U.S. v. Josleyn

• Decision Date: 08 December 1999
• Docket Number: No. 97-1920,N,No. 99-1620,97-1920,99-1620
• Citation: 206 F.3d 144
• Parties: (1st Cir. 2000) UNITED STATES OF AMERICA, APPELLEE, v. DENNIS R. JOSLEYN, DEFENDANT, APPELLANT. UNITED STATES OF AMERICA, APPELLEE, v. JOHN W. BILLMYER, DEFENDANT, APPELLANT. UNITED STATES OF AMERICA, APPELLEE, v. DENNIS R. JOSLEYN AND JOHN W. BILLMYER DEFENDANTS, APPELLANTS. o. 97-1921, Heard
• Court: U.S. Court of Appeals — First Circuit

Page 144

206 F.3d 144 (1st Cir. 2000)

UNITED STATES OF AMERICA, APPELLEE, v. DENNIS R. JOSLEYN, DEFENDANT, APPELLANT.

UNITED STATES OF AMERICA, APPELLEE, v. JOHN W. BILLMYER, DEFENDANT, APPELLANT.

UNITED STATES OF AMERICA, APPELLEE, v. DENNIS R. JOSLEYN AND JOHN W. BILLMYER DEFENDANTS, APPELLANTS.

No. 97-1920, No. 97-1921, No. 99-1620

United States Court of Appeals For the First Circuit

Heard December 8, 1999

Decided March 22, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Paul J. Twomey, with whom Twomey & Sisti Law Offices was on brief, for appellant Dennis R. Josleyn.

David W. Long, with whom Joseph E. Zeszotarski, Jr. and Poyner & Spruill, Llp were on brief, for appellant John W. Billmyer.

Donald A. Feith, Assistant United States Attorney, with whom Paul M. Gagnon, United States Attorney, was on brief, for appellee.

Selya, Boudin, and Lynch, Circuit Judges.

Lynch, Circuit Judge.

Widespread bribery, kickbacks, and other fraud infected the operations of the American Honda Motor Company from the 1970s to the early 1990s. Two American Honda executives and beneficiaries of the illicit largesse, Dennis Josleyn and John Billmyer, were convicted in 1995 in federal court of conspiring to defraud their employer. Josleyn was also convicted of racketeering, conspiracy, and fraud for receiving kickbacks in connection with sales training seminars and dealer advertising programs. Josleyn had most recently served the company as zone sales manager for the West Coast, and Billmyer, after 18 years with the company, had attained the position of national sales manager. Billmyer retired in 1988 and Josleyn resigned in 1992. This court affirmed their convictions in 1996. See United States v. Josleyn, 99 F.3d 1182, 1185 (1st Cir. 1996), cert. denied, 519 U.S. 1116 (1997). The matter now before us involves appeals from the denial of motions for new trial based on newly discovered evidence.

I.

A. The Trial and Post-Trial Proceedings

The prosecution's theory at trial was that the defendants had victimized American Honda by taking kickbacks from dealers in exchange for dealership rights and favorable vehicle allocations, among other things. At the time, Honda cars were difficult to come by: the need for energy efficient cars had enhanced their popularity and Japanese export restrictions had diminished their availability. Demand exceeded supply and profit margins for dealers were high. These economic conditions created a climate ripe for the fraud scheme. The prosecution argued that Billmyer and a cohort, Stanley James Cardiges, masterminded a continuous, self-perpetuating kickback scheme by regularly accepting cash and lavish gifts from dealers around the country in exchange for favorable allocation treatment. The prosecution claimed that Cardiges also participated in Josleyn's kickback schemes involving the dealer advertising programs and national sales training seminars. Cardiges and several other employees were indicted and entered into plea agreements. Cardiges cooperated and became one of the government's star witnesses.

At trial, one of the defenses offered by the defendants was that of condonation: that American Honda (and perhaps even its Japanese parent company) had sanctioned and condoned its executives' receiving money and lavish gifts from dealers. That another has also done wrong does not usually excuse wrongdoing by a defendant, so at trial there was a question as to the relevance of this condonation theory. In the end, the condonation theory resulted in an instruction to the jury that the evidence of condonation could be considered "to the extent such evidence bears on the issue of whether or not [the defendants] formed the required intent to commit the crimes with which [they are] charged." After seven days of deliberation, the jury rejected the lack-of-intent defense and convicted.

