U.S. v. Stoneman, 88-5294

• Citation: 870 F.2d 102
• Decision Date: 13 April 1989
• Docket Number: No. 88-5294,88-5294
• Parties: UNITED STATES of America, Appellee, v. Alan R. STONEMAN, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 102

870 F.2d 102

UNITED STATES of America, Appellee, v. Alan R. STONEMAN, Appellant.

No. 88-5294.

United States Court of Appeals, Third Circuit.

Argued Sept. 15, 1988.

Decided March 13, 1989.

As Amended April 12, 1989.

Rehearing and Rehearing In Banc Denied April 13, 1989.

Richard R. Nelson, II (argued), James J. Ross, Neil F. Siegel, Alder Cohen & Grigsby, P.C., Pittsburgh, Pa., for appellant.

James J. West (argued), U.S. Atty.'s Office, Harrisburg, Pa., for appellee.

Before BECKER, HUTCHINSON and SCIRICA, Circuit Judges.

OPINION OF THE COURT ^*

HUTCHINSON, Circuit Judge.

I.

Appellant Alan R. Stoneman appeals from the United States District Court for the Middle District of Pennsylvania's order denying his petition for a writ of error coram nobis. Stoneman seeks to vacate his conviction for conspiracy under 18 U.S.C.A. Sec. 371 (West 1966) to violate the mail fraud statute, 18 U.S.C.A. Sec. 1341 (West 1984) and to utilize a facility of interstate commerce in violation of the Interstate Travel in Aid of Racketeering Act (Travel Act), 18 U.S.C.A. Sec. 1952 (West 1984), based on the United States Supreme Court's recent decision in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). I conclude in Part V that the district court's charge on mail fraud only required the jury to find a loss of intangible rights in order to convict, and therefore, in light of McNally, was error. However, a majority of the panel believes that, under the evidence, just as in the companion case of United States v. Asher, 854 F.2d 1483 (3d Cir.1988), the loss of money was implicit in the intangible rights scheme. More specifically, the majority is unable to hypothesize a set of circumstances under which the jury could have found Stoneman guilty of depriving the citizens of the Commonwealth of Pennsylvania of their right to honest government (an impermissible intangible right under McNally ) without also having found that Stoneman was involved in a scheme the sole purpose of which was to insure that a company known as CTA, Ltd. (CTA) obtained a no-bid Federal Insurance Contribution Act (FICA) recovery contract at a substantially greater cost to the Commonwealth of Pennsylvania than a contract obtained through traditional competitive bidding. The majority believes that the indictment, evidence and jury charge in this case are essentially the same as Asher, and that on the authority of Asher the conviction must be affirmed.

II.

Stoneman and others were indicted in October of 1984 by a federal grand jury and charged with conspiracy, 18 U.S.C.A. Sec. 371, violations of the Travel Act, 18 U.S.C.A. Sec. 1952(a)(3), and mail fraud, 18 U.S.C.A. Sec. 1341. The indictment alleged a scheme to obtain FICA recovery contracts from state and local entities by bribing public officials. ¹ Stoneman and co-defendant William T. Smith, Jr. pled not guilty and were tried before a jury. After a lengthy trial, the jury found Smith guilty of conspiracy, four counts of mail fraud and four counts of utilizing a facility of interstate commerce in aid of racketeering. The jury convicted Stoneman only of conspiracy. Both defendants were sentenced to prison terms and fined.

Smith and Stoneman appealed their convictions on numerous grounds. They did not, however, argue that the indictment or jury instructions relied on an intangible rights theory and were therefore invalid under the mail fraud statute. We affirmed their convictions in United States v. Smith, 789 F.2d 196 (3d Cir.1986). Both defendants petitioned the Supreme Court for certiorari, which was denied. Smith v. United States, 479 U.S. 1017, 107 S.Ct. 668, 93 L.Ed.2d 720 (1986); Stoneman v. United States, 479 U.S. 1017, 107 S.Ct. 668, 93 L.Ed.2d 720 (1986). After an unsuccessful motion before the district court for a new trial based on newly discovered evidence, Stoneman served his four month prison sentence and paid his $10,000 fine.

On June 24, 1987, the Supreme Court held in McNally that the mail fraud statute did not encompass a scheme to defraud which deprived the victims of their intangible right to good and honest government. ² In November of 1987 Stoneman petitioned the district court for a writ of error coram nobis to vacate his conviction based on McNally. The district court denied Stoneman's petition, concluding that McNally did not apply to collateral attacks on final decisions. ³ In the alternative, the district court reviewed the indictment, the evidence introduced at trial and the jury instructions and concluded that the conviction was valid under McNally and our application of McNally in United States v. Piccolo, 835 F.2d 517 (3d Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 2014, 100 L.Ed.2d 602 (1988). Stoneman now appeals.

III.

