GJON N. NIVICA, PETITIONER V. UNITED STATES OF AMERICA MARK WELLINGTON, PETITIONER V. UNITED STATES OF AMERICA No. 89-6140, 89-6360 In The Supreme Court Of The United States October Term, 1989 On Petitions For A Writ Of Certiorari To The United States Court Of Appeals For The First Circuit Brief For The United States In Opposition OPINION BELOW The opinion of the court of appeals, 89-6140 Pet. App. A1-A45, is reported at 887 F.2d 1110. JURISDICTION The judgement of the court of appeals was entered on September 29, 1989. Petitions for rehearing were denied on November 1, 1989. The petition for a writ of certiorari in No. 89-6140 was filed on December 4, 1989. The petition for a writ of certiorari in No. 89-6360 was filed on January 2, 1990. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTIONS PRESENTED 1. Whether the district court's denial of petitioner Nivica's in limine motion to limit the scope of the government's cross examination of him if he testified is subject to appellate review even though petitioner did not testify at trial (No. 89-6140). 2. Whether petitioner Wellington, who was acting as his own lead counsel, was deprived of his right to testify when the district court required him to ask himself questions and give answers (No. 89-6360). 3. Whether the district court adequately instructed the jury on the defense of good faith (No. 89-6360). STATEMENT After a jury trial in the United States District Court for the District of Massachusetts, petitioners were convicted on four counts of mail fraud (18 U.S.C. 1341); seven counts of wire fraud (18 U.S.C. 1343); three counts of interstate transportation of money taken by fraud (18 U.S.C. 2314); one count of causing interstate travel in order to execute a fraudulent scheme (18 U.S.C. 2314); and one count of conducting the affairs of an enterprise through a pattern of racketeering activity (18 U.S.C. 1962(c)). /1/ The district court sentenced petitioner Nivica to four years' imprisonment and a $15,000 fine. It sentenced petitioner Wellington to eight years' imprisonment and a $25,000 fine. The court of appeals affirmed the convictions and sentences. 1. The evidence at trial showed that between October 1982 and January 1983, petitioners, along with co-defendant David Pedley Wellington (petitioner Wellington's father), offered to exchange Mexican pesos for dollars or dollar-denominated certificates of deposit issued by co-defendant Merchant Bank and Trust Co., Ltd. Petitioners made this offer despite currency restrictions imposed by Mexico in September 1982. Pursuant to those restrictions, Mexico nationalized its banking system, converted all U.S. dollar deposits into Mexican pesos, and restricted the exchange of pesos for dollars. Petitioner Wellington and his father, operating out of Mexico City, acquired the corporate shell for Merchant Bank from a lawyer in the Northern Marianas Islands. Nivica, a Massachusetts lawyer, acted as the bank's general counsel and recruited as the first board of directors three men who were already directors of a bank in the Bahamas. 89-6140 Pet. App. A3. Nivica concealed the Wellingtons' ownership interest from those directors. When they later became suspicious of Merchant's activities, Nivica replaced them with new directors. 89-6140 Pet. App. A6; Gov't C.A. Br. 8, 15-16. At the same time, petitioner Wellington (using the alias "Jack Williams") and his father (using the alias "Paul Johnson") falsely represented to customers that the bank had millions of dollars in assets and that its certificates of deposit were backed by a trust account containing securities worth 135% of the bank's outstanding liabilities. 89-6140 Pet. App. A3. Although Nivica tried to obtain a custodial agreement with various banks, in December 1982 he had to settle for a simple agency agreement, under which a trust company agreed only to hold whatever assets Merchant provided. Gov't C.A. Br. 16, 17-18, 19-20. Merchant's customers were given Merchant bank drafts with which they were supposed to be able to obtain dollars. The Wellingtons used Nivica's attorney trust account in Massachusetts to pay some of the drafts, but many customers found that there were no funds to back the drafts. Nivica had to give express approval for payment on any Merchant draft, and he only honored about a third of the drafts. 89-6140 Pet. App. A4, A5; Gov't C.A. Br. 12-13. Ultimately, the bank's customers suffered a loss of some $6,000,000. 