Dean v. United States - Opposition

No. 07-553

In the Supreme Court of the United States

WARD FRANKLIN DEAN, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

PAUL D. CLEMENT
Solicitor General
Counsel of Record
NATHAN J. HOCHMAN
Assistant Attorney General
ALAN HECHTKOPF
ELISSA HART-MAHAN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTIONS PRESENTED

1. Whether the district court erred in denying peti tioner's motion to stay proceedings to allow him to in vestigate alleged errors in selecting the jury pool, when the motion was untimely and was not supported by an affidavit.

2. Whether the district court's jury instruction on good faith was erroneous.

3. Whether the district court's jury instruction on the elements of tax evasion constituted plain error.

4. Whether sufficient evidence supported petition er's conviction for attempting to obstruct the admin- istration of the internal revenue laws.

5. Whether the district court's application of United States v. Booker, 543 U.S. 220 (2005), at sentencing vio lated the Ex Post Facto Clause, U.S. Const. Art. I, § 9, Cl. 3.

In the Supreme Court of the United States

No. 07-553

WARD FRANKLIN DEAN, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1a-28a) is reported at 487 F.3d 840.1

JURISDICTION

The judgment of the court of appeals was entered on May 25, 2007. A petition for rehearing was denied on July 27, 2007 (Pet. App. 41a-42a). The petition for a writ of certiorari was filed on October 25, 2007. The jurisdic tion of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District Court for the Northern District of Florida, petitioner was convicted on six counts of tax evasion, in violation of 26 U.S.C. 7201, and one count of attempting to obstruct the administration of the internal revenue laws, in viola tion of 26 U.S.C. 7212(a). Pet. App. 30a. He was sen tenced to 84 months of imprisonment, to be followed by three years of supervised release. Id. at 31a-32a. He was also ordered to pay approximately $291,000 in resti tution. Id. at 35a. The court of appeals affirmed. Id. at 1a-28a.

1. In 1996, petitioner, a medical doctor, became a tax protestor. Pet. App. 2a. Although he earned at least $136,000 that year, petitioner filed a "zero" return-that is, a return that stated that he had no income and owed no taxes. Id. at 2a-3a. Petitioner "also submitted a re vised W-4 form to his employer, claiming that he was exempt from federal income tax withholding." Id. at 3a. Petitioner disregarded the returns prepared by his ac countant for the 1996 and 1997 tax years, which re flected his actual income and tax liabilities. Ibid. He also ignored correspondence from the Internal Revenue Service (IRS) informing him that his "zero" returns were inaccurate and frivolous and that he was required to pay income tax. Ibid. Petitioner went on to file "zero" returns for the 1997 through 2001 tax years, in spite of the fact that he continued to earn substantial income. Id. at 3a-4a.

In its investigation of petitioner's actual tax debt, the IRS sought to obtain copies of petitioner's financial re cords by issuing summonses to petitioner's employer and to banks where he had accounts. Pet. App. 4a. Peti tioner responded by sending letters to each of those par ties advising them that they were "under no obligation to comply with this fraudulent 'Summons,'" which, he said, was "a phony document sent by a 'Revenue Agent' who has no authority to send a lawful summons to any one." Ibid. Meanwhile, in 2002, the district court up held a $500 penalty that the IRS had imposed on peti tioner for filing a frivolous return for the 1997 tax year. Id. at 4a-5a. Petitioner earned more than $240,000 in 2002, but he failed to file a tax return. Id. at 5a.

2. A grand jury sitting in the Northern District of Florida returned an indictment charging defendant with six counts of tax evasion, in violation of 26 U.S.C. 7201, and one count of attempting to obstruct the administra tion of the internal revenue laws, in violation of 26 U.S.C. 7212(a). Pet. App. 5a. After several delays caused by petitioner, Gov't C.A. Br. 15-23, the district court set a trial date of December 5, 2005. Pet. App. 5a.

On November 24, 2005, petitioner moved to inspect the jury records. Pet. App. 5a. The district court granted the motion on December 1, and petitioner's rep resentative inspected the records the next day. Ibid. On December 5-the day the trial was scheduled to begin-petitioner moved to stay the proceedings for failure to comply with the Jury Selection and Service Act of 1968, 28 U.S.C. 1861 et seq., in selecting the grand and petit jurors. Pet. App. 5a-6a. Specifically, peti tioner alleged that the information he received about potential petit jurors suggested that some of them might not be qualified to serve as jurors under the district's jury plan. Id. at 6a. Petitioner also alleged that he had been denied access to the records dealing with grand jury selection. Ibid.

