[00:00:03] Speaker 01:
Thank you may please the court good morning my name is Brooks Holland and I represent Bernard Ross Hanson with me with the court's permission is Lindsay a graduating law student from the University of Washington who assisted me on this appeal.

[00:00:17] Speaker 01:
Your Honor, I'm sharing defense argument time with my colleague, Jay Nelson, who represents Diane Erdman, the co-defendant from trial in this matter.

[00:00:25] Speaker 01:
We've submitted some discrete issues for the Court for each of our clients, but we share primary issues in common that we would like to emphasize in our shared argument.

[00:00:33] Speaker 01:
With the Court's permission, I will begin by addressing our substantive challenge to the fraud convictions, in particular the Bouillon sale fraud convictions.

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and Mr. Nelson will emphasize the jury trial selection issues and sentencing.

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Your Honor, our challenge that we share to the bullion sale convictions in this case that were charged as wire and mail fraud now centers on this court's very recent decision in the Milheiser case just one month ago today.

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In that case, that court confirmed and clarified the meaning of deceive and cheat as the essential element for federal criminal fraud.

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as defined in this court's jurisprudence, such as the Miller case, which the parties discussed extensively in the briefing.

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And Milheiser made clear that not any deception or lie alone that facilitates or induces a commercial transaction establishes federal criminal fraud.

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Rather, the lie or deception alleged by the government must establish

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a deception that goes to the nature of the bargain in the transaction itself.

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And this court Milheiser made clear that a party's interest in a transaction to accurate information or full disclosure is not itself a thing of value, an essential element of a commercial transaction for federal criminal fraud purposes.

[00:02:04] Speaker 01:
Instead, Milheiser emphasized,

[00:02:07] Speaker 01:
The nature of the bargain means something essential to the transaction, not collateral, such as price or quality, or something else in the context of the particular transaction that was essential to the sell and buy.

[00:02:22] Speaker 02:
Well, that's a great point, I think, because Milheiser did use that language.

[00:02:31] Speaker 02:
But wasn't there testimony at trial from customers and salespeople that some of these representations, like shipping timelines and locking in the prices, were considerations in the decisions to purchase?

[00:02:46] Speaker 02:
Why doesn't that fall right within the nature of the bargain?

[00:02:52] Speaker 01:
Well, there's the issue of what the evidence from the record can establish for appellate review purposes, and then also the concern we have, Your Honor, about how the jury was instructed and whether the jury actually reached the essential element defined by Milheiser for criminal fraud and denied the defense the opportunity to argue.

[00:03:11] Speaker 01:
exactly these facts to the jury, consistent with the laws defined by Milheiser.

[00:03:15] Speaker 01:
But Your Honor, the government's theory at trial was that, and this is clear, you can see on page 30 of the government's answering brief,

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in the Hansen matter, as well as in record portions of the closing argument that I outlined in pages 38 to 39 of my opening brief.

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The government's position to the jury, and this will be consistent with the instructions the court gave, was that my client and the co-defendant used misrepresentations about delivery timelines and the availability of refunds to induce the transactions.

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But the record is also quite clear from voluminous testimony that the defendants, our clients, never intended to deny anybody the essential element of the bargain of the nature or quality of the gold and silver they were purchasing, that the representations about price were deceptive or not true or accurate, or that our clients never intended to deliver the gold and the silver in the first place.

[00:04:17] Speaker 01:
The evidence was consistent.

[00:04:18] Speaker 03:
Isn't that a question for the jury?

[00:04:24] Speaker 03:
Because it seems like

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Mr. Hanson and Mr. Urban deprived customers the nature of their bargain insofar that their company delayed or did not fulfill thousands of bullion orders.

[00:04:38] Speaker 03:
So when you get to that number, how is it that they intended to fill that when that became very clear that they were not going to?

[00:04:48] Speaker 03:
I mean, it seems to go to intent.

[00:04:50] Speaker 03:
It's the nature of the bargain.

[00:04:52] Speaker 03:
I'm not sure how Milheiser helps you here.

[00:04:57] Speaker 01:
Well, Your Honor, I would say that actually your concern is very analogous to the situation the court addressed to Milheiser.

[00:05:02] Speaker 01:
Milheiser was looking at a very expansive record, thousands of pages of transcript with many victims of the alleged fraud, as we have here, and many variations on the theme of alleged deception about delivery timelines.

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The testimony presented many disputed questions of fact.

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Many witnesses said, we came to Northwest Territorial Mint because

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of our prior experience that was good, and also because of the quality and price that they were willing to offer.

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They even renegotiated timelines to be able to maintain the quality and price of the precious metals they wanted to purchase.

[00:05:35] Speaker 02:
I just want to be clear, because I thought you were starting out arguing about the sufficiency of the evidence, and then you shifted to the jury instruction.

