UNITED STATES OF AMERICA, PETITIONER V. JAMES C. LANE AND DENNIS R. LANE No. 84-744 In the Supreme Court of the United States OCTOBER TERM, 1984 The Solicitor General, on behalf of the United States, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Fifth Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit TABLE OF CONTENTS QUESTION PRESENTED Opinions below Jurisdiction Rules involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C OPINION BELOW The opinion of the court of appeals (App., infra, 1a-20a) is reported at 735 F.2d 799. JURISDICTION The judgment of the court of appeals (App., infra, 21a) was entered on June 18, 1984. A petition for rehearing was denied on August 22, 1984 (App., infra, 22a-33a). On October 11, 1984, Justice White extended the time in which to file a petition for a writ of certiorari to November 20, 1984. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). RULES INVOLVED Fed. R. Crim. P. 8 provides: (a) Joinder of Offenses. Two or more offenses may be charged in the same indictment or information in a separate count for each offense if the offenses charged, whether felonies or misdemeanors or both, are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan. (b) Joinder of Defendants. Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count. Fed. R. Crim. P. 52(a) provides: Harmless Error. Any error, defect, irregularity or variance which does not affect substantial rights shall be disregarded. QUESTION PRESENTED Whether the court of appeals erred in reversing respondents' convictions on the basis of misjoinder under Rule 8 of the Federal Rules of Criminal Procedure without determining whether the misjoinder constituted harmless error. STATEMENT After a jury trial in the United States District Court for the Northern District of Texas, respondent James C. (J.C.) Lane was convicted on four counts of mail fraud, in violation of 18 U.S.C. 1341, and one count of conspiracy, in violation of 18 U.S.C. 371. He was sentenced to a total of seven years' imprisonment and fined $9,000. His son, respondent Dennis Lane, was convicted on three counts of mail fraud, one count of conspiracy, and one count of perjury, in violation of 18 U.S.C. 1623. He was sentenced to custody under the Youth Corrections Act, 18 U.S.C. 4216, 5010(b). The court of appeals reversed (App., infra, 1a-20a). 1. Each respondent was charged in five counts of a six-count indictment encompassing three arson-for-profit schemes. Count 1 charged J.C. Lane with mail fraud in connection with a 1979 fire in a restaurant in Amarillo, Texas. Counts 2-4 charged both respondents with mail fraud in connection with a 1980 fire in a duplex in Amarillo. Count 5 charged both respondents with conspiracy in connection with the planned arson of a flower shop in 1980 in Lubbock, Texas. Count 6 charged Dennis Lane with perjury before a grand jury investigating the flower shop scheme in 1981. Respondents' motions for severance before and during trial were denied. They were tried jointly and convicted on all counts. App., infra, 8a. a. The evidence at trial showed that J.C. Lane and three partners opened the El Toro restaurant in Amarillo in the summer of 1978. They leased the building and restaurant equipment for a term of five years. App., infra, 2a. A clause in the lease provided that it would be terminated under certain circumstances in the event of five (Tr. 34-37; GX 1). The restaurant never operated at a profit, suffering declining sales after September 1978 and sustaining losses of $20,000 during 1978 and $9,000 during the two months it operated in 1979 (App., infra, 2a, 3a n.1). J.C. Lane purchased fire insurance for the restaurant in November 1978, covering the contents and improvements for $10,000 each and providing a maximum of $18,000 for business losses. At about the same time he contacted Sidney Heard, a professional "torch," asking him how much it would cost to burn the building and stating that he wanted to get out of his lease and the partnership. /1/ Heard set a fire in the building on February 27, 1979, which did not destroy it but did damage its contents. App., infra, 2a. The insurance company settled with Lane for $10,000 on the building's contents and $9,200 on the improvements. On June 1, 1979, the insurance adjustor mailed a memorandum to the company's regional headquarters concerning settlement of Lane's business-interruption claim. Included with the memorandum was a list of the restaurant's monthly