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United States v. Klein

decided: July 26, 1978.


Appeal from orders of the United States District Court for the Southern District of New York, Vincent L. Broderick, Judge, denying a motion to dismiss the indictment on the ground of double jeopardy, following the declaration of a mistrial. Affirmed.

Before Feinberg and Meskill, Circuit Judges, and Port, District Judge.*fn*

Author: Port

Appellant, Allen Klein, has appealed from two orders of Hon. Vincent L. Broderick, United States District Judge for the Southern District of New York, which denied a motion to dismiss the pending indictment against him, and after reargument adhered to the original ruling. Klein contends that a retrial after the sua sponte declaration of a mistrial, over his objection, by United States District Judge Charles M. Metzner*fn1 would violate his constitutional right not to be placed in jeopardy twice. Because our careful examination of the record convinces us that Judge Metzner, in declaring a mistrial in this case of a deadlocked jury, exercised the "sound discretion" mandated over 150 years ago by United States v. Perez, 22 U.S. (9 Wheat.) 579, 6 L. Ed. 165 (1824), we affirm.


The six count indictment upon which Klein was tried charged him with attempted income tax evasion for each of the years 1970, 1971 and 1972 in violation of 26 U.S.C. § 7201, and making false statements on each of the income tax returns for those years in violation of 26 U.S.C. § 7206(1). The indictment charged that the evasions and false statements arose out of Klein's failure to account for substantial cash he received from the sale of promotional phonograph records of the Beatles, whom he managed during those years. He is alleged to have received from the sale of such records $118,000, $55,000 and $52,000, respectively, for the years 1970, 1971 and 1972.

Although the case took 17 days to try, the decisive question to be resolved by the jury was: Should Pete Bennett,*fn2 the defendant's alleged accomplice, be believed?*fn3 If Bennett's testimony was accepted as true by the jury, then the defendant's testimony of necessity could not be.

The government's case was produced mainly through the testimony of Pete Bennett. Klein was President and Chief Executive Officer of ABKCO Industries and Bennett was ABKCO's promotion manager. ABKCO received 5,000 copies of each new Beatles' album and single from Capitol Records for promotional purposes, not for sale. Testimony indicated that, contrary to custom, these promotional records were not marked or otherwise identified as promotional copies. Bennett testified that the records were sold, according to Klein's instructions, to wholesalers and distributors. The cash was then supposedly divided between the two, the greater part going to Klein.

In addition, the government called other witnesses who claimed to have seen large sums of cash pass between Bennett and Klein. Many of these witnesses also testified to Bennett's statements which inculpated Klein by referring to the source of this cash.

Klein took the stand in his own behalf and denied Bennett's charges. He conceded that he kept a large cash hoard in a private safe and that substantial amounts of money had passed between him and Bennett. He contended, though, that cash advances had been given to Bennett and Bennett, in turn, had merely repaid the cash advances. An accountant testified as to Klein's net worth and claimed that his investigation did not reveal the income alleged in the indictment.

A chronology of the jury proceedings from submission to discharge helps recreate the atmosphere under which Judge Metzner's decision to declare a mistrial was made. After 17 trial days, the case went to the jury on Thursday morning, November 3, 1977. Later that day, the jury requested certain exhibits and the reading of the testimony of witnesses Silver and Salvi. Their testimony was offered in corroboration of Bennett's. The testimony was read to the jury and the exhibits provided. After six and one-half hours of deliberation, the jury was sent home. The next day, the jury deliberated for the entire day, on two occasions requesting further information.

