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United States v. Wolfson

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


June 3, 1977

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
LOUIS E. WOLFSON, ELKIN B. GERBERT, DEFENDANTS, LOUIS E. WOLFSON, DEFENDANT-APPELLANT

Appeal from denial by United States District Court for the Southern District of New York, Edmund L. Palmieri, J., of petition for writ of error coram nobis and motion for recusal pursuant to 28 U.S.C. §§ 144 and 455. Affirmed.

Lumbard and Feinberg, Circuit Judges, and Coffrin, District Judge.*fn*

Author: Feinberg

FEINBERG, Circuit Judge:

In 1966, the Government filed two indictments against Louis E. Wolfson. The first charged violations of section 5 of the Securities Act of 1933, 15 U.S.C. § 77e, in connection with the sale of unregistered stock of Continental Enterprises ("Continental"). The second charged, among other things, fraud in the purchase and sale of stock of Merritt-Chapman & Scott Corporation ("Merritt-Chapman"). Thus began a series of trials and appeals that have spanned more than a decade and have now involved six decisions by panels of this court alone. This appeal stems from the denial by the United States District Court for the Southern District of New York, Edmund L. Palmieri, J., of Wolfson's petition for a writ of error coram nobis and his motion for the recusal of Judge Palmieri. The background of the coram nobis petition is extensive, but for the purposes of this appeal, we need present it only in summary form.

Wolfson was found guilty on all counts in the Continental case after a three-week jury trial presided over by Judge Palmieri.*fn1 This conviction was affirmed, 405 F.2d 779 (2d Cir. 1968), cert. denied, 394 U.S. 946, 89 S. Ct. 1275, 22 L. Ed. 2d 479 (1969), as was a later denial of a motion for a new trial. 297 F. Supp. 881 (S.D.N.Y. 1968), aff'd, 413 F.2d 804 (2d Cir. 1969). Judge Palmieri was also assigned to preside over the trial of the Merritt-Chapman case, and Wolfson unsuccessfully sought to have the judge disqualified. Wolfson v. Palmieri, 394 F.2d 7 (2d Cir. 1968) (motion dismissed for lack of jurisdiction); id., 396 F.2d 121 (2d Cir. 1968) (motion dismissed on the merits). Afterwards, the jury found Wolfson guilty, but the conviction was reversed on appeal. 437 F.2d 862 (2d Cir. 1970). Two retrials were held before Inzer B. Wyatt, J., but neither jury could reach a verdict, and Wolfson eventually pleaded nolo contendere to a misdemeanor.*fn2

In 1975, Wolfson filed a voluminous coram nobis petition which raised many points touching on both the Merritt-Chapman and the Continental cases.*fn3 The petition was assigned to Judge Palmieri, and Wolfson moved for his recusal, primarily on the ground that the judge might be called as a witness during the coram nobis proceedings. The motion was denied. Wolfson then moved for reconsideration, this time emphasizing bias and prejudice as a ground for recusal. Reconsideration was granted, but the motion was denied. Subsequently, Judge Palmieri ruled against Wolfson on the merits of his coram nobis petition.*fn4 Wolfson now appeals from the denial of his coram nobis petition and his recusal motion.

I

The Recusal Motion

As the preceding chronology indicates, Wolfson unsuccessfully sought recusal of Judge Palmieri before the Merritt-Chapman trial began, and many of the issues then raised and considered by this court have surfaced again on this appeal. As before, Wolfson supports his claim of bias by pointing to various rulings and comments made by the judge during the Continental trial and to the sentence and bail set in that case. See 396 F.2d at 125. He also points to evidence of alleged bias not previously presented, such as the judge's failure to postpone the sentencing date in the Merritt-Chapman case despite the fact that Mrs. Wolfson was fatally ill at the time, and the judge's conduct of the proceedings on this coram nobis petition - in particular, his requirement that Wolfson's counsel file an affidavit indicating, among other things, the issues in the petition that had not been previously litigated. According to Wolfson, the antagonism between himself and Judge Palmieri is exemplified by a telegram Wolfson sent to the judge after the Merritt-Chapman sentencing, in which he pledged "to do everything to have you [Judge Palmieri] removed from the bench . . . ."*fn5 During the course of this coram nobis proceeding, Wolfson wrote a similar letter to the New York Times which accused the judge of participating in a "scheme to frame" him. The letter was never published, but Wolfson sent a copy of it to the judge. Wolfson argues that this evidence, considered as a whole, shows that Judge Palmieri, whether justifiably provoked or not, "has lost the objectivity which must be maintained by a court." At the least, he claims that it raises a reasonable question of the judge's bias and that recusal is therefore required by 28 U.S.C. § 455.

