Starski v. Kirzhnev , 682 F.3d 51 ( 2012 )

United States Court of Appeals
For the First Circuit
No. 11-1393
EUGENE STARSKI,
Plaintiff, Appellant,
v.
ALEXANDER KIRZHNEV and DAI SYNDITRADE LIMITED,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
Before
Boudin, Circuit Judge,
Souter,* Associate Justice,
and Thompson, Circuit Judge.
Seth S. Stoffregen for appellant.
Peter Charles Horstmann with whom Partridge, Ankner &
Horstmann was on brief for appellees.
June 20, 2012
*
The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
BOUDIN, Circuit Judge. This is an appeal by Eugene
Starski, who asserted claims in the district court against
Alexander Kirzhnev (and Kirzhnev's company DAI Synditrade ("DAI"))
growing out of a commercial dispute. The merits of the claims are
not central to the issues raised on appeal but some understanding
of Starski's lawsuit and version of events is needed to provide
context.
Starski claims that he had a business relationship with
a Vietnamese enterprise called Sovico and, in cooperation with it,
sought to facilitate a $1.5 billion debt swap between the
governments of Vietnam and the Russian Federation; that Starski
joined with Kirzhnev, said to have high level contacts in the
Russian government, to set up the swap; that Kirzhnev agreed to pay
Starski a substantial commission; that $1 billion of the debt swap
was completed and $100 million in commissions paid to some
combination of Kirzhnev, DAI, and Sovico; but that Kirzhnev reneged
and paid Starski nothing.
In January 2005, Starski filed suit in the district court
in Massachusetts against both Kirzhnev and DAI seeking at least $25
million in damages. Starski asserted diversity jurisdiction,
claiming that the two men lived in the United States and were
citizens of different states. The complaint set forth claims for
conversion, breach of contract, unjust enrichment, fraud and unfair
business practices in violation of Massachusetts' Chapter 93A,
-2-
Mass. Gen. Laws ch. 93A, § 11. Proceedings were protracted; partly
this was because Kirzhnev was at the time imprisoned in Russia,
seemingly after conviction for bribing an official in that
country's Ministry of Finance, although the timing is unclear and
records related to the conviction are a subject of dispute.
As the case proceeded, the district court disposed of
certain of the claims on summary judgement; and finally in 2010, a
trial was held focusing on Starski's factual claim that Kirzhnev
had entered into and then breached a contract promising
compensation to Starski if the debt swap was completed. At the
close of trial, the jury found specially on the verdict form that
no such contract had been proved by Starski and therefore did not
reach the questions of breach or damages.
Starski's appeal raises three questions, the first of
which is a claim that the district court abused its discretion in
excluding evidence. Specifically, Starski says the court erred in
precluding him from impeaching Kirzhnev through evidence of
Kirzhnev's convictions in Russian court for bribery and forgery,1
1
Starski attached to his motion in limine an original and
purported English translation of a Russian document that he said
was evidence of Kirzhnev's convictions. The English version had a
heading stating "Enquiry" and said: "This is to confirm that
Kirzhnev Alexander . . . was convicted by Moscow City Court and
sentenced to 4 years and 6 months . . . under articles: 291, part
1 (bribing government official) 322, part 1 (illegal sovereign
border crossing) 327, part 1 and 3 (forgery of documents and
knowingly using forged documents)." It was signed by "Secretary of
the court: Panova E.V."
-3-
and in barring Starski from cross-examining Kirzhnev about
documents that were seized or destroyed during his arrest by
Russian authorities for those same crimes.
Both sides had sought a ruling in limine, and the
district judge at that time ruled that the evidence was excluded
"without prejudice to [Starski] to provide a fuller showing in the
context of the trial itself" that, "assuming it is authenticated,"
the evidence was admissible for impeachment purposes. The court
told Starski he would have to provide "something that gives me some
degree of security with respect to the integrity of Russian
criminal process in this area."
At trial, Starski attempted to cross-examine Kirzhnev
about documents seized or destroyed during his arrest by Russian
authorities; the court ruled that Starski could ask whether
Kirzhnev possessed the items but could not inquire further because
"no showing regarding the convictions in Russia . . . satisf[ies]
me that the manner in which they were obtained was something that
should be recognized in the United States[, s]o, I am keeping it
out absent some showing."
On a new trial motion, the district court held that the
evidence of Starski's Russian convictions was insufficiently
authenticated: the document was not an official record of
conviction but a response to an inquiry (presumably by Starski);
the translated version indicated a place for an official stamp but
-4-
the original contained no such stamp; and it was not supported by
a certification of the genuineness of the signature and position of
the document's signer. Starski v. Kirzhnev, No. 06-10157-DPW, at
*4-6 (D. Mass. Mar. 15, 2011), 2011 WL 923499.
The district court in its post-trial ruling also held the
evidence inadmissible, regardless of its authenticity, because
"recent criticisms of the Russian criminal justice system" called
the fundamental fairness of the proceedings underlying Kirzhnev's
convictions into question and, despite being invited to do so,
Starski offered nothing to support the fairness of the convictions
at issue or the Russian criminal justice system generally.
