United States v. Exec. Recycling, Inc.
| Decision Date | 11 December 2012 |
| Docket Number | Criminal Case No. 11–cr–00376–WJM. |
| Citation | 908 F.Supp.2d 1156 |
| Parties | UNITED STATES of America, Plaintiff, v. 1. EXECUTIVE RECYCLING, INC., 2. Brandon Richter, and 3. Tor Olson, Defendants. |
| Court | U.S. District Court — District of Colorado |
OPINION TEXT STARTS HERE
Lillian Louisa Alves, Suneeta Hazra, U.S. Attorney's Office, Denver, CO, for Plaintiff.
Cleo J. Rauchway, Pamela Robillard Mackey, Haddon, Morgan & Foreman, P.C., Lucy Deakins Arnold, William J. Leone, Fulbright & Jaworski, LLP, Denver, CO, for Defendants.
ORDER DENYING COUNSEL FOR EXECUTIVE RECYCLING AND BRANDON RICHTER'S MOTION TO WITHDRAW
Before the Court is Attorneys Pamela Mackey and Cleo Rauchway's Motion to Withdraw (“Motion”). (ECF No. 250.) As stated on the record, and for the reasons set forth below, the Court denies the Motion.
In this action, the Government charges Executive Recycling, Brandon Richter, and Tor Olson with one count charging a violation of the Resource Conversation and Recovery Act (“RCRA”) (42 U.S.C. § 6928(d)(4)), one count of smuggling (18 U.S.C. § 554), eleven counts of wire fraud (18 U.S.C. § 1343), two counts of mail fraud (18 U.S.C. § 1341), and one count of obstruction of justice (18 U.S.C. § 1519). (ECF No. 1.) In short, the Government charges that Defendants (1) illegally transported and exported a shipment of electronic waste that included cathode ray tubes (“CRTs”) containing lead; (2) falsely represented to various businesses and government entities in Colorado that Defendants would dispose of the entities' electronic waste in an environmentally friendly manner and in compliance with all applicable local, state, and federal laws and regulations; and (3) knowingly altered, destroyed, mutilated or concealed evidence with the intent to impede the Government's investigation of them. ( Id.)
Defendants Executive Recycling and Brandon Richter retained attorney Pamela Mackey to represent them.1 (ECF No. 10.) Defendant Tor Olson retained attorney William Leone.2 (ECF No. 11.) These attorneys have continued to represent the same clients throughout this case and are currently representing the same clients.
In October 2011, Defendants entered into a Joint Defense Agreement (“JDA”). (ECF No. 246–1 3.) The JDA provided that materials shared between counsel would remain subject to attorney-client, work-product, and other applicable privileges. ( Id.) The JDA allowed any party to withdraw upon notification to all other signatories and, upon withdrawal, all communications and information covered by the JDA and disclosed to the withdrawing party prior to the party's notification of withdrawal would remain confidential. ( Id.)
After a lengthy discovery process and a hard fought pre-trial motions practice, a jury trial commenced on December 3, 2012. (ECF No. 239.) On the afternoon of the fourth day of trial, the Government introduced Exhibit 14.18, which is a series of invoices created by Executive Recycling's accounting program. An employee of Executive Recycling testified that it appeared one portion of Exhibit 14.18 had been altered as the invoice number was out of sequence. Exhibit 14.18 is the invoice for the shipment charged in Counts 14 and 15 of the Indictment.
On morning of the fifth day of trial, defense counsel requested an ex parte hearing with the Court to discuss an ethical issue. The merits of the ethical issue were resolved by the Court and are not germane here. However, during this ex parte discussion, Ms. Mackey orally moved to sever this action on behalf of her clients. The Motion to Sever was joined by Defendant Olson. The basis for the Motion to Sever was that, if the Government was going to pursue a theory that invoices had been altered or manipulated, it would place Defendants Richter and Olson at odds with each other because only a limited number of employees at Executive Recycling had access to the company's accounting software. (ECF No. 245 at 2–3.) As Defendant Olson alleged in his later briefing: “the Defendants may be forced into a position where they have no choice but to claim that neither of them altered the accounting record in question, and to cross examine the other, if he testifies, about that defendant's motive and opportunity to have performed the action in question.” ( Id. at 3.)
At the same time they filed their brief on the Motion to Sever, Defendants Executive Recycling and Brandon Richter filed a Motion to Withdraw. In the Motion to Withdraw, Defendants allege that Ms. Mackey received information on the morning of the fifth day of trial, from Defendant Olson and/or his counsel in accordance with their JDA, that has lead her to conclude that she has a conflict of interest which interferes with her ability to continue to represent her clients in this case. Defendants Richter and Olson withdrew from the JDA as of the morning of the fifth day of trial.
