United States v. Paul D. Wood

6 F.3d 692, 1993 WL 377050

• Court: Court of Appeals for the Tenth Circuit
• Decided: September 23, 1993
• Docket: 92-2172
• Status: Published

Opinions

LOGAN, Circuit Judge.

The government appeals the district court’s dismissal of the indictment against defendant Paul D. Wood for failure to state a punishable offense. We have jurisdiction pursuant to 18 U.S.C. § 3731.

I

In 1989 the FBI and a federal grand jury in Phoenix, Arizona were investigating allegations of political corruption involving Peter MacDonald, Sr., Chairman of the Navajo Nation of Indians. Defendant is the general manager of a construction company that had done a significant amount of business with the Navajo Nation, and FBI agents interviewed him in his office about his .dealings with MacDonald. During the course of the meeting, the government alleges that defendant made several false or misleading statements relating to an automobile that MacDonald had borrowed from defendant. Defendant was subsequently charged with making false statements to an FBI agent, in violation of 18 U.S.C. § 1001, and with obstruction of justice, in violation of 18 U.S.C. § 1503.

On remand from a prior appeal,¹ defendant moved to dismiss the indictment for failure to state a criminal offense. The district court held that because the FBI agents were acting under the auspices of the Phoenix grand jury, their discussion with defendant was part of a judicial proceeding, thereby falling within the “judicial function” exemption to liability for false statements under § 1001. As to the § 1503 charge, the court ruled that defendant’s unsworn false statements would not as a natural and probable consequence impede the due administration of justice. The court also noted a number of policy reasons why § 1503 should not apply to statements of the nature given by defendant, and therefore dismissed that charge as well. The government now appeals these dismissals.

II

As a general rule, “[i]n reviewing a trial court’s order granting or denying a motion to dismiss an indictment, the appellate court can only reverse if the lower court abused its discretion.” United States v. Strayer, 846 F.2d 1262, 1265 (10th Cir.1988). However, if, as here, the court dismisses the indictment based on its interpretation of the governing statutes, that is a legal determination we review de novo. Tramp v. United States, 978 F.2d 1055, 1055 (8th Cir.1992).

Because the district court dismissed the case before retrial, for purposes of review we accept as true the government’s allegations made in the indictment. United States v. Barker Steel Co., 985 F.2d 1123, 1125 (1st Cir.1993). According to the government, the FBI agents asked defendant to explain the circumstances surrounding his lending of a car to MacDonald. Defendant answered that he had recently purchased the car for his daughter, but that MacDonald had asked to borrow it to drive from Albuquerque to Window Rock, Arizona. Defendant stated that at the time he loaned the car to MacDonald it had approximately 1200 miles on it. Defendant told the agents that he had expected to receive the car back within a few days, but that eventually he had to fly to Flagstaff, Arizona, to retrieve it three weeks later. He said that the car at that time had 2500 miles on the odometer, and that he returned with it to Albuquerque.

The government alleges that defendant in fact purchased the car intending to give it to MacDonald, not to his daughter, and that the car had only 150 miles on it when MacDonald took possession. Further, MacDonald allegedly retained the car for eight weeks, not three, and when defendant retook possession he did not return to Albuquerque, but instead disposed of the car in Las Vegas, Nevada. The government contends that it did not pursue this aspect of the investigation after talking to defendant, and charged him with false statements and obstruction of justice after learning the truth about the car.

The district court ruled that defendant’s statements could not be prosecuted under 18 U.S.C. § 1001 because of the “judicial function” exception we recognized in United States v. Deffenbaugh Industries, Inc., 957 F.2d 749, 752 (10th Cir.1992). Section 1001 provides, in pertinent part: “Whoever, in any matter within the jurisdiction of any department or agency of the United States ... makes any false, fictitious or fraudulent statements or representations ... shall be fined not more than $10,000 or imprisoned not more than five years, or both.” Read literally, this section “would swallow up perjury statutes and a plethora of other federal statutes proscribing the making of false representations in respect of specific agencies and activities of Government. Extension of' section 1001 to its literal breadth, however, cannot be justified by its legislative history.” United States v. Bedore, 455 F.2d 1109, 1110 (9th Cir.1972) (footnote omitted).² “Most cir-euits have recognized a ‘judicial function’ exception to the application of § 1001, based on a finding that a court is not a ‘department or agency’....” Deffenbaugh, 957 F.2d at 752. Under this exception, false statements made to a court in a judicial proceeding are not covered by § 1001. Since the exception was first suggested in 1962, “there has been no response on the part of Congress either repudiating the limitation or refining it. It therefore seems too late in the day to hold that no exception exists.” United States v. Mayer, 775 F.2d 1387, 1390 (9th Cir.1985).³