The district court held a hearing on petitioner's mo tion. At the hearing, petitioner conceded that any ques tions about the qualifications of the petit jurors could be resolved during voir dire. Pet. App. 6a. The district court agreed to delay the trial to allow petitioner an op portunity to review the grand jury list, but it denied the motion to stay the proceedings, explaining that the mo tion was untimely and did not include an affidavit, as required by statute. Id. at 6a-7a. The court also stated that it believed the motion lacked merit. Id. at 7a.

3. At trial, petitioner testified that he had a good- faith belief that he did not have to pay income tax. Gov't C.A. Br. 8. The district court instructed the jury:

A defendant does not act willfully if he believes in good faith that he is acting within the law or that his actions comply with the law. This is so even if the defendant's belief was not objectively reasonable as long as he held the belief in [good] faith. Neverthe less, you may consider whether the defendant's belief was actually reasonable as a factor in deciding whether he held that belief in good faith.

Pet. App. 16a.

The jury returned a verdict of guilty on all counts. Pet. App. 7a. At sentencing, the district court applied United States v. Booker, 543 U.S. 220 (2005), and treated the Sentencing Guidelines as advisory, imposing a sentence above the Guidelines range. Pet. App. 23a; Gov't C.A. Br. 13-15. Petitioner was sentenced to 84 months of imprisonment, to be followed by three years of supervised release; he was also ordered to pay ap proximately $291,000 in restitution. Pet. App. 31a-35a.

4. The court of appeals affirmed. Pet. App. 1a-28a. The court rejected petitioner's argument that the dis trict court should have stayed proceedings to allow fur ther investigation of the selection of the jury pool. The court of appeals agreed with the district court that the motion was procedurally deficient in two respects: it was untimely, and it was not supported by an affidavit as required by the statute. Id. at 11a-14a.

The court of appeals also rejected petitioner's chal lenge to the jury instructions and to the sufficiency of the evidence. It held that the district court's instruction on good faith correctly explained that a good-faith belief negates the willfulness element required for a conviction under 26 U.S.C. 7201. Pet. App. 15a-18a. Reviewing for plain error, it also concluded that the jury instructions had correctly stated the elements of an offense under Section 7201. Id. at 18a-20a. And it determined that petitioner's letters to his employer and to his banks, instructing them that summonses from the IRS were "phony" and "fraudulent," provided a sufficient basis for the jury to conclude that he had attempted to impede the administration of the internal revenue laws. Id. at 21a-22a.

Finally, the court of appeals held that the application of Booker at sentencing was consistent with the Ex Post Facto Clause, U.S. Const. Art. I, § 9, Cl. 3, and with due process. Pet. App. 22a-24a.

ARGUMENT

Petitioner contends (Pet. 6-40) that the district court should have granted a stay of proceedings based on al leged deficiencies in selecting the jury pool, that the district court's jury instructions were erroneous, that the evidence was insufficient to convict him of attempt ing to impede the administration of the internal revenue laws, and that the district court's application of United States v. Booker, 543 U.S. 220 (2005), violated the Ex Post Facto Clause, U.S. Const. Art. I, § 9, Cl. 3. The court of appeals carefully considered these arguments and rejected all of them. Its decision does not conflict with any decision of this Court or any other court of ap peals. Further review is not warranted.

1. Petitioner asserts (Pet. 6-16) that the district court's denial of his motion to stay the proceedings vio lated the Jury Selection and Service Act of 1968, 28 U.S.C. 1861 et seq., and that the opinion of the court of appeals conflicts with this Court's opinion in Test v. United States, 420 U.S. 28 (1975) (per curiam). Con trary to petitioner's argument, the district court's deci sion was consistent both with the statute and with Test.

The Jury Selection and Service Act governs the se lection of grand and petit juries in federal court. The Act requires each federal district court to devise a writ ten plan for the random selection of jurors. 28 U.S.C. 1863(a). See Gov't C.A. Br. App. E (jury plan for the Northern District of Florida). The Act also provides that "[t]he parties in a case shall be allowed to in- spect, reproduce, and copy" records relating to the jury selection process "at all reasonable times." 28 U.S.C. 1867(f). A defendant who wishes to challenge the jury- selection process must present that challenge "before the voir dire examination begins, or within seven days after the defendant discovered or could have discovered, by the exercise of diligence, the grounds therefor, whichever is earlier." 28 U.S.C. 1867(a). Any motion to stay the proceedings must contain a "sworn statement of facts which, if true, would constitute a substantial failure to comply with [the Act]." 28 U.S.C. 1867(d). The procedures prescribed in Section 1867 "shall be the exclusive means by which a person * * * may chal lenge any jury on the ground that such jury was not se lected in conformity with the provisions of [the Act]." 28 U.S.C. 1867(e).

