Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. BIRRELL

November 15, 1967

UNITED STATES of America
v.
Lowell M. BIRRELL, Defendant



The opinion of the court was delivered by: HERLANDS

HERLANDS, District Judge:

 The indictment herein was filed on July 20, 1961. On April 23, 1964, defendant Birrell surrendered; pleading was adjourned at his request. On May 8, 1964, counsel was assigned to defendant by the Court; defendant pleaded not guilty. He was remanded to jail; at his request no bail was set.

 On July 1, 1964, defendant moved for sixty days additional time for the filing of pretrial motions. On July 6, 1964, Judge Bryan granted an extension of time for the making of all motions to September 21, 1964.

 On September 4, 1964, defendant moved for (1) dismissal of the indictment on the ground of taint and the production of grand jury minutes in connection with this motion; (2) dismissal of certain counts of the indictment or an order compelling the Government to elect one of the counts for trial; (3) striking certain allegations of the indictment as prejudicial surplusage; (4) a bill of particulars; and (5) discovery and inspection.

 As to the foregoing motions, "(1)" was denied by Judge Wyatt on June 11, 1965. United States v. Birrell, 242 F. Supp. 191, 205 (S.D.N.Y.1965); "(2)" was denied by this Court on April 3, 1967. United States v. Birrell, 266 F. Supp. 539 (S.D.N.Y.1967); "(3)" was granted by this Court on the Government's consent; "(4)" was partially granted by this Court on January 19, 1967. United States v. Birrell, 263 F. Supp. 113 (1967); and "(5)" was, on September 21, 1964, marked off the calendar on consent of all counsel subject to restoration; was subsequently revived on August 29, 1967 and is (as supplemented by a demand for sixteen additional items for discovery and inspection) now before the Court for decision.

 On September 9, 1964, defendant moved to suppress files seized on July 24, 1959 and on August 22, and 24, 1959. This motion was decided by Judge Wyatt in June and July, 1965. United States v. Birrell, 242 F. Supp. 191 (1965); 243 F. Supp. 36 (1965); 243 F. Supp. 38 (1965).

 On September 27, 1966, Chief Judge Sugarman assigned the case to this Court for all purposes. Defendant then moved, on October 28, 1966, (1) to disqualify this Court under 28 U.S.C. § 144; (2) for an order directing the United States Attorney to file an inventory of the files seized on August 22 and 24, 1959; (3) for renewal and argument of the motions filed September 4, 1964 that had not yet been heard and decided. As to these motions, "(1)" was denied by this Court on January 9, 1967. United States v. Birrell, 262 F. Supp. 97 (S.D.N.Y.1967); "(2)" was denied by this Court on May 23, 1967. United States v. Birrell, 269 F. Supp. 716 (S.D.N.Y.1967); and "(3)", involving certain motions made originally on September 4, 1964, was dealt with as already set forth above in detailing the disposition of the September 4, 1964 motions. Of those motions only the motion for discovery and inspection (as supplemented) remains undecided.

 On February 27, 1967, defendant moved for a pretrial evidential hearing to probe the genesis and evolution of the Government's prospective trial proof in order to have the Government demonstrate that its proposed trial evidence is uncontaminated by the suppressed records and clues or leads derived therefrom. The motion was denied by this Court on May 23, 1967. United States v. Birrell, 269 F. Supp. 716 (S.D.N.Y.1967).

 On May 26, 1967, William J. Brennan, III, Esq., then defendant's assigned counsel, requested to be relieved of his assignment. Over the Government's opposition (Minutes of Pretrial Hearing, pp. 190, 194) the Court, on June 16, 1967, relieved Mr. Brennan and designated Charles N. Brower, Esq. as assigned counsel. Mr. Brennan agreed to make himself available to Mr. Brower for conference and consultation "so that Mr. Brower will be brought up to date not only on the proceedings themselves as they maybe reflected in the court records, but, more importantly, brought up to date in terms of Mr. Brennan's theories of the defense, considerations of tactics and strategy, which are important in any litigation, and any other matters that would assure to Mr. Birrell that he should have the most effective representation both on the facts and on the law." (Minutes of Pretrial Hearings, p. 222).

