Free Response in Opposition - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Action No 04-cr-00103-REB UNITED STATES OF AMERICA Plaintiff, v. 1. NORMAN SCHMIDT, 2. GEORGE ALAN WEED, 3. PETER A.W. MOSS, 4. CHARLES LEWIS, 5. JANNICE McLAIN SCHMIDT, 6. MICHAEL SMITH, and 7. GEORGE BEROS, Defendants. _____________________________________________________________________ GOVERNMENT'S RESPONSES TO MOTIONS TO SHOW CAUSE [#s 760 & 763] _____________________________________________________________________ The United States, by Wyatt Angelo and Matthew T. Kirsch, the undersigned Assistant United States Attorneys ("the government"), hereby responds to the Motion to Show Cause Why the U.S. Government Should Not Be Required to Remove All Instances of the Use of the Name Tim Richardson, and for Injunctive and Other Relief [# 760] and the Motion to Show Cause Why the U.S. Government Should Not Be Required to Remove All Instances of the Use of the Name John Schlabach, and for Injunctive and Other Relief [# 763]. The motions should be stricken or denied for the reasons that follow:

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PROCEDURAL HISTORY 1. In a Scheduling Order [# 96] entered April 30, 2004, the Court required the government to file a James proffer containing statements it wished to offer in evidence during the trial of this matter pursuant to Rule 801(d)(2)(E) of the Federal Rules of Evidence. Id., ¶ 9. In a separate Order for James Proffer [# 100], the Court specified the format for the government's proffer, which included the identification of the declarant of each statement the government wished to offer under this evidentiary theory. 2. On December 30, 2004, the government filed its James Proffer [# 290] as prescribed by the Court's Orders. Paragraph 8 of the Proffer identified fifteen people, including the named defendants as well as a number of unindicted people, as members of the charged conspiracy. Both movants were named as part of the latter group of unindicted members and were also mentioned in other parts of the Proffer. The government attributed three statements to Mr. Richardson and approximately twenty-five statements to Mr. Schlabach. 3. On May 26, 2005, the Court entered an Order re: James Proffer [# 441]. In that Order, the Court specifically found that the government had proved, by the preponderance of the evidence standard required to make a Rule 801(d)(2)(E) determination, that Mssrs. Richardson and Schlabach were members of the conspiracy described in the Proffer. Id. at p. 8. The Court also ruled that all but approximately five of the statements attributed to Mr. Schlabach would be admissible pursuant to Rule 801(d)(2)(E). Id. at pp. 9-10. The Court did not find

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the statements attributed to Mr. Richardson admissible, but based its decision on the relationship of those statements to a transaction that it had ruled was not intrinsic to the conspiracy. Id. 4. On February 7, 2006, the Court entered a Second Supplemental Scheduling Order [# 658] requiring the government to file a second supplemental James log. On March 9, 2006, the government filed its Second Supplement to James Proffer [# 677], which contained four additional statements attributed to Mr. Schlabach. 5. On April 12, 2006, the Court entered an Order re: Second Supplement to James Proffer [# 709]. In that Order, the Court again found that Mssrs. Richardson and Schlabach were members of the conspiracy now alleged in Count 1 of the Second Superseding Indictment. Id. at p. 2. The Court further found that the four additional statements attributed to Mr. Schlabach would be admissible pursuant to Rule 801(d)(2)(E). Id. at p. 3. 6. The motions at issue were filed on May 25, 2006, and June 1, 2006, respectively. The motions rest on essentially identical legal claims that the movants' due process rights were violated when they were named in the government's initial James Proffer. (For reasons unknown to the government, Mr. Schlabach' motion does not refer to the government's Second Supplement to James Proffer.) Both motions seek relief including an injunction preventing the government from further naming the movants, expungement of those portions of the record containing references to the movants, the issuance of an Order by

