United States v. Williams

• Decision Date: 04 November 1971
• Docket Number: 26830.,No. 26829,26829
• Citation: 447 F.2d 1285
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James W. WILLIAMS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

447 F.2d 1285 (1971)

UNITED STATES of America, Plaintiff-Appellee, v. James W. WILLIAMS, Defendant-Appellant.

Nos. 26829, 26830.

United States Court of Appeals, Fifth Circuit.

September 16, 1971.

Rehearing Denied November 4, 1971.

J. Edwin Smith, Houston, Tex., for defendant-appellant.

Morton L. Susman, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Jonathan S. Cohen, Atty., Tax Div., Dept. of Justice, Washington, D. C., Anthony J. P. Farris, U. S. Atty., Malcolm R. Dimmitt, Asst. U. S. Atty., Houston, Tex., Will Wilson, Asst. Atty. Gen., Roger A. Pauley, Atty., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Before JOHN R. BROWN, Chief Judge, and RIVES, WISDOM, GEWIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, INGRAHAM, and RONEY, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

This case raises an important question concerning the admissibility of expert witness testimony in criminal prosecutions. Because of the importance of the issue, we have placed this appeal en banc pursuant to Rule 35 of the Federal Rules of Appellate Procedure.

James W. Williams, formerly Chairman of the Board of Westec Corporation, was convicted of conspiracy to violate 15 U.S.C. §§ 77e(a), 78ff(a) and 18 U.S.C. §§ 1001, 1341, and also of twelve substantive violations of the mail fraud statute, 18 U.S.C. § 1341, after a jury trial in the United States District Court for the Southern District of Texas.¹ These criminal charges against Williams grew out of the financial collapse of Westec Corporation.²

The indictment against Williams alleged, in part, that he had caused Westec to sell oil and gas properties to corporations controlled by conspirators at prices greater than their fair market value. In support of these allegations, the Government called the witness Thomas Jeffrey to testify as an expert concerning the value of the properties involved.

Williams objected to the admission of Jeffrey's testimony because it was based upon an investigation of documents and business records not themselves introduced in evidence. On appeal, a panel of this court accepted this argument and reversed the conviction, holding that "Williams was denied his constitutional right to confront and cross-examine the witnesses who prepared and were the custodians of the records on which Jeffrey relied". United States v. Williams, 5 Cir., 1970, 424 F.2d 344.³ Subsequently, the Government filed a timely petition for rehearing and a suggestion for rehearing en banc. The panel denied the petition for rehearing with a per curiam opinion which further elaborated the basis for its ruling. United States v. Williams, 5 Cir., 1970, 431 F.2d 1168. On the same date, the full Court granted the Government's petition for rehearing en banc on briefs without oral argument (431 F.2d 1175). We hold that the original panel of this court erred in reversing the conviction. The decision of the panel is overruled and the decision of the District Court is in all respects affirmed.

The admission of expert witness testimony based upon records not themselves introduced in evidence potentially raises questions with respect both to the constitutional right of confrontation and to the appropriate federal hearsay rule. Prior to the recent Supreme Court opinion in California v. Green, 399 U.S. 149, 90 S.Ct. 1930, 26 L.Ed.2d 489 (1970), it was thought by some commentators that the Sixth Amendment confrontation clause served to constitutionalize the common law hearsay rule; that the protection afforded by the confrontation clause was identical to that afforded by the hearsay rule and subject to the same exceptions.⁴Green, however, clarified the relationship between these two guarantees, making it clear that the right of confrontation and the rule against hearsay present two distinct, albeit related questions. Mr. Justice White, writing for the court, noted that:

While it may readily be conceded that hearsay rules and the Confrontation Clause are generally designed to protect similar values, it is quite a different thing to suggest that the overlap is complete and that the Confrontation Clause is nothing more or less than a codification of the rules of hearsay and their exceptions as they existed historically at common law. Our decisions have never established such a congruence * * *

399 U.S. 149, 155, 90 S.Ct. 1930, 1933, 26 L.Ed.2d 489, 495.

In terms of the reliability of evidence, the confrontation clause merely establishes a constitutional minimum as to the character of criminal proceedings.⁵ Evidence may be consitutionally admissible under the confrontation clause and still run afoul of the appropriate federal hearsay rule.⁶

Hence, while the original panel of this court based its decision principally upon the confrontation clause, we find it necessary to consider separately whether Jeffrey's testimony violated the confrontation clause or the hearsay rule. First, however, we shall describe in greater detail the testimony of the expert witness Jeffrey.

