U.S. v. W.R. Grace

• Decision Date: 12 July 2007
• Docket Number: No. 06-30192.,06-30192.
• Citation: 493 F.3d 1119
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. W.R. GRACE; Alan R. Stringer; Henry A. Eschenbach; Jack W. Wolter; J. McCaig; Robert J. Bettacchi; O. Mario Favorito; Robert C. Walsh, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

493 F.3d 1119

UNITED STATES of America, Plaintiff-Appellant, v. W.R. GRACE; Alan R. Stringer; Henry A. Eschenbach; Jack W. Wolter; J. McCaig; Robert J. Bettacchi; O. Mario Favorito; Robert C. Walsh, Defendants-Appellees.

No. 06-30192.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 26, 2006.

Filed July 12, 2007.

Sue Ellen Woolridge, Assistant Attorney General, William W. Mercer, United States Attorney, Kris McLean, Assistant United States Attorney, Todd S. Aagaard, Kevin M. Cassidy, Allen M. Brabender (argued), Attorneys, United States Department of Justice, Environmental and Natural Resources Division, Washington, DC, for the plaintiff-appellant.

Laurence A Urgenson, William B. Jacobson, Tyler D. Mace, Michael D. Shumsky (argued), Kirkland & Ellis LLP, Washington, DC, for the defendants-appellees.

Appeal from the United States District Court for the District of Montana; Donald W. Molloy, Chief District Judge, Presiding. D.C. No. CR-05-00007-DWM.

Before: J. CLIFFORD WALLACE, KIM McLANE WARDLAW and RAYMOND C. FISHER, Circuit Judges.

FISHER, Circuit Judge:

This appeal presents us with two questions. First, we must decide whether the government has adequately complied with the certification requirements of 18 U.S.C. § 3731, which gives us jurisdiction to hear this interlocutory appeal. Second, assuming we have jurisdiction, we must decide whether the district court exceeded its authority in issuing pretrial orders that: (1) required the government to submit a pretrial list of witnesses and later precluded the government from using any unlisted witnesses in its case-in-chief; and (2) precluded the government's identified expert witnesses from relying on documents not disclosed prior to a disclosure cutoff date. We hold that the government has now complied with its certification requirements, and that in some respects the district court's pretrial orders were improper.

FACTUAL AND PROCEDURAL BACKGROUND

W.R. Grace & Company mined and processed vermiculite ore outside of Libby, Montana from the early 1960s until the early 1990s. In February 2005, the United States obtained a 49-page, 10-count indictment against Grace and several of its officers, alleging that Grace committed criminal acts related to improper disposal of asbestos-contaminated vermiculite spanning 26 years and creating at least 1,200 victims and 230 potential witnesses.

In March 2005, after considering the parties' pretrial conference submissions, the district court entered a case management order setting a "firm" trial date of September 11, 2006 and establishing various pretrial discovery obligations and deadlines. Relevant here, the March 2005 order specified an April 29, 2005 deadline for the government to produce all discoverable materials specified in Rule 16(a) of the Federal Rules of Criminal Procedure as well as those the government had identified in an earlier statement of proposed discovery disclosures; a May 27, 2005 deadline for the government's preliminary list of intended witnesses and exhibits; and a September 30, 2005 deadline—almost a year before trial—for a "finalized list of witnesses and trial exhibits, including finalized disclosure of prosecution's expert witnesses." The government did not object to the court's order.

On September 30, the government notified the district court that it had given the defendants (hereinafter, collectively "Grace") "the government's final witness list and final exhibit list," but noted that it would "continue to investigate this case through close of all evidence at trial" and therefore "reserve[d the] right to update its witness list and exhibit list through the close of all evidence at trial." In its March 2005 submission to the court, the government had noted the same reservation of right. The government's qualified disclosure prompted concerns on Grace's part (apparently aggravating a history of discovery disputes between the parties), leading the district court to hold a status conference in early December 2005.

The court found the government's argument in support of its open-ended qualifier to its "final" list troublesome. It noted that the government's list of witnesses had gone from an estimated 60 to 80 in March to some 233 in September, and that the government had initially stated it would have been prepared to try the case in September 2005, some "three months ago. It cannot now credibly claim that it is necessary to continue adding witnesses to an already unwieldy list." Accordingly, the district court issued an order on December 5 (the "December 2005 order") limiting the government's presentation of witnesses at trial "to those witnesses that have been disclosed as of the filing of this Order." Addressing Grace's complaints about the adequacy of the government's expert witness disclosures, the court also limited the government's experts' reliance on reports and studies to those that "are contained in the discovery produced to date." On February 17, 2006, the district court denied the government's motion for reconsideration but clarified that the government could call unlisted witnesses and use other evidence if necessary for rebuttal (the "February 2006 order").