89-6140 Pet. App. A4. /2/ 2. a. Petitioners were tried together with other perpetrators of the Merchant Bank scheme. See note 1, supra. Petitioner Nivica moved in limine to restrict the scope of the government's cross examination of him in the event he testified at trial. Nivica's lawyer told the court that Nivica wanted to testify about his interview with an FBI agent; the circumstances of his first meeting with David Wellington; and the explanation he was given for the Wellingtons' name changes. Nivica's counsel asked the trial court to limit cross examination to those areas and to questions bearing on his credibility. The district court declined to do so. Nivica then chose not to testify, citing the district court's ruling. 89-6140 Pet. App. A10. b. At petitioner Wellington's request, the district court allowed Wellington to act as co-counsel with his appointed attorney. Wellington eventually asked that he be allowed to act as lead counsel and examine witnesses. The court tried to dissuade Wellington from that course, and warned him that if he testified, he would have to ask himself questions and give answers rather than simply giving a narrative -- i.e., he could not have his lawyer question him. If Wellington wanted to serve as lead counsel, the court maintained, he had to assume the full burdens of that position and could not "bounce back and forth" between lead counsel and a lesser role. 89-6140 Pet. App. A21-A22. /3/ When it came time for Wellington to put on his defense, Wellington announced that he would testify. Rather than examining himself, or renewing his request to have his lawyer examine him, Wellington asked the court to allow the jury to ask him questions. When the court denied that request, Wellington asked himself if he had "anything to hide." He responded that "(t)he answer is No." After the court sustained the prosecutor's subsequent objection, Wellington left the stand, saying: "Well, I guess I can't ask myself any more questions then." Wellington did not request that his lawyer conduct further direct examination of him. 89-6140 Pet. App. A22-A23. 3. The court of appeals, relying on this Court's decision in Luce v. United States, 469 U.S. 38 (1984), and its own post-Luce cases, held that petitioner Nivica could not obtain appellate review of the district court's in limine ruling. 89-6140 Pet. App. A10-A15. Because Nivica did not testify or ask for a question-and-answer voir dire, the exact testimony he might have given at trial was "'unknowable'" and the harm "'wholly speculative.'" The trial judge might have changed his mind when presented with actual testimony at trial. Alternatively, the government might not have sought to question Nivica on matters beyond the scope of his direct examination. 89-6140 Pet. App. A13 (quoting Luce). Beyond that, Nivica may have decided not to testify for reasons other than the district court's denial of his in limine motion. And even if Nivica had testified and the district court erroneously failed to cabin the government's cross-examination, Nivica's failure to testify or present voir dire prevented the appellate court from judging the harmfulness of the hypothetical error. /4/ The court of appeals also rejected petitioner Wellington's argument that the district court should have permitted his lawyer to examine him. 89-6140 Pet. App. A23-A29. The trial court had discretion, in granting Wellington the opportunity to act as lead counsel, "to place reasonable limitations and conditions upon the arrangement." 89-6140 Pet. App. A25. Requiring Wellington to conduct all witness questioning (including elicitation of his own testimony) or entrust that task to his appointed counsel was just such a reasonable condition, according to the court of appeals, because the confusion caused if the court had allowed team questioning might have trenched on the constitutional rights of Wellington's co-defendants (particularly if they sought to follow Wellington's lead). 89-6140 Pet. App. A26-A27. In any event, the court found that Wellington lost his right to testify not because of the trial court's ruling, but because of his own decision to abandon his direct examination. 89-6140 Pet. App. A27-A28. The court of appeals also held that the trial court adequately instructed the jury on the defense of good faith, and rejected Wellington's contrary contention. 89-6140 Pet. App. A31-A34. /5/ ARGUMENT 1. Petitioner Nivica renews his contention that the district court's in limine ruling abridged his right to testify in his own defense. 89-6140 Pet. 7-16. In Luce v. United States, supra, this Court held that, by deciding not to testify, the defendant waives his right to appellate review of a district court's allegedly erroneous in limine ruling -- in that case, that the prosecutor could impeach the defendant with his prior conviction. The Court explained that a proper determination of the prior conviction's admissibility required the trial court to know "the precise nature of the defendant's testimony, which is unknowable when, as here, the defendant does not testify." 