Recusal of federal court judges is governed by two statutes, 28 U.S.C. §§ 144 and 455.*fn6 Section 144, reproduced in the margin,*fn7 deals with the recusal of district court judges for "personal bias or prejudice" and sets forth detailed procedural requirements, such as the timely filing of an affidavit of prejudice, that must be followed in order to bring the recusal motion before the court. See Wolfson v. Palmieri, supra, 394 F.2d 7. Section 455 is more comprehensive, and was amended by Congress in 1974 to "broaden and clarify the grounds for judicial disqualification." Pub L. No. 93-512, Preamble. As amended, § 455 closely follows the provisions of Canon 3C of the American Bar Association's Code of Judicial Conduct,*fn8 and contains a general, objective standard requiring a judge to disqualify himself "in any proceeding in which his impartiality might reasonably be questioned." 28 U.S.C. 455(a).*fn9 Unlike its predecessor, the new § 455 deals directly with disqualification due to personal bias. Id. § 455(b)(1). As a result, § 455 now subsumes the subject matter of § 144, and the interaction between the two statutes is as yet unclear.*fn10 For instance, in this case the Government argues that the procedural requirements of § 144 apply to a claim of bias under § 455 and that Wolfson has not complied with them.*fn11 We need not reach those issues, however, for even if we assume arguendo that Wolfson's claim of bias is properly before us under § 455, the claim fails even under the standards of that section.

Both §§ 455(b)(1) and 144 refer to " personal bias" as triggering the requirement of recusal. (Emphasis supplied). And the cases construing both these sections have consistently held that for an alleged bias to be "personal," it "must stem from an extrajudicial source . . . ." United States v. Grinnell Corp., 384 U.S. 563, 583, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966) (interpreting § 144); accord with respect to § 455, Davis v. Board of School Commissioners of Mobile County, 517 F.2d 1044, 1051-52 (5th Cir. 1975), cert. denied, 425 U.S. 944, 48 L. Ed. 2d 188, 96 S. Ct. 1685 (1976); Lazofsky v. Sommerset Bus Co., 389 F. Supp. 1041, 1044-45 (E.D.N.Y. 1975). Here, all of Wolfson's charges of bias against Judge Palmieri arise out of the judge's conduct of the legal proceedings before him. The only exceptions to this are the letters written by Wolfson after his sentencing in the Merritt-Chapman case and during the coram nobis proceedings. But these letters only establish Wolfson's feelings towards Judge Palmieri, not the reverse. Cf. In re Union Leader Corp., 292 F.2d 381, 389 (1st Cir. 1961).

Moreover, a prior panel of this court has extensively examined Judge Palmieri's conduct of the Continental case, including the allegedly excessive bail and sentence, and found "nothing to suggest bias or prejudice" or proper "grounds for disqualification." 396 F.2d at 125. True, Wolfson now rests his claim on bias in part on events never considered by the prior panel. As to those events stressed before us, the record shows that Judge Palmieri's timing of the sentencing in the Merritt-Chapman case was based on the report of Mrs. Wolfson's doctor that Mrs. Wolfson's condition had improved somewhat. Similarly, Judge Palmieri's order requesting clarifying affidavits in the coram nobis proceedings was not unreasonable in light of the lengthy and complex history of the case and a significant error in the coram nobis papers.*fn12