These appeals are from the 1997 denial of the defendants' post-trial motions for a new trial, from the 1999 denial of a renewed motion for a new trial, and from the denial of a motion to reconsider the denial of the renewed motion for a new trial. Those motions were based on evidence that at first trickled and then flooded out of civil litigation that had been instituted by various dealers against American Honda. In that multi-district litigation (the "MDL litigation"), a federal district court in Maryland ordered the disclosure of certain information that American Honda had attempted to shield from disclosure through the attorney-client privilege. See In re Am. Honda Motor Co. Dealer Relations Litig., MDL Case No. 1069, slip op. at 1 (D. Md. June 3, 1998). The materials disclosed as a result of this ruling and others were used by Josleyn and Billmyer to support their renewed motion for a new trial in this case and tended to show much more knowledge of corruption by top-level American Honda officials than had previously been shown.

The 1997 motions for new trial were denied by the district court on July 17, 1997. After some skirmishing,¹ the defendants filed what was styled as a renewal of their original motions for new trial. The motion included the newly disclosed materials from the MDL litigation, which strengthened their argument. The district court denied the renewed motion for a new trial on the papers, thus denying as well the defendants' request for an evidentiary hearing on the motion. The court carefully reviewed the newly discovered evidence, both individually and in combination, and concluded that the evidence fell short of showing "that a reasonable probability of a different result exists or that the new evidence undermines confidence in the verdict."²

B. The MDL Litigation

The evidence on which much of the new trial motions rested came to light as a result of the MDL proceedings. In November 1997, the lead plaintiffs in the MDL litigation moved to set aside American Honda's attorney-client and work product privileges as to all communications regarding gratuities among American Honda, Honda North America, and any of their attorneys that occurred between 1979 and June 1993. On March 10, 1998, the district court ordered production of these communications between specified persons, finding that the crime-fraud exception vitiated the attorney-client and work product privileges. On March 24, 1998, a judge of the United States Court of Appeals for the Fourth Circuit denied a request to stay that order, finding that the "apparent breadth of American Honda's design to enlist the assistance, knowing or otherwise, of its attorneys in concealing evidence of gratuities supports the district court's finding that the privileges asserted in the instant case are negated by the crime-fraud exception." In June 1998, the district court also granted the plaintiffs' separate motion to compel the production of two memoranda written by counsel representing American Honda. These memoranda discussed two "proffer" meetings held in New Hampshire between American Honda and the prosecutors in the criminal case against Josleyn, Billmyer, and other American Honda employees. The MDL court found that American Honda had, at these meetings, attempted to persuade the prosecutor that it was "innocent of any wrongdoing" and that it was "ignorant of the crimes committed by its former executives who were under investigation." In so doing, the court concluded, the extent of American Honda's knowledge was concealed from the prosecutor. According to the district court, there was "prima facie evidence... that members of American Honda's upper management did have knowledge of (or at least wilfully blinded themselves to) allegations of bribe-taking by Honda executives." These findings led the court to note the possible impact this newly revealed evidence might have on the criminal prosecutions of Josleyn and Billmyer:

The indictment in United States v. Billmyer broadly charged that the defendants had "devised and intended to devise a scheme to defraud American Honda and its dealers" against the background of allegations relating to American Honda's conflict of interest policy and its policy regarding the award of new dealerships. If (as plaintiffs contend) the written policies were merely empty verbiage because of widespread knowledge about the illegal conduct among members of the upper management of American Honda..., the factual underpinnings of the prosecutions would have been brought into question.

In re Am. Honda Motor Co. Dealer Relations Litig., slip op. at 10 n.7.

II.

There is a preliminary question as to whether this court has appellate jurisdiction over the 1999 denial of the renewed motion for a new trial. The question arises because the defendants filed, but later withdrew, a notice of appeal from the denial of the renewed motion.³ Defendants later explained that they withdrew the notice of appeal because they believed the denial of the renewed motion was encompassed within the original notice of appeal they filed when the district court denied their 1997 motions for new trial.⁴

There is a split in the circuits over whether, when a direct criminal appeal is pending, a defendant needs to file a separate notice of appeal from a subsequently entered order denying a new trial motion or whether the original notice of appeal from the judgment of conviction suffices to bring before the appellate court the subsequently denied new trial motion. The Fifth, Ninth and Eleventh Circuits

have held that a court of appeals has jurisdiction to review the denial of a post-trial motion under Fed.R.Crim.P. 33 based on newly-discovered evidence even though no second notice of appeal from the denial of that motion has been filed, provided an initial timely notice of appeal from the judgment of conviction has been filed and the government has not been prejudiced. United States v. Wilson, 894 F.2d 1245, 1251 (11th Cir.) ("[A] second notice of appeal is not required in order for [the appellants] to challenge the district court's denial...