469 U.S. at 41 (footnote omitted). In addition, any possible harm from an in limine ruling is "wholly speculative," because a trial court may change its ruling in light of developments at trial. Id. at 41-42. Furthermore, there is no way to know whether the government actually would have used the prior conviction in cross examination, and the adverse ruling may not have been the basis for a defendant's decision not to testify. Id. at 42. Finally, absent a defendant's actual testimony and cross examination, there is no way to assess the harmlessness of the asserted error. Requiring a defendant to testify in order to preserve his claim for review therefore prevents defendants from "'plant(ing)'" reversible error in the record. The court of appeals correctly held that Nivica's challenge to the district court's in limine ruling was foreclosed by Luce. 89-6140 Pet. App. A13, A14. When Nivica moved in limine and the district judge said that he thought that Nivica would open himself up to a broad cross examination, the prosecutor observed that Nivica, "like any other witness, * * * (was) entitled to the protection of the rules and the rules of evidence." 19 Tr. 13. That statement indicates that the prosecutor likely would have adhered to the normal rule that cross examination must be relevant to topics brought out on direct examination and reasonably related to them. See Brown v. United States, 356 U.S. 148, 154-156 (1958). Hence, petitioner's concern about the scope of cross examination is entirely speculative, just as in Luce. And it is likewise impossible to determine whether any error regarding the scope of cross examination would have been harmless because Nivica failed to testify and subject himself to cross examination. /6/ The considerations enumerated in Luce fully apply to petitioner Nivica's cross examination claim; Nivica's failure to testify at trial prevents him from resurrecting it on appeal. Nivica seeks to distinguish Luce on the ground that it did not involve a constitutional claim. He relies principally on New Jersey v. Portash, 440 U.S. 450 (1979). But the Court in Portash simply deferred to the decision of the state trial and appellate courts to consider the defendant's claim on the merits, noting that in such a circumstance the Court would likewise reach the merits. Id. at 454-455. The same was true in Brooks v. Tennessee, 406 U.S. 605 (1972), on which Nivica also relies. Neither case established a blanket rule allowing a defendant to challenge in limine evidentiary rulings on appeal when he declined to testify at trial. 2. Petitioner Wellington argues that he was deprived of his right to testify and his right to the assistance of counsel by the district court's ruling that, if he chose to testify, he had to conduct his own examination. 89-6360 Pet. 5-14. Although the district court unquestionably had discretion to permit Wellington's appointed counsel to examine him at trial, 89-6140 Pet. App. A23-A24, Wellington points to no case -- and we are aware of none -- that requires a district court to allow both a defendant and his lawyer to examine witnesses jointly. See 89-6360 Pet. 7 ("petitioner may not have had a constitutional right to act as co-counsel ('hybrid representation') in this circumstance"). Instead, Wellington simply asserts that the district court presented him with an unconstitutional "Hobson's choice" when it required him to choose between examining witnesses himself or having his lawyer conduct the examinations. 89-6360 Pet. 10-11. Wellington's claim presupposes, however, that the requirement that he examine himself in fact prevented him from testifying in his defense. The record does not support that assumption. As the court of appeals correctly concluded, Wellington failed to exercise his right to testify not because of the trial court's ruling concerning the method of examination, but because of his own decision to forgo further inquiry. 