U.S. v. Isgro, 90-50531

• Decision Date: 25 November 1992
• Docket Number: No. 90-50531,90-50531
• Citation: 974 F.2d 1091
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Joseph ISGRO; Raymond Anderson; Jeffrey S. Monka, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1091

974 F.2d 1091

UNITED STATES of America, Plaintiff-Appellant, v. Joseph ISGRO; Raymond Anderson; Jeffrey S. Monka,

Defendants-Appellees.

No. 90-50531.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 10, 1992.

Decided Sept. 1, 1992.

As Amended on Denial of Rehearing and

Rehearing En Banc Nov. 25, 1992.

Drew S. Pitt, Asst. U.S. Atty., Los Angeles, Cal., Frank J. Marine, William S. Lynch, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellant United States of America.

Donald M. Re, Los Angeles, Cal., for defendant-appellee Joseph Isgro. W. Michael Mayock, Pasadena, Cal., for defendants-appellees Raymond Anderson and Jeffrey Monka.

Appeal from the United States District Court for the Central District of California.

Before: SNEED and D.W. NELSON, Circuit Judges, and ROLL, District Judge. ^*

D.W. NELSON, Circuit Judge:

Joseph Isgro, Raymond Anderson and Jeffrey Monka ("defendants") were indicted by a grand jury on government charges that they were involved in a complex scheme to promote certain musical artists illegally through the use of "payola"--payments/bribes to officials at local radio stations--using money allegedly derived from narcotics trafficking. Subsequently, citing prosecutorial misconduct before the grand jury and in pretrial proceedings, the district court dismissed the indictment with prejudice. In so doing, the district court invoked both the defendants' right to a constitutionally sound grand jury process and the court's inherent right to supervise judicial proceedings.

The government appeals, arguing that its conduct did not justify a dismissal of the indictment. We reluctantly agree. Based on recent Supreme Court case law, we find that the district court erred in dismissing the indictment, and we now reverse.

BACKGROUND ¹

Defendants were indicted by a grand jury on November 30, 1989. The indictment contained 57 counts, most of which The government's main witness before the grand jury was Dennis DiRicco, an attorney and accountant who had allegedly been a coconspirator with the defendants. ² DiRicco had been charged and tried in federal district court in San Francisco in 1988 for charges involving money laundering and narcotics. DiRicco testified at his trial, and a transcript of his testimony was prepared at that time. The government and the defendants disagree over the exact content of this testimony, but it conflicted significantly with DiRicco's later testimony before the grand jury investigating Isgro, Anderson and Monka. In its published opinion dismissing the indictment, the district judge characterized DiRicco's testimony as follows:

                named Isgro.   The indictment charged Isgro with RICO violations, mail fraud, various conspiracies, payola, filing of false income tax returns, and obstruction of justice.   Defendant Anderson was charged with mail fraud and conspiracy, and defendant Monka with filing false tax income returns and conspiracy
                

That testimony constituted a complete and detailed denial of any wrongdoing not only by [DiRicco], but also by any of the defendants in this case.

Among other things, DiRicco denied in sworn testimony before his trial jury acquiring cash from drug dealers, denied taking that cash to Isgro personally, and denied sending it to him via Isgro's employee, David Michael Smith. Furthermore, DiRicco denied helping cash couriers avoid security checks at San Francisco International Airport, denied conspiring with Isgro and others to defraud the Government of income tax, and denied conspiring with Isgro or anyone else to commit any crime. Evidently, that testimony had considerable effect on his jury since it only convicted him of two counts and acquitted him of eight counts.

United States v. Isgro, 751 F.Supp. 846, 847 (C.D.Cal.1990) (emphasis in original).

The main prosecuting attorney in this case, William Lynch, received a copy of this transcript in April 1989. Mr. Lynch questioned DiRicco before the grand jury, and at that time extracted testimony from DiRicco that was "diametrically opposed to his prior trial testimony in every important respect." Isgro, 751 F.Supp. at 848. The government informed the grand jury that DiRicco had been convicted in a previous trial, but did not reveal that DiRicco had testified or that a transcript of that testimony had been prepared. As a result, the grand jury returned the indictment without the benefit of DiRicco's previous testimony.