 In addition, for the purpose of assuring the most effective representation of defendant and to aid Mr. Brower in discharging his duties, the Court appointed Anthony F. Marra, Chief of the criminal defense staff of The Legal Aid Society, to serve as counsel with Mr. Brower in behalf of defendant.

 On June 16, 1967, the Court granted defense counsel until August 29, 1967 to make whatever motions they thought appropriate or necessary and set the case for trial on December 4, 1967. (Minutes of Pretrial Hearings, pp. 228, 234, 242, 261).

 In a series of motions made returnable on August 29 and September 5, 1967, defendant applies for the following relief: *fn1"

 (1) the disqualification of the Court from proceeding further in indictments 61 Cr. 200, 61 Cr. 820, 61 Cr. 903 and 62 Cr. 307 because of personal bias or prejudice (28 U.S.C. § 144);

 (2) a preliminary injunction restraining the United States Attorney, C. E. H. McDonnell, Trustee in Chapter X Reorganization of Equitable Plan Company and George C. Levin, Esq., Trustee in Chapter X Reorganization of Swan-Finch Oil Corporation, and all other persons "from entering, removing documents from, making photocopies of or in any other manner whatsoever using any of the files and other property seized from defendant Lowell M. Birrell on August 22 and 24, 1959, and presently lodged in Room 501 of * * * [the] United States Courthouse * * *";

 (3) a pretrial hearing for the return of property unlawfully seized from defendant and suppressed for use as evidence against the defendant by orders of Judge Wyatt, June 11 and 25, 1965; and at such hearing to require the return of all such property "together with all copies, transcriptions, abstracts, excerpts, notes and other memorializations of such property * * *" and an itemized list of all property returned;

 (4) an order pursuant to Fed.R.Crim.P. 12(b) and 48(b) dismissing the indictment in 61 Cr. 692 on the grounds that:

 
"(a) some of the defendant's property which was suppressed by the orders of the Honorable Inzer B. Wyatt, United States District Judge, dated June 11 and 25, 1965 has been lost, destroyed, mutilated, removed or otherwise made unavailable to defendant, and the remaining such property is in such a state of disorder, disarray and confusion that as a matter of law it is impossible for defendant to prepare for trial;
 
(b) as a matter of law the Government cannot establish that the evidence which it intends to introduce at the trial of this indictment is not tainted by any of the aforesaid suppressed property; and
 
(c) defendant has been deprived of his right to a speedy trial";

 (5) an order pursuant to Fed.R.Crim.P. 6(b) and 12(b) dismissing the indictment in 61 Cr. 692 on the grounds that the grand jury was improperly selected, as Negroes, Puerto Ricans and others of lower socio-economic status were systematically and intentionally excluded from the array;

 (6) an order pursuant to Fed.R.Crim.P. 15 permitting defendant to depose American Leduc Petroleums Limited and the Toronto Stock Exchange in connection with 61 Cr. 692;

 (7) an order pursuant to Fed.R.Crim.P. 15 and 17:

 
(a) precluding the use of evidence in 61 Cr. 692 (American Leduc) that defendant was a fugitive from justice. Should such evidence be used, defendant seeks to introduce as evidence certain depositions on file with the Court and to depose certain additional named persons.
 
(b) barring evidence which tends to show that acts alleged in indictment 61 Cr. 692 were part of a common plan or scheme; and
 
(c) requiring the Government to elect those counts of indictment 61 Cr. 692 which will actually be tried against defendant;

 (8) orders pursuant to Fed.R.Crim.P. 16 and 17(c) permitting defendant's discovery and inspection of thirty-two enumerated items in connection with 61 Cr. 692.

 The many and diverse issues raised by these motions necessitate a recital of the relevant factual background as disclosed by the motion papers. *fn2"

 On April 15, 1957, a civil action was instituted in this Court by the Securities and Exchange Commission against Birrell and twenty-three other defendants. Birrell was subpoenaed to testify on October 7, 1957, but did not appear. Instead, defendant left the United States sometime during October 1957 and did not return until April 23, 1964.

