Opinion
Criminal Action No. 04-370-05.
August 23, 2004
MEMORANDUM
I. Procedural History
On July 19, 2004, the government filed a Motion to Hold a Hearing Regarding Potential and Actual Conflicts of Interest concerning the representation of Defendants Holck, Umbrell, Hawkins, Knight, LeCroy, Snell, and Carlson. (Docket No. 49). Following discussions among counsel, the government withdrew the motion as to Ms. Knight. As to Defendant Carlson, the circumstances relating to the alleged conflict were set forth on the record of a hearing on August 6, 2004, and the Court approved an agreement that there was no conflict in Mr. Carlson's counsel continuing to represent him in this matter.
As to Defendants Holck, Umbrell, LeCroy, and Snell, the Court has had a colloquy with these Defendants on the record at hearings on August 13 and August 20, 2004, warranted by the fact that a third party was paying for their counsel to represent them in this matter, and the Court has found that all four of those Defendants have voluntarily and knowingly waived any potential conflict. The Court has approved, and the government does not dispute, their current counsel representing them.
As to Defendant Hawkins, the circumstances regarding the alleged conflict are different. The government has actively suggested that Mr. Hawkins' current counsel, Anthony T. Chambers, Esquire, has a conflict which precludes his continuing to represent Mr. Hawkins in this matter. For the reasons set forth below, the Court finds there is no actual conflict, but only a potential conflict which is minor in nature, and thus denies the government's request that Mr. Chambers be disqualified.
II. Statement of the Facts
In Count 1 of the Indictment, Hawkins stands accused, with others, of conspiring "to knowingly devise a scheme to defraud the City of Philadelphia and its citizens of the right to Defendant Corey Kemp's honest services in the affairs of the City of Philadelphia. . . ." In Counts 2 and 5, Hawkins is accused of committing wire fraud in connection with the alleged conspiracy; in Counts 37-40, Hawkins is accused of committing perjury before the grand jury investigating the case.
The alleged conflict of interest has arisen in the following context. Ms. Judy Andrews, who has served as a secretary to Hawkins in his Detroit office, was subpoenaed to be a witness before the grand jury. In that connection, Andrews was represented by Chambers. Hawkins was represented by a different lawyer in connection with his grand jury appearance. After the indictment was returned, Chambers ceased representing Andrews, but entered his appearance as counsel for Hawkins. Andrews is still employed by Hawkins in the same capacity as prior to the Indictment. Although Andrews' duties may be characterized as something more than pure secretarial work, she is not his confidant or bookkeeper and does not appear to be involved in the substance of any of his businesses.
As to the facts which are relevant to the present issue, Hawkins is a Detroit businessman and a business associate of another Defendant in the Indictment, Ronald White. The government asserts that Hawkins, with White's encouragement, endeavored to use the assistance of City Treasurer Corey Kemp to further a fast food venture, which Hawkins and White sought to undertake. The Indictment alleges (Count 1, ¶¶ 13-15) that Hawkins gave two $5,000 checks to Kemp during 2002 at White's request, and then committed perjury when giving testimony to the grand jury regarding those payments, Count 38.
According to the Indictment, the first $5,000 check to Kemp was dated March 10, 2002, written on the account of New Detroit 2, on its account at First Independence National Bank of Detroit. It was signed by Hawkins. New Detroit 2 is one of Hawkins' many entities.
The second $5,000 check was dated September 25, 2002, written on the First Independence account of La-Van Hawkins. This check was deposited in Kemp's account a day earlier, on September 24, then bounced. It was replaced by a wire transfer on October 10, 2002, sent from the First Independence account to Kemp's account at Commerce Bank. White allegedly wrote a check to Hawkins which appears to be dated September 23, 2002, for $5,000, in apparent reimbursement for Hawkins' payment to Kemp.
The government further contends that Hawkins, in response to law enforcement inquiries, gave false explanations of the above transactions. The government sees a conflict arising because it asserts that some of the grand jury testimony of Andrews is contrary to Hawkins' testimony and may tend to show that Hawkins committed perjury.