The December 2005 and February 2006 orders are the subject of this interlocutory appeal. The government contends that the district court erred in limiting the government's evidence by precluding witnesses and studies it had not disclosed as of December 5, 2005. Grace primarily argues that we do not have jurisdiction to hear this interlocutory appeal because the government has not satisfied its certification burden under 18 U.S.C. § 3731; alternatively, it argues that the district court's orders were plainly within the court's discretion. When the district court partially dismissed some of the indictment counts after this appeal was filed, see United States v. W.R. Grace, 429 F.Supp.2d 1207 (D.Mont.2006), we requested that the parties submit supplemental briefs discussing whether the excluded evidence would be "substantial proof of a fact material" to the remaining portions of the indictment for purposes of § 3731.¹ Specifically, we asked the parties to address whether the excluded evidence was such that "`a reasonable trier of fact could find the evidence persuasive in establishing the proposition for which the government seeks to admit it[.]' United States v. Adrian, 978 F.2d 486, 491 (9th Cir.1992)."

DISCUSSION

I. Jurisdiction

Title 18 U.S.C. § 3731 provides in relevant part:

An appeal by the United States shall lie to a court of appeals from a decision or order of a district court suppressing or excluding evidence or requiring the return of seized property in a criminal proceeding, not made after the defendant has been put in jeopardy and before the verdict or finding on an indictment or information, if the United States attorney certifies to the district court that the appeal is not taken for purpose of delay and that the evidence is a substantial proof of a fact material in the proceeding.

(Emphasis added). Section 3731 also states that it "shall be liberally construed to effectuate its purposes." We have explained that the United States' "right [under § 3731] to appeal a district court's order suppressing evidence is conditional." United States v. Loud Hawk, 628 F.2d 1139, 1150 (9th Cir.1979) (en banc); see also Adrian, 978 F.2d at 490 (reaffirming Loud Hawk and noting that the government has to satisfy certain conditions before being entitled to appeal under § 3731). "First, the appeal is not available if the defendant has been put in jeopardy. Second, the appeal must not be taken for purpose of delay. Third, the evidence suppressed must be substantial proof of a fact material in the proceeding." Loud Hawk, 628 F.2d at 1150.

The parties agree that the defendants have not been put in jeopardy and that the appeal is not for the purpose of delay. The only matter in dispute is whether the excluded evidence is substantial proof of a material fact. The government insists that the U.S. Attorney's mere certification that the evidence is substantial proof of a material fact is sufficient to establish our jurisdiction. However, we "require[] more than the prosecutor's bare certification that the conditions enumerated in section 3731 exist." Adrian, 978 F.2d at 490.² Rather, "before we may assume jurisdiction, the government must demonstrate that the evidence . . . [is] substantial proof of a fact material to the prosecution." Id. at 491 (emphasis added); see also id. at 490 (rejecting government's argument that § 3731 "permits an appeal whenever the government certifies to the district court that the evidence is `substantial proof of a material fact,' regardless of the truth of that certification"); see also Loud Hawk, 628 F.2d at 1150 (holding § 3731 not satisfied as to certain counts notwithstanding "the government's protests to the contrary" because substantial proof of material fact condition had not been met).

Consequently, in order to satisfy its relatively modest burden, the government must show that the evidence "makes a considerable contribution to cognition of a fact relevant to resolution of the case." Adrian, 978 F.2d at 491. In determining whether the government has made the necessary showing:

we must interpret the [substantial proof] requirement . . . in a way which facilitates rather than hinders the government's ability to seek review in this court. Thus, we will find the government to have satisfied this additional jurisdictional requirement if, assuming the evidence would be admissible, a reasonable trier of fact could find the evidence persuasive in establishing the proposition for which the government seeks to admit it.

Id.; see also United States v. Poulsen, 41 F.3d 1330, 1334 (9th Cir.1994).

A. Review Under "Substantial Proof of a Material Fact" Standard

The question of jurisdiction has bedeviled the government's attempted appeal in this case, as the...