[00:05:44] Speaker 01:
We're arguing both and the district court was given a combined rule 29, rule 33 motion.

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Our principle argument is that the government did not prove its case at trial under the federal criminal fraud statutes as defined by Milheiser and the other authorities that we discussed from other circuits that we argued clarified Miller.

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But alternatively, we argued that the district court's denial of the jury instruction

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that our clients requested to clarify in particular instructions 21 and 23 about good faith and the role of an intent to repay, which was very germane here because of the role of refunds in this case, denied the defense the ability to argue exactly this defense, because this is the defense that was argued to the jury, that the issues of timelines and when a refund- What was the jury instruction you proffered?

[00:06:34] Speaker 01:
The jury instruction we proffered, you can find the jury instruction colloquy in volume 14 and it runs from pages 2705 to about 2709, but in particular 2707 at 08.

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And what the defense request do is that the court modify the standard model instruction about good faith

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and intent to repay to more clarify in context that the issue here for the jury was whether the sort of haggling and perhaps misrepresentation about timelines and delivery.

[00:07:07] Speaker 03:
Did they offer an instruction?

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I mean, I'm trying to figure out what it was that was proper.

[00:07:12] Speaker 01:
The specific language requested was that the intent to establish cheat was to cause financial harm

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to the customers, particularly in the context of a business that, yes, in the end, folded and denied many people of the benefit of what they had hoped in the transaction.

[00:07:28] Speaker 02:
But the court didn't feel, I mean, you had the standard jury instructions when you put them together, permits you to make exactly that argument, right?

[00:07:38] Speaker 01:
Well, what I would say, Your Honor, in Milheiser, the Court made clear... No, but first answer my question.

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Was there anything, given the structure of the jury instructions taken as a whole, that would have in any way circumscribed your ability to make the argument you're making to us and presumably made, and you did make to the jury?

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I would say yes, particularly in the context of the government's arguments.

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The instructions taken together made clear that if Mr. Hanson and Ms.

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Erdman use deception to induce a transaction to cause money to change hands, that deception

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was sufficient for federal criminal fraud.

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And the government extensively argued that theory to the jury in closing argument.

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It's the position that the government took in its answering brief.

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But Milheiser forecloses that expansive theory for federal criminal fraud.

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And instead, the deception needs to go to the heart or the nature of the bargain.

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And the jury instruction that was requested, Your Honor, was that the district court tell the jury that the deception had to cause financial harm in the transaction, not merely, for instance, delays in expected delivery timelines.

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And this is in the context of a business that had been running for years and had fulfilled thousands of deliveries as customers expected with the quality and price.

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Some of the harmed customers here were returning customers because of their prior experience.

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Your honors, I see that I am down to one minute and I'd hope to reserve a minute for rebuttal if I may reserve that time and turn to my colleague, Mr. Nelson.

[00:09:09] Speaker 03:
Thank you.

[00:09:18] Speaker 04:
Good morning, Your Honors.

[00:09:20] Speaker 04:
Jane Elson on behalf of Diane Erdman.

[00:09:23] Speaker 04:
As Mr. Holland said at the beginning of his time, I'd like to focus my time on the juror bias issue with one quick point about the Milheiser issue, if I may just briefly.

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We have a citation in our opening brief, Ms.

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Erdman's opening brief.

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pages 12 to 13, we collect some evidence from the trial record showing that, actually, the representations at issue were not particularly important to a number of, if not all, of the witnesses who testified at trial.

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And so that was, at a bare minimum, a contested point, factually, at trial.

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If I may turn to the jury selection issue, I think this case calls for a relatively straightforward application of the Katchezian case.

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We have juror number 34 who responded to defense counsel's question that Mr. Hanson and Ms.

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Erdman must have done something because the government filed these fraud charges against them and was spending so much time on them.

[00:10:18] Speaker 04:
Now that answer clearly suggests either a pro-government bias or an anti-defense bias or both, and it also suggests a struggle with the presumption of innocence.

[00:10:27] Speaker 04:
And in compounding that, the juror was never rehabilitated and never unequivocally said that they could be fair and impartial insofar as they would denounce the prior statement suggesting, the prior response suggesting partiality.

[00:10:41] Speaker 02:
Well, I think this seems different than the unpronounceable Kozakian case where the juror really said, you know, they couldn't put the bias aside.

[00:10:54] Speaker 02:
And here,

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even if you admittedly point out there's some eyebrow raising statements here, she went on to clarify this.

[00:11:06] Speaker 02:
She says, everyone charged with anything deserves the best defense they can get.

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So if there is a technicality, that's a legitimate technicality.

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And then she says, that's the way the system should work.

[00:11:18] Speaker 02:
So it seems to me that

[00:11:22] Speaker 02:
this juror did something that didn't happen in that Gadzackian case and basically said that's how the system does work.

