U.S. v. Keane

• Decision Date: 17 October 1988
• Docket Number: No. 87-3030,87-3030
• Parties: UNITED STATES of America, Respondent-Appellee, v. Thomas E. KEANE, Petitioner-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 199

852 F.2d 199

UNITED STATES of America, Respondent-Appellee, v. Thomas E. KEANE, Petitioner-Appellant.

No. 87-3030.

United States Court of Appeals, Seventh Circuit.

Argued June 3, 1988.

Decided July 5, 1988.

Rehearing and Rehearing En Banc Denied Oct. 17, 1988.

Jerome H. Torshen, Torshen, Schoenfield & Spreyer, Ltd., Chicago, Ill., for petitioner-appellant.

Helene B. Greenwald, Asst. U.S. Atty., Anton Valukas, U.S. Atty., Chicago, Ill., for respondent-appellee.

Before EASTERBROOK and MANION, Circuit Judges, and GORDON, Senior District Judge. ^*

EASTERBROOK, Circuit Judge.

Thomas E. Keane, once the Chairman of the Finance Committee of Chicago's City Council, was convicted of mail fraud. The indictment, using the "intangible rights" theory minted in United States v. Isaacs, 493 F.2d 1124, 1149 (7th Cir.1974), charged that Keane defrauded the people of Chicago out of their right to his honest services. Keane was convicted in October 1974 and served his sentence between April 1976 and February 1978. He was released from parole in February 1980. The Supreme Court of Illinois restored his license to practice law in 1984, In re Keane, 102 Ill.2d 397, 80 Ill.Dec. 756, 466 N.E.2d 208 (1984). In 1987, the year Keane turned 80, the Supreme Court held that the mail fraud statute, 18 U.S.C. Sec. 1341, does not prohibit schemes to deprive employers of their agents' faithful services. McNally v. United States, --- U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). Keane immediately filed this petition for a writ in the nature of coram nobis, see 28 U.S.C. Sec. 1651(a), asking the district court to vacate the judgment of conviction and order the Treasury to return the fine of $27,000. The district judge who had conducted the trial in 1974 denied the application, 678 F.Supp. 708 (N.D.Ill.1987), concluding that Keane's acts are mail fraud even under McNally.

The indictment charged, and the evidence showed, see United States v. Keane, 522 F.2d 534, 539-44 (7th Cir.1975), cert. denied, 424 U.S. 976, 96 S.Ct. 1481, 47 L.Ed.2d 746 (1976), that Keane--one of Chicago's most influential political figures--and two of his friends formed a partnership that acquired more than 1,800 parcels of land. The partnership acquired the land from the City at property-tax-delinquency auctions; it held the land through an Illinois land trust, a device that permits beneficial owners of land to conceal their interests. Armed with knowledge about the City's (and other governmental bodies') plans, Keane told his partners what parcels to bid on. The original owners had two years to redeem their land by paying the taxes; after this redemption period passed, Keane used his position as Chairman of the Finance Committee to help the partnership obtain clear title to the parcels. The tax sale left in place any "special assessments": charges for neighborhood sewers, roads, and the like. Payments of these assessments flowed to a special assessment fund--which financed public improvements by issuing bonds, and to which the bondholders looked for repayment. If the landowners did not pay the full assessments (as Keane's partnership did not) the City Council would authorize sale of the land at auction with the proceeds applied to the special assessments. The Finance Committee would recommend a minimum price, usually 30% of the assessment due; the Council regularly approved the Finance Committee's recommendations. Keane induced the Finance Committee to set a reserve bid of 10% of the amount of the special assessments outstanding on the parcels his partnership owned; the City Council approved; its members did not know of Keane's interest in the parcels receiving this special treatment.

After the auctions the partnership held fee simple title to more than 1,000 of the original 1,800 parcels. Keane then induced his friends in public agencies to buy these parcels. Some went to the Chicago Housing Authority, some to the Metropolitan Sanitary District, some to smaller instrumentalities. The indictment charged and evidence showed that the prices for some parcels were inflated and that the partnership made more than $160,000 in profits; Keane contended, and a state court later concluded, Chicago ex rel. Cohen v. Keane, 105 Ill.App.3d 298, 61 Ill.Dec. 172, 434 N.E.2d 325 (1st Dist.1982), that the partnership lost money on the whole shebang. The jury was told that it need not find that Keane made a profit in order to convict him; it was enough, the instructions said, if Keane acted in an official capacity without telling anyone about his private interest, depriving the City and its residents of the candor and faithfulness required of a fiduciary.