income and expenses submitted by Lane, falsely claiming a net monthly profit of $2,500. This mailing was charged in count 1 of the indictment. On November 1, 1979, the claim was settled for $2,700. App., infra, 2a-3a. Dennis Lane was not involved in the restaurant arson. At the time the evidence relating to this count was received, the trial judge instructed the jury that the evidence was not to be considered against him (Tr. 95-96). The judge repeated this instruction in her final charge, together with an instruction regarding the separate consideration to be given each defendant and each count (Tr. 984-985). b. In early 1980, J.C. Lane hired Heard to set fire to a duplex that Lane was moving to a vacant lot in Amarillo. The duplex was owned by Dennis Lane and Andrew Lawson, doing business as L & L Properties. On January 22, 1980, J.C. Lane obtained a $35,000 fire insurance policy on the building, which had been purchased for $500. The duplex was burned on May 1, 1980, by Marvin McFarland, an employee of Heard's. App., infra, 3z-4a. Shortly after the fire, Dennis Lane signed an initial proof-of-loss form claiming $7,000 and stating that the "loss did not originate by any act, design or procurement on the part of your insured or this affiant" and that "no attempt to deceive (the) company as to the extent of the loss has been made" (App., infra, 4a). Dennis Lane submitted additional proof-loss-forms later in May 1980 claiming $5,000 for repairs to the building. He also submitted what purported to be invoices for materials used in making repairs. Certain of the repairs had in fact not been performed; the invoices were fabricated by J.C. Lane together with Heard and his secretary. The total amount paid on the policy was over $24,000. The mailings of the proof-of-loss forms and invoices were charged in counts 2 through 4 of the indictment. Id. at 4a-5a. c. At a meeting with respondents and Lawson several weeks after the duplex fire, Heard proposed that they establish and burn a phony flower shop in Lubbock. Respondents agreed to participate in the plan. Heard's associate William Lankford, who operated L & L Designs, an artificial-flower business in Amarillo, agreed to stock the Lubbock shop with old flowers and broomweed. Heard and Dennis Lane picked out a suitable building in July 1980, which Lankford stocked in August. Lankford prepared fictitious invoices for merchandise purportedly delivered to the shop. In November 1980, J.C. Lane insured the contents of the shop for $50,000. Heard was later ar#ested and Lankford questioned with respect to an unrelated crime, and the planned arson of the flower shop never took place. In March 1981, a newspaper article connected Dennis Lane to a scheme to burn the shop with Heard. The same day, J.C. Lane cancelled the insurance policy on the shop. App., infra, 5a-7a. In May 1981, Dennis Lane appeared before a grand jury investigating Heard. He testified that Heard had nothing to do with the flower shop or with his own dealings with Lankford. Id. at 7a-8a. 2. The court of appeals reversed respondents' convictions, holding (App., infra, 9a) that count 1 "should not have been joined with the others (under Fed. R. Crim. P. 8(b)) because it was not part of the same series of acts or transactions as Counts 2 through 6." The court reasoned that the restaurant fire was entirely separate from the other crimes and that it was not linked to them by any common scheme or plan (App., infra, 9a-13a). The court did conclude, however, that counts 2 through 6 were properly joined (id. at 13a). The courte refused to consider the government's argument that the error, if any, was harmless. Stating only that "Rule 8(b) misjoinder is prejudicaal per se in this circuit" (App., infra, 13a) and that it is "inherently prejudicial" (id. at 10a), the court remanded for new trials on all counts. /2/ Under the court's ruling (id. at 13a), respondents on remand may be tried jointly on counts 2 through 6 with a separate trial for J.C. Lane on count 1. /3/ The court denied the government's petition for rehearing without opinion (App., infra, 22a-23a). REASONS FOR GRANTING THE PETITION The decision of the court of appeals reversing respondents' convictions without determining whether the improper joinder of count 1 constituted harmless error conflicts with Rule 52(a) of the Federal Rules of Criminal Procedure, with the decisions of this Court recognizing that appellate courts have a duty to consider