1.Inigo Hearsay, Missing-Witness Rulings, and Defense-Requested Jury Instructions
65 linesUNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA,
v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant. ------------------------------x New York, N.Y. February 3, 2015 9:10 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York BY: SERRIN A. TURNER TIMOTHY HOWARD
Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal
(In open court; jury not present)
COURT CLERK: The continued matter on trial, the United States of America v. Ross William Ulbricht, 14 Cr. 68.
Counsel, state your names for the record.
MR. TURNER: Good morning. Serrin Turner for the government. With me at counsel table is AUSA Tim Howard and paralegal Molly Rosen.
MR. DRATEL: Good morning, your Honor. Joshua Dratel for Mr. Ulbricht who is standing besides me, also Lindsey Lewis from my office and also Joshua Horowitz.
THE COURT: Good morning to all of you.
We have several housekeeping matters to go over this morning. Let me make sure that the agenda I have corresponds with the matters which you folks agree we should raise.
I would like to check in and find out what the status is of the testimony of Bridget Prince. We left that as an open issue last night. Defense was going to think about it some more. I didn't receive any submissions on that, so I just wanted to find out where that stands.
MR. DRATEL: Your Honor, we're not going to use the timeline during her testimony. We informed the government of that last night.
THE COURT: All right. Then for inigo, we need to go over that and then we need to go over the defense-requested jury instructions, so those two final matters, since I think we have then taken care of the one, are where we are.
Are there things which you folks would like to raise?
MR. TURNER: No, your Honor. I responded to the inigo issue.
THE COURT: Mr. Dratel, anything from your perspective you would like to raise in addition to those items?
MR. DRATEL: No.
THE COURT: In terms of inigo, I have received the letter from defense counsel. Let me just preview that I think it breaks into analytically into two very separate inquiries though they're related: One is the hearsay issue relating to reading into the record the statement that inigo, a cooperating witness, gave to the government and as recounted in the letter of December 29. So there's the hearsay issue and then there's a separate request for a missing witness charge in the event that the statement is otherwise disallowed. So I think analytically those are related but stand separately.
Mr. Turner, I didn't receive a written response from the government. I knows you folks are busy, but why don't you tell me your views.
MR. TURNER: Sure. As the government sees it, this is sort of another example of the defense assuming they can get in their case through our witnesses. So the defense has known for approximately two weeks that we were not going to call Mr. Jones. They made no effort to contact or subpoena Mr. Jones until the eve of the defense case. They didn't ask us to immunize him. They made no effort to draft any stipulation even though we told them that we were open to a stipulation until the eve of their case. And now the defense is trying to use the lack of time, which is an issue of their own making, to try to force the government to agree to whatever stipulation language the defense wants, even though it does not include language that is favorable to the government.
Defense counsel had no right to assume that he'd be able to rely on a stipulation to get in facts they want from Mr. Jones. You have to have a witness lined up in case a stipulation falls through. That's why for Alex Miller with Stack Overflow, we wanted to get that in through stipulation. We weren't able to work that out. We had Alex Miller ready to testify. They were obliged to do the same thing with Mr. Jones.
Defense counsel is trying to make it out as we engaged in some sort of tactical maneuver by not calling Mr. Jones. We didn't call Mr. Jones because we felt like we no longer needed it for the case. That was our right. That was our call. And the defense was not entitled to rely on our calling a witness during our case and them getting in some fact from Mr. Jones through his testimony on our case.
The confrontation issue that they have tried to raise is ludicrous. This is a stipulation we're talking about. So a stipulation can present any statements that the witness would be able to testify to. And it would be perfectly appropriate if he were to testify about this conversation he had to explain his understanding of the conversation, to explain his state of mind during the conversation. It happens all the time when you have witnesses testifying about conversations they're having with other people and what's going on, the context of those conversations. That's all we were trying to put in this stipulation and the defense didn't want that in. We think it's necessary to be balanced.
So if they're not amenable to a stipulation, then it's up to them to call the witness. You can't just get in core hearsay because the government won't stipulate to putting information in a stipulation. You can't just take a letter that the government sends, which is not the declarant's statement, that is the government's disclosure, that is the government's characterization, that's not been adopted by the declarant, so you can't just ignore the hearsay rules and just submit a letter.
THE COURT: Let's go to the hearsay rules. As I said, I think this breaks analytically into two pieces, each of which have their own independent evidentiary standards. One is 8043, there's a typo in defense letter but we understood from yesterday what he was referring to, so it's not 803. It's 8043 which is a statement against penal interest, which is an easy juxtaposition to make, that statement against penal interest, as the Court understands it, requires two parts: It requires subpart A and subpart B. Subpart A requires a statement against penal interest, which typically is a statement made under circumstances which indicate that no person would have made it unless they were telling the truth because it was so contrary to their interest under those circumstances to do so. And it also requires B, which is big letter B, B also requires some independent corroborating evidence as to the trustworthiness and/or reliability.