During the course of pretrial proceedings, defendants' attorneys repeatedly asked the government for all exculpatory material under Brady v. Maryland, 373 U.S. 83, 87-88, 83 S.Ct. 1194, 1196-97, 10 L.Ed.2d 215 (1963). The government told the defense and the district court that all Brady material had either been released or would be released shortly before trial. The government neither produced the transcript nor acknowledged its existence; instead, it repeatedly denied the existence of material which would tend to exonerate the defendants. The government also assured the court that it fully understood its obligations to turn over any such materials.

Several weeks before trial, at the urging of the court, the government released a large amount of discovery to the defense. The material pertaining to DiRicco included a copy of statements made to the government after DiRicco had agreed to cooperate, but did not include either a copy of the trial transcript or an acknowledgment that the transcript existed.

Suspecting that despite its assurances the government was not revealing all exculpatory material, defense counsel finally conducted independent investigations and subsequently learned of the trial transcript's existence. However, the content of DiRicco's prior testimony was not discovered by defense counsel until the defendants' trial was well under way. At an August 28, 1990 appearance before the district court, defense counsel produced the transcript. Defense counsel asserted that the After considering the briefs, the district court dismissed the indictment with prejudice. The court found that the government had misled the grand jury by not presenting DiRicco's testimony, had lied to the court about the existence and nature of the Brady material, and had intended to keep the material from the defense even through trial. On the basis of this cumulative misconduct, the court found dismissal with prejudice warranted. The government appeals.

                transcript contained material completely contrary to DiRicco's grand jury testimony and therefore constituted Brady material concealed by the government.   Defendants asked that the court sanction the government.   In response, prosecutor Lynch "flatly denied that there was any inconsistency between the two sets of testimony."  Isgro, 751 F.Supp. at 848.   The court ordered briefing on the question of DiRicco's inconsistencies
                

DISCUSSION

A. Introduction

Federal courts draw their power to dismiss indictments from two sources. First, a court may dismiss an indictment if it perceives constitutional error that interferes with the grand jury's independence and the integrity of the grand jury proceeding. "Constitutional error is found where the 'structural protections of the grand jury have been so compromised as to render the proceedings fundamentally unfair, allowing the presumption of prejudice' to the defendant." United States v. Larrazolo, 869 F.2d 1354, 1357-58 (9th Cir.1989). Constitutional error may also be found "if [the] defendant can show a history of prosecutorial misconduct that is so systematic and pervasive that it affects the fundamental fairness of the proceeding or if the independence of the grand jury is substantially infringed." Id. at 1358.

Second, a district court may draw on its supervisory powers to dismiss an indictment. The supervisory powers doctrine "is premised on the inherent ability of the federal courts to formulate procedural rules not specifically required by the Constitution or Congress to supervise the administration of justice." Id. at 1358. Before it may invoke this power, a court must first find that the defendant is actually prejudiced by the misconduct. Absent such prejudice--that is, absent " 'grave' doubt that the decision to indict was free from the substantial influence of [the misconduct]"--a dismissal is not warranted. Bank of Nova Scotia v. United States, 487 U.S. 250, 256, 108 S.Ct. 2369, 101 L.Ed.2d 228 (1988).

In this case, the district court dismissed the indictment because it found that the cumulative prosecutorial misconduct (1) usurped the role of the grand jury and violated the defendants' fundamental right to a fair proceeding, and (2) "resulted in a violation of the defendants' due process" rights sufficient to justify the use of its supervisory powers. Isgro, 751 F.Supp. at 851. The question before us is whether the district court erred in this judgment. ³ We review the district court's judgment de novo. United States v. Smith, 924 F.2d 889, 897 (9th Cir.1991). See also United States v. Spillone, 879 F.2d 514, 520 (9th Cir.1989), cert. denied, --- U.S. ----, 111 S.Ct. 210, 112 L.Ed.2d 170 (1990) (noting intracircuit conflict on standard of review, and holding that because dismissals of indictments involve mixed questions of fact and law, de novo standard is appropriate.)

B. Analysis

1. Applicability of Jencks Act

As an initial matter, the government argues that DiRicco's trial testimony was covered by the Jencks Act, and that the The Jencks Act provides that in criminal prosecutions brought by the United States, no statement in the possession of the United States made by a government witness or prospective government witness may be the subject of discovery until that witness has testified at trial. See 18 U.S.C. § 3500(a), (b). The Act defines "statement" as follows:

                government was not required to turn it over to the defense until DiRicco actually testified at trial.   Therefore, it continues, its failure to disclose the transcript to

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