I. Jeffrey's Testimony

The testimony of Jeffrey concerned the value of two producing oil and gas properties known as the Irving properties and the Wilcrof properties. Jeffrey was an independent consulting petroleum engineer. In his testimony Jeffrey described his professional background and then explained the procedures employed in appraising the value of oil and gas properties. This testimony is quoted at length in the panel's per curiam opinion overruling the petitions for rehearing and will not be reproduced here.

Jeffrey testified that, on the basis of the appraisal procedures which he had described, he estimated the value of the Irving property to have been slightly less than $500,000 and the value of the Wilcrof property to have been approximately $44,469. In reaching these estimates, Jeffrey made a personal inspection of the properties and consulted the following sources of information: (a) the past production performance of the leases obtained from reports which are filed by the operators of the leases with the State, (b) core analyses data and well records obtained frm the records of the two companies, (c) data as to the price of oil and gas obtained from pipeline run statements in the records of the two companies, and (d) data as to operating costs for the year 1966 from the billing records from the operators of the leases.

Williams repeatedly objected to the admission of this expert testimony because the records of the two corporations upon which Jeffrey based his opinion were not themselves offered in evidence. The district judge overruled these objections and permitted Jeffrey to give his opinions as to the value of the properties. At the end of the direct examination, the Government offered into evidence the two appraisal reports, marked Government Exhibit X4 and X5, which Jeffrey had prepared. Defense counsel objected that the exhibits were hearsay and the court upheld the objection excluding the reports. Jeffrey was then cross-examined at length by the defense. During cross-examination, numerous factors which might reduce the weight of Jeffrey's expert opinion were developed, including the sources of information upon which he had relied.

II. The Confrontation Clause

The first question before the court is whether the admission of Jeffrey's expert witness testimony violated Williams' Sixth Amendment right of confrontation. In its per curiam opinion denying the motion for rehearing, the original panel of this court relied on California v. Green, supra, to support its decision that the admission of Jeffrey's testimony violated the confrontation clause. This reliance by the panel on Green was misconceived. Indeed, Green makes it clear that there is no Sixth Amendment obstacle to the admission of Jeffrey's testimony.

In Green, the Supreme Court held that the admission of the prior inconsistent statement of a witness as substantive evidence in a criminal case did not violate the confrontation rights of the accused so long as the witness was present at trial and available for cross-examination. The relevance of Green to the case at bar is that it represents the most recent effort by the Court to elaborate the nature of the right of confrontation. In its opinion, the Court observed that:

Our own decisions seem to have recognized at an early date that it is this literal right to "confront" the witness at the time of the trial that forms the core of the values furthered by the Confrontation Clause * * *

399 U.S. at 157, 90 S.Ct. at 1934, 26 L.Ed.2d at 496.

In support of this statement, the Court quoted with approval from Mattox v. United States, 156 U.S. 237, 242-243, 15 S.Ct. 337, 339, 39 L.Ed. 409, 411 (1895):

The primary object of the constitutional provision in question was to prevent depositions or ex parte affidavits, such as were sometimes admitted in civil cases, being used against the prisoner in lieu of a personal examination and cross-examination of the witness in which the accused has an opportunity, not only of testing the recollection and sifting the conscience of the witness, but of compelling him to stand face to face with the jury in order that they may look at him, and judge by his demeanor upon the stand and the manner in which he gives his testimony whether he is worthy of belief. * * *

Green, then, makes it clear that the confrontation guarantee focuses upon "the right of the accused to confront and probe each of his accusers — a narrow adversary activity".⁷

Given this view of the confrontation clause, it is evident that the admission of Jeffrey's testimony did not violate that guarantee. Jeffrey was personally available for cross-examination by the appellant. There was ample opportunity for the defense to probe the authenticity and accuracy of the sources relied upon by Jeffrey and the reasoning processes by which he arrived at his valuation. In light of the reasoning in Green, we conclude that Jeffrey's...