As the court of appeals explained, petitioner's motion to stay the proceedings was procedurally deficient for two independent reasons. Pet. App. 13a-14a. First, the motion was untimely. Petitioner was indicted on March 17, 2005, but he did not move to stay the proceedings until December 5. Petitioner could have investigated the alleged problems with the jury selection procedures at any time after the indictment, but he did not raise the issue until immediately before the trial was scheduled to begin-more than eight months later, and far more than "seven days after [petitioner] discovered or could have discovered, by the exercise of diligence, the grounds" for his challenge. 28 U.S.C. 1867(a). Petitioner has made no effort to explain the delay. Second, petitioner's mo tion to stay the proceedings did not contain "a sworn statement of facts which, if true, would constitute a sub stantial failure to comply with the provisions of [the Act]." 28 U.S.C. 1867(d). Thus, the court of appeals correctly concluded that petitioner's motion to stay the proceedings was procedurally barred.

Contrary to petitioner's suggestion (Pet. 10-14), the decision of the court of appeals is also consistent with Test. In Test, this Court held that a litigant has a right to inspect jury selection materials under Section 1867, 420 U.S. at 30, but it emphasized that "the statute does limit inspection to 'reasonable times,'" id. at 30 n.4. Test does not create an unqualified right to inspect jury selection records at any time, nor does it compel a dis trict court to grant a motion to stay the proceedings that does not conform to the requirements of Section 1867. Petitioner's argument rests on the erroneous premise that the district court did not permit him to inspect the jury selection records. In fact, the district court granted his motion to inspect the records. What the district court denied was petitioner's motion to stay the proceed ings, and that denial was compelled by the plain lan guage of Section 1867.

2. Petitioner next contends (Pet. 16-23) that the dis trict court's instruction on good faith was erroneous. Petitioner is incorrect.

In order to convict a defendant of a federal tax crime, the government must prove that the defendant acted willfully, that is, that he voluntarily and intentionally violated a known legal duty. See Cheek v. United States, 498 U.S. 192, 201 (1991). In Cheek, this Court held that a defendant's "good-faith belief that he was not violating any of the provisions of the tax laws" negated willful ness. Id. at 202. Consistent with Cheek, the district court in this case instructed the jury that "[a] defendant does not act willfully if he believes in good faith that he is acting within the law or that his actions comply with the law. This is so even if the defendant's belief was not objectively reasonable as long as he held the belief in [good] faith." Pet. App. 16a.

Petitioner objects (Pet. 21-23) that the court went on to explain that the jury could "consider whether the de fendant's belief about the tax statutes was actually rea sonable as a factor in deciding whether he held that be lief in good faith," Pet. App. 16a, but that statement was also correct. As the Court noted in Cheek, "the more unreasonable the asserted beliefs or misunderstandings are, the more likely the jury will consider them to be nothing more than simple disagreement with known le gal duties imposed by the tax laws and will find that the Government has carried its burden of proving knowl edge." 498 U.S. at 203-204. Several courts of appeals have approved similar instructions, concluding that Cheek permits the jury to consider the reasonableness of a defendant's claimed belief in evaluating whether the defendant actually believed it in good faith. See United States v. Pensyl, 387 F.3d 456, 459-460 & n.1 (6th Cir. 2004); United States v. Hilgeford, 7 F.3d 1340, 1343- 1344 & n.1 (7th Cir. 1993); United States v. Grunewald, 987 F.2d 531, 536 (8th Cir. 1993). Petitioner does not allege that the decision of the court of appeals to ap prove the instruction in his case is inconsistent with any decision of any other court of appeals.

Petitioner asserts (Pet. 19-20) that the district court should have instructed the jury that the government had the burden of negating his good-faith defense. In light of the district court's instruction that the government had to prove that defendant knew of his legal obligations and that petitioner did not willfully violate the law if he had a good-faith belief in the legality of his actions, such an instruction would have been superfluous. A jury is presumed to follow its instructions, see Weeks v. Ange lone, 528 U.S. 225, 234 (2000), and here, the jury could not have found petitioner guilty without finding that the government had proved petitioner's knowledge of the law beyond a reasonable doubt, nor could it have con victed petitioner if it had found that petitioner was act ing in good faith. Accordingly, the district court's good- faith instruction was sufficient.