Wolfson argues that the new § 455(a) is meant to make it easier to disqualify a judge whenever his "impartiality might be reasonably questioned." See 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 3542 at 346 (1975 ed.). We recognize that § 455(a) is designed to negate the "duty to sit" notion*fn13 and to allow "a greater flexibility in determining whether disqualification is warranted in particular situations." United States v. Ritter, 540 F.2d 459, 462 (10th Cir. 1976), cert. denied, 429 U.S. 951, 97 S. Ct. 370, 50 L. Ed. 2d 319 (1976). Also, we do not read the authorities referred to above as holding that a judge's conduct of proceedings before him can never form a basis for finding bias. See Wolfson v. Palmieri, supra, 396 F.2d at 124-25; 13 Wright, supra, at 352-53. But having said all that, we do not in good conscience think that Judge Palmieri had to disqualify himself on the coram nobis petition. We cannot disregard the action of the prior panel on the same claim based in large part on the same record, even though the standard for recusal has since changed. There is a broad reference to the "duty to sit" idea in the prior panel's decision, 396 F.2d at 124 (quoting Rosen v. Sugarman, 357 F.2d 794, 797-98 (2d Cir. 1966)). That was not the basis of the decision, however, and there is no indication that the prior panel felt compelled because of the old law's more restrictive test to deny recusal. Wolfson would undoubtedly rejoin that he is not asking us to reverse the prior decision, but only to take the prior record into account in connection with the recusal motion addressed to the coram nobis petition years later. We have done so to the extent we think appropriate. But as indicated, we do not believe that the change in standards would have affected the prior decision, and the determination of that panel on the record before it, therefore, carries great weight with us.*fn14 And for the reasons given above, the later events simply do not afford a reasonable basis for suspecting bias.*fn15

We understand that regardless of a court's fairness, a defendant who has undergone two lengthy trials before the same judge, both of which ended in guilty convictions, may come to consider that judge as biased against him. These suspicions are understandable, but, without more, they do not provide a reasonable basis for questioning a judge's impartiality. On oral argument, appellant pointed to the "general rule" of the First Circuit of assigning certain categories of § 2255 petitions automatically to other judges. See Halliday v. United States, 380 F.2d 270 (1st Cir. 1967), aff'd on other grounds, 394 U.S. 831, 23 L. Ed. 2d 16, 89 S. Ct. 1498 (1969); but cf. United States v. Cowden, 545 F.2d 257 (1st Cir. 1976). Whatever the overall merits of this approach, and we do not underestimate them, see generally 2 Wright, Federal Practice and Procedure, supra, § 600 at 631-32 (1969 ed.) and at 276 (1976 supp.), we do not believe that § 455(a) requires such a rule for § 2255 or coram nobis petitions where there is a claim of bias. Cf. United States v. Cowden, supra. It may well be that such a rule, or something similar but more limited,*fn16 would be useful in the future. Such a practice would, at the very least, render unnecessary the considerable time and effort expended by the district court and by this court on the issue here and allow all concerned to focus exclusively on the merits of the collateral attack.*fn17 But in the absence of such a pre-existing practice, there is no sound basis for reversal here. In short, we conclude that there is nothing in Judge Palmieri's conduct in the Continental, Merritt-Chapman and coram nobis proceedings to give rise to a reasonable suspicion of bias.

II

Having decided that Judge Palmieri could properly deal with the coram nobis proceeding, we turn to the claims presented in the coram nobis petition itself. On appeal, Wolfson has pressed only three of these claims, one of which - a Brady claim - he has since abandoned.*fn18 Both remaining claims allege violations of Wolfson's right to effective assistance of counsel. Appellant contends that he was deprived of effective counsel because his personal counsel appeared before the grand jury that indicted him and because his lead counsel at the Continental trial was the subject of an alleged Government criminal investigation into that lawyer's stock activities. The district court rejected these claims, as well as the others presented by the petition, on the merits and on the ground that the petition should be dismissed with prejudice pursuant to Fed. R. Civ. P. 41(b) for failure to follow the court's directions. See note 12, supra. Since we find that dismissal of the petition under Rule 41(b) was, under the circumstances, too severe a sanction, see Industrial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1338-39 (9th Cir. 1970); 5 Moore's Federal Practice, P 41.12 (1976-77 Supp.), we must review the merits of the claims.