The government cites the following summary of Andrews' grand jury testimony as demonstrating the conflict of interest in Chambers now representing Hawkins when he had represented Andrews when she testified before the grand jury:
[Andrews] stated that, to her knowledge, Hawkins is not a multi-millionaire, but rather has had recent difficulty in paying his bills. She said that on one recent occasion her paycheck bounced. She further testified that she never knew Hawkins to keep $40,000 or more in cash in his office, but rather the most she ever saw in the office in cash was $10,000. Further, she stated that there is a safe under her desk in the office for keeping valuable documents (making it unlikely that Hawkins kept cash in a drawer). She stated that she was not aware of Hawkins ever giving cash to White. She further confirmed that New Detroit 2 (on whose account the first check to Kemp was written) belongs to Hawkins, and she identified Hawkins' handwriting on both checks to Kemp. She stated that she was unaware of any work Kemp had ever done for Hawkins.
Government's Response, filed 8/5/04, p. 9.
The government asserts that there are several significant disputes between the testimony of Andrews and Hawkins. The first dispute arises over whether Andrews believes Hawkins is a multi-millionaire. Hawkins testified that he is a multi-millionaire and a successful entrepreneur, from which testimony one could infer that his participation in White's relationship with Kemp would be unnecessary. In contrast, Andrews testified that Hawkins is not a multi-millionaire, but in fact has had recent difficulty in paying his bills.
The second dispute arises over whether Hawkins kept significant amounts of cash in his desk drawer. While testifying before the grand jury, Hawkins was asked about receiving a $5,000 check from White contemporaneous with a $5,000 check that Hawkins wrote to Kemp. Hawkins denied that White's check to him was to reimburse him for the $5,000 check to Kemp. Hawkins claimed the check was part of the repayment of a $40,000 loan he made to White in 2002. Hawkins stated that the loan to White had been made in cash, and that he took cash out of his office desk and gave it to White. Andrews, on the other hand, testified that she never knew Hawkins to keep $40,000 in cash in his office, and that the most she ever saw in the office in cash was $10,000. Further, she stated that there is a safe under her desk in the office for keeping valuable documents, allegedly making it unlikely that Hawkins would keep such relatively large quantities of cash in his own desk.
Both Hawkins and Andrews testified that the first $5,000 check to Kemp dated March 10, 2002, was written on the account of New Detroit 2. Additionally, they testified that the second $5,000 check was dated September 25, 2002 and was written on a personal account of Hawkins. Hawkins and Andrews do not dispute Hawkins' handwriting on both checks to Kemp. Both Andrews and Hawkins testified that they were unaware of any work Kemp had ever done for Hawkins. Thus, there is no dispute between them as to these points.
Importantly, both Andrews and Hawkins have waived any actual or potential conflicts arising from the fact that Andrews was previously represented by Chambers who now represents Hawkins. Further, Chambers has represented he has not and will not reveal any confidential information he received from Andrews to Hawkins, and that his co-counsel in this case, Scott Godshall, Esquire, will cross-examine Andrews at trial and will also not receive such confidential information from Chambers. See transcript of hearing, 8/12/04, pp. 3-10.
III. Summary of the Arguments
The government contends that a conflict of interest arises whenever an attorney's loyalties are divided between the current client he now represents and the former client who must now be cross-examined. Additionally, the government states that Andrews' testimony is significant because it relates directly to Hawkins' perjury charge. The government also contends that it is immaterial if Chambers no longer represents Andrews because Chambers, during the course of the earlier representation of Andrews, presumably learned privileged information from her. Finally, the government claims that Chambers cannot appropriately cross-examine Andrews without jeopardizing her interest in not being impeached through the use of her knowledge which she imparted to Chambers in confidence, as her attorney at that time.
Hawkins contends that the Sixth Amendment, which ensures Hawkins the right to select and be personally represented by an attorney of his choice, overrides any potential conflict presented. Second, Hawkins contends that the differences between Andrews' and Hawkins' grand jury testimonies are minor, are not a material part of the government's case, and that evidence supporting the disputed issues can be corroborated from sources outside of Andrews. Finally, Chambers responds that no conflict of interest exists because Chambers no longer represents Andrews, and because he will refrain from cross-examining Andrews at trial, leaving that task to Scott Godshall, who will be co-counsel for Hawkins at the entire trial.
IV. Legal Standard
The Supreme Court determined in Wheat v. United States, 486 U.S. 153, 160, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988), that a court confronted with and alerted to possible conflicts of interest must take adequate steps to ascertain whether the conflicts warrant separate counsel. While a presumption exists in favor of a defendant's choice of attorney, Wheat, 486 U.S. at 164, the presumption in favor of the defendant's choice can be overcome "not only by a demonstration of actual conflict but by a showing of a serious potential for conflict. The evaluation of the facts and circumstances of each case under this standard must be left primarily to the informed judgment of the trial court."United States v. Stewart, 185 F.3d 112, 121-22 (3rd Cir.) (quoting Wheat, 486 U.S. at 163), cert. denied, No. 90-835, 1999 U.S. LEXIS 8302 (Dec. 13, 1999).
