United States District Court, W.D. New York
DECISION AND ORDER
WILLIAM M. SKRETNY United States District Court.
Defendant Steven D. Blumhagen is charged in a 9-count
indictment with seven counts of wire fraud, in violation of
18 U.S.C. §§ 1343 and 2; one count of conspiracy to
commit wire fraud, in violation of 18 U.S.C. § 371; and
one forfeiture count seeking a $695, 000 money judgment.
(Docket No. 1.) On July 1, 2016, this Court issued a Decision
and Order denying Blumhagen's Supplemental Pretrial
Motion, which sought dismissal of the indictment or
particularization. (Docket Nos. 172, 185.) Familiarity with
that decision is presumed. Now before this Court is
Blumhagen's Motion for Reconsideration, which is denied
to the extent it seeks reconsideration of this Court's
decision to deny his requests for dismissal of the indictment
and particularization, but granted to the extent it seeks a
hearing under Kastigar v. United States. 406 U.S.
441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972).
Generally, a district judge may modify pre-trial rulings and
interlocutory orders at any time before final judgment.
See In re United States, 733 F.2d 10, 13 (2d Cir.
1984). Reconsideration of a prior decision is generally
justified in any one of the following three circumstances:
(1) an intervening change in controlling law; (2) new
evidence; or (3) the need to correct a clear error of law or
to prevent manifest injustice. See Virgin Atl.
Airways, Ltd. v. Nat'l Mediation Bd., 956
F.2d 1245, 1255 (2d Cir.1992); see also Shrader v. CSZ
Trans., Inc., 70 F.3d 255, 257 (2d Cir. 1995)
(“reconsideration will generally be denied unless the
moving party can point to controlling decisions or data that
the court overlooked - matters, in other words, that might
reasonably be expected to alter the conclusion reached by the
court”); Amerisure Ins. Co. v. Laserage Tech.
Corp., No. 96-CV-6313, 1998 WL 310750, *1 (W.D.N.Y. Feb.
12, 1998) (citing United States v. Adegbite, 877
F.2d 174, 178 (2d Cir. 1989)).
decision whether to grant or deny a motion to reconsider lies
in this Court's discretion. See McCarthy v.
Manson, 714 F.2d 234, 237 (2d Cir. 1983). Parties
bringing motions to reconsider “should evaluate whether
what may seem to be a clear error of law is in fact simply a
point of disagreement between the Court and the
litigant.” Duane v. Spaulding and Rogers Mfg.
Inc., No. 92-CV-305, 1994 WL 494651, *1 (N.D.N.Y. Aug.
10, 1994) (quoting McDowell Oil Serv. v. Interstate Fire
and Cas., 817 F.Supp. 538, 541 (M.D.Pa. 1993)). Motions
for reconsideration are not to be used as a means to reargue
matters already disposed of by prior rulings or to put
forward additional arguments that could have been raised
before the decision. See Duane, 1994 WL 494651 at
*1. After all, a “motion for reconsideration is not a
device intended to give an unhappy litigant one additional
chance to sway the judge.” Nossek v. Bd. of Ed. of
Duanesburg Cent. Sch. Dist., No. 94-CV-219, 1994 WL
688298, *1 (N.D.N.Y. Nov. 10, 1994).
careful consideration of Blumhagen's motion, this Court
finds no basis to revisit or reverse its prior decision
denying his current requests for dismissal of the indictment
or particularization. Blumhagen simply reargues and
reiterates positions that have already been raised and
rejected. He does so under the guise that this Court
“misapprehend[ed] or overlook[ed] [his] arguments and
critical facts and controlling doctrine in demonstrable
ways.” (Docket No. 193.) The bulk of Blumhagen's
submission, however, simply re-states or re-argues the points
he made in his initial motion, which are no more persuasive
the second time than they were the first. No doubt Blumhagen
takes a different view and is dissatisfied with this
Court's decision. But use of a motion to reconsider as a
vehicle to reargue a case is improper. See Nossek,
1994 WL 688298 at *1; United States v. Chiochvili,
103 F.Supp.2d 526, 530-31 (N.D.N.Y. 2000) (reargument is not
a proper basis for a motion to reconsider);
Schonberger, 742 F.Supp. at 119 (“the
provision for reargument is not designed to allow wasteful
repetition of arguments already briefed, considered and
decided”). Accordingly, Blumhagen's Motion for
Reconsideration of this Court's decision to deny his
requests to dismiss the indictment and for particularization
upon further review of Blumhagen's contentions concerning
the government's use of information and documents that
may have been obtained under the terms of his plea agreement
in the 2003 case,  this Court is convinced that a
Kastigar hearing is warranted.
