U.S. v. Udziela

• Citation: 671 F.2d 995
• Decision Date: 11 February 1982
• Docket Number: No. 80-2820,80-2820
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Edward UDZIELA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 995

671 F.2d 995

UNITED STATES of America, Plaintiff-Appellee, v. Edward UDZIELA, Defendant-Appellant.

No. 80-2820.

United States Court of Appeals Seventh Circuit.

Argued Oct. 28, 1981.

Decided Feb. 11, 1982. ^*

Richard F. Walsh, Chicago, Ill., for defendant-appellant.

Keith C. Syfert, Asst. U. S. Atty., Dan K. Webb, U. S. Atty., Chicago, Ill., for plaintiff-appellee.

Before BAUER and WOOD, Circuit Judges, and CAMPBELL, Senior District Judge. ^**

BAUER, Circuit Judge.

Defendant-appellant Edward Udziela appeals from his conviction for conspiring to manufacture and distribute phencyclidine (PCP), in violation of 21 U.S.C. § 846, and for aiding and abetting in the manufacture of PCP, in violation of both 18 U.S.C. § 2 and 21 U.S.C. § 841(a)(1). Our jurisdiction is founded upon 28 U.S.C. § 1291. This appeal raises the important question whether perjured grand jury testimony, discovered and disclosed by the government after dismissal of the grand jury but before trial, should trigger an in camera judicial hearing to determine the existence and sufficiency of other evidence supporting the indictment. We hold that such a hearing is required in the future, unless the government chooses to seek a new indictment based on other, untainted evidence. Nevertheless, we affirm for the reasons expressed below.

I

Bruce Nacker, Paul Udziela (Paul) and appellant Edward Udziela (appellant) played varying roles in a conspiracy to manufacture and distribute PCP, an illegal drug. ¹ The scheme started in December 1979 when Paul approached Nacker, his Chicago neighbor for approximately four years, and discussed the profitability of selling PCP. After considering the matter, they decided to work together. Nacker, who was educated in biochemistry and pharmacy, obtained the formula and chemical components needed to produce a small amount of PCP. He then prepared the first batch and delivered it to Paul, who eventually sold it for $1500 and divided the proceeds with Nacker.

Shortly before the first batch was completed, the two neighbors decided to expand their production to accommodate a buyer seeking large quantities of PCP. They called several drug companies and ordered additional chemicals necessary for increased drug production, sometimes giving fictitious names of individuals or businesses, or the names of friends' businesses, to shield the purchasers' true identities. Appellant was aware of these clandestine activities, having occasionally sat in on conversations between his brother Paul and Nacker. ² Officials of one Chicago drug business, Lapine Scientific Company, became suspicious and contacted United States Drug Enforcement Administration (DEA) agents, who decided to monitor the activities of Nacker and Paul.

Although most of the companies' drug shipments were received by the conspirators, an order from Alfa Ventron Company in Massachusetts was inexplicably delayed. As a result, Nacker reordered the same quantity. Shortly thereafter, Nacker learned that his first Alfa Ventron Company order had been received, rendering the second unnecessary. Rather than cancel the second order, Nacker elected to obtain additional ingredients, which when mixed with his second order would yield double the initially anticipated amount of PCP.

Seeking additional chemicals, and unaware of DEA surveillance, appellant and his brother Paul drove to Precision Organic Chemical Company (Precision), a sham drug company operated by undercover DEA agents. Agent Mel Schabilion, posing as a Precision employee, greeted Paul, gave him a purchase order for three gallons of phenyl magnesium bromide, and then carried the chemical containers outside to appellant's car, where appellant was waiting. There Schabilion met appellant, exchanged pleasantries with him, loaded the three bottles of chemicals into appellant's car, and watched appellant and his brother depart.

Appellant then drove Paul from Precision to Nacker's garage, where the PCP was produced, and dropped off his brother and the chemicals. Later that day, appellant also drove his brother and Nacker to a store to buy a fish tank in which to mix the chemicals. In addition, appellant acted as a lookout during production and drove to a local store to purchase ice needed in the manufacturing process. That evening, agents searched Nacker's garage and seized drug containers and equipment. Nacker, Paul, and appellant were subsequently arrested.

Nacker ultimately appeared before the grand jury, where he attempted to minimize his role in the drug manufacturing conspiracy. He claimed that: (1) he never previously manufactured PCP; (2) he learned the PCP formula from Paul; (3) he only ordered chemicals twice; and (4) he and Paul were the only persons involved. He also admitted that he lied to federal agents about his role in the conspiracy, but claimed to be telling the true story to the grand jury because he was under oath.