Why don't you address whether or not, putting aside the circumstances over not reaching the stipulation, whether or not the hearsay statement otherwise meets the standard under 8043.
MR. TURNER: First of all, it's not his statement. It's not like an email that he sent. It's not an affidavit he signed.
THE COURT: No. It's your recitation of his statement.
MR. TURNER: That is hearsay.
THE COURT: I understand we're dealing with hearsay. I'm saying tell me why it doesn't fit within the hearsay exception.
MR. TURNER: The point is, it's not just the declarant's statement; it's somebody else's statement about what the declarant said, so it's double hearsay.
THE COURT: Lovely.
MR. TURNER: And that's part of the problem. That's a characterization of what this declarant said. It's not the statement itself.
THE COURT: So we go to both pieces of it, okay.
MR. TURNER: Right.
THE COURT: Mr. Turner, I'm trying to cut through because let me be perfectly blunt: I don't think this meets the hearsay standard. I don't think under 8043 this is a statement against penal interest. The reason for that is because the witness at the time was already under a cooperation agreement.
Under a cooperation agreement, under Second Circuit law, there is clear law that says that you're no longer under criminal penalty for making a particular statement; (B), based upon the representations of the government, there's no corroborating evidence for reliability because there's no chat that ever indicates apparently that this ever happened. There's no indication in the record so far that there is an absence of chats and, therefore, the absence here, there's just nothing to corroborate this as a reliable statement. So I don't think it meets 8043.
Do you disagree with my analysis?
MR. TURNER: We absolutely disagree, and we just also believe there are further reasons that it doesn't even come under 8043 to start with because it's not this witness' statement. It's the government's statement about what he said.
THE COURT: Why don't you go to the missing witness charge, which I think is analytically separate.
MR. TURNER: Again, this is an issue of the defendant's own making. If they wanted to call this witness, that's something they should have realized right after they learned we weren't going to call him. If they thought he was that important to their case, they should have asked can we immunize him, can we call him. That could have been worked out two weeks ago.
THE COURT: Would you have immunized him or is this sort of an argument that you can make because they didn't ask but you would not in fact have immunized him?
MR. TURNER: No. I'm not representing that at all. I think we would have immunized him. He's under our control and we would not have resisted allowing him to testify. The point is, even a stipulation was not proposed until the eve of the defense case when government counsel was busy preparing for closing, preparing for possible cross of the defendant, preparing for the witnesses that were going to be part of the defense case.
This was sprung on the government on the last minute. It's an issue of the defense's own making and to say that, oh, now there's an unavailable witness because they don't have time now to scramble and subpoena this witness and work out the immunity issues, it's their fault.
THE COURT: Let me ask you, I thought that Mr. Dratel had information that indicated this witness would take the Fifth if called.
MR. TURNER: Apparently he called his counsel, he didn't call me, he called -- this is just based on what Mr. Dratel said in court, I didn't even talk to counsel for Mr. Jones since then. But I understand that he called counsel for Mr. Jones and counsel said, well, he'd take the Fifth. But defense counsel can still contact the government and see if we would immunize the witness so that he couldn't claim the Fifth Amendment. We never had that discussion. We were never consulted about that.
MR. DRATEL: It's not the government's position to immunize a witness. It's the Court's authority under the statute. The government has never immunized a defense witness, never.
THE COURT: They make an application, which is then so ordered by the Court but typically it's within the prosecutorial discretion as to whether to suggest immunization, so they are related.
MR. DRATEL: That's the most specious argument, the most disingenuous argument I have heard. This is completely outrageous. By the way, last weekend we were told that Mr. Turner would not agree to anything and would not discuss anything with us, and that's what we were told last week. I'm just -- I want to call Mr. Turner as a witness. We'll eliminate the double hearsay problem. He wrote the letter and signed it. He's disavowing it. This is so disingenuous, so outrageous. A prosecutor has obligations that transcend wanting to win the case at all costs, and this is what we have here.
THE COURT: Let's take these two issues analytically separately; one is the hearsay issue whether we think of it as single hearsay or double hearsay, 8043, whether or not those standards are met.
MR. DRATEL: Yes.
THE COURT: If they're not met, then we are into the world of the missing witness charge. If they are met, then there is some other issues as to whether we can read it in.
