United States v. Pflueger
| Decision Date | 08 December 2011 |
| Docket Number | CR. NO. 10-00631-05 LEK |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. CHARLES ALAN PFLUEGER, (01) JAMES HENRY PFLUEGER, (02) RANDALL KEN KURATA, (03) DENNIS LAWRENCE DUBAN, (04) JULIE ANN KAM, (05) Defendants. |
| Court | U.S. District Court — District of Hawaii |
GOVERNMENT'S APPEAL AND
REQUEST TO THE DISTRICT COURT
TO RECONSIDER A PRETRIAL
MATTER DETERMINED BY THE
AFFIRMING ORDER DENYING
MOTION TO DISQUALIFY, FILED
ON AUGUST 15, 2011
Before the Court is Plaintiff the United States of America's ("the Government") Appeal and Request to the District Court to Reconsider a Pretrial Matter Determined by the Magistrate Judge ("Magistrate Appeal"), filed on October 4, 2011. [Dkt. no. 101.] Defendant Julie Ann Kam ("Defendant Kam") filed her opposition to the Magistrate Appeal ("Opposition") on October 18, 2011, and Defendant Randall Ken Kurata ("Defendant Kurata") filed a joinder in the Opposition ("Joinder") on October 19, 2011. [Dkt. nos. 103, 105.] This matter came on for hearing on December 2, 2001. Appearing on behalf of the Government were Assistant United States Attorney Leslie Osborne, Jr., and, by telephone, Timothy Stockwell and Kevin Sweeney,Special Attorneys, United States Department of Justice, Tax Division. Appearing on behalf of Defendant Kam were Lyle Hosoda, Esq., and Raina Gushiken, Esq. After careful consideration of the Magistrate Appeal, Opposition, the arguments of counsel, the Government's Magistrate Appeal is HEREBY DENIED.
The parties and the Court are familiar with the factual and procedural background of this case. The Court will therefore only discuss the events that are relevant to the Magistrate Appeal.
The Government filed its Motion to Disqualify on August 15, 2011. [Dkt. no. 85.] The Motion to Disqualify asserted that Defendant Kam's counsel, Mr. Hosoda, also currently represents several government witnesses that will provide critical testimony at trial implicating Defendant Kam. The Government argued that Mr. Hosoda and his law firm, Lyle S. Hosoda & Associates,1 must be disqualified from representing Defendant Kam because there is an actual conflict of interest and a significant risk of potential conflicts of interest during trial. The Government argued that, if Mr. Hosoda and his law firm are not disqualified, it would deprive Defendant Kam of her Sixth Amendment right to conflict-free counsel.
After briefing by the parties and a hearing on September 15, 2011, the magistrate judge orally denied the Motion to Disqualify. [Minutes, filed 9/15/11 (dkt. no. 99).] On September 23, 2011, the magistrate judge issued his Order Denying Motion to Disqualify, Filed on August 15, 2011 ("Order"). [Dkt. no. 100.] The Order notes that Mr. Hosoda submitted a declaration stating that he did not receive any confidential information from his former clients and that the scope of this representation was limited to assisting them with their appearances before the grand jury and securing immunity for them.2 The magistrate judge found that the Government had not established an actual conflict. [Order at 2-3.] Although Mr. Oshiro's grand jury testimony "may be useful to the Government to attempt to show inconsistency in position, . . . anything else would be speculation and conjecture." [Id. at 3.] The Order also states [Id.]
The Government urges this Court to reconsider the magistrate judge's finding that there is no actual conflict or serious potential for conflict. The Government reiterates that Defendant Kam and the Government witnesses, including Mr. Oshiro, have adverse interests and that Mr. Hosoda's representation of both creates an actual conflict of interest. The Government also argues that Mr. Hosoda will not be able to effectively cross-examine his former clients without violating his duty of loyalty to them. An ineffective cross-examination would deprive Defendant Kam of her right to cross-examine those witnesses.
Further, the Government urges the Court to reject Defendant Kam's purported waiver of the conflicts because the Government contends that the waiver was not knowing and intelligent. The Government argues that there was no colloquy to determine whether Defendant Kam understood the conflict and whether her waiver was knowing and intelligent. Moreover, the Government asserts that Defendant Kam could not knowingly and intelligently waive a conflict of interest "when the Magistrate Judge has told her that no such conflicts exist." [Magistrate Appeal at 6.] If this Court "is not inclined to deny the waiver, at a minimum it must conduct a thorough inquiry and extensively question Kam regarding her waiver to ensure that it is knowingand intelligent." [Id. at 8.] The Government asserts that allowing Defendant Kam's current waiver to stand could result in a future mistrial or reversal on appeal.
