JOHN PIMENTEL, ET AL., PETITIONERS V. UNITED STATES OF AMERICA No. 87-1569 In the Supreme Court of the United States October Term, 1987 On Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit Brief for the United States TABLE OF CONTENTS Question Presented Opinions below Jurisdiction Statement Argument Conclusion Appendix OPINIONS BELOW The opinion of the court of appeals affirming the judgment of conviction (Pet. App. 1a-3a) is reported at 841 F.2d 1117 (Table). The opinion of the court of appeals reversing an order suppressing evidence (Pet. App. 4a-11a) is reported at 810 F.2d 366. The opinion of the district court suppressing evidence (Pet. App. 12a-20a) is unreported. The prior opinion of the district court (Pet. App. 21a-24a) is reported at 626 F. Supp. 1372. JURISDICTION The judgment of the court of appeals was entered on January 22, 1988. The petition for a writ of certiorari was filed on March 22, 1988. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTION PRESENTED Whether evidence was properly admitted under the inevitable discovery doctrine. STATEMENT Following a jury trial in the United States District Court for the Southern District of New York, petitioners were convicted of conspiracy to defraud the Department of Defense (Count 1), in violation of 18 U.S.C. 371; submitting false statements to the United States (Counts 2 and 3), in violation of 18 U.S.C. 1001; and submitting false claims against the United States (Counts 4-7), in violation of 18 U.S.C. 287. Petitioner Pimentel was sentenced to concurrent terms of three years' imprisonment on Counts 2 through 7, he was fined $5000 on Count 1, and he was ordered to make restitution. Petitioner Duroyd Manufacturing Company (Duroyd) was fined $70,000 and was also ordered to make restitution. The court of appeals affirmed. 1. Briefly summarized, the evidence at trial, which is not in dispute, showed that Pimentel was the sole owner of Duroyd. /1/ In early 1982, Duroyd bid on a Department of Defense contract to manufacture certain metallic and nonometallic parts used in an artillery shell. One such part was a column segment, which, according to the contract, had to be manufactured to a specified level of hardness. The contract price was supposed to equal Duroyd's projected costs plus a percentage for overhead and profit. The contract required that Duroyd certify that the cost and pricing data submitted with the bid were "accura(te), complete(), and curren(t)." Duroyd submitted a bid that included the cost of a heat-treating process supposedly needed to bring the steel to the required hardness level. Duroyd certified that the cost estimate contained in the bid was "accura(te), complete(), and curren(t)." In fact, however, Mundex Metals Corporation had already informed Duroyd that it could deliver steel to Duroyd at the specified hardness level without any additional cost for heat treating. In a letter of March 2, 1982, Mundex informed Duroyd that "(w)e have discussed in detail with our mill your requirements, particularly with regard to hardness, and are pleased to inform you that the mill is now in a position to guarantee a hardness of min. Rockwell C-22." GX 12; C.A. App. A135. /2/ After receiving that letter, Pimentel requested that Mundex submit a new letter omitting all reference to the specified hardness level. Mundex complied with that request. Under a cover letter of March 19, 1982, Mundex supplied a revised, backdated version of the March 2 letter that did not refer to the hardness of the steel. GX 6; C.A. App. A134, A136. Duroyd attached the backdated letter to its bid. In September 1982, Duroyd was awarded the Defense Department contract. Mundex supplied the steel to Duroyd at the specified hardness level, and Duroyd was not required to harden any of the steel. In November 1983, the Defense Contract Audit Agency decided to conduct a post-award audit of Duroyd in connection with the contract and assigned Neil Hanrahan to conduct the audit. At a pre-audit conference, Hanrahan asked Duroyd to provide him with its files of vendor quotations, ventor invoices, purchase orders, and incurred costs. In reviewing the files, Hanrahan discovered that the files did not contain any invoices for heat treating the steel used in manufacturing the column segments, even though that cost item had been included in Duroyd's proposed package. When Hanrahan asked Pimentel when he had first learned that Mundex could supply prehardened steel, Pimentel falsely replied that he first learned that Mundex could do so in October or November of 1982. Thereafter, pursuant to Pimentel's instructions, an employee of Duroyd asked Mundex to write two letters to Duroyd backdated to April 5, 1982, and December 2, 1982. The first letter stated that Mundex could not provide steel at the necessary hardness level. GX 16. The second letter stated that Mundex had improved its manufacturing process and could now manufacture steel at the required level of hardness. GX 17. Those two letters were turned over to the Department of Defense in an attempt to rebut the conclusion reached by Hanrahan that Duroyd had failed in 1982 to make full disclosure of its cost and pricing data regarding the heat treatment. In the course of his audit, Hanrahan discovered the earlier, March 1982 letters from Mundex to Duroyd. Hanrahan testified that those letters were given to him by a Duroyd employee at his request (C.A. App. A83-A95), but petitioners contended that Hanrahan had taken them from Duroyd's files without permission (id. at A50-A56, A63-A65, A69-A70). 