MR. DRATEL: Two things: One is, it is a statement against penal interest. He is not sentenced. All of these things can be raised at sentencing. That's why he has a Fifth Amendment privilege is because the statement against penal -- even if he's cooperating, and the truthfulness and the trustworthiness aspect of it, there's a chat that substantiates the first part of it, so that indicates the trustworthiness. They went and found the chat. They didn't have the chat beforehand. They went and found the chat which substantiated the first part, and he is under an obligation to tell the truth or else he loses his cooperation agreement. Every jury is told that and argued by the government why would -- they're going to argue it here with respect to Mr. Duch. They're going to argue it here with respect to Mr. Bates. They're going to say this guy has an agreement. He would never lie to you. What more trust -- they can't have it both ways.
They continually want it both ways. This is a preposterous argument. I want a page and-a-half stipulation that they don't have time to read. They knew exactly what was in the -- my stipulation is completely what's in the letter. And what I objected to in their stipulation is what they're not entitled to. They could have called the witness if they wanted balance.
THE COURT: Hold on. I want us to pull back and take a deep breath and focus on --
MR. DRATEL: It's just an outrage. That's all. It's an outrage.
THE COURT: I hear what you're saying. I do want us to focus on the evidentiary rules because --
MR. DRATEL: Part of it is fairness. Part of it is Chambers v. Mississippi. Part of it is due process. Part of it is they can't do a bait and switch. I called the lawyer. He's on trial, by the way. I called him on the weekend and he told me he's taking the Fifth.
They never offered -- this immunity is preposterous. You should ask them right now. He's said no, we're not saying we're going to immunize him. Of course not, because they're not going to. This is a bogus argument, bogus, bogus, bogus, and it's coming in a way that is completely disingenuous.
He should be a witness, and it's a problem 100 percent of his making because they had him on the witness list. In the middle of trial, they say he's not testifying. He's the best witness; Mr. Turner wrote the letter. He heard the statement. He was there.
THE COURT: You folks are sufficiently emotional about it. I have the government's statement. I have your letter. I have read your letter. I have also looked at case law. Let me be sure that I understand the chats which do exist versus the chats which don't exist.
As I understand it, the chat which does exist is the October 16, 2012 chat which indicates the "recommend a good book Rothbard" answer, that that chat has been found.
MR. DRATEL: Correct.
THE COURT: I understand that paragraph C, which is really the heart of what we're discussing here, the chat as to whether the key identifying question was asked, that chat has not been found.
MR. DRATEL: Because it was a Pidgin chat, which are not saved. It's different. It's a different type of chat.
THE COURT: There are some.
MR. DRATEL: Well, not the Pidgin chats, no.
THE COURT: Here, let me just tell you my ruling on the 804(3) issue. On the 804(3) issue, putting aside the double level of hearsay, just assuming that this is a faithful representation of what the witness said, it's an out-of-court statement; without a doubt it's being offered for the truth. It has to meet both provisions of 804(3).
I do not believe that it was against the declarant's penal interest as the case law interprets it because he was under a cooperation agreement at the time. Moreover, the chat itself independently and in itself doesn't carry any particular penal impact; in other words, it's not the equivalent of a statement saying I sold the drugs or the equivalent of saying I did X, Y or Z. It's simply whether or not a particular communication occurred. So it does not meet some of the circumstances that are anticipated under (A).
Under subpart (B), it also needs to be -- and there's an "and" between those subparts -- corroborated by circumstantial evidence clearly indicating its trustworthiness. Its trustworthiness is not whether or not it was said to Mr. Turner. Its trustworthiness is whether or not it ever occurred. There's nothing that I'm aware of that indicates the trustworthiness as to whether or not it ever occurred. Therefore, it is not a hearsay statement which can come in under 8043.
Under a missing witness charge, I've received the government's now oral response and I've also looked at the defendant's papers. Important in this regard are several Second Circuit cases, which the Court pulled this morning. One is the Myerson case, 18 F.3d 153 at pin cite 159; the other is the Burgess v. U.S. case, which is a DC circuit case -- the Myerson case is a Second Circuit case -- the Burgess case is a DC circuit case which is quoted at length in the Myerson case favorably. That's at 440 F.2d 226. And then there are a series of other cases. There's the U.S. v. Torres case, Second Circuit, 845 F.2d 1165, pin cite 1169 to 70.
In the Myerson case where there's a question about a missing witness, the Court is to look at a series of things: One the relation of the parties, not only physical availability, and I think that there are some questions as to whether or not there was in fact true physical availability which would include the immunity issues and everything else, but the Court does note the special relationship between the parties by virtue of the cooperation agreement and that, therefore, there is some further ability by the government to control this witness.
Whether or not that the defense did all that it could have I think is open to question but, frankly, I'm more persuaded that the government does have control over this witness. That does not end the analysis. That just clears us to the point where we're able to ask the substantive question. The substantive question is whether or not -- and by the way, immunity is only given under extraordinary circumstances and I don't think that immunity here would be extraordinary circumstances.
