U.S. v. Lueben, 86-1465

• Decision Date: 01 May 1987
• Docket Number: No. 86-1465,86-1465
• Citation: 816 F.2d 1032
• Parties: 22 Fed. R. Evid. Serv. 1816 UNITED STATES of America, Plaintiff-Appellee, v. Robert LUEBEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1032

816 F.2d 1032

22 Fed. R. Evid. Serv. 1816

UNITED STATES of America, Plaintiff-Appellee, v. Robert LUEBEN, Defendant-Appellant.

No. 86-1465.

United States Court of Appeals Fifth Circuit.

May 1, 1987.

William J. Ruhe, Jr., Dallas, Tex., for defendant-appellant.

David B. Lewis, Sidney Powell, Asst. U.S. Atty., Dallas, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before GOLDBERG and RANDALL, Circuit Judges, and WOODWARD, ^* District Judge.

PER CURIAM:

We write again to modify our prior opinion in this case. See United States v. Lueben, 812 F.2d 179 (5th Cir.1987). The purposes of this opinion are fourfold: first, we vacate that part of our prior opinion reversing Lueben's convictions; second, we remand this case to the district court for an evidentiary hearing; third, we decide the two issues that we did not need to decide in our prior opinion; and fourth, we order that any subsequent appeal in this case be to this panel.

I.

The facts of this case are set out in the original opinion of this panel, and are reported at 812 F.2d at 181-182. Hence, we will not repeat them here. Suffice it to say that Lueben was indicted for submitting false loan applications, income tax returns, and financial statements to savings and loan associations for the purposes of obtaining condominium development loans, in violation of 18 U.S.C. Sec. 1014, and for conspiring with and aiding and abetting others in doing so, in violation of 18 U.S.C. Secs. 371 and 2. Furthermore, Lueben was indicted for violating 18 U.S.C. Sec. 1001, which prohibits the making of a false statement in any matter within the jurisdiction of a federal agency. Lueben was convicted on all counts and appealed to this court.

In our first opinion in this case, we reversed Lueben's convictions because the district court excluded expert testimony offered by Lueben on the issue of the materiality of the false statements. While noting that prior decisions of this court have held that the question of the materiality of a false statement in a section 1001 prosecution was for the court, we also noted that the district court had submitted the question of materiality of the false statements to the jury with respect to the section 1014 counts. Since this issue was not raised by the parties on appeal, we expressly declined to decide the issue of whether the materiality of a false statement under section 1014 was also a question for the court. Six days prior to our decision in Lueben, this issue was decided by another panel of this court. See United States v. Thompson, 811 F.2d 841, 845 n. 4 (5th Cir.1987). Thompson held that the question of the materiality of a false statement in a section 1014 prosecution, as in a section 1001 prosecution, is for the court, not the jury. We think that Thompson, decided before Lueben, should control the disposition of Lueben. Accordingly, we hold that the question of the materiality of the false statements that Lueben made to the various savings and loan associations should have been decided by the district court in both the section 1001 and the section 1014 counts. It follows, therefore, that it is unnecessary at this point to reverse Lueben's convictions, because the district court may itself decide the materiality issue at an evidentiary hearing held for that purpose. We therefore vacate that part of our prior opinion that reverses Lueben's convictions.

As we noted in our prior opinion in this case, however, the district court should itself have considered the testimony of Lueben's expert witness in making its determination on the issue of the materiality of the false statements. We therefore remand this case to the district court for an evidentiary hearing at which Lueben's expert is allowed to testify, and is subjected to cross-examination, on the issue of whether the false statements made by Lueben were material. After considering this testimony, the district court is to determine whether the statements were material--both with respect to the section 1001 counts and with respect to the section 1014 counts. If the district court decides that the statements were material with respect to the section 1001 counts or the section 1014 counts, then Lueben stands convicted upon all relevant counts. If, however, the district court decides that the statements were not material with respect to the section 1001 counts or the section 1014 counts, then it should vacate Lueben's convictions on all counts affected by its determination.

II.

Because we reversed Lueben's conviction in our prior opinion in this case on the ground that the district court erred in excluding the testimony of Lueben's expert witness on the issue of the materiality of the false statements, we did not address some of the other arguments raised by Lueben on appeal. ¹ We address those arguments now.

Lueben argues that the district court erred in permitting Michael Faldmo, an alleged co-conspirator, to testify to statements made by Clifford Sinclair, another alleged co-conspirator, because the district court, in conducting the James hearing on the existence of a conspiracy, erroneously applied an incorrect evidentiary standard. Lueben states that the district court applied a "substantial evidence" standard when the proper standard is a "preponderance of the evidence," and that, when the proper standard is applied, the evidence is insufficient to admit the hearsay statements of co-conspirators. This court recently summarized the relevant jurisprudence on this issue. We stated:

For extrajudicial co-conspirator statements to be admissible: (1) there must be a conspiracy; (2) the statement must be made during the course and in furtherance of the conspiracy; and (3) the declarant and the defendant must be members of the conspiracy. United States v. James, 590 F.2d 575, 578 (5th Cir.) (en banc), cert. denied, 442 U.S. 917, 99 S.Ct. 2836, 61 L.Ed.2d 283 (1979). The trial court alone is to determine whether the statements were admissible. Id. at 579-80. The trial court's determination is reversible on appeal only if clearly erroneous. United States v. Perry, 624 F.2d 29, 30-31 (5th Cir.1980).

The "trial court's threshold determination of admissibility is normally to be made during the presentation of the government's case in chief and before the evidence is heard by the jury." United States v. James, 590 F.2d at 581. At this point in the trial, "as a preliminary matter, there must be substantial independent evidence of a conspiracy at least enough to take the question to the jury." Id. (emphasis in original) (citation omitted). At the conclusion of all the evidence, "on appropriate motion," the trial court must determine whether the prosecution has satisfied the requirements of admissibility by a preponderance of independent evidence." Id. at 582.

United States v. Miliet, 804 F.2d 853, 856 (5th Cir.1986).

In this case, the district court conducted a James hearing out of the presence of the jury, and concluded that there was substantial independent evidence of the conspiracy to permit Faldmo to testify to statements made by Clifford Sinclair. Transcript Vol. IV at 173-74. At this point in the trial, that is all that is required by James. As we stated in James:

Because of our conclusion, discussed below, that the trial court's threshold determination of admissibility is normally to be made during the presentation of the government's case in chief and before the evidence is heard by the jury, it is more appropriate to adopt a "substantial" evidence rule rather than one which requires, at that stage of the proceedings, a "preponderance" of the evidence.

James, 590 F.2d...