U.S. v. Kellington, PLAINTIFF-APPELLANT

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: B. Fletcher; TASHIMA
• Citation: 217 F.3d 1084
• Parties: (9th Cir. 2000) UNITED STATES OF AMERICA,, v. DANIEL F. KELLINGTON,
• Decision Date: 07 July 2000
• Docket Number: DEFENDANT-APPELLEE,PLAINTIFF-APPELLANT,No. 98-30193

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217 F.3d 1084 (9th Cir. 2000) UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,
v.
DANIEL F. KELLINGTON, DEFENDANT-APPELLEE. No. 98-30193 UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Argued and Submitted July 14, 1999
July 7, 2000

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Frank R. Papagni, Jr., Assistant United States Attorney, Eugene, Oregon, attorney for the plaintiff-appellant.

Norman Sepenuk and James L. Collins, Portland Oregon, attorneys for the defendant-appellee.

Appeal from the United States District Court for the District of Oregon Michael R. Hogan, District Judge, Presiding D.C. No. CR-95-60103-MRH

Before: Betty B. Fletcher, A. Wallace Tashima, Circuit Judges, and Anthony W. Ishii, District Judge¹.

Opinion by Judge B. Fletcher; Dissent by Judge Tashima

B. Fletcher, Circuit Judge

The United States appeals the district court's order granting defendant, Daniel Kellington, a new trial. Because we find no abuse of discretion in the district court's decision, we affirm and remand the case for re-trial.

I. FACTUAL BACKGROUND

A. Pre-Verdict Proceedings

Daniel Kellington is an experienced civil attorney from Medford, Oregon specializing in personal injury law and trusts and estates. In 1996 he was tried and convicted of obstruction of justice under 18 U.S.C. S 1512(b)(2)(B), and conspiracy to obstruct justice under 18 U.S.C. S 371, for conduct arising from his representation of a client over the course of a weekend during which the client was apprehended for being a convicted drug trafficker and longstanding federal fugitive operating under an assumed name. The following facts were adduced at trial.

On a Saturday afternoon in March 1994, Kellington received a call at his office from a United States Marshal indicating that one of his business clients, "Richard Parker," had been positively identified as a fugitive named Peter MacFarlane who was wanted on a warrant issued in the District of Vermont, and that MacFarlane was in jail and wished to speak with him². Until

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that day, Kellington knew MacFarlane only as "Richard Parker" and had represented him over a period of six months in 1993 in a few matters connected with his business, Metalhead Boat Works.³ Kellington told MacFarlane over the phone that he did not do criminal work, but MacFarlane asked to see him anyway regarding "some matters related to a boat business," and Kellington agreed to come to the jail.

Once at the jail, MacFarlane confirmed that "Parker" was an alias, that he owed time for a prior drug conviction back East, and that he planned to go back to face the charges. He then asked Kellington to pass instructions along to one of his employees, Norm Young, whom he could not contact directly because the marshals would not allow him to speak with anyone but his attorney. Kellington agreed, and MacFarlane wrote out a list of personal property he wanted Young to remove from his house and hold (including stereo equipment, files, a black attache case, money stuffed between the mattresses of his bed, a laptop computer, electronic organizers, and a boat). MacFarlane also wrote out instructions to Young to retrieve and destroy an envelope hidden in a chair in the bedroom and to meet with MacFarlane on Monday to discuss running Metalhead Boat Works in his absence.⁴ Kellington read the list, discussed the priority of each task with MacFarlane, and entered numbers on the list reflecting MacFarlane's sense of urgency. The meeting lasted about ten minutes.

Kellington then took the list back to his office, called Young right away, and began reading him the instructions. When Young asked how he should destroy the envelope, Kellington suggested that he could burn it. Obviously concerned by the instructions in the list, Young asked why "Mr. Parker" was not making the call himself. Kellington simply responded that "Parker" was in jail, without mentioning either why he had been arrested or that "Parker" was actually Peter MacFarlane. At the end of the conversation, Young asked if he could get into trouble for executing the listed instructions and Kellington said no, but that he should certainly stop if he ran into the police or "somebody bigger than you." Reporter's Transcript ("RT"), Vol. II at 218.

