text:
    Frank Dean TEAGUE, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 73-1506.
    United States Court of Appeals, Seventh Circuit.
    Argued April 12, 1974.
    Decided July 17, 1974.

      Kenneth F. Levin, Chicago, 111., Frank Dean Teague, pro se, for petitioner-appellant'.
    James R. Thompson, U. S. Atty., Frederick H. Branding, Asst. U. S. Atty., Chicago, 111., for respondent-appellee.
    Before CUMMINGS, PELL and STEVENS, Circuit Judges.
   CUMMINGS, Circuit Judge.

This appeal is from the denial of petitioner’s motion under 28 U.S.C. § 2255 claiming that his conviction for armed robbery of the Citizens Savings and Loan Association (“Citizens”) in Chicago was based upon false testimony of Joseph Archie resulting from a deal between him and the prosecutor.

After having been sentenced to 25 years for armed. robbery, petitioner appealed to this Court. We affirmed the conviction. United States v. Teague, 445 F.2d 114 (7th Cir. 1971). Our opinion noted that four employees of Citizens had identified petitioner as the person who held them- at gunpoint while ordering the president of the association to hand over currency from the tellers’ desk drawers. As we noted, those witnesses first gave the Federal Bureau of Investigation descriptions of the robber’s weight and age which differ from those of the petitioner. However, in trial testimony, each witness was positive that petitioner was the robber.

As to Joseph Archie, our opinion stated:

“The defendant was also identified by Joseph Archie, who was in the process of opening up a checking account under a false name when the robber entered the building. He testified that he had observed Teague point a shotgun at a teller. Archie stated that he was directed by Teague to place the money in a briefcase. After the money was collected, Teague ordered all persons in the area into a back room.” (445 F.2d at 117)

This is the entire discussion of Archie’s testimony in our prior opinion which emphasized the testimony of the four employees of the association. Thus we stated:

“The positive and undisputed identification of the defendant by the employees of Citizens, who were eyewitnesses to the robbery, constitutes sufficient evidence to sustain the jury’s verdict of guilty beyond a reasonable doubt. * * * his guilt was more than adequately proved by the employees who observed the defendant committing the robbery.” (445 F.2d at 118)

In his Section 2255 motion, petitioner claimed under oath that in the course of his trial the Government failed to inform the jury that a deal or promise for leniency had been made to Joseph Archie, described “as a key witness.” Petitioner asserted that the prosecutor knowingly permitted Archie to perjure himself and knowingly suppressed evidence regarding Archie’s character, criminal convictions and charges against him.

According to petitioner’s affidavit attached to his motion, Archie perjured himself when he testified at petitioner’s trial that he was not then under federal arrest nor accused of any federal offense, that the prosecutor had not offered him leniency for his testimony, and that he had been convicted of only two felonies (burglary in 1961 and strongarm robbery in 1963). Actually, according to this affidavit, Archie had been a federal prisoner under charges involving 18 U.S.C. §§ 1708 and 2114 since the day before his appearance as a government witness at petitioner’s trial. Archie allegedly was granted leniency upon conviction for said federal offenses and was also granted leniency in an unrelated state felony case through the intervention of the federal prosecutor and his superior. In addition to the two felonies about which he testified, Archie was allegedly also convicted of a 1958 armed robbery, a February 1961 burglary and three armed robberies in March 1964.

In support of these sworn allegations, petitioner attached several exhibits to his motion. One such exhibit was a transcript of parts of Archie’s testimony, showing that he gave the answers alleged. Another exhibit was the record of proceedings before the United States Commissioner, showing that on June 17, the same day he testified against petitioner, a criminal complaint was filed charging Archie with assaulting a postal employee in violation of 18 U.S.C. § 2114. The exhibit also showed that Archie appeared before the Commissioner the same day and waived hearing after being advised of the complaint and of his rights. The complaint was superseded by an indictment one month later, which added a count of possessing a check stolen from the mails in violation of 18 U.S.C. § 1708. A final judgment order was also attached to the motion, showing that Archie pled guilty to the postal offenses and was sentenced on Count I to two years under 18 U.S.C. § 4208(a)(2) with recommendation that he be sent to a medical center rather than a prison, and that he be given “early parole by use of the Halfway House in Chicago.” Sentence on Count II was suspended and five years’ probation was imposed. The possible maximum was five years on Count I and ten years on Count II.

Another exhibit was a transcript of a hearing in Archie’s prosecution for forgery on November 7, 1969, in the Circuit Court of Cook County. In argument on a motion to dismiss for excessive pre-trial delay, Archie’s counsel and the Assistant State’s Attorney both represented that Archie had been arrested by state officers and delivered into fedéral custody on June 16, 1969, the day before he testified against petitioner. After the motion to dismiss was denied and a finding of guilty entered, the Assistant State’s Attorney informed the court of Archie’s criminal record, mentioning at least five felonies which predated petitioner’s trial.

The Assistant State's Attorney observed in mitigation that he had been in contact with petitioner’s federal prosecutor. The federal prosecutor had advised the Assistant State’s Attorney that “Mr. Joseph Archie was the key witness in a bank robbery case [against petitioner] * * * and his testifying is the sole reason of getting a conviction in the case * *

The Assistant State’s Attorney also advised the state sentencing judge that the United States Attorney had written him a letter relating “that Mr. Archie was a key witness for them.” The United States Attorney’s letter concluded by asking the state court to consider Archie’s cooperation in the prosecution of Teague and the fact that Archie had been “given five years probationary period” on his guilty plea to the postal offenses. Thereafter the state court judge sentenced Archie to a year and a day to rún concurrently with the federal sentence.

The Government’s response to the motion to vacate the sentence asserted that “the mere circumstance of Joseph Archie’s arrest on the federal complaint following his testimony in petitioner’s trial raises no inference that a ‘deal’ had been made with the government.” The response also asserted that petitioner did not present proof of his claim of knowing use of perjured testimony against him. The response was supported by an affidavit of the prosecutor stating that on June 16, 1969, when petitioner’s trial commenced, “the whereabouts of Joseph L. Archie, a principal witness in that cause, was unknown to the United States Attorney’s office” (emphasis supplied). The affiant also stated that on the evening of June 16 a postal inspector advised the prosecutor that Archie had been placed under arrest by the Harwood Heights, Illinois, police. The prosecutor interviewed Archie that evening. He agreed to appear as a witness the next morning at petitioner’s trial. The prosecutor’s affidavit concluded as follows:

“That affiant made no promises of immunity or leniency in exchange for Archie’s testimony. Affiant further states that he has no recollection of having discussed with Archie the possibility of the placement of federal charges against Archie prior to the time that Archie testified as a government witness.”

The Government’s response also appended an unsworn letter from Joseph Archie, then in federal prison at Sandstone, Minnesota, stating that he was arrested by suburban police on June 16, 1969, and interviewed by the federal prosecutor of petitioner that evening, but that he had no recollection of the content of their conversation.

Following the receipt of these documents and a reply from petitioner, the district court rendered a short memorandum opinion denying petitioner’s motion to vacate his sentence. After stating that it was “dubious” of petitioner’s assertions, the court added that the mere fact that an agreement to testify may have been reached does not raise an inference that the testimony was perjured. The opinion noted that petitioner’s exhibits “are related to factual matters tending to impeach Archie’s testimony rather than to the substance of his testimony as to Teague’s guilt.”

The district judge concluded that petitioner’s motion must be dismissed because in our opinion affirming his conviction we relied so heavily on the four association employees’ testimony against petitioner even though, as the district judge stated, “the testimony of Archie was helpful to the government in proving its case against Teague.” The court held that petitioner’s assertions regarding the knowing use of perjured testimony on the part of the Government showed only harmless error.

Although petitioner appeared pro se in the district court, we doubt that an attorney could have stated his contentions much more precisely. He set forth specific questions and the answers which he believed to be perjured; he set forth what he believed to be the true answers to those questions, and he attached court records which documented the untruth of several of the contested answers and raised a strong inference as to the untruth of the others. On the surface, the June 16th-17th timing at least implies a promise to Archie and a plea bargain before his testimony at petitioner’s trial. It may turn out that the Government can rebut that inference, that the attached court records are wrong, or that some of the answers were mistaken but not perjured. But petitioner need not disprove all such possibilities to be entitled to a hearing; rather, he is entitled to a hearing so that both sides can offer proof.

