United States v. Lilly

• Citation: 810 F.3d 1205
• Decision Date: 19 January 2016
• Docket Number: No. 14–8041.,14–8041.
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Janet Lea LILLY, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

810 F.3d 1205

UNITED STATES of America, Plaintiff–Appellee,

v.Janet Lea LILLY, Defendant–Appellant.

No. 14–8041.

United States Court of Appeals, Tenth Circuit.

Jan. 19, 2016.

W. Keith Goody, Cougar, WA, for Defendant–Appellant.

Thomas Szott, Assistant United States Attorney (Christopher A. Crofts, United States Attorney, with him on the brief), Office of the United States Attorney, District of Wyoming, Cheyenne, WY, for Plaintiff–Appellee.

Before BRISCOE, HOLMES, and BACHARACH, Circuit Judges.

HOLMES, Circuit Judge.

After federal investigative agents from the United States Drug Enforcement Administration ("DEA") arrested her fiancé with a quarter pound of methamphetamine, Defendant–Appellant Janet Lilly was contacted by investigative agents from the Wyoming Division of Criminal Investigation ("DCI"). She made several incriminating statements to the DCI agents about her involvement in distributing methamphetamine. The agents suggested that it would be beneficial to her to cooperate, and she ultimately agreed to serve as a confidential informant. Approximately eighteen months later, she was nevertheless indicted for conspiracy to distribute methamphetamine in violation of federal law. Believing that the investigative agents had promised her federal immunity from prosecution, Ms. Lilly filed a motion seeking to prevent the United States from prosecuting her. The district court denied her motion, finding that neither the DCI nor the DEA had the authority to bind the United States to any such agreement. Ms. Lilly entered a conditional guilty plea, and now appeals from the district court's denial of her motion. Exercising our jurisdiction under 28 U.S.C. § 1291, we affirm.

I

DEA agents arrested Tim Thomas, Ms. Lilly's fiancé, with approximately a quarter pound of methamphetamine on November 21, 2011. The DEA agents then called DCI special agent Chris McDonald and asked him to check the registration of Mr. Thomas's vehicle. The vehicle's registration indicated that Mr. Thomas resided at an address that Agent McDonald believed to be Ms. Lilly's home. Agent McDonald reported to the DEA agents that he had previously received information that Ms. Lilly was distributing methamphetamine; the DEA then asked him to interview her. The DEA agents also called Ms. Lilly to notify her that Mr. Thomas had been arrested and that DCI agents "would be coming to talk to" her. Aplt.App. at 172 (Tr. Mot. Hr'g, dated Feb. 21, 2014). She testified that the DEA told her that "it would be in [Mr. Thomas's] best interest if [she] cooperated." Id.

That same afternoon Agent McDonald and another DCI agent interviewed Ms. Lilly at her home. During the twenty-minute meeting, she made numerous incriminating statements directly implicating herself in the distribution of methamphetamine, including discussing prices, frequency of distribution, and the quantities in which she dealt, and revealing the identities of some of her associates. She acknowledged that "saying all of this to [the DCI agents] [was] an admission of guilt," Aplee. App., Vol. II, at 6:28–6:30 (Audio Recording of Nov. 21, 2011 Interview), and they responded that it was "going to help" and that they were "trying to minimize the damage to [her]," id. at 6:37–6:42. When she asked if she would be arrested for her actions, the DCI agents told her that they could not make any promises, but that "if [she] cooperate[d] and help[ed] out, that'd go a long ways." Id. at 4:22–4:27.

The following day, November 22, 2011, Ms. Lilly met with DEA agents. The DEA agents asked Ms. Lilly questions about the sources of her methamphetamine; the possibility that she would not be prosecuted as a result of her cooperation, however, was not discussed. It does not appear that any DCI agents were present at this meeting.

Next, on December 12, 2011, Ms. Lilly met with Agent McDonald and another DCI agent. At this meeting, she continued to provide information about her contacts and local distributors and sent several messages to her source in Colorado. Agent McDonald was "sure" they discussed the possibility of her cooperation, but denied promising her immunity from prosecution, Aplt.App. at 119; according to Ms. Lilly, she was informed "that the more [she] helped them, the more they would be able to help [her]," id. at 181. She claims that the DCI agents told her that they were going to treat the interview "as a proffer," which she understood to mean that "anything that [they talked about] wasn't going to be used." Id. at 183. Nevertheless, Ms. Lilly began to have qualms about speaking with the DCI agents and engaged an attorney to represent her.