whether any trial error was harmless, and with the decisions of several courts of appeals refusing to reverse convictions on the basis of misjoinder in the absence of a showing of prejudice to the defendants. In view of the substantial number of cases raising joinder questions, the decision below entails serious implications for the administration of criminal justice in the federal courts. Accordingly, review by this Court is warranted. /4/ 1. Rule 52(a) of the Federal Rules of Criminal Procedure provides that "(a)ny error * * * which does not affect substantial rights shall be disregarded." In United States v. Hasting, No. 81-1463 (May 23, 1983), this Court made it clear that "it is the duty of a reviewing court to consider the trial record as a whole and to ignore errors that are harmless" (slip op. 9). See also, e.g., Brown v. United States, 411 U.S. 223, 230-232 (1973); Milton v. Wainwright, 407 U.S. 371 (1972); Harrington v. California, 395 U.S. 250 (1969); Chapman v. California, 386 U.S. 18 (1967); Kotteakos v. United States, 328 U.S. 750 (1946). The Court in Hasting held that the requirement of appellate "consideration of the entire record prior to reversing a conviction" applies to all "errors that may be harmless" (slip op. 10 n.7). A violation of Rule 8's joinder standards surely falls within this category, as we argue below (pages 10-12, infra). The decision of the court of appeals thus is in clear violation of the requirement that any adjudication of error be accompanied by a harmless-error analysis. /5/ The approach adopted by the court below directly conflicts with the rule in six circuits, which take the view that misjoinder under Rule 8 /6/ may constitute harmless error. See, e.g., United States v. Ajlouny, 629 F.2d 830, 843 (2d Cir. 1980), cert. denied, 449 U.S. 1111 (1981); United States v. Seidel, 620 F.2d 1006 (4th Cir. 1980); United States v. Hatcher, 680 F.2d 438, 442 (6th Cir. 1982); United States v. Varelli, 407 F.2d 735, 747-748 (7th Cir. 1969) (dictum); United States v. Martin, 567 F.2d 849, 854 (9th Cir. 1977); Baker v. United States, 401 F.2d 958, 972-974 (D.C Cir. 1968). /7/ The other circuits deem misjoinder prejudicial per se and not subject to the harmless-error rule. See, e.g., United States v. Turkette, 632 F.2d 896, 906 & n.35 (1st Cir. 1980), rev'd on other grounds, 452 U.S. 576 (1981); United States v. Graci, 504 F.2d 411, 414 (3d Cir. 1974) (dictum); United States v. Bova, 493 F.2d 33 (5th Cir. 1974); United States v. Bledsoe, 674 F.2d 647, 654, 657-658 (8th Cir.), cert. denied, 459 U.S. 1040 (1982); United States v. Eagleston, 417 F.2d 11, 14 (10th Cir. 1969); United States v. Ellis, 709 F.2d 688, 690 (11th Cir. 1983). This even split among the circuits plainly warrants resolution by this Court. 2. By its terms, the harmless-error rule applies to "(a)ny error * * * which does not affect substantial rights." Fed. R. Crim. P. 52(a) (emphasis added). The rule makes no exception for claims of improper joinder, and no sound reason supports the creation of such an exception. On the contrary, to require a new trial even though the asserted misjoinder was harmless error would be inconsistent with the beneficial purposes of both Rule 52 /8/ and Rule 8. /9/ In Schaffer v. United States, 362 U.S. 511, 517 (1960), the Court seemingly recognized that the harmless-error rule is applicable to improper joinder, but it found that the "rule * * * is not even reached in the instant case, since here the joinder was proper under Rule 8(b) and no error was shown." See United States v. Ganello, 365 F.2d 990, 995 (2d Cir. 1966), cert. denied, 386 U.S. 1019 (1967). See also Kotteakos v. United States, 328 U.S. at 775 (harmless-error and joinder rules "must be construed and applied so as to bring them into substantial harmony, not into square conflict"). /10/ In Hasting, the Court noted that "certain errors may involve 'rights so basic to a fair trial that their infraction can never be treated as harmless error'" (slip op. 9 n.6, quoting Chapman v. California, 386 U.S. at 23). Such fundamental rights include the right to counsel /11/ and the right to an impartial judge. /12/ The joinder standards of Rule 8, which are not even of constitutional magnitude, /13/ obviously do not rise to the level of these fundamental rights. Nor is the prejudice that may result from misjoinder so difficult to ascertain that it should be presumed: Rule 14 /14/ provides for an inquiry by the trial court into