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this Court essentially reversing its previous orders that the government has proven that the movants were a part of the charged conspiracy, and the issuance of an Order by this Court directing the government to provide the movants with a letter exonerating them. 7. On June 6, 2006, the movants, Tim Richardson and John Schlabach, filed a civil case in the United States District Court, Eastern District of Washington, case number CV-06-164-RHW, against, inter alia, AUSA Matthew Kirsch and AUSA Wyatt Angelo. Both AUSAs Kirsch and Angelo are named as defendants in their personal capacities. The suit alleges that the movants' civil rights, specifically their due process rights, were violated when they were named in the James Proffer filed in this case in Colorado. ARGUMENT The Criminal Case is Not the Appropriate Forum for the Relief Sought by the Movants 8. The Federal Rules of Criminal Procedure do not appear to provide a mechanism to allow the movants, who are not actually parties to the criminal case, to have their motions heard in the context of the criminal case. Rules 12 and 47, for example, which govern the filing of pretrial and other motions, repeatedly refer to motions filed by a "party" or "the parties." Fed. R. Crim. P. 12 & 47. 9. It is a general principle of statutory construction that when "Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is presumed that Congress acts intentionally and purposely in

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the disparate inclusion or exclusion." Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 452 (2002) (citations omitted). This principle should apply with equal force to the Rules of Criminal Procedure. See 28 U.S.C. §§ 2702-04 (describing procedure that allows Congress to approve Rules of Criminal Procedure drafted by the Supreme Court or its committees). The drafters of the Rules considered the possible need and provided a mechanism for non-parties to file motions in a criminal case. See Fed. R. Crim. P. 41(g) (allowing a "person aggrieved by an unlawful search and seizure of property or by the deprivation of property" to move for the property's return). The existence of this provision in Rule 41 demonstrates that the omission in the Rules of any provision allowing the type of motion at issue here was intentional. The Rules do not provide for the motions at issue here, and they should be denied as procedurally improper. 10. The government is aware of two opinions which mention the procedural obstacle raised here, but neither of those opinions resolves the question of whether a non-party can file the type of motion at issue here. See In re Smith, 656 F.2d 1101, 1104-05, 1107 (5th Cir. 1981) (ruling without deciding question); United States v. Driscoll, 445 F. Supp. 868, 868 (D.N.J. 1978) (same). Although a few courts have allowed non-parties to file similar motions, see, e.g., United States v. Briggs, 514 F.2d 794 (5th Cir. 1975); United States v. Anderson, 55 F. Supp.2d 1163 (D. Kan. 1999), the opinions in those cases have focused on the separate question of whether the movants had constitutional standing. Briggs, 514 F.2d at 797-99; Anderson, 55 F. Supp.2d at 1167-68.

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11.

The movants also have other options to get the primarily injunctive relief they request. They might be more properly be brought in the context of a separate case pursuant to Title 28, United States Code, Section 1331, see Simmat v. United States Bureau of Prisons, 413 F.3d 1225, 1232 (10th Cir. 2005), a request for mandamus relief pursuant to Title 28, United States Code, Section 1361, see id. at 1234-35, or, as the movants themselves seem to have recognized through the filing of their lawsuit in Washington, a separate Bivens action. In any event, the motions are not properly before this Court in this criminal case and should therefore be stricken. The Movants' Due Process Rights Have Not Been Violated

12.

Even assuming that the motions are properly before the Court in this criminal case, they should be denied because the movants' due process rights have not been violated. The government's identification of the movants in the context of its James Proffer (and any supplements) was properly done in service of the government's substantial interest in admitting evidence at trial in the pursuit of the proper administration of criminal justice.

13.

Although a number of cases have found due process violations for unindicted coconspirators who have been named in pleadings, all of those cases have involved unindicted coconspirators named in documents without necessity or some other legitimate purpose. In Briggs, for example, the court found that there was no legitimate purpose for naming unindicted coconspirators in an indictment. 514 F.2d at 804-06. In Smith, the court found that there was no