defendant raising immunity as a defense “need only show
that he testified under a grant of immunity in order to shift
to the government the heavy burden of proving that all of the
evidence it proposes to use was derived from legitimate
independent sources.” Kastigar, 406 U.S. at
461-62. The government's burden is not limited to
“negation of taint;” rather, it must “prove
that the evidence it proposes to use is derived from a
legitimate source wholly independent of the compelled
testimony.” Id. at 460. The government must
meet this burden by a preponderance of the evidence and
cannot meet it by simply asserting that immunized testimony
or information was not used, for example, by submission of a
conclusory affidavit. See United States v. Nanni, 59
F.3d 1425, 1431, 1432 (2d Cir. 1995); see also United
States v. Nemes, 555 F.2d 51, 55 (2d Cir. 1977) (noting
that neither a mere “assertion that the immunized
testimony was not used” nor even proof that the
prosecutor “had no direct or indirect access to the
grand jury minutes” is sufficient). In sum, the
government cannot simply ask the court (and the defendant) to
rely on its good faith. See United States v.
Harloff, 807 F.Supp. 270, 282 (W.D.N.Y. 1992).
the parties are aware, Blumhagen entered a guilty plea in the
2003 case that contained cooperation and immunity provisions.
He then cooperated with the government under the terms of
that plea agreement by providing documents and proffering
information, both of which occurred before the return of the
indictment in this case. Although this Court is aware that
the government has repeatedly stated that it did not use any
of the immunized information or documents or derivatives
thereof in its investigation and prosecution of this case, it
has also stated that it does not have a record of what
documents it obtained from Blumhagen and what documents it
already possessed. In addition, Blumhagen raises issues
concerning a possible change in the government's theory
of the case between the initial criminal complaint and the
return of the indictment, that in his view, can only be
explained by the government having used information gleaned
from his immunized proffer. These circumstances are
compounded by the fact that the same case agent who attended
Blumhagen's proffer also served as a summary witness in
the grand jury post-proffer, and that some members of the
prosecution team were unaware of Blumhagen's proffer or
that documents may have been obtained directly from Blumhagen
under the terms of his plea agreement. Under these
circumstances, this Court finds that a Kastigar
hearing is warranted to ensure that immunized information and
documents are not used to prosecute Blumhagen.
timing of a Kastigar hearing falls within the
court's discretion, though the practice in the Second
Circuit is to hold Kastigar hearings after trial.
See, e.g., United States v. Conti, 160
F.Supp.3d 684, 687 (S.D.N.Y. 2016) (citing United States
v. Volpe, 42 F.Supp.2d 204, 219 (E.D.N.Y. 1999)
(“While the court has discretion to hold the hearing
before, during, or after the trial . . . it is the general
practice in this circuit to defer such a hearing until after
trial.”). In this case, however, this Court finds it
most expeditious to proceed with a pre-trial
Kastigar hearing for several reasons. See
Nanni, 59 F.3d at 1430 (involving pre-trial
Kastigar hearing) First, Blumhagen's counsel has
expressed concern that he may not be prepared to proceed to
trial on May 23, 2017, as scheduled. Proceeding first with
the Kastigar hearing on May 23, 2017, rather than
trial will allow this older case to continue moving forward
while also providing defense counsel more time to prepare for
trial. Second, a pre-trial resolve of all Kastigar
issues may affect the parties' plea postures. And
finally, pre-trial resolution of the Kastigar issues
may streamline or shorten the trial, thereby conserving
judicial resources. Consequently, this Court finds that a
pre-trial Kastigar hearing is warranted.
HEREBY IS ORDERED, that Defendants' Motion for
Reconsideration (Docket No. 193) is GRANTED in part and
DENIED in part, as set forth above.
that the May 23, 2017 trial date is now CONVERTED to a
that the trial of this matter is ADJOURNED generally.