Free Motion to Dismiss All Charges - District Court of Arizona - Arizona

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BLUMBERG & ASSOCIATES

Bruce E. Blumberg
BLUMBERG & ASSOCIATES
_____________________

45 West Jefferson, Suite 210 Phoenix, Arizona 85003
Office: (602) 277-6180 Fax: (602) 271- 4119

Attorney for Defendant Arizona State Bar Number 010779

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America, Plaintiff, vs. Harvey Sloniker, Defendant. ) Case No: 04-CR-820-PHX-FJM ) ) ) DEFENDANT'S MOTION TO DISMISS ) FOR DOUBLE JEOPARDY ) ) ) ) ) ) ) )

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Defendant Harvey Sloniker, by and through counsel, respectfully moves this Court to dismiss the indictment as against him. As grounds for this motion, shows the Court that Mr. Sloniker is charged in all 73 counts of the indictment, with, inter alia, conspiracy to commit mail and wire fraud. However, prior to the indictment, Mr. Sloniker entered into a stipulated settlement with the Federal Trade Commission that required him to pay close to $2 Million dollars to patrons of his businesses. As a result of the present indictment, the combined effect of the civil forfeiture and subsequent criminal proceedings brought by the government against Mr. Harvey Sloniker results in a violation of the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution. This motion is supported by the attached Memorandum.

Case 2:04-cr-00820-FJM

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RESPECTFULLY SUBMITTED, this 1st day of September, 2005.

BLUMBERG & ASSOCIATES

By:

s/ Bruce Blumberg________ Bruce E. Blumberg, Esq. 45 West Jefferson, Suite 210 Phoenix, Arizona 85003 Office: (602) 277-6180 Facsimile: (602) 271-4119 Attorney for Harvey Sloniker

Memorandum in support of Harvey Sloniker's Motion to Dismiss I. Background Defendant Harvey Sloniker owned and operated several telemarketing businesses that-- along with individual defendants--became the target of a Federal Trade Commission civil action that alleged, inter alia, violations of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101 et seq. On February 3, 2003, Mr. Harvey Sloniker and his codefendants entered into a stipulated judgment with the Federal Trade Commission that required the defendants to pay $20 million dollars. This amount was placed into a fund administered by the FTC and used to provide equitable relief to the consumers that were affected by Mr. Sloniker's businesses. Mr. Sloniker consequently forfeited approximately $2 million dollars in property and cash. Nevertheless, Mr. Sloniker was indicted in this case on August 5, 2004. Since the government is now seeking to try Mr. Sloniker for the same offenses as the prior civil action, it is the position of Mr. Sloniker that the instant prosecution is barred by the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution. Additionally, the prior civil settlement now blocks the Court from ordering further restitution in the instant case. II. Argument The Double Jeopardy clause of the Fifth Amendment to the United States Constitution prohibits a defendant from being put in jeopardy for the same offense twice. It also protects the defendant from multiple punishments for the same offense, Whalen v. United States, 445 U.S. 684,

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100 S.Ct. 1432, 63 L.Ed.2d 715 (1980), as well as encompass the corollary doctrine of collateral estoppel. See Ashe v. Swenson, 397 U.S. 436, 444-45, 90 S.Ct. 1189, 1194-95, 25 L.Ed.2d 469 (1970). In Sealfon v. United States, 332 U.S. 575, 580 (1948), the Supreme Court transplanted the doctrine of res judicata into the realm of criminal law, holding that the prosecution may not at a later trial have the opportunity "to prove. . . [that which was] crucial to the prosecution's case and which was necessarily adjudicated in the former trial. . . ." Later, in Ashe, 397 U.S. 436, 90 S.Ct. 1189, the Court ruled that the Fifth Amendment's guarantee against double jeopardy embodied collateral estoppel as a constitutional requirement and held that: `Collateral estoppel' is an awkward phrase, but it stands for an extremely important principle in our adversary system of justice. It means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit. Id., 397 U.S. at 443, 90 S.Ct. at 1194. See also United States v. Cejas, 817 F.2d 595, 598 (9th Cir. 1987) (the doctrine of res judicata applies to criminal as well as civil proceedings). At issue here, therefore, is whether the judgment in the prior civil case determined an issue of ultimate fact which cannot be relitigated. There are two distinctive types of such preclusion: claim preclusion and issue preclusion. Claim preclusion "treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same `claim' or `cause of action.' Robi v. Five Platters, Inc., 838 F.2d 318, 321(9th Cir. 1988). In this case, Mr. Sloniker is facing a second prosecution involving the same party as the first trial--the federal government. Second, the issue in this case sought to be litigated was previously determined by a valid and final judgment. The stipulated judgment not only sought injunctive relief but equitable relief for affected consumers as well as disgorgement of funds not used for that relief. Also, the same facts put forth in the prior civil action are necessary to go forward with the criminal proceedings. Congress' explicitly stated goal of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101 et seq. is to "enact legislation that will offer consumers necessary protection from telemarketing deception and abuse." In the present indictment, Mr. Sloniker is now charged

