United States District Court, S.D. New York
July 6, 2004.
UNITED STATES OF AMERICA,
MORRIS WEISSMAN, Defendant.
The opinion of the court was delivered by: BARBARA JONES, District Judge
Defendant moves for a new trial, for a declaration of a
mistrial on Count II, and for reconsideration of this Court's
opinion denying the existence of a joint defense privilege
shielding certain communications from use at trial. For the
reasons to follow, Defendant's motions are DENIED.
1. Motion for a New Trial
Defendant moves for a new trial, pursuant to Federal Rule of
Criminal Procedure 33, on the grounds that the Court's submission
of special interrogatories to the jury was inherently suggestive
and coerced the jury by providing a roadmap to a finding of
guilt. Although special interrogatories were used only for Counts
I and II, Defendant also argues that the allegedly improper
interrogatories "tainted" the verdicts on Counts III and IV.
As an initial matter, the Court notes that the Second Circuit
has approved the use of special verdict forms. In fact, the
Second Circuit has upheld convictions in cases where the trial court employed special verdict forms in a variety
of criminal cases, including for RICO violations, continuing
criminal enterprise violations, securities fraud, money
laundering, mail fraud, wire fraud, and conspiracies.*fn1
See, e.g., United States v. Pimentel 346 F.3d 285, 305 (2d
Cir. 2003) ("[W]e also strongly encourage the use of special
verdict forms in cases alleging multiple racketeering acts to
facilitate appellate review."); United States v. Coriaty,
300 F.3d 244 (2d Cir. 2002) (wire fraud); United States v.
Zichetello 208 F.3d 72 (2d Cir. 1991) (RICO).
In United States v. Ruggiero, 726 F.2d 913 (2d Cir. 1984),
the Second Circuit approved of the form in a RICO case, reasoning
if . . . a defect effecting a single predicate act is
later discovered, an automatic retrial can be avoided
whenever the jury's additional determinations
indicate that the defendant has been found beyond a
reasonable doubt to have committed at least two other
of the alleged predicate crimes.
Ruggiero, 726 F.2d at 922.
This logic is applicable here. Specifically, the verdict form
in this case "secur[ed] particularized fact-finding," see
Ruggiero, 726 F.2d at 927, and was used to avoid the possibility
of a retrial of a complex case in the event that certain objects
of the conspiracy or certain prongs of the security fraud count were subsequently found
Moreover, the Defendant suffered no prejudice from the use of
the special verdict form. The form first asked whether the jury
reached a general verdict of guilty or not guilty, and then
instructed the jury to answer the special interrogatories only if
they answered guilty to that first question. Cf. id. ("[I]t
might be worth considering an instruction to the jury, reflected
on the interrogatory form, that the interrogatory . . . is to be
answered only in the event that the jury has agreed upon a
The structure of the special verdict form also refutes
Defendant's contention that the form influenced the jury or
provided a roadmap to a finding of guilty. In fact, the Second
Circuit approved a similar form in United States v. Handakas,
286 F.3d 92 (2d Cir. 2002). In that case, the Court affirmed a
conviction in which the special verdict form "supplied by the
district court,  separately asked whether" the Defendant
committed either of two predicate acts. Handakas, 286 F.3d at
100-101. The Court found that "[t]he district court thus
carefully assured that each theory of the prosecution would be
separately considered and decided." Id.
Defendant also contends that it was improper not to include the
standard for the burden of proof and the requirement of unanimity
in the form. There is no requirement, however, that verdict forms include this
information, and it is not disputed in this case that the Court
properly instructed the jury during the charge that the burden of
proof was on the Government to prove guilt on each of the
elements beyond a reasonable doubt. Cf. United States v.
Gallishaw, 428 F.2d 760, 766 (2d Cir. 1970) ("Th[e] omission [of
the burden of proof] does not require us to reverse so long as
the oral charge on these matters was adequate."). Likewise, not
only did the Court instruct the jury on the requirement of
unanimity, the jury clearly indicated its understanding of that
requirement when it sent out its note regarding the questions
relating to the objects of the conspiracy, stating: "regarding
question 4(a)(ii), in 4(a) it says you may select more than one.
If we do not have unanimous agreement on (ii) but have
unanimous agreement on (i) and (iii), can we leave (ii) open
(blank)?" (Tr. at 4087).
Accordingly, the Court finds that the special verdict form was
proper for Counts I and II.
Defendant also claims that any flaws in Counts I and II tainted
the guilty verdicts on Counts III and IV. (Def's Reply at 3).
Even if this Court found Counts I and II flawed, which it does
not, the Defendant has made no showing that "there is a
substantial risk of prejudicial spillover," as is required. See
United States v. Scotti, 47 F.3d 1237, 1247 (2d Cir. 1995). 2. Motion for a Mistrial as to Count II
The defendant moves for a mistrial "at least as to Count 2"
claiming that the verdict was incomplete and that the Court
should have instructed the jury to continue their deliberations.
(Def's Br. at 18). These claims are without merit.
Question 3 on the verdict form asked the jury whether they
found Defendant guilty or not guilty of Count Two (securities
fraud). Question 4 states, "If you answered `guilty' in Question
3, answer the following questions for the defendant." The
subparts in Question 4(a) then asked whether the jury found that
the Defendant (i) employed a device, scheme or artifice to
defraud, or (ii) obtained money or property by means of making an
untrue statement of material fact, or (iii) engaged in an act,
practice or course of business that operated as fraud upon a
When the jury advised the Court that they had a unanimous
verdict the Court noticed, upon examination of the verdict form,
that it was unclear as to what the jury had answered in the space
provided for question 4(a)(ii). (Tr. 4085). Without objection
from counsel, the Court sent the jury back to the jury room to
indicate whether they had in fact reached a unanimous verdict
with respect to question 4(a)(ii), and if they had, to mark their
verdict clearly. The jury subsequently sent back a note asking
"If we do not have unanimous agreement on (ii) but have unanimous agreement on (i) and (iii), can we leave (ii) open (blank)?" (Tr.
at 4087). The Court stated to the Government and Defendant's
I think they obviously have to be told if they cannot
agree unanimously, then they have to leave it blank.