the possible prejudice flowing from joint trials, and there is no reason why the reviewing court cannot undertake the same examination with respect to Rule 8. Indeed, those circuits that have applied Rule 52(a) to misjoinder have engaged in the same sort of careful inquiry into the possibility of prejudice that has characterized the proper application of the harmless-error rule in other contexts. See, e.g., United States v. Seidel, 620 F.2d at 1009-1011; United States v. Turbide, 558 F.2d 1053, 1051-1063 (2d Cir.), cert. denied, 434 U.S. 934 (1977). See also 8 Moore's Federal Practice Paragraph 8.05(1), at 8-18 to 8-19 (2d ed. 1982) (application of Rule 52(a) to misjoinder "is acceptable and even desirable * * *(;) (d)efendants will suffer * * * only if, in the mame of 'efficiency,' the (harmless-error) doctrine is not carefully and strictly construed"). In support of the view that the harmless-error standard is inapplicable to misjoinder, it has been argued that application of Rule 52(a) in these circumstances would effectively make Rule 8 redundant with Rule 14, which expressly addresses the issue of prejudicial joinder (see note 14, supra). See, e.g., 1 C. Wright, Federal Practice and Procedure; Criminal Section 145, at 529-530 (2d ed. 1982). But this objection misses the crucial fact that the rules are addressed to procedures in the district court, where they are quite clearly distinct: Rule 8 requires the court to grant a motion for severance unless its standards are met, even in the absence of prejudice, while Rule 14 gives the court discretion to grant such a motion in the case of joinder that, though proper under Rule 8, is prejudicial. This difference goes to the question whether there has been error at all, not to the quite distinct question whether the error requires setting aside the convictions; consequently, it is wholly fallacious to contend that the difference in the rules is eviscerated simply because, on appeal, a reviewing court will not set aside a conviction for a violation of Rule 8 in the absence of prejudice. Moreover, even when Rule 52(a) is applied to violations of Rule 8, an important distinction remains between appellate review of the denial of Rule 8 motions and of those brought under Rule 14: the former are reviewed as a matter of law, with affirmance proper only if the government has carried the burden of establishing the harmlessness of any error, while the latter are reviewed under the highly deferential abuse of discretion standard, with the defendant having to shoulder the burden of a clear demonstration of substantial prejudice. For these reasons, Rule 14 cannot be said to create an implicit exception to the application of the harmless-error standard with respect to misjoinder. See United States v. Seidel, 620 F.2d at 1014-1015; United States v. Werner, 620 F.2d 922, 926 (2d Cir. 1980); Baker v. United States, 401 F.2d at 973; United States v. Granello, 365 F.2d at 995. 3. While this court, if it agrees with us that misjoinder is subject to harmless-error evaluation, may prefer to remand to the court of appeals for consideration of the harmfulness of the misjoinder of count 1, we believe there can be no question that it did not materially prejudice respondents' rights in the circumstances of this case. /15/ First, the error in joining count 1, we believe there can be no question that it did not materially prejudice respondents' rights in the circumstances of this case. /15/ First, the error in joining count 1 with the others was at most exceedingly marginal. Although there may not have been a single overarching conspiracy encompassing all three arson schemes, their close relation in terms of time, method, and participants suggests that it was only the court of appeals' narrow reading of Rule 8 that resulted in its conclusion (Pet. App. 9a-13a) of misjoinder here. Second, the testimonial and documentary evidence against respondents was overwhelming and countered by little more than Dennis Lane's denials and J.C. Lane's character defense. There is simply no reasonable probability in light of the evidence that the joinder of count 1 contributed to respondents' convictions. Finally, the new trials of respondents would be so substantially similar to the trial that they have already had that any conclusion of prejudice can only be deemed speculative. At a joint trial of counts 2 through 6, evidence of the first arson would still be admissible to establish J.C. Lane's