At the time the district court denied the motion without a hearing, the Supreme Court had not decided DeMarco v. United States, 415 U.S. 449, 94 S.Ct. 1185, 39 L.Ed.2d 501 (1974). That case reemphasized the rule of Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104, that a conviction is invalid if the Government permits one of its witnesses falsely to deny a promise of leniency made in exchange for his testimony. The Court said in DeMarco :

“there was a plea bargain between the witness and the Government at some point, the question being whether it was made after or before petitioner’s trial. This factual issue was dispositive of the case, and it * * * should have been [decided] in the District Court after an evidentiary hearing.”

Here no hearing was held to resolve the conflict in the affidavits presented by petitioner and the Government. It is clear that DeMarco requires such a hearing. If the district judge finds after a hearing that any government official made any promises to or deals with Archie before his 10:30 a. m. testimony on June 17, then Giglio and DeMarco require that petitioner be discharged or given a new trial.

Whether there was an explicit bargain before Archie testified is not the only issue, however. Archie also testified that no federal charges were pending against him, that he did not expect any federal charges, and that no one had ever suggested that he had broken any federal laws. He gave a somewhat non-responsive but essentially negative answer to the question whether he believed the federal authorities would treat him kindly if he cooperated with them. He stated that he only had two previous felony convictions. If the evidence shows that some or all of these answers were false, and that the Government had reason to know the answers were false, then the district judge must decide whether “the false testimony could * * * in any reasonable likelihood have affected the judgment of the jury * * *." Giglio, 405 U.S. at 154, 92 S.Ct. at 766; Napue v. Illinois, 360 U.S. 264, 271, 79 S.Ct. 1173, 3 L.Ed.2d 1217. Napue, Giglio and DeMarco all make clear that false answers to questions intended only to impeach the witness can be material under this test.

Finally, we note that the Government recommended leniency for Archie in his Illinois forgery trial because he was the “key witness” in petitioner’s trial, with his testimony as “the sole reason of getting a conviction.” This highlights the unimportance to the materiality issue of the fact that we noted on the prior appeal that the testimony of four employees of Citizens may have been sufficient for conviction. Archie’s testimony might still have tipped the jury’s verdict in favor of the Government; we do not know on which witness or witnesses the jury relied.

Accordingly, the order denying petitioner’s motion is vacated, and the case is remanded.


source: Caselaw Access Project

author: WILLIAM E. MILLER, Circuit Judge. McCREE, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Ronald Jackson CRANE, Defendant-Appellant.
    No. 73-1947.
    United States Court of Appeals, Sixth Circuit.
    Argued April 2, 1974.
    Decided July 11, 1974.

      Donald E. Warner (court appointed) Chattanooga, Tenn., for defendant-appellant.
    Hugh J. Moore, Jr., Asst. U. S. Atty., for plaintiff-appellee; John L. Bowers, Jr., U. S. Atty., E.D.Tenn., on brief.
    Before EDWARDS, McCREE and MILLER, Circuit Judges.
    MILLER, J., delivered the opinion of the Court, in which EDWARDS, J., joined. McCREE, J., (pp. 1389-1391) filed an opinion concurring in part and dissenting in part.
   WILLIAM E. MILLER, Circuit Judge.

The defendant, along with a number of other individuals, was sought by the F.B.I. because of his suspected involvement in a bank robbery. Two days after the robbery defendant was riding in an automobile driven by Gene Henry, who was also believed to have been involved in the robbery. The car was stopped by F.B.I. agents. Henry, apparently in an attempt to escape, rapidly accelerated the car toward some of the F. B.I. agents. Shots were fired into the car, and Henry was killed. When defendant, uninjured, was taken from the car, an agent saw a paper sack on the floor board between the defendant’s feet. In the sack was $7,780 of the more than $23,000 in cash that had been taken from the bank.

Defendant was arrested, advised of his constitutional rights, and then taken to the F.B.I. office where he was again given the Miranda warnings. He chose to give the F.B.I. a statement about his involvement in the robbery. According to the trial testimony of agent Smartt, defendant stated that he knew the two men who actually held up the bank and that it was an automobile that he had found for them that they used as their getaway car. Defendant had told the agent that he knew that he was to receive a share of the stolen money. To substantiate this statement, he gave to the agents a piece of paper which listed the names or initials of the other parties involved in the robbery and listed their share of the money. Beside his own name were the figures $2,500/$l,875— indicating that his original share was to be $2,500 but that that amount would be reduced to $1,875 after the stolen money was exchanged with another person for different bills. However, defendant stated that he had no intention of actually taking the money. Moreover, he said that Henry, the driver of the car, had placed the sack on the floor board and that the money was always in Henry’s keeping.

A joint indictment was returned against defendant and the three other men involved in the robbery. Count One charged defendants Alloway, Hughes and Brown with armed robbery of a federally insured bank. 18 U.S.C. §§ 2, 2113(a) and 2113(b). Defendant alone was charged under Count Two with possession of funds stolen from a federally insured bank. 18 U.S.C. § 2113(c). The district court decided to try all of the defendants before one jury but recognized that a problem could arise because of the government’s intention to offer defendant’s statement in evidence. As the statement could incriminate the other defendants, and as defendant would not take the stand to be available for cross-examination, it would be a violation of the other defendants’ sixth amendment right of confrontation to allow the jury to hear the statement before reaching a verdict as to them. Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). In consequence, the court bifurcated the trial. All evidence against the defendants charged under Count One was first submitted, and the jury was then asked to return its verdict on that count only. After the jury had returned its verdict on Count One, the remaining evidence against defendant, charged in Count Two, was introduced. The jury then returned its verdict as to defendant, finding him guilty as charged.

Shortly after the trial began, defendants Alloway and Hughes changed their pleas to guilty and testified for the prosecution. Brown, the remaining defendant charged under Count One, was found not guilty after completion of the case as to him.

Defendant argues that rather than bifurcate the trial, the court should have granted defendant’s motion for severance. The refusal of the court to grant the severance motion is said to have been error because the cumulative effect of the evidence in the first part of the trial so influenced the jury that the impartiality required by the sixth amendment became impossible.

In Bruton v. United States, supra, the prosecution had introduced in a joint trial the confession of one of the defendants. The trial court admitted the confession but cautioned the jury that it could not be considered as evidence against the codefendant. In reviewing this procedure, the Supreme Court held that the inculpating statements contained in the confession made the defendant a witness against his codefendant. As the defendant giving the confession chose not to testify, he was unavailable for cross-examination. In consequence the codefendant’s sixth amendment right to confront witnesses against him was violated.

Ever since Bruton was decided, trial judges have struggled to find ways that defendants may be tried jointly even though one has given a statement to the police. See, e. g., United States v. Sidman, 470 F.2d 1158, 1167-1170 (9th Cir. 1973). Their purpose has been to obey the commands of Bruton and at the same time to achieve the substantial saving of judicial time that may be accomplished through a joint trial. Given what appears to be an ever-increasing demand by litigants for access to federal courts, efforts by trial judges to keep their dockets current are to be commended. Yet justice, not judicial economy, is the first principle of our legal system. And under no circumstances may well-intentioned efforts to conserve judicial time be permitted to prejudice the fundamental right of a criminal defendant to a fair trial.

We have carefully scrutinized the record in this case and find that the defendant’s cause was not prejudiced by the manner in which the trial was conducted. Brown, whose case was tried first, was found not guilty. Consequently we do not believe that the jury drew an adverse inference from Brown’s association with defendant as developed at trial. Moreover, we find that the record contains convincing evidence to support the jury’s guilty verdict as to defendant.

Despite the lack of prejudice to defendant arising from the trial technique employed here, we entertain serious doubts about the propriety of the general use of a bifurcated trial as a means of preserving joint trials while still complying with the mandate of Bruton. If a jury were to find one of the defendants guilty, there could be a serious question whether the same jury could later give his codefendant the dispassionate and unprejudiced hearing required by due process and by the sixth amendment. In such a case the risk of prejudice would be unacceptably high. And of course the trial judge cannot predict at the beginning of the trial what the jury’s verdict will be as to the defendant whose case is first presented. Conceivably, a procedure may be discovered that will make possible a reconciliation of the efficient use of court time and the constitutional guarantee of the right to confrontation. In the meantime, whenever there is a possibility of prejudice to either defendant, the safest course would appear to be the traditional use of the severance device.

