United States v. Birrell
| Decision Date | 09 January 1967 |
| Docket Number | No. 61 Cr. 692.,61 Cr. 692. |
| Citation | 262 F. Supp. 97 |
| Parties | UNITED STATES of America v. Lowell M. BIRRELL, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Robert M. Morgenthau, U. S. Atty. for Southern Dist. of New York, for United States, Arthur L. Liman, Sp. Asst. U. S. Atty., and Stephen L. Hammerman, Asst. U. S. Atty., of counsel.
William J. Brennan, III, New York City, for defendant, Lowell M. Birrell.
The defendant Lowell M. Birrell has moved, pursuant to 28 U.S.C.A. § 144,1 to disqualify District Judge William B. Herlands (the writer of this opinion) from presiding over this case on the ground that Judge Herlands (hereinafter "the Court") has a personal bias or prejudice against the defendant. The case had been referred to the Court for all purposes by an order of the Chief District Judge, dated September 27, 1966, in accordance with Rule 2 of the General Rules of United States District Courts for the Southern and Eastern Districts of New York.
The indictment herein charges the defendant Birrell and thirteen others with distributing the common stock of American Leduc Petroleums Ltd. (hereinafter "American Leduc") in violation of the registration and anti-fraud provisions of the Securities Act of 1933 (15 U.S.C.A. §§ 77e(a), 77q(a), 77x), the mail fraud statute (18 U.S.C.A. § 1341) and the general conspiracy statute (18 U.S.C.A. § 371).
The defendant's "Affidavit of Personal Bias or Prejudice" asserts that the Court has a personal bias or prejudice against him. The defendant contends that the facts and the reasons for his belief that bias or prejudice exists are contained in a statement by the Court which appears as the opening sentence of a reported opinion by the Court, in ruling upon motions in a civil action to quash certain subpoenas duces tecum, In Re Equitable Plan Co., 185 F.Supp. 57 (S.D.N.Y.1960), modified, Iags v. Ferguson, 282 F.2d 149 (2d Cir. 1960).
The sentence referred to by the defendant states:
"This action is another chapter in the attempt to unravel the affairs and make whole the victims of Lowell Birrell, presently a fugitive from justice under indictment for crimes arising out of his financial activities." 185 F. Supp. at 58.
The subject matter of the civil action giving rise to the motions to quash the subpoenas was a derivative stockholders' action for the benefit of Doeskin Products, Inc. then pending in the Supreme Court of the State of New York. The plaintiffs in that case sought the cancellation of one million shares of the stock of Doeskin Products, Inc. which had been issued to the defendants in the derivative action while Doeskin Products, Inc. was under the alleged domination of Birrell. The defendants in the derivative action were a group of Canadians who claimed to have purchased the shares of Doeskin Products, Inc. from a Latin American corporation. Neither the plaintiffs nor the defendants in the derivative action were parties to the motions before this Court.
Equitable Plan Company — a debtor in a Chapter X reorganization proceeding pending in the United States District Court for the Southern District of California and with ancillary proceedings pending in the United States District Court for the Southern District of New York — had large stockholdings in Doeskin Products, Inc. Although the trustee of Equitable Plan Company was not a party to the State Court stockholders' derivative action, the referee permitted him to participate in the hearings.
The trustee's position was that the defendants in the derivative action knew that the one million shares of Doeskin Products, Inc. (which they claimed to have purchased in good faith from the Latin American corporation) were actually held and controlled by Birrell and that the ostensible stock purchase by the defendants was, in fact, part of a scheme to continue Birrell's alleged control of and beneficial interest in Doeskin Products, Inc.
To substantiate his position, the trustee endeavored to prove that the defendants in the derivative action fraudulently cooperated with Birrell in taking $100,000 from Doeskin Products, Inc. In order to prove this allegedly fraudulent transaction, the trustee in the ancillary proceeding in the Southern District of New York caused subpoenas duces tecum to be issued to three foreign banks requiring the production of records and documents located in branches outside the United States. The subpoenas were served at the New York agencies of the respective banks. The motions before this Court were made by the three banks to quash the said subpoenas.
Edward C. Kalaidjian, Esq., a member of the firm of Thacher, Proffitt, Prizer, Crawley & Wood, attorneys in New York for the trustee, submitted a twelve-page affidavit in opposition to the motion made by the banks. Mr. Kalaidjian also submitted an opposing memorandum of law that confined itself to an exposition of the legal issues involved.
The Kalaidjian affidavit undertook to acquaint the Court with essential background facts and details of the alleged transactions for the relevant purpose of showing that the trustee subpoenaed each of the banks "to obtain urgently needed material evidence." (Kalaidjian affidavit, pp. 3, 8). The affidavit described with particularity the transactions involved and also indicated what probable proof and what "conclusive proof" (Kalaidjian affidavit, p. 7) the trustee expected to obtain through the subpoenaed bank records, if produced for examination in the trustee's ancillary proceedings pending in the United States District Court for the Southern District of New York.
The facts recited in the Kalaidjian affidavit also relevantly showed the legitimate relationship between the subpoenas and the trustee's powers and responsibilities.2
In his affidavit, Mr. Kalaidjian asserted (at p. 2):
None of the other papers that were before the Court in connection with the motions to quash contradicted Mr. Kalaidjian's statements about Birrell and his activities.
The defendant attacks the Kalaidjian affidavit for the asserted reason that most of its contents consists of statements (including the one quoted above) that were totally unrelated to the issue of the proper service of the bank subpoenas. For the same expressed reason, the defendant argues that the statement made by the Court in the opening sentence of its opinion in In Re Equitable Plan Co., supra, was not related to the issue before the Court. Upon the foregoing premises, the defendant concludes that the Court's statement was personal and not judicial.
The fallacy underlying the defendant's premises is that neither the trustee nor the Court was required to limit himself to the naked ultimate legal issue, stripped of its factual context and background. Ex facto jus oritur. That important and novel legal questions should not be decided in a vacuum is a brocard.
The pertinency of the facts recited by the trustee and the Court was grounded upon desiderata to which this Court has already alluded in the course of this opinion.
The Court made the statement now quoted by the defendant on the basis of the clear state of...
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United States v. Birrell
...that had not yet been heard and decided. As to these motions, "(1)" was denied by this Court on January 9, 1967. United States v. Birrell, 262 F.Supp. 97 (S.D.N.Y.1967); "(2)" was denied by this Court on May 23, 1967. United States v. Birrell, 269 F. Supp. 716 (S.D.N.Y.1967); and "(3)", inv......
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Palmieri v. United States
...the time of sentencing was "relevant judicial opinion" and showed no extra-judicial or personal bias or prejudice. United States v. Birrell, 262 F.Supp. 97, 100 (S.D.N.Y.1967). The expression of opinions formed as a result of the evidence and observed conduct before the Court may not serve ......