include both forms of misconduct

456 F.3d 398
i.e., attempted evasion of assessment and attempted evasion of payment]. Other than that ruling, [I]'ve made no other ruling with respect to the indictment." (JA 65.) The District Court also noted, "I don't regard that as a dismissal. I don't regard my ruling to have been a ruling with respect to eliminating a count in the indictment. The only thing we've been talking about is sufficiency of the evidence." (JA 64 (emphasis added).)

Following the District Court's denial of the Government's reconsideration motion, the Government filed a notice of appeal and asked the District Court for a stay of the proceedings to permit the appeal to proceed. The District Court, over Farnsworth's objection, granted the stay, finding that Farnsworth had not demonstrated that the Government's appeal was frivolous. A jury was selected by the parties, but not sworn.

On January 31, 2006, Farnsworth filed a motion in this Court for summary dismissal of the appeal. The next day, Farnsworth filed an emergency motion in this Court to vacate the stay entered by the District Court. This Court denied both of Farnsworth's motions. The District Court then dismissed the jury that had been selected.

II. Discussion

The Government appeals what it believes is an erroneous pre-trial oral ruling in which the District Court explained how it intended to instruct the jury with respect to the crime of attempted evasion of payment of a tax. The Government argues that we have jurisdiction to consider its appeal under 18 U.S.C. § 3731 because the District Court's ruling will preclude it from proving one of the theories of liability set forth in Farnsworth's criminal indictment. The Government further argues that, even if we lack jurisdiction to consider its appeal, we should issue a writ of mandamus to correct the District Court's erroneous view of what the Government must show to prove attempted evasion of payment of a tax. We address these arguments in turn.

A. Jurisdiction

The Criminal Appeals Act, 18 U.S.C. § 3731, establishes when the United States can appeal in criminal cases. That section provides:

In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court dismissing an indictment . . . as to any one or more counts, or any part thereof, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.

. . . .

The provisions of this section shall be liberally construed to effectuate its purposes.

18 U.S.C. § 3731. The issue presented here is whether the District Court's oral ruling "dismissed" Farnsworth's indictment as to "any one or more counts, or any part thereof," such that we have jurisdiction under § 3731.2

[456 F.3d 399

Section 3731 was "intended to remove all statutory barriers to Government appeals and to allow appeals whenever the Constitution would permit." ...

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