Zach Scruggs oral argument in the Fifth Circuit: A difficult day for the Government

Interesting Fifth Circuit argument.  Edward Robertson, arguing for Zach Scruggs, did an excellent job.  Things did not go quite so well for John Alexander, arguing for the Government.

The upshot is this:  Skilling does matter, at least from the panel’s questions.  The panel focused on the information to which Zach Scruggs plead guilty.

For laymen:  An “information” is a charging document not brought by the grand jury; when there is a guilty plea, the Government uses an information to precisely charge what the crime on which there is to be a plea, and the defendant waives being (re)charged by a grand jury.  In  the argument, the panel frequently uses “indictment” and “information” interchangably.   At the time of the guilty plea, the Government has to state a “factual basis,” that is, the facts they would prove to establish guilt.

The information charged misprision of a felony– concealment of a felony.  Scruggs is arguing that you can’t tell what the felony is from the information alone, you have to look through to the factual basis to find out, and then you discover that the felony is “honest services” fraud, which was no longer a crime after Skilling.  

The Government response is that Scruggs would have had to raise this issue either by direct appeal– appealing the guilty plea, arguing “I plead guilty to something that is not a crime.”   Alternatively, he would have had to within a year file a collateral attack on the guilty plea.  He did neither, and so he is “procedurally barred”– his claim is barred because he did not follow the procedure for raising it by doing so in a timely manner.

Scruggs’s response is that the defect is jurisdictional– that, if you look at the information and the factual basis together, it fails to charge a federal crime and therefore fails to give a federal court jurisdiction– and jurisdictional defects are not procedurally barred.  The Government’s response to that is you can look at the information by itself and see that it fully charges a federal crime, misprision of a felony, and thus the information confers jurisdiction without reference to the factual basis.

During the argument, the Government conceded that the factual basis, because it does not mention bribery, fails to describe facts that constitute a federal crime.  Scruggs’s lawyer conceded that Scruggs’s claim was procedurally barred but for the jurisdiction issue.  While the panel far more closely questioned the Government, during Scruggs’s rebuttal, the questions made clear they were looking closely at both sides.  There’s a Supreme Court case, Bousley, that gave Scruggs the most trouble, and an 11th Circuit case, Peter, that was close to a train wreck for the Government.

Those two cases really do provide a dividing line that will decide this case.  In each, the defendant had entered a plea to what, subsequently, the Supreme Court held was not a crime.  Bousley had plead to a crime involving “use” of a firearm in connection with another crime and the Supreme Court later held that mere possession does not constitute use.  The information to which he plead just alleged use, and you had to go beyond the information to the factual basis to see that the government was merely charging possession.  The United States Supreme Court held that, because Bousley had not raised the issue on direct appeal, he could only raise it if he showed actual innocence.  Peters had plead to a RICO violation involving fraud in obtaining state licenses, and the Supreme Court had held that state licenses were not a “property” interest and therefore did not provide the predicate crime for the RICO charge.  The 11th Circuit held that, because the Government’s information charged that the property interest was state licenses, the information was explicitly charging something that was not a crime and was thus jurisdictionally defective.  In other words, because you could actually see the defect in the information in Peters, Bousley did not apply.

Apparently, the line between Bousley and Peters is this:  If the information “papers over” the flaw in the government proof by alleging the crime in conclusions without the detail, Bousley says the Government wins absent a defense showing of actual innocence.  If the defect is clear in the information, Peters says the Government loses.  Scruggs argued for a middle position, that you couldn’t tell what the crime was from the information and you had to go to the context– the factual basis and the plea colloquy– where you learn about the defect.  The Government said, no, because our information alleged enough, Bousley says you get to stop there.

Oddly enough, no one actually resorted to quoting the information to show what it did or did not do.  The information is short and simply alleges that Zach Scruggs concealed a felony, without suggesting what that felony might have been.  Here it is.  Seems like the pleadings in Bousley rather than Peters to me.  On the other hand, the factual basis makes clear that the concealed crime was honest services fraud, which Skilling holds is not a crime.  Here it is.