The defendant also contends that the warrantless search and seizure of the bag of money on the floor board of the car were in violation of the fourth amendment. We do not agree. The F. B.I. agents had just shot and killed the operator when he drove the car toward them. As they reached the car, defendant had between his feet a green paper bag. Had the bag contained a weapon, the agents unquestionably could have been in physical danger were the weapon not seized. Since the bag was within defendant’s “immediate control,” the search was a proper one. Chimel v. California, 395 U.S. 752, 763, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969); United States v. Kaye, 492 F.2d 744 (6th Cir. 1974); cf. United States v. Robinson, 414 U.S. 218, 94 S.Ct. 467, 38 L.Ed.2d 427 (1973).

On the morning of the fourth day of trial, defendant moved for a mistrial because on that and the preceding morning a few of the jurors had seen him in the hall of the courthouse handcuffed and chained to Hughes, a codefendant who had pleaded guilty under Count One of the indictment. The defendant Brown made a similar motion because he believed that the same jurors had seen him chained to Alloway. Both parties offered to present evidence on the circumstances of the incident. The court reserved ruling on the motion until the conclusion of the trial.

After the jury had returned its verdict, the defendant testified about his having been seen by some of the jurors handcuffed to codefendant Hughes as he was being led to the courtroom. By defendant’s description, three of the jurors were identified as Mrs. Chapman, Mrs. Hatchett and Mr. Craven. One of the marshals testified that it was standard procedure to handcuff and chain criminal defendants while.they were on their way to the courtroom. Furthermore, the marshal stated that defendants Alloway and Hughes were escapees from the Tennessee State Penitentiary.

Subsequently, the court called for questioning the three jurors identified by defendant. Mrs. Hatchett stated that she had seen defendant in chains, but that she did not discuss what she had seen with any other juror. She also testified that this encounter in the hall did not affect her vote in the case. Both Mrs. Chapman and Mr. Craven remembered seeing defendant in the hall, but neither could recall seeing chains or handcuffs.

We do not believe that defendant was prejudiced by the brief encounters with the jurors. See United States v. Leach, 429 F.2d 956 (8th Cir. 1970), cert. den. 402 U.S. 986, 91 S.Ct. 1675, 29 L.Ed.2d 151 (1971); Hardin v. United States, 324 F.2d 553 (5th Cir. 1963). Mrs. Hatchett specifically stated that she did not tell another juror about what she saw nor did it affect her consideration of defendant’s case. It is worthy of note that Mrs. Hatchett stated that she also saw defendant Brown in chains, yet the jury found him not guilty. The transcript clearly indicates that if either Mrs. Chapman or Mr. Craven saw the defendant chained and handcuffed, they attributed no significance to the fact.

In our recent opinion in Kennedy v. Cardwell, 487 F.2d 101 (6th Cir. 1973), we undertook an exhaustive review of the shackling cases. While we there recognized the inherent prejudice to a "defendant required to be manacled or shackled while in the courtroom during his trial, casting upon the prosecution the burden of showing that no prejudice had resulted, we adopted a somewhat different standard in cases where the defendant had been seen by the jurors in shackles only for a brief period somewhere in the courthouse. As to this class of cases we stated that “the only real question ... is the degree of prejudice affecting the defendant’s fair trial right ...” As stated above, the facts developed by the district court in the post-trial hearing, leads us to conclude that the defendant suffered no prejudice from the brief encounters with jurors while he was shackled. The district court did not err in denying the defendant’s motion for a mistrial because of these incidents.

The judgment of conviction is affirmed.

McCREE, Circuit Judge

(concurring in part and dissenting in part).

I concur in the court’s disposition of all the issues presented in this appeal except for its treatment of the “bifurcated” trial procedure. This procedure, which might more appropriately be characterized as “tandem,” violated appellant’s constitutional rights to due process and to a fair trial before an impartial jury.

Appellant’s admission implicating his codefendants could not agreeably to the Sixth Amendment, be introduced against them. Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). To prevent prejudice to them, and, at the same time, to achieve economy of judicial time and energy, the district court empanelled a single jury to hear the case in tandem fashion. The government was instructed to introduce all its evidence against the codefendants and Crane except for his admission. Thereupon, the jury heard argument from the codefendants, received the court’s charge concerning them, and retired to deliberate upon and decide their guilt or innocence. After the return of the verdict affecting only the codefendants, the government presented to the same jury evidence of Crane’s admission. Thereupon, the jury heard his argument, received the court’s instruction, and retired to deliberate about him.

Notwithstanding the district court’s commendable concern about the constitutional rights of Crane’s codefendants and its understandable desire to expedite cases on its crowded docket, this procedure deprived Crane of basic constitutional rights. Although innovation is essential to the growth of the law, the procedure adopted here endangered proper fact-finding and was fundamentally unfair. A more appropriate course of action would have been to grant appellant’s motion to sever under Rule 14 of the Federal Rules of Criminal Procedure. That rule provides that “[i]f it appears that a defendant ... is prejudiced by a joinder ... of defendants . . . for trial together, the court may . . . grant a severance of defendants or provide whatever other relief justice requires.”

During the first phase of the trial, the jury was required to determine at least one element (and possibly more) of the crime with which Crane was charged before is was instructed to deliberate on his guilt or innocence. It is unlikely that the jury would either reconsider or change its earlier determination of issues decided during deliberation about the codefendants, or accord to Crane, at the commencement of its deliberation about him, the presumption of innocence with respect to all the elements of the offense with which he was charged. This procedure presents the same risk of injustice that has compelled other courts to order a new trial when the jury that determined a defendant’s guilt was composed of persons who had served as jurors in a case related to and arising from the same criminal action. E.g., Lett v. United States, 15 F.2d 690 (8th Cir. 1926). See also, United States v. Haynes, 398 F.2d 980 (2d Cir. 1968), cert. denied, 393 U.S. 1120, 89 S.Ct. 996, 22 L.Ed.2d 124 (1969), Casias v. United States, 315 F.2d 614 (10th Cir. 1963) (en banc), and United States v. Stevens, 444 F.2d 630, 632 (6th Cir. 1971), where this court held that “whenever avoidable, jurors should not be called to serve in cases involving witnesses or parties who participated in cases in which they were previously impanelled.” In addition, the tandem procedure confused the role of appellant’s counsel whose client’s case did not enjoy the first priority on the jury’s agenda during the initial phase of the trial. He might have been reluctant, for fear of antagonizing the jury that had been told to defer consideration of his client’s case, to participate forcefully in the first phase of the trial, for example, in the examination of witnesses, and in the decision whether to make an opening statement or “partial” closing argument.

The jury’s verdict that Crane’s codefendant was not guilty of armed bank robbery does not warrant the conclusion in the majority opinion that Crane was not prejudiced by the tandem trial. At the start of trial, there were four defendants, three of whom were charged with armed bank robbery and one of whom, Crane, was charged only with possession of the proceeds of that robbery. On the second day of trial, two of appellant’s codefendants entered a plea of guilty to the charge of armed robbery, and one of them then became a witness for the prosecution. On the third day of trial, the jury determined that appellant’s third codefendant was not guilty. Within minutes of announcing the verdict, the trial of Crane alone resumed, and the jury was informed that appellant had given an FBI agent a list of persons to whom the robbery proceeds were to be paid. This list included the wife of the defendant whom the jury had just acquitted. It requires little imagination to conclude that the effect of this additional information on the jury was considerable. The jury,having been told, in effect, that it might have just erred in its earlier verdict, may have determined not to permit another “guilty” person to go free.

Although the majority expressed- its “serious doubts about the propriety of the general use of a bifurcated trial,” it concluded that the use of the procedure in this case was harmless. Assuming that a procedure that deprives a defendant of his constitutional right to a fair trial before an impartial jury can ever be deemed harmless, the majority opinion does not determine that the error was “harmless beyond a reasonable doubt,” Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967), and I do not so conclude.

Accordingly, I would hold that when the district court correctly determined that a joint trial of Crane and his codefendants would violate Bruton, it should have ordered separate trials, as appellant requested, or possibly, with appropriate safeguards, might have impanelled two juries, one to determine Crane’s guilt or innocence and the other to determine the guilt or innocence of his codefendants. See United States v. Sidman, 470 F.2d 1158, 1167-1170 (9th Cir. 1972), cert. denied, 409 U.S. 1127, 93 S.Ct. 948, 35 L.Ed.2d 260 (1973).

