United States v. Agosto, Cr. 3-81-96.
| Citation | 538 F. Supp. 1149 |
| Decision Date | 17 May 1982 |
| Docket Number | No. Cr. 3-81-96.,Cr. 3-81-96. |
| Parties | UNITED STATES of America, Plaintiff, v. Joseph Vincent AGOSTO, Deil Otto Gustafson, Roger Frank Newstrum, Ralph Edwin Bruins, James Louis Bacigalupo, Joan Lorrain Norris, Defendants. |
| Court | U.S. District Court — District of Minnesota |
James M. Rosenbaum, U. S. Atty., Douglas A. Kelley, Thorwald H. Anderson, Asst. U. S. Attys., Minneapolis, Minn., for plaintiff.
John R. Wylde, Minneapolis, Minn., for defendant Agosto.
Joe A. Walters, O'Connor & Hannan, Minneapolis, Minn., for defendant Gustafson.
Gordon G. Busdicker and Jerry W. Snider, Faegre & Benson, Minneapolis, Minn., for defendant Newstrum.
Joseph S. Friedberg and Mark W. Peterson, Minneapolis, Minn., for defendant Bruins.
Steven Z. Kaplan and James W. Littlefield, Briggs & Morgan, St. Paul, Minn., for defendant Bacigalupo.
Douglas W. Thomson, St. Paul, Minn., for defendant Norris.
This matter is before the court for further proceedings in accordance with the Court of Appeals' instructions in United States v. Agosto et al., 675 F.2d 965 (8th Cir. 1982). That decision reviewed this court's order of December 29, 1981, 528 F.Supp. 1300, disqualifying attorneys Stein, Greenberg and Walters from further representing defendants in this matter. That order was affirmed as to attorney Stein and remanded for further proceedings as to attorneys Walters and Greenberg. On May 10 and 11, 1982 further proceedings were held with regard to attorney Walters' further representation of defendant Gustafson.1
The facts of record at the time of the Court of Appeals' decision are set forth more fully in that court's opinion and this court's order of December 29, 1981. In brief, in addition to representing a number of grand jury witnesses in the preindictment stage of this case, attorney Walters represented codefendants Gustafson, Bruins and Newstrum. Some months prior to the indictment, Bruins retained separate counsel. Newstrum was represented by Walters until after his arraignment.
The Court of Appeals has directed this court to conduct further proceedings to determine whether Walters should be disqualified:
In the criminal context, disqualification on the basis of the attorney's receipt of privileged information from a codefendant formerly represented by that attorney should only be considered upon a clear showing that the present and former clients' interest are adverse. Here, there has been no such showing. Gustafson, Norris and Agosto all contend that all of the defendants intend to present a joint defense, and that there, therefore, is no adversity of interests. While defendants Bruins and Newstrum are not on the record as joining in this contention, it appears that they were never asked to state their position. We find that the district court erred in rejecting appellants' assertion of intent to present a joint defense without conducting further inquiry into its validity. On remand, we direct that further inquiry be made.
To that end, this court conducted separate in camera hearings with defendants Bruins and Newstrum and counsel. See Fed.R.Crim.P. 44, Advisory Committee Notes (1979). The transcripts of the in camera proceedings are ordered sealed, and are not to be examined or used for impeachment or for any other purpose by the government or any other party.
A thorough inquiry was made of Bruins and Newstrum regarding their intention to present a joint defense with defendant Gustafson. Both Bruins and Newstrum have declined to join in Gustafson's contention that all defendants intend to present a joint defense.2 This court finds that a clear showing has been made that Bruins and Newstrum have interests in this matter that are adverse to those of Gustafson.3
Because we find that the requisite clear showing of adversity of interest has been made, it is then necessary to consider "whether there exists a means of eliminating the potential conflict less burdensome than disqualification." Agosto, at 973. The Court of Appeals indicated that this court should inquire of defendants Bruins and Newstrum whether they are willing to consent to Walters' continued representation of Gustafson and to the use of backup counsel by Gustafson to conduct any cross examination of Bruins and Newstrum. Id. at 974. With regard to the nature of the consent required, the Court of Appeals stated:
If Bruins and Newstrum do consent, they will in effect waive any future objections they may have to the fairness of their trial arising as a result of Walters' continued representation of Gustafson and employment of backup counsel. Thus, in order for the consent to be effective, we hold that it should fulfill all the standards of a knowing and intentional waiver of a constitutional right.
