Free Memorandum in Support of Motion - District Court of Connecticut - Connecticut

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UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

UNITED STATES OF AMERICA v. WALTER A. FORBES and E. KIRK SHELTON

: : : : : :

No. 3:02CR00264 (AWT) January 21, 2005

MEMORANDUM IN SUPPORT OF THE MOTION OF THE UNITED STATES TO TRANSFER THE RETRIAL OF WALTER FORBES TO THE DISTRICT OF NEW JERSEY INTRODUCTION This criminal prosecution was instituted in the District of New Jersey in February 2001. Defendants Kirk Shelton

and Walter Forbes jointly moved to transfer this case from the District of New Jersey to the District of Connecticut under Fed. R. Crim. P. 21(b). The Government strenuously opposed the

motion, pointing out that prosecuting the case in the District of Connecticut would be substantially more burdensome to the Government than prosecuting it in the District of New Jersey. Additionally, the Government argued that the District of New Jersey judge to whom this case was assigned had developed a substantial knowledge about the complex facts of this case, based on the assignment to him of: (a) the related criminal cases of the three co-conspirators who had pleaded guilty; and (b) the approximately 100 civil cases arising from the fraudulent conduct alleged in the indictment.

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In addressing the defendants' Rule 21(b) transfer motion, the District of New Jersey judge considered the ten factors that were identified by the United States Supreme Court in Platt v. Minnesota Mining & Mfg. Co., 376 U.S. 240, 243-44 (1964): (1) location of [the] ... defendant; (2) location of possible witnesses; (3) location of events likely to be in issue; (4) location of documents and records likely to be involved; (5) disruption of defendant's business unless the case is transferred; (6) expense to the parties; (7) location of counsel; (8) relative accessibility of the place of trial; (9) docket condition of each district ... involved; and (10) any other special elements which might affect the transfer. With regard to those factors, Forbes resides in New Canaan, Connecticut, and Shelton in Darien, Connecticut. In

seeking a transfer to a courthouse closer to his home, Shelton represented that his wife was the "care giver" for her elderly and ill parents and for her then 14- and 11-year-old children, both of whom suffered from arthritis. Shelton also represented

that his wife intended to attend every day of the trial, but also would have to return quickly to her home in Darien in the event of a medical emergency involving either her parents or her children. Thus, according to Shelton, trying the case in Newark

rather than New Haven1 would impair Mrs. Shelton's ability to

The New Jersey judge assumed that if this case were transferred to the District of Connecticut, it would be assigned to a judge in the New Haven vicinage. This assumption proved incorrect, and the case was assigned to this Court in Hartford. According to the Mapquest web site, defendant Forbes' home is (continued...)

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both support her husband at the trial and provide care to her parents and children. The District of New Jersey judge concluded that the proper resolution of the transfer motion was "a very close [question] to decide one way or the other." His decision to The first The

transfer the case turned on two of the Platt factors.

was the fact that the defendants resided in Connecticut.

relatively close proximity of Shelton's home to the presumed transferee court in New Haven would ease the burdens on Mrs. Shelton's attendance at the trial. The second, and more

important factor, was that more of the events about which trial testimony would be elicited occurred in Connecticut than in New Jersey. The Government challenged the relevance of this factor,

given that the impact of the fraudulent conduct in this case was nationwide and that the greatest harm occasioned by the charged fraud occurred after the defendants caused CUC to merge with New Jersey-based HFS to form New Jersey-based Cendant in 1997. The District of New Jersey judge did not give strong weight to the substantial additional cost to the public of transferring the case, as well as the substantial inconvenience to the Government's attorneys, agents, and other personnel who were needed to try this case. Because the Cendant Corporation

(...continued) actually approximately seven miles further from the Hartford federal courthouse than it is from the Newark courthouse. 3

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was paying the legal fees of both defendants, the relative expense to the defendants of trying the case in New Jersey as opposed to Connecticut was irrelevant. On the other hand,

transferring the case to Connecticut imposed on the public the expense of transporting and housing several Government lawyers, agents, and support staff. Ultimately, the cost to the United

States Attorney's Office in New Jersey for renting office space, equipment, and paying to house the lawyers and support staff was in excess of $250,000.2 6, attached hereto. See Affirmation of Rosemary Iannacone, ¶