2. Before trial, petitioners sought to suppress the March 1982 letters from Mundex to Duroyd showing Pimentel's knowledge that Mundex could supply steel for the column segment without any need or charge for heat treating. The district court found that the government had not proved by a preponderance of the evidence that Hanrahan obtained those items with Duroyd's consent (C.A. App. A121; App., infra, 2a). It therefore held that Hanrahan had conducted an illegal warrantless search in violation of the Fourth Amendment. The court observed, however, that the letters would inevitably have been discovered during the course of the audit. C.A. App. A121-A122; App., infra, 3a. The court explained that a government regulation required Duroyd to turn over the letters to the auditor on request, and therefore Duroyd did not have a reasonable expectation of privacy in the letters. Moreover, when the audit failed to turn up a bill for heat treatment, the court found that Hanrahan would have interviewed Mundex, the steel vendor, as well as the company that was supposed to supply the heat treatment, according to Duroyd's bid proposal, to find out why there had been no heat treatment. C.A. App. A129; App., infra, 2a-8a. Mundex, in turn, would have disclosed to Hanrahan that the steel was already heat treated. For that reason the court concluded that "these documents would have been found in any event as a result of the audit, that the audit was started, of course, before these documents were found or known to the government, and therefore the prosecution here is not the fruit of the poison(ous) tree." C.A. App. A122; App., infra, 3a. The court suppressed the letters, but permitted the government to prove "by independent evidence" that false claims were submitted and that no money was paid for heat treatment. C.A. App. A122-A123; App., infra, 3a-4a. On reconsideration, the district court suppressed the letters on the ground that the inevitable discovery doctrine does not apply to "the poisonous tree," but only to the "fruit of the poisonous tree." In the court's view, the letters were the "poisonous tree." Pet. App. 22a-24a. On further reconsideration, the district court reversed its earlier finding that the letters would have been inevitably discovered. It now concluded that "the auditor did not have the right to demand copies of these vendor quotes, and Duroyd did not have the obligation under the contract to provide them to him" (id. at 17a). 3. The court of appeals reversed. Pet. App. 4a-11a. At the outset, the court held that there "can be no question concerning the Defense Department auditor's right to examine these letters in the course of his audit" (id. at 6a). Both the statutes and the contract so provide (ibid.). The court of appeals thus concluded that the district court's original finding that the letters would inevitably have been discovered during the course of the audit was correct (id. at 8a). The court further held that the inevitable discovery doctrine, which was first adopted by this Court in Nix v. Williams, 467 U.S. 431 (1984), "applies to the direct as well as the indirect products" of an unlawful search (Pet. App. 8a). To reach that conclusion, the court observed that several court of appeals decisions cited with approval in Nix applied the doctrine to the direct products of a constitutional violation. See United States v. Romero, 692 F.2d 699 (10th Cir. 1982); United States v. Apker, 705 F.2d 293 (8th Cir. 1983), cert. denied, 465 U.S. 1005 (1984); United States v. Roper, 681 F.2d 1354 (11th Cir. 1982), cert. denied, 459 U.S. 1207 (1983). The court of appeals noted that the district court had mischaracterized the letters as "the poisonous tree." Rather, the illegal search was the "the poisonous tree"; the letters were the "fruit" or product of that illegality. Pet. App. 7a n.1. Finally, the court held that no deterrent purpose would be served by suppression, because the ongoing audit "would have uncovered the letters at issue(;) (a)dmitting them in evidence would not encourage Fourth Amendment abuse" (id. at 10a). 4. Following reversal of the suppression orders, petitioners were tried by a jury, convicted on all counts, and sentenced. The court of appeals affirmed their convictions without revisiting the exclusionary rule issue. Pet. App. 1a-3a. ARGUMENT Petitioners contend that the March 1982 letters from Mundex to Duroyd should have been suppressed. They do not dispute the finding of the district court in its oral opinion, which was upheld by the court of appeals, that the government carried its burden of proving by a preponderance of the evidence (see Nix v. Williams, 467 U.S. at 444 & n.5) that the government would inevitably have discovered the letters during the course of the audit. In particular, petitioners do not dispute that, pursuant to the terms of Duroyd's contract and the pertinent statute and regulation, /3/ the Defense Department auditor had an absolute right to examine all vendor quotations, vendor invoices, and purchase orders, including the file containing the original and the replacement March 2 letters from Mundex. They do not dispute that auditor Hanrahan had requested to see all such documents before the audit began and that Duroyd was required to turn the letters over to Hanrahan pursuant to that request. Nor do they dispute that Hanrahan would have interviewed representatives of Mundex to determine why the file did not contain any invoices for heat treatment, and that those interviews would have led to the discovery of the same information. We submit that