On the morning of the third day of deliberations, Klein's entire cross-examination and redirect testimony were requested and read back. Later, further testimony was asked for, including some that had already been reread on the first day of deliberations. Toward the end of the day, Judge Metzner proposed to counsel that a note be sent into the jury asking whether a verdict was possible or if they were hopelessly deadlocked. Both counsel objected. Defense counsel contended that such a note was uncalled for as the jury was conscientiously deliberating. He further argued that the proposed note would improperly suggest to the jury that it was deadlocked, and he requested the court to wait until the jury announced the deadlock. The government objected to the timing of the note. If the jury responded by stating it was deadlocked, the government intended to request an Allen charge. Accordingly, it asked that the inquiry wait until the following morning when, if necessary, an Allen charge could be delivered and the jury could retire forthwith for further deliberations. At 5:40 P.M. Saturday, Judge Metzner, denying a government request that the jury deliberate on Sunday, chose to do nothing and excused the jury until Monday morning at 9:30 A.M.

Monday began the fourth day of deliberations. That morning the jury requested that the court's entire charge be reread. In the afternoon, they requested, for the second time, the rereading of Silver's testimony along with other corroborative evidence. Late in the day, Judge Metzner again proposed inquiring about the chances for reaching a verdict. He noted that the issues presented to the jury were not overly complicated and contrasted the case to an SEC problem or a net worth tax case. Since the jury had already deliberated four days after a three week trial, Judge Metzner felt he was free to make this inquiry of the jury.

Defense counsel again objected to Judge Metzner's proposal, arguing that the deliberations were proceeding properly and that the judge's note was somehow coercive. The government again objected to an inquiry so late in the day since it would ask for an Allen charge should the jury indicate a deadlock. The defendant's counsel was not prepared to join in the request for an Allen charge or object to it until he conferred with his client. The government further advised Judge Metzner that he must canvass the defendant for alternatives to a mistrial according to United States v. Grasso, 552 F.2d 46 (2d Cir. 1977), Vacated and remanded, 438 U.S. 901, 98 S. Ct. 3117, 57 L. Ed. 2d 1144 (1978).

Nevertheless, Judge Metzner sent the note in. It read: "Have you reached a verdict on any count in the indictment? If not, is there a possibility that you will reach a verdict on any count in the indictment if you continue your deliberations?" The jury responded: "Some feel there is no possibility of reaching a verdict on any of the counts as we appear to be deadlocked at this point. This, however, is not unanimous." Tr. 2841; JA 406. Judge Metzner then dismissed the jury until Wednesday, allowing them time off for Election Day.

On Wednesday morning, the beginning of the fifth day of deliberations, Judge Metzner decided to give the jury a modified Allen charge. He discussed this with counsel but rejected each of their respective proposals, choosing to give his own modified Allen charge which had been approved by this court in United States v. Tolub, 309 F.2d 286 (2d Cir. 1962). Later, after requesting a rereading of more corroborative testimony, the jury asked the court for clarification of the meaning of corroboration. The judge discussed his response with counsel and followed some of defendant's suggestions. His instructions were then read to the jury, only to be reread an hour and a half later following another note from the jury which requested the charge in writing. Wednesday's deliberations concluded without a verdict being reached.

The next morning the jury requested, for the third time, to hear the testimony of Silver concerning exchanges of money between Bennett and Silver. At noon they asked for Bennett's testimony concerning money passing between him and Silver. After hearing nothing further from the jury for the rest of the day, Judge Metzner called counsel to chambers shortly before 5 P.M. He noted that deliberations had lasted for six full days and that an Allen charge delivered Wednesday morning had produced no results. He suggested sending a second note into the jury to inquire about deadlock. Defendant continued to press his objections. He argued that a deadlock must be unanimous. Judge Metzner rejected this contention, stating that deadlock could result, instead, when some jurors determined not to change their minds. Defense counsel's request for further instructions on corroboration was also rejected.

A note prefaced by "At the end of . . . deliberations on Monday, you informed the court that you were deadlocked in your deliberations", was sent in and the jury responded as follows:

Are you deadlocked in your deliberations?


Have you reached a verdict on any count in the indictment?


If you have not reached a verdict as to any count in the indictment, is there a possibility that you can reach a verdict as ...

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