I would reverse and remand with instructions to grant a new trial.


author: ADAMS, Circuit Judge.

text:
    ECONO-CAR INTERNATIONAL, INC. v. ANTILLES CAR RENTALS, INC., Appellant.
    No. 74-1111.
    United States Court of Appeals, Third Circuit.
    Argued April 25,1974.
    Decided June 28,1974.
    See also D.C., 61 F.R.D. 8.
    Britain H. Bryant, Bryant, Costello & Burke, Christiansted, St. Croix, V. I., Olwine, Connelly, Chase, O’Donnell & Weyher, New York City, for appellee; William F. Sondericker, Joseph M. Burke, New York City, of counsel.
    Maria Tankenson Hodge, Charlotte Amalie, St. Thomas, V. I., J. Michael Spencer, Frederiksted, St. Croix, V. I., for appellant.
    Before ALDISERT, ADAMS and GARTH, Circuit Judges.
   ADAMS, Circuit Judge.

This appeal presents two questions relating to the Federal Arbitration Act. First, we must decide whether the Act grants to the district court for the Virgin Islands the authority to enforce an agreement to arbitrate contractual disputes. Second, if we should decide that the Act has the effect of conferring such authority, we must then determine whether the district court for the Virgin Islands has the statutory power, in light of section 4 of the Act, to order that the arbitration between the parties be conducted in New York City as the contract provides.

The controversy prompting this appeal centers upon a franchise agreement between Econo-Car International, Inc., the franchisor, and Antilles Car Rentals, Inc., the franchisee. On February 25, 1972, Antilles notified Econo-Car that it intended to terminate the franchise agreement. It appears that each party asserted, under the contract, certain adjustments, adjustments which the other party resisted. Econo-Car advised Antilles that it desired to submit the various disagreements to the process of arbitral resolution pursuant to paragraph 15 of the franchise agreement. Antilles refused to submit the disputes to arbitration, and Econo-Car thereupon filed a petition in the district court for the Virgin Islands to compel arbitration. On November 21, 1973, the district court ordered Antilles to “enter into arbitration proceedings in the City of New York in accordance with the terms of the [franchise] agreement. . . . ”

On this appeal, Antilles challenges the district court’s order on several grounds. First, Antilles seeks to establish that section of the Federal Arbitration Act,4 by its terms, does not confer power on the district court for the Virgin Islands to compel arbitration. The term “United States district court” as used in section 4 has, according to Antilles, an historic meaning that does not include the district court for the Virgin Islands. Further, Antilles points out that the definition of “district court of the United States” contained in 28 U.S.C. § 451 does not comprehend the district court of the Virgin Islands.

Second, Antilles contends that infirmities in the district court’s reasoning in its previous memorandum opinion in Sewer v. Paragon undermine its reliance on that decision in the case at hand. The district court’s determination that the strong federal policy favoring arbitration supported the application of the Act in toto to the Virgin Islands ignored, according to Antilles, the clear import of the Act’s terms. Antilles suggests that, on the basis of the use of the claimed inconsistent phrases relating to the courts covered in separate sections, it would be, at least, ho less reasonable to conclude that the Act does not extend authority to enforce arbitration agreements to the district courts of the Virgin Islands as to conclude that it does. In addition, Antilles emphasizes that in Jos. L. Muscarelle, Inc. v. American Timber and Trading Company, Inc., the Fifth Circuit held that the Arbitration Act did not apply to the Canal Zone. The court in Muscarelle, according to Antilles, relied heavily on the fact that “the district court for the Canal Zone [like the district court for the Virgin Islands] is not a constitutional court established by Chapter 5 of Title 28. . ” The district court in Sewer, Antilles suggests, was incorrect in failing to follow Muscarelle.

Third, Antilles contends that even if section 4 of the Act is held to apply to the district court for the Virgin Islands, the court’s order in this case is at odds with the specific terms of that section. Section 4 requires that “[t]he hearing and proceedings, under such [arbitration] agreement, shall be within the district in which the petition for an order directing such arbitration is filed. .” Hence, Antilles asserts, the district court for the Virgin Islands lacked the authority to order that the arbitration take place in New York City.

Econo-Car, in essence, claims that the substantive concerns underpinning the Federal Arbitration Act do not support any distinction based upon the particular federally-created court in which an order to enforce arbitration is sought, despite any contrary inference that may be drawn from the ambiguous language. Further, Econo-Car contends that Supreme Court opinions do not clearly indicate that the term “United States district court” has the narrow scope that'' Antilles suggests.

None of the arguments of the parties concerning the precise meaning of the uncertain statutory language and the relative wisdom of arguably conflicting judicial precedents offers a persuasive rationale for disposing of this appeal. The absence of legislative material relating to the applicability of the Act to the Virgin Islands suggests that Congress did not consider the precise issue presented by this appeal. With the issue of the applicability of the Act to the district court for the Virgin Islands in this inconclusive posture, it would appear that we should reach a decision reflecting the strong federal policy, evidenced by the Act itself, favoring the enforcement of arbitration agreements. No conflicting policy considerations of significance are apparent. Thus, we conclude that the Federal Arbitration Act extends to the district court for the Virgin Islands, thereby conferring upon it the power to direct arbitration in the present case.

The order compelling arbitration in this case, however, raises a different problem. Under the order’s terms the contemplated arbitration is to take place in New York City, as specifically provided in the agreement between the parties. Section 4 of the Act permits a party to request an order requiring arbitration “in the manner provided for in such agreement.” But Section 4 also provides that the arbitration “shall be within the district in which the petition for an order directing such arbitration is filed.” In a case like the present, where the agreement provides for arbitration outside of the district in which the petition is filed, Section 4 can create a perplexing dilemma: a district court might not be able to order arbitration strictly in accordance with the terms of the agreement, as one portion of Section 4 seems to require, without contravening a second portion of Section 4.

While any directive in Section 4 that arbitration be conducted according to the terms of the agreement is implicit at best, the requirement that arbitration take place in the district court where the petition is filed is clear and unequivocal. Certainly the saving of resources occasioned by the geographic concentration of all proceedings provides an appropriate legislative basis for this limitation on the district court’s power. We recognize that if the statutory language referring to the terms of the arbitration agreement is also given a restrictive reading, a party who seeks arbitration in a district court properly having venue may well be unable to secure an arbitration order in such district court in circumstances like those presented by this case. Despite the somewhat paradoxical situation thus possibly created, we are inclined to heed the unambiguous statutory language limiting the district court’s power to order arbitration outside of the district. We hold, therefore, that the district court erred in ordering arbitration to take place in New York City.

Accordingly, the judgment of the district court will be reversed and the case dismissed.

      . 9 U.S.O. §§ 1-14.

      . If the Act does not apply to the district court for the Virgin Islands, a party may well defeat any attempt specifically to enforce an agreement to arbitrate in the district court for the Virgin Islands since the party seeking arbitration would then be remitted to local law. There is no Virgin Islands statute providing for specific enforcement of arbitration agreements, and at common law such agreements are not specifically enforceable. See Sigal v. Three K’s Ltd., 456 F.2d 1242, 1243 (3d Cir. 1972).

      . Paragraph 15 of the contract provides as follows:
      It is mutually agreed that the parties hereto will submit any controversy or claim arising out of or relating to this agreement, or the breach thereof, to arbitration in the City of New York and shall abide by the provisions and rules of the “Rules of American Arbitration Association” and that any judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction thereof and all cost and expenses will be paid by the parties hereto according to said rules.

      . Section 4 of the Federal Arbitration Act provides, in part, as follows:
      A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admirality of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

      . 351 F.Supp. 596 (D.V.I.1972), appeal dismissed, No. 72-1592 (3d Cir. June 25, 1973).

      . The precise issue in Sewer concerned the • district court’s authority under section 3 of the Act to stay proceedings pending arbitration. Although section 3 employs the arguably broader phase “courts of the United States,” the district court expressly disavowed piecemeal. application of the Act to the district court for the Virgin Islands and concluded that the whole Act, including section 4, applied to it. Id. at 599-600 n. 4.

      . 404 F.2d 467 (5th Cir. 1968).

      . Id. at 469.

      . Antilles apparently presents this contention for the first time in its supplemental brief on this appeal. However, since tbe contention raises questions concerning the statutory authority of the district court, we deem it appropriate to consider it at this time.

      . See International Longshoremen’s & Warehousemen’s Union v. Juneau Spruce Corp., 342 U.S. 237, 72 S.Ct. 235, 96 L.Ed. 275 (1952); Mookini v. U. S., 303 U.S. 201, 58 S.Ct. 543, 82 L.Ed. 748 (1938).

      . Compare Jos. L. Muscarelle, Inc. v. American Timber & Trading Co., 404 F.2d 467 (5th Cir. 1968) and Kanazawa Ltd. v. Sound, Unlimited, 440 F.2d 1239 (9th Cir. 1971).