[00:11:31] Speaker 02:
You get the best defense and if there's technicality there's technicality but you would still be able to be convicted on that or get off on that.

[00:11:42] Speaker 04:
I think conceptually we're talking about different issues.

[00:11:46] Speaker 04:
Okay.

[00:11:47] Speaker 04:
Because I think when we're that that round of questions related to

[00:11:52] Speaker 04:
the jurors' perspective on defense attorneys and the defense function generally.

[00:11:57] Speaker 04:
The initial question addressed a really common issue that is conceptually distinct, I think, which is kind of colloquially, I would say, where there's smoke, there's fire.

[00:12:07] Speaker 04:
And to anybody on the defense side, particularly of a criminal case, we're always concerned about that, a jury trial.

[00:12:13] Speaker 04:
Because the government comes in with credibility, dutiful public servants trying to protect everybody, and not everybody sees the scales tilted that way.

[00:12:22] Speaker 04:
But on that particular issue, some people do, including Juror 34.

[00:12:27] Speaker 02:
So I think what we... You have to get over the plain error, which of course is not your fault.

[00:12:32] Speaker 02:
But how do you get over that standard here?

[00:12:35] Speaker 04:
Well, number one is I think we have tension that we've cited in the court's case law about whether plain error review even applies to this particular kind of issue.

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So we have some precedent suggesting that we can just treat it as de novo review of a structural error.

[00:12:48] Speaker 04:
Functionally speaking, because we're talking about a structural error, it actually doesn't really matter.

[00:12:53] Speaker 04:
Because what we have is also case law saying that if we establish a structural error, that necessarily satisfies the third and fourth prongs of the plain error test.

[00:13:02] Speaker 04:
So if we establish structural error, we establish plain error as well, Your Honor.

[00:13:08] Speaker 04:
And I think on the substance of the juror's comment, the primary response that we've seen from the government is to sort of downplay it and say, it wasn't that big a deal.

[00:13:18] Speaker 04:
The juror was just sort of acknowledging a passing thought that was suggested by Hanson's attorney.

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And I would ask the court to reject that characterization, because as I was trying to say earlier,

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This is an incredibly important issue to anybody, particularly in a criminal case.

[00:13:33] Speaker 04:
I have less experience with civil, but I would imagine as a civil defendant, you would want to tease out jurors who are inclined to believe that we wouldn't be doing this if the plaintiff didn't have something really meritorious to say.

[00:13:45] Speaker 04:
And so if you look at the transcript, Hanson's attorney had a long wind up to ask this question, and it was a big deal to him.

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And four people raised their hands and said, yeah, we believe where there's smoke, there's fire.

[00:13:57] Speaker 04:
And then unfortunately, this particular juror seems to have fallen through the cracks because he did fastidiously try to address each of the jurors who raised their hands.

[00:14:05] Speaker 04:
And so what I think happened on a fairest reading of the transcript is that in a busy trial, things are moving fast, things are complicated.

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It's a huge case.

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during number 34, unfortunately, slipped through the cracks.

[00:14:16] Speaker 04:
But what we have from the Kachezian case is the judge's sua sponte responsibility to pay close attention and to enforce the Sixth Amendment rights of the defendants and say, you know what, I'm troubled by that answer.

[00:14:29] Speaker 04:
It suggests a possibility of bias, and I have a duty to inquire, either to rehabilitate the juror and let them move forward with the jury selection process, or to strike them if I can't rehabilitate them.

[00:14:42] Speaker 04:
And we see this in voir dire transcripts and in jury selection all the time.

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It's a never-ending process of bias, rehabilitate, no, strike.

[00:14:49] Speaker 03:
But Chair 34 clarified on follow-up and said—believed we have to follow the letter of the law, and that if the defendant prevailed on a technicality, then that's the way this system should work.

[00:15:03] Speaker 03:
It seems like the burden that you have is so high right now.

[00:15:10] Speaker 03:
But the judge has to make a determination that he was so impermissibly biased that he was required to strike.

[00:15:20] Speaker 03:
And I'm just not quite sure with the follow-up questions that that standard is met.

[00:15:26] Speaker 04:
What I would say in response to that, Your Honor, is that I would refer the court—so that you don't have to listen to just me—I would refer the court to Judge Wallace's concurrence in the unpublished merit decision that we cited for the court, because Judge Wallace was

[00:15:39] Speaker 04:
critical of Kachezian.

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He does not like the rule that the court adopted in Kachezian.

[00:15:45] Speaker 04:
And in criticizing the rule, he discharacterized his understanding of the rule.

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And that includes the idea that if the juror says something that suggests the possibility of bias, the judge has a sua sponte duty to inquire.

[00:16:01] Speaker 03:
Yeah, but in that case, that

[00:16:03] Speaker 03:
I think juror number three was asked three times if she could be impartial.