 Sometime during 1957, approximately forty-six filing cabinets containing from one million to two million documents were moved at defendant's request from New York City to Teaneck, New Jersey. Allegedly the files contained personal papers of Birrell, business records of the law firm of Birrell and Larson, and records of various corporations including Swan-Finch Oil Corporation and Equitable Plan Company. These documents were moved again early in 1959 to Bucks County, Pennsylvania, where they were placed in the custody of Jonathan D. Dunn, an attorney for the defendant.

 In January 1958, the trustees in bankruptcy of Swan-Finch Oil Corporation and attorneys for the trustee in bankruptcy of Equitable Plan Company began searching for the records of their corporations. Finally, on August 20, 1959, the location of the records was revealed at an ancillary proceeding in bankruptcy pending in this Court. A search warrant was issued on August 22, 1959, based on an affidavit of an attorney in the ancillary proceeding. The affidavit of a postal inspector supported a second search warrant issued on August 24, 1959. Both warrants were executed and returned on the respective issue dates.

 The seized records were first placed in the custody of the United States Marshal for the Eastern District of Pennsylvania. Sometime after November 10, 1959, they were deposited in the custody of the Clerk of the Court for the Southern District of New York. During this period of approximately three months, the records were neither inspected nor disturbed.

 The removal of the records from the Eastern District of Pennsylvania was pursuant to two Court orders. The first, dated October 16, 1959, and filed on October 26, 1959, was issued by Judge Palmieri of the Southern District of New York. Judge John W. Lord of the Eastern District of Pennsylvania issued the second order, dated November 10, 1959. These orders directed the Marshal of the Eastern District of Pennsylvania to deliver the records to the custody of the Clerk of the United States Court for the Southern District of New York, subject to the further order of this Court.

 From November 1959 until July 1961, the files remained in the custody of the Clerk of this Court. The records were inspected and photocopied, pursuant to court order, by various attorneys in the above-mentioned bankruptcy proceedings, representatives of the Attorney-General of the State of California, and the District Attorney of the City of Los Angeles. However, no inspection or photocopying of the records by any representative of the United States Attorney for the Southern District of New York occurred during this period.

 In July 1961, the records were transferred from a file room in the Clerk's office to the file room of the United States Attorney (Room 501). Judge Palmieri approved the transfer in order to insure the completeness and maintain the integrity of the files. Custody of the records, however, remained with the Clerk of the Court. Representatives of the United States Attorney's Office and investigators from the Securities and Exchange Commission then began inspection and inventory of the documents.

 In 1961 and 1962, six federal indictments were returned against defendant. *fn3" These charges include, inter alia, violations of the Securities Act of 1933 (15 U.S.C. § 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), the mail fraud statute (18 U.S.C. § 1341), and the transportation of stolen property in interstate commerce (18 U.S.C. § 2314). Bench warrants for the arrest of defendant, issued as to each indictment, were executed upon Birrell's return to the United States on April 23, 1964.

 Birrell was arraigned on April 23, 1964. As the fixing of bail was adjourned at defendant's request, he was placed in custody. On February 11, 1965, bail was set at $150,000 by Judge Weinfeld of this Court. On June 28, 1965, bail was reduced to $50,000. It was reduced to $15,000 on July 27, 1965; and defendant, after posting this amount, was released on August 4, 1965.

 Late in 1964, defendant moved for suppression and return of the records seized on August 22 and 24, 1959. On June 11, 1965, Judge Wyatt ordered the seized records suppressed for use as evidence against defendant, ruling that the affidavits underlying the search warrants were insufficient to establish probable cause. United States v. Birrell, 242 F. Supp. 191, 201 (S.D.N.Y.1965). By subsequent order, Judge Wyatt ordered restored to defendant those records of which Birrell could establish ownership. The Court expressed the opinion that the burden of proof was properly placed on defendant because: "(a) movant knows more about the property than anyone else and (b) he delayed more than five years in making the present motion." United States v. Birrell, 243 F. Supp. 38, 41 (S.D.N.Y.1965).

