U.S. v. Yang

Citation281 F.3d 534
Decision Date20 February 2002
Docket NumberNo. 00-3126.,No. 00-3125.,No. 00-3150.,00-3125.,00-3126.,00-3150.
PartiesUNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Pin Yen YANG, a/k/a P.Y. Yang, a/k/a P.Y. Young; Four Pillars Enterprise Company, Ltd.; Hwei Chen Yang, a/k/a Huen Chan Yang, a/k/a Sally Yang, a/k/a Sally Young, Defendants-Appellants/Cross-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Nancy Luque (argued and briefed), Eric A. Dubelier (argued and briefed), Reed, Smith, Shaw & McClay, Washington, DC, for Pin Yen Yang and Four Pillars Enterprise Co., LTD in Nos. 00-3125 and 00-3150.

Ralph E. Cascarilla (argued and briefed), Darrell A. Clay (briefed), Walter & Haverfield LLP, Cleveland, OH, for Hwei Chen Yang in No. 00-3126.

Before: BATCHELDER and MOORE, Circuit Judges; BERTELSMAN, District Judge.*

OPINION

BATCHELDER, Circuit Judge.

The Defendants, Pin Yen Yang (Yang), his corporation Four Pillars Enterprise Company, Ltd. (Four Pillars), and Yang's daughter Hwei Chen Yang (Sally), were charged by indictment with thirteen counts of mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, three counts of money laundering in violation of 18 U.S.C. § 2315, and one count of attempted theft of a trade secret and conspiracy to commit theft of a trade secret in violation of the Economic Espionage Act of 1996(EEA), 18 U.S.C. § 1832.

Prior to the conclusion of the trial, the district court disposed of all but one of the fraud counts, and all of the money laundering and receipt of stolen property counts. On April 29, 1999, the jury found the Defendants guilty of attempt and conspiracy to commit theft of a trade secret, and acquitted them on the remaining fraud charge.

During the course of the proceedings the Defendants made numerous motions, including, among others, pretrial motions to suppress evidence, a Batson challenge to the composition of the jury, and motions for mistrial on several grounds, all of which the district court denied. In September, 1999, the Defendants moved for a new trial and renewed their motions for mistrial. After an evidentiary hearing on these motions, the court denied each of them. On January 5, 2000, the Defendants were sentenced. The court departed downward fourteen levels in establishing the offense level for each of the Defendants; the court, however, departed upward in sentencing Four Pillars, imposing the statutory maximum fine of $5,000,000.00. On appeal the Defendants appeal the denial of their pretrial, trial and post-trial motions and the district court's upward departure in imposing Four Pillars' fine. The Government appeals the district court's downward departure for each Defendant.

The principal issues before us in this appeal are the Defendants' contention that under the circumstances of this case it was legally impossible for them to have committed the crimes of which they were convicted; Four Pillars' contention that the district court erred in departing upward in imposing sentence; and the Government's contention that the district court erred in departing downward in setting the offense levels of the Defendants. Additionally, the Defendants challenge the district court's denials of a motion to suppress video- and audiotape evidence, a Batson challenge, a motion to prohibit contact between prosecutors and witnesses, motions for mistrial because of alleged prosecutorial misconduct, and motions for new trial on grounds of newly discovered evidence. Finally, the Defendants claim that the district court's instruction on the meaning of "theft" was plainly erroneous and that their convictions were not supported by the evidence. We conclude that the defense of impossibility is not available to the Defendants; that the district court erred in sentencing all of the Defendants; and, finally, that none of the remaining assignments of error has merit. We will therefore affirm the judgments of conviction but vacate the sentences and remand for further proceedings consistent with this opinion.

I. Factual Background

Four Pillars is a Taiwanese company owned by Yang. Avery Dennison Inc. (Avery), an American corporation, is one of Four Pillars' chief competitors in the manufacture of adhesives. Dr. Victor Lee, a native of Taiwan, was employed by Avery in 1986 to do scientific research into adhesives. At all times relevant to this case, Lee was an employee of Avery. In 1989, while Lee was making a presentation in Taiwan, Four Pillars vice-president C.K. Kao introduced him to Yang and Sally. Yang asked Lee to serve as a "consultant" to Four Pillars and offered him compensation of $25,000.00 for a year of consultation. The parties agreed that they would keep the arrangement secret. Lee received a check, made out to his sister-in-law, from Four Pillars shortly thereafter.

After his return to the United States, Lee corresponded with Yang and Sally, describing the information he would provide them and indicating that some of the information Lee intended to provide the Yangs was confidential to Avery. On August 8, 1989, Lee sent two confidential Avery rheology1 reports to the Yangs. The Yangs responded that the information was very helpful.

Lee continued to supply the Yangs with confidential information including information that Four Pillars could use in making a new acrylic adhesive developed by Avery. The Yangs sent Lee samples of the adhesives they had created using information he had supplied; Lee tested the samples and offered comparisons with Avery's products derived from the same adhesive formula.

The FBI confronted Lee after learning of Lee's industrial espionage. Lee admitted his relationship with the Yangs and Four Pillars and provided the Government with materials documenting his activities since 1989. Lee also agreed to cooperate with the Government in a sting operation to arrest and prosecute the Yangs. A short time later, Yang told Lee that he would be in the United States during the summer of 1997. Lee volunteered that he had information on a new emulsion coating that he would provide Yang at that time and asked whether Yang might also be interested in information on Avery's operations in Asia. Yang was very interested.

On September 4, 1997, Lee met Yang and Sally in Lee's hotel room in Westlake, Ohio. Lee had consented to the FBI's videotaping this meeting. In the course of the meeting, Lee showed the Yangs documents provided by the FBI, including an Avery patent application relating to a new adhesive product. The documents bore "confidential" stamps and Lee emphasized to the Yangs that the information was the confidential property of Avery. Yang and Sally, at Yang's direction, began to tear off the "confidential" stamps. The Yangs discussed with Lee the information Lee had previously provided to Four Pillars. Following the meeting, the Yangs — with the confidential documents in their possession — were arrested by the FBI.

II. Analysis
A. The trade secret counts

18 U.S.C. § 1832 provides:

(a) Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly —

(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;

(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits,

delivers, sends, mails, communicates, or conveys such information;

(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;

(4) attempts to commit any offense described in paragraphs (1) through (3); or

(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.

(b) Any organization that commits any offense described in subsection (a) shall be fined not more than $5,000,000.

The Defendants were found guilty of violating 18 U.S.C. § 1832(a)(4) and (5), based on their attempt and conspiracy to steal Avery's trade secret. On appeal the Defendants argue that the district court erred when it ruled that the Government did not have to prove that what the Defendants sought to steal was an actual trade secret. The Defendants contend that the district court's reliance on United States v. Hsu, 155 F.3d 189 (3d Cir.1998), which held that legal impossibility is no defense to attempt and conspiracy charges, was error because Hsu was incorrectly decided.

We review de novo the district court's definition of the elements of the charged offense, the meaning attached to those elements, and the applicability of the defense of legal impossibility. United States v. Alvarez, 266 F.3d 587, 592 (6th Cir.2001).

In Hsu, the Third Circuit was faced with a claim nearly identical to that raised by the Yangs, namely, that it was legally impossible for the defendants to be guilty of attempting to steal a trade secret and conspiring to steal a trade secret because that which they were accused of attempting and conspiring to steal was not, as it turned out, an actual trade secret. This issue arose in the context of the defendants' claim that they were entitled to examine the trade secret documents in order to establish their defense of legal impossibility since, in their...

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