[00:16:09] Speaker 03:
Not only were all of her responses, or number three's responses, equivocal, but she explicitly noted that she was unsure if she could put her personal biases aside.

[00:16:20] Speaker 03:
And I'm just not sure that that

[00:16:25] Speaker 03:
is similar to what you have here, especially under the plain air, that the judge should have on its own, based on the discussion that happened, needed to make that determination that it was just impermissible to have the juror on the panel.

[00:16:40] Speaker 04:
The judge had a duty to inquire.

[00:16:43] Speaker 04:
Maybe the judge would have cleared it up.

[00:16:45] Speaker 04:
I agree.

[00:16:46] Speaker 04:
But we don't know.

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And the problem is that we don't know.

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So what we have is a juror who raised his or her hand to say, these people must have done something wrong because the government brought us here.

[00:16:54] Speaker 04:
And that answer remains hanging out there, unaddressed, uncured, and unrehabilitated.

[00:17:00] Speaker 04:
Because conceptually, the comments later about the defense function generally didn't really speak to the issue of the credibility of the government and what they bring to the room when they bring everybody in here.

[00:17:10] Speaker 04:
to try our federal criminal case.

[00:17:13] Speaker 05:
And so... Council, if I can just interject, it would seem then the rule you would want us to take away from that Kachachian, however you say that name of the case, is that if a juror says, yeah, sometimes I think when there's smoke, there's fire, then that's an automatic for-cause strike.

[00:17:28] Speaker 04:
It's an automatic duty to inquire.

[00:17:31] Speaker 04:
And if the inquiry doesn't happen, then we have a problem because we have a problematic answer hanging in the record that is uncured.

[00:17:37] Speaker 05:
Fair enough.

[00:17:38] Speaker 05:
But in light of the comments, so what you're saying then is that the comments that juror made later does not absolve the district court's opportunity to or obligation to inquire?

[00:17:48] Speaker 04:
Correct.

[00:17:48] Speaker 04:
Because it addresses conceptually distinction.

[00:17:50] Speaker 05:
You're saying the two different things.

[00:17:51] Speaker 04:
Fair enough.

[00:17:52] Speaker 04:
Unless the court has further questions, if I may reserve the rest of my time.

[00:17:56] Speaker 04:
OK.

[00:17:56] Speaker 04:
Thank you.

[00:18:14] Speaker 00:
Good morning.

[00:18:15] Speaker 00:
May it please the court?

[00:18:16] Speaker 00:
Tanya Culberton on behalf of the United States.

[00:18:18] Speaker 00:
I'm happy to address any of the issues in the briefs, but because opposing counsel has focused on these two issues at argument, I'll start with sufficiency and then turn to juror bias.

[00:18:29] Speaker 00:
On sufficiency, in 2015, the jury heard in a conversation with the Mint's in-house counsel where he was warned that his business practices were fraudulent, Hanson said, quote, he was so far behind that he simply could not stop.

[00:18:42] Speaker 00:
Now, it seems that the panel has asked a lot of questions about the importance of the various misrepresentations, especially as to timing.

[00:18:50] Speaker 00:
The representations as to timing do go to essential aspects of the transaction.

[00:18:55] Speaker 00:
There is sufficient evidence in the record for the jury to make that determination.

[00:19:00] Speaker 03:
Well, in your view then, how is Milheiser relevant to us or not relevant to us?

[00:19:07] Speaker 00:
So Milheiser is relevant.

[00:19:09] Speaker 00:
It says you look at each transaction, the nature of this particular kind of transaction and different things for different transactions are going to go sort of to the heart of the bargain.

[00:19:18] Speaker 00:
Here we know that timing goes to the heart of the bargain, in part because of Hanson's own words.

[00:19:24] Speaker 00:
So we have testimony in the record from Aaron Robinson, one of the

[00:19:27] Speaker 00:
sales directors who says that she went to Hanson and said, you know, please, can we give more realistic lead times?

[00:19:33] Speaker 00:
We are getting so many customer complaints.

[00:19:35] Speaker 00:
This is incredibly difficult for customer service.

[00:19:38] Speaker 00:
And he said he couldn't quote longer delivery times because he thought it would dissuade customers from purchasing.

[00:19:44] Speaker 00:
So the timeline of delivery is part of the solicitation, part of the offer.

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made to the buyer.

[00:19:51] Speaker 00:
We also know that the buyers cared about it because of the volume of complaints that were coming in.

[00:19:56] Speaker 00:
This all started because back in 2008, there were so many complaints that the attorney general's office began an investigation.

[00:20:03] Speaker 00:
So I think it's unrealistic to suggest that timing was not sort of important to the customers.

[00:20:11] Speaker 00:
That makes sense given that this is investment-level gold buying.