Keane objected before, during, and after trial to the "intangible rights" aspect of the indictment and jury instructions. The district court in 1974, and this court in 1975, disagreed with his position; the Supreme Court in 1976 denied Keane's petition for a writ of certiorari. If this were an ordinary civil case Keane would have to swallow his losses. United States v. Stauffer Chemical Co., 464 U.S. 165, 104 S.Ct. 575, 78 L.Ed.2d 388 (1984). Everyone is entitled to a full and fair opportunity for litigation, and no one is entitled to multiple opportunities. The decision the second time around is not necessarily more accurate than the first and comes at great cost to legitimate interests in finality--not only the interests of the prevailing party but also the interests of the judicial system. Rules of preclusion induce parties to concentrate their energies and resources on getting things right the first time. Cf. Wainwright v. Sykes, 433 U.S. 72, 88-89, 97 S.Ct. 2497, 2507-08, 53 L.Ed.2d 594 (1977). The prospect of relitigation would reduce the effective stakes of the first case, leading to an erosion in accuracy. From a systemic perspective, time consumed relitigating one case subtracts from the time available to litigate others. Litigants must wait in a longer queue, receive less judicial attention, or both. It would not be possible to stop with two decisions; if hindsight shows the error of the first decision, it may show error of the second in turn. The high costs of multiple decisions in the same case have led the Supreme Court to conclude that a party does not get a second chance even if an intervening decision of that Court makes pellucid the error of the original decision. Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981). Given Moitie, there can be no doubt that if in a civil case Keane had been found liable for fraud and assessed $27,000 as damages, a later decision of the Supreme Court rejecting the reasoning used in his case would not have entitled him to a fresh adjudication.

For more than half of Keane's life, the same approach would have been employed in criminal litigation. The writ of habeas corpus supplied an avenue of collateral attack, but only in the event the court rendering the judgment of conviction was without jurisdiction to do so. See Paul M. Bator, Finality in Criminal Law and Federal Habeas Corpus for State Prisoners, 76 Harv.L.Rev. 441 (1963). Through the first part of this century judges became increasingly inventive in classifying errors as "jurisdictional" until, in Brown v. Allen, 344 U.S. 443, 73 S.Ct. 397, 97 L.Ed. 469 (1953), the Supreme Court held that a constitutional error could support issuance of the writ even if the trial court unquestionably had jurisdiction. Congress codified Brown in 1966 by amending 28 U.S.C. Sec. 2254, and the parallel statute for federal prisoners, 28 U.S.C. Sec. 2255, establishes the same scope of review as Sec. 2254. United States v. Hayman, 342 U.S. 205, 219, 72 S.Ct. 263, 272, 96 L.Ed. 232 (1952). Both statutes, however, deal with persons "in custody", and their relaxation of the finality rules is justified by the ongoing deprivation of liberty. A fresh look may prevent the imposition of unjustified, yet continuing, punishment. A criminal defendant fined but not imprisoned is not suffering an ongoing punishment and may not attack his sentence under these statutes. Wright v. Bailey, 544 F.2d 737, 739 & n. 2 (4th Cir.1976) (collecting cases). Once a defendant has been released from prison and relieved of civil disabilities, even a collateral attack begun during confinement becomes moot, showing that only the continuing interference with a liberty interest justifies relitigation. Lane v. Williams, 455 U.S. 624, 102 S.Ct. 1322, 71 L.Ed.2d 508 (1982). Civil disabilities (collateral consequences) may prevent a challenge begun during imprisonment from becoming moot on release, Sibron v. New York, 392 U.S. 40, 88 S.Ct. 1889, 20 L.Ed.2d 917 (1968), but civil disabilities alone are not "custody" authorizing collateral litigation. Westberry v. Keith, 434 F.2d 623 (5th Cir.1970) (fine and revocation of drivers' license do not add up to custody).

The norm of finality, with an exception while custody or another deprivation of liberty continues, is the background for understanding the writ of error coram nobis. Judgments are not final on the day when rendered; our legal system gives parties some period within which to seek reconsideration, a privilege that was especially important before the modern institution of appellate review. Many final judgments were not appealable. The permissible time within which to seek rehearing customarily was the "term of court"--a period that lasted until the judges moved on to some other city (or, in metropolitan courts, for a few months). This produced erratic results, for some judgments were rendered on the last day of the term and others evaded rehearing because the events justifying that relief were unknowable before the end of the term. The writ of error coram nobis developed as a run 'round the end-of-term limitation, one applicable to civil and criminal cases alike. It was justified not by special considerations attending loss of liberty but by perceived limitations of...