 Pursuant to Judge Wyatt's order, defendant moved, on October 25, 1965, for the return of the suppressed property. This motion was adjourned for two weeks in order that defendant, chapter X trustees in bankruptcy of Swan-Finch and Equitable Plan, and the Government might confer and agree on the return of the files. Eventually, the motion was referred to Chief Judge Ryan of this Court, who denied it on December 15, 1965, because defendant had disregarded the procedure outlined in Judge Wyatt's order.

 The Government moved, on December 2, 1965, for the appointment of a single Judge to handle 61 Cr. 692, the American Leduc indictment, pursuant to Rule 2 of General Rules of United States District Courts for the Southern and Eastern Districts of New York. Chief Judge Ryan announced that all but emergency matters should be deferred pending the appointment of a Rule 2 Judge. On September 27, 1966, Judge William B. Herlands was named Rule 2 Judge for the American Leduc indictment.

 1. MOTION TO RECUSE

 Defendant moves, pursuant to 28 U.S.C. § 144, *fn4" to disqualify District Judge William B. Herlands from criminal cases 61 Cr. 200, 61 Cr. 820, 61 Cr. 903 and 62 Cr. 307 (and possibly New York County Supreme Court indictment 2490-59) on the ground that Judge Herlands (hereinafter "the Court") has a personal bias or prejudice against defendant. Motions of defendant in these actions seeking the return of property suppressed as evidence, pursuant to the July 1, 1965 order of Judge Wyatt, were referred to the Court on August 28, 1967.

 According to defendant, the first sentence in a prior opinion in an unrelated civil suit shows bias or prejudice on the part of the Court. In Re Equitable Plan Co., 185 F. Supp. 57 (S.D.N.Y.) modified, Ings v. Ferguson, 282 F.2d 149 (2d Cir. 1960), disposing of a motion to quash subpoenas duces tecum, begins as follows:

 
"This action is another chapter in the attempt to unravel the affairs and make whole the victims of Lowell Birrell, presently a fugitive from justice under indictment for crimes arising out of his financial activities." (185 F. Supp. at 58)

 This same contention was the basis of a prior motion by defendant to disqualify the Court from presiding over 61 Cr. 692, the American Leduc indictment. United States v. Birrell, 262 F. Supp. 97 (S.D.N.Y.1967). The Court denied this request on the grounds (1) that defendant had overlooked the statutory requirement of stating "the facts and the reasons" for his belief that bias or prejudice existed, presenting, instead, mere conclusions; and (2) that the Court had simply expressed "relevant judicial opinion" and showed no extra-judicial or personal bias or prejudice. The single quoted sentence, the Court pointed out, occurred "in a totally extraneous case in which the Court summarized the relevant context of the dispute before it, in reliance upon the then uncontroverted record." United States v. Birrell, 262 F. Supp. 97, 100 (S.D.N.Y.1967).

 The rationale of the Court's prior opinion applies to the instant motion. The present moving affidavit is as inadequate as defendant's former affidavit. *fn5"

 The Court is aware of its duty not to recuse itself when there is no sound reason to do so. In the absence of persuasive circumstances calling for recusation, this obligation is even greater when inordinate delay in the administration of criminal justice would result from such a disqualification. *fn6" Such a result would occur here because precisely the same relief demanded by these motions - the return of the suppressed property - is requested in an identical motion in the American Leduc case, which the Court is required to decide.

 Defendant also cites as evidence of bias certain remarks made by then Assistant United States Attorney Gerald Walpin in the sentencing proceedings of defendants in United States v. Garfield et al., 61 Cr. 360 before the Court in 1962 and 1963 (Defendant's Affidavit of Prejudice, pp. 3-6). There is no claim that any opinions or statements about defendant were made by the Court; nor is there any claim that the Court acquiesced in or agreed with any statements or opinions made by the Government in these proceedings. Rather, it appears that defendant contends that the Court's hearing of these remarks is sufficient to show personal bias or prejudice. Mere exposure to unfavorable remarks or statements made in the course of adversary proceedings is not enough to show bias or prejudice on the part of the Court against defendant. Were that so, few judges could escape disqualification. Cf. United States v. Weldon, 384 F.2d 772, (2d Cir., Oct. 30, 1967).