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legitimate purpose for naming the uncharged recipient of bribes in factual summaries related to Rule 11 proceedings. 656 F.2d at 1106. In Anderson, the court found that there was no legitimate purpose for naming unindicted coconspirators in pleadings concerning an attorney conflict of interest issue. 55 F. Supp.2d at 1168.1 14. The only case to consider whether naming unindicted coconspirators in a James proffer violates those coconspirators' due process rights, Anderson, has concluded that such naming does not constitute a due process violation. 55 F. Supp.2d at 1169. In applying the balancing test first set out in Briggs, Anderson held: The government clearly had a substantial interest in identifying these coconspirators for 801(d)(2)(E) purposes. The governmental interest outweighed the movants' private injuries because their private injuries, while important, must yield to the proper administration of criminal justice under these circumstances. Id. at 1169. The court then denied the motions to strike all references to the unindicted coconspirators from the record and to make factual findings related to their innocence. Id. at 1170. 15. In this case, the government had an even more substantial interest in identifying the movants as coconspirators than in Anderson, because the Court had ordered the government to file the James Proffer in which the movants were named. This is not a case where there is even a suggestion that "the

Finn v. Schiller, 72 F.3d 1182 (7th Cir. 1996), the only other case on which the movants rely, explicitly refused to consider the plaintiff's due process claim and therefore does not support the movants' request for relief. Id. at 1190-91. 7

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stigmatization of [movants] was part of an overall government tactic directed against disfavored persons and groups," Briggs, 514 F.2d at 806, or where the Court could ask, "[w]hat possible legitimate purpose could be served by these official condemnations?" Smith, 656 F.2d 1105-06. Instead, the government has identified the movants only to the extent and in the pleadings necessary to promote its substantial interest in admitting evidence of the massive conspiracy charged in this case pursuant to Rule 801(d)(2)(E). In these circumstances, the government's interest in pursuing the administration of justice trumps any injuries to the movants' reputation. There Are No Legal Bases for the Movants' Other Requests 16. To the extent that the movants request findings from the Court that "the government has not presented to the court [sic] any evidence which meets the burden of proof that [Tim Richardson and John Schlabach have] been involved in the conspiracy," their request should also be denied as an unsupported motion for reconsideration of the Court's Prior Orders re: James Proffer and re: Second Supplement to James Proffer. A motion to reconsider should be based on "(1) an intervening change in controlling law, (2) availability of new evidence, or (3) the need to correct clear error or prevent manifest injustice." United States v. D'Armond, 80 F. Supp.2d 1157, 1170 (D. Kan. 1999). The movants have demonstrated none of these. Their request that the Court reconsider its findings that they were a part of the charged conspiracy should be denied. 17. The movants' request that the Court order the government to provide the

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movants with certified letters exonerating them is completely without basis and, if granted, would violate the constitutional principle of separation of powers. This request should be denied as well. THEREFORE, the government requests that the Court strike the Motion to Show Cause Why the U.S. Government Should Not Be Required to Remove All Instances of the Use of the Name Tim Richardson, and for Injunctive and Other Relief [# 760] and the Motion to Show Cause Why the U.S. Government Should Not Be Required to Remove All Instances of the Use of the Name John Schlabach, and for Injunctive and Other Relief [# 763], or, in the alternative, deny the motions in their entirety. Respectfully submitted this 13th day of July, 2006,

WILLIAM J. LEONE United States Attorney District of Colorado

s/ Matthew T. Kirsch WYATT ANGELO MATTHEW T. KIRSCH Assistant U.S. Attorneys 1225 17th Street, Suite 700 Denver, CO 80202 Telephone: (303) 454-0100 Facsimile: (303) 454-0402 Email: [email protected]

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CERTIFICATE OF SERVICE I certify that on the 13th day of July, 2006, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Thomas Hammond, Esq. [email protected] Richard Stuckey, Esq. [email protected] Ronald Gainor, Esq. [email protected] Declan J. O'Donnell, Esq. [email protected] and I hereby certify that I have emailed the document or paper to the following nonCM/ECF participants: John Schlabach [email protected] Tim Richardson [email protected] Thomas Goodreid, Esq. [email protected] Mitchell Baker, Esq. [email protected] Richard K. Kornfeld, Esq. [email protected]

s/ Matthew T. Kirsch WYATT ANGELO MATTHEW T. KIRSCH Assistant U.S. Attorneys 1225 17th Street, Suite 700 Denver, CO 80202 Telephone: (303) 454-0100 Facsimile: (303) 454-0402 Email: [email protected]

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