      . Cf. discussion in The Bremen et al. v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), where the Court held that a forum-selection clause was binding upon the parties unless the respondent could meet the heavy burden of showing that its enforcement would be unreasonable, unfair or unjust.

      . But see Continental Grain Co. v. Dant & Russell, Inc., 118 F.2d 967 (9th Cir. 1941).

      . We note that had Econo-Car brought this suit initially in a district court in New York, such court, it appears, would view the agreement to arbitrate in New York as a waiver of any possible objections Antilles might make to the court’s venue. See id. Joseph Muller Corp. Zurich v. Commonwealth Petrochemicals, Inc., 334 F.Supp. 1013, 1021 (S.D.N.Y.1071); Lawn v. Franklin, 328 F.Supp. 791, 793-794 (S.D.N.Y.1971).


author: WATERMAN, Circuit Judge:

text:
    Robert NOLAN, Plaintiff-Appellant and Cross-Appellee, v. SAM FOX PUBLISHING COMPANY, INC., Defendant-Appellee and Cross-Appellant, and Williamson Music, Inc., Defendant, and Hill & Range Songs, Inc., et al., Defendants on Counterclaims and Cross-Appellees.
    Nos. 68, 349, Dockets 73-1077, 73-1187.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 8, 1973.
    Decided July 8, 1974.

      Edythe Jacobs, Los Angeles, Calif., Norma Hack, Ginsberg & Hack, New York City, for Nolan,
    Charles A. Stillman, Julian W. Friedman, Morrison, Paul, Stillman, & Beiley, New York City, for Fox.
    ' Robert' C. Osterberg, John S. Clark, Abeles, Clark & Osterberg, New York City, for Cross-Appellees.
    Before WATERMAN, FRIENDLY and TIMBERS, Circuit Judges.
   WATERMAN, Circuit Judge:

These are cross-appeals by the plaintiff Nolan and one of the defendants below, Sam Fox Publishing Company, from a judgment of the United States District Court for the Southern District of New York, David N. Edelstein, Chief Judge, entered after a trial by the court without a jury. In his opinion, reported at 300 F.Supp. 1311 (SDNY 1969), Chief Judge Edelstein has clearly set forth the facts in this diversity of citizenship case, and we find no need to restate them here in any great detail. The main thrust of the arguments by both parties on appeal goes to the conclusions drawn from those facts by Chief Judge Edelstein.

Robert Nolan composed the song “Tumbling Tumbleweeds” (the “song”) in 1929, and thereafter assigned the song and the copyright on it to the Sam Fox Publishing Co. (“Fox”). Subsequently, in an agreement dated January 28, 1946, Fox in turn assigned all of its right and interest in and to the song to Williamson Music, Inc. (“Williamson”). On March 1, 1960, the plaintiff assigned the renewal term of the copyright to Fox which then assigned that renewal term, as it had all its previous rights and interests in the song, to Williamson.

In 1963 plaintiff Nolan sought to rescind the assignment to Fox of the original and renewal copyright on the musical composition. The plaintiff also sought injunctive relief protecting his claimed interest in the song. He sought the return of the copyright renewal, an accounting for royalties, and damages for alleged infringement of the copyright. He stated he had rescinded all his contractual arrangements with Fox and sought a judicial declaration confirming the rescission. Although Chief Judge Edelstein found divers breaches of the contract by Fox he found that none of them were substantial enough or were so material as to justify rescission by Nolan, maintaining that Nolan could “be rendered whole by an award of monetary damages.” 300 F.Supp. at 1317-1318. As Chief Judge Edelstein viewed the suit as being one based upon breach of contract he ordered an accounting by a Special Master to determine the amount of damages Nolan should recover for such a breach, which damages consisted principally of past royalty payments owed by Fox to Nolan. He applied the six-year applicable statute of limitations, N.Y. C.P.L.R. § 213, subd. 2, governing actions for breach of contract. This had the effect here of limiting the potential recovery to only those damages alleged to have accrued in the six years prior to the commencement of the action in 1963. The defendant Fox waived the statute of limitations defense, however, with reference to one category of royalty payments Claimed to be due from Fox, those for royalties from foreign mechanical income.

After the Special Master had issued his findings of fact, the court below determined that Fox was liable to Nolan in the amount of $94,148, including interest and taxable costs. This figure included royalties on money earned by Williamson but not paid over to Fox. The findings of the Special Master and the Memorandum Opinion of September 26, 1972 by Chief Judge Edelstein affirming the Master’s findings are not reported. The plaintiff appeals from the judgment insofar as it denied him the other and additional relief he sought.

The defendant Sam Fox Publishing Company, Inc. cross-appeals from that part of the judgment granting Nolan an accounting and computing the award of damages. Fox also appeals from the dismissal of its compulsory • counterclaims, found to be without substance, claims which it had originally made against the plaintiff Nolan and several additional parties, Hill & Range Songs, Inc. (“Hill”) and Joachim Jean Aberbach and Julian J. Aberbach, who were defendants on those counterclaims.

The first counterclaim alleged that the counterclaim defendants had induced Nolan to breach his contract with Fox and the second counterclaim charged that these defendants, together with Nolan, had intentionally damaged Fox’s business.

We now turn to our discussion of the merits of the appeals. All parties to this action agree that rescission of a contract is an extraordinary remedy which should not be granted whenever there is only an inconsequential breach of the contract. Rather, before rescission will be permitted the breach must be found to be “material and willful, or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract.” Callanan v. Powers, 199 N.Y. 268, 284, 92 N.E. 747, 752 (1910). See also In re Waterson, Berlin & Snyder Co., 48 F.2d 704 (2 Cir. 1931) (A. N. Hand, J.); United States Plywood Corp. v. Hudson Lumber Co., 113 F.Supp. 529 (SDNY 1953); Rosenwasser v. Blyn Shoes, Inc., 246 N.Y. 340, 159 N.E. 84 (1927); O’Herron v. Southern Tier Stores, Inc., 9 A.D.2d 568, 189 N.Y.S.2d 323 (3d Dep’t 1959).

A showing of fraud would certainly be grounds for rescission. Adams v. Gillig, 199 N.Y. 314, 92 N.E. 670 (1910). It is plaintiff Nolan’s contention here that the facts presented below demonstrate the existence of fraud, and that Chief Judge Edelstein erred in his conclusion that they do not. Nolan’s principal claim of fraud is that Fox’s relationship with Williamson was fraudulently concealed from the plaintiff. In support of this claim Nolan relies on the facts that he was never given actual notice of Fox’s assignment of the copyright to Williamson, and that he was totally ignorant of the arrangement whereby Fox would turn over the copyright renewal to Williamson. Nevertheless, these facts do not demonstrate that fraud existed. Fox had the right to assign the copyright, In re Waterson, Berlin & Snyder Co., supra, and Chief Judge Edelstein was unable to discern any effort by either Fox or Williamson to conceal their relationship from Nolan. We therefore do not believe that Chief Judge Edelstein was clearly erroneous in finding that “the reliable evidence fails to demonstrate fraud.” 300 F.Supp. at 1316.

In 1946, an advertisement appeared in the widely circulated trade newspaper Variety stating:

Important Announcement!
Williamson Music, Inc.
By special arrangement with
Sam Fox Publishing Company
Have Acquired The
Sensational Western Song
TU M B L IN G
TUMBLEWEEDS
By Bob Nolan

This public announcement is, of course, patently inconsistent with the theory that Fox and Williamson were intent on concealing their relationship. Moreover, Williamson’s name was displayed on all the sheet music copies of the song published by it. Nolan argues, however, that nowhere in the Variety announcement or on the sheet music was Williamson identified as the “publisher.” This omission, in and of itself, surely would not demonstrate fraud. In addition, it is significant that the assignment from Fox to Williamson was recorded at the Copyright Office. Inasmuch as that assignment was recorded, we need not even reach the question of whether Nolan can be charged with knowledge of the assignment because of that recording, for it suffices to say here that this recordation further illustrates that Williamson and Fox had no intention whatsoever of concealing their relationship from Nolan or from anyone else.