89-6140 Pet. App. A27-A28. Wellington chose to ask only one patently objectionable question. When the trial judge sustained the government's objection to that question, Wellington did not rephase his question. Nor did he ask the court to reconsider its earlier ruling and allow his lawyer to question him. Instead, he chose to leave the stand, claiming that he could not ask any other questions. See 89-6140 Pet. App. A28 n.7. In any event, the Constitution does not insulate a defendant from difficult choices, including choices among constitutional rights. McGautha v. California, 402 U.S. 183, 213 (1971). Wellington's own authorities make this point quite clear. Wellington cites Whiteside v. Scurr, 744 F.2d 1323 (8th Cir. 1984), in support of his claim that he was improperly forced to waive his right to the assistance of counsel. But Wellington fails to note that this Court reversed the Eighth Circuit and held that there is no Sixth Amendment violation when a lawyer refuses to cooperate with his client in presenting perjurious testimony at trial. Nix v. Whiteside, 475 U.S. 157, 166-176 (1986). It follows that Wellington suffered no Sixth Amendment deprivation when forced to make a similar choice between testifying on his own behalf and the assistance of counsel, particularly when his lawyer acted as co-counsel throughout the trial. /7/ 3. Finally, petitioner Wellington claims that the district court should have given the jury a separate instruction on his defense of good faith. 89-6360 Pet. 15-17. It is axiomatic that a trial court's instructions must be viewed both in the context of the charge as a whole and in light of the entire trial record. United States v. Park, 421 U.S. 658, 674 (1975); Cupp v. Naughten, 414 U.S. 141, 146-147 (1973). The district court here specifically instructed the jury that "good faith" was a defense to the charges and negated a defendant's specific intent: (T)he government must prove beyond a reasonable doubt that each defendant participated and acted knowingly with an intent to deceive or defraud. A defendant doesn't act with intent to deceive or defraud by accidentally doing something or mistakenly doing something or doing something in good faith. * * * A defendant must act knowingly with intent to defraud. Fraudulent intent is never assumed or presumed. It is personal intent. One can be charged only with what that person intends, not the intent of some other persons. Bad faith is essential. Good faith is a defense. One who acts with honest intentions, mistake, accident, (or) inadvertence cannot be charged with fraudulent intent. Fraudulent intent, as I said here, is established when the person knowingly and intentionally attempts to deceive another, that person is chargeable with fraudulent intent even though that person may be unaware of the exact manner and the exact form in which that deception or the entire scheme is to take place. 89-6140 Pet. App. A32 n.10 (emphasis added). The overwhelming majority of the circuits have held that an instruction on specific intent that speaks of intent to deceive sufficiently conveys the concept of the good faith defense to a jury. E.g., United States v. Gambler, 662 F.2d 834, 837 (D.C. Cir. 1981); New England Enterprises, Inc. v. United States, 400 F.2d 58, 71 (1st Cir. 1968), cert. denied, 393 U.S. 1036 (1969); United States v. Bronston, 658 F.2d 920, 930 (2d Cir. 1981), cert. denied, 456 U.S. 915 (1982); United States v. Chenault, 844 F.2d 1124, 1130 (5th Cir. 1988); United States v. McGuire, 744 F.2d 1197, 1201-1202 (6th Cir. 1984), cert. denied, 471 U.S. 1004 (1985); United States v. Green, 745 F.2d 1205, 1209 (9th Cir. 1984), cert. denied, 474 U.S. 925 (1985). The trial court's instructions certainly satisfy that standard. Although the Eighth and Tenth Circuits have held, in certain circumstances, that there must be an express instruction on the defense of good faith, e.g., United States v. Ammons, 464 F.2d 414, 417 (8th Cir.), cert. denied, 409 U.S. 988 (1972); United States v. Hopkins, 744 F.2d 716, 717-718 (10th Cir. 1984) (en banc), /8/ the district court's instruction here would have satisfied even the Eighth and Tenth Circuits. 89-6140 Pet. App. A33. The jury instructions expressly stated that good faith conduct was a defense and that such conduct negated the specific intent required to convict under the applicable statutes. /9/ CONCLUSION The petitions for a writ of certiorari should be denied. Respectfully submitted. KENNETH W. STARR Solicitor General EDWARD S.G. DENNIS, JR. Assistant Attorney General LOUIS M. FISCHER Attorney FEBRUARY 1990 /1/ The district court acquitted petitioners on one additional wire fraud count and one interstate travel count. Petitioners stood trial with co-defendants Merchant Bank & Trust co., Ltd., Suzanne Pedley, Brian E. Fisher, and David Pedley Wellington. Merchant Bank was convicted on virtually the same counts as petitioners, but it did not appeal. Pedley and Fisher, who were charged with all but the RICO count, were acquitted. David Wellington was in custody in Mexico at the time of trial; he has not yet been tried on the instant charges. /2/ As the scheme was winding down, Nivica denied to a Treasury official that the bank was doing business in this country. Nivica also tried to cover up the scheme when he was visited by FBI agents in early January 1983. 