Defendant Kam reiterates that, because of Mr. Hosoda's limited representation of the Government witnesses, Alvin Oshiro, Cindy Foster, Jandi Saito, and Trophine Nuuhiwa, he did not receive any privileged information from them. [Mem. in Opp. to Motion to Disqualify, Decl. of Lyle S. Hosoda ("Hosoda Decl."), filed 8/31/11 (dkt. no. 91-1), at ¶¶ 3-4.] Mr. Hosoda's representation of them ended after assisting Mr. Oshiro with his last grand jury appearance on August 4, 2010, [id. at ¶ 5,] long before Mr. Hosoda entered his appearance in this case as counsel for Defendant Kam [Notice of Withdrawal & Substitution of Counsel & Order, filed 6/8/11 (dkt. no. 80)]. Thus, Defendant Kam contends there is no risk that Mr. Hosoda could disclose his former clients' confidential information during his representation of her to his former clients' detriment, and there is no risk that he would avoid vigorous cross-examination of his former clients. Defendant Kam also argues that her interests are not directly and materially adverse to the interests of Mr. Hosoda's former clients because they are not now, and never were, co-defendants, victims, or government agents in this matter. Further, the Government's position that Mr. Oshiro'sgrand jury testimony implicates her is mere conjecture. [Opposition at 8.] "The Government has failed to put forth any credible evidence of even a single transaction that Mr. Oshiro testified to, with supporting documents showing that [Defendant] Kam, in her individual capacity, committed the tax fraud alleged against her." [Id. at 8-9.]
Defendant Kam also asserts that, in response to the Motion to Disqualify, she executed a knowing, intelligent, and voluntary waiver of the potential conflict identified by the Government. [Mem. in Opp. to Motion to Disqualify, Decl. of Julie Ann Kam, filed 8/31/11 (dkt. no. 91-2).] Her declaration in opposition to the Motion to Disqualify confirmed that Mr. Hosoda discussed the potential conflict with her, and that she was aware of the risks and possible consequences of the potential conflict. [Id. at ¶¶ 5, 7.] She also confirmed that she was aware of her right to: have conflict-free counsel; obtain counsel to replace Mr. Hosoda; and consult with independent counsel about Mr. Hosoda's potential conflict. [Id. at ¶¶ 8-10.] After considering all of these issues, Defendant Kam stated that she wants Mr. Hosoda to continue representing her, [id. at ¶ 11,] and she "voluntarily wish[es] to waive [her] right to be represented by an attorney free of conflict of interest and wish[es] to continue to be represented by [her] present counsel." [Id. at ¶ 12.] Defendant Kam emphasizes that the Government has notcontested the fact that "the governing ethical rules contemplate and allow for Mr. Hosoda's successive representation where he has obtained a voluntary, knowing and intelligent waiver from [Defendant] Kam." [Opposition at 12.] Defendant Kam urges the Court to uphold the magistrate judge's ruling that her waiver was valid and to deny the Magistrate Appeal.
At the hearing, this Court conducted an extended colloquy with Defendant Kam about her knowledge of the circumstances at issue in the Magistrate Appeal. The Court also questioned her regarding whether she understood her constitutional right to counsel, in particular her right to conflict-free counsel. All of Defendant Kam's responses were consistent with her statements in her declaration attached to her memorandum in opposition to the Motion to Disqualify.
In addition to reiterating the arguments previously raised in the Motion to Disqualify and the Magistrate Appeal, the Government argued that, if the Court was inclined to affirm the Order and deny the Magistrate Appeal, this Court should allow the Government to revisit the matter if future circumstances come to light that make the conflict more readily apparent.
Pursuant to 28 U.S.C. § 636(b)(1) and Criminal Local Rule 57.3(b), a party may appeal to a district judge any pretrial nondispositive matter determined by a magistrate judge. Under 28U.S.C. § 636(b)(1)(A), a magistrate judge's order may be reversed by the district court only if it is "clearly erroneous or contrary to law." The threshold of the "clearly erroneous" test is high. United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (); Thorp v. Kepoo, 100 F. Supp. 2d 1258, 1260 (D. Haw. 2000) (...
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