U.S. v. Keating

• Decision Date: 09 June 1998
• Docket Number: 97-50056,Nos. 97-50049,s. 97-50049
• Citation: 147 F.3d 895
• Parties: 98 Cal. Daily Op. Serv. 4379, 98 Daily Journal D.A.R. 6021 UNITED STATES of America, Plaintiff-Appellant, v. Charles H. KEATING, Jr., Charles H. Keating, III, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 895

147 F.3d 895

98 Cal. Daily Op. Serv. 4379, 98 Daily Journal

D.A.R. 6021

UNITED STATES of America, Plaintiff-Appellant, v. Charles H. KEATING, Jr., Charles H. Keating, III,

Defendants-Appellees.

Nos. 97-50049, 97-50056.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Dec. 10, 1997.

Decided June 9, 1998.

Miriam A. Krinsky, Assistant United States Attorney, Los Angeles, California, for plaintiff-appellant.

Stephen C. Neal and Scott D. Devereaux, Cooley Godward, LLP, Palo Alto, California, and Jeffrey S. Powell, Kirkland & Ellis, Chicago, Illinois, for defendant-appellee Charles H. Keating, Jr.

Dennis J. Landin, Chief Deputy Federal Public Defender and Paul L. Abrams, Deputy Federal Public Defender, Los Angeles, California, for defendant-appellee Charles H. Keating, III.

Appeal from the United States District Court for the Central District of California; Mariana R. Pfaelzer, District Judge, Presiding. D.C. Nos. CR-91-01021-MRP, CR-91-00110-MRP.

Before: WIGGINS, KOZINSKI, and THOMPSON, Circuit Judges.

Opinion by Judge WIGGINS; Concurrence by Judge KOZINSKI.

WIGGINS, Circuit Judge:

The government appeals a district court order granting defendants Charles H. Keating, Jr. ("Keating") and Charles H. Keating, III ("Keating III") a new trial following their convictions on charges of racketeering, conspiracy, bank fraud, securities fraud, and wire fraud. Following an evidentiary hearing, the district court found that several jurors during the federal trial learned of and discussed Keating's prior state court conviction. As a result, the court ordered a new trial on the ground of juror misconduct. We have jurisdiction pursuant to 18 U.S.C. § 3731, and, although we do not necessarily agree with the district court's analysis, we affirm.

BACKGROUND

In June of 1990, Keating and Keating III (collectively "defendants") were charged in a multi-count indictment with myriad violations of federal law. The indictment stemmed from the defendants' alleged orchestration of several fraudulent schemes designed to swindle money from Keating's federally-insured thrift, Lincoln Savings and Loan Association ("Lincoln"), and from purchasers of bonds issued by Lincoln's parent corporation, American Continental Corporation ("ACC").

Approximately ten months before the federal trial, a state court jury in Los Angeles convicted Keating of aiding and abetting the fraudulent sale of ACC bonds. This state trial and verdict were heavily publicized. See, e.g., James Bates & James S. Granelli, Keating Guilty of Fraud; Faces 10-year Term, L.A. Times, Dec. 5, 1991, at A1; Jay Mathews, Keating Guilty on 17 Fraud Counts, Wash. Post, Dec. 5, 1991, at A1.

In October of 1992, the defendants' federal trial began. The district court excluded any The prospective jurors completed a lengthy questionnaire which asked whether they had heard of either defendant. Ten of the jurors ultimately seated indicated that they had heard of Keating and seven had heard of Keating III. All jurors indicated under oath that they had formed no opinion about the case and that they would decide the case based solely on the evidence presented in court. The defendants chose not to question the jurors about their knowledge of the state conviction for fear that such questioning would impart prejudicial knowledge yet not provide a basis for a cause challenge.

evidence of or reference to the state conviction, explaining that "the prejudice is just altogether too great. It is just overwhelmingly great...." Notwithstanding this ruling, the district court stated that it would not excuse for cause a prospective juror solely on the ground that the juror knew of the state conviction.

During the trial, the district court frequently reminded the jurors of their obligation to decide the case solely on the evidence presented in court. On January 6, 1993, following six days of deliberation, the jury found the defendants guilty on all counts.

Following the conviction, Keating sent an investigator to interview the jurors. Four jurors signed a declaration indicating that they knew of Keating's state conviction before the federal trial began. Subsequently, the defendants filed a motion for a new trial in the district court.