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with devising a scheme and artifice to defraud over 57,000 consumers through misrepresentations, and knowingly using the wire or mails in furtherance of that scheme. Although Mr. Sloniker faced what was termed a "civil" sanction by the Federal Trade Commission, that label conceals its punitive effect only to avoid the constitutional bar against such proceedings. The Supreme Court, however, has recognized such circumvention in Austin v. United States, 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), by holding, unanimously, that civil forfeiture proceedings can indeed by punitive and subject to the Eighth Amendment. See also Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937 (1994). The initial civil forfeiture amounted to punishment that placed Mr. Sloniker in jeopardy within the meaning of the Fifth Amendment. Under Austin and Kurth Ranch, labeling punishments as "civil" in an effort to curtail constitutional protections for criminal conduct is impermissible. Of course, all statutes are not similar in nature, but regardless, Austin and Kurth Ranch set the parameters for deciding whether or not a balance exists between Constitutional norms and the government's ability to pursue forfeiture proceedings. Even if the causes of action were not the same in these two actions, issue preclusion prevents further restitution in the present action. The Ninth Circuit follows a three step process to examine a collateral estoppel claim: (1) the issues in the two actions are identified to determine whether they are sufficiently similar and material to justify invoking the doctrine, (2) the record in the first action is examined to determine whether the issue was fully litigated, and (3) the Court determines, based on examination of the record, if the issue was decided in the first action. United States v. Bernhardt, 840 F.2d 1441, 1448 (9th Cir. 1988). Paragraph XXV of the Stipulated Judgment notes that "[t]he parties hereby consent to entry of the foregoing Order which shall constitute a final judgment and order in this matter. The parties further stipulate and agree that the entry of the foregoing order shall constitute a full, complete and final settlement of this action." Because the government "fully litigated" the merits of this issue, it does not now get another turn on the swing. The essence of the protection provided by the collateral estoppel principle is that when the issues have been determined on the first try, the government

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cannot hale the defendant into court to litigate that issue again. Ashe, 397 U.S. at 446, 90 S.Ct. at 1195. The same reasoning applies to the Stipulated Judgment. For this judgment, the government sought to prove the defendants were engaged in deceptive and unfair acts or practices. Since the Stipulated Judgment part and parcel of this course of dealing, Mr. Sloniker cannot now be said to be facing dissimilar actions. III. Conclusion Because the ultimate issue of whether Mr. Sloniker engaged in deceptive and unfair acts or practices through his telemarketing businesses, he cannot be tried in this case for those acts. Under principles of collateral estoppel embodied in the Double Jeopardy Clause of the United States Constitution, this indictment should therefore be dismissed. RESPECTFULLY SUBMITTED, this 1st day of September, 2005.

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BLUMBERG & ASSOCIATES

By:

s/ Bruce Blumberg________ Bruce E. Blumberg, Esq. 45 West Jefferson, Suite 210 Phoenix, Arizona 85003 Office: (602) 277-6180 Facsimile: (602) 271-4119 Attorney for Harvey Sloniker

CERTIFICATE OF SERVICE
I hereby certify that on this date, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Michael Bresnehan, Rachel Hernandez, Gary Restaino, Jeanette Alvardo, Thomas Hoidal, Ivan Mathew, Gregory Parzych and the Honorable Frederick Martone.

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