In Stewart, the court outlined the standard of review for such conflict of representation cases. Stewart, 185 F.3d at 120. First, the Third Circuit will exercise a plenary review in order to determine whether the district court's disqualification was arbitrary. A disqualification is arbitrary where it represents "the product of a failure to balance proper considerations of judicial administration against the right to counsel." Id. (quoting United States v. Voight, 89 F.3d 1050, 1074 (3d Cir. 1996)). Second, where the district court's decision was not arbitrary, then the reviewing court determines whether the court abused its discretion in disqualifying the attorneys.Id.
While a defendant may waive his right to conflict-free counsel, a court has discretion to refuse such a waiver if the court concludes that there exists either an actual conflict of interest or a serious potential for a conflict of interest. United States v. Moscony, 927 F.2d 742, 750 (3rd Cir.), cert. denied, 501 U.S. 1211, 111 S. Ct. 2812, 115 L. Ed. 2d 984 (1991). Moscony identified factors that a court should consider when determining whether to accept such a waiver, which other courts have summarized as follows:
(1) the court's institutional interest in protecting the truth-seeking function of the proceedings; (2) the defendant's right to effective assistance of counsel, regardless of the proffered waiver; (3) protection of attorney-client communications, and the candor between counsel and client such protection engenders; (4) promotion of respect for the court in general through enforcement of ethical rules; and (5) protection of a fairly rendered verdict from trial tactics designed to generate issues for appeal.United States v. Stansfield, 874 F. Supp. 640, 643 (M.D. Pa. 1995) (citing Moscony, 927 F.2d at 749).
Applying these factors to the present case, the leading precedents approving or ordering disqualification are quite different. In Wheat, supra, the defendant, along with numerous co-defendants, was charged with participating in a massive drug distribution conspiracy. A co-defendant, who was a lesser player in the conspiracy, decided to forgo trial and pleaded guilty. At the conclusion of the guilty plea, the attorney notified the trial court that the lead defendant had asked the attorney to try his case as well. Wheat, 486 U.S. at 154. The trial court denied the lead defendant's motion for substitution of counsel, rejecting the lead defendant's offer to waive his right to conflict-free counsel. Id. at 157.
The Supreme Court determined that the government intended to call the co-defendant as a witness for the prosecution at defendant's trial. Id. The Court also postulated that the government might have tied certain deliveries of drugs by the co-defendant to the defendant "necessitating vigorous cross-examination" of the guilty party by defendant's counsel.Id. at 164. The Court determined that the attorney, because of his prior representation of the co-defendant, "would have been unable ethically to provide that cross-examination." Id.
In Moscony, supra, the defendant and his co-conspirator were charged with orchestrating a fraud upon two federal agencies. Moscony, 927 F.2d at 742. The co-conspirator pleaded guilty and testified for the government at Moscony's trial. During most of the grand jury investigation, the same attorney represented Moscony, the co-conspirator, and the employees from his company, despite several warnings from the government that the multiple representation might pose a conflict of interest during a subsequent trial. Shortly after the indictment, the government moved to disqualify the firm representing Moscony. Moscony's employees joined the motion, id. at 747, and the District Court granted the motion.
On appeal from his conviction, Moscony asserted that the trial court had erred in disqualifying his trial counsel. The Third Circuit affirmed, finding that an actual conflict had arisen because the same attorney had represented not only Moscony, but also his co-defendant and several employees of Moscony, who had substantive knowledge of important facts. The court found that cross-examination of those defendants would have deprived Moscony of his Sixth Amendment right to effective assistance of counsel, and if pursued would have violated ethical standards regarding privileged communications. Id. at 748. Additionally, the Third Circuit noted that Moscony did not offer to forgo cross-examination of the other defendants whom he had previously represented. Id. at 751.
In Stewart, supra, the counsel was disqualified from the criminal trial because the same firm had been representing the defendant and government witnesses from the criminal trial together in a parallel civil trial. Stewart, 185 F.3d at 119. The court recognized that the government granted immunity to the government witnesses in the civil trial in exchange for their participation with the government in the criminal trial against the defendant. Id. Even though the witnesses waived the conflict and consented to have their attorney represent Stewart in the criminal trial, the trial court still found conflict because the attorneys, in defending Stewart, were "directly adverse" to their representation of the government witnesses and put the attorneys in the "unenviable position of cross-examining their own clients with the help of attorney-client communications." Id. at 120.