In response to the government's opposition to the motion, Keating submitted two additional declarations. In the first declaration, alternate juror Wilderman stated that he learned of Keating's prior conviction during the federal trial and that "all the jurors, except possibly Daniel Rasic, discussed the fact that Keating had been previously convicted by the State of California." The second declaration, from Thomas Gallo (Keating's private investigator), stated that juror Ravenstine said he had learned of the state conviction either before or during the trial, and that juror Rasic said he learned of the conviction during the federal trial.

On July 29, 1993, the district court denied the defendants' new trial motion without holding an evidentiary hearing. The defendants then appealed their conviction to this court, claiming that the district court abused its discretion in declining to order a new trial.

We concluded that the district court had erred and remanded for an evidentiary hearing "to determine whether there is a reasonable possibility extrinsic evidence affected the verdicts." We noted that the evidence of the defendants' guilt was not overwhelming and that, depending on the evidence presented at the evidentiary hearing, a new trial may be justified.

On remand, the district court held an evidentiary hearing at which eleven of the twelve jurors and five of the six alternates testified. Six jurors testified that they did not learn of Keating's prior state conviction either before or during the federal trial. Three jurors testified that they knew about the conviction before the federal trial began but did not discuss it with others. Juror Rasic testified that he learned of the state conviction by reading a newspaper prior to the federal trial. He denied discussing the conviction with any of his fellow jurors. Juror Ravenstine testified that he learned about the state conviction during the federal trial. He said that he overheard a conversation in the jury room: "What I really learned was that he [Keating] was serving time in another jail at the time of this trial.... I believe it was for a previous trial on the same thing. The only difference was it was not federal." Ravenstine believed that he learned this information from juror Webb, now deceased. ¹ Ravenstine also indicated that other jurors were present during the conversation but were not listening. He did, however, state that "later on [Keating's state conviction] became common knowledge."

It also appears that juror Webb falsely denied having heard of either Keating or Alternate Bradley testified that she overheard a brief conversation between three jurors during the trial. She indicated that one juror speculated about the outcome of the state trial: "[T]hey had mentioned there was a previous case concerning Keating and that someone had mentioned they didn't know the outcome and someone said that they felt he had been convicted--he was guilty." In his declaration, alternate Wilderman stated that one juror during the federal trial reported that Keating had been previously convicted. The declaration also stated that all of the jurors, except possibly juror Rasic, discussed the conviction. At the evidentiary hearing, however, alternate Wilderman denied that he had heard jurors discuss the state conviction.

Keating III in his pretrial questionnaire. In his post-trial declaration, Webb indicated that he had learned of Keating's state conviction before the federal trial. The district court found that Webb discussed the conviction with other jurors.

Based on this evidence, the district court granted Keating a new trial. The court explained its decision as follows:

Although the jurors' conduct during the trial, the attention they paid to the evidence presented, their demeanor, and the course of their deliberations--both the length of the deliberations and the sequence of jury notes--indicated that beyond question, they followed the instructions given them and decided the case based on the evidence presented at trial, this Court is persuaded by defendants' reading of Dickson v. Sullivan, 849 F.2d 403, 408 (9th Cir.1988); United States v. Vasquez, 597 F.2d 192, 193-94 (9th Cir.1979); and Marshall v. United States, 360 U.S. 310, 312-13, 79 S.Ct. 1171, 3 L.Ed.2d 1250 (1959) (per curiam), that once a juror learns of a defendant's prior conviction from any source, including pretrial publicity, because of the prejudicial nature of the information, the government cannot meet its burden of rebutting the presumption of prejudice. The government must prove the error harmless beyond a reasonable doubt.

The court also ordered a new trial for Keating III on the ground that "[w]hen a finding of guilt is dependent upon a connection between defendants, collateral information clearly prejudicial to one defendant is not harmless to the other defendant." The government appeals this order granting both defendants a new trial.

STANDARD OF REVIEW

Ordinarily, we review a district court's decision to order a new trial for an abuse of discretion. See United States v. Alston, 974 F.2d 1206, 1212 (9th Cir.1992). In cases where jurors are exposed to extrinsic evidence, however, our review "is an independent one, and we must consider the entire record in determining whether the state has met its burden of demonstrating that extrinsic evidence did not contribute to the verdict." Dickson v. Sullivan, 849 F.2d 403, 405-06 (9th Cir.1988).

DISCUSSION

I.

As a preliminary matter, the government argues that the defendants waived any claim that the jury might have been poisoned by knowledge of Keating's state court conviction. In support of this contention, the government points out that the defendants had an...