United States v. Ackerly

• Decision Date: 24 November 2020
• Docket Number: No. 19-1967,19-1967
• Citation: 981 F.3d 70
• Parties: UNITED STATES of America, Appellant, v. Donna M. ACKERLY, a/k/a Donna Kulmaczewski, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

981 F.3d 70

UNITED STATES of America, Appellant,

v.Donna M. ACKERLY, a/k/a Donna Kulmaczewski, Defendant, Appellee.

No. 19-1967

United States Court of Appeals, First Circuit.

November 24, 2020

Stephen E. Frank, Assistant United States Attorney, with whom Andrew E. Lelling, United States Attorney, was on brief, for appellant.

Michael Kendall, Boston, MA, with whom Yakov Malkiel, Boston, MA, and White & Case LLP were on brief, for appellee.

Before Howard, Chief Judge, Selya and Barron, Circuit Judges.

SELYA, Circuit Judge.

A jury convicted defendant-appellee Donna M. Ackerly of three counts charging her with wire fraud, honest services wire fraud, and conspiracy to commit both types of wire fraud. The district court granted Ackerly's motion for a new trial upon finding what it deemed to be a violation of the Confrontation Clause. See U.S. Const. amend. VI. Concluding, as we do, that the government has failed to show reversible error, we affirm the grant of a new trial.

I. BACKGROUND

We begin by rehearsing the relevant facts and travel of the case. On August 10, 2016, a federal grand jury sitting in the District of Massachusetts indicted Ackerly, along with Charles Garske, Richard Gottcent, and Michael Sedlak, on charges of wire fraud, honest services wire fraud, and conspiracy to commit both types of wire fraud. See 18 U.S.C. §§ 1343, 1346, 1349. The indictment alleged that the defendants were employees of Georgeson, Inc., a proxy-solicitation firm that advises publicly traded companies on matters requiring shareholder approval; that, between September 2007 and March 2012, the defendants conducted a fraudulent scheme, which consisted of bribing an employee of Institutional Shareholder Services, Inc. (ISS), a firm that provides voting advice to shareholders, in exchange for nonpublic information about ISS's proxy-voting advice; and that the defendants concealed the scheme by falsely invoicing Georgeson's clients for at least a portion of the cost of the bribes.

Trial began on February 26, 2018, before a jury of twelve (which had been empaneled along with two alternate jurors). United States v. Garske, 939 F.3d 321, 326 (1st Cir. 2019), cert. denied, ––– U.S. ––––, 140 S. Ct. 1121, 206 L.Ed.2d 187 (2020). During the trial, the district court excused three jurors for various reasons. See id. Although Garske, Gottcent, and Sedlak consented to proceed with a jury of fewer than twelve, Ackerly withheld her consent. See id. at 326-27.

Ackerly's refusal had a domino effect: the government refused to proceed with a jury of eleven unless all four defendants acquiesced. See id. at 326. Faced with this impasse, the district court declared a mistrial. See id. at 327.

Garske, Gottcent, and Sedlak responded to the mistrial by moving to dismiss the indictment against them on Double Jeopardy grounds. See id. On August 16, 2018, the district court ruled that the Double Jeopardy Clause barred the government from retrying Garske, Gottcent, and Sedlak and dismissed the indictment against them with prejudice. See United States v. Ackerly, 323 F. Supp. 3d 187, 200-03 (D. Mass. 2018). Following the government's appeal, we reversed. See Garske, 939 F.3d at 327, 336.

While that appeal was pending, the government proceeded to retry Ackerly. See id. at 336 n.4. Ackerly's separate trial began on January 7, 2019. In its opening statement, the government told the jury that the evidence would show that an ISS employee, "a man named Brian Zentmyer ... secretly passed information about how ISS's clients were voting to one of Ackerly's colleagues at Georgeson, Michael Sedlak, and Sedlak passed that information on to Donna Ackerly and others." Although Zentmyer had testified to that effect in the first trial and the government included him on its witness list for Ackerly's separate trial, the government chose not to call him as a witness the second time around.

In his place, the government called a cooperating witness, Keith Haynes. Haynes — like Ackerly — was a senior account executive at Georgeson. Haynes testified that he participated in a scheme to bribe Zentmyer with expensive tickets to sporting events and concerts in exchange for confidential information. He also testified that others at Georgeson were involved in the scheme. Along the way, Haynes recounted how he received emails from Sedlak containing confidential voting information and how he falsely billed Georgeson clients for some of the cost of the tickets.

