United States v. Case , 309 F. App'x 883 ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 9, 2009
No. 08-60405 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff - Appellant
v.
RODNEY CASE; KEVIN CLARK; MIKE FULTON; DOUGLAS MURPHY;
JAMES WARD
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:06-CR-00210
ON PETITION FOR REHEARING
Before HIGGINBOTHAM, STEWART, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
The petition for rehearing is GRANTED. The prior opinion, United States
v. Case, 288 F. App’x 212 (5th Cir. 2008), is WITHDRAWN, and the following
opinion is substituted.1
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
1
The Government does not seek a rehearing as to Count One. The Government
contends that this Court erred in affirming the district court’s dismissal of Counts Nine and
No. 08-60405
Plaintiff-Appellant United States of America asserts that the district court
erred when it dismissed Counts One, Nine, and Twelve of the Second
Superseding Indictment. We affirm the district court’s dismissal of Count One
and reverse and remand as to Counts Nine and Twelve.
I. Background
Count One of the Second Superseding Indictment charges all the above-
named Defendants-Appellees with conspiring to commit wire fraud in violation
of 18 U.S.C. § 371. The district court dismissed Count One, as well as all of the
substantive wire fraud counts, Counts Two through Five, finding that they were
unconstitutionally vague. The Government does not challenge the dismissal of
Counts Two through Five, but it contends that the district court erred in
dismissing Count One.
Counts Nine and Twelve of the Second Superseding Indictment charge
Defendants-Appellees with violations of the Economic Espionage Act (“EEA”),
codified at 18 U.S.C. § 1832. Defendants moved to dismiss Counts Nine and
Twelve on several grounds, including the vagueness doctrine, improper venue,
and prosecutorial vindictiveness. The district court held that these counts were
not unconstitutionally vague and denied the motion to dismiss on that ground.
The district court did not reach, however, the issue as to whether the counts
should be dismissed on venue grounds or on the basis of prosecutorial
vindictiveness. Instead, the district court found that Counts Nine and Twelve
were barred by the statute of limitations. On appeal, the Government contends
that the district court should not have dismissed Counts Nine and Twelve on
statute of limitations grounds because they allege conduct continuing until
January 2004, within five years of the return of the indictment.
Twelve. The only issue presented for rehearing is whether the panel made an error in its
consideration of the dismissal of Counts Nine and Twelve on statute of limitations grounds.
We substitute the entire opinion, although the ruling as to Count One remains the same.
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No. 08-60405
II. Discussion
A. Count One
Defendants moved to dismiss Counts One through Five on the grounds
that they were unconstitutionally vague and failed to state an offense.
Specifically, Defendants argued that these counts failed to identify any
materially false or fraudulent representation and failed to identify the wires
made in furtherance of the purported scheme. The Government argued that the
indictment sufficiently alleged a material falsehood and the wires used. The
district court held that the allegations in these counts were not sufficient to
support a charge of wire fraud, as the counts did not allege a materially false
representation. On appeal, having considered the parties’ arguments and the
applicable law, we affirm the district court’s dismissal of Count One. See Neder
v. United States, 527 U.S. 1, 25 (1999) (“[M]ateriality of falsehood is an element
of the federal mail fraud, wire fraud, and bank fraud statutes.”).
B. Counts Nine and Twelve
We review the district court’s factual findings in relation to the statute of
limitations issue for clear error and its legal conclusions de novo. United States
v. Gunera, 479 F.3d 373, 376 (5th Cir. 2007). In the motion to dismiss on
limitations and venue grounds, Defendants stated the following bases for
dismissal:
Counts 7-8 and 10-11 should be dismissed because they charge
alleged crimes that occurred in January, 2002, for which the five
year statute of limitations has expired given that the superseding
indictment was returned on October 11, 2007. Counts 9 and 12
should be dismissed because they charge a crime that allegedly
occurred in January, 2004 in North Carolina but do not charge that
offense in Mississippi, where this case is being prosecuted.