the decision of the court of appeals is correct. All of the prerequisites to the application of the inevitable discovery rule heretofore recognized by this Court and the federal courts of appeals have been met, including the requirement imposed by some courts that there be an ongoing investigation at the time of the illegality. /4/ The government therefore should not be placed in a worse position by suppression of the letters than it would have occupied if no misconduct had occurred (Nix v. Williams, 467 U.S. at 443, 445, 447). There is no basis in the rationale of Nix for the rule, which petitioners urge, that the government should be deprived of evidence that it inevitably would have obtained just because that evidence can be labeled the "direct" rather than the "indirect" product of a search that has been held unlawful. Nevertheless, petitioners' proposed rule resembles the argument advanced by the petitioners in Murray v. United States, No. 86-995, and Carter v. United States, No. 86-1016 (consolidated; argued Dec. 8, 1987), that all "primary" as opposed to "derivative" evidence must be suppressed without regard to the inevitable discovery and independent source doctrines. See also People v. Stith, 69 N.Y.2d 313, 506 N.E.2d 911, 514 N.Y.S.2d 201 (1987). We therefore agree with petitioners that this case should be held pending the Court's decision in Murray. If the Court adopts the distinction between "primary" and "derivative" evidence that is being urged in Murray, this case should be remanded to the court of appeals for further consideration. Otherwise, there is no need for this Court to review the straightforward application of the inevitable discovery rule by the court below, and the petition should be denied. /5/ CONCLUSION The petition for a writ of certiorari should be held pending resolution of Murray v. United States, No. 86-995, and Carter v. United States, No. 86-1016, and then disposed of in light of that resolution. Respectfully submitted. CHARLES FRIED Solicitor General JOHN C. KEENEY Acting Assistant Attorney General PATTY MERKAMP STEMLER Attorney MAY 1988 /1/ The statement of facts is taken from the briefs filed by the government in the court below (Nos. 86-1271 and 87-1354). /2/ "C.A. App." refers to the appendix filed in the court of appeals on the government's interlocutory appeal from the order of the district court suppressing the evidence (No. 86-1271). That appendix contains the district court's initial bench ruling on the suppression motion (C.A. App. A119-A129), which is not included in petitioners' appendix. A copy of this ruling is attached. /3/ 10 U.S.C. 2306(f)(3) provides: For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this subsection, any authorized representative of the head of the agency who is an employee of the United States Government shall have the right, until the expiration of three years after final payment under the contract or subcontract, to examine all books, records, documents, and other data of the contractor or subcontractor related to the negotiation, pricing, or performance of the contract or subcontract. Similarly, Defense Acquisition Reg. Section 7-104.41(c) provides: Cost or Pricing Data. If the contractor submitted cost or pricing data in connection with the pricing of this contract * * * the Contracting Officer or his representatives who are employees of the United States Government shall have the right to examine all books, records, documents and other data of the Contractor related to the negotiation, pricing or performance of such contract, change or modification, for the purpose of evaluating the accuracy, completeness and currency of the cost or pricing data submitted. /4/ See United States v. Namer, 835 F.2d 1084, 1088 (5th Cir. 1988) (citing United States v. Cherry, 759 F.2d 1196 (5th Cir. 1985)), cert. denied, No. 87-1404 (May 16, 1988); United States v. Satterfield, 743 F.2d 827 (11th Cir. 1984), cert. denied, 471 U.S. 1117 (1985). In a single cryptic sentence, petitioners state that "(t)he court of appeals did not make a specific finding that the audit would have been pursued even had the letters not been unlawfully observed and taken" (Pet. 5). To the contrary, the court of appeals observed that "there was an ongoing audit which surely would have uncovered the letters at issue" (Pet. App. 10a). /5/ In Murray, the event that inevitably would have led (and in fact did lead) to the discovery and seizure of the evidence in question was the acquisition of a valid search warrant. The bales of marijuana at issue in that case had earlier been seen during a warrantless search of the premises, which the court of appeals assumed to be illegal. Petitioners in Murray have made various arguments based on the Warrant Clause of the Fourth Amendment; they describe their case (and a larger class of cases including Segura v. United States, 468 U.S. 796 (1984), and United States v. Griffin, 502 F.2d 959 (6th Cir.), cert. denied, 419 U.S. 1050 (1974)), as "search-unlawfully-first-get-the-warrant-later" cases. The Murray petitioners' arguments in this regard, even if accepted by this Court, would be of no help to petitioners in this case. The government's (now undisputed) factual contention is not that it would have discovered the March 1982 letters pursuant to a warrant, but that the ongoing audit would have led inevitably to the discovery of those letters. Thus, even if petitioners prevail in Murray, it may not be necessary or appropriate for the court of appeals to consider further its decision in this case. APPENDIX