3. Petitioner argues (Pet. 23-29) that the district court erred in instructing the jury on the elements of tax evasion. Because petitioner failed to preserve that claim, it was subject to review for plain error only, Pet. App. 18a; see Fed. R. Crim. P. 52(b), and therefore peti tioner could prevail only if the error were "obvious." Johnson v. United States, 520 U.S. 461, 467 (1997). The court of appeals correctly determined that there was no error.

Tax evasion under 26 U.S.C. 7201 involves "willfully attempting in any manner to evade or defeat any tax imposed by the Internal Revenue Code." Sansone v. United States, 380 U.S. 343, 350 (1965). The elements of tax evasion are "willfulness, the existence of a tax defi ciency, and an affirmative act constituting an evasion or attempted evasion of the tax." Id. at 351 (citations omit ted). The filing of a false tax return constitutes an affir mative act under 26 U.S.C. 7201. Sansone, 380 U.S. at 351-352.

Here, the district court instructed the jury that it could find petitioner guilty of tax evasion only if the gov ernment proved beyond a reasonable doubt, "[f]irst: That [petitioner] owed substantial income tax in addition to that declared in his tax return; and [s]econd: That [petitioner] knowingly and willfully attempted to evade or defeat such tax." Pet. App. 46a-47a. The district court further instructed the jury that petitioner could attempt to evade the tax "by willfully failing to report all of the income which he knew he had during that year." Id. at 47a. That instruction required the jury to find that petitioner filed a false tax return in order to find him guilty of tax evasion. Although the instruction did not include the phrase "affirmative act," the instruction, when read as a whole, included the three elements iden tified by this Court in Sansone.

Contrary to petitioner's theory, there is no risk that the jury found petitioner guilty based on a finding that he failed to act. In this case, it was undisputed that peti tioner filed several returns that reported both his in come and his tax liability as "zero." Under the district court's instruction, the jury could find guilt only if it found that those "zero" returns substantially under stated petitioner's tax liability or income and that the understatement was a willful attempt to evade tax. The instruction was entirely consistent with Sansone and with the pattern instructions cited by petitioner (Pet. 26- 29).

4. Petitioner asserts (Pet. 29-37) that there was in sufficient evidence presented at trial to support his con viction under 26 U.S.C. 7212(a) for corruptly impeding or obstructing the due administration of the internal revenue laws. That claim lacks merit.

The courts of appeals have interpreted Section 7212(a) broadly to encompass actions such as filing false tax forms with the IRS, see United States v. Bowman, 173 F.3d 595, 600 (6th Cir. 1999); filing a false return and false forms, see United States v. Winchell, 129 F.3d 1093, 1099 (10th Cir. 1997); aiding in the concealment of assets, see United States v. Wilson, 118 F.3d 228, 234- 235 (4th Cir. 1997); and creating a sham corporation to disguise income, see United States v. Popkin, 943 F.2d 1535, 1541 (11th Cir. 1991), cert. denied, 503 U.S. 1004 (1992). See also United States v. Hanson, 2 F.3d 942, 947 (9th Cir. 2003) (filing of false IRS forms reporting payments that had never been made and claiming a tax refund that was not due); United States v. Mitchell, 985 F.2d 1275, 1277, 1279 (4th Cir. 1993) (fraudulent claim and use of tax-exempt status, and inducing others to file false returns); United States v. Kuball, 976 F.2d 529, 529-531 (9th Cir. 1992) (filing forms that falsely report payments and income and improperly seek a refund); United States v. Williams, 644 F.2d 696, 701 (8th Cir.) (aiding and abetting the filing of false W-4 forms), cert. denied, 454 U.S. 841 (1981).

In this case, in addition to filing numerous false re turns, petitioner sent letters to his banks and employers designed to prevent them from cooperating with the IRS investigation of his income. That conduct easily falls within the scope of Section 7212(a). Contrary to peti tioner's assertions (Pet. 33), the letters went beyond advising financial institutions to comply with the law. The letters stated that the summonses sent by the reve nue agent who was investigating petitioner were "phony" and "fraudulent," despite the fact that peti tioner had received copies of all of the summonses and knew that they came from the IRS. Pet. App. 21a. "The letters closed by threatening legal action against anyone who complied with [the IRS summonses]." Ibid. In light of the substantial evidence of petitioner's efforts to disrupt the IRS's investigation, the jury could reason ably conclude that petitioner corruptly endeavored to interfere with the administration of the internal revenue laws.2

5. Finally, petitioner contends (Pet. 37-40) that his sentence violates the Ex Post Facto Clause because the district court applied Booker in sentencing him to a term that exceeded the range specified by the Sentencing Guidelines. That theory has been rejected by every court of appeals to consider it.