Starski, 2011 WL 923499 at *6.
Central to the merits of the case was whether Kirzhnev
had contracted with Starski to pay a commission--Starski said yes
and Kirzhnev no. Although Starski offered documentary evidence of
a contract offer, Kirzhnev said the document or at least his
purported signature was a forgery. Thus, evidence of Kirzhnev's
credibility was certainly material; and a conviction within the
prior ten years for a crime whose elements include a "dishonest act
or false statement" is not subject to ordinary Rule 403 balancing
and "must be admitted" for impeachment purposes. Fed. R. Evid.
609(a)(2); United States v. Tracy, 36 F.3d 187, 192 (1st Cir.
1994), cert. denied, 514 U.S. 1074 (1995).
-5-
However, the document showing a conviction must be
authenticated, and absent testimony (e.g., from a court official),
a foreign document is self-authenticating if (1) signed or attested
by a person who is authorized to do so, and (2) accompanied by a
final certification--either by certain officials enumerated in the
rules or pursuant to treaty--of the genuineness of the signature
and official position of the signer or attester. Fed. R. Evid.
902(3); see also Fed. R. Civ. P. 44(a)(2). Here, Starski tendered
no such certification.
Starski says that the court failed to warn him about
authentication concerns when it ruled on the motion in limine; but
at oral argument in this court Starski's counsel conceded that
authentication issues were raised during the motion hearing. In
any event, the authentication requirements are set forth in the
Federal Rules of Evidence and it is not the court's job to remind
counsel of the need to comply with them. Nor has the discrepant
missing stamp been adequately explained.
A savings clause in Rule 902 permits the court to relax
the authentication requirements, but one condition is that the
party so requesting show that it was "unable to satisfy" the rule's
requirements for authentication "despite . . . reasonable efforts."
United States v. De Jongh, 937 F.2d 1, 4 (1st Cir. 1991) (quoting
Fed. R. Civ. P. 44 advisory committee note). Starski was able to
get other documents properly authenticated; and, if he made a
-6-
"reasonable efforts" proffer below, he does not develop that claim
on appeal.
The whole controversy has an opéra-bouffe air of
unreality. As Starski points out, Kirzhnev never denied to the
court that he had been convicted of bribery, although the jury was
not told of the fact. Conversely, the jury likely fathomed just
what Kirzhnev was doing to earn his own commission, whether or not
he was formally convicted of bribery; whether or not the jury drew
a negative inference from the conduct is unclear but, if not, it is
unclear that a formal conviction would alter its view.
Indeed, a trial judge untroubled by doubts about the
legal regime underpinning the conviction might well have admitted
the document and (we need not prolong the discussion) could likely
have found bases for doing so. For this somewhat more effort from
Starski in complying with the rules and attempting the requisite
showing would have been useful. In any event, the technical
authentication grounds for excluding the conviction were adequate
and we do not reach issues touching on Russia's legal regime.
Starski also argues that he should have been allowed more
latitude to cross-examine Kirzhnev as to the loss or destruction of
Kirzhnev's passport at his arrest, but Starski's counsel admitted
that the questioning would--and was in part designed to--introduce
inadmissible evidence of Kirzhnev's alleged crime through a "back
-7-
door" reference to his arrests. The district court fairly
concluded that such inquiries failed the Rule 403 balancing test.
Starski's second principal claim on this appeal is that
the district court abused its discretion in failing to impose
sanctions on Kirzhnev for misconduct in stalling the proceedings.
Although Starski filed suit in January 2006, progress in the
litigation was delayed, first by service of process problems
apparently owing to Kirzhnev's incarceration, and then by a series
of incidents due to Kirzhnev's travels abroad, failure to
communicate with local counsel, and general lack of diligence.
Most important, on February 17, 2010--five days before
trial was set to begin--Kirzhnev filed an emergency motion
requesting a continuance on account of an emergency hospitalization
for back surgery in Russia. After a hearing, the district court
reluctantly granted the continuance, although it also requested
medical records to support Kirzhnev's story. Kirzhnev then
submitted two unsworn, unauthenticated letters signed by a Dr. A.V.
Sokolov--but with dissimilar-appearing signatures--purporting to
confirm Kirzhnev's hospitalization and surgery.
Starski moved for sanctions against Kirzhnev, submitting
(among other things) a certified, authenticated letter from a
member of the Russian Duma reporting that the hospital where
Kirzhnev claimed he had surgery had no record of him as a patient
at the relevant time. Kirzhnev then testified that he had been at
-8-
the hospital for four or five days but had no back surgery.
Starski asked the court to enter judgment against Kirzhnev as a
sanction for misleading the court, but the judge declined to rule
on the motion before trial.
After the jury rejected Starski's claims, the district
court allowed Kirzhnev to submit two unsworn statements from
friends, one a Duma representative and the other his family's
attorney, purporting to confirm Kirzhnev's stay in the hospital and
to describe visits to him there, although these hardly allayed all
doubts.2 Starski submitted more certified documents from a Duma
representative stating that no Dr. Sokolov worked at the hospital
in question during the relevant period.