The day before trial, after the grand jury was no longer sitting, Nacker revealed that he had lied to the grand jury. The government, taken by surprise, immediately disclosed this new information to appellant's counsel. The case proceeded to trial, and on direct examination, Nacker told a story greatly different from his grand jury version, directly implicating appellant in many respects. After three days at trial, appellant moved to dismiss the indictment because he claimed it was based, at least in part, on Nacker's perjured testimony. The motion was denied and appellant was eventually convicted. This appeal followed.

II

Appellant's sole contention on appeal is that the trial court erred in not dismissing his indictment. Although Nacker's perjury was not discovered until after the grand jury was dismissed, appellant argues that the government was obligated to seek dismissal of the flawed indictment and then, if it chose, attempt to secure a new indictment. The government, on the other hand, contends that dismissal is warranted only if the perjured testimony was introduced knowingly, which it claims was not the case. As authority for their positions in this case of first impression in this Circuit, both sides rely heavily on their respective interpretations of United States v. Basurto, 497 F.2d 781 (9th Cir. 1974).

A

Before discussing Basurto, the problem raised in this appeal should be placed in perspective. Under the ancient English system, where criminal prosecutions were instituted by the King at the suit of private prosecutors, "the most valuable function of the grand jury was not only to examine into the commission of crimes, but to stand between the prosecutor and the accused, and to determine whether the charge was founded upon credible testimony or was dictated by malice or personal ill will." Hale v. Henkel, 201 U.S. 43, 59, 26 S.Ct. 370, 372, 50 L.Ed. 652 (1906). Accord, Wood v. Georgia, 370 U.S. 375, 390, 82 S.Ct. 1364, 1373, 8 L.Ed.2d 569 (1962); Ex parte Bain, 121 U.S. 1, 11, 7 S.Ct. 781, 786, 30 L.Ed. 849 (1887); Kaufman, The Grand Jury-Its Role and Its Powers, 17 F.R.D. 331, 335 (1955). In drawing this nation's charter, the drafters of the United States Constitution elevated the grand jury to constitutional status, embodied in the fifth amendment command that no federal prosecution shall occur "unless on a presentment or indictment of a Grand Jury." Indeed, the framers thought the grand jury essential to preserve our basic liberties. See United States v. Calandra, 414 U.S. 338, 343, 94 S.Ct. 613, 617, 38 L.Ed.2d 561 (1974); Note, The Grand Jury as an Investigative Body, 74 Harv.L.Rev. 590, 591 (1961). Thus, "the grand jury performs the dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions." In re Walsh, 623 F.2d 489, 492 (7th Cir. 1980), quoting Branzburg v. Hayes, 408 U.S. 665, 686-87, 92 S.Ct. 2646, 2659, 33 L.Ed.2d 626 (1972). See also United States v. Zarattini, 552 F.2d 753, 756 (7th Cir. 1977), cert. denied, 431 U.S. 942, 97 S.Ct. 2661, 53 L.Ed.2d 262 (1978).

Despite its lofty place as an instrument of justice, see Branzburg v. Hayes, 408 U.S. at 687, 92 S.Ct. at 2659; Costello v. United States, 350 U.S. 359, 362, 76 S.Ct. 406, 408, 100 L.Ed. 397 (1956), as a practical matter the modern grand jury is greatly dependent on the United States Attorney "to present to it such evidence as it needs for its performance of its function and to furnish it with controlling legal principles." United States v. Ciambrone, 601 F.2d 616, 622 (2d Cir. 1979). See also 8 J. Moore, Federal Practice, P 6.02(1) (2d ed. 1981). Recognizing this increasing dependency, federal courts in recent years have become more sensitive to allegations of governmental misconduct before the grand jury and have demonstrated greater willingness to curb prosecutorial abuse of such proceedings. See generally Holderman, Preindictment Prosecutorial Conduct in the Federal System, 71 J.Crim.L. & C. 1, 16-19 (1980). Thus, in cases where over-zealous prosecutors have manipulated a grand jury by willfully misleading it or knowingly presenting false evidence, courts have not hesitated to exercise their power to dismiss indictments. See, e.g., United States v. Samango, 607 F.2d 877 (9th Cir. 1979) (intentional suppression of favorable testimony); United States v. McKenzie, 524 F.Supp. 186 (E.D.La.1981) (prosecutors placed undue pressure on the grand jury to indict policeman accused of murder and brutality); United States v. Martin, 480 F.Supp. 880 (S.D.Tex.1979) (failure to reveal both SEC agreement not to prosecute and alleged bribery scheme); United States v. Gold, 470 F.Supp. 1336 (N.D.Ill.1979) (failure to divulge exculpatory evidence and other misconduct); United States v. Phillips Petroleum Co., 435 F.Supp. 610 (N.D.Okla.1977) (withholding of exculpatory testimony); United States v. Braniff Airways, Inc., 428 F.Supp. 579 (W.D.Tex.1977) (failure to present complete record of prior grand...