United States v. Shunk ( 1997 )

REVISED
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 96-60394
____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
PHILIP K. SHUNK and LINDA M. SHUNK,
Defendants-Appellants.
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Mississippi
_________________________________________________________________
May 8, 1997
Before REAVLEY, KING, and BARKSDALE, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
At issue is whether, in the light of the well-known
proscriptions imposed by Teague v. Lane, 489 U.S. 288 (1989), on
retroactive application of new rules to collateral review
proceedings, the rule established in United States v. Gaudin, ___
U.S. ___, 115 S. Ct. 2310 (1995) (materiality element for 18 U.S.C.
§ 1001 to be decided by jury, not judge), can be applied
retrospectively in a § 2255 proceeding pertaining to a similar
offense (18 U.S.C. § 1006). The district court held that it could
not and, therefore, denied § 2255 relief. We AFFIRM.
I.
Philip K. and Linda M. Shunk were charged with various
offenses committed while they served as officers and directors of
Republic Bank for Savings, F.A. (Republic). The pertinent charges
were conspiracy to misapply funds of Republic, to defraud Republic,
and to deceive Federal Home Loan Bank Board examiners by making
false statements in the reports of, and statements for, Republic,
in violation of 18 U.S.C. §§ 2 and 371; and Philip Shunk’s making
false statements in Republic’s records and reports, in violation of
18 U.S.C. § 1006.
At trial, the Shunks proposed an instruction that would have
submitted the materiality vel non of the false statements to the
jury; but, the court ruled, over the Shunks’ objection, that such
materiality had been established as a matter of law. The jury
found against the Shunks.
The Shunks withdrew their direct appeal in 1992.
Concomitantly, having cooperated with the Government on related
criminal charges against other Republic officers, they received
substantial FED. R. CRIM. P. 35 sentence reductions.
This notwithstanding, the Shunks sought relief in 1995 under
28 U.S.C. § 2255, contending that their convictions were unlawful
because the district court had refused to present the materiality
element to the jury, contrary to the Supreme Court’s then recent
decision in United States v. Gaudin, 115 S. Ct. 2310 (1995). But,
the court concluded that, under Teague, Gaudin could not be applied
retroactively in this § 2255 proceeding.
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II.
The Shunks contest the non-application of Gaudin. We must
first consider a possible procedural bar and the effect, if any, of
the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA),
Pub. L. No. 104-132, 110 Stat. 1214.
A.
An immediate sua sponte query is why, given our procedural bar
rule, see United States v. Guerra, 94 F.3d 989, 992-93 (5th Cir.
1996), the Shunks can even proceed under § 2255, in that they
withdrew their direct appeal in exchange for reduced sentences
under their Rule 35 agreement with the Government. See id. at 993
(defendant precluded from collaterally attacking conviction where
he “had the opportunity to raise contested issues in a direct
appeal from his conviction but failed to do so”).
Although the Government asserted a procedural bar in district
court, the court did not reach that issue because of its Teague
ruling. On appeal, the Government has not pursued the procedural
bar issue, although it could have sought affirmance, of course, on
that basis. E.g., Cross v. Lucius, 713 F.2d 153, 157 n.3 (5th Cir.
1983) (“We may, of course, affirm the district court’s decision on
any ground urged below, regardless of whether it was relied on by
the district court.”); Williams v. Butler, 819 F.2d 107, 108 n.1
(5th Cir. 1987). Because the Government does not present that
issue here, we will not address it. E.g., In re Asbestos
Litigation, 90 F.3d 963, 990 n.19 (5th Cir. 1996), petition for
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cert. filed, 65 U.S.L.W. 3611 (U.S. Feb. 27, 1997) (No. 96-1379);
Webb v. Investacorp, Inc., 89 F.3d 252, 257 n.2 (5th Cir. 1996).
B.
Section 2255 relief was denied in May 1996. The previous
month, AEDPA had been signed into law.
1.
For a § 2255 proceeding, AEDPA amended 28 U.S.C. § 2253 to
require obtaining a certificate of appealability (COA) from a
“circuit justice or judge” before an appeal may be taken from the
final order. AEDPA, § 102; 28 U.S.C. § 2253(c)(1)(B). To obtain
a COA, the applicant must make a “substantial showing of the denial
of a constitutional right”. 28 U.S.C. § 2253(c)(2). This
standard, which applies to this appeal, requires the same showing
as that formerly required for obtaining a § 2253 certificate of
probable cause (federal habeas challenging state detention). See
United States v. Orozco, 103 F.3d 389 (5th Cir. 1996); Drinkard v.