Ultimately, the district court denied Starski's motion
for sanctions. Starski, 2011 WL 923499 at *11. Insofar as
sanctions were sought under Rule 11, the court rejected Starski's
request for failure to comply with the rule's "safe harbor"
provision requiring an opportunity for the opposing party to
withdraw the offending submission; but the court proceeded to the
merits by construing the request as one also invoking the court's
inherent powers. Id. at *9 (citing Aoude v. Mobil Oil Corp., 892
F.2d 1115, 1118 (1st Cir. 1989)).
2
The letters both described purported visits to Kirzhnev in
the hospital but the two letters provided inconsistent dates for
when Kirzhnev supposedly entered the hospital--one said February
15, and the other February 16, while Kirzhnev himself said February
17 in his motion to supplement the record.
-9-
Without deciding whether Kirzhnev's actions amounted to
a fraud on the court, the judge denied the sanction of judgment
against Kirzhnev because any delays resulting from fraud were not
unduly prejudicial to Starski. Because the questions surrounding
Kirzhnev's hospitalization were "immaterial to the merits of the
dispute" and did not "generate an unfair resolution of the case,"
the court held there "was no manifest injustice at trial."
Starski, 2011 WL 923499 at *10-11.
The court did, however, express "concern[] that Kirzhnev
appears to have procured potentially perjurious and fraudulent
statements designed to impede the Order setting this case for trial
on February 22, 2010," and ordered the parties to show cause why
the court should not refer the case to the U.S. Attorney's office
for investigation of possible contempt charges under 18 U.S.C.
§ 401(3). Starski, 2011 WL 923499 at *11; Starski, No. 06-10157-
DPW (Mar. 15, 2011) (order to show cause), ECF No. 126. Kirzhnev's
counsel advised us at oral argument that the matter was referred to
the U.S. Attorney's Office but nothing (as of yet) has resulted.
In sanctioning "fraud on the court," consideration is
normally given to multiple factors-for example, the egregiousness
of the conduct, prejudice to the opposing party, the general policy
favoring adjudication on the merits, the need to maintain
institutional integrity, and deterrence of future misconduct.
Aoude, 892 F.2d at 1118, 1120 n.3; Hull v. Municipality of San
-10-
Juan, 356 F.3d 98, 102-03 (1st Cir. 2004). Not surprisingly, the
district court's judgment is reviewed with considerable deference,
Mulero-Abreu v. P.R. Police Dep't, 675 F.3d 88, 91 (1st Cir. 2012).
The sanction Starski sought for the alleged fraud was a
default judgment on the merits against Kirzhnev, along with costs
and attorneys' fees. Because the judge reserved judgment pending
the trial, this sanction post-verdict would have entailed an award
to Starski on a contract claim that a jury had just rejected on the
merits. And, contrary to Starski's position on this appeal, there
is no showing that the delay in the trial had any likely effect on
the verdict. In fact, Starski had not opposed the continuance
based on the alleged hospitalization.
Starski argues that, if the trial had gone forward, he
might have been able to produce a witness, later unavailable, to
dispute prior testimony of Kirzhnev as to whether or not his son
lived in Connecticut between 2005 and 2007. This issue was
tangentially relevant to a pre-trial dispute about personal
jurisdiction, which Kirzhnev had ultimately conceded; was not
germane to the merits; and extrinsic testimony if offered to
impeach would have been excludable as collateral. United States v.
Beauchamp, 986 F.2d 1, 3 (1st Cir. 1993).
Further, Starski did not seek at trial to question
Kirzhnev about his supposed misstatement of his son's residence.
Questioning Kirzhnev would not have offended the rule against
-11-
extrinsic evidence on collateral matters. Whether it would have
been permissible under a stipulation between the parties resolving
personal jurisdiction in Starski's favor but limiting evidence of
the dispute is less clear; but any limitations that applied would
have applied as well to an independent witness called by Starski.
Finally, to resolve clearly the question of whether
Kirzhnev had been in the hospital could easily have involved
complicated further proceedings involving foreign witnesses and
documents after an already protracted case that had finally been
resolved. Fiat justitia ruat caelum--let justice be done though
the heavens fall--is an important legal maxim, but it includes the
need to move on to the next case and provide justice to the next
litigant in line on a crowded docket.
Starski's third and last claim of error requires little
discussion. Starski says that Kirzhnev's company, DAI Synditrade,
was improperly dismissed from the lawsuit on summary judgment
entered by the district judge prior to trial. Our review is de
novo, Guay v. Burack, 677 F.3d 10, 15 (1st Cir. 2012), but the
summary judgment decision was manifestly harmless given Starski's
theory of DAI Synditrade's liability--that both Kirzhnev and the
company were bound by the same document--since the jury ultimately
rejected it as a valid contract.
In other words, Starski made no claim to evidence
implicating only the company or establishing a separate contract
-12-
that could cause a jury to reach a different result as between
Starski and the company. Thus, the result would necessarily have
been the same even if the company had remained a co-defendant.
Affirmed.
-13-