In United States v. Provenzano, 620 F.2d 985 (3d Cir. 1980), the defendants appealed from a judgment which convicted them of conspiracy to violate the Racketeer Influenced and Corrupt Organization Act. Provenzano led a group whose main aim was to extort money from trucking companies in return for "labor peace."Id. at 989. The Third Circuit determined that the district court correctly disqualified one of the co-defendant's attorneys where that attorney had represented the government's chief witness on a murder conviction in an unrelated case.
The court decided that the attorney would be in a conflict of interest between the duty of vigorous representation of the co-defendant and the duty of loyalty to the government's chief witness. Id. at 1004-05. The court determined that confidences relating to the chief witness's murder conviction and events of that period would be useful to impeach him as a witness against the co-defendant. The co-defendant's willingness to waive effective representation in order to retain his counsel was insufficient to neutralize this conflict. Id.
The Third Circuit determined that although there were no explicit findings that the attorney knew specific facts that would have involved him in conflict, the trial court had correctly concluded that the attorney must assume as much, since he could not actually inquire about the matter without destroying the confidence. Id. at 1005.
In United States v. Kadomsky, No. 02-254-05, 2002 U.S. Dist. LEXIS 20319 (E.D. Pa. Oct. 15, 2002) (Surrick, J.), the government moved for a hearing on conflict of counsel, requesting that the court disqualify the defendant's counsel due to a conflict of interest, because he had previously represented three of the government's witnesses whom the government had deemed essential to its case. Id. at *3. The attorney contended that he barely had any relationship with the three former clients, that he represented them on unrelated matters, and that he had no intention of cross-examining those witnesses as he did not expect their testimony to relate to his client.
Considering these factors, the court found that the information he obtained through an attorney-client relationship might be used to impeach the credibility of the three witnesses. Id. at *12. Because of the complexity of the trial, the court rejected the attorney's offer to avoid the conflict by not cross-examining his former clients. The court reasoned that while the primary testimony of the attorney's former clients may not relate directly to the charges against the defendant (who was but one of ten defendants in the action), the witnesses might offer background testimony that might implicate the defendant, at least indirectly. Neither the attorney nor the court could predict the course of the trial. Given this possibility, the court did not want the attorney to potentially have to cross-examine one or more of these witnesses in order to properly represent his client, as such a result could have become a significant issue for appeal. Id. at *13.
V. Discussion
The fundamental right of a defendant in a criminal case for his own choice of counsel cannot be lightly taken away. The Sixth Amendment right to assistance of counsel is a fundamental right that is essential to a fair trial. A criminal defendant who desires and is financially able to retain his own counsel "should be afforded a fair opportunity to secure counsel of his own choice." Powell v. Alabama, 287 U.S. 45, 53, 53 S. Ct. 55, 77 L. Ed. 158 (1932).
Andrews' testimony at the trial is far from the crux of the government's case. Her testimony, according to the government, is directly relevant to Count 38 of the Indictment only, which charges perjury, relating to Hawkins' explanation as to the transactions involving the two $5,000 checks.
The Court characterizes Andrews' testimony, summarized above, as to Hawkins' status as a multi-millionaire, and the amount of cash he had in the office as largely anecdotal. The government does not contend that Andrews had control over Hawkins' assets or cash or even that she knew, constantly and consistently, what activities he conducted in his office.
The government does not assert that Andrews' testimony is directly relevant to any other counts, but claims that if Andrews' testimony assists the jury in finding that Hawkins made false statements about the $5,000 payments, the jury may consider that as evidence of consciousness of guilt of the wrongdoing involved in the payment, which may tend to provide evidence against Hawkins as to the other perjury counts, as well as the conspiracy charge in Count 1 and the wire fraud charge in Counts 2 and 5.
The Court rejects what may be characterized as the government's "spillover" argument as creating a conflict requiring disqualification of Chambers, because her testimony is peripheral to these other charges. Furthermore, the government does not assert it is relying completely or even substantially on Andrews' testimony to prove the falsity of Hawkins' testimony. There is no assertion that Andrews has any overall knowledge of the Defendant's assets. There is no evidence that she prepared his tax returns or financial statements that he would give to banks or other entities. Also, her testimony is not necessarily material or inconsistent with Hawkins', because a person can have millions in fixed assets, but very little cash on hand.