By contrast, Forbes' Washington, D.C. based

attorneys would have encountered no greater inconvenience or expense in trying this case in Newark rather than in Connecticut.3

This amount does not include any additional costs to the other federal agencies, the Federal Bureau of Investigation and the United States Postal Service, that participated in this prosecution. With respect to the remaining Platt factors, the District of New Jersey judge concluded that, because the Government had assembled copies of all of the relevant documents in its Newark Office, the location of those records was a "neutral factor." Because neither defendant was employed at the time of the transfer decision, the District of New Jersey judge declined to consider any possible disruption of their work. The Court found that opportunities for transportation to New Jersey and Connecticut by train were comparable, and that Newark was more accessible by air. The difference between the docket conditions between New Jersey and Connecticut were deemed not significant. (continued...) 4
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On March 18, 2002, the District of New Jersey judge granted the motion and transferred the entire prosecution "to New Haven" and thereafter denied the Government's motion for reconsideration of the transfer order. The Government sought

mandamus from the Court of Appeals for the Third Circuit, which was denied on August 23, 2002. This case was then transferred to

the District of Connecticut and assigned to this Court for trial. Following an almost nine month trial, which included two months of deliberations, the jury convicted Shelton of all twelve counts with which he had been charged, but was unable to reach a verdict on any of the sixteen counts with which Forbes had been charged. The Government now moves this Court to retransfer this case to the District of New Jersey for retrial of all of the charges against defendant Walter A. Forbes. The Government does

not seek the retransfer of any future proceedings involving defendant E. Kirk Shelton, or of the related criminal cases of United States v. Cosmo Corigliano, Dist. of Ct. Docket 3:02-cr379, United States v. Anne Pember, Dist. of Ct. Docket 3:02-cr380, and United States v. Casper Sabatino, Dist. of Ct. Docket 3:02-cr-378.

(...continued) The New Jersey judge disagreed with the Government's position that the judge's personal knowledge about the events at issue in this case, gleaned from presiding over the many related criminal and civil cases, was a significant factor that weighed against transfer. 5

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ARGUMENT THE RESOLUTION OF THE SHELTON CASE ELIMINATES ONE OF THE TWO REASONS WHY THIS CASE WAS TRANSFERRED AND JUSTIFIES THE RETRANSFER OF THIS CASE BACK TO THE DISTRICT OF NEW JERSEY FOR RETRIAL OF FORBES IN ORDER TO SPARE THE PUBLIC FROM SUBSTANTIAL UNNECESSARY EXPENSE. One of the two reasons that prompted the District of New Jersey judge to transfer this case to the District of Connecticut was that both defendants lived substantially closer to New Haven than to Newark. In granting the defendants'

transfer motion, the District of New Jersey judge pointed out that he had considered the reduction in hardship that would accrue to both defendants, and to Mrs. Shelton, if the case was tried in New Haven instead of Newark.4 Since a retrial will

involve only Forbes and not Shelton, the relative convenience to either Shelton or his wife based on where the case is venued is no longer of any moment. Forbes will suffer no inconvenience

from having this case transferred back to Newark, as he lives closer to the federal courthouse in Newark than to the federal courthouse in Hartford.5 As the New Jersey judge recognized in ruling on the transfer motion, the issue was a close one even when the relative

Of course, this case was not transferred to the New Haven vicinage of this District, but to Hartford. Several members of the prosecution team who participated in the first trial observed that Forbes was staying in a Hartford hotel during at least part of the proceedings in this Court. Presumably, it would be no more burdensome or expensive for Forbes to reside in a Newark hotel than in a Hartford hotel. 6
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convenience of a trial in Connecticut to the defendants and to Mr. Shelton was treated as an important factor. Because that

factor no longer has any bearing on where the retrial should occur, a re-balancing of the Platt factors in light of the transfer of this case to Hartford rather than to New Haven and of the resolution of all charges against Shelton tips strongly in favor or retrying the case in New Jersey. Retransfer of this case for the retrial of Forbes would not only strike the proper balance between the Platt factors, but would be a permissible exercise of this Court's substantial discretion under Fed. R. Crim. P. 21(b). See United States v.