The district court ruled that the FBI agents who interviewed defendant were acting under the authority of the Phoenix grand jury. Although the government argues that the agents were also acting in their independent investigatory capacity, we note that the indictment specifically states that the agents interviewed defendant “in furtherance of an investigation by the United States Grand Jury sitting in Phoenix, Arizona.” Also it is undisputed that at the end of the interview the agents served a subpoena duces tecum on defendant’s business seeking records for that grand jury. This fact may be considered. See United States v. Brown, 925 F.2d 1301, 1304 (10th Cir.1991) (“[I]t is permissible and may be desirable where the facts are essen tially undisputed, for the district court to examine the factual predicate for an indictment to determine whether the elements of the criminal charge can be shown sufficiently for a submissible case.”). It supports the district court’s ruling that the agents were working on behalf of the grand jury. “[Gjrand jury investigations are criminal proceedings that are a part of the judicial process.” Deffenbaugh, 957 F.2d at 752-53. Thus, because defendant’s statements were made in connection with a judicial proceeding, they are exempt from prosecution pursuant to the “judicial function” exception. See also United States v. Masterpol, 940 F.2d 760, 766 (2d Cir.1991); United States v. Abrahams, 604 F.2d 386, 393 (5th Cir.1979).

Ill

Defendant was also charged with obstruction of justice, in violation of 18 U.S.C. § 1503. That section prohibits a number of specific acts relating to jurors and judicial officers, and also contains an “omnibus” clause: “Whoever ... corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be fined not more than $5,000 or imprisoned not more than five years, or both.”

There are three core elements that the government must establish to prove a violation of the omnibus clause of section 1503: (1) there must be a pending judicial proceeding; (2) the defendant must have knowledge or notice of the pending proceeding; and (3) the defendant must have acted corruptly with the specific intent to obstruct or impede the proceeding in its due administration of justice.

United States v. Williams, 874 F.2d 968, 977 (5th Cir.1989). Further, although the defendant need not succeed in his attempt to obstruct justice, his conduct must be such “that its natural and probable effect would be the interference with the due administration of justice.” United States v. Thomas, 916 F.2d 647, 651 (11th Cir.1990). The government argues vigorously against adoption of the “natural and probable effect” requirement of Thomas. This element is necessary, however, because particular acts, “although arguably interfering with some aspect of the administration of justice, may be beyond the scope of § 1503 because the nexus to the progress of a judicial proceeding is too attenuated and the statutory construction therefore too strained.” United States v. Walasek, 527 F.2d 676, 679 (3d Cir.1975).⁴

Here;, a grand jury proceeding was under way and the agents informed defendant of its pendency at the outset of the interview. A grand jury investigation qualifies as a “pending judicial proceeding” for purposes of the statute. United States v. Wood, 958 F.2d 963, 975 n. 18 (10th Cir.1992). Given this case’s procedural posture, we must conclude that the government would be able to prove that defendant acted with specific intent to impede the due administration of justice.⁵ The only remaining issue is whether defendant’s statements had the natural and probable effect of impeding the grand jury investigation.