Although Nolan might not have had actual knowledge of Williamson’s role, there was evidence at the trial below that Nolan’s longtime authorized business agent and attorney, Edward Gray, whose role in this whole matter is of the utmost importance, did have actual knowledge that Williamson was publishing the song. Gray handled all of Nolan’s business affairs and was specifically authorized to act as Nolan’s agent for Tumbling Tumbleweeds from the mid-nineteen forties until his dismissal by Nolan in 1962. Nolan’s account with Fox was maintained in his, Gray’s, name, royalty statements were sent by Fox to Gray, and the royalty checks were drawn to Gray’s order. In 1946, Gray, who was then Nolan’s business agent, negotiated with Williamson Music for use of the song “Tumbling Tumbleweeds,” but he was then acting on behalf of Pioneer Radio Productions, Inc., a corporation with which Nolan had no connection whatever. It was at this point that Gray acquired knowledge that Williamson and not Fox was exploiting the song. Although, as we have mentioned, Gray was not acting on behalf of Nolan when he was representing Pioneer Radio, he was Nolan’s agent with regard to the song. It is unimportant what Gray actually did or did not tell Nolan about the knowledge Gray obtained. Whatever knowledge Gray had is imputed to Nolan. Farr v. Newman, 14 N.Y.2d 183, 250 N.Y.S.2d 272, 199 N.E.2d 369 (1964); Bonham v. Coe, 249 App.Div. 428, 292 N.Y.S. 423 (4th Dep’t), aff’d, 276 N.Y. 540, 12 N.E.2d 566 (1937); Hurley v. John Hancock Mut. Life Ins. Co., 247 App.Div. 547, 288 N.Y.S. 199 (4th Dep’t 1936).

In addition to his claim that there was fraud, plaintiff Nolan argues that Fox’s failure to pay a substantial percentage of the royalties later determined to be owing to him by the Special Master is such a substantial" breach of the contract by Fox as to jnsti-fy-r-escission by Nolan. Nolan "di'd“'not"receive 74% of the royalties dueffirnTtarthe applicable six-year periocT from 1957 until 1963. Fox failed to pay-an-y-rayalties on income from foreign sotcrcesi — royalties on income from licensing of the song for public performances, and royalties on income from printed material other than piano copies. At theCtrial below. Fox advanced several defenses that it argued relieved it of the obligation to pay these royalties. The court found that, with the exception of the statute of limitations claim, cutting off liability for failure to pay any royalties due prior to 1957, all the defenses raised were without merit. Chief Judge Edelstein attributed Fox’s failure to pay to “[o]versight, negligence and less than meticulous bookkeeping. . . .” 300 F.Supp. at 1320.

Although the existence of fraud is a sufficient ground for permitting rescission it is not a necessary one. Rescission has also been allowed, despite the absence of any showing of fraud, in cases in which a publisher has made none of the royalty payments. The rationale of these decisions is, of course, that an essential objective of a contract between a composer and publisher is the payment of royalties, and a complete failure to pay means this objective has not been achieved. Here, however, Fox did pay 26% of the royalties due to Nolan for the applicable six-year period, and this partial payment of royalties due distinguishes this case from cases where there was total failure to pay the required royalties. See Driver-Harris Co. v. Industrial Furnace Corp., 12 F.Supp. 918 (WDNY 1935); Broadcast Music, Inc. v. Taylor, 10 Misc.2d 9, 55 N.Y.S.2d 94 (Sup.Ct.1945); DeMille Co. v. Casey, 115 Misc. 646, 189 N.Y.S. 275 (Sup.Ct.1921).

In defending against the cause of action for an accounting Fox admitted failure to pay royalties • due Nolan from “foreign mechanical income.” As to the other categories of income for which royalty payments were claimed to be owing to Nolan, however, Fox denied any liability and defended on two grounds. First, Fox asserted that any moneys received by Fox from the American Society of Composers, Authors, and Publishers (ASCAP) were exempt from royalty payments because Nolan would have received these payments directly from ASCAP had he been a member of that organization. In rejecting this defense, Chief Judge Edelstein first relied on the plain language of the contract between Nolan and Fox providing for the payment of royalties on all sources of income not specifically excluded by the contract. Fox had argued that the language of this contract must be read in light of the custom in the trade that these payments were exempt from the obligation to pay royalties. Yet Chief Judge Edelstein found that the evidence on this point presented by Fox was “woefully inadequate.” 300 F.Supp. at 1318. No evidence in the record on appeal suggests that we find differently.

The second defense offered by Fox to prove that Nolan had received all royalties properly due him, other than those for foreign mechanical income, was that Nolan was not entitled to royalties from Fox on money which was earned by Williamson but not paid over to Fox. In finding the defense without merit, Chief Judge Edelstein relied on the language of the contract and his in-, terpretation of the word “publisher” to cover assignee Williamson. Fox had argued that “publisher” did not include Williamson. That this argument is disingenuous is shown by Fox’s admission that the term covers both the partnership of Sam Fox Publishing Company, and its successor, the Sam Fox Publishing Company, Inc. Furthermore, under the interpretation of the contract suggested by Fox, continual dilution of earnings payable to Nolan could be achieved through successive assignments. Our construction of the contract does not reform the agreement in any way, but is more likely in keeping with the intentions of the parties than is Fox’s reading.

The court below found that as between Fox and Williamson, only the former would be held liable to Nolan. Chief Judge Edelstein carefully examined the assignment from Fox to Williamson and found that it, provided for Fox to pay all the royalties. Nolan argues that this court should impose an equitable lien on the copyright so that Williamson can be held liable to Nolan in the future if Fox should be unable to make payments. For authority, Nolan relies on In re Waterson, Berlin & Snyder Co., supra, where this court imposed such a lien when the assignor publisher was, in fact, bankrupt. In In re Waterson, however, the trustee for the bankrupt publisher wished to sell the copyright free of any royalty claims. This effort to repudiate the obligation to pay royalties is not present in the instant case. Fox has consistently paid some royalties to Nolan, and Williamson has made some royalty payments to Fox. The court in In re Waterson faced a much different situation from that which is now before us, and the Waterson case has not been extended to cases like the present one where the publisher is not bankrupt. To impose a lien on the copyright when Nolan’s contract with Fox imposes no restriction on assign-ability of the copyright is a drastic remedy not required by the facts in the present case.

Because he treated this case as one for breach of contract, Chief Judge Edelstein applied a six-year statute of limitations so as to cut off all liability for any payments allegedly owed from before' 1957. See N.Y.C.P.L.R. § 213, subd. 2. Inasmuch as we discern no basis for disturbing the district court’s finding that there was no fraud, this statute of limitations applicable to actions in contract must therefore be the applicable statute unless we accept one of the other theories offered by the plaintiff Nolan to support his position that this six-year limitation provision should not be invoked here. Nolan argues that the statute of limitations pertaining to actions in contract should not apply here, for the relationship of a writer or composer to his publisher is one of trust, that here there has been not only a breach of contractual relationship but a breach of fiduciary duty, as well, and therefore we should hold that Nolan’s cause of action for any of the royalty payments allegedly withheld by Fox at any time accrued only upon Nolan’s discovery of all the facts which he claims Fox had concealed from him until shortly before his declaration of rescission. It is true that several New York courts have mentioned the trust elements that are part of the relationship between a writer and a publisher. See Nelson v. Mills Music, Inc., 278 App.Div. 311, 104 N.Y.S.2d 605 (1st Dep’t 1951); Schisgall v. Fairchild Publications, Inc., 207 Misc. 224, 137 N.Y.S.2d 312 (Sup.Ct.1955); Broadcast Music, Inc. v. Taylor, supra. None of these cases, however, are concerned with the statute of limitations question. Rather, these cases involve only the question of what effect the relationship between the composer or writer and the publisher has on the publisher’s acknowledged obligation to exploit the copyright. In the present case Chief Judge Edelstein found that in the past there had been no failure by Fox to exploit the-copyright, and it was unlikely that there would be a failure to do so in the future. Thus, exploitation of the copyright not being at issue here, the cases cited by Nolan are inapposite.

On appeal, defendant Fox has dropped the plaintiff Nolan as a party to the counterclaims, but the allegations and claims for relief against Hill and the Aberbachs are the same as those raised in the district court. The counterclaim for inducing breach of contract was dismissed as against Nolan by Judge Edelstein below because such an action could not properly be maintained by Fox against Nolan, and dismissed as to the other counterclaim defendants because of a complete failure to prove damages, an essential element of a cause of action for inducing breach of contract. In the second counterclaim alleging the intentional infliction of damage to Fox’s business, Fox’s failure to prove damages was also one reason for dismissal. We find nothing to indicate that Judge Edelstein ruled incorrectly on either counterclaim.

Affirmed.