intent or for similar purposes under Fed. R. Evid. 404(b). Respondents would receive limiting instructions just as they did at the first trial (see page 4, supra). Any possibility of transferance of guilt is remote in light of the substantial involvement of both respondents and would not in any event be reduced on joint retrial. Finally, reversal of J.C. Lane's convictions on counts 2 through 5 is wholly unsupportable, as they could have been tried with count 1 or with count 6; surely no demonstrable prejudice arose simply because they were tried with both of these counts. Respondents were convicted following a lengthy trial at which the government presented 29 witnesses and more than 100 exhibits. The court of appeals reversed on a technical violation of the joinder requirements without any determination of the harmfulness of the error. At a time when the criminal justice system is already overburdened, such a result, which does nothing to contribute to the fairness of the process, makes little sense indeed. A substantial proportion of prosecutions -- all except those based on single-count, single-defendant indictments -- raise joinder questions. In view of the importance of the issue and the clear split among the circuits, review by this Court would contribute to the fair, uniform and efficient administration of criminal justice in the federal courts. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. REX E. LEE Solicitor General STEPHEN S. TROTT Assistant Attorney General ANDREW L. FREY Deputy Solicitor General BRUCE N. KUHLIK Assistant to the Solicitor General SAMUEL ROSENTHAL Attorney NOVEMBER 1984 /1/ Evidence of Heard's prior dealings with J.C. Lane in connection with two other arsons was excluded by the trial court (Tr. 229, 370-376). Heard, who testified at trial, had entered into a plea agreement with the government (Tr. 265-275, 605-606). /2/ The court rejected respondents' challenge to the sufficiency of the evidence (App., infra, 13a-20a). /3/ Although the court did not address the issue, it seems clear that, under Rule 8(a), count 1 could properly be joined with counts 2 through 5 at a trial of J.C. Lane alone. Accordingly, each respondent may be tried on all his charges at a trial separate from that of the other respondent. /4/ Although we believe, as we argued to the court of appeals, that the joinder was permissible here, we are not presenting this largely factual question in the petition. /5/ The decision below also violates 28 U.S.C. 2111, which provides that "(o)n the hearing of any appeal * * *, the court shall give judgment after an examination of the record without regard to errors or defects which do not affect the substantial rights of the parties." /6/ In considering whether to apply the harmless-error rule, it should make no difference whether the joinder was of offenses under Rule 8(a) or of defendants under Rule 8(b). See, e.g., United States v. Ajlouny, 629 F.2d at 843 (treating issue as one under Rule 8 and citing precedents addressing both subsections of the Rule). We note that, although the language of the Rule may support a different result, the courts have generally applied Rule 8(a) only to single-defendant indictments and not to the joinder of counts charging one defendant in the context of a multi-defendant indictment. See 1 C. Wright, Federal Practice and Procedure: Criminal Section 143, at 479 & n.1 (2d ed. 1982) (citing cases); 8 Moore's Federal Practice Paragraph 8.05(1), at 8-19 (2d ed. 1982). /7/ Most of these courts had previously taken the view that misjoinder is prejudicial per se. See, e.g., Ingram v. United States, 272 F.2d 567 (4th Cir. 1959); United States v. Sutton, 605 F.2d 260, 272 (6th Cir. 1979); United States v. Gougis, 374 F.2d 758, 762 (7th Cir. 1967); Metheany v. United States, 365 F.2d 90, 94-95 (9th Cir. 1966), cert. denied, 393 U.S. 824 (1968); Ward v. United States, 289 F.2d 877, 878 (D.C. Cir. 1961). The Second Circuit has from the beginning adhered to its current position that misjoinder may be harmless. See United States v. Granello, 365 F.2d 990, 995 (2d Cir. 1966) (Friendly, J.), cert. denied, 386 U.S. 1019 (1967). /8/ See Hasting, slip op. 10 ("The goal * * * is 'to conserve judicial resources by enabling appellate courts to cleanse the judicial process of prejudicial error without becoming mired in harmless error,'" quoting R. Traynor, The Riddle of Harmless Error 81 (1970)); Kotteakos v. United States, 328 U.S. at 758- 760. In