[00:20:15] Speaker 00:
These customers, because of all of the representations made to them, thought that they were buying a 100 percent chance that they would get their bullion in the promised time frame, or else they would get a refund that would make them whole, so that would account for any change in the market fluctuation.

[00:20:31] Speaker 02:
Well, we've focused, I think, on questions with defense counsel.

[00:20:38] Speaker 02:
more on the misrepresentation.

[00:20:40] Speaker 02:
So that's the intent to deceive part of it.

[00:20:44] Speaker 02:
But weren't they also, they were hoping everything would turn out okay.

[00:20:49] Speaker 02:
And so you have the second half of this, which we haven't talked about, and that's the, you know, this intent to cheat.

[00:20:55] Speaker 02:
Could you address that?

[00:20:57] Speaker 00:
Certainly, I think it's clear that they hoped everything would turn out okay, and they made that defense to the jury.

[00:21:04] Speaker 00:
But I think the jury rejected it because it simply was not plausible that these defendants could have a good faith belief that they could meet the representations that they were putting forward.

[00:21:14] Speaker 00:
At this point, by 2008, they were already sending out these excuses about unprecedented demand, and that is why your order is late.

[00:21:23] Speaker 00:
By 2011, they were already poaching metal from storage to fill customer orders because they were so far behind, and their own data from their own systems shows that from the end of 2014 until the bankruptcy in 2016,

[00:21:36] Speaker 00:
Of 11,000 of these relevant bullion orders, only 518 were delivered within the 8 to 10 week, the original 8 to 10 week time frame.

[00:21:46] Speaker 00:
And then beyond that, only 2,000 more were delivered within the sort of 14 week extension time frame.

[00:21:52] Speaker 00:
The rest of those were going past the drop dead date.

[00:21:55] Speaker 00:
So for them to continue to misrepresent that they could meet these timing promises and deliver this bullion was just simply not plausible.

[00:22:03] Speaker 03:
But they're tying that now to the jury instruction.

[00:22:08] Speaker 03:
Can you talk about that?

[00:22:09] Speaker 00:
Sure.

[00:22:09] Speaker 00:
So I would sort of go back to what Judge McEwen said about looking to the jury instructions as a whole.

[00:22:16] Speaker 00:
They were certainly allowed to present their theory of the case.

[00:22:21] Speaker 00:
They wanted the intent to cause financial harm to the victim as the instruction.

[00:22:25] Speaker 00:
There's no support for that in this court's case law.

[00:22:27] Speaker 00:
It's deceive and cheat.

[00:22:29] Speaker 00:
And that requires depriving the victims of money or property.

[00:22:34] Speaker 00:
Framing it as an intent to cause financial harm, I think, risks actually confusing the jury because of the instruction that intent to repay is not a defense.

[00:22:43] Speaker 00:
I think that sends the jury down the road of thinking about, well, is it permanent financial harm?

[00:22:48] Speaker 00:
Is it temporary financial harm?

[00:22:49] Speaker 00:
What does that mean?

[00:22:50] Speaker 00:
On its face, wire fraud is depriving of money or property by means of deception.

[00:22:57] Speaker 00:
And that is what we have here.

[00:23:00] Speaker 05:
Can I ask you a question about Milheiser?

[00:23:02] Speaker 05:
And I know that I've been fine.

[00:23:03] Speaker 05:
I don't think the government sought in bank review in that case, correct?

[00:23:07] Speaker 00:
I think that's correct.

[00:23:08] Speaker 05:
All right, so I'm not asking you to defend Milheiser.

[00:23:10] Speaker 05:
I'm asking you to help me understand it.

[00:23:12] Speaker 05:
Here's the hypothetical.

[00:23:14] Speaker 05:
So I'm outside of a grocery store.

[00:23:15] Speaker 05:
There are two tables.

[00:23:17] Speaker 05:
One table is a young girl saying, please buy my cookies.

[00:23:20] Speaker 05:
They're for a fundraiser for us to go on a trip.

[00:23:23] Speaker 05:
Right next to her is another table.

[00:23:24] Speaker 05:
There's a girl saying, please buy my cookies.

[00:23:26] Speaker 05:
My mom has cancer.

[00:23:28] Speaker 05:
I see those two tables, cookies are the same, same price.

[00:23:32] Speaker 05:
Look, the trip is nice, but, you know, the mom's got cancer.

[00:23:37] Speaker 05:
So I want to buy the cookies from the girl who says her mom has cancer.

[00:23:40] Speaker 05:
Actually, it's for her mom to get plastic surgery.

[00:23:43] Speaker 05:
And had I known that, I'm like, well, I'm going to buy the cookies from the girl who wants it for the trip, not because her mom wants plastic surgery.

[00:23:51] Speaker 05:
But the cookies are the same, the price is the same.

[00:23:55] Speaker 05:
Under Milheiser, the girl who says, or the mom, say the mom's the co-schemer, the mom who's putting her up to this to say, hey, tell them it's for my cancer when it's really for my plastic surgery.