The Court denied the Motion to Sever based on its finding that Defendants had failed to show mutually antagonistic defenses. Trial continued into the sixth day and, after the jury was sent home, the Court heard argument from the parties on the Motion to Withdraw. A portion of this argument was conducted outside the presence of counsel for the Government so as to allow defense counsel the opportunity to raise issues ex parte. However, the Government was permitted to make its own argument and also permitted to file supplemental briefing.
On the morning of the seventh day of trial, the Court heard additional argument on the Motion to Withdraw. Following this argument, the Court informed the parties that it was denying the Motion to Withdraw. The purpose of this Order is to set forth the Court's rationale behind this decision.
The conflict at issue here arises out of the JDA entered into by defense counsel. This Court has described the “joint defense privilege” as follows:
The joint defense privilege preserves the confidentiality of communications and information exchanged between two or more parties and their counsel who are engaged in a joint defense effort. Waiver of the joint defense privilege requires the consent of all parties participating in the joint defense. [T]he joint defense privilege is merely an extension of the attorney-client privilege and the work-product doctrine.
Static Control Components, Inc. v. Lexmark Intern., 250 F.R.D. 575, 578 (D.Colo.2007). A joint defense agreement does not create an attorney-client relationship betweenan attorney and the co-defendant. United States v. Stepney, 246 F.Supp.2d 1069, 1080 (N.D.Cal.2003). Thus, an attorney owes no duty of loyalty to her client's co-defendant. United States v. Almeida, 341 F.3d 1318, 1323 (11th Cir.2003). However, an attorney who learns confidential or privileged information as a result of a JDA has a duty to maintain the confidentiality of such information, even after the JDA is no longer in force. United States v. Gonzalez, 669 F.3d 974, 982 (9th Cir.2012).
A defendant's Sixth Amendment right to counsel includes “the right to the effective assistance of counsel.” Strickland v. Washington, 466 U.S. 668, 686, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984); United States v. Winkle, 722 F.2d 605, 609 (10th Cir.1983). “The constitutional standard for attorney performance is that of reasonably effective assistance ... which we have defined as the ‘exercise [of] the skill, judgment and diligence of a reasonably competent defense attorney.’ ” United States v. Burney, 756 F.2d 787, 790 (10th Cir.1985) (quoting Dyer v. Crisp, 613 F.2d 275, 278 (10th Cir.1980)). This right to effective assistance of counsel includes the right to counsel free from conflicts of interest. Strickland, 466 U.S. at 692, 104 S.Ct. 2052. However, if the Court is satisfied that a conflict does not risk compromising the defendant's representation, it need not require substitution of counsel. See United States v. Solomon, 42 Fed.Appx. 88, 91 (10th Cir.2002).
At argument on the Motion, Ms. Mackey acknowledged that she owed no duty of loyalty to Mr. Olson. However, she maintains that her ability to effectively represent her clients would be so impaired by information that she gained under the JDA that she is compelled to withdraw. Ms. Mackey has explained her position to her clients and they have “reluctantly agreed” to her Motion to Withdraw.
To succeed on the Motion to Withdraw, counsel must show an actual conflict of interest that detrimentally affects her ability to represent her client. Strickland, 466 U.S. at 692, 104 S.Ct. 2052. Ms. Mackey contends that her conflict arises out of confidential information that she learned during the JDA. Essentially, Ms. Mackey contends that she cannot effectively represent her clients because she knows confidential information about co-Defendant Olson and, if he chooses to testify, she will not be permitted to examine him about this information.4
The Tenth Circuit has yet to address a case with facts such as those present here. However, in a similar action, the Eleventh Circuit held that “[t]he mere inability to utilize the privileged communication is not itself a manifestation of a conflict of interest, because no lawyer in the world could utilize those communications.” Almeida, 341 F.3d at 1323. The Court agrees with Almeida's rationale and finds that the facts presented here do not rise to the level of an actual conflict of interest. If the Court were to grant the Motion to Withdraw, Defendant Richter's and Executive Recycling's new counsel would likewise be unable to examine Mr. Olson about any confidential information. Indeed, new counsel would not likely have access to such confidential information. Therefore, as the Government contends, if anything, new counsel would be less able to provide an adequate defense for Mr. Richter and Executive Recycling. Thus, the Court fails to see how Mr. Richter and Executive Recycling are prejudiced by Ms. Mackey's continued representation of them.
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