They certainly can't answer it, because they can only
answer these questions unanimously. It seems to me
the only issue is whether you want me to ask them to
try to reach agreement or whether we should simply
take this verdict.
(Tr. at 4089). (Emphasis added.)
The Court then asked "What do you want, Mr. Obermaier?" (Tr. at
4090). Instead of asking the Court to have the jury continue to
deliberate on question 4(a)(ii) or proposing an instruction,
defense counsel responded "well, what I want is for them to clear
up the ambiguity." (Tr. at 4090).
The Court asserted that "[t]here is no ambiguity about anything
in the verdict form, so I am unclear as to what ambiguity you
think exists." (Id.). Mr. Obermaier responded, "It indicates
that they have ambiguity with respect to finding the defendant
guilty on Count Two. That's my position." (Id.). Defendant's
counsel said nothing more.
The Court brought the jury back in and told them, "If you
cannot agree unanimously, then you must leave (ii), that section
of question 4(a), blank." (Tr. at 4091). The jury subsequently
returned the verdict sheet leaving question 4(a)(ii) blank, and
noting on the verdict form that "We wish to leave this question
(ii) blank." The jury unambiguously answered yes to the other
subparts of question 4. First, it is quite clear that the verdict was complete. The
jury unambiguously reached a verdict on this Count by indicating
in question 3 that they found the Defendant "guilty" of Count II.
In addition, the jury indicated, by answering "yes" to questions
4(a)(i) and 4(a)(iii), that they found unanimously that Defendant
had both employed a device or scheme to defraud, as well as
engaged in an act, practice or course of business that operated
as fraud or deceit upon a purchaser. Either of these findings
alone would have been sufficient to convict the Defendant of
Count II. There is no requirement that the jury unanimously
answer every special interrogatory.
As to the Court's failure to instruct the jury to continue to
deliberate, it was unnecessary and in any event, at no time did
the Defendant suggest any instruction to be given to the jury or
move for a mistrial.
Since the Defendant has not shown that it would be manifestly
unjust to let his guilty verdict on Count II stand, his motion
with respect to this issue is denied.
3. Court Erred in Deciding that there was No Joint Defense
Defendant also moves the Court to reconsider its August 11,
2003 Opinion, which was issued after review of the parties'
written submissions, as well as 2 days of hearings. The Court
declines to do so. The August 11 Opinion held that the Joint Defense Agreement
("JDA") did not apply to the interviews conducted by corporate
counsel on February 11, 12, September 9 and December 18, 1999 for
several reasons. First, the Court found that the plain language
of the JDA did not cover the interviews, in part because the
language refers only to the sharing of information "between
counsel and not between a party and another party's counsel."
(Op. at 6-10). Second, the Court stated that, even assuming the
language of the JDA was ambiguous, the extrinsic evidence showed
that the parties to the JDA did not intend for it to apply to the
interviews. (Id. at 6-7). Last, the Court held that no joint
defense privilege existed outside of the JDA because the parties
were not "participating in a common enterprise" when they
conducted the interviews, and because the interviews did not
further any alleged common enterprise but rather were being
conducted "as part of the ongoing internal investigations by the
 corporations." (Id. at 10-19). The Court specifically found
that the interviews were clearly fact-gathering, rather than
strategic, sessions.*fn2 (Id. at 17). Defendant's motion for reargument is based upon his claim that
"he had a reasonable basis to believe that the conversation he
was about to have with the attorneys who were signators to the
Joint Defense Agreement was in fact privileged." (Def's Br. at
24). This argument fails because the Second Circuit has flatly
rejected the "reasonable belief" standard as a basis for
determining the existence of a personal attorney-client privilege
in discussions between employees and corporate counsel.
In United States v. International Brotherhood of Teamsters,
119 F.3d 210, 216-17, 216 n. 2 (2d Cir. 1997), the Second Circuit
"decline[d] [Defendant's] invitation to adopt a `reasonable
belief' standard," and instead held that the "`reasonable belief'
standard is not only not supported by the case law, but . . . it
is also unwise."
Defendant unsuccessfully attempts to distinguish this case from
International Brotherhood of Teamsters. He argues that because
there was no joint defense agreement in that case, the employee
could not have held a reasonable belief that his communications
with corporate counsel about corporate matters would create a
personal privilege. This is a distinction without legal
significance because the reasoning of International Brotherhood
of Teamsters was not based on an analysis of whether the
defendant's belief was reasonable under the circumstances. Rather, the Second Circuit
wholly rejected the reasonable belief standard.
In further support of his contention that a joint defense
privilege applies, Defendant reiterates a point made in this
Court's August 11 Opinion, "Only those communications made in the
course of an ongoing common enterprise and intended to further
the enterprise are protected." (Def's Br. at 26). This
requirement, however, defeats Defendant's argument. As the Court
found previously, "The evidence demonstrates that the interviews
were not part and parcel of a defense strategy," but rather were
"conducted as part of the ongoing internal investigations by the
ABN and ABNH corporations." (Op. at 12). The Opinion also clearly
holds that there was no common enterprise. Therefore, applying
these factual findings to the law as the Court, and even the
Defendant, sets out, results in the conclusion that the
communications were not privileged.*fn3 Accordingly, Defendant's motion for a new trial is denied.