When this case was before this court a year ago, we stated that “we have not found one reported case where a person was charged with, much less convicted of, obstructing justice based on unsworn false statements to FBI agents investigating on behalf of a grand jury.” Id. at 976 n. 19. The government now cites a number of situations in which unsworn false statements were in fact prosecuted. They all involve a type of active deception that is significantly distinguishable from the exculpatory explanations provided by defendant in the instant case. In United States v. Haldeman, 559 F.2d 31 (D.C.Cir.1976) (en banc), cert. denied, 431 U.S. 933, 97 S.Ct. 2641, 53 L.Ed.2d 250 (1977), defendants were charged with using the CIA to obstruct the FBI investigation into the Watergate break-in. This case of massive deception and abuse of power is clearly distinguishable from the exculpatory explanation provided by the defendant before us. We cannot equate the loaning of an automobile with the most infamous political scandal in our nation’s history. In United States v. Hawkins, 765 F.2d 1482 (11th Cir.1985), cert. denied, 474 U.S. 1103, 106 S.Ct. 886, 88 L.Ed.2d 921 (1986), and United States v. Perkins, 748 F.2d 1519 (11th Cir.1984), the defendants conspired to prevent the FBI from learning that an account in their savings and loan was assigned to a fictitious person. They arranged for a third party to pose as that person, in the hopes of eventually receiving federal insurance money for the account. See also United States v. Barber, 881 F.2d 345, 351 (7th Cir.1989) (defendant sent false letters of recommendation to sentencing judge in support of another person), cert. denied, 495 U.S. 922, 110 S.Ct. 1956, 109 L.Ed.2d 318 (1990); United States v. Nelson, 852 F.2d 706, 711 (3d Cir.) (defendants fabricated or modified documents), cert. denied, 488 U.S. 909, 109 S.Ct. 262, 102 L.Ed.2d 250 (1988); United States v. Vesich, 724 F.2d 451, 457 (5th Cir.1984) (defendant attempted to influence testimony of prospective grand jury witness); United States v. Shoup, 608 F.2d 950, 962 (3d Cir.1979) (defendant conspired with city councilman to submit false report concerning voting machine fraud).

We find it difficult to believe that the FBI agents would terminate their investigation based on the self-serving exculpatory explanation offered by defendant. If the agents had reason to believe that defendant was a participant in MacDonald’s political corruption, they would not expect a full confession in the context of an unsworn interview. That the investigation eventually revealed what the government claims is the truth about the car is evidence that they did not rely exclusively on defendant’s statements. We conclude that defendant’s un-sworn exculpatory statements given in his own office to interviewing FBI agents did not have the natural and probable effect of impeding the due administration of justice in the sense required by 18 U.S.C. § 1503, and a prosecution under that section is therefore barred.

AFFIRMED.

1 . At a first trial the district court dismissed the obstruction of justice charge, and the jury found defendant guilty on the false statement count. The district court ordered a new trial on that charge because some of the prosecution's notes were found in the jury room. On appeal, this court ruled that the obstruction of justice charge was erroneously dismissed, and ordered a new trial on both counts. United States v. Wood, 958 F.2d 963 (10th Cir.1992). We left open, however, the issues before us in the present appeal. See id. at 975 n. 19.

2 . See also United States v. Levin, 133 F.Supp. 88 (D.Colo.1953):

Any person who failed to tell the truth to the myriad of government investigators and representatives about any matter, regardless of how trivial, whether civil or criminal, which was within the jurisdiction of a department or agency of the United States, would be guilty of a crime punishable with greater severity than that of perjury.... An inquiry might be made of any citizen concerning criminal cases of a minor nature, or even of civil matters of little consequence, and if he wilfully falsified his statements, it would be a violation of this statute. It is inconceivable that Congress had any such intent when this portion of the statute was enacted. A literal construction of a statute is not to be resorted to when it would bring about absurd consequences, or flagrant injustices, or produce results not intended by Congress.

Id. at 90.

3 . In United States v. Rodgers, 466 U.S. 475, 104 S.Ct. 1942, 80 L.Ed.2d 492 (1984), the Supreme Court noted the development of the exception, but expressed “no opinion on the validity of this line of cases.” Id. at 483 n. 4, 104 S.Ct. at 1948 n. 4.

4 . Although the government contends that the Thomas court misread its own Eleventh Circuit law, if anything, the "natural and probable effect” test is less demanding than that enunciated in an earlier case from the circuit. In United States v. Perkins, 748 F.2d 1519 (11th Cir.1984), the court stated that "[w]hen false statements form the basis of the alleged obstruction, ... the government must prove that the statements had the effect of impeding justice.” Id. at 1528. This "actual effect” standard would place a more onerous burden of proof on the government than does the more speculative "probable effect” test.

5 . There appears to be no clear definition for the phrase "due administration of justice." One court concluded that it "refers to the performance of acts required by law in the discharge of duties such as appearing as a witness and giving truthful testimony when subpoenaed.” Williams, 874 F.2d at 976 n. 24 (quotation omitted!.