[00:24:06] Speaker 05:
Under your view of Milheiser, is that fraud?

[00:24:12] Speaker 05:
And assume I use a phone or something to get a wire transmission out of it.

[00:24:17] Speaker 00:
I think that that's a great hypothetical, and I think that that is not necessarily fraud under Milheiser, but that is certainly not what we have.

[00:24:26] Speaker 05:
And I agree there are differences.

[00:24:27] Speaker 05:
I'm just trying to understand, because I always thought the test, and again, I'm putting you in a tough spot, but I always thought that you're here.

[00:24:34] Speaker 05:
I always thought the test was materiality.

[00:24:37] Speaker 05:
And that was the way we determined whether something did go to the core, or something was integral to the transaction.

[00:24:42] Speaker 05:
And now it seems like we have this other test

[00:24:46] Speaker 05:
that I'm not exactly sure what it is.

[00:24:50] Speaker 00:
I agree.

[00:24:51] Speaker 00:
I think it is a little bit difficult to parse.

[00:24:54] Speaker 00:
And I also had understood sort of materiality.

[00:24:57] Speaker 00:
If it is material to your decision to part with your money or property, then it should fall within it.

[00:25:02] Speaker 00:
I think, again, I don't want to overstate Milheiser.

[00:25:07] Speaker 00:
It does say you have to look at each transaction.

[00:25:12] Speaker 00:
It cites back to the case, and I'm blanking on the name of it, but where the important piece of information that was misrepresented was that, oh, we have all of these famous investors involved in our company.

[00:25:24] Speaker 00:
And that, I think, Milheiser says, that still survives because the kind of transaction there is an investment transaction where it's very important, your belief about the strength of the company.

[00:25:35] Speaker 00:
And so in that circumstance,

[00:25:36] Speaker 00:
It may be that, yes, you are investing in the company, and the company is perhaps giving you some returns.

[00:25:41] Speaker 00:
But that could still be a material misrepresentation, and it could be one that goes to the heart of the bargain.

[00:25:45] Speaker 00:
So I don't want to go too far out on a limb with Milheiser.

[00:25:49] Speaker 00:
But I would just say, again, that is so far afield from where we are here.

[00:25:56] Speaker 00:
If there are any other questions on sufficiency, I'll turn to the juror bias.

[00:26:02] Speaker 00:
So as we stated in our brief, our position is that this claim is actually waived, not just forfeited.

[00:26:09] Speaker 00:
I know my colleagues on the other side said, well, they failed to object to the seating of the jury.

[00:26:14] Speaker 00:
And I think that's not quite right.

[00:26:16] Speaker 00:
They affirmatively accepted the jury as picked and as seated after being given a full opportunity to question.

[00:26:25] Speaker 00:
And that is a knowing and purposeful relinquishment of a right to challenge for cause.

[00:26:30] Speaker 00:
They clearly knew or should have known the purported basis for an objection because it was elicited by their own questioning.

[00:26:39] Speaker 00:
So our position is that this court should follow the approach of the second, fourth, eighth, and tenth circuits and just simply conclude that this is waived.

[00:26:47] Speaker 02:
So you could never bring a post-conviction jury bias claim in that case, because once you have the jury seated—I've made my objection, I've used my peremptories—the judge asks the general question and everybody says yes.

[00:27:05] Speaker 02:
Now you are foreclosed forever from bringing a jury bias claim under your argument.

[00:27:12] Speaker 00:
Perhaps that happens, right?

[00:27:15] Speaker 00:
I mean, you can waive constitutional claims, claims of constitutional dimension.

[00:27:19] Speaker 02:
You can, but look at the practical aspects of how things run at trial and what the lawyers say when the judge asks that question.

[00:27:27] Speaker 02:
So maybe I should ask a better question.

[00:27:32] Speaker 02:
And that is, how could someone bring a post-conviction, juror bias claim?

[00:27:41] Speaker 02:
other than leave habeas aside.

[00:27:43] Speaker 02:
OK.

[00:27:44] Speaker 00:
My answer was going to be habeas.

[00:27:46] Speaker 02:
I shut off that afternoon.

[00:27:48] Speaker 00:
That's fine.

[00:27:50] Speaker 00:
And I take your point on this.

[00:27:51] Speaker 00:
And if the court does not want to adopt that standard, I would certainly fall back on plain error, which I think is what should apply here on the circumstances that we have if the court is not going to deem it waived.

[00:28:04] Speaker 02:
All these cases are a little different, and all the jurors are a little different.

[00:28:10] Speaker 02:
This juror doesn't actually make a statement that gets to the heart of, I can be fair.

[00:28:18] Speaker 00:
I don't think that's quite right.