The Ex Post Facto Clause prohibits the retroactive application of laws that increase the punishment for a given crime. See Rogers v. Tennessee, 532 U.S. 451, 456 (2001). The text of the clause is directed to legislatures, not courts. While the Ex Post Facto Clause does not apply to judicial action, this Court has held that "limita tions on ex post facto judicial decisionmaking are inher ent in the notion of due process," ibid., which requires that a defendant have "fair warning" of the criminal pen alty resulting from his conduct, id. at 459-461.

This Court's decision in United States v. Booker, 543 U.S. 220 (2005), altered the federal sentencing regime by making the Sentencing Guidelines advisory rather than mandatory. In the wake of Booker, a district court must calculate the appropriate advisory Guidelines range and consider all of the factors set out in 18 U.S.C. 3553(a) (2000 & Supp. V 2005) before sentencing, but the sentence need not be within the advisory Guidelines range. See 543 U.S. at 260-261; United States v. Rita, 127 S. Ct. 2456, 2464 (2007). In this case, the govern ment argued at sentencing that the district court should impose an above-Guidelines sentence because of peti tioner's extensive obstructive conduct and because of his role in encouraging others not to pay taxes. Gov't Sen tencing Mem. 1-7. The government argued that either an upward departure under the Guidelines or an upward variance based on the Section 3553(a) factors would be appropriate. The court ultimately imposed an above- Guidelines sentence.

Petitioner claims that, because his sentence exceeded the advisory Guidelines range, the retroactive applica tion of this Court's holding in Booker violated the Ex Post Facto Clause. This Court's decision in Booker, however, did not enact a statute; accordingly, the Ex Post Facto Clause has no direct application. Nor does the retroactive application of Booker in sentencing for pre-Booker crimes transgress due process notice con cerns. Even under the pre-Booker sentencing regime, the district court could have departed upward and im posed exactly the same sentence. See United States v. Lata, 415 F.3d 107, 112 (1st Cir. 2005). Because peti tioner had fair notice that he could be subject to a sen tence above the Guidelines range, this Court's decision in Booker did not bring about an "unexpected and inde fensible" change in the law, and therefore it did not vio late the ex post facto principles protected by the Due Process Clause. Rogers, 532 U.S. at 457.

Every court of appeals to consider the question has determined that the retroactive application of Book er does not violate the Ex Post Facto Clause. See United States v. Barton, 455 F.3d 649, 656-657 (6th Cir.), cert. denied, 127 S. Ct. 748 (2006); United States v. Pennavaria, 445 F.3d 720, 723-724 (3d Cir.), cert. de nied, 127 S. Ct. 531 (2006); United States v. Davenport, 445 F.3d 366, 370 (4th Cir. 2006); United States v. Alston-Graves, 435 F.3d 331, 343 (D.C. Cir. 2006); United States v. Austin, 432 F.3d 598, 599-600 (5th Cir. 2005); United States v. Vaughn, 430 F.3d 518, 524-525 (2d Cir. 2005), cert. denied, 547 U.S. 1060 (2006); United States v. Dupas, 419 F.3d 916, 921 (9th Cir.), cert. de nied, 547 U.S. 1011 (2006); United States v. Jamison, 416 F.3d 538, 539 (7th Cir. 2005); United States v. Lata, 415 F.3d 107, 110-112 (1st Cir. 2005); United States v. Duncan, 400 F.3d 1297, 1304 (11th Cir.), cert. denied, 546 U.S. 940 (2005). Particularly in light of the fact that the retroactive application of Booker is a matter of steadily diminishing importance and has no prospective significance for crimes committed after the January 2005 decision in Booker, this Court's review is not war ranted.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

PAUL D. CLEMENT
Solicitor General
NATHAN J. HOCHMAN
Assistant Attorney General
ALAN HECHTKOPF
ELISSA HART-MAHAN
Attorneys

1 The appendix to the petition lacks page numbers. For convenience, this brief will refer to the appendix as if its pages were numbered from 1a to 48a.

2 Petitioner argues (Pet. 34-37) that his conviction violates the First Amendment. Petitioner did not raise that claim before the district court, see Gov't C.A. Br. 30-31, and the court of appeals did not address it. In any event, the argument lacks merit because there was ample evidence that petitioner's letters were false and fraudulent, and the First Amendment does not protect speech that constitutes fraud or public deception. See, e.g., Illinois ex rel. Madigan v. Telemarketing Assocs., Inc., 538 U.S. 600, 612 (2003).