With respect to Wolfson's argument that he was denied effective counsel because of Government investigation involving his lead counsel at trial, the coram nobis papers alleged only that Wolfson "has reason to believe" that there was a criminal investigation against that attorney.*fn19 Appellant presented no evidence that the attorney was aware of such an investigation, if it in fact existed. No affidavit from the attorney was submitted, nor was there any explanation of why one was unavailable. In short, appellant's petition presented little, aside from his own speculations, in support of the claim, and on this record he was not entitled to a hearing on the issue. See United States v. Tribote, 297 F.2d 598, 601 (2d Cir. 1961).

Appellant's argument concerning the appearance of his personal counsel before the grand jury that indicted him requires more discussion. Although this claim was raised below, it was not emphasized or phrased in the same terms in the coram nobis petition, and the district court treated it as part of Wolfson's general complaint over the ineffectiveness of his counsels' strategic decisions.*fn20 As more fully explicated on appeal, Wolfson's assertion is that "the Fifth and Sixth Amendments protect a criminal defendant from grand jury inquiry into the work of defense counsel," and that violation of that principle should result in the dismissal of the indictment.

We are sensitive to the grave dangers posed when counsel appears before the same grand jury that indicted defendant. See In re Terkeltoub, 256 F. Supp. 683 (S.D.N.Y. 1966); United States v. Colacurcio, 499 F.2d 1401, 1404 (9th Cir. 1974). We also recognize that the potential disclosures "touch upon a vital center in the administration of criminal justice, the lawyer's work in investigating and preparing the defense of a criminal charge." In re Terkeltoub, supra, 256 F. Supp. at 684. See also United States v. Nobles, 422 U.S. 225, 237, 45 L. Ed. 2d 141, 95 S. Ct. 2160 (1975), quoting Hickman v. Taylor, 329 U.S. 495, 510-11, 91 L. Ed. 451, 67 S. Ct. 385 (1947). Nevertheless, on this record, we cannot hold that the judge erred in denying a hearing on this issue. Although we have cautioned against the abuses that may result, cf. Matter of Doe, 546 F.2d 498, 502 (2d Cir. 1976), the Government has the right to call an attorney before the grand jury and question him on unprivileged matters. See Blair v. United States, 250 U.S. 273, 63 L. Ed. 979, 39 S. Ct. 468 (1919); In re Grand Jury Subpoena Served Upon David Doe, 551 F.2d 899, slip op. 2403 (2d Cir. 1977); In re Kinoy, 326 F. Supp. 400 (S.D.N.Y. 1970). In this case, the lawyer was not only the personal attorney of defendant, but also general counsel to some of the corporations involved in the grand jury investigation.*fn21 Cf. In re Grand Jury Investigation, 412 F. Supp. 943 (E.D. Pa. 1976). Furthermore, the ordinary presumption that a lawyer is competent to protect his client's confidential interests before the grand jury, see Kinoy, supra, 326 F. Supp. at 402; United States v. Mackey, 405 F. Supp. 854, 865 (E.D.N.Y. 1975), is even stronger in a coram nobis proceeding where the petitioner bears the burden of overcoming the presumption of regularity in the challenged proceedings. See United States v. Morgan, 346 U.S. 502, 512, 98 L. Ed. 248, 74 S. Ct. 247 (1954). Here, according to the coram nobis petition, Wolfson's counsel claimed to have "invoked the attorney-client privilege where appropriate," and there is nothing to indicate that this is not so. And even if there were a violation of the attorney-client privilege, appellant concedes that he is unable to find any case in which such a violation has resulted in dismissal of an indictment or even in a new trial. Nor are we aware of any such case.*fn22 See the thorough opinion of Judge Weinstein in United States v. Mackey, supra, 405 F. Supp. at 860-67. In short, appellant's claim on this issue had insufficient factual support or likelihood of ultimate success, and the district court did not err in denying a hearing.

Finally, we turn to the remaining claims in the coram nobis petition that have not been pressed on appeal, including arguments that the grand jury was biased against petitioner*fn23 and that the trial was tainted by prosecutorial misconduct.*fn24 These claims were carefully considered in Judge Palmieri's thorough opinion, and we need not review them in any detail. We note, as did Judge Palmieri, that many of the claims have been previously raised in this or similar form by the petitioner and considered by this court,*fn25 and we agree with the disposition of the district court.

The judgment of the district court is, accordingly, affirmed.

Disposition

The judgment of the district court is, accordingly, affirmed.


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