U.S. v. Monsanto

Decision Date29 January 1988
Docket NumberD,No. 436,436
Citation836 F.2d 74
PartiesUNITED STATES of America, Appellee, v. Peter MONSANTO, Defendant-Appellant. ocket 87-1397.
CourtU.S. Court of Appeals — Second Circuit

Mark C. Hansen, Asst. U.S. Atty., New York City (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., John F. Savarese, Asst. U.S. Atty., New York City, of counsel), for appellee.

Edward M. Chikofsky, New York City, for defendant-appellant.

Neal R. Sonnett, Benedict P. Kuehne, Sonnett, Sale & Kuehne, Miami, Fla., amicus curiae for Nat'l Ass'n of Criminal Defense Lawyers.

Before OAKES, CARDAMONE and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

This is an expedited interlocutory appeal from an order of the United States District Court for the Southern District of New York, Robert J. Ward, Judge, denying a motion to vacate or modify an ex parte post-indictment restraining order entered by John F. Keenan, Judge, pursuant to a provision of the Comprehensive Forfeiture Act of 1984 ("CFA"), 21 U.S.C. Sec. 853(e)(1)(A) (Supp. III 1985). The restraining order prohibits defendant Peter Monsanto from alienating or in any way depreciating two parcels of real property that were specified in an indictment as "constituting and derived from the proceeds" of violations of Title III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. Sec. 801 et seq. (1982 and Supp. III 1985). Monsanto challenges the application of the CFA to this property, which he claims to need in order to retain counsel of choice for his pending trial on substantive RICO, RICO conspiracy, narcotics conspiracy, Continuing Criminal Enterprise ("CCE") and firearms charges.

Monsanto argues that Congress did not intend the CFA to apply to property needed to pay for legitimate attorney's fees. He contends, moreover, that if Congress did intend the CFA to apply to property needed for that purpose, the statute would then violate the qualified sixth amendment right to counsel of choice. Monsanto challenges not only the post-indictment restraint provision, 21 U.S.C. Sec. 853(e)(1)(A) (Supp. III 1985), but also the post-conviction "relation back" provision, 21 U.S.C. Sec. 853(c) (Supp. III 1985), which allows the government to seek post-conviction forfeiture of property transferred to a third person. The latter provision, Monsanto contends, deters private counsel from representing defendants as long as there is a threat that attorney's fees will be subject to forfeiture in the event of conviction.

We reverse and remand.


In an indictment unsealed on July 8, 1987, Monsanto was charged with one substantive RICO count, 18 U.S.C. Sec. 1962(c) (1982), one RICO conspiracy count, 18 U.S.C. Sec. 1962(d) (1982), one conspiracy to distribute narcotics count, 21 U.S.C. Sec. 846 (1982), one CCE count, 21 U.S.C. Sec. 848 (1982 & Supp. III 1985), and four illegal possession of a firearm counts, 18 U.S.C. Appendix Sec. 1202(a) (1982). 1 The indictment also specified two parcels of residential real property, valued at $335,000 and $30,000, as well as $35,000 in cash, as being subject to forfeiture under 21 U.S.C. Sec. 853(a) (Supp. III 1985). On the same day, Judge Keenan entered an ex parte restraining order, 21 U.S.C. Sec. 853(e)(1)(A) (Supp. III 1985), prohibiting Monsanto from directly or indirectly transferring or encumbering the residential properties. 2

At the initial pre-trial conference before Judge Ward on July 31, 1987, James Merberg, an attorney from Boston, audited the proceedings but declined to enter a formal appearance on behalf of Monsanto. The court was informed by the Assistant United States Attorney ("AUSA") that "[Merberg] and Mr. Monsanto are exploring the circumstances under which he would be retained." At a later conference on August 6, 1987, Edward M. Chikofsky, counsel pro tem appearing on behalf of Monsanto for the limited purpose of presenting Monsanto's challenge to the forfeiture provisions, informed Judge Ward that the threat of forfeiture of attorney's fees was specifically what deterred Mr. Merberg from representing Monsanto. Although Merberg did not attend this conference, the AUSA described his own discussions with Merberg concerning a possible agreement by the government not to seek forfeiture of attorney's fees. The AUSA stated that the government would not enter into such an agreement. Judge Ward then stated his position that invasion of the forfeitable assets could be allowed to pay attorney's fees for Monsanto's counsel of choice, but that such exemption from forfeiture would be allowed only to the extent of the rates established by the Criminal Justice Act ("CJA"). 18 U.S.C. Sec. 3006A (1982 and Supp. IV 1986).