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No. 08-60405
In ruling on the motion to dismiss Counts Nine and Twelve, the district court
stated that “[b]ecause the charges in Counts 9 and 12 of the Second Superceding
Indictment were not charged in the original Indictment, the Court finds they do
not relate back to that Indictment and are time-barred.” United States v. Case,
et al., No. 3:06-cr-00210, 2008 WL 1932403, at *9 (S.D. Miss. Apr. 25, 2008). The
Defendants did not raise, however, any argument in their motion to dismiss as
to the timeliness of Counts Nine and Twelve.
In its opinion, the district court never addressed the argument that
Defendants did make relating to Counts Nine and Twelve, namely whether those
counts should be dismissed because they were not brought within the proper
venue. Defendants’ motion to dismiss as to Counts Nine and Twelve on venue
grounds provided in part as follows:
Counts 9 and 12 both charge possession offenses in January, 2004,
in Clemmons, North Carolina, but they do not charge these offenses
in Mississippi. Even if these counts survive the statute of
limitations since they allege acts within five years of the
superseding indictment, they are not charged in the proper venue.
In response to Defendants’ argument, the Government contended that:
Defendants’ motion to dismiss on venue grounds should be denied
because the crime of possession is a continuing offense and, under
18 U.S.C. § 3237(a), such an offense may be prosecuted in any
district where the offense began, continued, or concluded.
The distinction between the charges in Counts Nine and Twelve and the other
counts which Defendants sought to dismiss as untimely is that the other counts
allege conduct that occurred in January 2002 while Counts Nine and Twelve
allege conduct beginning in January 2002 and continuing through January 2004.
On appeal, the Government contends that the five-year statute of
limitations begins to run on the last day of a continuing offense. The Defendants
argue that “[t]o the extent [the Government] is relying on the alleged January
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No. 08-60405
2002 possession in Mississippi, that is outside the statute of limitations for the
first and second superseding indictment.” Defendants seem to recognize,
however, the statute providing that an offense may be prosecuted in any district
where the offense was begun, continued or completed.
Except as otherwise expressly provided by enactment of Congress,
any offense against the United States begun in one district and
completed in another, or committed in more than one district, may
be inquired of and prosecuted in any district in which such offense
was begun, continued, or completed.
18 U.S.C. § 3237(a); United States v. Santos, 203 F. App’x 613, 618 (5th Cir.
2006) (unpublished) (citing 18 U.S.C. § 3237(a) and finding that venue was
proper in the district where the illegal conduct began); accord United States v.
Muhammad, 502 F.3d 646, 653 (7th Cir. 2007) (“Congress has determined that,
with respect to a continuing crime, venue is proper in any district where the
crime began, continued, or was completed.” (citing 18 U.S.C. § 3237(a))).
Nonetheless, Defendants argue that because Counts Nine and Twelve fail
to allege venue in Mississippi within the last five years, the statute of limitations
and venue requirements have not been satisfied. Defendants not only failed to
raise this statute of limitations argument in the district court, but Defendants
cite no authority to support this position on appeal. Defendants do not argue
that the offenses in Counts Nine and Twelve are not continuing offenses.2
Counts Nine and Twelve alleged conduct beginning in January 2002 in
Mississippi and continuing through January 2004 in North Carolina. These
counts allege continuing acts, and therefore, we find no basis for the statute of
limitations to begin running on the date the conduct began in Mississippi in
January 2002.
2
The EEA makes it an offense for someone to do certain acts “with an intent to convert
a trade secret.” See 18 U.S.C. § 1832(a)(1)-(5). Counts Nine and Twelve state that the
Defendants “did knowingly possess without authorization trade secrets . . . , intending to
convert.”
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No. 08-60405
The statute of limitations as to Counts Nine and Twelve is five years. The
Second Superseding Indictment was filed November 7, 2007. Counts Nine and
Twelve allege continuing acts with conduct occurring in 2004. Therefore, Counts
Nine and Twelve are not time-barred.
On appeal, Defendants raised other arguments as to Counts Nine and
Twelve which the district court did not consider. We need not address those
arguments in the first instance.
III. Conclusion
For the foregoing reasons, we affirm the district court’s dismissal of Count
One, reverse the district court’s dismissal of Counts Nine and Twelve, and
remand to the district court for further proceedings not inconsistent with this
opinion. AFFIRMED IN PART as to Count One, REVERSED and REMANDED
IN PART as to Counts Nine and Twelve for further proceedings not inconsistent
with this opinion.
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