[00:28:22] Speaker 00:
I think he or she talks at great length at every opportunity about the pride they took in serving on a jury before, the fact that they've had some exposure to law enforcement, but that wouldn't

[00:28:37] Speaker 00:
stop them from being impartial.

[00:28:39] Speaker 00:
They talk about their pride in setting aside personal knowledge that they had about one of the locations involved in a case on which they sat on the jury and how proud they felt at being able to do that.

[00:28:49] Speaker 00:
I also, and this is something that hasn't been aired yet in argument, but there was some subsequent questioning by Hanson's counsel after he had everybody raise his hand.

[00:28:59] Speaker 00:
And he talks at great length about the reason I'm asking that question, does anyone have their

[00:29:04] Speaker 00:
that thought crossed their mind is because the presumption of innocence is so important.

[00:29:09] Speaker 00:
And he spends a couple of pages explaining the presumption of innocence.

[00:29:12] Speaker 00:
And then he says, does anybody have a problem with that presumption?

[00:29:15] Speaker 00:
Nobody raises their hand.

[00:29:18] Speaker 00:
He says, does anybody think that that presumption should be different?

[00:29:20] Speaker 00:
Nobody raises their hand.

[00:29:21] Speaker 00:
So I think that in combination with all of the subsequent statements from juror 34,

[00:29:28] Speaker 00:
is enough that it was not plain to this judge that he had a duty to intercede here and further question.

[00:29:35] Speaker 00:
And I would even say that the statements that the court has quoted here from juror 34 show that that juror was potentially a good juror for the defense, saying, I understand there's technicalities.

[00:29:48] Speaker 00:
I don't love that.

[00:29:49] Speaker 00:
But of course, that's how the system works.

[00:29:50] Speaker 00:
Everybody should get a fair defense.

[00:29:52] Speaker 00:
And so it may well be that the defense was happy to have this person on the jury.

[00:29:57] Speaker 05:
I mean, it seems that as the defense counsel, there may be reasons you want a very chatty juror who kind of spouts off all the time.

[00:30:05] Speaker 05:
That might be someone you would actually want on your jury, because they're not necessarily going to go along with whatever the prosecutor is saying.

[00:30:12] Speaker 00:
Right.

[00:30:13] Speaker 00:
Right.

[00:30:14] Speaker 00:
That's exactly right.

[00:30:15] Speaker 00:
And on this structural error point, I just want to say that the work that plain error is doing here is very

[00:30:26] Speaker 00:
It is a structural error if you find actual or implied bias.

[00:30:32] Speaker 00:
Here, there is no finding of actual and implied bias.

[00:30:35] Speaker 00:
There's no request to make that finding.

[00:30:36] Speaker 00:
There's no suesplante finding because none was merited.

[00:30:40] Speaker 00:
And so in that circumstance, the review has to be plain error.

[00:30:43] Speaker 00:
And if the rule were otherwise, then as Judge Wallace expresses in his concurrence and merit,

[00:30:49] Speaker 00:
A defense counsel could sit back, not ask any follow-up questions, hope that the court doesn't ask any follow-up questions, and then voila, automatic reversal on structural error.

[00:31:00] Speaker 00:
I think here the proper analysis is plain error.

[00:31:05] Speaker 00:
Katchezian, the case that we've all been talking about.

[00:31:10] Speaker 00:
There, there was an objection raised to the juror.

[00:31:12] Speaker 00:
What happened in Katchezian is simply that this court on review said the district court got the analysis wrong.

[00:31:19] Speaker 00:
So I think that's a different circumstance than we have here.

[00:31:22] Speaker 00:
I would instead point the court to Mitchell.

[00:31:26] Speaker 00:
And in Mitchell, also on plain error review,

[00:31:29] Speaker 00:
Both sides expressly said, we're not challenging this juror for cause.

[00:31:33] Speaker 00:
But the comments by the juror were, yes, I think it will affect me.

[00:31:38] Speaker 00:
I mean, I think they were even more clear than a raising of a hand in this circumstance.

[00:31:43] Speaker 00:
But still, this court said that was not enough to put the district court on notice that they had a duty to strike this juror.

[00:31:49] Speaker 00:
Unless the court has questions on any of the other issues.

[00:31:58] Speaker 01:
We ask that you affirm.

[00:32:12] Speaker 01:
Thank you.

[00:32:13] Speaker 01:
Thank you.

[00:32:17] Speaker 01:
illustrates exactly the key point from the Milheiser decision.

[00:32:21] Speaker 01:
The jury question that these facts present on the difficult question of whether somebody not only deceived but cheated an individual out of the nature of the bargain.

[00:32:30] Speaker 01:
The question for the jury in this trial would be whether your purchase of the cookie as an essential element of the bargain to transact for the cookie was to support a cancer victim.

[00:32:42] Speaker 01:
And that's why you engage in the transaction.

