UNITED STATES OF AMERICA, PETITIONER V. SOL C. SCHWARTZ AND RAYMOND
F. LANE

   No. 85-2031

   In the Supreme Court of the United States

   October Term, 1986

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Ninth Circuit

   Reply Memorandum For The United States

   1. The district court entered judgment for the defendants in this
case because of what it described as a "fatal variance" between the
indictment and the proof at trial (Pet. App. 30a).  The court of
appeals noted that the cases supporting this conclusion were "based on
the Fifth Amendment's grand jury guarantee" (Pet. App. 7a).  The only
factual question resolved by the district court was whether the
government had shown a scheme to defraud that was as broad as the one
charged in the indictment -- not whether the government had shown a
scheme to defraud.  Nonetheless, the court of appeals dismissed the
government's appeal as barred by the Double Jeopardy Clause on the
theory that the district Court's action amounted to a finding that the
evidence was insufficient to support a conviction.

   Respondent Lane contends that the analysis of the court of appeals
was correct.  He argues (Lane Br. in Opp. 3-4) that the district court
found that the government failed to prove "some or all of the factual
elements of the offense charged" (United States v. Martin Linen Supply
Co., 430 U.S. 564, 571 (1977)) when it found that the evidence was
insufficient with respect to four of the six alleged victims of
respondents' fraudulent scheme.  As we showed in our petition,
however, the necessary "element" of wire fraud is the existence of a
fraudulent scheme, not the existence of the precise scheme alleged in
the indictment.  When it held in earlier decisions that the government
must prove every object of the scheme alleged in the indictment, the
Ninth Circuit carefully explained that it was not expanding the
"elements" of the offense of wire fraud but was imposing a requirement
based on its reading of the Grand Jury Clause (see Pet. 9 n.9).

   Respondent Schwartz, in similar fashion, argues that the district
court treated the existence of a unitary scheme with six victims as an
"essential" fact, and that an error as to what facts are essential
does not affect the factual nature of the judgment (Schwartz Br. in
Opp. 5-6).  But this is not a case like Smalis v. Pennsylvania, No.
85-227 (May 5, 1986), where the trial court misunderstood the elements
of the offense of third-degree murder and was led by that
misunderstanding to hold that the proof did not show that the
defendants had committed the offense.  /1/ This is a case in which the
court held that a "fatal variance" and the protections of the Grand
Jury Clause precluded a conviction under an indictment drafted in a
particular way, whether or not the proof showed that respondents were
factually guilty of committing wire fraud and conspiracy as the court
understood those crimes.

   Respondent Schwartz acknowledges that the district court's ruling
rests not on any determination that the government had failed to prove
the statutory elements of wire fraud and conspiracy, but instead on
"cases construing the Constitution so as to create further
requirements as to the proof sufficient for conviction of the offense
charged" (Schwartz Br. in Opp. 8).  Under this Court's precedents,
that distinction is crucial.  As this Court observed in United States
v. Scott, 437 U.S. 82, 98 n.11 (1978), "a defendant who has been
released by a court for reasons required by the Constitution or laws,
but which are unrelated to factual guilt or innocence, has not been
determined to be innocent in any sense of that word." The Double
Jeopardy Clause does not bar retrial "where the defendant *** obtains
the termination of the proceedings against him in the trial court
without any finding by a court or jury as to his guilt or innocence.
He has not been 'deprived' of his valued right to go to the first
jury;  only the public has been deprived of its valued right to 'one
complete opportunity to convict those who have violated its laws." Id.
at 100 (quoting Arizona v. Washington, 434 U.S. 497, 509 (1978)).

   2. Respondents content (Schwartz Br. in Opp. 6-7;  Lane Br. in Opp.
4-6) that this case is controlled by Sanabria v. United States, 437
U.S. 54 (1978).  But there is only a superficial similarity between
Sanabria's "acquittal" on the nonessential averment that he was
connected with horse betting and respondents' "acquittal" on the
nonessential averments in this case.  The trial court in Sanabria
refused to admit the evidence connecting Sanabria with numbers betting
and then found a lack of evidence connecting him with horse betting.
This Court held that "the ruling below is properly to be characterized
as an erroneous evidentiary ruling, which led to an acquittal for
insufficient evidence" (437 U.S. at 68-69 (footnote omitted)) -- a
description that cannot be fitted to this case.

   The Sanabria Court also assumed for the sake of argument that "the
District Court 'dismissed' the numbers allegation" (437 U.S. at 69).
Once that allegation was dismissed, the indictment still contained an
averment that Sanabria was "connected with" an illegal gambling
business engaged in horse betting, and that averment was sufficient to
charge a violation of 18 U.S.C. 1955.  But the district court then
reached a factual determination that Sanabria was not "connected with"
the illegal gambling business that was still alleged in the
indictment.  The ultimate determination that Sanabria was not
"connected with" the illegal gambling business was factual, even
though it was affected by an erroneous legal ruling along the way that
had narrowed the indictment.  See 437 U.S. at 70-73.