 Defendant finally contends that certain conduct of the Court after it was assigned as the all purpose judge herein indicates personal bias or prejudice (Defendant's Affidavit, pp. 7-9). Defendant points to the Court's action at the pretrial conference of October 14, 1966, scheduling hearings on numerous pretrial motions despite notification that defendant was filing an affidavit of prejudice.

 The efforts of the Court to expedite the trial herein does not evidence bias or prejudice. It is the trial judge's duty to prevent a defendant from utilizing an affidavit of prejudice for the sole purpose of delaying and otherwise unjustifiably embarrassing the administration of justice. United States v. Murphy, 19 F. Supp. 987, 988 (W.D.Mo.1937). See also Rosen v. Sugarman, 357 F.2d 794, 797-798 (2d Cir. 1966) (Friendly, J.).

 Defendant also points to certain statements of the Court as indications that these motions would be decided unfavorably to him. Whether examined singly or together, these statements are legally insufficient to show personal bias or prejudice. Defendant repeatedly submits quotations out of context and ignores the requirement that "[the] fair meaning of any remark must be interpreted in the light of the context in which it is uttered". Foster v. Medina, 170 F.2d 632, 633 (2d Cir. 1948) cert. denied, 335 U.S. 909, 69 S. Ct. 412, 93 L. Ed. 442 (1949).

 Moreover, disqualification based on alleged bias and prejudice cannot be predicated on tentative opinions of the Court based on the papers and testimony before it. *fn7"

 For the reasons heretofore stated, defendant's motion is hereby denied. So ordered.

 2. MOTION FOR PRELIMINARY INJUNCTION

 Defendant seeks to enjoin the United States Attorney, the Chapter X Trustees of Swan-Finch Oil Corporation and Equitable Plan Company and all other persons from entering or making any use whatsoever of the files seized on August 22 and 24, 1959, pending the determination of a motion for the return of said property. (Motion number 3, infra.)

 The Government is precluded by Judge Wyatt's suppression order of June 11, 1965 from offering any of these files into evidence. On the other hand, the trustees are not subject to any such retraint. Indeed, they are using the documents in various civil proceedings, including one now pending in this Court in which Lowell Birrell is named as a party defendant. McDonnell v. American Leduc et al., Civ.No. 137-160. This latter litigation is now actively in the pretrial stage; and attorneys of the Equitable Plan trustee are marking as exhibits photocopies of documents in the suppressed files and using them in the deposing of prospective witnesses.

 Defendant asserts that the injunctive relief sought is necessary in order to prepare properly for trial, to preclude the prosecution from a cumulative means of discovery beyond that provided for in the Federal Rules of Criminal Procedure, to safeguard his Fifth Amendment privilege against self-incrimination, and to preserve the Court's ability to grant the ultimate relief demanded - return of the suppressed property.

 The present motion involves the reconciliation of important competing interests and policies: the right of a defendant in a criminal case to a fair and impartial trial vis-a-vis the right of the Chapter X trustee, representing many large and small creditors, to vindicate pecuniary and economic rights in an expeditious manner. The Court is sensitively aware that its duty to insure the fairness of the criminal proceedings before it demands adherence to standards higher than those required by due process, McNabb v. United States, *fn8" 318 U.S. 332, 340, 63 S. Ct. 608, 87 L. Ed. 819 (1943), and even the "probability of unfairness" is to be prevented, In re Murchison, 349 U.S. 133, 136, 75 S. Ct. 623, 99 L. Ed. 942 (1954). The ultimate issue before the Court is whether a practical accommodation of the rival interests and policies can be achieved; or whether vindication of the rights of the defendant justifies and compels resort to the drastic remedy of an inter-court injunction.