Maldonado-Rivera, 922 F.2d 934, 966 (2d Cir. 1990) ("Disposition of a Rule 21(b) motion is vested in the sound discretion of the district court."). The counterpart to Rule 21(b) for civil cases Like Rule 21(b), § 1404(a) provides that

is 28 U.S.C. § 1404(a).

"[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." U.S.C. § 1404(a). Neither Rule 21(b) nor § 1404(a) expressly authorize the retransfer of a case back to the transferor district. As the 28

Second Circuit has recognized, however, § 1404(a) implicitly authorizes the retransfer of a civil case following a change in circumstances that justified the original transfer. SongByrd,

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Inc. v. Estate of Grossman, 206 F.3d 172, 177-78 (2d Cir. 2000) (after a case has been transferred, subsequent developments might make retransfer appropriate). The party seeking retransfer is

required to file a motion, which "affords the transferee court an opportunity to assess the then-current circumstances." Id.; See

also Russell v. IU International Corp., 685 F.Supp. 172, 175 (N.D.Ill. 1988) (although transferee courts are reluctant "to review a transfer order indirectly by means of a motion to retransfer . . . . [a] motion to retransfer is perfectly appropriate . . . on a showing of changed circumstance."), quoting 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure (2d ed.) § 3846 at 361-62 (1986)(emphasis in the opinion, not in the treatise). At least one Court of Appeals has recognized that, following a transfer of a federal criminal case under Rule 21(b), "a district court possess the inherent authority to retransfer proceedings to the original forum when the reasons for the initial Rule 21(b) transfer no longer exist." United States v.

Blackwell, 946 F.2d 1049, 1051 n.1 (4th Cir. 1991)(holding that the Fourth Circuit was without jurisdiction to review the retransfer of a criminal prosecution from the Western District of Kentucky, which is in the Sixth Circuit, back to the Middle District of North Carolina, from which the case was originally

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transferred).6

This inherent authority exists apart from Rule 21 Id.

itself, which does not expressly authorize such retransfer. The Blackwell opinion acknowledges that the same implicit

authority of a federal district court to retransfer a civil case based on changed circumstances also applies to the retransfer of a criminal prosecution. Rule 21(b) in the criminal context and § 1404(a) in the civil context are animated by the same considerations of convenience to the parties and the interests of justice. Additionally, motions to transfer under either Rule 21(b) or § 1404(a) are governed by the same criteria. The ten Platt factors

apply to motions for transfer brought under § 1404(a) in a civil proceeding, In re Scott, 709 F.2d 717, 719 (D.C. Cir. 1983); Carnes Co., Inc. v. Stone Creek Mechanical, Inc., 2002 WL 32349391, *7 (W.D.Wis. June 6, 2002), just as they apply to a transfer motion under Rule 21(b) in a criminal case, United States v. Maldonado-Rivera, 922 F.2d 934, 966 (2d Cir. 1990); United States v. Jordan, 223 F.3d 676, 685 (7th Cir. 2000). It follows then, as the Blackwell Court recognized, that retransfer should be equally available in a criminal case as

Because the Government did not seek to retransfer this case to Newark until the substantial changes in circumstances occasioned by completion of the initial trial had transpired, the general rule that the transferee court may not review the propriety of the transfer decision, United States v. U.S. District Court for the Eastern District of Tennessee, 209 F.2d 575, 577 (6th Cir. 1954), does not apply. 9

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in a civil case.

Given the strong public interest in conserving

the Government's limited resources to investigate and prosecute crime, the retransfer of a criminal prosecution for the purpose of conserving those resources, particularly where such a retransfer imposes no additional burden on the defense, is appropriate. Cf. United States v. De Peri, 778 F.2d 963, 984 (3d

Cir. 1986) (explaining that the chief rationale for the presumption of joint trials of defendants who are jointly indicted is "the public interest considerations" in the "conservation of public resources that would be lost if the same evidence were presented at separate trials"). Following the resolution of the charges against Shelton in the first trial, the balance of the Platt factors now favors retransfer of this case back to the District of New Jersey. In

particular, the United States Attorney's Office for the District of New Jersey had to expend an additional $250,000 to undertake the first trial in the District of Connecticut that it would not have had to spend had the case been tried in Newark. Iannacone Affirmation. See

The Government would again incur

substantial expenses from retrying the case in the District of Connecticut that it would not incur by retrying the case in the District of New Jersey.7