Johnson, 97 F.3d 751, 756 (5th Cir. 1996) cert. denied, 117 S. Ct.
1114 (1997).
Although the Shunks have not requested a COA, we treat their
notice of appeal as such a request. See Orozco, 103 F.3d at 392;
see also FED. R. APP. P. 22(b). The COA is GRANTED.
2.
The Teague issue at hand is quite similar to subpart (3) of
the new limitations period imposed by AEDPA’s § 105. As amended,
§ 2255 provides in pertinent part:
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A 1-year period of limitation shall apply to a
[§ 2255] motion .... The limitation period
shall run from the latest of —
(1) the date on which the judgment of
conviction becomes final; ...
(3) the date on which the right asserted was
initially recognized by the Supreme Court, if
that right has been newly recognized by the
Supreme Court and made retroactively
applicable to cases on collateral review....
The Shunks sought § 2255 relief more than a year after their
convictions became final; therefore, if the new limitations period
under AEDPA applies, they must satisfy subpart (3). As is
immediately apparent, it is almost a restatement of the Teague
issue here. We will not pause, however, to decide whether this new
limitations rule has retrospective application. Needless to say,
it presents important and difficult issues. And, there are obvious
and quite forceful arguments against its application. See United
States v. Rocha, 1997 WL 123580, *1-*3 (5th Cir. 1997); Orozco, 103
F.3d at 390-92; Lindh v. Murphy, 96 F.3d 856, 861-67 (7th Cir.
1996), cert. granted in part, 117 S. Ct. 726 (1997). In any event,
neither side has presented the issue. We are satisfied that we
need not decide it and can, instead, proceed to the Teague
question.
C.
The Shunks contend that, in refusing to allow the jury to
decide materiality, the district court ran afoul of the Supreme
Court’s subsequent decision in Gaudin. Whether Teague bars
application of Gaudin in this § 2255 proceeding is a question of
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law reviewed de novo. E.g., United States v. Gipson, 985 F.2d 212,
214 (5th Cir. 1993).
In Gaudin the Court held that, because materiality was an
element of the crime of making false statements in a matter within
the jurisdiction of a federal agency, 18 U.S.C. § 1001, a defendant
was entitled to have a jury decide whether the Government had
proved that element beyond a reasonable doubt. Gaudin, 115 S. Ct.
at 2313-14.
At issue is 18 U.S.C. § 1006 — making false entries in the
records of certain federal banking institutions. That section,
unlike § 1001, does not explicitly mention the words “material” or
“materiality”; but, this circuit has held that materiality is an
element for a § 1006 offense. See United States v. Pettigrew, 77
F.3d 1500, 1511 (5th Cir. 1996); United States v. Tullos, 868 F.2d
689, 693-94 (5th Cir. 1989); United States v. Stovall, 825 F.2d
817, 822 (5th Cir.), amended, 833 F.2d 526 (5th Cir. 1987).
Therefore, under the reasoning of Gaudin, the refusal to give the
Shunks’ proposed jury instruction on materiality deprived them of
their Fifth and Sixth Amendment right to a jury determination of
guilt beyond a reasonable doubt on every element of the offense.
Gaudin, 115 S. Ct. at 2313.
Shortly before oral argument for this appeal, the Court held
in United States v. Wells, 117 S. Ct. 921, 926-29 (1997), that
materiality was not an element for violation of 18 U.S.C. § 1014 —
making false statements to federally insured financial
institutions. The Government contends that, because § 1006 is
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similar to § 1014, materiality is also not an element for a § 1006
violation. But, as noted, our court has held that materiality is
an element for a § 1006 offense, and we decline to not follow that
precedent based on a Supreme Court decision dealing with a
different section. United States v. Zuniga-Salinas, 945 F.2d 1302,
1306-07 (5th Cir. 1991) (“[A]bsent an unequivocal contrary holding
by the Supreme Court, we must adhere to our prior decisions....”).
Instead, we assume that materiality remains an element for a § 1006
offense.
