United States v. Shayota

• Decision Date: 19 August 2019
• Docket Number: No. 17-10271,No. 17-10270,17-10270
• Citation: 934 F.3d 1049
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Joseph SHAYOTA, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Adriana Shayota, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

934 F.3d 1049

UNITED STATES of America, Plaintiff-Appellee,

v.Joseph SHAYOTA, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Adriana Shayota, Defendant-Appellant.

No. 17-10270

No. 17-10271

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 14, 2019 San Francisco, California

Filed August 19, 2019

O’SCANNLAIN, Circuit Judge:

We are asked to decide whether prior civil deposition testimony of a witness, who has subsequently invoked his Fifth Amendment right against self-incrimination, may be introduced against defendants in a criminal trial without violating their Confrontation Clause right to confront the witnesses against them.

I

At the time of the events giving rise to this case, defendants Joseph Shayota and his wife Adriana Shayota ran Baja Exporting, LLC ("Baja Exporting")—a California company that imported, exported, and distributed snacks and drinks to gas stations, convenience stores, and bodegas, both in the United States and abroad. In 2009, Baja Exporting contracted with Living Essentials, LLC and its related entities (collectively "Living Essentials") to sell the liquid dietary supplement 5-Hour Energy in Mexico.

Unfortunately, the product did not sell well. The parties terminated their sales agreement in 2010, and Baja Exporting was left with excess bottles of Spanish-labeled 5-Hour Energy. Rather than dispose of the bottles, Baja Exporting tried to sell them in the United States, despite not having approval from Living Essentials to do so. When the product again failed to sell, the Shayotas and their associates relabeled the bottles in English and sold them without authorization from Living Essentials.

By December 2011, Baja Exporting had sold the last of its 5-Hour Energy supply. Given the potential market in the United States, the Shayotas and their associates then conspired to create a counterfeit version of the drink, pass it off as genuine 5-Hour Energy, and distribute it across the country.

A

The scheme lasted from early 2012 to November 2012 and involved several key players. Joseph Shayota oversaw and financed the operation. Adriana Shayota was in charge of the accounting; she collected invoices for the counterfeit product and made wire transfers to cover costs. Walid Jamil (Joseph’s brother-in-law) and Justin Shayota (Joseph and Adriana’s nephew) coordinated the repackaging and relabeling of the counterfeit drink at Baja Exporting’s San Diego warehouse. They worked closely with Leslie Roman, who supplied blank bottles and manufactured counterfeit 5-Hour Energy labels. Jamil hired others to create the counterfeit drink and to manufacture boxes for the finished product. Finally, Justin sent the finished product either to Baja Exporting or to Dan Dee Company—a cash-and-carry warehouse owned by Kevin Attiq—for distribution across the country.

Living Essentials became aware of the scheme in 2012, after it noticed a mysterious drop-off in its California sales. Living Essentials hired private investigators, who ultimately raided warehouses controlled by Baja Exporting and Jamil and discovered boxes of counterfeit 5-Hour Energy. Consequently, Living Essentials sued the Shayotas, Jamil, and others, alleging numerous violations of laws pertaining to trademark infringement and false advertising.

During discovery, Living Essentials deposed numerous participants in the scheme, including Jamil and Roman. Because the Shayotas were parties to the suit, their counsel attended the depositions and questioned the witnesses. The civil suit ultimately ended in a settlement in which Baja Exporting agreed to pay $6 million to Living Essentials.

B

Subsequent to the civil proceedings, the government launched a criminal investigation into the scheme. A grand jury returned an indictment against the Shayotas, Jamil, and Roman, among others. The government ultimately filed a two-count Superseding Information charging each defendant with (1) conspiracy to traffic in counterfeit goods, in violation of 18 U.S.C. § 2320(a), and (2) conspiracy to commit copyright infringement and to introduce misbranded food into interstate commerce, in violation of 17 U.S.C. § 506, 18 U.S.C. § 2319, and 21 U.S.C. §§ 331 and 333. Jamil and Roman pleaded guilty; the Shayotas proceeded to trial.

As trial approached, the government notified defense counsel of its intent to offer into evidence statements made by Jamil and Roman during their civil depositions. The Shayotas moved to exclude the testimony on the ground that its admission would violate the Sixth Amendment’s Confrontation Clause if Jamil and Roman refused to testify, but the district court denied the motion. The depositions were introduced at trial after Jamil and Roman invoked their Fifth Amendment privilege not to testify, and the jury ultimately found the Shayotas guilty of the charged offenses.