Andrews' testimony is not the only way, or even the most accurate and effective way, the government could prove the Defendant's wealth or lack thereof. If it is relevant, the government can call other witnesses or subpoena documents concerning Hawkins' financial status, and need not rely solely on the testimony of Defendant's secretary.
It appears obvious that Stewart, Moscony and Provenzano must be distinguished. The court in Moscony determined that the witnesses' trial testimony "would be central to the government's case, and that vigorous cross-examination of these witnesses would be necessary." 927 F.2d at 747-48. In Provenzano, the Third Circuit disqualified defendant's counsel because he had represented the government's chief witness in a prior murder conviction. 620 F.2d at 989, 1004. In Stewart, the extent of the witnesses' testimony was very substantive. The same cannot be said about the importance of Andrews and her testimony in demonstrating the government's case. Unlike the witnesses inProvenzano or Moscony, Andrews does not qualify as a "chief government witness" nor is her testimony "central to the government's case." Additionally, in Moscony, the leading case in this Circuit, all three of the government witnesses expressly joined in the motion to disqualify their former counsel.Moscony, 927 F.2d 747. The Court notes not only that Andrews did not join the pending motion to disqualify their former counsel, but that she has waived any conflict.
The court in United States v. McDade, No. 92-249, 1992 U.S. Dist. LEXIS 11447 (E.D. Pa. July 30, 1992) (Gawthrop, J.), confronted a situation with an even more serious conflict potential, but refused to disqualify a law firm from representing a criminal defendant in a federal prosecution on the basis that the firm had previously represented the government's principal witness during the investigative phase of the proceedings. Id. at *1. The court reasoned that, although there is a legitimate concern whether defense counsel in this situation could fully and fairly cross-examine a witness whom counsel had represented earlier:
"logic suggests that not only could that lawyer not cross-examine on those confidential matters, but no lawyer could. The very fact that [those matters] were given out in confidence during the privileged context of the private sanctity of the former attorney-client relationship, suggests that those confidences would come to the attention of no other defense lawyer. . . . Thus, by forgoing the right to cross-examine on those otherwise unearthed pieces of evidence, the defense, in effect, forgoes nothing."Id. at* 8.
In McDade, the court weighed the "salient and inescapable fact that the witness in question has not joined in the motion to disqualify." Id. at *9. The court determined that courts should be hesitant to grant a motion to disqualify defense counsel when the witness, whose interests the government is supposedly protecting, does not demand disqualification in order to protect those interests. Id. at *10.
In this case, the fact that co-counsel Godshall will, with the clear consent of Hawkins, not be privy to any confidences given by Andrews to Chambers, but will himself cross-examine Andrews, is an additional reason to allow Chambers to represent Hawkins.
Additionally, the government does not contend that Chambers is violating either Rule 1.6 or 1.7 of the Pennsylvania Rules of Professional Conduct. VI. Conclusion
Rule 1.6 provides, in pertinent part: "A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation. . . ." 204 PA. CODE § 81.4 (Rule 1.6(a))(2004). Further, "the duty not to reveal information relating to representation of a client continues after the client-lawyer relationship had terminated." Id. (Rule 1.6(d)).
Rule 1.7 provides that:
(a)[A] lawyer shall not represent a client if the representation of the client will be directly adverse to another client, unless: (1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and (2) each client consents after consultation. (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and, (2) the client consents after full disclosure and consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.Id. (Rule 1.7).
Mr. Chambers has been admitted to practice before this Court pro hac vice, and the Pennsylvania Rules of Professional Conduct apply. See E.D. PA. CIV. P.R. 83.6 (Rule IV(B)) (2003) (adopting Pennsylvania's Rules of Professional Conduct for use in the Eastern District of Pennsylvania). Rule 8.5 of the Pennsylvania Rules provides that the rules of professional conduct apply:
for conduct in connection with a proceeding in a court or agency before which a lawyer has been admitted to practice (either generally or for purposes of that proceeding), the rules to be applied shall be the rules of the jurisdiction in which the court or agency sits, unless the rules of the court or agency provide otherwise. . . .Id. (Rule 8.5).
This Court finds that the potential conflict between Chambers' previous representation of a government witness during the grand jury proceedings and his current representation of Hawkins is not significant enough to overcome Hawkins' right to choose his own counsel as provided by the Sixth Amendment.
For the foregoing reasons, the government's assertion that Anthony T. Chambers, Esquire be disqualified to act as counsel for Defendant La-Van Hawkins will be denied.
An appropriate Order follows.