On the other hand, the Court held in Teague that, “[u]nless
they fall within an exception to the general rule, new
constitutional rules of criminal procedure will not be applicable
to those cases which have become final before the new rules are
announced”. Teague, 489 U.S. at 310 (emphasis added). The Shunks’
convictions became final in 1992, when they withdrew their direct
appeal; Gaudin was rendered in 1995. Therefore, if Teague
applies, the Gaudin rule must fall within one of the Teague
exceptions or the Shunks are precluded from raising Gaudin error in
this § 2255 proceeding.
1.
The Shunks’ maintain that Teague does not apply, insisting
that Gaudin created a rule of substantive criminal law, not of
criminal procedure; and that it is not “new” within the meaning of
Teague. Each contention fails.
a.
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The claim that Gaudin is a rule of substantive law is premised
on the contention that it alters what the Government must prove in
a criminal matter. But Gaudin explicitly states that the rule it
created was procedural. Gaudin, 115 S. Ct. at 2319. Moreover,
Gaudin did not change what the Government must prove; materiality
was always an element of a § 1001 offense. See, e.g., Tullos, 868
F.2d at 693-94. Instead, Gaudin changed the party to whom the
Government must prove materiality — from judge to jury. Gaudin,
115 S. Ct. at 2313-14.
b.
In addition, Gaudin created a “new” rule within the meaning of
Teague. Although defining the parameters of “newness” for
retroactivity purposes is often difficult, the Court has stated
that, “in general ... a case announces a new rule when it breaks
new ground or imposes a new obligation on the States or the Federal
Government”. Teague, 489 U.S. at 301. Restated, a new rule is one
where “the result was not dictated by precedent existing at the
time the defendant’s conviction became final”. Id.The Shunks maintain that the Gaudin rule is not “new” because
of the manner in which the Court decided that case. It held that a
defendant has a constitutional right to have a jury find him guilty
of all elements of the crime beyond a reasonable doubt; materiality
is an element for a § 1001 violation; therefore, a defendant has a
constitutional right to have a jury decide that issue. Gaudin, 115
S. Ct. at 2313-14; 18 U.S.C. § 1001. The Shunks’ read this
syllogism to mean that Gaudin implicitly concluded that the result
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was dictated by existing precedent, a reading they bolster with the
Court’s treatment of the Government’s contentions in that case.
See Gaudin, 115 S. Ct. at 2315 (“[T]he Government’s position ...
has absolutely no historical support.”); id. at 2318 (“[The
Government’s] proposition is contrary to the uniform general
understanding [of] the Fifth and Sixth Amendments ....”); id. at
2318-20 (dismissing Government’s stare decisis contention by
distinguishing prior Court cases).
This notwithstanding, having the judge, instead of the jury,
decide materiality was accepted practice throughout the Country
prior to Gaudin. See United States v. Gaudin, 28 F.3d 943, 955
(9th Cir. 1994) (en banc) (Kozinski, J., dissenting) (“Every other
circuit to have considered whether materiality under 18 U.S.C. §
1001 is a question of fact or a question of law — which means every
circuit except the Federal — has held that it’s a question of law
....”) (collecting cases), aff’d, 115 S. Ct. 2310 (1995). In fact,
the Gaudin Court acknowledged that its prior precedent, such as
Sinclair v. United States, 279 U.S. 263 (1929), came very close to
supporting the Government’s position in Gaudin, although Sinclair
was not “strictly controlling”. Gaudin, 115 S. Ct. at 2318. The
Court, therefore, was forced to conclude that it could not “hold
for [Gaudin] today while still adhering to the reasoning and the
holding of [Sinclair]”. Id. In short, Gaudin created a new rule
for Teague purposes.
2.
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The Teague rule that new criminal procedural rules cannot be
applied retroactively on collateral review has two exceptions. The
first, which the Shunks do not claim applies, is when the new rule
places “certain kinds of primary, private individual conduct beyond
the power of the criminal law-making authority to proscribe”.
Teague, 489 U.S. at 307 (citation and quotation marks omitted).
They do, however, claim shelter under the second exception,
which is for those new rules requiring the observance of procedures
“implicit in the concept of ordered liberty”. Id. (citation and
quotation marks omitted). The Court described them as watershed
rules of criminal procedure” that are “central to an accurate
determination of innocence or guilt”. Id. at 311, 313 (emphasis
added). Needless to say, and as the Court noted, it is “unlikely
that many such components of basic due process have yet to emerge”.