the context of a criminal prosecution, the harmless-error rule recognizes that "justice, though due to the accused, is due the accuser also. The concept of fairness must not be strained till it is narrowed to a filament. We are to keep the balance true." Snyder v. Massachusetts, 291 U.S. 97, 122 (1934) (Cardozo, J.). See also Bruton v. United States, 391 U.S. 123, 135 (1968) ("'A defendant is entitled to a fair trial not a perfect one,'" quoting Lutwak v. United States, 344 U.S. 604, 619 (1953)). /9/ See, e.g., Bruton v. United States, 391 U.S. at 134 (joint trials "conserve state funds, diminish inconvenience to witnesses and public authorities, and avoid delays in bringing those accused of crime to trial"); Parker v. United States, 404 F.2d 1193, 1196 (9th Cir. 1968), cert. denied, 394 U.S. 1004 (1969) (joinder "expedites the administration of justice, reduces the congestion of trial dockets, conserves judicial time, lessens the burden upon citizens who must sacrifice both time and money to serve upon juries, and avoids the necessity of recalling witnesses who would otherwise be called upon to testify only once"); United States v. Werner, 620 F.2d 922, 928 (2d Cir. 1980) ("trial convenience and economy of judicial and prosecutorial resources (are) considerations of partciular weight when the Government and the courts have been placed under strict mandate to expedite criminal trails (under the) Speedy Trial Act"). /10/ McElroy v. United States, 164 U.S. 76 (1896), while often cited for the proposition that misjoinder is prejudicial per se, in fact does not establish such a rule. In that case, which was decided prior to either the adoption of the Federal Rules of Criminal Procedure in 1946 or the enactment of the harmless-error statute in 1919 (see Act of Feb. 26, 1919, ch. 48, 40 Stat. 1181, 28 U.S.C. (1946 ed.) 391), the government argued that the finding of misjoinder did not require reversal of the convictions of those defendants who had been charged in all counts "because there is nothing in the record to show that they were prejudiced or embarrassed in their defense by the course pursued" (164 U.S. at 81). The Court rejected this argument on the ground that "(i)t cannot be said * * * that all the defendants may not have been embarrassed and prejudiced in their defence, or that the attention of the jury may not have been distracted to their injury in passing upon distinct and independent transactions" (ibid.). Thus, McElroy rests upon the conclusion that the misjoinder there might have been prejudicial and so could not be presumed harmless. See United States v. Granello, 365 F.2d at 995. /11/ Gideon v. Wainwright, 372 U.S. 335 (1963). /12/ Tumey v. Ohio, 273 U.S. 510 (1927). /13/ "(N)o federal court has raised misjoinder to an error of constitutional dimension." Note, Harmless Error and Misjoinder Under the Federal Rules of Criminal Procedure: A Narrowing Division of Opinion, 6 Hofstra L. Rev. 533, 540 (1978) (footnote omitted). See, e.g., United States v. Seidel, 620 F.2d at 1013 (misjoinder only "a violation of a mere procedural rule") (footnote omitted). While joinder may of course give rise to constitutional violations (see, e.g., Bruton v. United States, supra), this Court has not suggested that a violation of Rule 8 in itself contravenes any constitutional provision. See generally Schaffer v. United States, supra; Bruton, 391 U.S. at 131 n.6 (joinder rules designed to achieve economies without violating rights of defendants). The Court's discussion of the harmless-error standard for nonconstitutional violations in Kotteakos v. United States, supra, which raised joinder as well as variance issues (328 U.S. at 756 n.6, 774), further suggests that improper joinder does not violate the Constitution. /14/ Fed. R. Crim. P. 14 provides: If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires. In ruling on a motion by a defendant for severance the court may order the attorney for the government to deliver in the court for inspection in camera any statements or confessions made by the defendants which the government intends to introduce in evidence at trial. /15/ Because violation of Rule 8 is not an error of constitutional dimension (see note 13, supra), the harmfulness of the error in this case is to be assessed under the normal standard of Kotteakos (see 328 U.S. at 764-765) rather than under the strict reasonable doubt standard established by Chapman for constitutional violations. APPENDIX