89-6140 Pet. App. A8; Gov't C.A. Br. 21-23. /3/ Two days later, Wellington's lawyer sought clarification of the court's order. Counsel said that he understood the court to have ruled that if Wellington examined prosecution witnesses, Wellington would be responsible for the entire examination. The court said that counsel's understanding was correct; the judge said he would not allow Wellington and his lawyer to alternate questioning. Thereafter, Wellington cross examined the government's witnesses. Before concluding each cross-examination, the court had Wellington consult with his lawyer to make sure that the most important topics were covered. Gov't C.A. Br. 48 n.50. /4/ The court of appeals also rejected Nivica's attempt to distinguish Luce on the ground that the district court had ruled as a matter of law that the government's cross examination would not be limited. The court held instead that the district judge's decision, whatever his initial inclination, still would have had to be based on the particular questions that arose at trial; the judge could not make a final ruling in a vacuum. 89-6140 Pet. App. A13-A15. /5/ The court of appeals also rejected Wellington's argument that the proof did not show his knowing participation in the scheme; that the trial court had erred in failing to grant Wellington's last-minute motion to subpoena six witnesses; that evidence of the Wellingtons' previous indictment and of petitioner Wellington's arrest was erroneously admitted; that the trial court should have allowed the jury to question Wellington; that the district court should have admitted a tape recording (or transcript of that recording) that Wellington proffered; and that the trial court erred in admitting certain summary charts and documentary exhibits on which the charts were based. /6/ Nivica was not without a remedy at trial. He could have proffered a question and answer voir dire that set out the exact nature of his proposed testimony, and the government then could have cross examined him, all outside the presence of the jury. See Fed. R. Evid. 103(b). In that way, he would have had a concrete record on which to base his claim. /7/ The district court had petitioner consult with his lawyer before concluding his examination of each witness whom he chose to cross examine. See 12 Tr. 48-49. Petitioner's counsel continued to make legal objections, such as when the government attempted to cross examine Wellington after his aborted testimony. See 17 Tr. 105-106; 19 Tr. 65. Petitioner's lawyer assisted him throughout the trial and represented him fully on legal issues. /8/ Even the Eighth and Tenth Circuits do not hold that a separate instruction on good faith must be given in every case. They merely hold that, when the charge as a whole makes no mention of good faith, a standard instruction on specific intent is insufficient to convey the substance of the good faith defense to the jury. See United States v. Casperson, 773 F.2d 216, 223 (8th Cir. 1985); United States v. Hopkins, 744 F.2d at 718. Wellington also claims, 89-6360 Pet. 16, that the Fifth Circuit's rule is the same as that in the Eighth and Tenth Circuits. To the contrary, the Fifth Circuit has held that an instruction on specific intent is sufficient to convey the substance of a good faith defense. See United States v. Chenault, 844 F.2d at 1130; United States v. Laverne, 805 F.2d 517, 523 (5th Cir. 1986); United States v. Hunt, 794 F.2d 1095, 1097-1098 (5th Cir. 1986). /9/ It is not clear that the adequacy of the district court's good faith defense instruction is properly before the Court. Wellington proffered no testimony to support his claim in the court of appeals that he relied on the actions of a third ppaty in setting up the bank. To the contrary, the record is replete with Wellington's false statements to customers and others that are devoid of good faith. Gov't C.A. Br. 61 n.63. What is more, Wellington's lawyer merely adopted an objection voiced by Nivica's lawyer -- who conceded the validity of the charge. Nivica's lawyer objected that the district court had omitted a sentence from his tendered instruction concerning an opinion or belief that was honestly held. Gov't C.A. Br. 61. Because Wellington failed to testify to any such opinion or belief, the alleged omission could not have harmed him and thus furnishes no basis for review of his convictions.