 The power of a criminal court to enjoin concurrent civil proceedings involving the same subject matter was recognized in United States v. Simon, 262 F. Supp. 64 (S.D.N.Y.1966), rev'd, 373 F.2d 649 (2d Cir. 1967), cert. dismissed, sub nom. Simon v. Wharton, 386 U.S. 1030, 87 S. Ct. 1485, 18 L. Ed. 2d 591 (1967). A civil action for damages had been brought in the Eastern District of New York by a reorganization trustee against an accounting firm alleging a conspiracy to despoil assets. Subsequently, an indictment based on the same transaction was returned in the Southern District of New York against certain named members of the firm charging them with violations of the Securities Exchange Act of 1934. The defendants in the criminal proceeding moved to enjoin the trustee from taking their depositions in the civil action until the completion of the criminal trial. The District Court, in enjoining the taking of depositions for a ninety-day period, cited two authorities: the "All Writs" Act *fn9" and the federal criminal court's inherent equity jurisdiction or supervisory power over the administration of criminal justice. Since the scope of pretrial discovery is much broader in civil than in criminal proceedings, the Court found that the deposing of the defendants would enable the Government to obtain "a full disclosure of the . . . [defendants'] case while relying on the rules to prevent disclosure of its own * * *" (262 F. Supp. at 73-74). Therefore, the probability of unfairness in the criminal trial justified the resort to injunctive relief.

 In reversing the order of the District Court, the Court of Appeals for the Second Circuit assumed, without deciding, that a federal criminal court has power to issue an inter-court injunction. The Court, however, found this case inappropriate for such relief because it was not shown that civil discovery would interfere with the criminal trial or the preparation of the defense. The defendants' rights were protected by the availability of the privilege against self-incrimination in the civil proceedings.

 We recognize that, in appropriate circumstances, a federal criminal court has the power to enjoin concurrent civil proceedings *fn10" in order to prevent unfairness in the criminal trial. The inherent power of a federal court to supervise the administration of criminal justice *fn11" and the explicit mandate of the Federal Rules of Criminal Procedure provide sufficient bases for such relief. *fn12" Under Fed.R.Crim.P. 57(b), where "no procedure is specifically prescribed by rule, the court may proceed in any lawful manner not inconsistent with these rules or with any applicable statute".

 Moreover, to prevent unfairness in criminal proceedings, a federal court clearly has the power to affect persons not party to the criminal action. Rea v. United States, 350 U.S. 214, 217, 76 S. Ct. 292, 100 L. Ed. 233 (1956); Go-Bart Importing Co. v. United States, 282 U.S. 344, 355, 51 S. Ct. 153, 75 L. Ed. 374 (1931); In re No. 32 East Sixty-Seventh Street, 96 F.2d 153 (2d Cir. 1938). See also, Ex parte Lennon, 166 U.S. 548, 17 S. Ct. 658, 41 L. Ed. 1110 (1897); City of Fresno v. Edmonston, 131 F. Supp. 421, 427 (S.D.Cal.1955).

 The extreme remedy of an inter-court injunction should be employed only "in exceptional circumstances". Interference with proceedings in another court should be avoided where other adequate remedies are available. United States v. Simon, 373 F.2d 649, 653 (2d Cir.), cert. dismissed, sub nom. Simon v. Wharton, 386 U.S. 1030, 87 S. Ct. 1485, 18 L. Ed. 2d 591 (1967); D'Ippolito v. American Oil Co., 272 F. Supp. 310 (S.D.N.Y. Aug. 18, 1967). Furthermore, in the absence of prejudice to the criminal defendant, the Court must insure the right of the trustee to litigate his civil action in an unhindered and expeditious manner.

 Defendant relies on United States v. Simon, supra and United States v. American Radiator & Standard Sanitary Corp., 272 F. Supp. 691 (W.D.Pa. August 8, 1967) as authority for the issuance of injunctive relief in the instant case. We do not agree. The present case is factually distinguishable because of an illegal search and seizure. Since the seized files - the subject matter of the present motion - are suppressed for use as evidence against the defendant, all clues and leads derived therefrom are likewise inadmissible as fruit of the poisonous tree. Therefore, any evidence adduced by the trustee through the use of the suppressed files in the civil suit is inadmissible in the criminal trial. *fn13"

 The inability of the Government to utilize evidence so obtained by the trustee invalidates defendant's claim that his privilege against self-incrimination is or may be violated. *fn14" The charge that the United States Attorney is obtaining a cumulative means of discovery is likewise rejected. While in Simon and American Radiator,15 the prosecution might use ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.