United States v. Castellano, SSS 84 Cr. 63 (ADS).

• Decision Date: 05 March 1985
• Docket Number: No. SSS 84 Cr. 63 (ADS).,SSS 84 Cr. 63 (ADS).
• Citation: 610 F. Supp. 1137
• Parties: UNITED STATES of America v. Paul CASTELLANO, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

610 F. Supp. 1137

UNITED STATES of America v. Paul CASTELLANO, et al., Defendants.

No. SSS 84 Cr. 63 (ADS).

United States District Court, S.D. New York.

March 5, 1985.

COPYRIGHT MATERIAL OMITTED

Rudolph W. Giuliani, U.S. Atty. for S.D. N.Y., New York City (Walter S. Mack, Jr., Mary Lee Warren, Michael Kellogg, New York City, of counsel), for U.S.

Gerald L. Shargel, New York City (Jonathan J. Silbermann, New York City, of counsel), for defendant Richard Mastrangelo.

OPINION AND ORDER

SOFAER, District Judge:

The government has moved to disqualify Gerald L. Shargel, Esq., from representing defendant Richard Mastrangelo at the trial of this criminal action. The government argues that Shargel must be disqualified for three reasons. First, Shargel invoked his fifth amendment privilege against self-incrimination before a grand jury with respect to his relationships with several of the twenty-four defendants named in the indictment, including Mastrangelo. The government claims that this creates a conflict of interest between Shargel and Mastrangelo, since Shargel might seek to limit his own potential criminal exposure at the expense of zealously representing Mastrangelo. Second, the government claims that Mr. Shargel "should be a witness at the trial." Government Memorandum at 4. It was unclear from the discussion in the affidavits and memorandum filed by the government who exactly was going to call Mr. Shargel, but at a conference on December 19, 1984 (at which defense counsel other than Shargel were present), the government represented that it intended to call Mr. Shargel as a hostile witness. Third, the government argues that the A.B.A.'s Canons of Ethics require Shargel's disqualification, seemingly because Shargel's participation as Mastrangelo's counsel at trial might adversely affect the interests of some of his former clients, and that those clients who are defendants in this case are not in a position to give effective waivers.

The Supreme Court's recent decision in Flanagan v. United States, 465 U.S. 259, 104 S.Ct. 1051, 1054-57, 79 L.Ed.2d 288 (1984), which held that orders disqualifying trial counsel are not immediately appealable under 28 U.S.C. § 1291 (1982), forces courts to walk a fine line. On the one hand, if counsel is not disqualified, the client may nevertheless later "establish that an actual conflict of interest adversely affected his lawyer's performance," Cuyler v. Sullivan, 446 U.S. 335, 350, 100 S.Ct. 1708, 1719, 64 L.Ed.2d 333 (1980), depriving him of his sixth amendment right to effective assistance of counsel. On the other hand, Flanagan forces a defendant whose lawyer is improperly disqualified to undergo trial without the counsel of his choice. A defendant convicted under such circumstances may claim that he too has been deprived of "a right of constitutional dimension"—the ability to pick his own lawyer. United States v. Cunningham, 672 F.2d 1064, 1070 (2d Cir. 1982); see also, e.g., United States v. Bubar, 567 F.2d 192, 203 n. 18 (2d Cir.) (recognizing defendant's "constitutional right to be represented by counsel of his own choice") (emphasis in original), cert. denied, 434 U.S. 872, 98 S.Ct. 217, 54 L.Ed.2d 151 (1977); United States v. Armedo-Sarmiento, 524 F.2d 591, 592 (2d Cir.1975) (per curiam) (defendant's sixth amendment rights are implicated by motion to disqualify retained counsel). The standard on appeal for claims involving wrongful deprivation of counsel has not yet been established. Nevertheless, the weighty public interest in the finality of any judgment, see Illinois v. Somerville, 410 U.S. 458, 463, 93 S.Ct. 1066, 1070, 35 L.Ed.2d 425 (1973), particularly in a case which the government estimates will take many months to try, militates in favor of great caution in disqualifying Mr. Shargel. Before any such drastic step is taken, the government must show convincingly that no less intrusive measure can adequately protect the interests it has invoked.

I. Factual Background.

In March 1984, Shargel was served with a subpoena duces tecum requiring him to testify before a grand jury and to produce records of any money or property transferred to him by or on behalf of ten individuals, eight of whom are defendants in this case. Shargel moved to quash the subpoena on the ground that disclosure of the information requested would breach the attorney-client privilege. On April 26, 1984, Judge Lasker denied the motion to quash, and his decision was upheld by the Second Circuit. In re Shargel, 742 F.2d 61 (2d Cir.1984).