On the last day of Haynes' testimony, defense counsel cross-examined Haynes about his decision to plead guilty. Haynes responded that, at the time of his decision, he was unaware of provisions in ISS contracts that appear to presume voting information to be nonconfidential unless an ISS client specified otherwise.

On redirect examination, the government sought to address Haynes' characterization of his knowledge at the time of his plea. The following exchange transpired:

Q. You were asked what you were aware of at the time you chose to plead guilty, correct?

A. Correct.

Q. You were aware -- Mr. Kendall asked you about Brian Zentmyer's cooperation agreement?

A. About --

Q. Do you recall being asked whether Brian Zentmyer was cooperating with the government?

A. Yes.

Q. You were aware at the time you pled guilty that Mr. Zentmyer had also pled guilty to being involved in a conspiracy --

MR. KENDALL: Objection.

Q. -- to steal confidential ISS information in exchange for bribes?

The court sustained the objection and instructed the jury that "the admitted guilt of others really is not relevant to this specific defendant's guilt or non-guilt, as the case may be."

Ackerly nonetheless moved for a mistrial at the next break in the proceedings. The court denied the motion, suggesting that its corrective instruction following defense counsel's objection, combined with a reiteration in final instructions, would suffice to ward off prejudice. On the sixth day of trial, Ackerly renewed her motion for a mistrial. In a supporting brief, she argued that the government had violated the Confrontation Clause by "expos[ing] the jury to Mr. Zentmyer's plea through a prosecutor's comment, not through testimony." Denying this motion, the district court indicated that it had "revised the jury instructions on that point to try to more directly address the issue [Ackerly] raised in the motion."

The case went to the jury on the following day. True to its word, the court instructed the jury that "[a]rguments and statements by lawyers ... are not evidence" and that "[q]uestions to witnesses are not evidence." Getting down to specifics, the court explained that "Mr. Haynes and anyone else who may have pled guilty may be presumed to have acted after an assessment of their own best interest, for reasons that are personal to them, but that fact has no bearing on Ms. Ackerly's guilt or innocence." Guilt by association, the court said, cannot support a conviction.

After the jury charge, Ackerly requested an instruction that the government had "violated [her] constitutional rights by referring to [Zentmyer's] plea." The court denied that request, insisting that its curative instructions had defused any issue.

After deliberating, the jury convicted Ackerly. She subsequently moved, in the alternative, for a judgment of acquittal or for a new trial. The district court granted her motion for a new trial, and this timely appeal ensued. We have jurisdiction under 18 U.S.C. § 3731.

II. ANALYSIS

The issue before us is whether the district court abused its discretion in granting Ackerly's motion for a new trial. In arguing the affirmative, the government mounts two principal contentions. First, the government contends that the Confrontation Clause is not implicated as a matter of law because the testimonial statement that the district court found prejudicial was never admitted into evidence. Second, the government contends that a single unanswered question, followed by multiple curative jury instructions, could not — as a matter of law — have violated the Confrontation Clause. And if either of these contentions is correct, the government says, it would mean that the district court applied too strict a standard of harmless-error review. Compare Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967) (holding that an error of constitutional dimension can only be harmless if it is shown to be "harmless beyond a reasonable doubt"), with Kotteakos v. United States, 328 U.S. 750, 776, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946) (holding that a non-constitutional error is harmless unless the error is shown to have had a "substantial and injurious effect or influence in determining the jury's verdict"). We evaluate each contention in turn.

A. Statement Not in Evidence .

As we approach the government's first claim of error, a threshold question looms. Ordinarily, we review a district court's grant of a new trial for abuse of discretion. See United States v. Theodore, 468 F.3d 52, 56 (1st Cir. 2006). Here, the government entreats us to follow suit. Ackerly demurs, maintaining that the government is now attempting to advance an argument that it never advanced below. On that basis, Ackerly asks that we review the government's claim solely for plain error. See United States v. Madsen, 809 F.3d 712, 717 (1st Cir. 2016). We start, therefore, by evaluating whether the government "raise[d] [the issue] squarely in the lower court" so as to avoid the daunting plain error standard. United States v. Lilly, 13 F.3d 15, 18 (1st Cir. 1994) ; see also United States v. Taylor, 54 F.3d 967, 972-73 (1st Cir. 1995) (explaining that under plain error doctrine, "appellate courts will notice unpreserved errors only in the most egregious circumstances").

The record tells the tale. The motion for a new trial was not the first time that Ackerly raised the Confrontation Clause as an objection to the prosecutor's question; she first articulated the argument in a written motion for a mistrial on the sixth day of the trial. S...