If Bousley says you stop at the information (that is, that defects from outside the information don’t defeat jurisdiction), and I think it implicitly does, the Government wins.  Scruggs’s argument is that you can’t tell what the crime is here without resort to the factual basis.  My take-away is this:  if the information itself is adequate to charge a crime (which it is), then flaws only visible by going beyond the indictment don’t create jurisdictional problems.

However, because of the quality of Scruggs’s argument, the persistent questions from the court, and the lack of clarity on the Government side, this was Zach Scruggs’s best day in court.  It seems to me a close one.

There were no questions whatsoever about ineffective assistance or the issue about the Government misrepresentation.  Alexander mentioned those issues at the end of his argument, almost in passing, and Robertson very briefly mentioned the later at the end of his rebuttal.

Here’s the recording of the oral argument.

My notes on the argument are below the fold.

Robertson for Zach Scruggs.

Q “How do you distinguish Bowsley?”

A.  says that Bowsley is about factual invalidity, while this case involves facial invalidity.

Judge Davis  “What was the crime.  The crime was approaching the judge ex parte?  Was that the underlying crime.”

Says earwigging is only found in Mississippi law.

Judge Davis  “Is that a crime in Mississippi”

Not a crime that I am aware of in Mississippi.

The prosecutors “expanded honest services … to ethical violations…”

Q  The indictment does say that the defendant “having knowledge of the actual commission of a felony cognizable by a court of the United States concealed it” and so forth.  That sounds like a lot more than earwhigging.

Q  Turn to the question of whether there is a factual basis on which a reasonable juror could have concluded that your client learned of a, had knowledge of a conspiracy to bribe, specifically the November 1, 2007 order where they are talking about revisions of it, and there was an  email to Patterson about the payment for void dire.  Why couldn’t a reasonable juror have concluded that the engagement for void dire was a cover for the payment of money.

Robertson:  Balducci, who was the only witness who could say anything about Scruggs, said he only talked 3 times, and in the first two did not talk about the bribe.  … My client is not involved in any conversations until November 1st.  Listen to the 8 minutes on the tape and they are talking about this order.  “They don’t revise it, they don’t talk about changes in it, they talk about what it means.”  This whole case boils down to that 8 minutes, there is no evidence of his joining the conspiracy.

Q.  You know, Balducci talking about having to carry more sweet potatoes down to the judge.  Part of those sweet potatoes belonged to this man as a partner in the law firm.  The district judge thought that was enough.

Alexander for the Government

Q Are you familiar with the Peter case out of the 11th Circuit

A.  Yes, your honor.

Q  Can you distinguish it

A.  I’m trying to remember what that case held.

Q  You had a plea to a RICO violation, and the indictment charged an offense that was not an offense.  [explanation  omitted]  on collateral review, the court said he indictment did not state an offense, so there was no jurisdiction

A.  ….  That was similar to the Mecham case in the Fifth Circuit.  [grumbling from the bench]

Q.  Distinguish those facts for me.

A.  It was never an offense [in Peters].

…

Q  If it was a non-offense, there is no jurisdiction, is there.

A.   In this case there was an offense.  Skilling did not invalidate the misprision of a felony offense in section 4.  … We had a good charge under section 4.

Q  Only until Skilling came out.

A.  Well, even afterwards your honor.  We had a bribery case.  This defendant actually knew about the bribery.  Judge Biggers had taken four guilty pleas….

Q.  You’ve got to have an underlying felony don’t you.

A.  We do and we did.

Q.  Where do you find that in the indictment or the record of the plea.

A.  The factual basis shows a corrupt influence.  At the time that was a valid charge.  The plea basically accommodated the defendant’s claim that he didn’t know anything about the crime.

Q.  That’s what he plead to.

Q.  The judge said something that he did know about it, and he denied that, and the judge said we are taking a plea on the earwigging.

A.  He procedurally defaulted and did not prove his actual innocence….

Q  The problem is that he didn’t plead to that apparently (a conspiracy to bribe)

Q When you look at the record, it is clear that he declined to plead guilty to knowing of a bribe, and the judge accepted that.  Isn’t that right

A.  It is.  That was something he mentioned in the plea, but it didn’t matter at that time.

Q,  Well, that’s the problem.  [laughs]  Didn’t matter at that time but it develops that that itself doesn’t charge a crime.  The language of the Peter case that Judge Davis referred to says an indictment’s charge is jurisdictional inadequate if an affirmative allegation of specific conduct  that is not described by the charging statute.  I look at that indictment and do not see specific conduct being charged that is described by the charging statute

A The actual payments to the judge were not included in the information but says a felony that’s cognizable. … We had a felony of conspiracy to bribe, … which is Skilling proof.