Ms. Lilly, her lawyer, and the DCI agents again met in late December 2011. Ms. Lilly signed an agreement to work as a confidential informant, and provided further details about her sources and distribution network.¹ While the DCI agents again stated that they were amenable to treating the interview as a "proffer," id. at 137, it does not appear that they explicitly promised that she would not face federal prosecution. Indeed, the confidential-informant agreement indicated that the agency could "make only recommendations" regarding whether any potential charges against her should be reduced. Aplee. App., Vol. III, at 4 (Confidential Informant Agreement, dated Dec. 30, 2011) (emphasis omitted). Ms. Lilly agreed that the agents never explicitly promised that she would not be prosecuted, but that it "was just somewhat implied." Aplt.App. at 193.

Her attorney also admitted that there was no formal non-prosecution agreement. He had worked with Agent McDonald in the past, "trust[ed] [him] implicitly," id. at 165, and believed "there was kind of an implied ‘wink and a nod’ " that if Ms. Lilly cooperated she would not "have to be looking over [her] shoulder with the feds," id. at 166. He conceded that the United States Attorney's Office for the District of Wyoming was not involved in the discussions. Ultimately, he did not remember any "specific conversation," "written communication," or "specific reason" why he advised Ms. Lilly to answer the DCI agents' questions, id. at 168; her counsel was apparently guided by his implicit "impression that there would not be federal charges coming," id. at 156.

But federal charges did come. On November 20, 2013, a grand jury indicted Ms. Lilly on one count of conspiracy to possess with intent to distribute, and to distribute, methamphetamine in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(A), and 846. The indictment alleged that the conspiracy occurred between January 2010 and April 2013. Believing that she had been promised immunity from federal prosecution, Ms. Lilly filed a "Motion to Enforce Agreement of the United States to Not Prosecute the Defendant and Motion in Limine." Id. at 12 (Mot., filed Feb. 4, 2014) (capitalization altered). The district court denied the motion after a hearing, concluding that regardless of whether Ms. Lilly was promised immunity, "the evidence fail [ed] to establish any actual authority on the part of the DCI agents to grant" any immunity, id. at 270 (Tr. Telephonic Oral Ruling, dated Feb. 24, 2014), and even if "the DEA agents were somehow giving authority to DCI to negotiate immunity on their behalf," there was still no evidence "to support that the DEA agents had the authority to do so," id. at 267.

Ms. Lilly then entered a conditional guilty plea and reserved her right to appeal, inter alia, the district court's denial of her motion to enforce the alleged non-prosecution agreement. Ms. Lilly was sentenced, pursuant to a plea agreement, to eighty-seven months' imprisonment and four years of supervised release. This timely appeal followed.

II

On appeal, Ms. Lilly claims that she had an agreement with the "United States that she would not be prosecuted for her criminal conduct occurring between January 10, 2010 and November 21, 2011[,] and anything she said during her proffer would not be used against her." Aplt. Opening Br. at 5. This contention has both a factual dimension—namely, whether the DCI or DEA agents actually promised Ms. Lilly federal prosecutorial immunity—and a legal dimension—whether the DCI or DEA agents had the authority to promise such immunity. We focus on the latter aspect of Ms. Lilly's argument; more specifically, we assume arguendo that Ms. Lilly has demonstrated the factual aspect—viz., that either the DCI or the DEA agents promised her immunity from federal prosecution—and turn our inquiry to whether either group of agents had the legal authority to enter into such an agreement on behalf of the United States. "This is a pure issue of law, which we review de novo." United States v. Ellis, 527 F.3d 203, 205 (1st Cir.2008). As we explain below, neither agency had the authority to promise Ms. Lilly federal immunity, and thus any purported agreement is unenforceable against the United States.

A

In a seminal Supreme Court case that is perhaps most central to the resolution of Ms. Lilly's appeal, almost seventy years ago, Justice Frankfurter wrote:

Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. The scope of this authority may be explicitly defined by Congress or be limited by delegated legislation, properly exercised through the rule-making power. And this is so even though, as here, the agent himself may have been unaware of the limitations upon his authority.

Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 92 L.Ed. 10 (1947) ; cf. Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 420, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) (describing Merrill as "the leading case in our modern line of estoppel decisions"). Currently, "[i]t is well established that the federal government will not be bound by a contract or agreement entered into by one of its agents unless such agent is acting within the...