      . At suit “Fox” is a corporation. In 1934 it was a co-partnership, in 1960 a corporation. We see no need to differentiate between the co-partnership and its successor corporation.
      In its brief in the Court of Appeals Fox appears to have dropped its appeal from the district court’s dismissal as to Nolan of the first counterclaim. The court held it improper to join Nolan as a defendant on this first counterclaim with other counterclaim defendants whom Fox claims induced Nolan to break his contract with Fox.


author: KOELSCH, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Frank COLACURCIO, Appellant.
    Nos. 72-2313, 73-1025.
    United States Court of Appeals, Ninth Circuit.
    May 29, 1974.

      Malcolm L. Edwards (argued), Seattle, Wash., for appellant.
    Stuart F. Pierson, Asst. U. S. Atty. (argued), Stan Pitkin, U. S. Atty., Douglas D. McBroom, Asst. U. S. Atty., Seattle, Wash., for appellee.

       The Honorable Robert C. Belloni, Chief Judge, United States District Court for the District of Oregon, sitting by designation.

   OPINION

Before KOELSCH and WRIGHT, Circuit Judges, and BELLONI, District Judge.

KOELSCH, Circuit Judge:

By this appeal, Frank Colacurcio seeks reversal of the district court’s adjudication of his guilt of conspiracy to violate (Count I) and the violation (Counts II, III, IV and V) of the “travel” section of the Anti-Racketeering Act (18 U.S.C. § 371, 18 U.S.C. § 1952) and of the district court's orders denying him a new trial.

Briefly stated, Count I of the indictment charged that Colacurcio, together with co-defendants Charles Berger and Harry Hoffman, conspired to open and conduct bingo games in Seattle, Washington, in violation of the penal laws of that State. Included in the count are allegations that the three persons, in furtherance of the conspiracy, used the facilities of interstate commerce to bring gambling paraphernalia to Seattle from the State of Colorado; that Berger managed and operated the illicit gambling enterprise; that Colacurcio secured local police protection for it; and that Hoffman organized bingo clubs.

Counts II, III, IV and V each specified a separate occasion when the accused utilized interstate facilities to order and transport equipment used for gambling.

The charges were tried to the court, sitting without a jury. Berger was granted immunity and dismissed from the case in return for his testimony as a witness for the prosecution. Hoffman was acquitted; but Colacurcio was found guilty on all five counts.

We will group related assignments together and discuss them under appropriate headings.

1. The Prosecution’s “Interference with Counsel”

Several months after the indictment was returned, one of the government's key witnesses, Betty Luke, came to the district attorney with a story which suggested that Colacurcio and a lawyer, now deceased, not Colacurcio’s, had met with her for the purpose of discussing a bribe not to testify. The district attorney had thereupon subpoenaed Ronald G. Colacurcio’s chief counsel, Neubauer, to appear before a grand jury and there interrogated him about the matter. Neubauer immediately complained to Judge Solomon, the then presiding judge, who, after severely reprimanding the district attorney, warned him that the case would be dismissed if he called Neubauer as a witness or attempted to use his grand jury testimony at the upcoming trial.

When the case, in due course, was thereafter assigned for trial to Judge Powell, Colacurcio formally moved for dismissal. He urged that the district attorney, by calling and interrogating Neubauer, had materially impaired the latter’s ability to function as defense counsel and thus violated Colacurcio’s constitutional right of due process and to effective representation by counsel. Judge Powell held a hearing. After considering the lengthy affidavits, the transcript of the grand jury inquisition and the other written statements submitted for in camera, inspection, Judge Powell denied the motion.

We fully share the views expressed by Judge Frankel in Re Terkeltoub, 256 F.Supp. 683 (D.C., S.D.N.Y.1966), that generally it is grossly improper for a district attorney to seek to compel a lawyer to testify concerning his work in preparing a defense for his client. The likelihood that this drastic move will have at least a slightly chilling impact upon the lawyer’s advocacy is indeed great, but more important, perhaps, is the invasion of the lawyer’s privacy in his preparation. Any such inquiry can ordinarily be deferred to a less critical time without seriously hampering the district attorney in fulfilling his duty to protect the integrity of the judicial process.

We nevertheless are not persuaded that Judge Powell’s ruling requires a reversal. Judge Powell, in this case, unlike Judge Frankel in Terkeltoub, had before him both the lawyer’s grand jury testimony and the materials presented in camera; here the inquisition was a fait accompli, while in Terkeltoub it was simply incipient; and, likewise, here Judge Powell entertained and considered the in camera matters which Judge Frankel had rejected (although with the significant observation that, “It is possible, of course, that further information could lead to a changed conclusion.” (p. 686)).

From our own study of all these materials, we are satisfied, as was Judge Powell, that the inquiry extended wholly to matters collateral to the criminal case and that Neubauer’s professional talents were in nowise appreciably impaired.

2. The “Conditional Waiver” of Jury Trial

The day before trial was to begin, Hoffman, Colacurcio’s codefendant, was unexpectedly stricken with a heart attack and taken to a hospital. However, through his lawyer he expressed the wish that the trial not be postponed but that it proceed against him in absentia, “even if the result is a conviction.”

After much consideration of the problem, Colaeurcio also decided not to seek a postponement and to immediately proceed without a jury. Both he and Hoffman filed the necessary waivers. After eight days of trial, the respective parties had submitted all their evidence, save for that which Colaeurcio expected to adduce from Hoffman. Judge Powell thereupon declared an indefinite recess until such time as Hoffman was physically able to give testimony. But Hoffman’s condition continued unchanged. Four months later, when the fact was manifest that Hoffman could never appear or testify, Judge Powell terminated the recess and, over Colacurcio’s objection, proceeded with the trial to its conelusion. He acquitted Hoffman, and as noted earlier, found Colacurcio guilty on all counts.

Colacurcio’s written “Waiver of Jury Trial” is concise and unequivocal. Nevertheless, he contends that it should be treated as conditional only, the condition being Hoffman’s giving of testimony.

Colacurcio likens his position to that of the plea bargainer in Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1941). He points out that “[e]very plea bargain involves the waiver of a trial by jury conditioned upon the happening of a subsequent event. In the plea bargain cases, the waiver of trial by jury is the guilty plea. The condition subsequent is the promise by the prosecutor . . . ” concerning sentence, etc. He argues that here, when the future event could not occur, his waiver became ineffective. We are not persuaded. The “unkept promise of the prosecutor” in Santobello has no counterpart in this case. Fault cannot be attributed to either the prosecutor or the judge. Hoffman’s physical condition obviously was beyond the control of either the judge or the prosecutor. With commendable candor, Colacurcio concedes that when the waiver was entered, everyone stood on an equal footing and that they did not discuss what the effect might be of Hoffman’s permanent testimonial disability. The hard fact emerges that the contingency was simply not contemplated at all, and nothing in this record justifies the engrafting of any condition onto the waiver. In sum, and as succinctly stated in United States v. Sadrzadeh, 440 F.2d 389, 390 (9th Cir. 1971):

“We cannot accept the contention that (appellant) was entitled to start over again at the end of the government’s case with a jury and not a judge when his wife Toni chose to plead guilty. Both had previously intelligently waived a jury. The trial court simply has to get on with its business and cannot give parties first a practice trial before the court and then summon a jury.”

3. The Scope of 18 U.S.C. § 1952

Colacurcio is simply mistaken in his contention that (a) Section 1952 does not apply to this bingo operation because “the bingo clubs were local in nature and ... all of the supplies used in these clubs were available from Ace Novelty Co. of Seattle . ” and in his related contention that (b) the statute is limited to those who engage in “organized interstate criminal activities” and is “aimed at interstate racketeers conducting an unlawful business in one state while living in another.” United States v. Roselli, 432 F.2d 879 (9th Cir. 1970), contains an exhaustive exposition of the purpose and coverage of the statute; and what we said there about those matters will not be repeated except for the following quotation: “It is quite clear that in enacting Section 1952, Congress was not concerned with regulating interstate travel or the use of interstate facilities, but rather with directly suppressing unlawful local activities from which organized crime drew its sustenance.” (Roselli, supra, p. 891.)

In this regard, too, Colacurcio’s further contention to the effect that the government failed to prove that he conspired to violate “federal law” is likewise fallacious. Of course, such proof was essential to a conviction. Pereira v. United States, 347 U.S. 1, 12, 74 S.Ct. 358, 98 L.Ed. 435 (1953). But a finding of guilt did not require proof that the conspirators agreed to use interstate facilities to advance their conspiratorial purpose to violate the Washington anti-gambling law: “ . . the knowing use of interstate facilities is not an essential element of either the substantive offenses or the conspiracy to commit them; . . . . ” United States v. Roselli, supra, p. 890. However, we do note that the record contains evidence sufficient to support a finding that the parties had agreed to order gambling paraphernalia from the State of Colorado.