[00:32:44] Speaker 01:
Or alternatively, you wanted a nice cookie at a good price that was comparable between the two and to support a family need was maybe a collateral part of your decision.

[00:32:54] Speaker 05:
How is that different than materiality?

[00:32:56] Speaker 01:
I don't know that it is different.

[00:32:57] Speaker 01:
I think perhaps Milheiser is refining

[00:33:00] Speaker 01:
the nature of materiality in helping us to understand the cheat component from the Miller case of to deceive and cheat for federal criminal fraud.

[00:33:09] Speaker 01:
And we can see it showcased very clearly in the Milheiser facts, because in Milheiser, the court was presented with defendants who were selling printer toner.

[00:33:18] Speaker 01:
They lied about their identity as a business, as being

[00:33:22] Speaker 01:
the business that had served this company in the past and lied about price points in the market.

[00:33:27] Speaker 01:
And you better lock in with us now to preserve the lower price point.

[00:33:31] Speaker 01:
And this court decided there was still a jury question that was not resolved under the model instructions about good faith and intent to repay in line with the Miller decision that required a new trial so that the jury could decide whether, beyond a reasonable doubt, those aspects of the transaction were essential to the nature of the bargain.

[00:33:52] Speaker 01:
And I would add that the court reversed without engaging in harmless error review because in Milheiser, as in here, the government did not argue harmless error in the answering brief on appeal.

[00:34:03] Speaker 01:
I would also add, as a final note, the government has alluded in pointing to facts that it argues did resolve these jury questions in the initial trial to testimony from Mr. Hanson's own lawyers, Mr. Fullington and Ms.

[00:34:16] Speaker 01:
Hopkins.

[00:34:17] Speaker 01:
And I wanted to emphasize that for the reasons we argued in our opening and reply brief, that testimony never should have been submitted to the jury in the scope in which it was delivered.

[00:34:30] Speaker 01:
in making comparisons between Mr. Hanson's circumstances and another individual who was engaging in purportedly similar conduct who had pleaded guilty to fraud, this information being delivered by Mr. Hanson's own lawyers presented to the jury along with documents citing to rules of professional conduct and moral objections.

[00:34:50] Speaker 01:
I think the key, again, returning to your hypothetical, Judge Owens, is we have to distinguish between business practices we might find to be overly aggressive, unseemly, even unethical, because deception is involved, and it might even be deception that lures somebody into a transaction and deception that cheats somebody out of the nature or essential aspects of their bargain.

[00:35:13] Speaker 01:
Thank you very much, Your Honor.

[00:35:13] Speaker 03:
Thank you.

[00:35:21] Speaker 04:
I just have a couple quick points on the Turbias issue.

[00:35:24] Speaker 04:
One really quick one is that Katchezian itself explicitly forecloses the argument that a later question about the presumption of innocence cures the earlier problematic question.

[00:35:35] Speaker 04:
There's a whole section of Katchezian specifically about that.

[00:35:39] Speaker 04:
The other issue I'd like to address is the idea that Juror 34 was rehabilitated at all, let alone in a way that could be perceived as good for the defense.

[00:35:49] Speaker 04:
As a defense lawyer, I can say that nobody who talks really about technicalities is somebody who I would want on a jury.

[00:35:54] Speaker 04:
My mom actually referred to what I do as technicalities the other day, and I was like, mom?

[00:36:01] Speaker 04:
That's not true.

[00:36:05] Speaker 04:
What we ask judges and jurors to do is enforce the rule of law against the government.

[00:36:09] Speaker 04:
And we ask appellate judges to enforce the rule of law against lower court judges.

[00:36:13] Speaker 04:
That's what we do.

[00:36:14] Speaker 04:
And referring to the defense function as playing around with technicalities and getting away with stuff, that is a common perception of what we do.

[00:36:22] Speaker 04:
But that is not actually a respectful and nuanced understanding or portrayal of what this job entails.

[00:36:30] Speaker 04:
And so I disagree that the jury was rehabilitated.

[00:36:32] Speaker 04:
And I don't think that it's fair to speculate that the jury would have been a positive contribution to the jury from a defense perspective.

[00:36:39] Speaker 04:
And I see that I'm running low on time, unless the court has further questions.

[00:36:43] Speaker 04:
Thank you.

[00:36:44] Speaker 05:
You can tell your mom did a great job.

[00:36:51] Speaker 03:
Thank you.

[00:36:51] Speaker 03:
All right.

[00:36:52] Speaker 03:
Thank you all very much.

[00:36:55] Speaker 03:
Ms.

[00:36:55] Speaker 03:
Culbertson, Mr. Holland, Mr. Nelson, thank you for your argument presentations here today.

[00:37:00] Speaker 03:
The case of United States of America versus Bernard Ross Hanson and Diane Renee Erdman is now submitted.