Id. at 974, n. 8. Both Bruins and Newstrum have emphatically declined to provide such consent. The Court of Appeals ruled that disqualification should follow: "If they do not consent ... and there is a clear showing of adverse interests, then we concur in the district court's exercise of discretion and disqualify Walters." Id. at 974.
Immediately prior to this court's ruling on this matter following the in camera proceedings on May 10, 1982, attorney Walters argued for the first time that the Court of Appeals intended that severance be considered as a less restrictive alternative to disqualification. Because this issue had never been previously raised nor briefed, this court permitted Walters to file a motion for severance raising this point.
Gustafson argues that severance must be granted merely because this court found that there has been a clear showing of adverse interests between Bruins and Newstrum and Gustafson. Simply because the defendants' positions can be said to be generally antagonistic or that one or more defendants may try to save themselves at the expense of the others, does not entitle Gustafson to a severance. See United States v. Boyd, 610 F.2d 521, 526 (8th Cir. 1979), cert. denied sub. nom, Artez v. United States, 444 U.S. 1089, 100 S.Ct. 1052, 62 L.Ed.2d 777 (1980).
Gustafson next contends that severance is a less burdensome means of eliminating his attorney's conflict than disqualification. Gustafson argues that this court has no discretion to deny the motion because his Sixth Amendment right to choose a particular counsel is superior to any other interests favoring a joint trial. It is important to note that there has been no contention that joinder of these defendants and offenses is improper, and an examination of the indictment indicates that defendants and offenses are properly joined. See Fed. R.Crim.P. 8; United States v. Sanders, 563 F.2d 379, 382 (8th Cir. 1977, cert. denied, 434 U.S. 1020, 98 S.Ct. 744, 54 L.Ed.2d 767 (1978).
The threshold inquiry which must be made in considering this motion is whether severance will in fact eliminate Walters' conflict. The Court of Appeals found the source of the potential conflict in Canon 4 of the Code of Professional Responsibility requiring Walters to preserve his former client's confidences, and in Canon 5, requiring his loyalty to his former clients. Agosto, at 973. In view of Walters' conflict, the danger is that he "may be tempted to use confidential information to the detriment of his former clients ...." Id.
The conflict in this instance arises because Bruins and Newstrum are not committed to the presentation of a joint defense. The record indicates the likelihood that Gustafson's defense will be first, that no crime was committed, and secondly, that if criminal activity occurred, the culpable parties are other bank officers and directors. Bruins and Newstrum are the natural and obvious targets of such a defense.
In this court's opinion, that likelihood presents irreconcilable ethical problems for attorney Walters which have already been illustrated by the position he took at the preindictment conference with Justice Department personnel. Assuming that this court's duty to supervise the members of its bar, Coffelt v. Shell, 577 F.2d 30, 32 (8th Cir. 1978), is an insufficient basis to sustain a disqualification, see Agosto, at 969, it is necessary to examine the harm that may befall Bruins and Newstrum in the event of separate trials. See id. at 973-974.
The problem of the potential use of confidential information imparted by Bruins and Newstrum could arise in 1) cross examination of Bruins and Newstrum; 2) planning trial strategy; 3) arguing culpability of Bruins and Newstrum to the jury; and 4) examination of other witnesses regarding Bruins and Newstrum's participation in the alleged offenses. Id. at 973. In the event Gustafson's case was severed and Gustafson was tried prior to Bruins and Newstrum, Bruins and Newstrum presumably would not testify at that trial. There remains the possibility, however, that confidential information imparted by Bruins and Newstrum would be used in planning trial strategy, and examining other witnesses. Such use could elicit testimony at trial exculpating Gustafson and inculpating his codefendants. Evidence of this nature would surely be used by the prosecution in the subsequent trial of Bruins and Newstrum.
Trial of Bruins and Newstrum prior to Gustafson avoids the more obvious danger to these defendants in obtaining a fair trial. Walters would still be faced with the temptation to use their confidences in defending Gustafson. There could be the added problem of attempting to cross examine Bruins and Newstrum. The potential detriment to Bruins and Newstrum, while not affecting the disposition of their criminal case, could occur through the evidence that could be used in any civil proceeding against them brought in connection with their alleged criminal activities. Thus, a trial of Bruins and Newstrum prior to Gustafson eliminates neither Walters' ethical dilemma nor the strong potential of detriment to Bruins and Newstrum.
Gustafson argues that neither...
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