The United States Attorney's Office for District of New Jersey obviously does not have unlimited resources. The (continued...) 10

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Retransfer of this case to a judge in the District of New Jersey will not render this Court's substantial work to date on this case for naught. Aside from the fact that this Court's

many pre-trial and trial rulings resulted in a disposition of all of the charges against defendant Shelton, those rulings would also presumptively be followed by any judge in the District of New Jersey to whom this case would be assigned, under the "law of the case" doctrine. "As most commonly defined, the doctrine [of the law of the case] posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." U.S. 605, 618 (1983). Arizona v. California, 460

The doctrine "promotes the finality and

efficiency of the judicial process by protecting against the agitation of settled issues." 1B J. Moore, J. Lucas, & T. "A

Currier, Moore's Federal Practice ¶ 0.404[1], p. 118 (1984). court has the power to revisit prior decisions of . . . a

coordinate court in any circumstance, although as a rule courts should be loathe to do so in the absence of extraordinary

(...continued) financial resources of the Office are stretched particularly thin at present. The Executive Office of the United States Attorneys Offices has recently imposed a 5.6% reduction in the operating budget of the United States Attorney's Office for District of New Jersey for the fiscal year ending September 30, 2005, on top of a 4.5% reduction in the salary budget of that Office for the fiscal year ending September 30, 2004. See Iannacone Affirmation, ¶ 7. 11

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circumstances such as where the initial decision was `clearly erroneous and would work a manifest injustice.'" Christianson v.

Colt Industries Operating Corp., 486 U.S. 800, 817 (1988) (quoting Arizona v. California, 460 U.S. at 618 n. 8).8 Even though the retransfer of this case would subject the retrial to the law of a different circuit than that under which the original trial was conducted, the Government anticipates that Third Circuit law diverges very little if at all from Second Circuit law on the vast majority of issues resolved by this Court to date. In the event that this Court denies this motion, the Government respectfully requests that this Court set a date for the retrial of the charges against Forbes no earlier than September 6, 2005 (the day following Labor Day), given the numerous legal issues that will likely require pretrial

To be sure, the law of the case doctrine "does not constitute a limitation on the court's power but merely expresses the general practice of refusing to reopen what has been decided." United States v. Birney, 686 F.2d 102, 107 (2d Cir. 1982), quoting Dictograph Products Co. v. Sonotone Corp., 230 F.2d 131, 134-36 (2d Cir. 1956). The Third Circuit Court of Appeals, whose law would govern if this case were retransferred to the District of New Jersey, provides similar treatment to the "law of the case" doctrine, which "limits the extent to which an issue will be reconsidered once the court has made a ruling on it." Fagan v. City of Vineland, 22 F.3d 1283, 1290 (3d Cir. 1994); see also Lambert v. Blackwell, 387 F.3d 210, 237 (3d Cir. 2004). Absent a significant divergence between Second and Third Circuit law regarding a particular legal issue that may arise at a retrial, there is every reason to believe that a district court judge in New Jersey to whom the retrial is assigned would rely on this Court's rulings as the law of the case. 12

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resolution, including possible defense motions to limit or preclude the testimony of certain Government witnesses now that Shelton is no longer a co-defendant. In addition, this Court's resolution of Shelton's posttrial motions will determine whether he will be retried, so any retrial of Forbes should await the disposition of those motions. Finally, as the first trial spanned more than eight months, involved dozens of witnesses and hundreds of exhibits, allowing the Government adequate time to attempt to more sharply focus its presentation with the goal of lessening the time required to retry the case would conserve the resources of the parties and of this Court.

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CONCLUSION For the foregoing reasons, the Government respectfully requests that this Court transfer this case back to the United States District Court for the District of New Jersey for the retrial of all of the indictment counts charging Walter Forbes. Respectfully submitted, CHRISTOPHER J. CHRISTIE Special Attorney U.S. Department of Justice By: JOHN J. CARNEY Special Attorney U.S. Department of Justice Federal Bar No. 24063

By: NORMAN GROSS Special Attorney U.S. Department of Justice Federal Bar No. 24933

By: JAMES MCMAHON Special Attorney U.S. Department of Justice Federal Bar No. 24062

By: RICHARD J. SCHECHTER Special Attorney U.S. Department of Justice Federal Bar No. 24238