   This case would be comparable to Sanabria if the district court had
first, for some reason, deleted from the indictment (or excluded
evidence on) the charges of defrauding the two Local 28 Oakland
benefit plans, and had then reached a factual determination that
respondents were not guilty of the scheme to defraud the four other
benefit plans that were left in the indictment.  But the district
court did just the opposite:  it resolved the factual questions
concerning the other four benefit plans first and then reached a legal
conclusion that the allegations concerning the Local 28 benefit plans
must be dismissed, whether or not the facts proved at trial supported
those allegations.  Although the district court resolved some of the
factual allegations supporting the scheme to defraud, its ultimate
termination of the trial was based on a purely legal consideration:
the Grand Jury Clause rule established by the Ninth Circuit's decision
in United States v. Miller, 715 F.2d 1360 (1983), modified, 728 F.2d
1269 (1984), rev'd, No. 83-1750 (Apr. 1, 1985).

   3. Respondents are unsuccessful in their attempts (Schwartz Br. in
Opp. 13;  Lane Br. in Opp. 7) to show that the decision below does not
conflict with United States v. Maker, 751 F.2d 614 (3d Cir. 1984),
cert. denied, No. 84-1419 (June 17, 1985).  In Maker, as in this case,
the district court granted judgment for defendants after the jury had
been empaneled and the presentation of testimony had begun.  It is
true that the district court in Maker acted before the government had
finished presenting its case in chief, and it is also true that the
court did not denominate its ruling a "judgment of acquittal." But
neither fact distinguishes Maker from this case.  Respondents point to
no opinion of this Court or any court of appeals that treats one type
of midtrial dismissal differently from another based on how much of
its case the government was allowed to put on;  and, as the cases
cited in our petition make clear (Pet. 8 n.8), it is the substance of
a trial court's action, not its label, that determines the double
jeopardy consequences.

   The key question is whether the "essential character" (Scott, 437
U.S. at 98) of the district court's ruling was factual or legal.  In
Maker, the court of appeals held that the essential character of a
midtrial judgment for defendants was legal when it was based on a
determination that "a single scheme conviction requires proof that the
defendant had planned the scheme in its major details before any
aspect of the scheme is implemented" (751 F.2d at 623).  In this case,
the court of appeals held that the essential character of a midtrial
judgment for defendants was factual when it was based on a
determination that a "unitary scheme" conviction requires proof that
the details of the scheme (including the identity of the victims) were
identical to those alleged in the indictment.  Those two holdings are
in conflict.

   Respondent Schwartz virtually concedes the existence of a conflict
by suggesting that certiorari should not be granted because Maker is
"at odds with this Court's decisions" (Schwartz Br. in Opp. 13).  For
reasons already elaborated, we believe that the decision below was
incorrect and that, correspondingly, the decision in Maker was
correct.  In any case, it is plain that the lower courts have been
unable to agree on the implications of this Court's decisions, and
review by this Court is appropriate to clear up the confusion.

   4. Respondent Lane suggests (Lane Br. in Opp. 4 n.6, 8) that
certiorari should be denied because this case does not present an
issue that is likely to recur.  But the logic of the decision below
would suggest that a district court's entry of judgment for defendants
raises a double jeopardy bar whenever the trial court examines the
facts for any purpose.  /2/ Among other things, that logic would
preclude a government appeal or retrial any time that a trial court
finds a fatal variance between the indictment and the proof at trial,
no matter how strongly the facts proved at trial show that the
defendant is guilty of a criminal offense (and no matter how erroneous
the ruling of the trial court).  Thus, the ruling below portends
sweeping consequences that deserve the attention of this Court.

   For the foregoing reasons and those given in the petition, it is
respectfully submitted that the petition for a writ of certiorari
should be granted.

   CHARLES FRIED

      Solicitor General

   AUGUST 1986

   /1/ Likewise, this case is not like Arizona v. Rumsey, 467 U.S. 203
(1984), where the trial court misunderstood the meaning of the
statutory aggravating circumstance that a murder was committed "as
consideration for the receipt, or in expectation of the receipt, of
anything of pecuniary value" and was led by that misunderstanding to
hold that the proof did not support a finding of that aggravating
circumstance.

   /2/ Indeed, respondent Schwartz advances the radical proposition
that, "where a district court has terminated a trial favorably to the
defendants based on findings as to the sufficiency of evidence,
scrutiny of the reasoning underlying the findings is irrelevant and
impermissible for double jeopardy analysis" -- even when there is no
hint of factual innocence in the district court's findings (Schwartz
Br. in Opp. 9).