4. The Illegally Seized Evidence

Judge Powell was correct in ruling that Colacurcio lacked standing to challenge the legality of the search of the Lifeline Club and in permitting the use as evidence against him of the incriminating records and other papers incidentally seized. Colacurcio was not a person “aggrieved” (Rule 41(e), F.R. Crim.P.): He was not, as in Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960), charged with a “possessory” crime and hence entitled to “automatic” standing; neither was he on the club premises at the time of the search, not did he establish any proprietary or possessory interest in the seized property. Brown v. United States, 411 U.S. 223, 93 S.Ct. 1565, 36 L.Ed.2d 208 (1972), applies.

5. The “Recanting” Witness

As one of his many grounds for new trial, Colacurcio asserted that Betty Luke had given perjured testimony. His showing in support of the motion was not contained in an affidavit by Luke herself but was the more common recantation “once removed” — i. e., the sworn statement of third parties to the effect stated. But despite Colacurcio’s weak showing in support of his motion, Judge Powell conducted a hearing. Luke appeared as a witness. She flatly denied the accusation of perjury and reaffirmed the truth of her trial testimony. Judge Powell credited her. For that reason it is immaterial that his oral formulation of the legal standard for granting a new trial departs in a measure from the one generally approved. United States v. Johnson, 327 U.S. 106, 66 S.Ct. 464, 90 L.Ed. 562 (1946).

Moreover, the finding of non-perjury rendered Colacurcio’s proof of recantation simply impeaching. This latter type of evidence “is not, according to the often-repeated statement of the courts, an adequate basis for the grant of a new trial.” Mesarosh v. United States, 352 U.S. 1, 9, 77 S.Ct. 1, 5, 1 L.Ed.2d 1 (1956).

6. The Prosecution’s Failure to Produce

The record does indeed reveal that the district attorney did not produce for Colacurcio’s inspection all recorded statements and documents of the witness Luke, to which Colacurcio was entitled under the Jencks Act. However, a comparison of those withheld with those actually produced discloses that the statements in all of them are consistent with each other and are uniformly the same. Thus the conclusion is manifest that inspection of the withheld materials. would not have afforded Colacurcio any real aid in his defense.

Colacurcio’s syllogism as it relates to his demand to inspect the fruits of the investigative activities of F.B.I. agents Friang and Smith lacks its essential major premise. In their affidavits the agents deny taking notes of their conversation with and making a report of their interview with the witness Luke. These statements are unchallenged. Neither was the district court required, as a pre-condition to deciding Colacurcio’s motion for inspection, to hold an evidentiary hearing on the issue and permit Colacurcio to cross-examine the agents. What we said in United States v. Clay, 476 F.2d 1211, 1216 (9th Cir. 1973), is relevant: “Assuming the trial court, in its discretion, may hold an evidentiary hearing, we hold that the trial court here did not abuse that discretion.”

Colacurcio’s remaining points are not of sufficient substance to warrant discussion.

The judgment is affirmed.

      . “18 U.S.O. § 311. Conspiracy to commit offense or to defraud United States. If two or more persons conspire either to commit any act to effect the object of the conspir- . . . and one or more of such persons do any act to efect the object of the conspiracy, each shall be . . . ” punished.

        “18 U.S.O. § 1952. Interstate and foreign travel or transportation in aid of racketeering enterprises.
      “(a) Whoever . . . uses any facility in interstate or foreign commerce, including the mail, with intent to—
      * * * * *
      (3) promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity, and thereafter performs or attempts to perform any of the acts specified in sub-paragraphs (1), (2), and (3), shall be . . . (guilty of a penal offense).
      “(b) As used in this section ‘unlawful activity’ means (1) any business enterprise involving gambling, ... in violation of the laws of the State in which they are committed. . . . ”

      . “I was somewhat relieved,” Judge Solomon stated, “when I read the transcript before the Grand Jury. But I asked myself: ‘How is it possible to protect a lawyer when you ask him the questions you did ask him?’ For example, if he wanted to use this testimony to destroy the credibility of this witness (i. e., Betty Luke), hasn’t he, by the testimony he gave to the Grand Jury, absolutely destroyed his cross-examination of that witness?”
      Concluding, Judge Solomon admonished the United States attorney thus: “I don’t think you are going to do that (i. e., call Neubauer as a witness). You can’t force a lawyer to testify in one case and then use his testimony against his client. If you attempt to do this, I will dismiss the case . . .

      . In the alternative, the motion to dismiss requested an order directing the district attorney to permit inspection of the grand jury transcript and other documents. Judge Powell denied this alternative.

      . Colaeurcio did not assert as a further ground a violation of the attorney-client privilege. He apparently recognized that since the discussion included a third party, the privilege did not attach.

      . The district attorney, resisting the motion, argued in substance that his investigation which led to calling Neubauer before the grand jury was not related to the pending criminal prosecution against Colaeurcio, but was launched to determine whether Colacurcio or Luke was endeavoring to obstruct justice.

      . Judge Powell made the comment that the matter was “collateral.” In addition, he made the statement, “. . . I do feel that Mr. Neubauer is a very capable and competent, energetic, enthusiastic advocate. I think he is well capable of taking care of himself and representing his client. I don’t think his client has been jeopardized in the least up to this point, and I will deny his motion to dismiss.”

      . “WAIVER OF JURY TRIAL”
      “Pursuant to Rule 23(a) Federal Rules of Criminal Procedure, the undersigned Frank Colacurcio, defendant, does hereby waive his right for trial by jury and requests that it be tried without a jury. I fully understand that I am entitled to a jury trial, but it is my desire to waive that right.
      “DATED June 16,1971.
      “/s/ Frank Colacurcio
      Frank Colacurcio, Defendant
      “/s/ Ronald G. Neubauer
      u Attorney for Defendant Frank Colacurcio”

      . Colacurcio also attacks the waiver as not intelligently made in that he was not apprised, before making his election to forego a jury and constitute Judge Powell the fact finder, of the precise content of the m camera matter which the district attorney had previously submitted to the judge when opposing the motion to dismiss the action on the ground of “interference with counsel.”
      As a separate point, he urges that the “in camera” matter probably tended to prejudice Judge Powell against him.
      Neither has merit. We think it enough that Colacurcio knew that in camera matter has been submitted; surely he must have realized that some of it was unfavorable to him. Moreover, he made no demand to inspect it prior to making his decision. The short answer to the second point is that judicial integrity is not so lightly regarded as Colacurcio suggests. Dedmore v. United States, 322 F.2d 938 (9th Cir. 1963).

      . Footnote 1, supra.

      . It is significant that Colacurcio did not testify at the suppression hearing. Yet, if he actually had some proprietary interest in the seized papers, he could have asserted it without thereby providing the district attorney with evidence that could later be used to inculpate him. Simmons v. United States, 390 U.S. 377, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968).

       guch motions are ordinarily decided solely upon affidavits. Indeed, the Fifth Circuit has declared that only in exceptional circumstances should hearings be held. Lyles v. United States, 272 F.2d 910 (5th Cir. 1959).

      . The particular documents were those submitted by the district attorney (for Judge Powell’s in camera perusal) at the “interference with counsel” hearing. Colacurcio was not afforded access to them until after trial.

      . Additional support for our conclusion is found in the affidavit of Thomas H. S. Brucker, one of Colacurcio’s attorneys. In support of the contention that the “in camera” materials probably tended to prejudice Judge Powell (see footnote 4), he averred, after opining how critical the credibility of a witness was in a conspiracy case, that “I would never have proposed to Mr. Colacurcio that he waive his right to trial by jury if I had been aware that the information contained in the in camera material was known to the trial judge, particularly so shortly prior to the trial date. I state this because:
      “1. The affidavits provided prior consistent statements that supported the trial testimony of Betty Luke, at a trial where evaluation of credibility determined the guilt or innocence of a defendant;
      “2. This prior consistent statement completely, and unknowingly to the defendants, undercut the cross-examination of Betty Lou Luke;
      “3. These affidavits independently corroborated the direct testimony of Betty Lou Luke and deprived the defendant of his opportunity to cross-examine;
      “4. These affidavits meant that Judge. Powell, to find the defendant Colacurcio not guilty, would necessarily have to disbelieve the trial testimony of the witness Luke — which testimony was substantially identical to testimony in her prior affidavits upon which two other federal district judges had relied to authorize phone tapping and recording of conversations ; . . . . ”
      * * * # S}t