The Shayotas timely appealed their convictions.

II

The Shayotas argue that admission of Jamil’s and Roman’s deposition testimony violated the Sixth Amendment’s Confrontation Clause.¹

The Sixth Amendment to the United States Constitution provides in pertinent part: "[I]n all criminal prosecutions the accused shall enjoy the right ... to be confronted with the witnesses against him." U.S. Const. amend. VI. Generally, this means that the government must produce at trial any witnesses who have offered testimonial evidence against the accused. But where, as here, the prosecution chooses not to produce such witnesses and offers their hearsay statements instead, a defendant’s right of confrontation is satisfied if (1) the declarant is unavailable, and (2) the defendant had a prior opportunity to confront him through cross-examination. Crawford v. Washington , 541 U.S. 36, 68, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004). The district court concluded that Jamil and Roman were unavailable because they had validly invoked their Fifth Amendment privilege against self-incrimination. The court also ruled that the Shayotas had a prior opportunity to cross-examine Jamil and Roman in the civil suit, given that the Shayotas sent their lawyers to attend Jamil’s and Roman’s depositions in that case.

The Shayotas dispute the district court’s legal conclusion that Jamil and Roman were unavailable. They argue that Jamil and Roman were in fact available because the government could have granted them immunity and compelled them to testify.

We have held on numerous occasions that a witness’s assertion of Fifth Amendment privilege renders him "unavailable" for purposes of the Confrontation Clause. See, e.g. , United States v. Wilmore , 381 F.3d 868, 872 (9th Cir. 2004) ; see also California v. Green , 399 U.S. 149, 167–68, 90 S.Ct. 1930, 26 L.Ed.2d 489 (1970) (explaining in dicta that once a witness has been produced at trial and "claimed his privilege against compulsory self-incrimination, ... nothing in the Confrontation Clause prohibit[s] the State from ... relying on his prior testimony to prove its case"). But we have yet to confront the Shayotas’ precise argument here—that the government’s inherent discretion to grant a witness immunity and thereby prevent him from invoking the privilege against self-incrimination renders the witness effectively available to the government for testimony at trial. Nevertheless, we need not resolve the issue here: even if the district court erred by concluding that Jamil and Roman were unavailable, the error was harmless.

"[C]onfrontation [C]lause violations are subject to harmless error analysis." United States v. Bernard S. , 795 F.2d 749, 756 (9th Cir. 1986). "Whether a violation of the [C]onfrontation [C]lause is harmless depends on a variety of factors including: (1) the importance of the evidence to the prosecution’s case; (2) whether the evidence was cumulative; (3) the presence of corroborating evidence; (4) the overall strength of the prosecution’s case." Id. To be sure, the testimony of Jamil and Roman was an important component of the trial. But the testimony was also corroborated by live witness testimony, including that of Kevin Attiq and Justin Shayota who described the Shayotas’ involvement in the scheme, and a bounty of other circumstantial evidence relating to the Shayotas’ management of the counterfeit product and exchange of invoices with other members of the conspiracy. Considering the other evidence presented at trial, the prosecution’s case against the Shayotas was strong. We conclude that the outcome of the trial would not have changed had the depositions been excluded.²

III

The judgment of the district court is AFFIRMED.

O’SCANNLAIN, Circuit Judge, specially concurring:

I write separately to call attention to our court’s precedent regarding the "unavailability" requirement of the Sixth Amendment’s Confrontation Clause. We have held that a witness is unavailable for purposes of the Confrontation Clause if he invokes his Fifth Amendment privilege and refuses to testify. See, e.g. , United States v. Wilmore , 381 F.3d 868, 872 (9th Cir. 2004). Presumably we have done so because such a witness is considered unavailable under the former testimony exception to the federal hearsay rule. See id. (citing Fed. R. Evid. 804(b)(1) ). But the right of confrontation is "most naturally read as a reference to the right of confrontation at common law, admitting only those exceptions established at the time of the founding." Crawford v. Washington , 541 U.S. 36, 54, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004). Thus, a determination of whether the former testimony of a witness who has since invoked his Fifth Amendment privilege is admissible necessarily requires an analysis of whether such testimony would have been admitted at the time of the founding. Our court has yet to do that work, but history suggests that the scope of unavailability may be narrower than our court has recognized. I respectfully suggest that we should revisit our prior decisions to perform the historical analysis that Crawford demands.

I

To understand how the Confrontation Clause...