But putting that aside, the question really is, and I'm quoting from the Second Circuit, "When the court is asked to give the instruction, then a judgment is to be reached as to whether, from all the circumstances, an inference of unfavorable testimony from an absent witness is a natural and reasonable one."
From the Burgess case, I'm going to recite a longer paragraph because it gives really the basis for what all of the circuit courts do in this regard and it's the Burgess case is widely cited for setting this standard.
"When the court is asked to give the instruction, then a judgment is to be reached as to whether, from all the circumstances, an inference of unfavorable testimony from an absent witness is a natural and reasonable one. In reaching a decision, the court will have in mind that it is not ruling upon an offer of evidence. The missing witness instruction is not evidence, but is concerned with the absence of evidence. While the context in which the question arises may clothe the missing witness with significance, there is the danger that the instruction permitting an adverse inference may add a fictitious weight to one side or another of the case. When thus an instruction is sought, which, in a sense, creates evidence from the absence of evidence, the court is entitled to reserve to itself the right to reach a judgment as wisely as can be done in all the circumstances." It is the Court's view having looked at the proffered language, and assuming that the witness, if called, would testify to that language, is that this is not reasonably exculpatory when all things are considered. This witness says he asked a first question. There's no indication that it was not answered -- I guess the only implication is it was not answered. There's no implication that it was answered wrongly. There's no implication as to whether or not multiple things were going on at the same time. Eleven months had passed. A second question was then asked to reveal identity, just as Google does to reveal identity of people all the time where you get three or four different questions to figure out what your first dog's name was, that second question was answered correctly; and therefore, the only reasonable inference to be drawn from this is that the DPR identification was completed. Any other inference would be, in this Court's view, an unreasonable inference, so the inigo issue is resolved. There will be no missing witness instruction on that issue.
MR. DRATEL: Then I'm signing the stipulation that the government proposed.
THE COURT: Go ahead. Do you want to agree to the stipulation?
MR. DRATEL: He already did. He proposed it to me.
MR. TURNER: Let me just consult, your Honor, over the break.
THE COURT: That's fine with me. If you stipulate to facts, that takes it out of the Court's hands, then I have no reason to make an independent evidentiary ruling.
Now, on the jury instructions, we will accept the defense jury instruction on the character evidence with the addition of two sentences from the Sands instruction. Sands for character evidence also includes -- I don't have the exact language right here, but it's essentially, here it is, the testimony is not to be taken by you as the witness' opinion as to whether the defendant is guilty or not guilty, that question is for you alone to determine.
So it will say an independent -- there will be an independent instruction on character: You have reputation evidence about the defendant's character trait for peacefulness and nonviolence. This testimony is not to be taken by you as the witness' opinion as to whether the defendant is guilty or not guilty. That question is for you alone to determine. You should consider character evidence together with and in the same way as all other evidence in the case. So that will be included.
MR. DRATEL: I object to that sentence being added. Sand also has that a character testimony alone can provide a reasonable doubt and I left that out because generally most of the circuits don't have that and they don't have the other sentence. What I took is from the Seventh Circuit. I believe it's the same as the Ninth Circuit. It's a very simple instruction and I object to that additional sentence.
THE COURT: Your objection is noted.
As to supplemental instructions number two, three and four as well as five, those will not be included for the following reasons: Number two is an incorrect statement of the law. Conduct outside of a district when combined with sufficient jurisdictional conduct within a district is fine.
As to three, it's confusing and misleading and, in fact, the undercover purchases becomes argumentive because they're not by themselves. These are combined with a whole variety of other evidence, so that's not an issue. But in any event, by themselves, they would nonetheless be potentially evidence of a variety of things.
The Homeland Security seizures could be, for instance, evidence of sales over the Internet. They could be evidence of sales of a narcotics conspiracy or substantive narcotics violations. The venue issue the Court has already discussed at length.
In terms of fake identification documents, that's just an incorrect statement of the law.
In terms of supplemental defense instruction number five, this is not applicable under the circumstances here. This is not about a law enforcement confession. There are independent indicia of reliability for these statements indeed because they were stated in chats where this individual believed that the communications were quite secure and anonymous; but in any event, the cases cited are inapplicable to this statement. So that's the Court's ruling on those instructions.
Are there any other applications we should take up before we bring the jury out?
MR. TURNER: Not from the government.
MR. DRATEL: Well, I want to know about the stipulation before we start the case.
MR. TURNER: I'll need to confer, your Honor.
THE COURT: You folks do that outside of the presence of the Court. We're waiting, I think, for everybody else to be gathered for the jurors. We had most of them but not all.
We have three witnesses. Who is going to be the first witness?
MR. DRATEL: We only have two witnesses.
THE COURT: Who is the one who is not going to be testifying?
MR. DRATEL: Schiller.
THE COURT: Schiller will not be here?
MR. DRATEL: Correct.