Id. at 313. In contending that Gaudin created such a watershed
rule, the Shunks rely on Supreme Court and Fifth Circuit cases
involving jury instructions on reasonable doubt.
The Court held in Cage v. Louisiana, 498 U.S. 39, 41 (1990),
that the reasonable doubt instruction in issue was unconstitutional
because it impermissibly reduced the Government’s burden of proof.
However, our court held that Cage error was not applicable
retroactively on collateral review because it did not meet the
second (watershed) Teague exception. Skelton v. Whitley, 950 F.2d
1037, 1044-46 (5th Cir. 1992).
Next, in Sullivan v. Louisiana, 113 S. Ct. 2078, 2082-83
(1993), the Court held that Cage error was a “structural[] defect
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in the constitution of the trial mechanism”, making it not amenable
to harmless error analysis. Our court stated later in Schneider v.
Day, 73 F.3d 610, 611 (5th Cir. 1996), that this conclusion was an
implicit recognition that Cage error met this second Teague
exception. (As discussed infra, this statement in Schneider is not
binding precedent.)
Moreover, our court held recently in Pettigrew, 77 F.3d at
1511, that Gaudin error is structural, making harmless error
analysis inapplicable. Pettigrew so held because the jury did not
render a verdict as to the element of materiality. Id.The even more recent statement in United States v. Jobe, 101
F.3d 1046, 1062 (5th Cir. 1996), that Pettigrew does not establish
Gaudin error as “per se reversible” is not inconsistent with such
error being structural. In Jobe, unlike in Pettigrew, the
defendants did not object at trial to the jury charge; therefore,
any Gaudin error was subject to our narrow plain error review. Id.
at 1061. Restated, Jobe determined simply that the fact that
Gaudin error requires reversal when preserved does not mean that it
likewise requires reversal when not preserved.
Here, the Shunks — as was done in Pettigrew — objected at
trial to the charge; thus, Pettigrew controls. Accordingly, the
Shunks reason that, because we stated in Schneider that Cage
structural error met the second Teague exception, we must hold
likewise for Gaudin error. We disagree.
a.
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First, in Brown v. Cain, 104 F.3d 744, 753 (5th Cir. 1997),
cert. denied, 1997 WL 194482 (U.S. Apr. 23, 1997) (No. 96-8624),
our court held very recently that the Cage/Teague statement in
Schneider is not binding precedent in this circuit. This is
because in an earlier, unpublished opinion, Smith v. Stalder, No.
93-3683, 26 F.3d 1118 (5th Cir. 1994) (per curiam) (table), our
court concluded that Sullivan did not affect our conclusion in
Skelton that Cage error did not fall within the second Teague
exception, because Sullivan was a direct appeal and did not involve
the retroactive application of the Cage rule. “Unpublished
opinions issued before January 1, 1996 are precedent”, 5TH CIR. LOCAL
R. 47.5.; and, it goes without saying that, except under
circumstances not present here, one panel is not free to disregard
the decision of a prior panel. E.g., Brown, 104 F.3d at 753. We
are, therefore, bound by the earlier holding in Smith; any
discrepancy between it and Schneider can be corrected only by our
court en banc. Id.; FDIC v. Dawson, 4 F.3d 1303, 1307 (5th Cir.
1993).
b.
In addition, we have a far more fundamental disagreement with
the Shunks’ position. Even assuming arguendo that Cage error meets
the second Teague exception, it does not necessarily follow that
all structural errors do. As noted, rules requiring the observance
of procedures “implicit in the concept of ordered liberty” are
“watershed” rules, of which few have yet to emerge. Requiring the
Government to prove materiality to the jury, instead of the judge,
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is not a “watershed” rule of criminal procedure, even though Gaudin
was a clear break with prior decisions. Obviously, the fact that
the Gaudin rule is new does not necessarily make it “watershed”.
Furthermore, one can easily envision a system of “ordered liberty”
in which certain elements of a crime can or must be proved to a
judge, not to the jury.
In sum, Gaudin error does not meet the second Teague
exception. Accord United States v. Swindall, 107 F.3d 831, 836
(11th Cir. 1997) (“The Gaudin rule ... is not a watershed rule ...
that alters our understanding of the bedrock procedural elements
essential to the fairness of a proceeding.”).
III.
Accordingly, the denial of § 2255 relief is
AFFIRMED.
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