On August 21, 1987, Monsanto's counsel pro tem filed a motion to vacate or modify the restraining order by (a) permitting Monsanto to use the restrained assets to retain private trial counsel, and (b) exempting legal fees paid to that counsel from post-trial forfeiture. Judge Ward held a hearing on this motion on August 28, 1987. The court accepted that Monsanto was rendered de facto indigent by the restraining order. Moreover, the court was informed by counsel pro tem that Monsanto had contacted several "potential trial counsel," but that none of them was willing to represent Monsanto for the CJA-level compensation that Judge Ward had suggested at the August 6, 1987 conference. Counsel pro tem also submitted an empirical study prepared by the Association of the Bar of the City of New York indicating that private attorney's fees in RICO and CCE cases routinely exceed CJA rates. Although Judge Ward stated that some potential trial counsel should have appeared to present a proposed fee arrangement, he did not depart from his position that he would allow only CJA-level compensation. Judge Ward entered an order denying Monsanto's motion "without prejudice to renewal upon the submission of further factual and legal argument."

On September 4, 1987, Monsanto's counsel pro tem filed a notice of appeal. On September 8, 1987, Monsanto moved for an expedited appeal, which was granted. Oral argument was set for October 20, 1987. On October 13, 1987, Monsanto moved for a stay of trial pending appeal. The trial date for Monsanto and thirteen co-defendants was originally set for November 30, 1987. On the day after oral argument however, Judge Ward adjourned the commencement of trial until January 4, 1988.

We have jurisdiction over this interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(a)(1) (1982).

A. Ripeness

At the outset, we must determine whether this controversy is ripe for adjudication. The government argues that it is not, mainly because Monsanto has failed to make an adequate record of the effect of the forfeiture provisions on his ability to obtain counsel of choice. See United States v. Gelb, 826 F.2d 1175, 1176-77 (2d Cir.1987). 3 While we conclude, for reasons explained below, that this case must be remanded for further proceedings, we do not agree that Monsanto has failed adequately to demonstrate the impact of the forfeiture provisions on his ability to retain counsel.

It is true, as the government points out, that no attorney appeared at the motion hearing or thereafter to present a proposed fee arrangement to Judge Ward. Nevertheless, the district court had already held two pretrial conferences at which Monsanto's de facto indigence and efforts to obtain counsel were made known to the court. The court had been informed, not only by Monsanto's counsel pro tem but also by the AUSA, that James Merberg had made his representation of Monsanto contingent upon obtaining an agreement from the government not to seek forfeiture of attorney's fees. Then, at the motion hearing, the court was informed that none of the attorneys contacted by Monsanto was interested in representing him for the CJA-level compensation that Judge Ward was willing to allow.

For purposes of ripeness, therefore, we think it would have been a futile exercise for Monsanto to bring attorneys who were uninterested in CJA-level compensation into court simply to hear Judge Ward reiterate his position that invasion of the assets would be allowed only to pay CJA rates. See Image Carrier Corp. v. Beame, 567 F.2d 1197, 1201-02 (2d Cir.1977), cert. denied, 440 U.S. 979, 99 S.Ct. 1785, 60 L.Ed.2d 239 (1979). That no attorney made such an "appearance" arguably demonstrates the very "chill" that Monsanto claims to be the effect of the forfeiture provisions on private attorneys who would otherwise represent RICO and CCE defendants. Such an appearance by an attorney would not "significantly advance our ability to deal with the legal issues presented nor aid us in their resolution." Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 82, 98 S.Ct. 2620, 2635, 57 L.Ed.2d 595 (1978). Any further delay before appeal, furthermore, would only have caused hardships for Monsanto, since the case was already set for trial, and his trial preparation would obviously be affected by the resolution of the issue presented on appeal. We note also that Monsanto and many co-defendants are detained pending trial.

United States v. Gelb, 826 F.2d 1175 (2d Cir.1987), upon which the government heavily relies, is clearly distinguishable. In Gelb, the defendants failed to pursue their motion to vacate and/or modify a post-indictment restraining order in the district court, representing to the court that an impending agreement with government counsel would probably moot the issue. When the agreement fell through, defendants then appealed from the restraining order to this court without giving the district court any opportunity to consider or decide their motion, and moved here to stay the restraining order pending appeal and to expedite the appeal. We concluded that the restraining order was appealable, but denied the motions because, in view of defendants' failure to...

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