Also, that same information and factual basis, under a harmless error analysis, could be shown to have a money/property, a traditional money/property scheme to defraud against Jones.  Everything is in there that is necessary to find that.

Q.  Where would you find that in the record of the plea, though

A.  It is talking about how this was an attempt to gain an unfair advantage against Jones, the plaintiff in that case  by corruptly influencing the judge, and that he was going to loose money on that.  The case went to arbitration.  The  case was decided on something, the language in there, something other than the merits of the case, and then was an interstate wire in furtherance of the scheme.  This was concealed from the Jones plaintiffs.

Q.  Let me ask you this, if the indictment had simply charged misprision of a felony, to wit, concealment of honest services fraud.  Would that state a charge?

A.  That would be a charge that would be viable at the time of the plea.

Q.  But now.  Is it a…

A.  You’d have to go back to see whether there was an actual bribery, and yhat’s our argument your honor, there was an actual crime.  The concealment of honest services is a crime, but it must involve an actual crime.

Q.  The problem is that he did not actually plead to that, apparently, or did he.  You’re not showing me where he plead to that.  It suggests strongly that the man, whatever may be said of the other evidence of the conspiracy to bribe the judge and all that, he did not want to plead out on being aware of that underlying conspiracy itself.  The question then becomes that your left with a plea to honest services and the Supreme Court says that honest services is no crime.  Then, Is that where we are, and then you deal with the timeliness of the attack on the plea

A.  Yes, your honor, because he didn’t appeal.  He’s procedurally barred from raising the Skilling unless he can show cause

Q If he escapes the procedural bar then you have an invalid plea.  Would you agree with that?

A.  I don’t your honor for this reason because he has got to show cause and he can’t do it because the futility of raising Skilling….

Q.  But that’s escapes the procedural bar.  My question is, suppose if he had timely filed a 2255 attacking that plea.

A.  He would be in entirely different situation as far as the application of Skilling.

Q.  The plea couldn’t stand could it.

A.  Sir

Q.  That plea would have to be set aside and we’d go to trial.

A.  Most likely, yes sir.  …. The futility of making a Sklling claim prior to Skilling does not provide cause to excuse the procedural problem.

Q.  Do you say its jurisdictional or not jurisdictional.

A.  The court had jurisdiction because misprision of a felony  under Bowsley, you are not limited to just what was said in the court.  The entire record should be looked at.  The actual innocence standard under Bowsley is factual innocence is actual innocence.  He had a chance to show he was actually innocent and failed to do that.

Q.  You say there is no distinction between failure to charge an offense on the one hand and actual innocence in the calculation of procedural bar.

A.  We submit that we have charged an offense that it was a felony cognizable under the courts of the United States.

Robertson for Scruggs on rebuttal

It would be news to the law that you could be guilty of misprision of a non-felony. …

Q What is your answer to the argument that this information on on its face charges a felony albeit globally,   What we have apparently is an inadequate factual basis.  The law provides your client with a remedy to correct that if he desires to do that but he failed to do so… He’s never attacked the sufficiency of the factual basis….

A.  That is correct your honor but nonetheless.  The decisions of all the courts that I’m familiar with suggest that you don’t just look at the information you look at the factual basis if the information is vague, to limit it….

Q.  Stay with me on this.  The argument goes by the Government that the court’s jurisdiction was invoked by the information which plainly charges a felony.   If he had come in and plead to a factual basis for that, no one would be here, I guess.  W hat you do have is that he tried to avoid admitting that he was aware of the underlying crime of bribery, that he was only guilty of an ethical violation and for whatever reason, the trial judge took it.  All you are left with is that the court took jurisdiction and the court had an inadequate basis for a plea.  …. Why aren’t we in that posture?

Answered that you have to look at them all together and you see that the Government charged misprision of a non-felony.    “Even Judge Biggers said that, he doesn’t know anything about the bribe.”