One week later, on August 20, 1984, Shargel appeared before the grand jury pursuant to the subpoena duces tecum. He declined, however, to produce the records or to answer any questions concerning the ten named individuals, and invoked his fifth amendment privilege against self-incrimination. The government challenged Shargel's assertion of the privilege, but Judge Keenan accepted the representation of Shargel's counsel, Edward M. Shaw, Esq., that a valid basis existed for its invocation. Therefore, upon the government's application, Judge Keenan ordered that, if Shargel subsequently invoked the privilege, he must be given immunity before being required to testify. On August 22, Shargel again appeared before the grand jury. When he asserted his fifth amendment privilege, the government activated the immunity order signed by Judge Keenan. The order was amended to grant Shargel retroactive immunity to cover his August 20 appearance. Shargel then testified and produced three documents which he claimed were the only records he possessed that were responsive to the subpoena. He appeared before the grand jury again on September 5, 1984. He later produced various other bank records.

II. Mr. Shargel's Assertion of His Fifth Amendment Privilege.

The government contends that Shargel's mere assertion of his privilege against self-incrimination before the grand jury creates a conflict of interest between him and his client Mastrangelo that requires his disqualification. It claims that "by invoking the Fifth Amendment privilege, Shargel has admitted that he himself may be involved in some sort of wrongdoing involving his clients." Government Memorandum at 10. This potential criminal exposure, the government contends, may lead Shargel to hold back in his defense of Mastrangelo, minimizing his exposure at the expense of his client's interest in an effective defense.

The government relies on the Second Circuit's decisions in United States v. Cancilla, 725 F.2d 867 (2d Cir.1984), and Solina v. United States, 709 F.2d 160 (2d Cir.1983), which, it argues, establish a "per se" disqualification requirement in cases where an attorney is implicated in criminal conduct. In Solina, the Court of Appeals held that a per se conflict of interest between a defendant and his attorney exists when the attorney was not admitted to the bar. Such an attorney, the Court found, "cannot be wholly free from fear of what might happen if a vigorous defense should lead the prosecutor or the trial judge to inquire into his background and discover his lack of credentials. Yet a criminal defendant is entitled to be represented by someone free from such constraints." 709 F.2d at 164. The Court concluded, "without enthusiasm," id. at 169, that when a defendant unknowingly was represented by a person not licensed to practice law harmless-error analysis is inapplicable and "a per se rule appears to us to be required," id. at 168. In Cancilla, the Court was asked to assume for purposes of the appeal that the defendant's trial counsel himself was "involved in criminal activity similar to the charges against Cancilla," in part due to his "prior and arguably continuing representation" of a person who would be implicated in criminal conduct if the co-defendant's defense were accepted. 725 F.2d at 868. Citing Solina, the Court in Cancilla "concluded with a similar lack of enthusiasm" that a per se rule was appropriate:

It must have occurred to counsel that a vigorous defense might uncover evidence or prompt testimony revealing his own crimes, even more so than in Solina.... Moreover, representation of Cancilla in ways other than by a vigorous defense may have been affected. It is difficult to see how counsel conflicted in this way could impartially have given Cancilla advice on whether or not to take a guilty plea, since counsel might have feared that acceptance of a plea would turn on Cancilla's cooperation, which might lead to discovery of the link to counsel's own activities. In such circumstances, proof of this type of conflict, which the government here asks the court to assume, constitutes under Solina a per se violation of the Sixth Amendment right to effective assistance of counsel.

Id. at 870. The court then noted how Solina drew upon Cuyler v. Sullivan, 446 U.S. 335, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980), which had held that "a defendant who raised no objection at trial must show that an actual conflict of interest adversely affected his lawyer's performance.... The possibility of conflict is insufficient to impugn a criminal conviction." Id. at 348, 350, 100 S.Ct. at 1719. The Second Circuit explained:

The Court in Cuyler was concerned with the effect of multiple representation, a situation that invariably raises the possibility of harmful conflict that often does not exist in fact. Solina involved a different type of conflict for a lawyer, which is always real, not simply possible, and which, by its nature, is so threatening as to justify a presumption that the adequacy of representation was affected.

725 F.2d at 870 (emphasis in original).

This case, however, differs from both Solina and Cancilla. First, those cases provide no basis for the government's claim that Shargel's invocation of the privilege against self-incrimination before the grand jury indicates that he is "involved in some sort of wrongdoing." The law in fact provides no support for such an inference:

No implication of guilt

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