Young went to MacFarlane's house that afternoon and began removing the listed items and loading them into a truck. After finding the envelope, he took it to the wood stove in the house and began burning the enclosed papers until he came across a New York State driver's license with MacFarlane's picture but the name "Branon." The name matched a name Young had seen on some of the "official looking" papers he had already burned and he decided to stop burning. He continued to load the other listed property, however, and drove home, pocketing the driver's license and the remaining identification papers for "Branon."

After showing the driver's license to a friend who also knew "Parker," discovering over $20,000 in cash in one of the bags he removed, and talking with his wife over the phone (who was the bookkeeper for "Parker's" business), Young decided to drive back to MacFarlane's house and return the property. When he came up the driveway he was accosted by federal marshals who had returned to the property to execute a search warrant. Young immediately handed over the "Branon" documents and told the marshals that he had been instructed by Kellington to remove the property from "Parker's " house and to destroy the contents of the envelope.

The next day, a Sunday, federal agents came to Young's house, recovered some of

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the cash Young had withheld, and arranged to have Young initiate a tape-recorded call to Kellington to confirm that Kellington had given him the list. Two calls were made during which Young informed Kellington that he found fake I.D.'s in the envelope he destroyed and that there were thousands of dollars in one of the bags he removed. Young falsely told Kellington that the I.D.'s were destroyed, and when Kellington asked whether he had "heard from anybody about anything," Young said no. Kellington advised Young that they should make an inventory, count the money, and that he would take possession of the small items such as the cash, the computer, and the electronic organizers.

At the prompting of federal agents, Young also asked Kellington whether they should go to the authorities and Kellington replied, "Well, I don't think you have to do that...." Govt. Trial Ex. 27 at 2. Instead, Kellington again assured Young that he was not in trouble and agreed to come to Young's house to pick up his client's property that night. He added that there was no indication that the money was tainted and that he had a duty to protect any of his client's untainted assets:

I have a duty to my client to protect his assets that, that they can't get and when they.... If they, if somebody uh, come and, comes and says hey we're attaching that money because it's ill gotten gains or something.... Well then I have to turn it over to them, but in the meantime it's his money, and it's his money and he may need to defend uh, you know pay a lawyer.

Id. at 5. As Kellington left Young's house with the small items and cash that Young gave him, federal agents detained him.

Kellington and MacFarlane were tried together. Each was charged with obstructing justice by "knowingly... engag[ing] in misleading conduct toward another person, with intent to alter, destroy, mutilate, or conceal an object with intent to impair the object's integrity or availability for use in an official proceeding." 18 U.S.C. S 1512(b)(2)(B). Another count charged the two with conspiring to obstruct justice.

At trial, Kellington testified that he did not know or even suspect that the envelope contained potential evidence when he conveyed MacFarlane's request to Young, and that he did not learn anything about the envelope's contents until Young called him on Sunday.⁵ As for the other items on the list, Kellington said that he simply assumed MacFarlane wanted his employee to secure his property and business assets since he would be away for a long time. When asked on crossexamination why he wasn't initially suspicious of MacFarlane's request to remove and destroy property -- why he didn't ask MacFarlane more questions before passing the instructions on to Young -- Kellington repeatedly conceded that in hindsight, he should have been more inquiring but that, at the time, he thought he was only helping MacFarlane deal with business matters and "none of the flags were up":

[W]hen I went to the jail and talked with -- with Richard, he was the same friendly person that he had been. He was going to go back and pay his debt. He wasn't going to fight it. Just too trusting, I'm sure. Looking back, I certainly would be more suspicious, but I wasn't suspicious at the time.

RT III 153. When asked on direct why he did not tell Young the nature of MacFarlane's offense (or that "Parker" was just an alias), Kellington replied that, as a matter of course, he does not disclose to third parties any information or problems he learns in confidence from his clients.

At trial, the court allowed Kellington to introduce the testimony of an expert on

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legal ethics, Peter Jarvis. He testified (a) that the duty of loyalty requires a lawyer to do what the client requests unless the lawyer knows the conduct to be illegal, (b) that because of the duty of loyalty, lawyers "tend to very strongly believe [their] clients," and, at least in the civil bar, lawyers "tend not, by and large, to be immediately suspicious of [clients] if they ask us to do things," RT II 180 (c) that it would not be surprising for a civil lawyer to fail to immediately recognize a request to remove and destroy personal property as potentially illegal,⁶ (d) that Kellington's conduct on Sunday was "completely covered in [Oregon State] Ethics Opinion 1991-105......