The question before us is not whether McNally is retroactive. This Court recently held that McNally applies on a collateral attack of a final conviction in United States v. Osser, 864 F.2d 1056 (3d Cir.1988). ⁴ As in Osser, the question here is whether an error in jury instructions under McNally is a fundamental error justifying vacation of a final conviction on collateral review by issuance of a writ of error coram nobis. ⁵

Those substantive errors which result in a person's charge and conviction for something not a crime are fundamental. In determining what is not a crime, authoritative Supreme Court cases are as much a part of the law as the statute itself. Hence, when the Supreme Court decided in McNally that the statute punished only persons who caused tangible loss to victims, that requirement became a part of the definition of the crime. A person charged in an indictment that did not include a loss of tangible rights or convicted by evidence that did not show a violation is punished for something not a crime and is entitled to collateral review. If a defendant were convicted and punished "for an act that the law does not make criminal[, t]here can be no room for doubt that such a circumstance 'inherently results in a complete miscarriage of justice' and 'present[s] exceptional circumstances' that justify collateral relief." Davis v. United States, 417 U.S. 333, 346-47, 94 S.Ct. 2298, 2305, 41 L.Ed.2d 109 (1974) (in habeas corpus proceeding, petitioner may assert change in the substantive law after his conviction).

IV.

The writ of error coram nobis is available to federal courts in criminal matters under the All Writs Act, 28 U.S.C.A. Sec. 1651(a) (West 1966). ⁶ United States v. Morgan, 346 U.S. 502, 74 S.Ct. 247, 98 L.Ed.2d 248 (1954). It is used to attack allegedly invalid convictions which have continuing consequences, when the petitioner has served his sentence and is no longer "in custody" for purposes of 28 U.S.C.A. Sec. 2255. The petitioner must show that he is suffering from continuing consequences of the allegedly invalid conviction. Id. at 512-13, 74 S.Ct. at 253-54.

Use of the writ is appropriate to correct errors for which there was no remedy available at the time of trial and where "sound reasons" exist for failing to seek relief earlier. Id. at 512, 74 S.Ct. 253. "Only where there are errors of fact of 'the most fundamental kind, that is, such as to render the proceeding itself irregular and invalid', [sic] can redress be had." United States v. Cariola, 323 F.2d 180, 184 (3d Cir.1963) (quoting United States v. Mayer, 235 U.S. 55, 69, 35 S.Ct. 16, 19-20, 59 L.Ed. 129 (1914)). The error must go to the jurisdiction of the trial court, thus rendering the trial itself invalid. An error which could be remedied by a new trial, such as an error in jury instructions, does not normally come within the writ. See Mayer, 235 U.S. at 69, 35 S.Ct. at 19-20; United States v. Gross, 614 F.2d 365, 368 (3d Cir.) (per curiam) (conduct of deputy marshal, who annoyed several jurors and expressed romantic interest in particular juror, insufficient to warrant issuance of writ), cert. denied, 447 U.S. 925, 100 S.Ct. 3019, 65 L.Ed.2d 1118 (1980). Earlier proceedings are presumptively correct and the petitioner bears the burden to show otherwise. Cariola, 323 F.2d at 184.

Coram nobis is an extraordinary remedy, and a court's jurisdiction to grant relief is of limited scope. Id. at 184. "The interest in finality of judgments dictates that the standard for a successful collateral attack on a conviction be more stringent than the standard applicable on a direct appeal." Gross, 614 F.2d at 368. It is even more stringent than that on a petitioner seeking habeas corpus relief under Sec. 2255. See Osser, 864 F.2d at 1060-61; United States v. Keogh, 391 F.2d 138, 148 (2d Cir.1968) (unlike habeas, where part of sentence remained unserved, no opportunity or incentive in coram nobis setting to retry defendant using newly discovered evidence where sentence already served).

Here, the indictment alleges and the evidence introduced by the government shows that Stoneman schemed to defraud the Commonwealth of Pennsylvania by securing no-bid FICA contracts through the bribery of public officials and did, in fact, cause a money loss to the Commonwealth through such a scheme.

The indictment against Stoneman charges a valid 18 U.S.C.A. Sec. 1341 offense under McNally. ⁷ Count I alleges:

3. It was part of said conspiracy and scheme or artifice to defraud and use the facilities of interstate commerce to promote, manage, establish, carry on and facilitate bribery that: ... (h) The defendants would obtain lucrative contracts from state and local government without competitive bidding, notwithstanding the fact that others were willing to perform substantially identical FICA recovery work at a much lower cost.

Appendix (App.) at 33, 37-38. Count I also alleges that one of the objects of the conspiracy was "to defraud the citizens of the Commonwealth of Pennsylvania, and other states where the defendants did business, of the tangible monetary savings and financial benefits" by corruptly influencing various elected public officials. Id. at 39....